UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 2000       Commission file number 1-12724

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

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

                              11200 Rockville Pike
                            Rockville, Maryland 20852
                                 (301) 816-2300
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)
        -----------------------------------------------------------------


           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


     Indicated  by check mark whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate 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 12, 2001,  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 $51,927,947.

                       Documents incorporated by Reference

                                      None
<PAGE>






              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                         2000 ANNUAL REPORT ON FORM 10-K

                                TABLE OF CONTENTS


                                     PART I
<TABLE>
<CAPTION>
                                                                                                       Page
                                                                                                       ----
<S>               <C>                                                                                   <C>
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.........        5
Item 6.           Selected Financial Data........................................................        6
Item 7.           Management's Discussion and Analysis of Financial Condition and Results
                     of Operations...............................................................        7
Item 7A.          Qualitative and Quantitative Disclosures About Market Risk.....................       13
Item 8.           Financial Statements and Supplementary Data....................................       13
Item 9.           Changes in and Disagreements with Accountants on Accounting and
                     Financial Disclosure........................................................       13


                                    PART III

Item 10.          Directors and Executive Officers of the Registrant.............................       14
Item 11.          Executive Compensation.........................................................       15
Item 12.          Security Ownership of Certain Beneficial Owners and Management.................       15
Item 13.          Certain Relationships and Related Transactions.................................       16


                                     PART IV

Item 14.          Exhibits, Financial Statement Schedules and Reports on Form 8-K................       16

Signatures        ...............................................................................       19
</TABLE>
<PAGE>
                                     PART I

ITEM 1.   BUSINESS

FORWARD-LOOKING  STATEMENTS.  When used in this Annual Report on Form 10-K,  the
words  "believes,"   "anticipates,"   "expects,"   "contemplates,"  and  similar
expressions  are  intended to identify  forward-looking  statements.  Statements
looking forward in time are included in this Annual Report on Form 10-K pursuant
to the "safe harbor" provision of the Private  Securities  Litigation Reform Act
of 1995. Such statements are subject to certain risks and  uncertainties,  which
could cause actual  results to differ  materially.  Accordingly,  the  following
information contains or may contain forward-looking  statements: (1) information
included  or  incorporated  by  reference  in this  Annual  Report on Form 10-K,
including,  without  limitation,  statements  made  under  Item 7,  Management's
Discussion and Analysis of Financial  Condition and Results of  Operations,  (2)
information  included or  incorporated  by  reference  in future  filings by the
Partnership  with the  Securities  and Exchange  Commission  including,  without
limitation,  statements with respect to growth,  projected  revenues,  earnings,
returns and yields on its portfolio of mortgage  assets,  the impact of interest
rates, costs and business strategies and plans and (3) information  contained in
written  material,  releases and oral statements  issued by or on behalf of, the
Partnership,  including, without limitation,  statements with respect to growth,
projected  revenues,  earnings,  returns and yields on its portfolio of mortgage
assets, the impact of interest rates,  costs and business  strategies and plans.
Factors which may cause actual results to differ materially from those contained
in the forward-looking  statements identified above include, but are not limited
to (i) regulatory and litigation  matters,  (ii) interest rates, (iii) trends in
the economy,  (iv) prepayment of mortgages and (v) defaulted mortgages.  Readers
are cautioned not to place undue reliance on these  forward-looking  statements,
which speak only of the date hereof. The Partnership undertakes no obligation to
publicly   revise  these   forward-looking   statements  to  reflect  events  or
circumstances  occurring  after the date hereof or to reflect the  occurrence of
unanticipated events.

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, 5, 6 and 7 of the  Notes to  Financial  Statements  of the  Partnership
(filed in response to Item 8 hereof), all of which are incorporated by reference
herein. See also Schedule IV-Mortgage Loans on Real Estate, for the table of the
Insured  Mortgages  (as defined  below),  invested in by the  Partnership  as of
December 31, 2000, which is hereby incorporated herein by reference.


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").  The General Partner is a
wholly owned subsidiary of CRIIMI MAE Inc. ("CRIIMI MAE").

     The general  partner of the Advisor is AIM  Acquisition  Corporation  ("AIM
Acquisition")  and the  limited  partners  include,  but are not limited to, AIM
Acquisition,  The Goldman  Sachs  Group,  L.P.,  Sun America  Investments,  Inc.
(successor to Broad, Inc.) and CRI/AIM Investment,  L.P., an affiliate of CRIIMI
MAE. AIM  Acquisition is a Delaware  corporation  that is primarily owned by Sun
America Investments, Inc. and The Goldman Sachs Group, L.P.

