<PAGE>1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended     December 31, 1998
                              ------------------

Commission file number             1-12724
                              -----------------

     AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
-----------------------------------------------------------------
      (Exact name of registrant as specified in charter)

             Delaware                           13-3398206
-------------------------------------      ----------------------
  (State or other jurisdiction of           (I.R.S. Employer
  incorporation or organization)            Identification No.)

11200 Rockville Pike, Rockville, Maryland           20852
-----------------------------------------  ----------------------
(Address of principal executive offices)          (Zip Code)

                           (301) 816-2300
-----------------------------------------------------------------
       (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                                        Name of each exchange on
    Title of each class                      which registered
--------------------------------      ---------------------------
 Depositary Units of Limited            American Stock Exchange
   Partnership Interest

           Securities registered pursuant to Section 12(g) of the Act:

                            NONE
-----------------------------------------------------------------
                        (Title of class)

         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

         Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be contained, 
to the best of registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K. [X]

         As of March 5, 1999,  8,802,091 Depositary Units of Limited Partnership
Interest were  outstanding and the aggregate  market value of such units held by
non-affiliates of the Registrant on such date was $92,964,228.

<PAGE>3

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                         1998 ANNUAL REPORT ON FORM 10-K

                                TABLE OF CONTENTS

                                     PART I
                                     ------
                                                                   Page
                                                                   ----
Item 1.    Business................................................  4
Item 2.    Properties..............................................  6
Item 3.    Legal Proceedings.......................................  6
Item 4.    Submission of Matters to a Vote of
             Security Holders......................................  6

                                     PART II
                                     -------
Item 5.    Market for Registrant's Securities and
             Related Security Holder Matters.......................  6
Item 6.    Selected Financial Data.................................  9
Item 7.    Management's Discussion and Analysis of
             Financial Condition and Results of
             Operations............................................ 10
Item 7A.   Qualitative and Quantitative Disclosures
             About Market Risk..................................... 22
Item 8.    Financial Statements and Supplementary Data............. 22
Item 9.    Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure................ 22

                                    PART III
                                    --------
Item 10.   Directors and Executive Officers of the
             Registrant............................................ 23
Item 11.   Executive Compensation.................................. 26
Item 12.   Security Ownership of Certain Beneficial
             Owners and Management................................. 26
Item 13.   Certain Relationships and Related
             Transactions.......................................... 27

                                     PART IV
                                     -------
Item 14.   Exhibits, Financial Statement Schedules and
             Reports on Form 8-K................................... 28

Signatures ........................................................ 32


<PAGE>4

                                     PART I

ITEM 1.  BUSINESS

Development and Description of Business
---------------------------------------
         Information  concerning  the  business  of  American  Insured  Mortgage
Investors  L.P.-Series  88 (the  Partnership)  is  contained in Part II, Item 7,
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  and in Notes 1, 4, 5 and 7 of the notes to the financial  statements
of the  Partnership.  Also see Schedule  IV-Mortgage  Loans on Real Estate for a
summary of mortgage investments held by the Partnership as of December 31, 1998,
which is hereby incorporated by reference herein.

Employees
---------
         The Partnership has no employees.  The business of the Partnership is
managed by CRIIMI, Inc. (the General Partner), while its portfolio of mortgages
is managed by AIM Acquisition Partners, L.P. (the Advisor) pursuant to an 
advisory agreement (the Advisory Agreement).  CRIIMI, Inc. is a wholly owned 
subsidiary of CRIIMI MAE Inc. (CRIIMI MAE).  CRIIMI MAE was formerly managed by
an affiliate of CRI, Inc. (CRI).

         The general partner of the Advisor is AIM Acquisition  Corporation (AIM
Acquisition)  and the  limited  partners  include,  but are not  limited to, AIM
Acquisition,  The  Goldman  Sachs  Group,  L.P.,  Broad,  Inc.  and CRIIMI  MAE.
Effective September 6, 1991 and through June 30, 1995, a sub-advisory  agreement
(the  Sub-advisory  Agreement)  existed  whereby  CRI/AIM  Management,  Inc., an
affiliate of CRI, managed the  Partnership's  portfolio.  In connection with the
transaction  in  which  CRIIMI  MAE  became  a  self-administered   real  estate
investment  trust (REIT),  an affiliate of CRIIMI MAE acquired the  Sub-advisory
Agreement. As a result of this transaction,  effective June 30, 1995, CRIIMI MAE
Services  Limited   Partnership,   an  affiliate  of  CRIIMI  MAE,  manages  the
Partnership's  portfolio.  These transactions had no effect on the Partnership's
financial statements.

Competition
-----------
         In disposing of mortgage  investments,  the  Partnership  competes with
private investors, mortgage banking companies, mortgage brokers, state and local
government agencies, lending institutions, trust funds, pension funds, and other
entities,  some with similar  objectives to those of the Partnership and some of
which are or may be  affiliates of the  Partnership,  its General  Partner,  the
Advisor  and  their  respective  affiliates.  Some of  these  entities  may have
substantially  greater capital  resources and experience than the Partnership in
disposing of the Federal Housing Administration (FHA) insured mortgages than the
Partnership.

<PAGE>5

                                     PART I

ITEM 1.  BUSINESS - Continued

         CRIIMI  MAE and its  affiliates  also may  serve as  general  partners,
sponsors  or  managers  of real  estate  limited  partnerships,  REITS  or other
entities in the future.  The  Partnership may attempt to dispose of mortgages at
or about the same time that one or more of the other AIM Partnerships  (American
Insured Mortgage Investors L.P. - Series 84, American Insured Mortgage Investors
- Series  85,  L.P.,  American  Insured  Mortgage  Investors  L.P.  - Series 86,
American Insured Mortgage Investors L.P. - Series 88,  collectively  referred to
herein as AIM Partnerships) and/or other entities sponsored or managed by CRIIMI
MAE, are  attempting to dispose of mortgages.  As a result of market  conditions
that could limit  dispositions,  CRIIMI MAE Services Limited Partnership (CMSLP)
and its  affiliates  could be faced with  conflicts  of interest in  determining
which mortgages would be disposed of. Both CMSLP and CRIIMI,  Inc., however, are
subject to their  fiduciary  duties in evaluating the  appropriate  action to be
taken when faced with such conflicts.

Forward-Looking Statements
--------------------------
         In  accordance  with the Private  Securities  Litigation  Reform Act of
1995, the Partnership can obtain a "Safe Harbor" for forward-looking  statements
by  identifying  those  statements and by  accompanying  those  statements  with
cautionary  statements which identify factors that could cause actual results to
differ from those in the forward-looking statements.  Accordingly, the following
information contains or may contain forward-looking  statements: (1) information
included  or  incorporated  by  reference  in this  Annual  Report on Form 10-K,
including,  without  limitation,  statements  made  under  Item 7,  Management's
Discussion and Analysis of Financial  Condition and Results of  Operations,  (2)
information  included or  incorporated  by  reference  in future  filings by the
Partnership  with the  Securities  and Exchange  Commission  including,  without
limitation,  statements with respect to growth,  projected  revenues,  earnings,
returns and yields on its portfolio of mortgage  assets,  the impact of interest
rates, costs and business strategies and plans and (3) information  contained in
written  material,  releases and oral statements  issued by or on behalf of, the
Partnership,  including, without limitation,  statements with respect to growth,
projected  revenues,  earnings,  returns and yields on its portfolio of mortgage
assets, the impact of interest rates,  costs and business  strategies and plans.
The  Partnership's  actual results may differ materially from those contained in
the forward-looking  statements identified above. Factors which may cause such a
difference  to  occur  include,  but  are  not  limited  to (i)  regulatory  and
litigation  matters,  (ii)  interest  rates,  (iii) trends in the economy,  (iv)
prepayment of mortgages and (v) defaulted mortgages.


<PAGE>6

                                     PART I

ITEM 2.  PROPERTIES

         Although the Partnership  does not own the underlying real estate,  the
mortgages  underlying  the  Partnership's  mortgage  investments  are  primarily
non-recourse first liens on the respective multifamily residential  developments
or retirement homes.

ITEM 3.  LEGAL PROCEEDINGS

         Reference is made to Note 4 of the notes to the financial statements on
pages 45 through 49.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to the security holders to be voted on during
the fourth quarter of 1998.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S SECURITIES AND RELATED SECURITY  HOLDER MATTERS

Principal Market and Market Price for Units
-------------------------------------------
         The General Partner listed the  Partnership's  Units for trading on the
American  Stock  Exchange  (AMEX)  on  January  18,  1994,  in order to  provide
investment  liquidity as contemplated in the Partnership's  original prospectus.
The Units are traded under the symbol "AIK."

         The high and low trade  prices  for the Units as  reported  on AMEX for
each quarterly period in 1998 and 1997 were as follows:


                                                       1998   
                                                       ----
    Quarter Ended                              High             Low            
   ---------------------                    ---------         ---------     
   March 31, 1998                            $ 14 1/4         $ 13 5/16
   June 30, 1998                               14               12  1/2
   September 30, 1998                          13 1/4           11  7/8
   December 31, 1998                           12 5/8           10 11/16


<PAGE>7



                                                       1997
                                                      -----
Quarter Ended                                 High                Low
------------------                         ----------           --------
March 31, 1997                             $  15                $ 14
June 30, 1997                                 15                  14
September 30, 1997                            14  7/8             13 3/8
December 31, 1997                             13 15/16            13 3/16

Distribution Information
------------------------
         Distributions   per  Unit,   payable  out  of  the  cash  flow  of  the
Partnership, during 1998 and 1997 were as follows:

                  Distributions for the               Amount of Distribution
                      Quarter Ended                           Per Unit
                  -------------------------           -----------------------
                  March 31, 1998                          $      1.21(1)
                  June 30, 1998                                  1.50(2)
                  September 30, 1998                             1.42(3)
                  December 31, 1998                              0.21
                                                          -----------
                                                          $      4.34
                                                          ===========

                  March 31, 1997                          $      0.59(4)
                  June 30, 1997                                  0.30
                  September 30, 1997                             1.06(5)
                  December 31, 1997                              0.38(6)
                                                          -----------
                                                          $      2.33
                                                          ===========

(1)      This amount  includes  approximately  $0.92 per Unit  representing  net
         proceeds from the prepayment of the mortgages on Northpoint  Apartments
         and Olmstead Park Apartments.
(2)      This  amount  includes  approximately  $0.08  per Unit  representing  a
         curtailment of the mortgage on Olde Mill  Apartments and  approximately
         $1.18 per Unit  representing  net proceeds  from the  prepayment of the
         mortgage on Arbor Village.
(3)      This amount  includes  approximately  $1.19 per Unit  representing  net
         proceeds  from  the  prepayment  of the  mortgage  on  Water's  Edge II
         Apartments.
(4)      This amount includes  approximately $0.27 per Unit representing partial
         receipt of proceeds  from the  assignment of Water's Edge of New Jersey
         and approximately  $0.02 per Unit  representing  proceeds from mortgage
         dispositions not reinvested prior to the expiration of the reinvestment
         period.
(5)      This amount includes approximately $0.76 per Unit representing proceeds
         from the prepayment of the mortgage on Parkside Estates.
(6)      This  amount  includes  approximately  $0.08  per Unit  representing  a
         curtailment on the mortgage of Olde Mill  Apartments and  approximately
         $0.01 per Unit representing  previously  undistributed accrued interest
         received from St. Charles Place - Phase II.

         There are no material legal restrictions upon the Partnership's present
or future ability to make distributions in accordance with the provisions of the
Partnership Agreement.

<PAGE>8

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S SECURITIES AND RELATED SECURITY HOLDER 
           MATTERS Continued

                                           Approximate Number of Unitholders
Title of Class                                   as of December 31, 1998
-----------------                           -------------------------------
Depositary Units of Limited
  Partnership Interest                                     7,000


<PAGE>9

ITEM 6.  SELECTED FINANCIAL DATA
         (Dollars in thousands, except per Unit amounts)
<TABLE>
<CAPTION>
                                                                     For the Years Ended December 31,
                                               1998            1997           1996           1995        1994
                                             --------       ---------      ----------     ---------    ---------
<S>                                          <C>            <C>            <C>            <C>          <C>
Income                                       $  9,998       $  12,167       $  12,465     $  13,236    $  13,332

Net gains (losses) on mortgage
  disposition/modification                        756            (354)           (378)        2,452          978

Net earnings                                    9,179          10,097          10,293        13,795       11,540

Net earnings per Limited
  Partnership Unit - Basic (1)                   0.99           1.09             1.11          1.49          1.24

Distributions per Limited
  Partnership Unit (1)(2)                        4.34           2.33             1.22          1.66          1.41


                                                                           As of December 31,
                                               1998         1997            1996           1995         1994
                                             --------     --------        --------       --------     --------

Total assets                                 $116,464     $150,616        $159,554       $161,927     $154,805

Partners' equity                             $114,442     $146,977        $156,644       $158,806     $150,506


(1)      Calculated based upon the weighted average number of Units outstanding.
         See Note 2 of the notes to the financial statements of the Partnership.

(2)      Includes distributions due the Unitholders for the Partnership's fiscal
         quarters ended December 31, 1998, 1997, 1996, 1995 and 1994, which were
         paid  subsequent  to year  end.  See  Notes 6 and 8 of the notes to the
         Partnership's  financial  statements  contained  in Item 8,  "Financial
         Statements and Supplementary Data."

</TABLE>

         The  selected  statements  of  income  and  comprehensive  income  data
presented  above for the years ended  December 31, 1998,  1997 and 1996, and the
balance  sheet data as of December  31, 1998 and 1997,  are derived from and are
qualified by reference to the Partnership's financial statements which have been
included elsewhere in this Form 10-K. The statements of income and comprehensive
income data for the years ended December 31, 1995 and 1994 and the balance sheet
data as of December 31, 1996,  1995 and 1994 are derived from audited  financial
statements  not  included  in  this  Form  10-K.  This  data  should  be read in
conjunction with the financial statements and the notes thereto.


<PAGE>10

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS
General
-------
         American Insured Mortgage  Investors L.P. - Series 88 (the Partnership)
was formed under the Uniform Limited Partnership Act of the state of Delaware on
February 13, 1987.  During the period from October 2, 1987 (the initial  closing
date  of  the  Partnership's  public  offering)  through  March  10,  1989  (the
termination  date of the  offering),  the  Partnership,  pursuant  to its public
offering  of  Units,  raised  a total of  $177,039,320  in  gross  proceeds.  In
addition,  the initial limited partner  contributed $2,500 to the capital of the
Partnership and received 125 units of limited  partnership  interest in exchange
therefor.

         CRIIMI, Inc. (the General Partner) holds a partnership interest of 4.9%
which includes shares acquired from the former assignor limited partner.  
CRIIMI, Inc. is a wholly-owned subsidiary of CRIIMI MAE Inc. (CRIIMI MAE).

         AIM Acquisition Partners, L.P. (the Advisor),  serves as the advisor to
the Partnership.  AIM Acquisition  Corporation (AIM  Acquisition) is the general
partner of the Advisor and the limited partners include, but are not limited to,
AIM  Acquisition,  The Goldman Sachs Group,  L.P.,  Broad,  Inc. and CRIIMI MAE.
Pursuant to the terms of certain  amendments to the Partnership  Agreement,  the
General Partner is required to obtain the consent of the Advisor prior to taking
certain  significant  actions  which affect the  management  and policies of the
Partnership.

