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


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

For the fiscal year ended     December 31, 1996
                              ------------------

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 February 27, 1997, 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 $130,920,037.

<PAGE>3
              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                         1996 ANNUAL REPORT ON FORM 10-K

                                TABLE OF CONTENTS

                                     PART I
                                     ------
                                                         Page
                                                         ----
Item 1.   Business  . . . . . . . . . . . . . . . . . .    4
Item 2.   Properties  . . . . . . . . . . . . . . . . .    5
Item 3.   Legal Proceedings . . . . . . . . . . . . . .    5
Item 4.   Submission of Matters to a Vote of
            Security Holders  . . . . . . . . . . . . .    5

                                     PART II
                                     -------
Item 5.   Market for Registrant's Securities and
            Related Security Holder Matters . . . . . .    6
Item 6.   Selected Financial Data . . . . . . . . . . .    7
Item 7.   Management's Discussion and Analysis of
            Financial Condition and Results of
            Operations  . . . . . . . . . . . . . . . .    8
Item 8.   Financial Statements and Supplementary Data .   18
Item 9.   Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosure  . .   19

                                    PART III
                                    --------
Item 10.  Directors and Executive Officers of the
            Registrant  . . . . . . . . . . . . . . . .   20
Item 11.  Executive Compensation  . . . . . . . . . . .   20
Item 12.  Security Ownership of Certain Beneficial
            Owners and Management . . . . . . . . . . .   20
Item 13.  Certain Relationships and Related Transactions. 20

                                     PART IV
                                     -------
Item 14.  Exhibits, Financial Statement Schedules and
            Reports on Form 8-K . . . . . . . . . . . .   21
Signatures  . . . . . . . . . . . . . . . . . . . . . .   24

<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, 1996.

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).

     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 (CRI, Inc.), managed the Partnership's portfolio.  On June
30, 1995, in connection with a merger transaction approved by CRIIMI MAE's
shareholders, an affiliate of CRIIMI MAE acquired the Sub-advisory Agreement and
as a result, CRIIMI MAE Services Limited Partnership acts as the sub-advisor to
the Partnership effective June 30, 1995.

Competition
-----------
     In acquiring and 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 acquiring mortgage investments which are fully insured or
guaranteed by the Federal National Mortgage Association, the Government National
Mortgage Association (GNMA), the Federal Housing Administration (FHA) or the
Federal Home Loan Mortgage Corporation.

     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 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 and its affiliates could be faced with conflicts of interest
in determining which mortgages would be disposed of.  Both CRIIMI MAE Services
Limited Partnership and CRIIMI, Inc., however, are subject to their fiduciary
duties in evaluating the appropriate action to be taken when faced with such
conflicts.

<PAGE>5

                                     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

     The information required by Item 3 is incorporated herein by reference to
Note 12 of the notes to the Partnership's financial statements.

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 1996.

                                     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 bid prices for the Units as reported on AMEX for each
quarterly period in 1996 and 1995 were as follows:

                                                1996
                                                ----
     Quarter Ended                      High            Low
     -------------                     -------        -------

March 31, 1996                         $14 1/8        $12 3/4
June 30, 1996                           13 5/8         12 5/8
September 30, 1996                      13 3/8         12 3/4
December 31, 1996                       13 7/8         13 1/8

<PAGE>6

                                     PART II

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

                                                 1995
                                                 ----

     Quarter Ended                      High            Low
     -------------                     -------        -------
March 31, 1995                         $12 3/8        $11 3/8
June 30, 1995                           13 5/8         11 7/8
September 30, 1995                      13 1/4         12 7/8
December 31, 1995                       13 1/2         12 3/4


     Prior to listing of the Partnership's Units for trading on the AMEX, the
Units were only tradable through the informal market called the "secondary
market."

Distribution Information
------------------------
     Distributions per Unit, payable out of the cash flow of the Partnership,
during 1996 and 1995 were as follows:


          Distributions for the     Amount of Distribution
              Quarter Ended                Per Unit
          ---------------------     ----------------------
          March 31, 1996                  $    0.32 (1)
          June 30, 1996                        0.30
          September 30, 1996                   0.30
          December 31, 1996                    0.30
                                          ---------
                                          $    1.22
                                          =========

          March 31, 1995                  $    0.49 (2)
          June 30, 1995                        0.53 (3)
          September 30, 1995                   0.32 (4)
          December 31, 1995                    0.32 (1)
                                          ---------
                                          $    1.66
                                          =========

(1)  This amount includes approximately $0.02 per Unit representing previously
     undistributed accrued interest received from Water's Edge of New Jersey.
(2)  This amount includes approximately $0.15 per Unit representing accrued, but
     previously undistributed, interest related to the receipt of claim proceeds
     from the mortgage on Pinewood Park Apartments and approximately $0.01 per
     Unit representing previously undistributed accrued interest received from
     Water's Edge of New Jersey.
(3)  This amount includes approximately $0.22 per Unit representing accrued, but
     previously undistributed, interest and capital gain related to the receipt
     of claim proceeds from the mortgage on Hamlet at Cobb's Landing.
(4)  This amount includes approximately $0.02 per Unit representing capital gain
     from the disposition of the mortgage on Gilbert Greens Apartments.


                               Approximate Number of Unitholders
Title of Class                      as of December 31, 1996
-----------------               -------------------------------
Depositary Units of Limited
  Partnership Interest                       7,200

<PAGE>7

                                     PART II

ITEM 6.   SELECTED FINANCIAL DATA
          (Dollars in thousands, except per Unit amounts)
<TABLE>
<CAPTION>
                                                                     For the Years Ended December 31,
                                                              1996         1995        1994          1993        1992
                                                            --------     --------    --------      --------    --------
<S>                                                         <C>          <C>         <C>           <C>         <C>
Income                                                      $ 12,465     $ 13,236    $ 13,332      $ 13,644    $ 12,018

Net (losses) gains on
  mortgage dispositions/modifications                           (378)       2,452         978          (972)     (1,582)

Net earnings                                                  10,293       13,795      11,540        10,542       8,383

Net earnings per Limited
  Partnership Unit (1)                                          1.11         1.49        1.24          1.13        0.90

Distributions per Limited
  Partnership Unit (1)(2)                                       1.22         1.66        1.41          1.12      1.1128


                                                                                  As of December 31,
                                                              1996         1995        1994          1993        1992
                                                            --------     --------    --------      --------    --------

Total assets                                                $159,554     $161,927    $154,805      $166,904    $166,768

Partners' equity                                            $156,644     $158,806    $150,506      $161,498    $161,381


(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, 1996, 1995, 1994, 1993 and
     1992, which were paid subsequent to year end.  See Notes 7 and 9 of the notes to the Partnership's financial statements.

</TABLE>

     The selected statements of operations data presented above for the years
ended December 31, 1996, 1995 and 1994, and the balance sheet data as of
December 31, 1996 and 1995, 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 operations data for the years ended December
31, 1993 and 1992 and the balance sheet data as of December 31, 1994, 1993 and
1992 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>8

                                     PART II

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, CRIIMI MAE Services Limited Partnership manages the Partnership's
portfolio.  These transactions had no effect on the Partnership's financial
statements.

     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, 1996, 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.  The Partnership's principal investment objectives are to invest in
Insured Mortgages which (i) preserve and protect the Partnership's invested
capital; (ii) provide quarterly distributions of adjusted cash from operations
which may be increased over time as a result of Participations (as defined
below), when obtainable, on Originated Insured Mortgages; and (iii) provide
appreciation by selecting Acquired Insured Mortgages which present the
possibility of early prepayment.

     As of December 31, 1996, the Partnership had invested in 37 Insured
Mortgages with aggregate amortized cost, face and fair values of approximately
$150 million, $151 million, and $150 million, respectively.

<PAGE>9

                                     PART II

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.

     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, 1996 and 1995:

<TABLE>
<CAPTION>                                         December 31,
                                              1996             1995
                                          ------------     ------------
<S>                                       <C>              <C>
Number of:
  GNMA Mortgage-Backed Securities                   22(1)            19
  FHA-Insured Certificates                           5                7
Amortized Cost                            $ 73,722,912     $ 76,462,511
Face Value                                  73,970,506       76,636,450
Fair Value                                  74,492,545       77,918,878

(1)  During 1996, the Partnership purchased three Acquired Insured Mortgages
totalling approximately $9.4 million, as discussed below.
</TABLE>

          Listed below is the Partnership's aggregate investment in fully
     insured Originated Insured Mortgages as of December 31, 1996 and 1995:
<TABLE>
<CAPTION>                                      December 31,
                                           1996            1995
                                       ------------    ------------
<S>                                    <C>             <C>
Number of Mortgages                               1               1
Amortized Cost                        $  11,356,150    $ 11,411,412
Face Value                               10,994,620      11,043,976
Fair Value                               11,128,509      11,289,584

</TABLE>

          As of February 28, 1997, all fully insured mortgages were current with
     respect to the payment of principal and interest.