     Under the  Advisory  Agreement,  the Advisor  will  render  services to the
Partnership,  including but not limited to, the management of the  Partnership's
portfolio of mortgages and the disposition of the Partnership's mortgages.  Such
services  will be subject to the review and  ultimate  authority  of the General
Partner.  However, the General Partner is required to receive the consent of the
Advisor prior to taking certain significant  actions,  including but not limited
to the  disposition of mortgages,  any transaction or agreement with the General
Partner,  or its  affiliates,  or any material  change as to policies  regarding
distributions  or  reserves of the  Partnership.  The  Advisor is  permitted  to
delegate the performance of services  pursuant to a sub-advisory  agreement (the
"Sub-Advisory Agreement").  The delegation of such services will not relieve the
Advisor of its obligation to perform such services.  CRIIMI MAE Services Limited
Partnership  ("CMSLP"),  an affiliate of CRIIMI MAE,  manages the  Partnership's
portfolio,  pursuant to the Sub-Advisory Agreement. The general partner of CMSLP
is CRIIMI MAE Services, Inc., an affiliate of CRIIMI MAE.


Competition
-----------

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

     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 mortgage  investments at or
about the same time  that  CRIIMI  MAE,  one or more of the  other  "AIM  Funds"
[defined as the Partnership,  American  Insured  Mortgage  Investors ("AIM 84"),
American  Insured  Mortgage  Investors - Series 85, L.P. ("AIM 85") and American
Insured Mortgage  Investors L.P. - Series 86 ("AIM 86")],  and/or other entities
sponsored or managed by CRIIMI MAE, or its affiliates, are attempting to dispose
of mortgages.  As a result of market  conditions that could limit  dispositions,
CMSLP  and  its  affiliates  could  be  faced  with  conflicts  of  interest  in
determining  which  mortgages  would be disposed  of. Both CMSLP and the General
Partner,  however,  are  subject to their  fiduciary  duties in  evaluating  the
appropriate action to be taken when faced with such conflicts.


ITEM 2.   PROPERTIES

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


ITEM 3.   LEGAL PROCEEDINGS

     Reference is made to Note 5 of the Notes to Financial  Statements  on pages
28 through 30.


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 2000.


                                     PART II

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

Principal Market and Market Price for Units and Distributions
-------------------------------------------------------------

     The Units are traded on the American Stock Exchange ("AMEX") with a trading
symbol of "AIK." The high and low trade prices for the Units as reported on AMEX
and the distributions, as applicable, for each quarterly period in 2000 and 1999
were as follows:

<TABLE>
<CAPTION>
                                                     2000                      Amount of
                                                     ----                     Distribution
   Quarter Ended                              High              Low             Per Unit
   -------------                            --------          --------        ----------
   <S>                                      <C>               <C>             <C>
   March 31,                                $ 6.8750          $ 6.1250        $     0.37 (1)
   June 30,                                   6.5000            6.0625              0.42 (2)(3)
   September 30,                              6.5000            6.0000              0.15
   December 31,                               6.6250            5.8125              0.84 (4)
                                                                              ----------
                                                                              $     1.78
                                                                              ==========


                                                     1999                      Amount of
                                                     ----                     Distribution
   Quarter Ended                              High              Low             Per Unit
   -------------                            --------          --------        ----------

   March 31,                                $11.4375          $10.5625        $     0.61 (5)
   June 30,                                  11.6250           10.5000              3.26 (6)(7)(8)
   September 30,                             11.0000            7.3750              0.15
   December 31,                               7.9375            6.2500              1.04 (9)(10)(11)
                                                                              ----------
                                                                              $     5.06
                                                                              ==========
</TABLE>


     The following disposition proceeds are included in the distributions listed
above:
<TABLE>
<CAPTION>
                                                             Date                            Net
                                                           Proceeds        Type of         Proceeds
                   Complex Name                            received      Disposition       Per Unit
                   ------------                            --------      -----------       --------
         <S>       <C>                                     <C>           <C>               <C>
         (1)       Linville Manor                          Mar. 2000     Prepayment        $ 0.22
         (2)       Park Avenue Plaza                       May 2000      Prepayment          0.22
         (3)       Kingsway Apartments                     May 2000      Prepayment          0.05
         (4)       Lioncrest Towers                        Nov. 2000     Prepayment          0.70
         (5)       Olde Mill Apartments                    Dec. 1998     Prepayment          0.37
         (6)       Seven Springs Apartments                April 1999    Prepayment          0.53
         (7)       Kon Tiki Apartments                     May 1999      Prepayment          0.06
         (8)       The Breakers at Golf Mill               May 1999      Prepayment          2.43
         (9)       Oak Grove Apartments                    Oct. 1999     Prepayment          0.06
         (10)      Heather Ridge Apartments                Nov. 1999     Prepayment          0.49
         (11)      St. Charles Place - Phase II            Nov. 1999     Sale                0.32
</TABLE>


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

                                               Approximate Number of Unitholders
       Title of Class                               as of December 31, 2000
       --------------                               -----------------------
Depositary Units of Limited                                  6,300
   Partnership Interest