         Effective  September 6, 1991 and through June 30, 1995, a  sub-advisory
agreement (the Sub-advisory Agreement) existed whereby CRI/AIM Management, Inc.,
an affiliate of CRI, managed the Partnership's portfolio. In connection with the
transaction  in  which  CRIIMI  MAE  became  a  self-administered   real  estate
investment  trust (REIT) on June 30,  1995,  an affiliate of CRIIMI MAE acquired
the Sub-advisory Agreement. As a consequence of this transaction, effective June
30, 1995, CMSLP manages the Partnership's  portfolio.  These transactions had no
effect on the Partnership's financial statements.

         On October 5, 1998, CRIIMI MAE, the parent of the General Partner,  and
the parent to AIM Investment L.P., and CRIIMI MAE Management, Inc., an affiliate
of CRIIMI MAE and  provider  of  personnel  and  administrative  services to the
Partnership,  filed a voluntary petition for reorganization  under Chapter 11 of
the U.S.  Bankruptcy  Code.  As a  debtor-in-possession,  CRIIMI MAE will not be
permitted  to provide  any  available  capital to the  General  Partner  without
approval from the bankruptcy  court.  This  restriction or potential loss of the
availability of a potential  capital resource could adversely affect the General
Partner  and  the  Partnership;   however,   CRIIMI  MAE  has  not  historically
represented  a  significant  source of capital  for the  General  Partner or the
Partnership.  Such bankruptcy filings could also result in the potential need to
replace   CRIIMI  MAE   Management,   Inc.  as  a  provider  of  personnel   and
administrative services to the Partnership.

<PAGE>11

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

Year 2000
---------
         The Year 2000  issue is a  computer  programming  issue that may affect
many electronic  processing  systems.  Until  relatively  recently,  in order to
minimize the length of data fields, most date-sensitive  programs eliminated the
first two digits of the year.  This issue could  affect  information  technology
("IT")  systems and date sensitive  embedded  technology  that controls  certain
systems (such as  telecommunications  systems,  security systems,  etc.) leaving
them unable to properly  recognize or  distinguish  dates in the  twentieth  and
twenty-first   centuries.   This   treatment   could   result   in   significant
miscalculations when processing critical date-sensitive  information relating to
dates after December 31, 1999.

The General  Partner is currently  in the process of assessing  and testing Year
2000 compliance of its IT systems,  which include software systems to administer
and manage mortgage assets, and for internal accounting  purposes. A majority of
the IT systems used by the  Partnership  is licensed from third  parties.  These
third  parties  have  either  provided  upgrades  to  existing  systems  or have
indicated that their systems are Year 2000  compliant.  The General  Partner has
applied upgrades and has completed a substantial amount of compliance testing as
of March 31, 1999. There can be no assurance, however, that the Partnership's IT
systems will be Year 2000 compliant by December 31, 1999.

         The Year 2000 issue may also  affect the  Partnership's  date-sensitive
embedded  technology,  which  controls  systems  such as the  telecommunications
systems,  security  systems,  etc. The General Partner does not believe that the
cost to modify or replace such technology to make it Year 2000 compliant will be
material.  The failure of any such  systems to be Year 2000  compliant  could be
material to the Partnership.

         The  potential  impact of the Year 2000 issue  depends  not only on the
corrective  measures the General Partner has undertaken and will undertake,  but
also on the ways in which the Year 2000 issue is addressed by third parties with
whom the  Partnership  directly  interfaces  or  whose  financial  condition  or
operations  are  important to the  Partnership.  The  Partnership  has initiated
communications  with third parties with which it directly interfaces to evaluate
the risk of their failure to be Year 2000  compliant and the extent to which the
Partnership  may be vulnerable to such failure.  There can be no assurance  that
the systems of these third  parties will be Year 2000  compliant by December 31,
1999. The failure of these third parties to be Year 2000 compliant  could have a
material adverse effect on the operations of the Partnership.

         The  Partnership  believes  that its greatest  risk with respect to the
Year 2000 issue relates to failures by third parties to be Year 2000  compliant.

<PAGE>12

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

In  addition  to  risks  posed by  third  parties  with  which  the  Partnership
interfaces  directly,  risks are created by third parties providing  services to
large  segments  of  society.  The  failure  of third  parties  to be Year  2000
compliant could,  among other things,  cause disruptions in the capital and real
estate  markets and borrower  defaults on real estate loans and  mortgage-backed
securities as well as the pools of mortgage loans  underlying  such  securities.
The  Partnership  believes  that its  greatest  exposure  to the Year 2000 issue
involves the loan servicing  operations of an affiliate of the Partnership  that
rely on computers to process and manage loans. An affiliate of the  Partnership,
CMSLP,  currently  services  approximately  21% of the  total  loans  in the AIM
Partnerships. CMSLP has applied a vendor upgrade and has substantially completed
compliance testing on the upgrade.

         Currently the Partnership estimates the cost of system upgrades related
to Year 2000 issues to be immaterial.

         Although the General Partner has substantially completed its compliance
testing and  remediation,  it is also in the process of  developing  contingency
plans for the risks of the  failure of the  Partnership  or third  parties to be
Year 2000 compliant.  The General Partner intends to complete  contingency plans
for the Year 2000 issue by May 31, 1999.  Due to the inability to predict all of
the potential  problems that may arise from the Year 2000 issue, there can be no
assurance that all contingencies will be adequately addressed by such plans.

Mortgage Investments
--------------------
         Until the change in the Partnership's  investment  policy, as discussed
below,  the  Partnership  was in the  business  of  originating  mortgage  loans
(Originated  Insured  Mortgages) and acquiring  mortgage loans (Acquired Insured
Mortgages, and together with Originated Insured Mortgages, referred to herein as
Insured  Mortgages).  As of December 31, 1998, the  Partnership  had invested in
either Originated Insured Mortgages which are insured or guaranteed, in whole or
in  part,  by the  Federal  Housing  Administration  (FHA) or  Acquired  Insured
Mortgages which are fully insured (as more fully described below).

         The Partnership's reinvestment period expired on December 31, 1996, and
the Partnership Agreement states that the Partnership will terminate on December
31, 2021, unless  previously  terminated under the provisions of the Partnership
Agreement.

         As of December 31,  1998,  the  Partnership  had invested in 31 Insured
Mortgages with aggregate  amortized cost, face and fair values of  approximately
$106 million, $108 million and $106 million, respectively.

<PAGE>13

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


Investment in Insured Mortgages
-------------------------------
         The  Partnership's  investment  in Insured  Mortgages  is  comprised of
participation  certificates  evidencing a 100% undivided  beneficial interest in
government insured multifamily mortgages issued or sold pursuant to FHA programs
(FHA-Insured Certificates),  mortgage-backed securities guaranteed by GNMA (GNMA
Mortgage-Backed  Securities) and FHA-insured mortgage loans (FHA-Insured Loans).
The mortgages underlying the FHA-Insured Certificates,  the GNMA Mortgage-Backed
Securities and the FHA-Insured Loans are non-recourse first liens on multifamily
residential developments or retirement homes.

         Payments of principal  and  interest on  FHA-Insured  Certificates  and
FHA-Insured  Loans are insured by the United  States  Department  of Housing and
Urban  Development  (HUD)  pursuant  to  Title 2 of the  National  Housing  Act.
Payments of  principal  and  interest  on GNMA  Mortgage-Backed  Securities  are
guaranteed by GNMA pursuant to Title 3 of the National Housing Act.

         The   following  is  a  discussion   of  the   Partnership's   mortgage
investments, along with the risks related to each type of investment.


<PAGE>14

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


         A.       Fully Insured FHA-Insured Certificates and GNMA
                    Mortgage-Backed Securities
                  -----------------------------------------------
                  Listed  below is the  Partnership's  aggregate  investment  in
         fully insured  Acquired  Insured  Mortgages as of December 31, 1998 and
         1997:

<TABLE>
<CAPTION>
                                                                            December 31,
                                                                 1998                  1997
                                                           ----------------        -----------------
<S>                                                        <C>                     <C>
Number of:
  GNMA Mortgage-Backed Securities                                        22                       22
  FHA-Insured Certificates(1)(2)                                          3                        5
Amortized Cost                                                 $ 65,698,059             $ 72,251,365
Face Value                                                       65,930,408               72,492,904
Fair Value                                                       67,018,830               74,963,747

</TABLE>

(1)      On January 31, 1998, the mortgage on Northpoint Apartments was prepaid.
         The Partnership  received net proceeds of  approximately  $1.7 million,
         and  recognized  a gain of  approximately  $6,000  for the  year  ended
         December  31, 1998.  A  distribution  of $0.19 per Unit related to this
         prepayment was declared in February 1998 and paid to Unitholders in May
         1998.

(2)      On December 21, 1998, the mortgage on Olde Mill Apartments was prepaid.
         The Partnership  received net proceeds of  approximately  $3.4 million,
         and  recognized  a gain of  approximately  $97,000  for the year  ended
         December  31, 1998.  A  distribution  of $0.37 per Unit related to this
         prepayment  was  declared in January 1999 and is expected to be paid to
         Unitholders in May 1999.

         Listed below is the Partnership's aggregate investment in fully insured
Originated Insured Mortgages as of December 31, 1998 and 1997:

<TABLE>
<CAPTION>


                                                                            December 31,
                                                                   1998                   1997
                                                               ------------         ----------------
<S>                                                            <C>                  <C>
Number of Mortgages (3)                                                   0                        1
Amortized Cost                                                            0             $ 11,296,412
Face Value                                                                0               10,941,101
Fair Value                                                                0               11,055,186

</TABLE>

(3)      On June 4,  1998,  the  mortgage  on Arbor  Village  was  prepaid.  The
         Partnership  received net proceeds of approximately $10.9 million,  and
         recognized a loss of approximately $350,000 for the year ended December
         31, 1998. A distribution  of $1.18 per Unit related to this  prepayment
         was declared in June 1998 and paid to Unitholders in August 1998.

                  As of March 5, 1999, all fully insured  mortgages were current
         with respect to the payment of principal and interest.

<PAGE>15

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

                  In February 1996, the General Partner  instructed the servicer
         for the  mortgage  on  Water's  Edge  of New  Jersey,  a fully  insured
         acquired construction loan, to file a Notice of Default and an Election
         to  Assign  the  mortgage  with the  Department  of  Housing  and Urban
         Development (HUD). The property  underlying this construction loan is a
         nursing home located in Trenton,  New Jersey.  As of December 31, 1998,
         the  Partnership  had  received  approximately  $10.2  million  on this
         assignment including partial repayment of the outstanding principal and
         accrued  interest.  The remainder of the proceeds,  approximately  $1.5
         million,   is  included  in  Receivables  and  Other  Assets.  HUD  has
         disallowed  approximately  $1.5 million of the  assignment  claim.  The
         servicer,   Greystone   Servicing   Corporation,   Inc.,  is  currently
         negotiating with HUD in regard to collection of the disallowed  portion
         of the claim. In addition,  the General Partner has retained counsel in
         this matter and is actively pursuing litigation.  On July 30, 1998, the
         Partnership  filed a Motion for Judgment  against  Greystone  Servicing
         Corporation,  Inc.  (the  servicer)  in the  Circuit  Court of Fauquier
         County,  Virginia.  The Motion for Judgment  alleges breach of contract
         and negligence  claims and seeks judgment for $1,653,396 plus interest,
         attorneys' fees and costs. The Partnership  believes that the allowance
         for loan losses of $375,000 as of December 31, 1998,  is  sufficient to
         provide for amounts that may not be recovered from the servicer.

         B.       Coinsured FHA-Insured Certificates
                  ----------------------------------
                  Under  the  HUD   coinsurance   program,   both  HUD  and  the
         coinsurance  lender  are  responsible  for  paying  a  portion  of  the
         insurance  benefits  if a  mortgagor  defaults  and  the  sale  of  the
         development  collateralizing  the mortgage  produces  insufficient  net
         proceeds  to  repay  the  mortgage  obligation.   In  such  cases,  the
         coinsurance lender will be liable to the Partnership for the first part
         of such loss in an amount up to 5% of the outstanding principal balance
         of the mortgage as of the date  foreclosure  proceedings are instituted
         or the deed is acquired in lieu of  foreclosure.  For any loss  greater
         than 5% of the outstanding  principal  balance,  the responsibility for
         paying the insurance benefits will be borne on a pro-rata basis, 85% by
         HUD and 15% by the coinsurance lender.

                  While the Partnership is due payment of all amounts owed under
         the mortgage,  the  coinsurance  lender is  responsible  for the timely
         payment of principal and interest to the  Partnership.  The coinsurance

<PAGE>16

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

         lender is prohibited  from entering into any workout  arrangement  with
         the borrower  without the  Partnership's  consent and must file a claim
         for coinsurance  benefits with HUD, upon default, if the Partnership so
         directs. As an ongoing  HUD-approved  coinsurance lender, and under the
         terms  of  the  participation  documents,  the  coinsurance  lender  is
         required to satisfy certain minimum net worth requirements as set forth
         by HUD. However, it is possible that the coinsurance lender's potential
         liability for loss on these developments,  and others, could exceed its
         HUD-required  minimum net worth.  In such case, the  Partnership  would
         bear the risk of loss if the  coinsurance  lenders  were unable to meet
         their coinsurance  obligations.  In addition,  HUD's obligation for the
         payment  of its share of the loss  could be  diminished  under  certain
         conditions,  such as the  lender  not  adequately  pursuing  regulatory
         violations of the borrower or the failure to comply with other terms of
         the  mortgage.  However,  the  General  Partner  is  not  aware  of any
         conditions  or  actions  that  would  result  in  HUD  diminishing  its
         insurance coverage.

                  As of  December  31,  1998  and  1997,  the  Partnership  held
         investments  in three  coinsured  FHA-Insured  Certificates  secured by
         coinsured mortgages.  One of these coinsured mortgage investments,  the
         mortgage on St. Charles Place - Phase II, is coinsured by The Patrician
         Mortgage Company  (Patrician),  an unaffiliated third party coinsurance
         lender under the HUD coinsurance  program. As of December 31, 1998, and
         1997,  the  remaining  two  FHA-Insured  Certificates  are coinsured by
         Integrated  Funding,  Inc. (IFI), an affiliate of the Partnership,  and
         are discussed below.

         1.       Coinsured by third party
                  ------------------------
                  St. Charles Place - Phase II is a 156-unit  apartment  complex
                  located in Miramar, Florida. Listed below is the Partnership's
                  investment in the St.  Charles Place - Phase II mortgage as of
                  December  31,  1998 and  1997.  These  amounts  represent  the
                  Partnership's   approximate  55%  ownership  interest  in  the
                  mortgage.  The  remaining  45%  ownership  interest is held by
                  American Insured Mortgage Investors L.P. - Series 86 (AIM 86),
                  an affiliate of the Partnership.

<TABLE>
<CAPTION>
                                                                            December 31,
                                                                 1998                     1997
                                                            ---------------          ---------------
<S>                                                         <C>                      <C>
Amortized Cost                                                 $  3,710,287             $  3,710,287
Face Value                                                        3,710,287                3,710,287
Fair Value                                                        3,422,177                3,484,715

</TABLE>

<PAGE>17

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

                  As of March 5,  1999,  the  mortgagor  had  made  payments  of
                  principal and interest due to the  Partnership on the mortgage
                  through November 1995. As the result of bankruptcy proceedings
                  that have been ongoing  since 1992,  the property was acquired
                  and vested with  Patrician in November  1998.  Patrician is in
                  the process of improving  the property and intends to file its
                  initial claim with HUD by October  1999. A  coinsurance  claim
                  will be filed with HUD for remaining  amounts not collected as
                  a result of the disposition.  Due to deferred  maintenance and
                  tax deficiencies, the Partnership does not expect cash flow to
                  be realized from this property  until the property is sold and
                  claims  are  filed  with  HUD  for   Multifamily   Coinsurance
                  benefits.