<PAGE>10

                                     PART II

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, 1996, the Partnership had received
     approximately $7.6 million from the assignment including repayment of
     accrued interest.  The remainder of the proceeds, approximately $4.1
     million, is included in Due from HUD and Receivables and other assets.  In
     January 1997, the Partnership received additional gross proceeds of
     approximately $2.6 million from HUD.  These proceeds of $0.27 per unit were
     declared as part of the January 1997 distribution and will be distributed
     in May 1997.  HUD has disallowed approximately $1.5 million of the
     assignment claim.  The Servicer is currently negotiating with HUD in regard
     to collection of the disallowed portion of the claim.  The General Partner
     believes the full amount of the receivable will be recovered from either
     HUD or the Servicer.  In conjunction with the assignment of the mortgage,
     the Partnership recognized a net loss of approximately $204,000 in the
     second quarter of 1996.

          During March 1996, a retained yield holder in the Harbor View Estates
     loan exercised its right to purchase the participation certificate with
     respect to this insured mortgage after a Notice of Default was filed with
     HUD.  In March 1996, the Partnership received approximately $709,100 in
     disposition proceeds, including approximately $17,400 of interest due to
     the Partnership from this prepayment.  The net principal proceeds were
     approximately $691,000, resulting in a gain of approximately $600.  The net
     proceeds were reinvested in fully insured mortgages.  In April 1996,
     approximately $4,900 was remitted to the retained yield holder in the
     Harbor View Estates mortgage in connection with the final accounting of
     this disposition.  This resulted in a net loss of approximately $4,300
     which is included on the accompanying statement of operations for the year
     ended December 31, 1996.

          In June 1996, the Partnership entered into a modification agreement
     with the mortgagor of Turn at Gresham.  This agreement effectively lowered
     the interest rate on the mortgage from 8.375% to 8% for a period until
     maturity.  In addition, a seven year prepayment lockout was included in the
     modification, followed by a 3%, 2%, and 1% penalty in years eight, nine,
     and ten, respectively.  The Partnership incurred a loss of approximately
     $169,600 in connection with this modification which represents the write
     off of unamortized costs.

          In the case of fully insured Originated Insured Mortgages and Acquired
     Insured Mortgages, the Partnership's maximum exposure for purposes of
     determining loan losses would generally be approximately 1% of the unpaid
     principal balance of the Insured Mortgage (an assignment fee charged by
     FHA) at the date of a default, plus the unamortized balance of acquisition
     fees and closing costs paid in connection with the acquisition of the
     Insured Mortgages and the loss of approximately 30 days accrued interest.

     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

<PAGE>11

                                     PART II

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

     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, 1996 and 1995, 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, 1996, and 1995, 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, 1996 and
          1995.  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,
                                          1996            1995
                                      ------------    ------------
<S>                                   <C>             <C>
Amortized Cost                        $  3,730,991    $  3,749,991
Face Value                               3,730,991       3,749,991
Fair Value                               3,527,521       3,583,856

</TABLE>

          As of February 28, 1997, the mortgagor had made payments of principal
          and interest due to the Partnership on the mortgage through October

<PAGE>12

                                     PART II

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

          1995.  Patrician is litigating the case in bankruptcy court while
          pursuing negotiations on a modification agreement with the borrower.

          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>13

                                     PART II

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

     2.   Coinsured by affiliate
          ----------------------
          As of December 31, 1996 and 1995, 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.

          The IFI coinsured mortgages had an aggregate fair value of $30,012,592
          and $30,553,317, as of December 31, 1996 and 1995, respectively, and
          amortized costs and face values as follows:

<PAGE>14

                                     PART II

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

<TABLE><CAPTION>

                                  Amortized        Face       Amortized       Face        Loan Losses Recognized
                                     Cost          Value         Cost         Value        for the year ended       Cumulative
                                 December 31,   December 31, December 31,  December 31,       December 31,          Loan Losses
                                     1996           1996         1995          1995          1996         1995      Recognized
                                 ------------   ------------ ------------  ------------   ----------   ----------   -----------
<S>                              <C>            <C>          <C>           <C>            <C>          <C>          <C>
The Breakers at Golf
  Mill(1)                        $ 22,492,106   $ 22,492,106 $ 22,662,648  $ 22,662,648   $       --   $       --   $   980,000
Summerwind Apts.-Phase
  II(1)                             8,000,581      9,442,628    8,037,922     9,501,784           --           --     1,511,743
                                 ------------   ------------ ------------  ------------   ----------   ----------   -----------
                                 $ 30,492,687   $ 31,934,734 $ 30,700,570  $ 32,164,432   $       --   $       --   $ 2,491,743
                                 ============   ============ ============  ============   ==========   ==========   ===========

(1)  As of February 28, 1997, the mortgagor was current with respect to payment of principal and interest on this mortgage.
</TABLE>

     C.   FHA-Insured Loans
          -----------------
          Listed below is the Partnership's aggregate investment in fully
     insured Originated Insured Mortgages as of December 31, 1996 and 1995:


<TABLE>
<CAPTION>                                   December 31,
                                         1996          1995
                                     ------------  ------------
<S>                                  <C>           <C>
Number of Mortgages                             4             4
Amortized Cost                       $ 29,746,073  $ 30,162,342
Face Value                             29,163,152    29,299,733
Fair Value                             29,712,245    30,199,166

</TABLE>

<PAGE>15

                                     PART II

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

          Listed below is the Partnership's aggregate investment in fully
     insured Acquired Insured Mortgages as of December 31, 1996 and 1995:

<TABLE>
<CAPTION>                                    December 31,
                                          1996          1995
                                      ------------  ------------
<S>                                   <C>           <C>
Number of Mortgages                              2             2
Amortized Cost                        $  1,129,575  $  1,161,339
Face Value                               1,126,731     1,158,329
Fair Value                               1,173,057     1,219,590

</TABLE>

          As of February 28, 1997, 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, 1996, 1995 and 1994, the Partnership received additional
     interest of $63,045, $46,581 and $13,938, respectively, from the FHA-
     Insured Loans which contain Participations.  These amounts are included in
     mortgage investment income on the accompanying statements of operations.

     Results of Operations
     ---------------------
     1996 versus 1995
     ----------------
     Net earnings decreased for 1996 as compared to 1995 primarily as a result
     of a reduction in net gains on mortgage dispositions and modifications, as
     discussed below.  Also contributing to this decrease were decreases in
     mortgage investment income and interest and other income, as discussed
     below.

     Mortgage investment income decreased for 1996 as compared to 1995.  This
     decrease was primarily due to the timing of the reinvestment of net
     proceeds from the May 1996 assignment of the Water's Edge of New Jersey
     mortgage.  Additionally, the participation agreement with The Breakers at
     Golf Mill was terminated effective March 1, 1995, therefore Participations
     received by the Partnership decreased from $133,120 in 1995 to $21,902 in
     1996.

     Interest and other income decreased for 1996 as compared to 1995.  This
     decrease was primarily due to interest earned on claim proceeds from
     Hazeltine Shores and Pinewood Park Apartments during 1995.  Also
     contributing to this decrease was a decrease in short-term investment
     income.

     General and administrative expenses decreased for 1996 as compared to 1995.
     This decrease was primarily the result of non-recurring professional fees
     in connection with the disposition of problem mortgages in 1995, as well as
     a decrease in service fee expense as a result of the reduction in the
     mortgage base.

     Net gains on mortgage dispositions and modifications decreased for 1996 as
     compared to 1995.  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 1996, the
     Partnership incurred net losses on mortgage dispositions and modifications

<PAGE>16

                                     PART II

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

     of approximately $378,000 related to the prepayment of the mortgage on
     Harbor View Estates, the partial settlement of the coinsurance claim on
     Water's Edge of New Jersey and the modification of the mortgage on Turn at
     Gresham.  This compares to gains recognized in 1995 of approximately $2.3
     million related to the settlement of the coinsurance claims on Pinewood
     Park Apartments and Hamlet at Cobb's Landing, and to a gain of
     approximately $140,000 in connection with the prepayment of the mortgage on
     Gilbert Greens Apartments.

     1995 versus 1994
     ----------------
     Net earnings increased for 1995 as compared to 1994 primarily as a result
     of an increase in gains on mortgage dispositions.  Also contributing to
     this increase were decreases in general and administrative expenses and the
     provision for settlement of litigation, as discussed below.
     Mortgage investment income remained relatively constant for 1995 as
     compared to 1994.