ITEM 6.   SELECTED FINANCIAL DATA
          (Dollars in thousands, except per Unit amounts)

<TABLE>
<CAPTION>
                                                       For the Years Ended December 31,

                                           2000         1999         1998          1997          1996
                                        ----------   ----------   ----------    ----------    ----------
<S>                                     <C>          <C>          <C>           <C>           <C>
Income                                  $    5,501   $    7,294   $    9,998    $   12,167    $   12,465

Net gains (losses) on mortgage
  dispositions                                 387        1,072          756          (354)         (378)

Net earnings                                 4,738        7,053        9,179        10,097        10,293

Net earnings per Limited
  Partnership Unit - Basic (1)          $     0.51   $     0.76   $     0.99    $     1.09    $     1.11

Distributions per Limited
  Partnership Unit (1)(2)               $     1.78   $     5.06   $     4.34    $     2.33    $     1.22

                                                       For the Years Ended December 31,
                                           2000         1999          1998         1997          1996
                                        ----------   ----------   ----------    ----------    ----------

Total assets                            $   71,288   $   83,455   $  116,464    $  150,616    $  159,554

Partners' equity                        $   63,131   $   73,702   $  114,442    $  146,977    $  156,644
</TABLE>

(1)  Calculated based upon the weighted average number of Units outstanding.
(2)  Includes  distributions  due the Unitholders for the  Partnership's  fiscal
     quarters ended December 31, 2000,  1999,  1998,  1997 and 1996,  which were
     paid  subsequent  to year end.  See Notes 7 and 8 of the Notes to Financial
     Statements.


     The selected  income data presented  above for the years ended December 31,
2000,  1999 and 1998,  and the balance  sheet data as of  December  31, 2000 and
1999,  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
income data for the years ended December 31, 1997 and 1996 and the balance sheet
data as of December 31, 1998,  1997 and 1996 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.


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

General
-------

     The  following  discussion  and analysis  contains  statements  that may be
considered  forward  looking.  These  statements  contain  a number of risks and
uncertainties  as  discussed  herein  and in Item 1 of this Form 10-K that could
cause actual results to differ materially.

     The  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%
and 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 pursuant to an advisory agreement (the "Advisory Agreement").

     The general  partner of the Advisor is AIM  Acquisition  Corporation  ("AIM
Acquisition")  and the  limited  partners  include,  but are not limited to, AIM
Acquisition,  The Goldman  Sachs  Group,  L.P.,  Sun America  Investments,  Inc.
(successor to Broad, Inc.) and CRI/AIM Investment,  L.P., an affiliate of CRIIMI
MAE. AIM  Acquisition is a Delaware  corporation  that is primarily owned by Sun
America Investments, Inc. and the Goldman Sachs Group, L.P.

     Under the  Advisory  Agreement,  the Advisor  will  render  services to the
Partnership,  including but not limited to, the management of the  Partnership's
portfolio of mortgages and the disposition of the Partnership's mortgages.  Such
services  will be subject to the review and  ultimate  authority  of the General
Partner.  However, the General Partner is required to receive the consent of the
Advisor prior to taking certain significant  actions,  including but not limited
to the  disposition of mortgages,  any transaction or agreement with the General
Partner,  or its  affiliates,  or any material  change as to policies  regarding
distributions  or  reserves of the  Partnership.  The  Advisor is  permitted  to
delegate the performance of services  pursuant to a sub-advisory  agreement (the
"Sub-Advisory Agreement").  The delegation of such services will not relieve the
Advisor of its obligation to perform such services.  CRIIMI MAE Services Limited
Partnership  ("CMSLP"),  an affiliate of CRIIMI MAE,  manages the  Partnership's
portfolio,  pursuant to the Sub-Advisory Agreement. The general partner of CMSLP
is CRIIMI MAE Services, Inc., an affiliate of CRIIMI MAE.

Mortgage Investments
--------------------

     Prior  to  the  expiration  of the  Partnership's  reinvestment  period  in
December  1996,  the  Partnership  was engaged 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").  In accordance with the terms of the
partnership  agreement,  the Partnership is no longer authorized to originate or
acquire Insured Mortgages and, consequently,  its primary objective is to manage
its portfolio of mortgage  investments,  all of which are insured or guaranteed,
in whole or in part, by the Federal Housing Administration ("FHA") under section
221(d)(4)  or section 231 of the National  Housing Act of 1937,  as amended (the
"National Housing Act"). The Partnership is a liquidating  partnership and as it
continues  to  liquidate  its  mortgage   investments   and  investors   receive
distributions of return of capital and taxable gains,  investors should expect a
reduction in earnings and distributions due to the decreasing mortgage base. The
partnership agreement states that the Partnership will terminate on December 31,
2021,  unless  previously  terminated  under the  provisions of the  partnership
agreement.