                  The  General  Partner  intends  to  continue  to  oversee  the
                  Partnership's  interest in this mortgage  investment to ensure
                  that Patrician meets its coinsurance obligations.  The General
                  Partner's  assessment  of the  realizability  of the  carrying
                  value of the St.  Charles  Place-Phase II mortgage is based on
                  the most recent information available, and to the extent these
                  conditions change or additional information becomes available,
                  the General  Partner's  assessment  may change.  However,  the
                  General  Partner  does  not  believe  that  there  would  be a
                  material  adverse  impact  on  the   Partnership's   financial
                  condition  or its results of  operations  should  Patrician be
                  unable to comply with its full coinsurance obligation.

         2.       Coinsured by affiliate
                  ----------------------
                  As of  December  31,  1998  and  1997,  the  Partnership  held
                  investments  in  two  FHA-Insured   Certificates   secured  by
                  coinsured  mortgages,  where  the  coinsurance  lender is IFI.
                  These  investments  were made on behalf of the  Partnership by
                  the former  managing  general  partner.  As  structured by the
                  former  managing  general  partner,   with  respect  to  these
                  mortgages, the Partnership bears the risk of loss upon default
                  for IFI's portion of the  coinsurance  loss on these  mortgage
                  investments.


<PAGE>18

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

<TABLE>
<CAPTION>


                                                           December 31, 1998                         December 31, 1997
                                                 Fair           Amortized     Face           Fair         Amortized      Face
                                                Mkt. Value      Cost          Value        Mkt. Value        Cost        Value
                                               -----------   ------------  ------------   ------------   -----------  -----------
<S>                                            <C>           <C>           <C>            <C>            <C>          <C>
The Breakers at Golf
  Mill(1)(2)                                   $20,470,263     22,113,145  $ 22,113,146    $20,873,845   $22,309,235  $22,309,236
Summerwind Apts.-Phase
  II(1)(2)                                       8,638,778      7,913,874     9,307,962      8,809,008     7,959,366    9,378,179
                                               -----------   ------------  ------------    -----------   -----------  -----------
                                               $29,109,041     30,027,019  $ 31,421,108    $29,682,853    30,268,601   31,687,415
                                               ===========   ============  ============    ===========   ===========  ===========

(1) As of March 5, 1999,  the  mortgagor  was current with respect to payment of
principal  and  interest  on this  mortgage.  

(2)  There  were  no  loan  losses recognized  for the years  ended,  1998 and 
1997.  The  cumulative  loan  losses recognized  in prior years were  $980,000
for The  Breakers  at Golf Mill,  and $1,511,743 for Summerwind Apartments - 
Phase II.

</TABLE>
         C.       FHA-Insured Loans
                  -----------------
                  Listed  below is the  Partnership's  aggregate  investment  in
         fully insured  Originated Insured Mortgages as of December 31, 1998 and
         1997:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                 1998                      1997
                                                            ---------------         ----------------
<S>                                                         <C>                     <C>
Number of Mortgages(1)(2)(3)                                              1                        3
Amortized Cost                                                 $  5,721,754             $ 22,609,310
Face Value                                                        5,721,754               22,213,954
Fair Value                                                        5,725,377               22,428,570


(1) On February 28, 1998, the mortgage on Olmstead Park  Apartments was prepaid.
The  Partnership  received  net  proceeds of  approximately  $6.8  million,  and
recognized  a gain of  approximately  $780,000  for the year ended  December 31,
1998. A distribution  of $0.73 per Unit related to this  prepayment was declared
in March 1998 and paid to Unitholders in May 1998.

(2)  On September 1, 1998, the mortgage on Water's Edge II was prepaid. The 
Partnership received net proceeds of approximately $11.0  million,  and  
recognized a gain of approximately $223,000 for the year ended December 31,  
1998.  A  distribution  of $1.19 per Unit  related to this prepayment was 
declared in September  1998 and paid to  Unitholders in November 1998.

(3)  During  August  1997,  the  mortgage  on  Parkside  Estates  was  prepaid.
The Partnership received net proceeds of approximately $7.1 million and 
recognized a gain of approximately  $20,700 on this prepayment. A  distribution
of $0.76 per Unit  related to this  prepayment  was declared in September 1997 
and was paid in November 1997.

</TABLE>
                  Listed  below is the  Partnership's  aggregate  investment  in
         fully insured  Acquired  Insured  Mortgages as of December 31, 1998 and
         1997:

<PAGE>19

<TABLE><CAPTION>
                                                                             December 31,
                                                                  1998                     1997
                                                             --------------           --------------
<S>                                                          <C>                      <C>
Number of Mortgages                                                       2                        2
Amortized Cost                                                 $  1,055,778             $  1,094,502
Face Value                                                        1,053,273                1,091,827
Fair Value                                                        1,061,917                1,107,188

</TABLE>

                  As of  March 5,  1999,  all of the  Partnership's  FHA-Insured
         Loans were  current  with  respect  to the  payment  of  principal  and
         interest.

                  All of the FHA-Insured  Loans contain  Participations.  During
         the years ended  December  31,  1998,  1997 and 1996,  the  Partnership
         received  additional   interest  of  $69,820,   $134,769  and  $63,045,
         respectively,  from the FHA-Insured Loans which contain Participations.
         These  amounts  are  included  in  mortgage  investment  income  on the
         accompanying statements of income and comprehensive income.

         Results of Operations
         ---------------------
         1998 versus 1997
         ----------------
         Net  earnings  decreased  approximately  $900,000  or 9%  for  1998  as
         compared  to 1997,  primarily  as a result of a  decrease  in  mortgage
         investment  income caused by the reduction in the mortgage  asset base.
         This decrease was partially  offset by an increase in net gains on 
         mortgage dispositions.

         Mortgage  investment income decreased by approximately $2.3 million for
         1998 as  compared  to 1997.  This  decrease  was  primarily  due to the
         prepayment  of the mortgages on  Northpoint  Apartments,  Olmstead Park
         Apartments,  Arbor Village,  Water's Edge II Apartments,  and Olde Mill
         Apartments, as discussed previously.

         Interest and other income  increased for 1998 as compared to 1997. This
         increase was primarily due to the temporary investment of proceeds from
         mortgage prepayments.

         Net realized gains on mortgage dispositions and modifications increased
         for 1998 as compared to 1997. Gains or losses on mortgage  dispositions
         and  modifications  are  based  on the  number,  carrying  amounts  and
         proceeds of mortgage investments disposed of during the period.  During
         1998, the  Partnership  recognized  gains on mortgage  dispositions  of
         approximately  $1.1 million  related to the prepayment of the mortgages
         on Northpoint  Apartments,  Olmstead Park  Apartments,  Water's Edge II
         Apartments, and Olde Mill Apartments. This compares to gains recognized

<PAGE>20

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

         in 1997 of  approximately  $21,000  related  to the  prepayment  of the
         mortgage on Parkside Estates.  During 1998, the Partnership  incurred a
         loss of  approximately  $350,000 on the  disposition of the mortgage on
         Arbor  Village,  compared  to no losses in 1997.  Additionally,  during
         1997, the Partnership  provided $375,000 to reserve for possible losses
         in  connection  with a claim filed with HUD for the mortgage on Water's
         Edge of New Jersey.

         1997 versus 1996
         ----------------
         Net  earnings  decreased  for 1997 as compared to 1996  primarily  as a
         result of a decrease in the mortgage asset base.

         Mortgage investment income decreased for 1997 as compared to 1996. This
         decrease  was  primarily  due to the  prepayment  of  the  mortgage  on
         Parkside Estates and principal curtailment on the mortgage on Olde Mill
         Apartments, as discussed previously, as well as the normal amortization
         of the mortgage base.

         Interest  and other income  increased  slightly for 1997 as compared to
         1996.  This increase was  primarily due to the temporary  investment of
         proceeds from mortgage prepayments.

         Net realized gains on mortgage dispositions and modifications increased
         for 1997 as compared to 1996.  During 1997,  the  Partnership  incurred
         gains on  mortgage  dispositions  and  modifications  of  approximately
         $21,000 related to the prepayment of the mortgage on Parkside  Estates.
         This compares to losses  recognized in 1996 of  approximately  $378,000
         related to the  prepayment of the mortgage on Harbor View Estates,  the
         partial  settlement  of the  coinsurance  claim in Water's  Edge of New
         Jersey  and the  modification  of the  mortgage  on  Turn  at  Gresham.
         Additionally, during 1997, the Partnership provided $375,000 to reserve
         for possible losses on its portfolio.

         Liquidity and Capital Resources
         -------------------------------
         The  Partnership's  operating cash  receipts,  derived from payments of
         principal  and interest on Insured  Mortgages,  plus cash receipts from
         interest on  short-term  investments  are the  Partnership's  principal
         sources of cash flows, and were sufficient for the years ended December
         31, 1998, 1997 and 1996 to meet operating requirements. The Partnership
         anticipates   its  cash  flows  to  be  sufficient  to  meet  operating
         requirements for 1999.

         The basis for paying  distributions to Unitholders is net proceeds from
         mortgage  dispositions,  if any, and cash flow from  operations,  which
         includes regular  interest income and principal from Insured  Mortgages
         after  paying all  expenses of the  Partnership.  Although  the Insured

<PAGE>21

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

         Mortgages yield a fixed monthly  mortgage  payment once purchased,  the
         cash  distributions  paid to the  Unitholders  will  vary  during  each
         quarter  due to (1) the  fluctuating  yields  in the  short-term  money
         market where the monthly  mortgage  payments  received are  temporarily
         invested  prior to the  payment  of  quarterly  distributions,  (2) the
         reduction  in the  asset  base and  monthly  mortgage  payments  due to
         monthly  mortgage  payments  received  or  mortgage  dispositions,  (3)
         variations in the cash flow  attributable to the delinquency or default
         of  Insured   Mortgages  and  professional  fees  and  foreclosure  and
         acquisition  costs incurred in connection with those Insured  Mortgages
         and (4) variations in the Partnership's operating expenses.

         Cash flow - 1998 versus 1997
         ----------------------------
         Net  cash  provided  by  operating  activities  decreased  for  1998 as
         compared to 1997  primarily due to a reduction in net  earnings,  which
         was caused by a decrease in the mortgage asset base. Additionally, cash
         provided by operating activities decreased for 1998 as compared to 1997
         due to a decrease in receivables and other assets.

         Net  cash  provided  by  investing  activities  increased  for  1998 as
         compared  to  1997  primarily  due to the  increase  in the  amount  of
         mortgage disposition proceeds received in 1998 as compared to 1997.

         Net cash used in financing activities increased for 1998 as compared to
         1997 due to an increase in  distributions  paid to partners as a result
         of the disposition of the mortgages on Northpoint Apartments,  Olmstead
         Park  Apartments,  Arbor  Village,  Water's Edge II Apartments and Olde
         Mill Apartments,  and a principal  curtailment made on the mortgage for
         Olde Mill Apartments prior to the disposition of the mortgage.

         Cash flow - 1997 versus 1996
         ----------------------------
         Net  cash  provided  by  operating  activities  decreased  for  1997 as
         compared  to 1996  primarily  due to a decrease in the  mortgage  asset
         base.

         Net  cash  provided  by  investing  activities  increased  for  1997 as
         compared to 1996  primarily due to the  expiration of the  reinvestment
         period as of  December  31,  1996,  thereby  resulting  in no  mortgage
         acquisitions in 1997.

         Net cash used in financing activities increased for 1997 as compared to
         1996 due to an increase in  distributions  paid to partners as a result
         of special  distributions  and  capital  gains in  connection  with the
         disposition of the mortgages on Water's Edge of New Jersey and Parkside
         Estates, and the principal curtailment on Olde Mill Apartments.


<PAGE>22

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

         The Partnership's principal market risk is exposure to changes in
interest rates in the US Treasury market,  which coupled with the related spread
to treasury  investors required for the Partnership's  Insured  Mortgages,  will
cause fluctuations in the market value of the Partnership's assets.

         The table below provides  information about the  Partnership's  Insured
Mortgages.  The table  presents  anticipated  principal  and interest cash flows
based  upon  the  assumptions  used in  determining  the  fair  value  of  these
securities and the related weighted average interest rates by expected maturity.

<TABLE><CAPTION>
                                                                                                              Fair
                                    1999      2000     2001      2002     2003       Thereafter      Total    Value
                                    ----      ----     ----      ----     ----       ----------      -----    -----
<S>                                 <C>       <C>      <C>       <C>      <C>        <C>             <C>      <C>
Insured Mortgages
(in millions)                      $17.7     $16.7    $15.0     $13.7     $12.6           $92.7     $168.4   $106.3

Average Interest Rate               7.68%     7.69%    7.70%     7.70%     7.70%           7.81%        --       --
</TABLE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The information  required by this item is contained on pages 33 through
         62.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                           ACCOUNTING AND FINANCIAL DISCLOSURES

         None.


<PAGE>23

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         (a),(b),(c),(e)

         The Partnership has no officers or directors. CRIIMI, Inc. (the General
Partner)  holds a General  Partnership  interest  of 4.9%.  The  affairs  of the
Partnership are managed by the General Partner,  which is wholly owned by CRIIMI
MAE, a Corporation whose shares are listed on the New York Stock Exchange. Prior
to June 30, 1995,  CRIIMI MAE was managed by an advisor whose general partner is
CRI.  However,  effective June 30, 1995,  CRIIMI MAE became a  self-administered
REIT, and, as a result, the advisor no longer advises CRIIMI MAE.

         AIM Acquisition  Partners,  L.P. (the Advisor) serves as the advisor of
the  Partnership.  AIM  Acquisition  Corporation  is the general  partner of the
Advisor  and  the  limited  partners  include,  but  are  not  limited  to,  AIM
Acquisition,  The Goldman Sachs Group, L.P, Broad, Inc. and CRIIMI MAE. Pursuant
to the terms of certain  amendments to the  Partnership  Agreement,  the General
Partner is  required  to receive  the  consent  of the  Advisor  prior to taking
certain  significant  actions  which affect the  management  and policies of the
Partnership.

         The  General  Partner is also the general  partner of AIM 84  (American
Insured Mortgage Investors L.P. Series 84, referred to herein as AIM 84), AIM 85
(American Insured Mortgage Investors L.P. - Series 85, referred to herein as AIM
85) and AIM 86 (American  Insured Mortgage  Investors L.P. - Series 86, referred
to herein as AIM 86), limited partnerships with investment objectives similar to
those of the Partnership.

         The following  table sets forth  information  concerning  the executive
officers and directors of the General Partner as of March 15, 1999:

<TABLE><CAPTION>


 Name                                  Age                          Position
-------                               -----                        ------------
<S>                                   <C>                         <C>
William B. Dockser                      62                         Chairman of the Board

H. William Willoughby                   52                         President and Secretary

Frederick J. Burchill (a)               50                         Executive Vice President

Cynthia O. Azzara                       39                         Senior Vice President,  Chief  Financial  Officer and
                                                                     Treasurer

Brian L. Hanson                         37                         Senior Vice President

David B. Iannarone                      38                         Senior Vice President and General Counsel

Garrett G. Carlson, Sr.                 61                         Director

G. Richard Dunnells                     61                         Director

Robert Merrick                          54                         Director

Robert E. Woods                         51                         Director

</TABLE>

<PAGE>24

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - Continued

         William B. Dockser has served as Chairman of the Board of the General 
Partner since 1991.  Mr. Dockser has been Chairman of the Board of CRIIMI MAE 
since 1989 and Chairman of the Board of CRIIMI MAE Financial Corporation since 
1995.  Mr. Dockser is also the founder of CRI, serving as its Chairman of the 
Board since 1974.