     General and administrative expenses decreased for 1995 as compared to 1994.
     This decrease was primarily a result of non-recurring payroll expenses and
     professional fees incurred in connection with the disposition of Hazeltine
     Shores, Pinewood Park Apartments and Hamlet at Cobb's Landing during 1994.
     Also contributing to the decrease was a one-time payment in 1994 for the
     Partnership's initial listing on the American Stock Exchange.

     Provision for settlement of litigation decreased for 1995 as compared to
     1994 due to the recognition of a non-recurring provision for settlement of
     litigation, as discussed below.

     Net gains on mortgage dispositions increased for 1995 as compared to 1994.
     During 1995, the Partnership recognized aggregate gains of approximately
     $2.4 million related to the settlement of the coinsurance claims on
     Pinewood Park Apartments and Hamlet at Cobb's Landing and the prepayment of
     the mortgage on Gilbert Greens Apartments.  This compares to the
     recognition in 1994 of a gain of approximately $1.0 million related to the
     settlement of the coinsurance claim on Hazeltine Shores, and a loss of
     approximately $42,000 in connection with the disposition of the mortgage on
     Ashbury Meadows Apartments.

<PAGE>17

                                     PART II

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

     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, were sufficient during 1996 to meet
     operating requirements.

     The basis for paying distributions to Unitholders is cash flow from
     operations, which includes regular interest income and principal from
     Insured Mortgages, and gains, if any, from mortgage dispositions. 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 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 - 1996 versus 1995
     ----------------------------
     Net cash provided by operating activities decreased for 1996 as compared to
     1995 primarily due to a decrease in net earnings in 1996 as a result of a
     decrease in mortgage investment income and interest and other income, as
     discussed above.  Also contributing to the decrease was an increase in
     receivables and other assets during 1996 as a result of the assignment of
     the mortgage on Water's Edge of New Jersey.

     Net cash provided by investing activities decreased for 1996 as compared to
     1995 primarily due to an increase in the acquisition of Acquired Insured
     Mortgages from approximately $7.6 million in 1995 to approximately $9.4
     million in 1996.  This decrease was also due to a reduction in proceeds
     from mortgage dispositions and modifications from approximately $9.3
     million in 1995 to approximately $8.6 million in 1996.

     Net cash used in financing activities decreased for 1996 as compared to
     1995 primarily due to a decrease in distributions paid to partners as a
     result of special distributions related to the receipt of previously
     undistributed accrued interest and capital gain in connection with the
     disposition of the mortgages on Hazeltine Shores, Pinewood Park Apartments
     and Hamlet at Cobb's Landing during the first three quarters of 1995.

     Cash flow - 1995 versus 1994
     ----------------------------
     Net cash provided by operating activities increased for 1995 as compared to
     1994 primarily due to an increase in receivables and other assets during
     1994 as a result of the disposition of the properties underlying the
     coinsured mortgages on Pinewood Park Apartments, Hazeltine Shores and
     Hamlet at Cobb's Landing, as discussed above.  Also contributing to the
     increase was a decrease in payments made and treated as an addition to AHFS
     and Due from HUD during 1995, as compared to 1994, as well as a decrease in
     general and administrative costs, as previously discussed.

     Net cash provided by investing activities decreased for 1995 as compared to
     1994 primarily due to a decrease in proceeds from mortgage dispositions
     from approximately $29.4 million for 1994 to approximately $9.3 million for

<PAGE>18

                                     PART II

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

     1995.  Partially offsetting this decrease was a decrease in the acquisition
     of Acquired Insured Mortgages from approximately $25.3 million in 1994 to
     approximately $7.7 million in 1995.

     Net cash used in financing activities increased for 1995 as compared to
     1994 primarily due to an increase in distributions paid to partners as a
     result of special distributions related to the receipt of previously
     undistributed accrued interest and capital gain in connection with the
     disposition of the mortgages on Hazeltine Shores, Pinewood Park Apartments
     and Hamlet at Cobb's Landing during the fourth quarter of 1994 and the
     first three quarters of 1995.

     Other Events
     ------------
     On November 6, 1992, a complaint was filed on behalf of a limited partner
     of the Partnership in the Superior Court for the State of California for
     the County of Los Angeles, Southwest District against the Partnership.   On
     March 28, 1994, the Partnership entered into an agreement to settle the
     lawsuit.  Under the terms of the settlement, the Partnership paid $968,574
     to the plaintiff on April 14, 1994, and the plaintiff returned its 50,000
     Units of limited partnership interest to the Partnership.  In connection
     with the settlement, the Partnership recorded a provision for settlement of
     litigation in the amount of $349,824 in the accompanying statement of
     operations for the year ended December 31, 1994. This provision represented
     the difference between the market value of the 50,000 Units, as of April
     14, 1994, and the Partnership's cost to repurchase the Units.

     During 1994, IFI, an affiliate of the Partnership, filed a Complaint in the
     United States District Court for the District of Minnesota.  The case
     concerned the violation of the HUD regulatory agreement and breach of
     fiduciary duty by the mortgagor of the mortgage on Hazeltine Shores.  In
     response to this Complaint, the mortgagor filed counterclaims against IFI
     and against the Partnership, the General Partner and CRI.  A motion to
     dismiss the counterclaims was granted with prejudice on July 24, 1995.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information required by this item is contained on pages 27 through 54.

<PAGE>19

                                     PART II

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

     None.
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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

     The Partnership has no officers or directors.  The affairs of the
Partnership are managed by the General Partner, which is wholly owned by CRIIMI
MAE, a company 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 manages CRIIMI MAE.

     Effective September 6, 1991, the General Partner succeeded the former
general partners to become the sole general partner of the Partnership.  CRIIMI,
Inc. purchased the interests of the former managing general partner and the
former corporate general partner pursuant to the terms of the Partnership
Agreement.  In addition, the General Partner acquired the shares of the company
which acted as the assignor limited partner in the Partnership.  The Advisor
purchased the interest of the associate general partner but withdrew from the
Partnership effective September 19, 1991.  The Partnership succeeded to the 0.1%
interest formerly held by the Advisor.

     Also, on September 6, 1991, the Advisor succeeded IFI as the advisor of the
Partnership.  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
receive 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 REIT, on June 30,
1995, an affiliate of CRIIMI MAE acquired the Sub-advisory Agreement.  As a
consequence of this transaction, 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.

     The General Partner is also the general partner of AIM 84, AIM 85 and AIM
86, limited partnerships with investment objectives similar to those of the
Partnership.

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

<PAGE>20

                                    PART III

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

          (f)  Involvement in certain legal proceedings.

               None.

          (g)  Promoters and control persons.

               Not applicable.

          (h)  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, 1996.

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by Item 11 is incorporated herein by reference to
Note 9 of the notes to the Partnership's financial statements.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT

     As of December 31, 1996, no person was known by the Partnership to be the
beneficial owner of more than 5% of the outstanding Units of the Partnership.

     As of December 31, 1996, 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.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

   (a)  Transactions with management and others.

        Note 9 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 incorporated herein by
        reference.

   (b)  Certain business relationships.

        Other than as set forth in Item 11 of this report which is incorporated
        herein by reference, 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>21

                                     PART IV

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, 1996
       and 1995                                              27

     Statements of Operations for the years ended
       December 31, 1996, 1995 and 1994                      28

     Statements of Changes in Partners' Equity for
       the years ended December 31, 1996, 1995 and
       1994                                                  29

     Statements of Cash Flows for the years ended
       December 31, 1996, 1995 and 1994                      32

     Notes to Financial Statements                           33


(a)(2)      Financial Statement Schedules:

            IV - Mortgage Loans on Real Estate

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

  4.(b)     Amendment to the Amended and Restated Agreement of Limited
            Partnership of the Partnership dated February 12, 1990.

 10.(a)     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.(b)     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.

<PAGE>22

                                     PART IV

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

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

 10.(g)     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.(h)     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.(i)     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.(j)     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.

 10.(k)     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.(l)     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.(m)     Non-negotiable promissory note to American Insured Investors -
            Series 85, L.P. in the amount of $1,784,688 dated December 31, 1991,
            incorporated by reference to Exhibit 28(d) to the Partnership's
            Annual Report on Form 10-K for the year ended December 31, 1991.

 10.(n)     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.

<PAGE>23

                                     PART IV

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

10.(o)      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.(p)     Non-negotiable promissory note from American Insured 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.(q)     Non-negotiable promissory note from American Insured 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.(r)     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.