     As of  December  31,  2000,  the  Partnership  had  invested  in 21 Insured
Mortgages  with  aggregate   amortized  cost,  face  value  and  fair  value  of
approximately  $58  million,  $60  million  and $58  million,  respectively,  as
discussed below.

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  insured  mortgage
investments, along with the risks related to each type of investment:

Fully Insured FHA-Insured Certificates and GNMA Mortgage-Backed Securities
--------------------------------------------------------------------------

     Listed below is the  Partnership's  aggregate  investment  in Fully Insured
Mortgages as of December 31, 2000 and 1999:
<TABLE>
<CAPTION>
                                                                            December 31,
                                                                   2000                      1999
                                                               ------------              ------------

<S>                                                            <C>                       <C>
Number of:
  GNMA Mortgage-Backed Securities(1)(3)(4)                               18                        20
  FHA-Insured Certificates(2)                                             1                         2
Amortized Cost                                                 $ 45,000,295              $ 55,763,736
Face Value                                                       44,953,069                55,736,170
Fair Value                                                       44,649,442                54,329,225
</TABLE>

(1)  In March 2000, the mortgage on Linville Manor was prepaid.  The Partnership
     received net proceeds of  approximately  $2.0 million and recognized a gain
     of  approximately  $107,000  for  the  year  ended  December  31,  2000.  A
     distribution of  approximately  $0.22 per Unit related to the prepayment of
     this  mortgage  was  declared in March and was paid to  Unitholders  in May
     2000.
(2)  In May 2000, the mortgage on Park Avenue Plaza was prepaid. The Partnership
     received net proceeds of  approximately  $2.0 million and recognized a gain
     of  approximately   $95,000  for  the  year  ended  December  31,  2000.  A
     distribution of  approximately  $0.22 per Unit related to the prepayment of
     this  mortgage  was declared in May and was paid to  Unitholders  in August
     2000.
(3)  In November 2000, the mortgage on Lioncrest Towers  Apartments was prepaid.
     The  Partnership  received net proceeds of  approximately  $6.5 million and
     recognized a gain of approximately $180,000 for the year ended December 31,
     2000.  A  distribution  of  approximately  $0.70  per Unit  related  to the
     prepayment  of this  mortgage was declared in December 2000 and was paid to
     Unitholders in February 2001.
(4)  In January 2001, the mortgage on Silver Lake Plaza  Apartments was prepaid.
     The  Partnership  received net proceeds of  approximately  $5.2 million and
     expects to recognize a gain of  approximately  $83,000.  A distribution  of
     approximately $0.56 per Unit related to the prepayment of this mortgage was
     declared in February 2001 and will be paid to Unitholders in May 2001.

     As of February 16, 2001, all of the  Partnership's  fully insured  mortgage
investments are 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
HUD. The property underlying this construction loan is a nursing home located in
Trenton,  New Jersey.  As of December 31,  2000,  the  Partnership  had received
approximately  $10.2  million  of the  assignment  proceeds,  including  partial
repayment of the outstanding principal and accrued interest.  HUD has disallowed
approximately  $1.65  million of the  assignment  claim,  which is  included  in
Receivables  and Other  Assets.  The General  Partner  retained  counsel in this
matter and is actively pursuing litigation against the loan servicer,  Greystone
Servicing Corporation, Inc. ("Greystone"),  for the amount disallowed by HUD. On
July 30, 1998, the Partnership  filed a Motion for Judgment against Greystone in
the Circuit Court of Fauquier  County,  Virginia (the  "Court").  The Motion for
Judgment alleges breach of contract and negligence claims and seeks judgment for
$1,653,396,  the amount  disallowed by HUD, plus interest,  attorneys'  fees and
costs.  In the Motion for  Judgement,  the General  Partner  alleges as follows:
Pursuant to a mortgage  servicing  contract,  the  Participation  and  Servicing
Agreement  ("PSA"),  Greystone was obligated to ensure that the requirements for
preserving  HUD  insurance  on the loan  were satisfied.  Specifically,  the PSA
required  Greystone  to  prepare a written  notice of  default  in the event the
borrower defaulted on the mortgage loan repayment  obligation and to file notice
of such  default  with HUD within  thirty (30) days after an uncured  borrower's
cure period. Due to Greystone's  failure to timely file a notice of default with
HUD, HUD applied a surcharge of $1,653,396 to the insurance proceeds due AIM 88,
as permitted pursuant to the FHA Insurance  Contract.  On February 28, 2000, AIM
88 and  Greystone  Servicing  Corporation,  Inc.  presented  oral  arguments for
summary  judgement  before  the Court in this  matter.  In May  2000,  the Court
granted the motion for summary  judgement  of the  Partnership,  in part.  Final
judgement  is still  outstanding.  The trial date has been  continued  until May
2001. The Partnership believes that the allowance for loan losses of $375,000 as
of December  31,  2000,  is  sufficient  to provide for amounts  that may not be
recovered from the servicer.