         H.  William  Willoughby  has served as President  and  Secretary of the
General  Partner since 1991.  Mr.  Willoughby  has been  President of CRIIMI MAE
since 1990 and a Director and  Secretary  of CRIIMI MAE since 1989.  He has also
served as a  director  of CRIIMI  MAE  Financial  Corporation  since  1995.  Mr.
Willoughby has been a director of CRI since 1974,  Secretary of CRI from 1974 to
1990 and President of CRI since 1990.

(a) Mr.  Burchill was Executive Vice President of the General  Partner until his
resignation from CRIIMI MAE and the General Partner on February 8, 1999.

         Cynthia O. Azzara has served as Chief Financial  Officer of the General
Partner since 1994. Ms. Azzara has served as Chief  Financial  Officer of CRIIMI
MAE since 1994. She has also served as Senior Vice President of CRIIMI MAE since
1995 and Treasurer of CRIIMI MAE since 1997,  Accounting and Finance Departments
of CRI from 1985 to June 1995.

         Brian L.  Hanson has served as Senior  Vice  President  of the  General
Partner  since March 1998.  Mr.  Hanson has served as Senior Vice  President  of
CRIIMI MAE since March 1998;  Group Vice President of CRIIMI MAE from March 1996
to March  1998;  Chief  Operating  Officer,  Director  of Asset  Operations  and
Portfolio Director of JCF Partners, Lanham, Maryland from 1991 to March 1996.

         David B.  Iannarone has served as Senior Vice  President of the General
Partner since March 1998.  Mr.  Iannarone has served as Senior Vice President of
CRIIMI  MAE since  March  1998;  General  Counsel of CRIIMI MAE since July 1996;
Counsel-Securities     and    Finance    for    Federal    Deposit     Insurance
Corporation/Resolution Trust Corporation from 1991 to July 1996.

         Garrett G. Carlson, Sr. has served as Director of the General Partner
since 1989.  Mr. Carlson has served as Director of CRIIMI MAE since 1989; 
President of Can-American Realty Corp. and Canadian Financial Corp. since 1979 
and 1974, respectively; President of Garrett Real Estate Development since 1982;
President of the Satellite Broadcasting Corporation since 1996; Chairman of the
Board of SCA Realty Holdings Inc. from 1985 to 1995; Vice Chairman of Shelter 
Development Corporation Ltd. from 1983 to 1995 and member of the board of Bank
Windsor from 1992 to 1994.

<PAGE>25

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         G. Richard Dunnells has served as Director of the General Partner since
1991.  Mr.  Dunnells has served as Director of CRIIMI MAE since 1991;  Firm-wide
Hiring Partner,  Partner in the  Washington,  D.C. office and former Director of
the law firm of Holland & Knight since January 1994; Chairman of the Washington,
D.C. law firm of Dunnells & Duvall from 1989 to 1993; Senior Partner of such law
firm from 1973 to 1993;  Special  Assistant  to the  Under-Secretary  and Deputy
Assistant Secretary for Housing and Urban Renewal and Deputy Assistant Secretary
for Housing Management with the U.S. Department of Housing and Urban Development
from 1969 to 1973; President's Commission on Housing from 1981 to 1982.

         Robert J. Merrick has served as Director of the General  Partner  since
1997. Mr.  Merrick has served as Director of CRIIMI MAE since 1997;  Director of
MCG Credit  Corporation since February 1998;  Executive Vice President from 1985
and Chief Credit Officer of Signet Banking Corporation through 1997, also served
as Chairman of the Credit Policy Committee and member of the Asset and Liability
Committee and Management Committee; Credit Officer-Virginia Banking Corporation,
an affiliate of Signet  Bank/Virginia,  from 1980 to 1984; Senior Vice President
of Bank of Virginia from 1976 to 1980.

         Robert E. Woods has served as  Director of the  General  Partner  since
1998.  Mr.  Woods has  served as  Director  of CRIIMI MAE since  1998;  Managing
Director and head of loan syndications for the Americas at Societe Generale, New
York since 1997;  Managing  Director,  head of Real Estate  Capital  Markets and
Mortgage-backed  Securities  division,  Citicorp  from  1991  to  1997,  Head of
Citicorp's  syndications,  private  placements,  money markets and  asset-backed
businesses from 1985 to 1990.


                (d)      There is no family relationship between any of the 
                         officers and directors of the General Partner.

                (f)      Involvement in certain legal proceedings.

                         None.

                (g)      Promoters and control persons.

                         Not applicable.

                (h)      Section 16(a)-Beneficial Ownership Reporting Compliance
                         -------------------------------------------------------
                         Based  solely  on its  review  of  Forms  3 and 4 and
                         amendments thereto furnished to the Partnership,  and
                         written   representations   from  certain   reporting
                         persons  that  no Form 5s  were  required  for  those
                         persons,  the Partnership believes that all reporting
                         persons have filed on a timely basis Forms 3, 4 and 5
                         as  required in the fiscal  year ended  December  31,
                         1998.

<PAGE>26

ITEM 11. EXECUTIVE COMPENSATION

         The  Partnership  does not have any directors or officers.  None of the
directors  or officers  of the General  Partner  receive  compensation  from the
Partnership  and the General  Partner  does not receive  reimbursement  from the
Partnership for any portion of their salaries.  The information required by Item
11 is hereby  incorporated  herein by reference herein to Note 8 of the notes to
the Partnership's financial statements.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT

         (a) As of December 31, 1998, no person was known by the  Partnership to
be the  beneficial  owner  of  more  than  5% of the  outstanding  Units  of the
Partnership.

         (b) As of December 31, 1998,  neither the officers and directors,  as a
group,  of the  General  Partner  nor any  individual  director  of the  General
Partner,  are  known  to own  more  than  1% of  the  outstanding  Units  of the
Partnership.

         (c) There are no arrangements  known to the Partnership,  the operation
of which  may at any  subsequent  date  result  in a change  in  control  of the
Partnership.


<PAGE>27

                                     PART IV

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     (a)  Transactions with management and others.

              Note 8 of the  notes to the  Partnership's  financial  statements,
              which  contains  a  discussion  of the  amounts,  fees  and  other
              compensation  paid or accrued by the  Partnership to the directors
              and   executive   officers  of  the  General   Partner  and  their
              affiliates, is hereby incorporated by reference herein.

     (b) Certain business relationships.

              Other than as set forth in Item 11 of this report, which is hereby
              incorporated by reference herein,  the Partnership has no business
              relationship with entities of which the former general partners or
              the  current  General  Partner of the  Partnership  are  officers,
              directors or equity owners.

     (c) Indebtedness of management.

              None.

     (d) Transactions with promoters.

              Not applicable.


<PAGE>28

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
            FORM 8-K

   (a)(1)   Financial Statements:

                                                                Page
         Description                                            Number
         -----------                                            ------
         Balance Sheets as of December 31, 1998
           and 1997                                               35

         Statements of Income and Comprehensive income
       for the years ended December 31, 1998, 1997
       and 1996                                                   36

         Statements of Changes in Partners' Equity for
           the years ended December 31, 1998, 1997 and
           1996                                                   37

         Statements of Cash Flows for the years ended
           December 31, 1998, 1997 and 1996                       38

         Notes to Financial Statements                            39


     (a)(2)           Financial Statement Schedules:

                      IV - Mortgage Loans on Real Estate          55

                      All other  schedules  have been  omitted  because they are
                      inapplicable, not required, or the information is included
                      in the Financial Statements or Notes thereto.

     (a)(3)           Exhibits:

   3.                 Certificate  of Limited  Partnership  is  incorporated  by
                      reference  to  Exhibit  4(a)  to  Amendment  No.  1 to the
                      Partnership's  Registration  Statement  on Form  S-11 (No.
                      33-12479) filed with the Commission on June 10, 1987.

   4.                 Agreement   of  Limited   Partnership,   incorporated   by
                      reference to Exhibit 3 to the Post-Effective Amendment No.
                      1 to the Partnership's Registration Statement on Form S-11
                      (No.  33-12479) filed with the Commission on March 8, 1988
                      (such    Amendment   is   referred   to   hereinbelow   as
                      Post-Effective Amendment No.1).

   4.1                Material Amendments to Agreement of Limited Partnership 
                      are incorporated by reference to Exhibit 3(a) to 
                      Post-Effective Amendment No.1.

   4.2                Amendment to the Amended and Restated Agreement of Limited
                      Partnership of the Partnership dated February 12, 1990.

<PAGE>29

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
            FORM 8-K - Continued


  10                  Escrow Agreement is incorporated by reference to Exhibit 
                      10(a) to the Partnership's Annual Report on Form 10-K for
                      the year ended December 31, 1987.

  10.1                Origination and Acquisition Services Agreement is 
                      incorporated by reference to Exhibit 10(b) to the 
                      Partnership's Annual Report on Form 10-K for the year 
                      ended December 31, 1987.

  10.2                Management Services Agreement is incorporated by reference
                      to Exhibit  10(c) to the  Partnership's  Annual  Report on
                      Form 10-K for the year ended December 31, 1987.

  10.3                Disposition   Services   Agreement  is   incorporated   by
                      reference  to Exhibit  10(d) to the  Partnership's  Annual
                      Report on Form 10-K for the year ended December 31, 1987.

  10.4                Agreement among the former managing general partner, the 
                      former associate general partner and Integrated Resources,
                      Inc. is incorporated by reference to Exhibit 10(e) to the
                      Partnership's Annual Report on Form 10-K for the year 
                      ended December 31, 1987.

  10.5                Reinvestment Plan is incorporated by reference to Exhibit
                      10(f) to Post- Effective Amendment No. 1.

  10.6                Mortgagor-Participant Agreement, Mortgage Assignment of 
                      Rents and Security Agreement and Mortgage Note with 
                      respect to The Breakers (sometimes also referred to as the
                      Niles Senior Lifestyle Community) is incorporated by 
                      reference to Exhibit 10(g) to Post-Effective
                      Amendment No. 1.

  10.7                Mortgagor-Mortgagee  Agreement, Mortgage Note and Mortgage
                      with respect to the Arlington  development is incorporated
                      by reference to Exhibit 10(h) to Post-Effective  Amendment
                      No. 1.

  10.8                Pages A-1 - A-5 of the Partnership Agreement of 
                      Registrant, incorporated by reference to Exhibit 28 to the
                      Partnership's Annual Report on Form 10-K for the year 
                      ended December 31, 1990.

  10.9                Purchase Agreement among AIM Acquisition, the former 
                      managing general partner, the former corporate general 
                      partner, IFI and Integrated dated as of December 13, 1990,
                      as amended January 9, 1991, incorporated by reference to 
                      Exhibit 28(a) to the Partnership's Annual Report on Form 
                      10-K for the year ended December 31, 1990.

<PAGE>30

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
            FORM 8-K - Continued


  10.10               Purchase Agreement among CRIIMI, Inc., AIM Acquisition, 
                      the former managing general partner, the former corporate 
                      general partner, IFI and Integrated dated as of December 
                      13, 1990 and executed as of March 1, 1991, incorporated by
                      reference to Exhibit 28(b) to the Partnership's Annual 
                      Report on Form 10-K for the year ended December 31, 1990.

10.11                 Amendments to Partnership Agreement dated August 13, 1991.
                      Incorporated by reference to Exhibit 28(c) to the 
                      Partnership's  Annual Report on Form 10-K for the year 
                      ended December 31, 1991.

  10.12               Sub-management Agreement by and between AIM Acquisition 
                      and CRI/AIM Management, Inc., dated as of March 1, 1991, 
                      incorporated by reference to Exhibit 28(e) the 
                      Partnership's Annual Report on Form 10-K for the year 
                      ended December 31, 1992.

  10.13               Expense Reimbursement Agreement by Integrated Funding Inc.
                      and the AIM Funds, effective December 31, 1992, 
                      incorporated by reference to Exhibit 28(f) to the 
                      Partnership's Quarterly Report on Form 10-Q for the 
                      quarter ended June 30, 1993.

  10.14               Non-negotiable promissory note from American Insured 
                      Mortgage Investors L.P. - Series 85 in the amount of 
                      $319,074.67 dated April 1, 1994, incorporated by reference
                      to Exhibit 10(p) to the Partnership's Annual Report on 
                      Form 10-K for the year ended December 31, 1994.

  10.15               Non-negotiable promissory note from American Insured 
                      Mortgage Investors L.P. - Series 86 in the amount of 
                      $478,612.00 dated April 1, 1994, incorporated by reference
                      to Exhibit 10(q) to the Partnership's Annual Report on 
                      Form 10-K for the year ended December 31, 1994.

  10.16               Amendment to Reimbursement Agreement by Integrated 
                      Funding, Inc. and the AIM Funds, effective April 1, 1994,
                      incorporated by reference to Exhibit 10(r) to the 
                      Partnership's Annual Report on Form 10-K for the year 
                      ended December 31, 1994.

  10.17               Second Amendment to Reimbursement Agreement by Integrated
                      Funding, Inc. and the AIM Funds, effective April 1, 1997,
                      incorporated by reference to Exhibit 10.17 to the 
                      Partnership's Annual Report on Form 10-K for the year 
                      ended December 31, 1997.

  10.18               Non-negotiable promissory note from American Insured 
                      Mortgage Investors, L.P. - Series 86, in the amount of 
                      $658,486 dated April 1, 1997, incorporated by reference to
                      Exhibit 10.18 to the Partnership's Annual Report on 
                      Form 10-K for the year ended December 31, 1997.

<PAGE>31

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
            FORM 8-K - Continued


  27.                 Financial Data Schedule (filed herewith).

  (b)                 Reports on Form 8-K filed during the last quarter of the 
                      fiscal year:  None.

                      All other items are not applicable.



<PAGE>32


                                                 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.

                                             AMERICAN INSURED MORTGAGE
                                             INVESTORS L.P. - SERIES 88
                                             (Registrant)

                                              By:    CRIIMI, Inc.
                                                     General Partner

/s/ March 31, 1999                                  /s/ William B. Dockser
---------------------------                         -------------------------
DATE                                                William B. Dockser
                                                    Chairman of the Board and
                                                    Principal Executive Officer


/s/ March 31, 1999                                  /s/ H. William Willoughby
---------------------------                         -------------------------
DATE                                                H. William Willoughby
                                                    President and Director


/s/ March 31, 1999                                   /s/ Cynthia O. Azzara
---------------------------                          -------------------------
DATE                                                 Cynthia O. Azzara
                                                     Principal Financial and
                                                       Accounting Officer

/s/ March 31, 1999                                   /s/ Garrett G. Carlson, Sr.
---------------------------                          -------------------------
DATE                                                 Garrett G. Carlson, Sr.
                                                     Director

/s/ March 31, 1999                                   /s/ G. Richard Dunnells
---------------------------                          -------------------------
DATE                                                 G. Richard Dunnells
                                                     Director


/s/ March 31, 1999                                   /s/ Robert Merrick
---------------------------                          -------------------------
DATE                                                 Robert Merrick
                                                     Director

/s/ March 31, 1999                                   /s/ Robert E. Woods
---------------------------                          -------------------------
DATE                                                 Robert E. Woods
                                                     Director


<PAGE>33


        









              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

              Financial Statements as of December 31, 1998 and 1997

            and for the Years Ended December 31, 1998, 1997 and 1996


<PAGE>34



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
  American Insured Mortgage Investors L.P. - Series 88:

         We have audited the  accompanying  balance  sheets of American  Insured
Mortgage  Investors L.P. - Series 88 (the  Partnership)  as of December 31, 1998
and 1997 and the related statements of income and comprehensive income,  changes
in partners'  equity and cash flows for the years ended December 31, 1998,  1997
and 1996. These financial  statements and the schedule referred to below are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements and the schedule based on our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material  respects,  the financial position of the Partnership as
of December 31, 1998 and 1997,  and the results of its  operations  and its cash
flows for the years ended December 31, 1998,  1997 and 1996, in conformity  with
generally accepted accounting principles.

         Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule IV-Mortgage Loans on Real Estate
as of  December  31,  1998 is  presented  for  purposes  of  complying  with the
Securities and Exchange Commission's rules and regulations and is not a required
part of the basic  financial  statements.  The  information in this schedule has
been  subjected  to the auditing  procedures  applied in our audits of the basic
financial  statements  and, in our  opinion,  is fairly  stated in all  material
respects in relation to the basic financial statements taken as a whole.



Arthur Andersen LLP
Washington, D.C.
March 31, 1999


<PAGE>35

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                            As of December 31,
                                                                                        1998                  1997
                                                                                   ------------           ------------
<S>                                                                                <C>                    <C>
                                                      ASSETS
Investment in FHA-Insured Certificates and 
  GNMA Mortgage-Backed  Securities,  at fair value:
  Acquired insured mortgages                                                       $ 67,018,830           $ 74,963,747
  Originated insured mortgages                                                       32,531,218             44,222,754
                                                                                   ------------           ------------
                                                                                     99,550,048            119,186,501
                                                                                   ------------           ------------
Investment in FHA-Insured Loans, at amortized cost, net of unamortized  discount
  and premium:
  Originated insured mortgages                                                        5,721,754             22,609,310
  Acquired insured mortgages                                                          1,055,778              1,094,502
                                                                                   ------------           ------------
                                                                                      6,777,532             23,703,812

Cash and cash equivalents                                                             5,524,324              2,721,306

Investment in affiliates                                                              1,266,971              1,281,884

Notes receivable from affiliates and due from affiliates                                705,507                728,684

Receivables and other assets                                                          2,639,242              2,993,538
                                                                                   ------------           ------------
         Total assets                                                              $116,463,624           $150,615,725
                                                                                   ============           ============
                                         LIABILITIES AND PARTNERS' EQUITY
Distributions payable                                                              $  1,943,679           $  3,517,134

Accounts payable and accrued expenses                                                    77,729                121,331
                                                                                   ------------           ------------
         Total liabilities                                                            2,021,408              3,638,465
                                                                                   ------------           ------------
Partners' equity:
 Limited partners' equity, 15,000,000 Units
    authorized, 8,802,091 Units issued and outstanding                              118,004,167            147,475,554
 General partner's deficit                                                           (3,057,885)            (1,539,380)
  Less:  Repurchased Limited Partnership
    Units - 50,000 Units                                                               (618,750)              (618,750)
 Accumulated other
    comprehensive income                                                                114,684              1,659,836
                                                                                   ------------           ------------

         Total partners' equity                                                     114,442,216            146,977,260
                                                                                   ------------           ------------
         Total liabilities and  partners' equity                                   $116,463,624           $150,615,725
                                                                                   ============           ============
                                    The   accompanying  notes  are  an  integral
                                          part of these financial statements.
</TABLE>


<PAGE>36

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

<TABLE>
<CAPTION>

                                                                         For the years ended December 31,
                                                                   1998              1997             1996
                                                                -----------       -----------      -----------
         <S>                                                    <C>               <C>              <C>                 
         Income:
           Mortgage investment income                           $ 9,606,555       $11,892,090      $12,229,747
           Interest and other income                                391,565           274,652          235,386
                                                                -----------       -----------      -----------
                                                                  9,998,120        12,166,742       12,465,133
                                                                -----------       -----------      -----------
         Expenses:
           Asset management fee to related parties                1,287,672         1,469,320        1,503,297
           General and administrative                               287,395           245,921          291,178
                                                                -----------       -----------      -----------
                                                                  1,575,067         1,715,241        1,794,475
                                                                -----------       -----------      -----------
           Earnings before gains on
                     mortgage dispositions/modifications          8,423,053        10,451,501       10,670,658

         Gains on mortgage dispositions/modifications             1,106,588            20,746               --
         Losses on mortgage dispositions/modifications             (350,159)               --         (377,900)
         Provision for loss                                              --          (375,000)              --
                                                                -----------       -----------      -----------
                 Net earnings                                   $ 9,179,482       $10,097,247      $10,292,758
                                                                ===========       ===========        =========
                 Other comprehensive income                      (1,545,152)        1,801,409       (1,162,724)
                                                                -----------       -----------      -----------
                         Comprehensive income                   $ 7,634,330       $11,898,656      $ 9,130,034
                                                                ===========       ===========      ===========
         Net earnings allocated to:
           Limited partners - 95.1%                             $ 8,729,687       $ 9,602,482      $ 9,788,413
           General partner - 4.9%                                   449,795           494,765          504,345
                                                                -----------       -----------      -----------
                                                                $ 9,179,482       $10,097,247      $10,292,758
                                                                ===========       ===========      ===========

         Net earnings per Limited
           Partnership Unit
           outstanding - Basic                                  $      0.99       $      1.09      $      1.11
                                                                ===========       ===========      ===========


                                    The   accompanying  notes  are  an  integral
                                          part of these financial statements.
</TABLE>


<PAGE>37



                STATEMENTS OF CHANGES IN PARTNERS' EQUITY

              For the years ended December 31, 1998, 1997 and 1996

<TABLE><CAPTION>

                                                                         Repurchased            Accumulated
                                                                           Limited                 Other               Total
                                 Limited           General               Partnership           Comprehensive         Partner's    
                                 Partners          Partner                  Units                 Income              Equity 
                              --------------     --------------        ----------------      ----------------       -----------
<S>                             <C>                <C>                   <C>                   <C>                    <C>
Balance, January 1, 1996         159,332,082           (928,476)               (618,750)            1,021,151       158,806,007

  Net earnings                     9,788,413            504,345                      --                    --        10,292,758

  Adjustment to unrealized gains 
    (losses) on investment in 
    insured mortgages                     --                 --                      --            (1,162,724)       (1,162,724)

  Distributions paid or accrued of
    $1.22 per Unit, including return
    of capital of
    $0.11 per Unit               (10,738,551)          (553,301)                     --                    --       (11,291,852)
                              --------------     --------------        ----------------      ----------------       -----------
Balance, December 31, 1996       158,381,944           (977,432)               (618,750)             (141,573)      156,644,189

  Net earnings                     9,602,482            494,765                      --                    --        10,097,247

  Adjustment to unrealized gains on
    investments in insured mortgages      --                 --                      --             1,801,409         1,801,409

  Distributions paid or accrued of 
    $2.33 per Unit, including return
    of capital of
    $1.24 per Unit               (20,508,872)          (1,056,713)                     --                    --       (21,565,585)
                              --------------     ----------------      ------------------    ------------------       -----------
Balance, December 31, 1997       147,475,554           (1,539,380)               (618,750)            1,659,836       146,977,260

  Net earnings                     8,729,687              449,795                      --                    --         9,179,482

  Adjustment to unrealized gains 
   (losses) on investments in 
   insured mortgages                      --                   --                      --            (1,545,152)       (1,545,152)

  Distributions paid or accrued of 
    $4.34 per Unit, including return 
    of capital of 
    $3.35 per Unit               (38,201,074)          (1,968,300)                     --                    --       (40,169,374)
                              --------------     ----------------      ------------------    ------------------       -----------
Balance, December 31, 1998       118,004,167           (3,057,885)               (618,750)              114,684       114,442,216
                              ==============     ================      ==================    ==================       ===========
  Limited Partnership Units outstanding -
    basic, as of December 31, 1998, 1997,
    and 1996                                             8,802,091
                                                        ==========


                                        The accompanying  notes are an  integral
                                            part of these financial statements.

  </TABLE>


<PAGE>38

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                               For the years ended December 31,
                                                                                1998             1997          1996
                                                                            ------------    -------------   -----------
<S>                                                                         <C>             <C>             <C>
Cash flows from operating activities:
  Net earnings                                                              $  9,179,482    $ 10,097,247    $10,292,758

  Adjustments  to  reconcile  net  earnings to net cash  provided  
    by  operating activities:
    Gains on mortgage dispositions/modifications                              (1,106,588)        (20,746)            --
    Losses on mortgage dispositions/modifications                                350,159              --        377,900
    Changes in assets and liabilities:
      Decrease (increase) in investment in affiliate
        and due from affiliates                                                   38,090         (35,107)        11,542
      Decrease (increase) in receivables and other assets                        354,296       2,255,203       (335,872)
      Decrease in accounts payable and accrued expenses                          (43,602)        (12,153)       (25,608)
    Provision for loss                                                                --         375,000             --
                                                                            ------------    ------------    -----------
        Net cash provided by operating activities                              8,771,837      12,659,444     10,320,720
                                                                            ------------    ------------    -----------
Cash flows from investing activities:
  Proceeds from dispositions/modifications of
    Insured Mortgages                                                         33,845,966       7,016,157      8,571,748
  Investment in Acquired Insured Mortgages and advances on
    construction loans                                                                --              --     (9,416,014)
Receipt of principal payments                                                  1,928,044       1,952,500      1,037,314
                                                                            ------------    ------------    -----------
        Net cash provided by investing activities                             35,774,010       8,968,657        193,048
                                                                            ------------    ------------    -----------
Cash flows from financing activities:
  Distributions paid to partners                                             (41,742,829)    (20,825,136)   (11,476,964)
                                                                            ------------    ------------    -----------
        Net cash used in financing activities                                (41,742,829)    (20,825,136)   (11,476,964)
                                                                            ------------    ------------    -----------
Net increase (decrease) in cash and cash equivalents                           2,803,018         802,965       (963,196)

Cash and cash equivalents, beginning of year                                   2,721,306       1,918,341      2,881,537
                                                                            ------------    ------------    -----------
Cash and cash equivalents, end of year                                      $  5,524,324    $  2,721,306    $ 1,918,341
                                                                            ============    ============    ===========

                                     The   accompanying  notes  are an  integral
                                           part of these financial statements.


</TABLE>


<PAGE>39

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

1.       ORGANIZATION

         American Insured Mortgage Investors L.P. - Series 88 (the Partnership)
was formed under the Uniform Limited Partnership Act of the state of Delaware 
on February 13, 1987.

         CRIIMI, Inc. (the General Partner) holds a partnership interest of 4.9%
which includes shares acquired from the former assignor limited partner. CRIIMI,
Inc.  is a  wholly-owned  subsidiary  of  CRIIMI  MAE Inc.  (CRIIMI  MAE).  From
September 6, 1991  through  June 30, 1995,  CRIIMI MAE was managed by an advisor
whose general  partner is CRI, Inc.  (CRI).  However,  effective  June 30, 1995,
CRIIMI MAE became a  self-administered  real estate investment trust (REIT) and,
as a result, the advisor no longer advises CRIIMI MAE.

         AIM Acquisition  Partners,  L.P. (the Advisor) serves as the advisor to
the Partnership.  AIM Acquisition  Corporation (AIM  Acquisition) is the general
partner of the Advisor,  and the limited partners  include,  but are not limited
to, AIM Acquisition, The Goldman Sachs Group, L.P., Broad, Inc., and CRIIMI MAE.

         Effective  September 6, 1991 and through June 30, 1995, a  sub-advisory
agreement (the Sub-advisory Agreement) existed whereby CRI/AIM Management, Inc.,
an  affiliate  of CRI,  managed the  Partnership's  portfolio  and  directed the
acquisition  and  disposition  of the  Partnership's  mortgage  investments.  In
connection with the  transaction in which CRIIMI MAE became a  self-administered
REIT,  an  affiliate of CRIIMI MAE acquired  the  Sub-advisory  Agreement.  As a
consequence of this transaction, effective June 30, 1995, CMSLP, an affiliate of
CRIIMI MAE, manages the Partnership's portfolio.

         Until the change in the Partnership's  investment  policy, as discussed
below,  the  Partnership  was in the  business  of  originating  mortgage  loans
(Originated  Insured  Mortgages) and acquiring  mortgage loans (Acquired Insured
Mortgages, and together with Originated Insured Mortgages, referred to herein as
Insured  Mortgages).  As of December 31, 1998, the  Partnership  had invested in
either Originated Insured Mortgages which are insured or guaranteed, in whole or
in  part,  by the  Federal  Housing  Administration  (FHA) or  Acquired  Insured
Mortgages which are fully insured (as more fully described below).

         Effective  September  19, 1991,  the General  Partner  changed,  at the
Advisor's  recommendation,  the investment policies of the Partnership to invest
only in Acquired Insured  Mortgages which are fully insured or guaranteed by the
Federal  National  Mortgage   Association,   the  Government  National  Mortgage
Association (GNMA), FHA or the Federal Home Loan Mortgage Corporation.

         The Partnership's  reinvestment period expired on December 31, 1996 and
the Partnership Agreement states that the Partnership will terminate on December
31, 2021, unless  previously  terminated under the provisions of the Partnership
Agreement.  After the expiration of the reinvestment  period, the Partnership is
required  (subject to the conditions set forth in the Partnership  Agreement) to
distribute disposition proceeds to its Unitholders.

<PAGE>40

             AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

1.       ORGANIZATION - Continued

         The General Partner listed the  Partnership's  Units for trading on the
American  Stock  Exchange  (AMEX)  on  January  18,  1994,  in order to  provide
investment  liquidity as contemplated in the Partnership's  original prospectus.
The Units are traded under the symbol "AIK."

         On October 5, 1998, CRIIMI MAE, the parent of the General Partner,  and
the parent to AIM Investment L.P., and CRIIMI MAE Management, Inc., an affiliate
of CRIIMI MAE and  provider  of  personnel  and  administrative  services to the
Partnership,  filed a voluntary petition for reorganization  under Chapter 11 of
the U.S.  Bankruptcy  Code.  As a  debtor-in-possession,  CRIIMI MAE will not be
permitted  to provide  any  available  capital to the  General  Partner  without
approval from the bankruptcy  court.  This  restriction or potential loss of the
availability of a potential  capital resource could adversely affect the General
Partner  and  the  Partnership;   however,   CRIIMI  MAE  has  not  historically
represented  a  significant  source of capital  for the  General  Partner or the
Partnership.  Such bankruptcy filings could also result in the potential need to
replace   CRIIMI  MAE   Management,   Inc.  as  a  provider  of  personnel   and
administrative services to the Partnership.

2.       SIGNIFICANT ACCOUNTING POLICIES

         Method of Accounting
         --------------------
                  The  Partnership's  financial  statements  are prepared on the
         accrual  basis of  accounting in  accordance  with  generally  accepted
         accounting  principles.  The  preparation  of financial  statements  in
         conformity  with  generally  accepted  accounting  principles  requires
         management to make estimates and  assumptions  that affect the reported
         amounts  of  assets  and  liabilities  at the  date  of  the  financial
         statements and the reported amounts of revenues and expenses during the
         reporting period. Actual results could differ from those estimates.


<PAGE>41

             AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

2.       SIGNIFICANT ACCOUNTING POLICIES - Continued

         Investment in Mortgages
         -----------------------
                  The Partnership's investment in Insured Mortgages is comprised
         of participation  certificates  evidencing a 100% undivided  beneficial
         interest in government  insured  multifamily  mortgages  issued or sold
         pursuant to FHA programs  (FHA-Insured  Certificates),  mortgage-backed
         securities  guaranteed by GNMA (GNMA  Mortgage-Backed  Securities)  and
         FHA-insured   mortgage  loans   (FHA-Insured   Loans).   The  mortgages
         underlying   the   FHA-Insured   Certificates,   GNMA   Mortgage-Backed
         Securities  and  FHA-Insured  Loans  are  non-recourse  first  liens on
         multifamily residential developments or retirement homes.