 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>24

                                   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

March 18, 1997                /s/ William B. Dockser
---------------------------   -------------------------
DATE                          William B. Dockser
                              Chairman of the Board and
                                Principal Executive Officer


March 18, 1997                /s/ H. William Willoughby
---------------------------   -------------------------
DATE                          H. William Willoughby
                              President and Director


March 18, 1997                /s/ Cynthia O. Azzara
---------------------------   -------------------------
DATE                          Cynthia O. Azzara
                              Principal Financial and
                                Accounting Officer


March 18, 1997                /s/ Garrett G. Carlson, Sr.
---------------------------   --------------------------
DATE                          Garrett G. Carlson, Sr.
                              Director

March 18, 1997                /s/ Larry H. Dale
---------------------------   -------------------------
DATE                          Larry H. Dale
                              Director


March 18, 1997                /s/ G. Richard Dunnells
---------------------------   -------------------------
DATE                          G. Richard Dunnells
                              Director


March 18, 1997                /s/ Robert F. Tardio
---------------------------   -------------------------
DATE                          Robert F. Tardio
                              Director

<PAGE>25






























              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

              Financial Statements as of December 31, 1996 and 1995

            and for the Years Ended December 31, 1996, 1995 and 1994

<PAGE>26

                    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, 1996
and 1995 and the related statements of operations, changes in partners' equity
and cash flows for the years ended December 31, 1996, 1995 and 1994.  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, 1996 and 1995, and the results of its operations and its cash flows
for the years ended December 31, 1996, 1995 and 1994, in conformity with
generally accepted accounting principles.

     As explained in Note 2 of the notes to the financial statements, effective
January 1, 1994, the Partnership changed its method of accounting for its
investment in insured mortgages.

     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, 1996 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 18, 1997

<PAGE>27

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                                 BALANCE SHEETS
                                     ASSETS
<TABLE>
<CAPTION>
                                                         As of December 31,
                                                       1996            1995
                                                   ------------    ------------
<S>                                                <C>             <C>
Investment in FHA-Insured Certificates
  and GNMA Mortgage-Backed
  Securities, at fair value:
  Acquired insured mortgages                       $ 74,492,545    $ 77,918,878
  Originated insured mortgages                       44,668,622      45,426,757
                                                   ------------    ------------
                                                    119,161,167     123,345,635
Investment in FHA-Insured Loans,
  at amortized cost, net of unamortized
  discount and premium:
  Originated insured mortgages                       29,746,073      30,162,342
  Acquired insured mortgages                          1,129,575       1,161,339
                                                   ------------    ------------
                                                     30,875,648      31,323,681

Due from HUD                                          3,221,611         285,330

Cash and cash equivalents                             1,918,341       2,881,537

Investment in affiliates                              1,177,774       1,189,316

Notes receivable from affiliates
  and due from affiliates                               797,687         797,687

Receivables and other assets                          2,402,130       2,103,710
                                                   ------------    ------------
         Total assets                              $159,554,358    $161,926,896
                                                   ============    ============

<PAGE>28

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                        LIABILITIES AND PARTNERS' EQUITY

Distributions payable                              $  2,776,685    $  2,961,797

Accounts payable and accrued expenses                   133,484         159,092
                                                   ------------    ------------
         Total liabilities                            2,910,169       3,120,889
                                                   ------------    ------------
Commitments and contingencies

Partners' equity:
  Limited partners' equity                          158,381,944     159,332,082
  General partner's deficit                            (977,432)       (928,476)
  Less:  Repurchased Limited Partnership
    Units - 50,000 Units                               (618,750)       (618,750)
  Net unrealized (losses) on investment
    in FHA-Insured Certificates and GNMA
    Mortgage-Backed Securities                       (2,240,839)     (1,519,157)
  Net unrealized gains on investment in
    FHA-Insured Certificates and GNMA
    Mortgage-Backed Securities                        2,099,266       2,540,308
                                                   ------------    ------------

         Total partners' equity                     156,644,189     158,806,007
                                                   ------------    ------------
         Total liabilities and
           partners' equity                        $159,554,358    $161,926,896
                                                   ============    ============

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

<PAGE>29

                         AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                                           STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                      For the years ended December 31,
                                                                 1996             1995            1994
                                                              -----------      -----------    ------------
<S>                                                           <C>              <C>            <C>
     Income:
       Mortgage investment income                             $12,229,747      $12,524,904    $ 12,575,210
       Interest and other income                                  235,386          710,734         757,271
                                                              -----------      -----------    ------------
                                                               12,465,133       13,235,638      13,332,481
                                                              -----------      -----------    ------------
     Expenses:
       Asset management fee to related parties                  1,503,297        1,493,283       1,503,831
       General and administrative                                 291,178          399,681         881,855
       Interest expense to affiliate                                   --               --          35,694
       Provision for settlement of
         litigation                                                    --               --         349,824
                                                              -----------      -----------    ------------
                                                                1,794,475        1,892,964       2,771,204
                                                              -----------      -----------    ------------
       Earnings before gains (losses) on
            mortgage dispositions/modifications                10,670,658       11,342,674      10,561,277

     Gains on mortgage dispositions/modifications                      --        2,452,221       1,020,793
     Losses on mortgage dispositions/modifications               (377,900)              --         (42,488)
                                                              -----------      -----------    ------------
             Net earnings                                     $10,292,758      $13,794,895    $ 11,539,582
                                                              ===========      ===========    ============

     Net earnings allocated to:
       Limited partners - 95.1%                               $ 9,788,413      $13,118,945    $ 10,974,142
       General partner - 4.9%                                     504,345          675,950         565,440
                                                              -----------      -----------    ------------
                                                              $10,292,758      $13,794,895    $ 11,539,582
                                                              ===========      ===========    ============

     Net earnings per weighted average
       Limited Partnership Unit
       outstanding                                            $      1.11      $      1.49    $       1.24
                                                              ===========      ===========    ============
     Weighted average Limited Partnership Units
       outstanding                                              8,802,091        8,802,091       8,816,201
                                                              ===========      ===========     ===========


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

<PAGE>30

                                 AMERICAN INSURED INVESTORS L.P. - SERIES 88

                                  STATEMENTS OF CHANGES IN PARTNERS' EQUITY

                           For the years ended December 31, 1996, 1995 and 1994

<TABLE><CAPTION>

                                                                                      Unrealized       Unrealized
                                                                                         Gains           Losses
                                                                                    on Investment    on Investment
                                                                                    in FHA-Insured   in FHA-Insured
                                                                      Repurchased    Certificates      Certificates
                                                                       Limited        and GNMA           and GNMA          Total
                                           General        Limited     Partnership  Mortgage-Backed   Mortgage-Backed     Partners'
                                           Partner        Partners       Units       Securities        Securities         Equity
                                         ------------  -------------  ----------- ----------------  ----------------  -------------
<S>                                      <C>           <C>            <C>         <C>               <C>               <C>
Balance, January 1, 1994                 $   (776,874) $ 162,274,414  $        -- $             --  $             --  $ 161,497,540

  Repurchase of 50,000 Limited
    Partnership Units                              --             --     (618,750)              --                --       (618,750)

  Net earnings                                565,440     10,974,142           --               --                --     11,539,582

  Distributions paid or accrued
    of $1.41 per weighted
    average Unit outstanding,
    including return of capital
    of $0.17 per Unit                        (640,140)   (12,423,948)          --               --                --    (13,064,088)

  Unrealized gains (losses) on
    investment in FHA-Insured
    Certificates and GNMA Mortgage-
    Backed Securities                              --             --           --          393,579        (9,241,699)    (8,848,120)
                                         ------------  -------------  ----------- ----------------  ----------------  -------------
Balance, December 31, 1994                   (851,574)   160,824,608     (618,750)         393,579        (9,241,699)   150,506,164

<PAGE>31

                            AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          STATEMENTS OF CHANGES IN PARTNERS' EQUITY - Continued

                           For the years ended December 31, 1996, 1995 and 1994


</TABLE>
<TABLE><CAPTION>

                                                                                      Unrealized       Unrealized
                                                                                         gains           losses
                                                                                    on Investment    on Investment
                                                                                    in FHA-Insured   in FHA-Insured
                                                                    Repurchased      Certificates      Certificates
                                                                     Limited          and GNMA           and GNMA        Total
                                         General        Limited     Partnership    Mortgage-Backed   Mortgage-Backed   Partners'
                                         Partner        Partners       Units         Securities        Securities       Equity
                                       ------------  -------------  -----------   ----------------  ---------------- ------------
<S>                                    <C>           <C>            <C>           <C>               <C>              <C>
  Net earnings                              675,950     13,118,945           --                 --                --   13,794,895

  Distributions paid or accrued
    of $1.66 per Unit, including
    return of capital of $0.17 per
    Unit                                   (752,852)   (14,611,471)          --                 --                --  (15,364,323)

  Adjustment to net unrealized gains
    (losses) on investment in FHA-
    Insured Certificates and
    GNMA Mortgage-Backed
    Securities                                   --             --           --          2,146,729         7,722,542    9,869,271
                                       ------------  -------------  -----------   ----------------  ----------------  -----------
Balance, December 31, 1995                 (928,476)   159,332,082     (618,750)         2,540,308        (1,519,157) 158,806,007