Coinsured FHA-Insured Certificate
---------------------------------

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

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

     As of December 31, 2000 and 1999, the Partnership  held one investment in a
coinsured  FHA-Insured  Certificate  secured  by a  coinsured  mortgage.  As  of
December 31, 2000 and 1999,  the remaining  single  FHA-Insured  Certificate  is
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 affiliate
----------------------

     As of December 31, 2000 and 1999, the Partnership  held one investment in a
coinsured  FHA-Insured  Certificate secured by a coinsured  mortgage,  where the
coinsurance lender is IFI. This investment was made on behalf of the Partnership
by the former  managing  general  partner.  As structured by the former managing
general partner,  with respect to this mortgage,  the Partnership bears the risk
of loss upon default for IFI's portion of the coinsurance  loss on this mortgage
investment.

<TABLE>
<CAPTION>
                                         December 31, 2000                            December 31, 1999
                               Amortized       Face         Fair            Amortized       Face         Fair
                                  Cost         Value     Mkt. Value            Cost         Value     Mkt. Value
                               ----------   ----------   ----------         ----------   ----------   ----------
<S>                            <C>          <C>          <C>                <C>          <C>         <C>
 Summerwind Apts. - Phase II   $7,808,228   $9,148,110   $8,492,111         $7,863,659   $9,231,460  $8,452,851
</TABLE>

     As of February 16, 2001,  the mortgagor was current with respect to payment
of principal and interest on this mortgage.

     There was no loan loss  recognized  for the years ended 2000 and 1999.  The
cumulative  loan loss  recognized in prior years was  $1,511,743  for Summerwind
Apartments - Phase II.

Coinsured by third party
------------------------

     The previously owned 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.  On October 14,  1993,
Patrician filed a foreclosure  action on the property  underlying this coinsured
mortgage.  On November 2, 1993, the mortgagor filed for protection under chapter
11 of the U.S.  Bankruptcy  Code.  The  property  was  acquired  and vested with
Patrician in November 1998 and subsequently sold on October 12, 1999.  Patrician
filed a coinsurance  claim for insurance  benefits with HUD in October 1999, for
remaining  amounts due,  including  past due  interest.  In November  1999,  the
Partnership  received sales proceeds of approximately $3 million. A distribution
of  approximately  $0.32 per Unit  related to the sale was  declared in November
1999 and was paid to  Unitholders  in  February  2000.  In  February  2001,  the
Partnership received claim proceeds from Patrician of approximately $2.2 million
and expects to recognize a gain of  approximately  $822,000.  The claim proceeds
represent the remaining  balance due on the  mortgage,  including  interest from
November  1, 1995  through  the date of  receipt.  The  Partnership  expects  to
distribute  approximately  $0.24 per Unit  related  to the  disposition  of this
mortgage in May 2001.  As of December  31, 2000,  approximately  $1.4 million of
this amount is included on the balance  sheet in  Receivables  and other assets.
The amount of the  Partnership's  investment  in this  mortgage  represents  the
Partnership's  approximate 55% ownership interest in the mortgage. The remaining
45% ownership interest is held by AIM 86, an affiliate of the Partnership.


Investment in FHA-insured loans
-------------------------------

     Listed below is the  Partnership's  aggregate  investment  in fully insured
Originated Insured Mortgages as of December 31, 2000 and 1999:

                                                        December 31,
                                               2000                     1999
                                           ------------             ------------
Number of Mortgages(1)                                1                        1
Amortized Cost                             $  5,627,149             $  5,676,336
Face Value                                    5,627,149                5,676,336
Fair Value                                    5,248,132                5,169,038

     As of February 16, 2001,  the  Partnership's  FHA-Insured  Loan was current
with respect to payment of principal and interest.

     Listed below is the  Partnership's  aggregate  investment  in fully insured
Acquired Insured Mortgages as of December 31, 2000 and 1999:

                                                        December 31,
                                                 2000                   1999
                                           ------------             ------------

Number of Mortgages(1)                                -                        1
Amortized Cost                             $          -             $    461,081
Face Value                                            -                  460,441
Fair Value                                            -                  459,177

(1)  In  May  2000,  the  mortgage  on  Kingsway  Apartments  was  prepaid.  The
     Partnership received net proceeds of approximately  $455,000 and recognized
     a gain of  approximately  $4,600 for the year ended  December  31,  2000. A
     distribution of  approximately  $0.05 per Unit related to the prepayment of
     this  mortgage  was declared in May and was paid to  Unitholders  in August
     2000.