                  Payments of principal and interest on FHA-Insured Certificates
         and  FHA-Insured  Loans are insured by the United States  Department of
         Housing and Urban Development (HUD) pursuant to Title 2 of the National
         Housing Act. Payments of principal and interest on GNMA Mortgage-Backed
         Securities  are  guaranteed by GNMA pursuant to Title 3 of the National
         Housing Act.

                  As of December 31, 1998, the weighted  average  remaining term
         of the Partnership's investments in GNMA Mortgage-Backed Securities and
         FHA-Insured  Certificates  is  approximately  29  years.  However,  the
         Partnership  Agreement  states that the  Partnership  will terminate in
         approximately  23  years,  on  December  31,  2021,  unless  previously
         terminated  under the provisions of the Partnership  Agreement.  As the
         Partnership is anticipated to terminate  prior to the weighted  average
         remaining term of the GNMA  Mortgage-Backed  Securities and FHA-Insured
         Certificates  in its  portfolio,  the  Partnership  does  not  have the
         ability,   at  this  time,  to  hold  these  investments  to  maturity.
         Consequently,  the  General  Partner  believes  that the  Partnership's
         investments  in  GNMA   Mortgage-Backed   Securities  and   FHA-Insured
         Certificates  should be included in the  Available  for Sale  category.
         Although  the   Partnership's   investments  in  GNMA   Mortgage-Backed
         Securities and FHA-Insured Certificates are classified as Available for
         Sale for financial  statement  purposes,  the General  Partner does not
         intend to  voluntarily  sell these assets other than those which may be
         sold as a result of a default.

                  In  connection  with this  classification,  as of December 31,
         1998 and 1997, the  Partnership's  investments in GNMA  Mortgage-Backed
         Securities  and  FHA-Insured  Certificates  are recorded at fair value,
         with the net unrealized gains or losses on these  investments  reported
         as  comprehensive  income  and as a  separate  component  of  partners'
         equity.  Subsequent  increases  or  decreases in the fair value of GNMA
         Mortgage-Backed Securities and FHA-Insured Certificates,  classified as
         Available  for  Sale,  will be  included  as a  separate  component  of
         partners'  equity.  Realized  gains and losses on GNMA  Mortgage-Backed

<PAGE>42

             AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

2.       SIGNIFICANT ACCOUNTING POLICIES - Continued

         Securities and  FHA-Insured  Certificates,  classified as Available for
         Sale,  will continue to be reported in earnings.  The amortized cost of
         the  investments in GNMA  Mortgage-Backed  Securities  and  FHA-Insured
         Certificates in this category is adjusted for amortization of discounts
         and premiums to  maturity.  Such  amortization  is included in mortgage
         investment income.

                  Gains from dispositions of mortgage investments are recognized
         upon the receipt of cash or HUD debentures.

                  Losses on dispositions of mortgage  investments are recognized
         when it becomes  probable  that a mortgage will be disposed of and that
         the disposition will result in a loss. In the case of Insured Mortgages
         fully insured by HUD, the  Partnership's  maximum exposure for purposes
         of  determining  the loan losses would  generally be an assignment  fee
         charged by HUD  representing  approximately  1% of the unpaid principal
         balance  of the  Insured  Mortgage  at the  date of  default,  plus the
         unamortized  balance  of  acquisition  fees and  closing  costs paid in
         connection with the acquisition of the Insured Mortgage and the loss of
         approximately 30 days accrued interest.

         Reclassifications
         -----------------
                  Certain  amounts  in the  financial  statements  for the years
         ended December 31, 1997 and 1996 have been  reclassified  to conform to
         the 1998 presentation.

         Cash and Cash Equivalents
         -------------------------
                  Cash and cash equivalents  consist of money market funds, time
         and demand deposits,  commercial  paper,  certificates of deposit,  and
         repurchase agreements with original maturities of three months or less.

         Income Taxes
         ------------
                  No provision has been made for Federal,  state or local income
         taxes in the  accompanying  financial  statements,  since  they are the
         personal responsibility of the Unitholders.

         Provision for Loss
         ------------------
                  The Partnership assesses the realizability of its investments
         on a loan level basis.  As a result, the Partnership provided a reserve
         of $375,000 for the year ending December 31, 1997.  No provision was 
         made for the year ending December 31, 1998.

<PAGE>43

             AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

2.       SIGNIFICANT ACCOUNTING POLICIES - Continued

         New Accounting Standards
         ------------------------
                  During 1997, FASB issued SFAS No. 130 "Reporting Comprehensive
         Income"  (FAS 130).  FAS 130 states that all items that are required to
         be recognized under accounting standards as components of comprehensive
         income are to be  reported  in a  separate  statement  of income.  This
         includes net income as currently  reported by the Partnership  adjusted
         for unrealized gains and losses related to the Partnership's  mortgages
         accounted  for as  "available  for  sale."  FAS 130 was  adopted by the
         Partnership on January 1, 1998.  Accumulated other comprehensive income
         is reported  in the equity  section of the  "Balance  Sheet." The table
         below breaks out the  adjustment  to  unrealized  gains and losses that
         relate to mortgages  which were  disposed of during the period with the
         resulting  gain or loss  reflected  in the  "Statements  of Income  and
         Comprehensive Income" (reclassification adjustments) and the portion of
         the adjustment that relates to those investments that were not disposed
         of during the period.

<TABLE><CAPTION>

                                                                   1998           1997              1996
                                                                ---------      ---------         ----------
<S>                                                             <C>            <C>               <C>
Reclassification adjustment for (gains) losses
  included in net income                                          146,033             --            (44,617)
Unrealized holding gains (losses) arising during
  the period                                                   (1,691,185)     1,801,409         (1,118,107)
                                                               ----------      ---------         ----------
Net adjustment to unrealized gains (losses) on mortgages       (1,545,152)     1,801,409         (1,162,724)
                                                               ----------      ---------         ----------
</TABLE>

<PAGE>44
              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS


3.       FAIR VALUE OF FINANCIAL INSTRUMENTS

         The  following  estimated  fair values of the  Partnership's  financial
instruments  are  presented in accordance  with  generally  accepted  accounting
principles which define fair value as the amount at which a financial instrument
could be exchanged in a current transaction between willing parties,  other than
in a forced or liquidation  sale. These estimated fair values,  however,  do not
represent the liquidation value or the market value of the Partnership.

<TABLE>
<CAPTION>
                                                          As of December 31, 1998             As of December 31, 1997
                                                          Amortized           Fair             Amortized          Fair
                                                             Cost            Value                  Cost          Value
                                                       ------------   -------------         -------------    -----------------
<S>                                                    <C>            <C>                   <C>              <C>
Investment in FHA-Insured Certificates and 
  GNMA Mortgage-Backed Securities:
    Acquired insured mortgages                         $ 65,698,059    $ 67,018,830         $  72,251,365    $ 74,963,747
    Originated insured mortgages                         33,737,306      32,531,218            45,275,300      44,222,754
                                                       ------------    ------------         -------------    ------------
                                                       $ 99,435,365    $ 99,550,048         $ 117,526,665    $119,186,501
                                                       ============    ============         =============    ============

Investment in FHA-Insured Loans:
  Originated insured mortgages                         $  5,721,754    $  5,725,377         $  22,609,310    $ 22,428,570
  Acquired insured mortgages                              1,055,778       1,061,917             1,094,502       1,107,188
                                                       ------------    ------------         -------------    ------------
                                                       $  6,777,532    $  6,787,294         $  23,703,812    $ 23,535,758
                                                       ============    ============         =============    ============

Cash and cash equivalents                              $  5,524,324    $  5,524,324         $   2,721,306    $  2,721,306

Accrued interest receivable                            $    670,406    $    670,406         $   1,612,260    $  1,612,260

</TABLE>

         The following  methods and  assumptions  were used to estimate the fair
         value of each class of financial instrument:

         Investment in FHA-Insured Certificates, GNMA Mortgage-Backed
           Securities and FHA-Insured Loans
         -----------------------------------------------------------
                  The fair value of the fully insured FHA-Insured  Certificates,
         GNMA  Mortgage-Backed  Securities  and  FHA-Insured  Loans  is based on
         quoted  market  prices from an  investment  banking  institution  which
         trades these instruments as part of its day-to-day activities. The fair
         value of the mortgage security collateral and mortgages is based on the
         quoted market price from an investment banking institution which trades
         these  instruments  as part of its day-to-day  activities.  In order to
         determine  the fair value of coinsured  FHA-Insured  Certificates,  the
         Partnership  valued the coinsured  FHA-Insured  Certificates  as though
         they were fully insured  FHA-Insured  Certificates  (in the same manner
         fully insured FHA-Insured  Certificates were valued). From this amount,
         the  Partnership  deducted a discount factor from the face value of the
         loan.  This discount  factor is based on the  Partnership's  historical
         analysis of the difference in fair value between coinsured  FHA-Insured
         Certificates and fully insured FHA-Insured Certificates.

         Cash and cash equivalents and accrued interest receivable
         ---------------------------------------------------------
                  The carrying  amount  approximates  fair value  because of the
         short maturity of these instruments.

4.       INVESTMENT IN FHA-INSURED CERTIFICATES AND GNMA MORTGAGE-
           BACKED SECURITIES

         The   following  is  a  discussion   of  the   Partnership's   mortgage
investments, along with the risks related to each type of investment.

         A.       Fully Insured FHA-Insured Certificates and GNMA
                    Mortgage-Backed Securities
                  -----------------------------------------------
                  Listed  below is the  Partnership's  aggregate  investment  in
         fully insured  Acquired  Insured  Mortgages as of December 31, 1998 and
         1997:

<TABLE>
<CAPTION>
                                                                             December 31,
                                                                 1998                    1997
                                                           ----------------         ----------------
<S>                                                        <C>                      <C>
Number of:
  GNMA Mortgage-Backed Securities                                        22                       22
  FHA-Insured Certificates(1)(2)                                          3                        5
Amortized Cost                                                 $ 65,698,059             $ 72,251,365
Face Value                                                       65,930,408               72,492,904
Fair Value                                                       67,018,830               74,963,747

</TABLE>

(1)      On January 31, 1998, the mortgage on Northpoint Apartments was prepaid.
         The Partnership  received net proceeds of  approximately  $1.7 million,
         and  recognized  a gain of  approximately  $6,000  for the  year  ended
         December  31, 1998.  A  distribution  of $0.19 per Unit related to this
         prepayment was declared in February 1998 and paid to Unitholders in May
         1998.

(2)      On December 21, 1998, the mortgage on Olde Mill Apartments was prepaid.
         The Partnership  received net proceeds of  approximately  $3.4 million,
         and  recognized  a gain of  approximately  $97,000  for the year  ended
         December  31, 1998.  A  distribution  of $0.37 per Unit related to this
         prepayment  was  declared in January 1999 and is expected to be paid to
         Unitholders in May 1999.


<PAGE>46

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

4.       INVESTMENT IN FHA-INSURED CERTIFICATES AND GNMA MORTGAGE-
           BACKED SECURITIES - Continued

                  Listed  below is the  Partnership's  aggregate  investment  in
         fully insured  Originated Insured Mortgages as of December 31, 1998 and
         1997:

<TABLE>
<CAPTION>
                                                                           December 31,
                                                                  1998                     1997
                                                               ------------         ----------------
<S>                                                            <C>                <C>
Number of Mortgages(3)                                                    0                        1
Amortized Cost                                                            0             $ 11,296,412
Face Value                                                                0               10,941,101
Fair Value                                                                0               11,055,186

</TABLE>

(3)      On June 4,  1998,  the  mortgage  on Arbor  Village  was  prepaid.  The
         Partnership  received net proceeds of approximately $10.9 million,  and
         recognized a loss of approximately $350,000 for the year ended December
         31, 1998. A  distribution  of  approximately  $1.18 per Unit related to
         this  prepayment  was declared in June 1998 and paid to  Unitholders in
         August 1998.

                  As of March 5, 1999, all fully insured  mortgages were current
         with respect to the payment of principal and interest.

                  In February 1996, the General Partner  instructed the servicer
         for the  mortgage  on  Water's  Edge  of New  Jersey,  a fully  insured
         acquired construction loan, to file a Notice of Default and an Election
         to  Assign  the  mortgage  with the  Department  of  Housing  and Urban
         Development (HUD). The property  underlying this construction loan is a
         nursing home located in Trenton,  New Jersey.  As of December 31, 1998,
         the  Partnership  had  received  approximately  $10.2  million  on this
         assignment including partial repayment of the outstanding principal and
         accrued  interest.  The remainder of the proceeds,  approximately  $1.5
         million,   is  included  in  Receivables  and  Other  Assets.  HUD  has
         disallowed  approximately  $1.5 million of the  assignment  claim.  The
         servicer,   Greystone   Servicing   Corporation,   Inc.,  is  currently
         negotiating with HUD in regard to collection of the disallowed  portion
         of the claim. In addition,  the General Partner has retained counsel in
         this matter and is actively pursuing litigation.  On July 30, 1998, the
         Partnership  filed a Motion for Judgment  against  Greystone  Servicing
         Corporation,  Inc.  (the  servicer)  in the  Circuit  Court of Fauquier
         County,  Virginia.  The Motion for Judgment  alleges breach of contract
         and negligence  claims and seeks judgment for $1,653,396 plus interest,

<PAGE>47

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

4.       INVESTMENT IN FHA-INSURED CERTIFICATES AND GNMA MORTGAGE-
           BACKED SECURITIES - Continued

         attorneys' fees and costs. The Partnership  believes that the allowance
         for loan losses of $375,000 as of December 31, 1998,  is  sufficient to
         provide for amounts that may not be recovered from the servicer.

         B.       Coinsured FHA-Insured Certificates
                  ----------------------------------
                  Under  the  HUD   coinsurance   program,   both  HUD  and  the
         coinsurance  lender  are  responsible  for  paying  a  portion  of  the
         insurance  benefits  if a  mortgagor  defaults  and  the  sale  of  the
         development  collateralizing  the mortgage  produces  insufficient  net
         proceeds  to  repay  the  mortgage  obligation.   In  such  cases,  the
         coinsurance lender will be liable to the Partnership for the first part
         of such loss in an amount up to 5% of the outstanding principal balance
         of the mortgage as of the date  foreclosure  proceedings are instituted
         or the deed is acquired in lieu of  foreclosure.  For any loss  greater
         than 5% of the outstanding  principal  balance,  the responsibility for
         paying the insurance benefits will be borne on a pro-rata basis, 85% by
         HUD and 15% by the coinsurance lender.

                  While the Partnership is due payment of all amounts owed under
         the mortgage,  the  coinsurance  lender is  responsible  for the timely
         payment of principal and interest to the  Partnership.  The coinsurance
         lender is prohibited  from entering into any workout  arrangement  with
         the borrower  without the  Partnership's  consent and must file a claim
         for coinsurance  benefits with HUD, upon default, if the Partnership so
         directs. As an ongoing  HUD-approved  coinsurance lender, and under the
         terms  of  the  participation  documents,  the  coinsurance  lender  is
         required to satisfy certain minimum net worth requirements as set forth
         by HUD. However, it is possible that the coinsurance lender's potential
         liability for loss on these developments,  and others, could exceed its
         HUD-required  minimum net worth.  In such case, the  Partnership  would
         bear the risk of loss if the  coinsurance  lenders  were unable to meet
         their coinsurance  obligations.  In addition,  HUD's obligation for the
         payment  of its share of the loss  could be  diminished  under  certain
         conditions,  such as the  lender  not  adequately  pursuing  regulatory
         violations of the borrower or the failure to comply with other terms of
         the  mortgage.  However,  the  General  Partner  is  not  aware  of any
         conditions  or  actions  that  would  result  in  HUD  diminishing  its
         insurance coverage.