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

  Distributions paid or accrued
    of $1.22 per Unit, including
    return of capital of $.11 per
    Unit                                   (553,301)   (10,738,551)          --                 --                --  (11,291,852)

  Adjustment to net unrealized gains
    (losses) on investment in FHA-
    Insured Certificates and
    GNMA Mortgage-Backed
    Securities                                   --             --             --           (441,042)       (721,682)    (1,162,724)
                                     --------------  -------------  -------------   ----------------  --------------  -------------
Balance, December 31, 1996           $     (977,432) $ 158,381,944  $    (618,750)  $      2,099,266  $   (2,240,839) $ 156,644,189
                                     ==============  =============  =============   ================  ==============  =============
Limited Partnership Units outstanding -
  December 31, 1994, 1995 and 1996                         8,802,091
                                                       =============

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

<PAGE>32

                            AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                                         STATEMENTS OF CASH FLOWS

<TABLE><CAPTION>

                                                                                  For the years ended December 31,
                                                                             1996              1995           1994
                                                                         ------------      ------------   ------------
<S>                                                                      <C>               <C>             <C>
Cash flows from operating activities:
  Net earnings                                                           $ 10,292,758      $ 13,794,895   $ 11,539,582

  Adjustments to reconcile net earnings to net cash
    provided by operating activities:
    Gains on mortgage dispositions/modifications                                   --        (2,452,221)    (1,020,793)
    Losses on mortgage dispositions/modifications                             377,900                --         42,488
    Provision for settlement of litigation                                         --                --        349,824
    Changes in assets and liabilities:
      Decrease in investment in affiliate and notes
        receivable and due from affiliates                                     11,542            88,035      1,696,074
      (Increase) decrease in receivables and other assets                    (298,420)          169,312       (520,988)
      Decrease in accounts payable and accrued expenses                       (25,608)          (67,462)       (44,119)
      Decrease in note payable and due to affiliate                                --                --     (1,784,688)
                                                                         ------------      ------------   ------------
        Net cash provided by operating activities                          10,358,172        11,532,559     10,257,380
                                                                         ------------      ------------   ------------
Cash flows from investing activities:
    Payments made and treated as an
      addition to Assets Held for Sale
      Under Coinsurance Program/mortgage
      investment income accrued/accreted on AHFS                              (37,452)          (97,952)      (745,431)
  Proceeds from dispositions/modifications of
    Insured Mortgages                                                       8,571,748         9,316,015     29,372,643
  Investment in Acquired Insured Mortgages and advances on
    construction loans                                                     (9,416,014)       (7,687,752)   (25,334,265)
  Receipt of principal from scheduled payments                              1,037,314           929,409        788,169
                                                                         ------------      ------------   ------------
        Net cash provided by investing activities                             155,596         2,459,720      4,081,116
                                                                         ------------      ------------   ------------
Cash flows from financing activities:
  Distributions paid to partners                                          (11,476,964)      (16,474,997)   (12,342,566)
  Repurchase of Limited Partnership Units                                          --                --       (968,574)
                                                                         ------------      ------------   ------------
        Net cash used in financing activities                             (11,476,964)      (16,474,997)   (13,311,140)
                                                                         ------------      ------------   ------------
Net (decrease) increase in cash and cash equivalents                         (963,196)       (2,482,718)     1,027,356

Cash and cash equivalents, beginning of year                                2,881,537         5,364,255      4,336,899
                                                                        -------------      ------------   ------------
Cash and cash equivalents, end of year                                  $   1,918,341      $  2,881,537   $  5,364,255
                                                                        =============      ============   ============

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

<PAGE>33

              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, CRIIMI MAE Services
Limited Partnership, 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, 1996, 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
will be required (subject to the conditions set forth in the Partnership
Agreement) to distribute such proceeds to its Unitholders.  The Partnership's
principal investment objectives are to invest in Insured Mortgages which (i)
preserve and protect the Partnership's invested capital; (ii) provide quarterly
distributions of adjusted cash from operations which may be increased over time
as a result of Participations (as defined below), when obtainable, on Originated
Insured Mortgages; and (iii) provide appreciation by selecting Acquired Insured
Mortgages which present the possibility of early prepayment.

     The General Partner listed the Partnership's Units for trading on the
American Stock Exchange (AMEX) on January 18, 1994, in order to provide

<PAGE>34

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

1.   ORGANIZATION - Continued

investment liquidity as contemplated in the Partnership's original prospectus.
The Units are traded under the symbol "AIK."

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.

     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.

          Prior to January 1, 1994 the Partnership accounted for its investment
     in Insured Mortgages at amortized cost in accordance with Statement of
     Financial Accounting Standards No. 65 "Accounting for Certain Mortgage
     Banking Activities" (SFAS 65) since it had the ability and intent to hold
     these assets for the foreseeable future.  The difference between the cost
     and the unpaid principal balance, at the time of purchase, is carried as a
     discount or premium and amortized over the remaining contractual life of
     the mortgage using the effective interest method.  The effective interest
     method provides a constant yield of income over the term of the mortgage.
     Mortgage investment income is comprised of amortization of the discount
     plus the stated mortgage interest payments received or accrued, less
     amortization of the premium.

          In May 1993, the Financial Accounting Standards Board issued Statement
     of Financial Accounting Standards No. 115 "Accounting for Certain
     Investments in Debt and Equity Securities" (SFAS 115), effective for fiscal
     years beginning after December 15, 1993.  The Partnership adopted this
     statement as of January 1, 1994.  This statement requires that investments
     in debt and equity securities be classified into one of the following
     investment categories based upon the circumstances under which such
     securities might be sold:  Held to Maturity, Available for Sale, and
     Trading.  Generally, certain debt securities for which an enterprise has
     both the ability and intent to hold to maturity should be accounted for

<PAGE>35

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

2.   SIGNIFICANT ACCOUNTING POLICIES - Continued

     using the amortized cost method and all other securities must be recorded
     at their fair values.

          As of December 31, 1996, the weighted average remaining term of the
     Partnership's investments in GNMA Mortgage-Backed Securities and FHA-
     Insured Certificates is approximately 32 years.  However, the Partnership
     Agreement states that the Partnership will terminate in approximately 25
     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, 1996 and
     1995, 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 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
     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.

     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.

<PAGE>36

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

2.   SIGNIFICANT ACCOUNTING POLICIES - Continued

     Reclassification
     ----------------
          Certain amounts in the financial statements for the year ended
     December 31, 1994 have been reclassified to conform with the 1996 and 1995
     presentation.

     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.

     Net Earnings Per Limited Partnership Unit
     -----------------------------------------
          Net earnings per Limited Partnership Unit is computed based upon the
     weighted average number of Units outstanding of 8,802,091, 8,802,091 and
     8,816,201, for the years ended December 31, 1996, 1995 and 1994,
     respectively.

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.

<PAGE>37

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS
3.   FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued

<TABLE>
<CAPTION>
                                                     As of December 31, 1996      As of December 31, 1995
                                                     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                      $ 73,722,912   $ 74,492,545  $ 76,462,511   $ 77,918,878
    Originated insured mortgages                      45,579,828     44,668,622    45,861,973     45,426,757
                                                    ------------   ------------  ------------   ------------
                                                    $119,302,740   $119,161,167  $122,324,484   $123,345,635
                                                    ============   ============  ============   ============

Investment in FHA-Insured Loans:
  Originated insured mortgages                      $ 29,746,073   $ 29,712,245  $ 30,162,342   $ 30,199,166
  Acquired insured mortgages                           1,129,575      1,173,057     1,161,339      1,219,590
                                                    ------------   ------------  ------------   ------------
                                                    $ 30,875,648   $ 30,885,302  $ 31,323,681   $ 31,418,756
                                                    ============   ============  ============   ============

Cash and cash equivalents                           $  1,918,341   $  1,918,341  $  2,881,537   $  2,881,537

Accrued interest receivable                         $  1,344,679   $  1,344,679  $  1,971,322   $  1,971,322

</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.  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.

<PAGE>38

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

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, 1996 and 1995:

<TABLE>
<CAPTION>                                      December 31,
                                           1996          1995
                                       ------------  ------------
<S>                                    <C>           <C>
Number of:
  GNMA Mortgage-Backed Securities                22(1)         19
  FHA-Insured Certificates                        5             7
Amortized Cost                         $ 73,722,912  $ 76,462,511
Face Value                               73,970,506    76,636,450
Fair Value                               74,492,545    77,918,878

(1)  During 1996, the Partnership purchased three Acquired Insured Mortgages
totalling approximately $9.4 million.