     In  addition  to  base  interest  payments  from  FHA-Insured   Loans,  the
Partnership is entitled to additional  interest based on a percentage of the net
cash flow  from the  underlying  development  and of the net  proceeds  from the
refinancing,  sale or other disposition of the underlying  development (referred
to as  "Participations").  During the years ended  December 31,  2000,  1999 and
1998,  the  Partnership  received  additional  interest  of $0, $0 and  $69,820,
respectively,  from the FHA-Insured Loans, through these  Participations.  These
amounts,  if any, are included in mortgage investment income on the accompanying
statements of income and comprehensive income.

Results of Operations
---------------------

2000 versus 1999
----------------

     Net earnings  decreased  for 2000 as compared to 1999,  primarily  due to a
decrease in mortgage  investment  income caused by the reduction in the mortgage
asset base and a reduction in net gains on mortgage dispositions.

     Mortgage investment income decreased for 2000 as compared to 1999, due to a
reduction in the mortgage  base.  The mortgage base decreased as a result of ten
mortgage  dispositions with an aggregate  principal balance of approximately $47
million,  representing  an approximate  43% decrease in the aggregate  principal
balance of the total mortgage portfolio, since March 1999.

     Interest  and other  income  decreased  for 2000 as compared to 1999.  This
increase was primarily due to the timing of the temporary investment of proceeds
from mortgage prepayments.

     Asset  management fee expense  decreased for 2000 as compared to 1999. This
decrease  was  due to the  reduction  in the  mortgage  base,  primarily  due to
mortgage prepayments as previously discussed.

     General and administrative expenses increased for 2000 as compared to 1999.
This  increase  was  primarily  due to the legal  fees  related  to the  ongoing
litigation related to Water's Edge of New Jersey as previously discussed.

     Net realized gains on mortgage dispositions  decreased for 2000 as compared
to 1999.  Gains or  losses on  mortgage  dispositions  are based on the  number,
carrying  amounts and  proceeds of mortgage  investments  disposed of during the
period. During 2000, the Partnership  recognized gains of approximately $387,000
related to the prepayment of the mortgages on Linville Manor, Park Avenue Plaza,
Lioncrest  Towers  Apartments  and Kingsway  Apartments.  This compares to gains
recognized in 1999 of  approximately $1 million related to the prepayment of the
mortgages  on Seven  Spring  Apartments,  The  Breakers at Golf Mill,  Oak Grove
Apartments, and Heather Ridge.

1999 versus 1998
----------------

     Net earnings  decreased  for 1999 as compared to 1998,  primarily  due to a
decrease in mortgage  investment  income caused by the reduction in the mortgage
asset base.  This decrease was  partially  offset by an increase in net gains on
mortgage dispositions.

     Mortgage  investment  income  decreased for 1999 as compared to 1998.  This
decrease was primarily due to the  prepayment of five  mortgages and the sale of
one  property  during  1999 for  approximately  $36  million in  proceeds.  Also
contributing to the decrease was the normal amortization of the mortgage base.

     Interest  and other  income  increased  for 1999 as compared to 1998.  This
increase was primarily due to the timing of the temporary investment of proceeds
from mortgage prepayments.

     Asset  management fee expense  decreased for 1999 as compared to 1998. This
decrease  was  due to the  reduction  in the  mortgage  base,  primarily  due to
mortgage prepayments as previously discussed.

     General and administrative expenses increased for 1999 as compared to 1998.
This increase was primarily due to the legal fees related to the mortgage issues
on Water's Edge of New Jersey as previously discussed.

     Net realized gains on mortgage dispositions  increased for 1999 as compared
to 1998.  Gains or  losses on  mortgage  dispositions  are based on the  number,
carrying  amounts and  proceeds of mortgage  investments  disposed of during the
period.  During 1999,  the  partnership  recognized  gains of  approximately  $1
million  related to the prepayment of the mortgages on Seven Spring  Apartments,
The  Breakers  at Golf Mill,  Oak Grove  Apartments,  and  Heather  Ridge.  This
compares to gains  recognized in 1998 of  approximately  $1.1 million related to
the  prepayments  of the  mortgages  on  Northpoint  Apartments,  Olmstead  Park
Apartments,  Water's Edge II Apartments, and Olde Mill Apartments.  During 1999,
the Partnership  incurred a loss of approximately $400 on the disposition of Kon
Tiki Apartments  versus a loss of  approximately  $350,000 on the disposition of
the mortgage on Arbor Village in 1998.