                  As of  December  31,  1998  and  1997,  the  Partnership  held
         investments  in three  coinsured  FHA-Insured  Certificates  secured by
         coinsured mortgages.  One of these coinsured mortgage investments,  the
         mortgage on St. Charles Place - Phase II, is coinsured by The Patrician
         Mortgage Company  (Patrician),  an unaffiliated third party coinsurance
         lender under the HUD coinsurance  program.  As of December 31, 1998 and

<PAGE>48

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

4.       INVESTMENT IN FHA-INSURED CERTIFICATES AND GNMA MORTGAGE-
           BACKED SECURITIES - Continued

         1997, the remaining two FHA-Insured  Certificates are coinsured by IFI,
         an  affiliate of the  Partnership.  The  following  is a discussion  of
         actual  and  potential   performance   problems  with  respect  to  the
         Partnership's coinsured mortgage investments.

                  Coinsured by third party
                  ------------------------
                  St. Charles Place - Phase II is a 156-unit  apartment  complex
                  located in Miramar, Florida. Listed below is the Partnership's
                  investment in the St.  Charles Place - Phase II mortgage as of
                  December  31,  1998 and  1997.  These  amounts  represent  the
                  Partnership's   approximate  55%  ownership  interest  in  the
                  mortgage.  The  remaining  45%  ownership  interest is held by
                  American Insured Mortgage Investors L.P. - Series 86 (AIM 86),
                  an affiliate of the Partnership.
<TABLE>
<CAPTION>
                                                                            December 31,
                                                                 1998                     1997
                                                            ---------------          ---------------
<S>                                                         <C>                      <C>
Amortized Cost                                                 $  3,710,287             $  3,710,287
Face Value                                                        3,710,287                3,710,287
Fair Value                                                        3,422,177                3,484,715

</TABLE>

                  As of March 5,  1999,  the  mortgagor  had  made  payments  of
                  principal and interest due to the  Partnership on the mortgage
                  through November 1995. As the result of bankruptcy proceedings
                  that have been ongoing  since 1992,  the property was acquired
                  and vested with  Patrician in November  1998.  Patrician is in
                  the process of improving  the property and intends to file its
                  initial claim with HUD by October  1999. A  coinsurance  claim
                  will be filed with HUD for remaining  amounts not collected as
                  a result of the disposition.  Due to deferred  maintenance and
                  tax deficiencies, the Partnership does not expect cash flow to
                  be realized from this property  until the property is sold and
                  claims  are  filed  with  HUD  for   Multifamily   Coinsurance
                  benefits.

                  The  General  Partner  intends  to  continue  to  oversee  the
                  Partnership's  interest in this mortgage  investment to ensure
                  that Patrician meets its coinsurance obligations.  The General
                  Partner's  assessment  of the  realizability  of the  carrying
                  value of the St. Charles Place - Phase II mortgage is based on
                  the most recent information available, and to the extent these
                  conditions change or additional information becomes available,
                  the General  Partner's  assessment  may change.  However,  the
                  General  Partner  does  not  believe  that  there  would  be a
                  material  adverse  impact  on  the   Partnership's   financial
                  condition  or its results of  operations  should  Patrician be
                  unable to comply with its full coinsurance obligation.

<PAGE>49

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

4.       INVESTMENT IN FHA-INSURED CERTIFICATES AND GNMA MORTGAGE-
           BACKED SECURITIES - Continued

                  Coinsured by affiliate
                  ----------------------
                  As of  December  31,  1998  and  1997,  the  Partnership  held
                  investments  in  two  FHA-Insured   Certificates   secured  by
                  coinsured  mortgages,  where  the  coinsurance  lender is IFI.
                  These  investments  were made on behalf of the  Partnership by
                  the former  managing  general  partner.  As  structured by the
                  former  managing  general  partner,   with  respect  to  these
                  mortgages, the Partnership bears the risk of loss upon default
                  for IFI's portion of the  coinsurance  loss on these  mortgage
                  investments.

<TABLE>
<CAPTION>

                                                           December 31, 1998                         December 31, 1997
                                                 Fair           Amortized     Face           Fair         Amortized      Face
                                                Mkt. Value      Cost          Value        Mkt. Value        Cost        Value
                                               -----------   ------------  ------------   ------------   -----------  -----------
<S>                                            <C>           <C>           <C>            <C>            <C>          <C>
The Breakers at Golf
  Mill(1)(2)                                   $20,470,263     22,113,145  $ 22,113,146    $20,873,845   $22,309,235  $22,309,236
Summerwind Apts.-Phase
  II(1)(2)                                       8,638,778      7,913,874     9,307,962      8,809,008     7,959,366    9,378,179
                                               -----------   ------------  ------------    -----------   -----------  -----------
                                               $29,109,041     30,027,019  $ 31,421,108    $29,682,853    30,268,601   31,687,415
                                               ===========   ============  ============    ===========   ===========  ===========

(1) As of March 5, 1999,  the  mortgagor  was current with respect to payment of
principal  and  interest  on this  mortgage.  (2)  There  were  no  loan  losses
recognized  for the years  ended,  1998 and 1997.  The  cumulative  loan  losses
recognized  in prior years were  $980,000  for the  Breakers  at Golf Mill,  and
$1,511,743 for Summerwind Apartments - Phase II.

</TABLE>

5.       INVESTMENT IN FHA-INSURED LOANS

         Listed below is the Partnership's aggregate investment in fully insured
Originated Insured Mortgages as of December 31, 1998 and 1997:

<TABLE><CAPTION>
                                                                           December 31,
                                                                 1998                    1997
                                                            ---------------         ----------------
<S>                                                         <C>                     <C>
Number of Mortgages(1)(2)(3)                                              1                        3
Amortized Cost                                                 $  5,721,754             $ 22,609,310
Face Value                                                        5,721,754               22,213,954
Fair Value                                                        5,725,377               22,428,570

(1) On February 28, 1998, the mortgage on Olmstead Park  Apartments was prepaid.
The  Partnership  received  net  proceeds of  approximately  $6.8  million,  and
recognized  a gain of  approximately  $780,000  for the year ended  December 31,
1998. A distribution  of $0.73 per Unit related to this  prepayment was declared
in March 1998 and paid to Unitholders in May 1998.

<PAGE>50

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

5.       INVESTMENT IN FHA-INSURED LOANS - Continued

(2) On  September 1, 1998,  the  mortgage on Water's  Edge II was  prepaid.  The
Partnership received net proceeds of approximately $11.0 million, and recognized
a gain of  approximately  $223,000  for the year  ended  December  31,  1998.  A
distribution  of $1.19 per Unit  related  to this  prepayment  was  declared  in
September 1998 and paid to Unitholders in November 1998.

(3) During  August  1997,  the  mortgage on Parkside  Estates was  prepaid.  The
Partnership received net proceeds of approximately $7.1 million and recognized a
gain of approximately  $20,700 on this  prepayment.  A distribution of $0.76 per
Unit related to this  prepayment  was declared in September 1997 and was paid in
November 1997.
</TABLE>
                  Listed  below is the  Partnership's  aggregate  investment  in
         fully insured  Acquired  Insured  Mortgages as of December 31, 1998 and
         1997:

<TABLE>
<CAPTION>
                                                                         December 31,
                                                                 1998                     1997
                                                            ---------------          ---------------
<S>                                                         <C>                      <C>
Number of Mortgages                                                       2                        2
Amortized Cost                                                 $  1,055,778             $  1,094,502
Face Value                                                        1,053,273                1,091,827
Fair Value                                                        1,061,917                1,107,188

</TABLE>

         As of March 5, 1999, all of the  Partnership's  FHA-Insured  Loans were
current with respect to the payment of principal and interest.

         All of the FHA-Insured Loans contain  Participations.  During the years
ended December 31, 1998,  1997 and 1996,  the  Partnership  received  additional
interest of $69,820,  $134,769 and $63,045,  respectively,  from the FHA-Insured
Loans which  contain  Participations.  These  amounts  are  included in mortgage
investment  income on the  accompanying  statements of income and  comprehensive
income.

6.       DISTRIBUTIONS TO UNITHOLDERS

         The  distributions  paid or accrued to  Unitholders on a per Unit basis
for the years ended December 31, 1998, 1997 and 1996 are as follows:

<PAGE>51

<TABLE><CAPTION>
                                                         1998                  1997                 1996
                                                        -------               -------              ------
         <S>                                            <C>                   <C>                  <C>
         Quarter ended March 31                         $ 1.21(1)              $ 0.59(4)             $ 0.32(7)
         Quarter ended June 30                            1.50(2)               0.30                 0.30
         Quarter ended September 30                       1.42(3)               1.06(5)              0.30
         Quarter ended December 31                        0.21                  0.38(6)              0.30
                                                        ------                ------               ------
                                                        $ 4.34                 $ 2.33              $ 1.22
                                                        ======                 ======              ======
</TABLE>

(1)      This amount  includes  approximately  $0.92 per Unit  representing  net
         proceeds from the prepayment of the mortgages on Northpoint  Apartments
         and Olmstead Park Apartments.
(2)      This  amount  includes  approximately  $0.08  per Unit  representing  a
         curtailment of the mortgage on Olde Mill  Apartments and  approximately
         $1.18 per Unit  representing  net proceeds  from the  prepayment of the
         mortgage on Arbor Village.
(3)      This amount  includes  approximately  $1.19 per Unit  representing  net
         proceeds  from  the  prepayment  of the  mortgage  on  Water's  Edge II
         Apartments.
(4)      This amount includes  approximately $0.27 per Unit representing partial
         receipt of proceeds  from the  assignment of Water's Edge of New Jersey
         and approximately  $0.02 per Unit  representing  proceeds from mortgage
         dispositions not reinvested prior to the expiration of the reinvestment
         period.
(5)      This amount includes approximately $0.76 per Unit representing proceeds
         From the prepayment of the mortgage on Parkside Estates.
(6)      This  amount  includes  approximately  $0.08  per Unit  representing  a
         curtailment on the mortgage of Olde Mills Apartments and  approximately
         $0.01 per Unit representing  previously  undistributed accrued interest
         received from St. Charles Place - Phase II.
(7)      This  amount  includes   approximately   $0.02  per  Unit  representing
         previously undistributed accrued interest received from Water's Edge of
         New Jersey.

         The basis for paying  distributions to Unitholders is net proceeds from
mortgage  dispositions,  if any, and cash flow from  operations,  which includes
regular  interest  income and  principal  from Insured  Mortgages.  Although the
Insured  Mortgages yield a fixed monthly  mortgage  payment once purchased,  the
cash  distributions paid to the Unitholders will vary during each quarter due to
(1) the  fluctuating  yields in the  short-term  money  market where the monthly
mortgage  payments  received are  temporarily  invested  prior to the payment of
quarterly distributions,  (2) the reduction in the asset base resulting from the
receipt of monthly mortgage payments or mortgage dispositions, (3) variations in
the cash flow  attributable to the  delinquency or default of Insured  Mortgages
and  professional  fees  and  foreclosure  and  acquisition  costs  incurred  in
connection with those Insured  Mortgages and (4) variations in the Partnership's
operating expenses.

7.       INVESTMENT IN AFFILIATE, NOTES RECEIVABLE FROM AFFILIATES,
           DUE FROM AFFILIATES AND NOTE PAYABLE AND DUE TO AFFILIATE

         In  order to  capitalize  IFI  with  sufficient  net  worth  under  HUD
regulations,  in April 1994, the Partnership  transferred a GNMA Mortgage-Backed
Security in the amount of  approximately  $2.0 million to IFI. AIM 85 and AIM 86
each issued a demand note payable to the  Partnership and recorded an investment
in IFI through AIM Mortgage,  Inc. at an amount  proportionate  to each entity's
coinsured  mortgages  for which IFI was the  mortgagee  of record as of April 1,
1994.  Interest income on the note, which is based on an annual interest rate of
7.25%  (representing  the  interest  rate on the GNMA  Mortgage-Backed  Security

<PAGE>52


              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

7.       INVESTMENT IN AFFILIATE, NOTES RECEIVABLE FROM AFFILIATES,
           DUE FROM AFFILIATES AND NOTE PAYABLE AND DUE TO AFFILIATE - Continued

transferred by the Partnership),  was $47,740 and $50,263 during the years ended
December 31, 1998 and 1997, respectively,  and is included in interest and other
income on the accompanying  statements of income and  comprehensive  income.  In
April 1997, the GNMA  mortgage-backed  security,  with a current balance of $1.9
million,  was reallocated between the Partnership and AIM 86 as AIM 85 no longer
holds any mortgages  coinsured by IFI. As a result, a new demand note receivable
from AIM 86 was issued and the investment in IFI was updated.

         In connection with these transfers, the expense reimbursement agreement
was  amended  as of April 1,  1997,  to adjust  the  allocation  of the  expense
reimbursement  to the AIM  Funds to an  amount  proportionate  to each  entity's
coinsured  mortgage  investments for which IFI was the mortgagee of record as of
April  1,  1997.  The  expense   reimbursement,   as  amended,  along  with  the
Partnership's  interest income from the notes receivable,  and the Partnership's
equity interest in IFI's net income or loss,  substantially  equals the mortgage
principal and interest on the GNMA Mortgage-Backed  Security transferred to IFI.
In April  1997,  this  agreement  was  amended to exclude AIM 85 which no longer
holds mortgages coinsured by IFI.

8.       TRANSACTIONS WITH RELATED PARTIES

         In addition to the related party  transactions  described above in Note
7, the General Partner and certain affiliated  entities,  during the years ended
December  31,  1998,  1997 and 1996,  have  earned or received  compensation  or
payments for services from the Partnership as follows:

<TABLE>
<CAPTION>
                                   COMPENSATION PAID OR ACCRUED TO RELATED PARTIES
                                   -----------------------------------------------
                                 Capacity in Which                     For the years ended December 31,
Name of Recipient                   Served/Item                    1998               1997            1996
-----------------------    ----------------------------      --------------      ------------     ------------
<S>                        <C>                               <C>                 <C>             <C>
CRIIMI, Inc.(1)            General Partner/Distribution          $1,968,300         1,056,713       $  553,301

AIM Acquisition            Advisor/Asset Management Fee           1,287,672         1,469,320        1,503,297
  Partners, L.P.(2)

CRIIMI MAE                 Affiliate of General Partner/             68,010            53,474           62,376
  Management, Inc.(3)       Expense Reimbursement


(1)      The  General  Partner,   pursuant  to  amendments  to  the  Partnership
         Agreement,  effective September 6, 1991, is entitled to receive 4.9% of
         the Partnership's  income, loss, capital and distributions,  including,
         without limitation, the Partnership's Adjusted Cash from Operations and
         Proceeds of Mortgage  Prepayments,  Sales or Insurance (both as defined
         in the Partnership Agreement).

<PAGE>53

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

8.       TRANSACTIONS WITH RELATED PARTIES - Continued

(2)      The Advisor, pursuant to the Partnership Agreement is entitled to an 
         Asset Management Fee equal to 0.95% of Total Invested Assets (as 
         defined in the Partnership Agreement).  The Sub-advisor to the 
         Partnership is entitled to a fee of 0.28% of Total Invested Assets of
         the Advisor's Asset Management Fee.  Of the amounts paid to the 
         Advisor, CRIIMI MAE Services Limited Partnership (CMSLP), the
         Sub-advisor, earned a fee equal to $379,506, $433,040 and $443,060 for 
         the years ended December 31, 1998, 1997 and 1996, respectively.  The 
         Limited Partner of CMSLP is a wholly-owned subsidiary of CRIIMI MAE 
         Inc., which filed for protection under Chapter 11 of the U.S. 
         Bankruptcy Code.