</TABLE>

          Listed below is the Partnership's aggregate investment in fully
     insured Originated Insured Mortgages as of December 31, 1996 and 1995:

<TABLE>
<CAPTION>                                   December 31,
                                        1996             1995
                                    ------------     ------------
<S>                                 <C>              <C>
Number of Mortgages                            1                1
Amortized Cost                     $  11,356,150     $ 11,411,412
Face Value                            10,994,620       11,043,976
Fair Value                            11,128,509       11,289,584

</TABLE>

          As of February 28, 1997, 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, 1996, the Partnership had received
     approximately $7.6 million including repayment of accrued interest.  The
     remainder of the proceeds, approximately $4.1 million, is included in Due
     from HUD and Receivables and other assets.  In January 1997, the
     Partnership received proceeds of approximately $2.6 million from HUD.
     These proceeds of $0.27 per unit were declared as part of the January 1997
     distribution and will be distributed in May 1997.    HUD has disallowed
     approximately $1.5 million of the assignment claim.  The Servicer is

<PAGE>39

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

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

     currently negotiating with HUD in regard to collection of the disallowed
     portion of the claim.  The General Partner believes the full amount of the
     receivable will be recovered from either HUD or the Servicer.  In
     conjunction with the assignment of the mortgage, the Partnership recognized
     a net loss of approximately $204,000 in the second quarter of 1996.

          During March 1996, a retained yield holder in the Harbor View Estates
     loan exercised its right to purchase the participation certificate with
     respect to this insured mortgage after a Notice of Default was filed with
     HUD.  In March 1996, the Partnership received approximately $709,100 in
     disposition proceeds, including approximately $17,400 of interest due to
     the Partnership from this prepayment.  The net principal proceeds were
     approximately $691,000, resulting in a gain of approximately $600.  The net
     proceeds were reinvested in fully insured mortgages.  In April 1996,
     approximately $4,900 was remitted to the retained yield holder in the
     Harbor View Estates mortgage in connection with the final accounting of
     this disposition.  This resulted in a net loss of approximately $4,300
     which is included on the accompanying statement of operations for the year
     ended December 31, 1996.

          In June 1996, the Partnership entered into a modification agreement
     with the mortgagor of Turn at Gresham.  This agreement effectively lowered
     the interest rate on the mortgage from 8.375% to 8% for a period until
     maturity.  In addition, a seven year prepayment lockout was included in the
     modification, followed by a 3%, 2%, and 1% penalty in years eight, nine,
     and ten, respectively.  The Partnership incurred a loss of approximately
     $169,600 in connection with this modification which represents the write
     off of unamortized costs.

     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

<PAGE>40

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

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

     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, 1996 and 1995, 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, 1996 and 1995, 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, 1996 and
          1995.  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,
                                         1996            1995
                                     ------------    ------------
<S>                                  <C>             <C>
Amortized Cost                       $  3,730,991    $  3,749,991
Face Value                              3,730,991       3,749,991
Fair Value                              3,527,521       3,583,856

</TABLE>

          As of February 28, 1997, the mortgagor had made payments of principal
          and interest due to the Partnership on the mortgage through October
          1995.  Patrician is litigating the case in bankruptcy court while
          pursuing negotiations on a modification agreement with the borrower.

          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>41

              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, 1996 and 1995, 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.

          The IFI coinsured mortgages had an aggregate fair value of $30,012,592
          and $30,553,317, as of December 31, 1996 and 1995, respectively, and
          amortized costs and face values as follows:

<PAGE>42

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>

                                    Amortized        Face         Amortized      Face        Loan Losses Recognized
                                       Cost          Value          Cost         Value        for the year ended     Cumulative
                                   December 31,   December 31,  December 31,  December 31,       December 31,        Loan Losses
                                       1996           1996          1995          1995          1996        1995     Recognized
                                   ------------   ------------  ------------  ------------   ----------  ----------  -----------
<S>                                <C>            <C>           <C>           <C>            <C>         <C>         <C>
The Breakers at Golf
  Mill(1)                          $ 22,492,106   $ 22,492,106  $ 22,662,648  $ 22,662,648   $       --  $       --  $   980,000
Summerwind Apts.-Phase
  II(1)                               8,000,581      9,442,628     8,037,922     9,501,784           --          --    1,511,743
                                   ------------   ------------  ------------  ------------   ----------  ----------  -----------
                                   $ 30,492,687   $ 31,934,734  $ 30,700,570  $ 32,164,432   $       --  $       --  $ 2,491,743
                                   ============   ============  ============  ============   ==========  ==========  ===========

(1)  As of February 28, 1997, the mortgagor was current with respect to payment of principal and interest on this mortgage.
</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, 1996 and 1995:

<TABLE>
<CAPTION>                                     December 31,
                                          1996           1995
                                      ------------   ------------
<S>                                   <C>            <C>
Number of Mortgages                              4              4
Amortized Cost                        $ 29,746,073   $ 30,162,342
Face Value                              29,163,152     29,299,733
Fair Value                              29,712,245     30,199,166

</TABLE>

          Listed below is the Partnership's aggregate investment in fully
     insured Acquired Insured Mortgages as of December 31, 1996 and 1995:

<TABLE>
<CAPTION>                                     December 31,
                                           1996           1995
                                       ------------   ------------
<S>                                    <C>            <C>
Number of Mortgages                               2              2
Amortized Cost                         $  1,129,575   $  1,161,339
Face Value                                1,126,731      1,158,329
Fair Value                                1,173,057      1,219,590

</TABLE>

     As of February 28, 1997, all of the Partnership's FHA-Insured Loans were
current with respect to the payment of principal and interest.

<PAGE>43

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

5.   INVESTMENT IN FHA-INSURED LOANS - Continued

     All of the FHA-Insured Loans contain Participations.  During the years
ended December 31, 1996, 1995 and 1994, the Partnership received additional
interest of $63,045, $46,581 and $13,938, respectively, from the FHA-Insured
Loans which contain Participations. These amounts are included in mortgage
investment income on the accompanying statements of operations.

6.   DUE FROM HUD

     Due from HUD consists of amounts due to the Partnership in connection with
losses incurred on the disposition of fully insured and coinsured mortgage
investments.  Prior to these dispositions, the mortgage investments were
accounted for as Assets Held For Sale (AHFS) under the coinsurance program.

     As of December 31, 1996, Due from HUD includes approximately $3.2 million
related to the assignment of Water's Edge of New Jersey, as discussed in Note 4.
As of December 31, 1996 and 1995, Due from HUD includes approximately $59,000
and $285,000, respectively, related to the disposition of Hazeltine Shores.

7.   DISTRIBUTIONS TO UNITHOLDERS

     The distributions paid or accrued to Unitholders on a per Unit basis for
the years ended December 31, 1996, 1995 and 1994 are as follows:

                                     1996      1995     1994
                                   -------   -------   ------
     Quarter ended March 31,       $0.32(1)  $0.49(2)  $0.26(5)
     Quarter ended June 30,         0.30      0.53(3)   0.25(6)
     Quarter ended September 30,    0.30      0.32(4)   0.46(7)
     Quarter ended December 31,     0.30      0.32(1)   0.44(8)
                                   -----     -----     -----
                                   $1.22     $1.66     $1.41
                                   =====     =====     =====

(1)  This amount includes approximately $0.02 per Unit representing previously
     undistributed accrued interest received from Water's Edge of New Jersey.
(2)  This amount includes approximately $0.15 per Unit representing accrued, but
     previously undistributed, interest related to the receipt of claim proceeds
     from the mortgage on Pinewood Park Apartments and approximately $0.01 per
     Unit representing previously undistributed accrued interest received from
     Water's Edge of New Jersey.
(3)  This amount includes approximately $0.22 per Unit representing accrued, but
     previously undistributed, interest and capital gain related to the receipt
     of claim proceeds from the mortgage on Hamlet at Cobb's Landing.
(4)  This amount includes approximately $0.02 per Unit representing capital gain
     from the disposition of the mortgage on Gilbert Greens Apartments.
(5)  This amount includes approximately $0.05 per Unit representing previously
     undistributed accrued interest received from delinquent mortgages.
(6)  This amount includes approximately $0.02 per Unit representing previously
     undistributed accrued interest received from delinquent mortgages.
(7)  This amount includes approximately $0.22 per Unit of accrued but previously
     undistributed interest and gain received from HUD relating to the
     foreclosure and sale of the mortgage on Hazeltine Shores.
(8)  This amount includes $0.05 per Unit representing additional gain received
     from the disposition of the mortgage on Hazeltine Shores; and $0.08 per
     Unit representing previously undistributed accrued interest from delinquent
     mortgages.