(3)      Prior to June 30, 1995, these amounts were paid to CRI as reimbursement
         for expenses  incurred  prior to June 30, 1995 on behalf of the General
         Partner and the Partnership. The transaction in which CRIIMI MAE became
         a  self-administered  REIT had no impact on the payments required to be
         made  by  the  Partnership,   other  than  the  expense   reimbursement
         previously  paid  by the  Partnership  to CRI in  connection  with  the
         provision of services by the Sub-advisor are,  effective June 30, 1995,
         paid to a wholly-owned subsidiary of CRIIMI MAE, CRIIMI MAE Management,
         Inc.

</TABLE>

9.       PARTNERS' EQUITY

         Depositary Units  representing  economic rights in limited  partnership
interests  (Units)  were issued at a stated  value of $20. A total of  8,851,966
Units were issued for an aggregate  capital  contribution  of  $177,039,320.  In
addition,  the initial limited partner  contributed $2,500 to the capital of the
Partnership and received 125 Units in exchange therefor,  and the former general
partners  contributed  a total of $1,000 to the  Partnership.  During 1994,  the
Partnership repurchased 50,000 Units.


<PAGE>54

10.      SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
         (In thousands, except per unit data)

         The following is a summary of unaudited quarterly results of operations
for the years ended December 31, 1998, 1997 and 1996:

<TABLE><CAPTION>
                                                                             1998
                                                                         Quarter ended
                                            March 31             June 30         September 30      December 31
                                          -----------          ----------     ---------------- ----------------
<S>                                       <C>                  <C>            <C>              <C>
Income                                     $    2,812           $   2,625       $        2,342   $        2,219
Net gains (losses) from
  mortgage dispositions                           786                (350)                 223               97
Net earnings                                    3,170               1,778                2,174            2,057
Net earnings per
  Limited Partnership Unit - Basic               0.34                0.19                 0.24             0.22

</TABLE>
<TABLE><CAPTION>
                                                                              1997
                                                                         Quarter ended
                                            March 31             June 30         September 30      December 31
                                          -----------          ----------    ----------------- ----------------
<S>                                       <C>                  <C>           <C>               <C>
Income                                    $     3,122           $   3,104     $          2,982   $        2,959
Net gains/(losses) from mortgage
  disposition/modification                         --                  --                   21             (375)
Net earnings                                    2,696               2,629                2,588            2,184
Net earnings per
  Limited Partnership Unit - Basic               0.29                0.28                 0.28             0.24

</TABLE>
<TABLE><CAPTION>
                                                                             1996
                                                                         Quarter ended
                                            March 31             June 30         September 30      December 31
                                          -----------          ----------    ----------------- ----------------
<S>                                       <C>                  <C>           <C>               <C>
Income                                    $     3,200           $   3,184      $         3,034   $        3,047
Net gains (losses) from
  mortgage dispositions/modifications               1                (379)                  --               --
Net earnings                                    2,765               2,333                2,589            2,606
Net earnings per
  Limited Partnership Unit - Basic               0.30                0.25                 0.28             0.28

</TABLE>


<PAGE>55


              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 1998


<TABLE>
<CAPTION>

                                                           Interest                                                  Annual Payment
                                                            Rate on      Face            Net                         Principal and
                                     Maturity    Put        Mortgage    Value of    Carrying Value     Cumulative       Interest
Development Name/Location             Date       Date(1)    (5)(6)      Mortgage    (3)(10)(11)(13)    Loan Losses     (5)(6)(12)
-------------------------           ---------  ---------  -----------  -----------  --------------    ------------   ------------
<S>                                 <C>        <C>        <C>          <C>          <C>               <C>            <C>
ACQUIRED INSURED MORTGAGES:
--------------------------
FHA-Insured Certificates
  (carried at fair value)

Sylvan Manor
  Silver Spring, Maryland               5/21        N/A       7.500%   $ 3,079,345      3,083,782               --     $  284,523
Heather Ridge Apartments
  Fayetteville, North Carolina          4/27        N/A       8.625%     4,400,093      4,414,139               --        416,231
Park Avenue Plaza
  Omaha, Nebraska                       9/29        N/A       9.000%     1,954,513      1,960,396               --        187,923
                                                                       -----------  -------------
  Total Investment in FHA-Insured
    Certificates - Acquired Insured
    Mortgages                                                            9,433,951      9,458,317
                                                                       -----------  -------------
GNMA Mortgage-Backed Securities
  (carried at fair value)

Garden Terrace
  Douglasville, Georgia                 1/20        N/A       7.125%     2,643,526      2,674,536               --        236,402
Lioncrest Towers
  Richton Park, Illinois               10/28        N/A       7.000%     6,410,286      6,479,771               --        497,004
San Jose South
  San Jose, California                 10/23        N/A       7.750%     8,123,480      8,213,845               --        698,088
Beauvoir Manor Apts.
  Biloxi, Mississippi                   9/18        N/A       8.875%     1,227,894      1,279,008               --        127,591
Greenview Garden
  Butler, Pennsylvania                  7/33        N/A       9.000%       877,091        912,494               --         78,272
Lorenzo Carolina Apts.
  Tampa, Florida                        6/26        N/A       8.250%     1,010,158      1,021,070               --         89,246
Silver Lake Plaza Apts.
  Los Angeles, California              11/35        N/A       7.950%     5,294,124      5,349,075               --        431,672
Woodcrest Townhomes
  Chaska, Minnesota                     8/31        N/A       8.375%     3,090,367      3,122,797               --        269,353

</TABLE>

<PAGE>56
              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 1998


<TABLE>
<CAPTION>

                                                           Interest                                                  Annual Payment
                                                            Rate on      Face            Net                         Principal and
                                     Maturity    Put        Mortgage    Value of    Carrying Value     Cumulative       Interest
Development Name/Location             Date       Date(1)    (5)(6)      Mortgage    (3)(10)(11)(13)    Loan Losses     (5)(6)(12)
-------------------------           ---------  ---------  -----------  -----------  --------------    ------------   ------------
<S>                                 <C>        <C>        <C>          <C>          <C>               <C>            <C>
ACQUIRED INSURED MORTGAGES:
--------------------------
GNMA Mortgage-Backed Securities
  (carried at fair value) - Continued

Hewitt Gardens Apts.
  Omaha, Nebraska                      10/29        N/A       8.750%   $ 4,429,145      4,608,763               --     $  404,973
Lamplighter Apts.
  Port Arthur, Texas                   10/29        N/A       9.000%     2,213,465      2,303,165               --        207,177
Linville Manor
  Shelby, North Carolina                7/31        N/A       8.750%     1,978,249      2,058,309               --        178,965
Oak Grove Apts.
  Austin, Texas                         9/26        N/A       8.750%       552,292        574,793               --         51,702
Oakwood Gardens
  San Jose, California                 10/23        N/A       7.750%     1,136,019      1,148,656               --         97,623
Seven Springs
  College Park, Maryland               12/21        N/A       7.625%     4,661,812      4,714,743               --        419,268
Stoney Creek
  Washington Township, Michigan         2/29        N/A       7.500%     5,334,021      5,391,307               --        427,208
Burlwood Apts.
  Portland, Oregon                      8/15        N/A       9.000%       609,891        617,330               --         61,755
Collin Care Centers
  Plano, Texas                          9/30        N/A       8.125%     1,686,528      1,704,348               --        144,240
Holton Manor
  Elkhorn, Wisconsin                   11/21        N/A       8.250%       995,107      1,006,298               --         94,435
Oaklawn Apts.
  Boise, Idaho                          8/24        N/A       9.000%       473,677        478,814               --         40,303
Orchard Creek Apts.
  Farmington Hills, Michigan            1/30        N/A       8.625%     1,272,289      1,323,888               --        113,177

</TABLE>

<PAGE>57

<TABLE>
<CAPTION>
              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 1998




                                                           Interest                                                  Annual Payment
                                                            Rate on      Face            Net                         Principal and
                                     Maturity    Put        Mortgage    Value of    Carrying Value     Cumulative       Interest
Development Name/Location             Date       Date(1)    (5)(6)      Mortgage    (3)(10)(11)(13)    Loan Losses     (5)(6)(12)
-------------------------           ---------  ---------  -----------  -----------  --------------    ------------   ------------
<S>                                 <C>        <C>        <C>          <C>          <C>               <C>            <C>
ACQUIRED INSURED MORTGAGES:
--------------------------
GNMA Mortgage-Backed Securities
  (carried at fair value) - Continued

Tehama Estates
  Sacramento, California                7/29        N/A        8.750%    1,340,159      1,394,525              --         122,740
Westview Terrace Apts.
  Tacoma, Washington                    4/30        N/A        8.550%    1,136,877      1,182,978              --         101,082

Total Investment in GNMA Mortgage-
  Backed Securities, carried at fair value                              56,496,457      57,560,513
                                                                        ----------      ----------

Total Investment in Acquired Insured
  Mortgages, carried at fair value                                      65,930,408      67,018,830
                                                                        ----------      ----------
</TABLE>


              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 1998

<TABLE><CAPTION>


                                                           Interest                                                  Annual Payment
                                                            Rate on      Face            Net                         Principal and
                                     Maturity    Put        Mortgage    Value of    Carrying Value     Cumulative       Interest
Development Name/Location             Date       Date(1)    (5)(6)      Mortgage    (3)(10)(11)(13)    Loan Losses     (5)(6)(12)
-------------------------           ---------  ---------  -----------  -----------  --------------    ------------   ------------
<S>                                 <C>        <C>        <C>          <C>          <C>               <C>            <C>

ORIGINATED INSURED MORTGAGES:
----------------------------
Coinsured Mortgages
-------------------------
FHA-Insured Certificates
  (carried at fair value)

Summerwind Apartments-Phase II
  Naples, Florida (7)                     6/30     7/03       8.500%   9,307,962           8,638,778         1,511,743       23,519

St. Charles Place - Phase II
  Miramar, Florida (4)                    2/30    12/03       8.625%   3,710,287(4)(8)(9)  3,422,177                --       341,697

The Breakers at Golf Mill
  Niles, Illinois (7)                    11/29    11/02       7.000%  22,113,146(7)       20,470,263           980,000     1,751,525

Total Investment in coinsured
  FHA-Insured Certificates,
  carried at fair value                                               35,131,395          32,531,218
                                                                    ------------     ---------------

Total Investment in FHA-Insured Certificates
  and GNMA Mortgage-Backed Securities,
  carried at fair value                                              101,061,803          99,550,048
                                                                    ------------     ---------------
</TABLE>


<PAGE>59

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 1998


<TABLE><CAPTION>

                                                           Interest                                                  Annual Payment
                                                            Rate on      Face            Net                         Principal and
                                     Maturity    Put        Mortgage    Value of    Carrying Value     Cumulative       Interest
Development Name/Location             Date       Date(1)    (5)(6)      Mortgage    (3)(10)(11)(13)    Loan Losses     (5)(6)(12)
-------------------------           ---------  ---------  -----------  -----------  --------------    ------------   ------------
<S>                                 <C>        <C>        <C>          <C>          <C>               <C>            <C>
ACQUIRED INSURED MORTGAGES:
--------------------------
FHA-Insured Loans
  (carried at amortized cost)(2)

Kingsway Apts.
  Monroe, Louisiana                      8/07     N/A         10.000%      499,132        499,901(2)           --          86,862
Kon Tiki Apts.
  League City, Texas                     1/27     N/A          9.875%      554,141        555,877(2)           --          58,444

    Total Investment in FHA-Insured
       Loans - Acquired Insured Mortgages,
       carried at amortized cost                                         1,053,273      1,055,778
                                                                       -----------   ------------

ORIGINATED INSURED MORTGAGES:
----------------------------
Fully Insured Mortgages
----------------------------
FHA-Insured Loans
  (carried at amortized cost)(2)

The Turn at Gresham
  Gresham, Oregon                        8/29     12/02       8.000%     5,721,754      5,721,754(2)           --         501,516

    Total Investment in FHA-Insured
      Loans - Originated Insured
      Mortgages, carried at amortized cost                               5,721,754      5,721,754
                                                                      ------------   ------------
    Total Investment in FHA-Insured Loans                                6,775,027      6,777,532
                                                                      ------------   ------------
    TOTAL INVESTMENT IN INSURED MORTGAGES                             $107,836,830   $106,327,580
                                                                      ============   ============

</TABLE>


<PAGE>60





              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

              NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

                                DECEMBER 31, 1998


(1)      Certain  Insured  Mortgages  possess a special  assignment  option,  in
         certain mortgage documents, which allow the Partnership,  anytime after
         this date, to require  payment by the borrower of the unpaid  principal
         balance of the Insured Mortgages. At such time, the borrowers must make
         payment  to the  Partnership  or the  Partnership  may  cancel  the FHA
         insurance and institute foreclosure proceedings.

(2)      Inclusive of closing costs and acquisition fees.

(3)      Prepayment of these Insured Mortgages would be based upon the unpaid 
         principal balance at the time of prepayment.

(4)      This  mortgage  is  insured  under  the  HUD  coinsurance  program,  as
         previously   discussed.   The   Patrician   Mortgage   Company  is  the
         HUD-approved coinsurance lender.

(5)      This represents the base interest rate during the permanent phase of 
         this Insured Mortgage loan.  Additional interest, measured as a 
         percentage of surplus cash (as defined in the participation
         agreements) and a percentage of the proceeds from the sale or 
         refinancing of the development (as defined in the participation 
         agreements), will also be due.  During the years ended 1998, 1997 and
         1996, additional interest was recognized in the amount of $69,820, 
         $134,769 and $84,947, respectively.  These amounts are included in 
         mortgage investment income on the accompanying statements of income and
         comprehensive income.



<PAGE>61

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

              NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

                                DECEMBER 31, 1998

(6)      In  addition,  the  servicer  or  the  sub-servicer  of  the  mortgage,
         primarily   unaffiliated   third   parties,   is  entitled  to  receive
         compensation for certain services rendered.

(7)      These mortgages are insured under the HUD coinsurance  program.  IFI is
         the HUD-approved  coinsurance lender and the Partnership bears the risk
         of any coinsurance loss, as previously discussed.

(8)      These amounts represent the Partnership's 55% interest in this 
         mortgage.  The remaining 45% interest was acquired by AIM 86, an 
         affiliate of the Partnership.

(9)      Represents the principal amount subject to delinquent principal or 
         interest.  See Note 4 to the Partnership's financial statements.

(10)     A reconciliation of the carrying value of the Partnership's  investment
         in Insured  Mortgages,  for the years ended December 31, 1998 and 1997,
         is as follows:


<PAGE>62

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

              NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

                                DECEMBER 31, 1998

<TABLE>
<CAPTION>

                                                              1998                        1997
                                                       -----------------             ---------------
<S>                                                    <C>                           <C>
  Beginning balance                                        $142,890,313                 $150,036,815

           Principal receipts on mortgages                   (1,928,044)                  (1,952,500)

           Proceeds from mortgages assigned
             or sold                                        (33,845,966)                  (7,016,157)

           Net gains on mortgage
             dispositions                                       756,429                       20,746
           Net unrealized (losses) gains on
             investment in FHA-Insured
             Certificates and GNMA Mortgage-
             Backed Securities                               (1,545,152)                   1,801,409

         Ending balance                                    $106,327,580                 $142,890,313
                                                           ============                 ============

</TABLE>

(11)     The mortgages  underlying the Partnership's  investments in FHA-Insured
         Certificates, GNMA Mortgage-Backed Securities and FHA-Insured Loans are
         primarily   non-recourse   first  liens  on   multifamily   residential
         developments or retirement homes.

(12)     Principal and interest are payable at relatively level amounts over the
         life of the Insured Mortgages.

(13)     As of December 31, 1998 and 1997, the tax basis of the Insured 
         Mortgages was approximately $141 million and $144 million, 
         respectively.