<PAGE>44

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS
7.   DISTRIBUTIONS TO UNITHOLDERS - Continued

     The basis for paying distributions to Unitholders is cash flow from
operations, which includes regular interest income and principal from Insured
Mortgages and gains, if any, from mortgage dispositions. 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.

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

     Effective December 31, 1991, American Insured Mortgage Investors - Series
85, L.P. (AIM 85), an affiliate of the Partnership, transferred a GNMA Mortgage-
Backed Security (the GNMA Security) in the amount of approximately $4.7 million
to IFI in order to capitalize IFI with sufficient net worth under HUD
regulations. The Partnership and AIM 86 each issued a demand note payable to AIM
85 and recorded an investment in IFI through an affiliate (AIM Mortgage, Inc.)
at an amount proportionate to each entity's coinsured mortgages for which IFI
was the mortgagee of record as of December 31, 1991.  AIM Mortgage, Inc. is
jointly owned by AIM 85, AIM 86, and the Partnership.  The Partnership accounts
for its investment in IFI under the equity method of accounting.  Interest
expense on the note was based on an interest rate of 8% per annum.

     In 1992, IFI entered into an expense reimbursement agreement with the
Partnership, AIM 85 and AIM 86 (collectively, the AIM Funds) whereby IFI
reimburses the AIM Funds for general and administrative expenses incurred on
behalf of IFI.  The expense reimbursement is allocated to the AIM Funds based on
an amount proportionate to each entity's coinsured mortgages.  The expense
reimbursement, along with the Partnership's equity interest in IFI's net income
or loss, substantially equalled the Partnership's interest expense on the note
payable.

     In April 1994, IFI received net proceeds of approximately $4.7 million from
the prepayment of the GNMA Mortgage-Backed Security, which IFI distributed to
the AIM Funds, in proportion to each entity's coinsured mortgage investments for
which IFI was the mortgagee of record as of December 31, 1991.  On June 30,
1994, the Partnership repaid its note payable to AIM 85.

     As a result of the prepayment, in April 1994, the Partnership transferred a
GNMA Mortgage-Backed Security in the amount of approximately $2.0 million to IFI
in order to recapitalize IFI with sufficient net worth under HUD regulations.
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 transferred by the Partnership), was $57,832
during the years ended December 31, 1996 and 1995, respectively, and is included
in interest and other income on the accompanying statements of operations.

     In connection with these transfers, the expense reimbursement agreement was
amended as of April 1, 1994, to adjust the allocation of the expense
reimbursement to the AIM Funds to an amount proportionate to each entity's

<PAGE>45

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

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

coinsured mortgage investments for which IFI was the mortgagee of record as of
April 1, 1994.  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.

9.   TRANSACTIONS WITH RELATED PARTIES

     In addition to the related party transactions described above in Note 8,
the General Partner and certain affiliated entities, during the years ended
December 31, 1996, 1995 and 1994, have earned or received compensation or
payments for services from the Partnership as follows:

<PAGE>46

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

9.   TRANSACTIONS WITH RELATED PARTIES - Continued

<TABLE>
<CAPTION>
                                           COMPENSATION PAID OR ACCRUED TO RELATED PARTIES
                                           -----------------------------------------------
                                        Capacity in Which                   For the years ended December 31,
Name of Recipient                          Served/Item                  1996              1995           1994
-----------------                 ----------------------------       ----------        ----------     ----------
<S>                               <C>                                <C>               <C>            <C>
CRIIMI, Inc.(1)                   General Partner/Distribution       $  553,301        $  752,852     $  640,140

AIM Acquisition                   Advisor/Asset Management Fee        1,503,297         1,493,283      1,503,831
  Partners, L.P.(2)

CRI(3)                            Affiliate of General Partner/              --            62,347        215,001
                                    Expense Reimbursement

CRIIMI MAE                        Affiliate of General Partner/          62,376            24,696             --
  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).

     (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 amounts paid to the Advisor, CRIIMI MAE Services Limited Partnership, the Sub-advisor, earned a fee equal
to $443,060 and $219,670 for the year ended December 31, 1996 and for the six months ended December 31, 1995, respectively.  No fees
were earned by CRIIMI MAE Services Limited Partnership for the year ended December 31, 1994.  CRI/AIM Management, Inc., which acted
as the Sub-advisor through June 30, 1995, earned a fee equal to $220,449 and $443,224, for the six months ended June 30, 1995 and
for the year ended December 31, 1994, respectively.

     (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>

10.  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 in connection with the settlement of
litigation, as discussed in Note 12.

<PAGE>47

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

11.  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, 1996, 1995 and 1994:

<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                           0.30          0.25             0.28           0.28

</TABLE>

<TABLE><CAPTION>
                                                                     1995
                                                                Quarter ended
                                               March 31       June 30      September 30    December 31
                                              -----------    ----------    -------------   ------------
<S>                                           <C>            <C>            <C>            <C>
Income                                        $     3,412    $    3,469     $      3,175   $      3,180
Net gains from
  mortgage dispositions                             1,075         1,377               --             --
Net earnings                                        4,015         4,392            2,686          2,702
Net earnings per
  Limited Partnership Unit                           0.43          0.48             0.29           0.29

</TABLE>

<TABLE>
<CAPTION>
                                                                     1994
                                                               Quarter ended
                                               March 31       June 30      September 30    December 31
                                              -----------    ----------    -------------   ------------
<S>                                           <C>            <C>            <C>            <C>
Income                                         $    3,326    $    3,326     $      3,141     $    3,539
Net (losses) gains from
  mortgage dispositions                               (42)           --              864            156
Net earnings                                        2,372         2,710            3,240          3,218
Net earnings per
  Limited Partnership Unit                           0.25          0.29             0.35           0.35

</TABLE>

<PAGE>48

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                          NOTES TO FINANCIAL STATEMENTS

12.  LITIGATION

     On November 6, 1992, a complaint was filed on behalf of a limited partner
of the Partnership in the Superior Court for the State of California for the
County of Los Angeles, Southwest District against the Partnership.  On March 28,
1994, the Partnership entered into an agreement to settle the claims in the
lawsuit.  Under the terms of the settlement, the Partnership paid $968,574 to
the plaintiff on April 14, 1994, and the plaintiff returned its 50,000 Units to
the Partnership.  In connection with the settlement, the Partnership recorded a
provision for settlement of litigation in the amount of $349,824 in the
accompanying statement of operations for the year ended December 31, 1994.  This
provision represents the difference between the market value of the 50,000 Units
as of April 14, 1994 of $618,750 and the Partnership's cost to repurchase the
Units of $968,574.

     During 1994, IFI, an affiliate of the Partnership, filed a Complaint in the
United States District Court for the District of Minnesota.  The case concerned
the violation of the HUD regulatory agreement and breach of fiduciary duty by
the mortgagor of the mortgage on Hazeltine Shores.  In response to this
Complaint, the mortgagor filed counterclaims against IFI and against the
Partnership, the General Partner and CRI.  A motion to dismiss the counterclaims
was granted with prejudice on July 24, 1995.

<PAGE>49


                        AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
                               SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                             DECEMBER 31, 1996


<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)(14)
-------------------------            --------    --------  -----------  ----------- ---------------  -----------  --------------
<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%$  3,178,553   $   3,219,878           --      $  284,523
Northpoint Apartments
  Richland, Washington                   1/23         N/A        8.550%   1,734,725       1,771,037           --         166,490
Heather Ridge Apartments
  Fayetteville, North Carolina           4/27         N/A        8.625%   4,467,331       4,559,502           --         416,231
Olde Mill Apartments
  Liverpool, New York                    4/27         N/A        8.920%   5,057,932       5,162,111           --         484,083
Park Avenue Plaza
  Omaha, Nebraska                        9/29         N/A        9.000%   1,976,432       2,016,903           --         187,923
                                                                       ------------   -------------

  Total Investment in FHA-Insured
    Certificates - Acquired Insured
    Mortgages                                                            16,414,973      16,729,431
                                                                       ------------   -------------
GNMA Mortgage-Backed Securities
  (carried at fair value)

Garden Terrace
  Douglasville, Georgia                  1/20         N/A        7.125%   2,745,154       2,728,800           --         236,149
Lioncrest Towers
  Richton Park, Illinois                10/28         N/A        7.000%   6,530,007       6,486,429           --         496,706
San Jose South
  San Jose, California                  10/23         N/A        7.750%   8,325,158       8,271,424           --         697,086
Beauvoir Manor Apts.
  Biloxi, Mississippi                    9/18         N/A        8.875%   1,270,317       1,311,962           --         127,434
Greenview Garden
  Butler, Pennsylvania                   8/33         N/A        9.000%     883,877         911,963           --          78,238
Lorenzo Carolina Apts.
  Tampa, Florida                         6/26         N/A        8.250%   1,027,983       1,021,075           --          89,179
Silver Lake Plaza Apts.
  Los Angeles, California               11/35         N/A        7.950%   5,338,422       5,300,721           --         431,562
Woodcrest Townhomes
  Chaska, Minnesoata                     8/31         N/A        8.375%   3,123,893       3,102,114           --         269,269

<PAGE>50


                         AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
                                SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                              DECEMBER 31, 1996


                                                            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)(14)
-------------------------            --------    --------  -----------  ----------- ---------------  -----------  --------------
<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%   4,481,265       4,624,361           --         404,843
Lamplighter Apts.
  Port Arthur, Texas                    10/29         N/A        9.000%   2,238,093       2,309,502           --         207,115
Linville Manor
  Shelby, North Carolina                 7/31         N/A        8.750%   1,998,028       2,061,693           --         178,916
Oak Grove Apts.
  Austin, Texas                          9/26         N/A        8.750%     560,993         578,991           --          51,680
Oakwood Gardens
  San Jose, California                  10/23         N/A        7.750%   1,164,222       1,156,708           --          97,483
Seven Springs
  College Park, Maryland                12/21         N/A        7.625%   4,801,407       4,771,311           --         418,918
Stony Creek
  Washington Township, Michigan          2/29         N/A        7.500%   5,421,380       5,384,720           --         426,882
Burlwood Apts.
  Portland, Oregon                       8/15         N/A        9.000%     639,138         635,522           --          61,320
Collin Care Centers
  Plano, Texas                           9/30         N/A        8.125%   1,707,558       1,695,758           --         144,187
Holton Manor
  Elkhorn, Wisconsin                    11/21         N/A        8.250%   1,022,363       1,015,853           --          94,368
Oaklawn Apts.
  Boise, Idaho                           8/24         N/A        9.000%     482,402         479,170           --          40,173
Orchard Creek Apts.
  Farmington Hills, Michigan             1/30         N/A        8.625%   1,287,332       1,328,443           --         113,121
Tehama Estates
  Sacramento,California                  7/29         N/A        8.750%   1,356,303       1,399,626           --         122,700
Westview Terrace Apts.
  Tacoma, Washington                     4/30         N/A        8.550%   1,150,238       1,186,968           --         101,042
                                                                        -----------    ------------
  Total Investment in GNMA Mortgage-Backed
    Securities, carried at fair value                                    57,555,533      57,763,114
                                                                        -----------    ------------
  Total Investment in Acquired Insured
    Mortgages, carried at fair value                                     73,970,506      74,492,545
                                                                        -----------    ------------

<PAGE>51


                         AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
                                SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                             DECEMBER 31, 1996


                                                            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)(14)
-------------------------            --------    --------  -----------  -----------     ---------------  -----------  --------------
<S>                                  <C>         <C>       <C>          <C>             <C>              <C>          <C>

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

Arbor Village
  Tallahassee, Florida                   1/34          --        8.125%  10,994,620          11,128,509            --        944,868
                                                                      -------------        ------------
Coinsured Mortgages
-------------------
FHA-Insured Certificates
  (carried at fair value)

Summerwind Apartments-Phase II
  Naples, Florida (7)                    6/30        7/03        8.500%   9,442,628           8,928,581           --         865,175
St. Charles Place - Phase II
  Miramar, Florida (4)                   2/30       12/03        8.625%   3,730,991(4)(8)(9)  3,527,521           --         341,697
The Breakers at Golf Mill
  Niles, Illinois (7)                   11/29       11/02        7.000%  22,492,106(7)       21,084,011           --       1,751,525
                                                                      -------------        ------------
    Total Investment in coinsured
      FHA-Insured Certificates,
      carried at fair value                                              35,665,725          33,540,113
                                                                      -------------        ------------
    Total Investment in Originated Insured
      Mortgages, carried at fair value                                   46,660,345          44,668,622
                                                                      -------------        ------------
    Total Investment in FHA-Insured Certificates
      and GNMA Mortgage-Backed Securities,
      carried at fair value                                             120,630,851         119,161,167
                                                                      -------------        ------------

<PAGE>52



                         AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
                                SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                               DECEMBER 31, 1996


                                                            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)(14)
-------------------------            --------    --------  -----------  ----------- ---------------  -----------  --------------
<S>                                  <C>         <C>       <C>          <C>         <C>              <C>          <C>

ACQUIRED INSURED MORTGAGES:
--------------------------
FHA-Insured Loans
  (carried at amortized cost)(2)

Kingsway Apts.
  Monroe, LA                             8/07         N/A       10.000%     565,859         566,892(2)        --          86,862
Kon Tiki Apts.
  League City, TX                        1/27         N/A       9.875%      560,872         562,683(2)        --          58,444
                                                                        -----------    ------------
    Total Investment in FHA-
      Insured Loans - Acquired
      Insured Mortgages, carried
      at amortized cost                                                   1,126,731       1,129,575
                                                                        -----------    ------------

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

The Turn at Gresham
  Gresham, OR                            8/29       12/02       8.000%    5,802,413       5,802,413(2)        --         501,516
Parkside Estates
  Glendale Heights, IL                   2/31       12/06       8.375%    6,833,362       7,015,062(2)        --         607,634
Olmstead Park Apts.
  Charlotte, NC                          7/32       12/07       8.500%    5,795,975       6,018,551(2)        --         518,476
Water's Edge II
  Columbus, OH                           7/33         N/A       8.250%   10,731,402      10,910,047(2)        --         933,734
                                                                       ------------    ------------

    Total Investment in FHA-
      Insured Loans - Originated
      Insured Mortgages, carried
      at amortized cost                                                  29,163,152      29,746,073
                                                                       ------------    ------------
    Total Investment in FHA-Insured Loans                                30,289,883      30,875,648
                                                                       ------------    ------------
    TOTAL INVESTMENT IN INSURED MORTGAGES                              $150,920,734    $150,036,815
                                                                       ============    ============

</TABLE>

<PAGE>53


              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

              NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

                                DECEMBER 31, 1996

(1)  Under the Section 221 program of the National Housing Act of 1937, as
     amended, a mortgagee has the right to assign an Insured Mortgage (put) to
     FHA at the expiration of 20 years from the date of final endorsement, if
     the mortgage is not in default at such time. Any mortgagee electing to
     assign a FHA-insured mortgage to FHA will receive, in exchange therefor,
     HUD debentures having a total face value equal to the then outstanding
     principal balance of the FHA-insured mortgage plus accrued interest to the
     date of assignment.  These HUD debentures will mature 10 years from the
     date of assignment and will bear interest at the "going Federal rate" at
     such date.  This assignment procedure is applicable to an Insured Mortgage
     which had a firm or conditional FHA commitment for insurance on or before
     November 30, 1983 and, in the case of mortgages sold in a GNMA auction, was
     sold in an auction prior to February 1984.  Certain of the Partnership's
     Insured Mortgages may have the right of assignment under this program.
     Certain Insured Mortgages that do not qualify under this program 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
     1996, 1995 and 1994, additional interest was recognized in the amount of
     $84,947, $179,701 and $36,550, respectively.  These amounts are included in
     mortgage investment income on the accompanying statements of operations.

(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, 1996 and 1995, is as
     follows:

<PAGE>54


              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

              NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

                                DECEMBER 31, 1996

<TABLE>
<CAPTION>

                                                 1996              1995
                                             ------------      ------------
     <S>                                     <C>               <C>
     Beginning balance                       $154,669,316      $140,906,391

       Investment in Acquired Insured
          Mortgages and advances on
          construction loans, including
         acquisition costs                      9,416,014         7,687,752

       Principal receipts on mortgages         (1,037,314)         (929,409)

       Proceeds from mortgages assigned
         or sold                               (8,308,830)(a)    (3,007,796)(b)

       Net (losses) gains on mortgage
         dispositions                            (377,900)          143,107(b)

       Coinsurance claims due from HUD         (3,161,747)               --

       Net unrealized (losses) gains on
         investment in FHA-Insured
         Certificates and GNMA Mortgage-
         Backed Securities                     (1,162,724)        9,869,271
                                             ------------      ------------
     Ending balance                          $150,036,815      $154,669,316
                                             ============      ============

          (a)  Excludes proceeds received in connection with the
          settlement of the HUD coinsurance claim related to Hazeltine
          Shores.

          (b)  Excludes proceeds received and gains recognized in
          connection with the settlement of the HUD coinsurance claims
          related to Pinewood Park Apartments and the Hamlet at Cobb's
          Landing.

          </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, 1996 and 1995, the tax basis of the
               Insured Mortgages, including AHFS, was approximately
               $153 million and $156 million, respectively.

          (14) Annual principal and interest payments for mortgages
               acquired during 1996 are annualized.