Liquidity and Capital Resources
-------------------------------

     On October 5, 1998,  CRIIMI  MAE,  the parent of the General  Partner,  and
CRIIMI  MAE  Management,  Inc.,  an  affiliate  of CRIIMI  MAE and  provider  of
personnel  and  administrative  services  to the  Partnership,  filed  voluntary
petitions for relief under chapter 11 of title 11 of the United States Code (the
"Bankruptcy  Code").  Such  bankruptcy  filings could result in certain  adverse
effects to the Partnership.  For example, as a debtor-in-possession,  CRIIMI MAE
will not be permitted to provide any available capital to the General Partner or
to the general partner of CMSLP, the Partnership's sub-advisor, without approval
from the Bankruptcy Court. Even though this restriction or potential loss of the
availability of a potential  capital resource could adversely affect the General
Partner  and the  Partnership,  CRIIMI MAE has not  historically  represented  a
significant  source of capital for the General Partner or the Partnership.  Such
bankruptcy filings could also result in the potential need to replace CRIIMI MAE
Management,  Inc. as a provider of personnel and administrative  services to the
Partnership.

     On November 22, 2000, the United States  Bankruptcy  Court for the District
of Maryland,  in Greenbelt,  Maryland (the "Bankruptcy  Court") confirmed CRIIMI
MAE's  and  CRIIMI  MAE   Management,   Inc.'s  Third   Amended  Joint  Plan  of
Reorganization  (as  amended  and  supplemented  by  praecipes  filed  with  the
Bankruptcy  Court on July 13, 14 and 21, and  November  22,  2000,  the "Plan").
CRIIMI MAE is working to complete the debt documentation, evidencing the secured
financings to be provided by (1) the unsecured creditors,  and (2) Merrill Lynch
Mortgage Capital, Inc. and German American Capital Corporation (collectively the
"New Debt  Documents").  On March 9, 2001,  the  Bankruptcy  Court  approved  an
extension of the date by which the Plan must be effective to April 13, 2001. The
Official  Committee of Unsecured  Creditors had previously filed its own plan of
reorganization and proposed disclosure  statement,  but has asked the Bankruptcy
Court, subject to completion of mutually acceptable debt documentation, to defer
consideration  of its plan and proposed  disclosure  statement.  There can be no
assurance  at this time that  CRIIMI MAE will be able to  complete  the New Debt
Documents and effectuate the Plan by April 13, 2001.


     The  Partnership's  operating  cash  receipts,  derived  from  payments  of
principal and interest on Insured Mortgages, plus cash receipts from interest on
short-term investments are the Partnership's principal sources of cash flows and
were sufficient  during the years ended December 31, 2000, 1999 and 1998 to meet
operating  requirements.  The  Partnership  anticipates  its  cash  flows  to be
sufficient to meet operating expense requirements for 2001.

     The basis for paying  distributions  to  Unitholders  is net proceeds  from
mortgage  dispositions,  if any, and cash flow from  operations,  which includes
regular  interest  income and principal from Insured  Mortgages after paying all
expenses  of the  Partnership.  Although  the  Insured  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  payment  receipts are
temporarily  invested prior to the payment of quarterly  distributions,  (2) the
reduction in the asset base, resulting from monthly mortgage payment receipts or
mortgage  dispositions,  (3)  variations  in the cash flow  attributable  to the
delinquency  or  default  of  Insured   Mortgages  and  professional   fees  and
foreclosure  costs incurred in connection  with those Insured  Mortgages and (4)
variations in the Partnership's operating expenses.

     Since the  Partnership  is obligated to distribute the Proceeds of Mortgage
Prepayments,  Sales and  Insurance  on  Insured  Mortgages  (as  defined  in the
partnership  agreement)  to its  Unitholders,  the  size  of  the  Partnership's
portfolio  will continue to decrease.  The magnitude of the decrease will depend
upon the size of the Insured Mortgages,  which are prepaid, sold or assigned for
insurance proceeds.

Cash flow - 2000 versus 1999
----------------------------

     Net cash provided by operating activities decreased for 2000 as compared to
1999, primarily due to the decrease in mortgage base, as discussed previously.

     Net cash  provided by investing  activities  decreased for 2000 as compared
1999, primarily due to a reduction in proceeds from mortgage dispositions.

     Net cash used in  financing  activities  decreased  for 2000 as compared to
1999, due to a decrease in the amount of  distributions  paid to partners during
2000, as compared to the same period in 1999.

Cash flow - 1999 versus 1998
----------------------------

     Net cash provided by operating activities decreased for 1999 as compared to
1998  primarily  due to a decrease in net  earnings in 1999.  This  decrease was
primarily  the result of a decrease  in  mortgage  investment  income  discussed
previously.  Also contributing to the decrease was a decrease in receivables and
other  assets  during 1999 related to the sale of the  property  underlying  St.
Charles  Place-Phase  II and the  remaining  amounts  due from  the  coinsurance
lender.

     Net cash provided by investing activities increased for 1999 as compared to
1998 due to an increase in mortgage  disposition proceeds from approximately $36
million in 1999 versus approximately $33.8 million received in 1998.

     Net cash used in  financing  activities  decreased  for 1999 as compared to
1998 primarily due to a decrease in distributions paid to partners.


ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

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

     The  table  below  provides  information  about the  Partnership's  Insured
Mortgages,  all of which were entered into for purposes other than trading.  The
table  presents  anticipated  principal  and interest  cash flows based upon the
assumptions  used in  determining  the fair  value of these  securities  and the
related weighted average interest rates by expected maturity.

<TABLE>
<CAPTION>
                                       2001       2002      2003       2004       2005        Thereafter     Total     Fair Value
                                       ----       ----      ----       ----       ----        ----------     -----     ----------
<S>                                   <C>        <C>       <C>        <C>        <C>            <C>          <C>         <C>
Insured Mortgages
(in millions)                         $10.0      $ 9.0     $ 8.1      $ 9.1      $ 8.6          $47.0        $91.9       $58.4

Average Interest Rate                   7.86%      7.86%     7.86%      7.86%      7.87%          7.95%        7.93%        --
</TABLE>


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information required by this Item is set forth in this Annual Report on
Form 10-K commencing on page 19.



ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURES
            None.
<PAGE>
                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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

     The Partnership has no officers or directors.  CRIIMI, Inc. holds a general
partnership  interest of 4.9%. The affairs of the Partnership are managed by the
General Partner, which is wholly owned by CRIIMI MAE, a corporation whose shares
are listed on the New York Stock Exchange.

     The  general  partner of the  Advisor is AIM  Acquisition  and the  limited
partners  include,  but are not limited to, AIM  Acquisition,  The Goldman Sachs
Group,  L.P.,  Sun America  Investments,  Inc.  (successor  to Broad,  Inc.) and
CRI/AIM  Investment,  L.P., an affiliate of 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,  including  but  not  limited  to the  disposition  of  mortgages,  any
transaction or agreement with the General  Partner,  or its  affiliates,  or any
material  change as to  policies  regarding  distributions  or  reserves  of the
Partnership.  CMSLP,  an  affiliate  of CRIIMI MAE,  manages  the  Partnership's
portfolio,  pursuant to the Sub-Advisory Agreement. The general partner of CMSLP
is CRIIMI MAE Services, Inc., an affiliate of CRIIMI MAE.

     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.

     The  following  table  sets  forth  information  concerning  the  executive
officers  and  directors  of CRIIMI  MAE,  the sole  shareholder  of the General
Partner, as of February 20, 2001:

<TABLE>
<CAPTION>
 Name                                                  Age             Position
 ----                                                  ---             --------
<S>                                                     <C>            <C>
William B. Dockser                                      63             Chairman of the Board

H. William Willoughby                                   54             President, Secretary, and Director

David B. Iannarone                                      40             Executive Vice President

Cynthia O. Azzara                                       41             Senior Vice President,
                                                                         Chief Financial Officer and
                                                                         Treasurer

Brian L. Hanson                                         39             Senior Vice President

Garrett G. Carlson, Sr.                                 63             Director

G. Richard Dunnells                                     63             Director

Robert Merrick                                          55             Director

Robert E. Woods                                         53             Director
</TABLE>


     William B.  Dockser  has  served as  Chairman  of the Board of the  General
Partner  since 1991.  Mr.  Dockser has been  Chairman of the Board of CRIIMI MAE
since 1989. Mr. Dockser is also the founder of C.R.I., Inc. ("CRI"),  serving as
its Chairman of the Board since 1974.

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

     David B.  Iannarone has served as Executive  Vice  President of the General
Partner  since  December  2000.  Mr.  Iannarone  has  served as  Executive  Vice
President of CRIIMI MAE since  December 2000; as Senior Vice President of CRIIMI
MAE from March 1998 to December  2000;  and  General  Counsel of CRIIMI MAE from
July 1996 to  December  2000.  He served as  Counsel-Securities  and Finance for
Federal Deposit Insurance  Corporation/Resolution Trust Corporation from 1991 to
July 1996.

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

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

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

     G.  Richard  Dunnells has served as Director of the General  Partner  since
1991.  Mr.  Dunnells  has served as Director  of CRIIMI MAE since  1991;  Hiring
Partner of the law firm of Holland & Knight since January 1995;  and Chairman of
the  Washington,  D.C.  law firm of Dunnells & Duvall from 1989 to 1993;  Senior
Partner of such law firm from 1973 to 1993.

     Robert J. Merrick has served as Director of the General Partner since 1997.
Mr.  Merrick  has served as  Director  of CRIIMI MAE since  1997;  Chief  Credit
Officer and Director of MCG Capital  Corporation since February 1998;  Executive
Vice President from 1985 and Chief Credit Officer of Signet Banking  Corporation
through 1997, also served as Chairman of the Credit Policy  Committee and member
of the Asset and Liability Committee and Management Committee.

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

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

          (f)  Involvement in certain legal proceedings.

                           None.

          (g)  Promoters and control persons.

                           Not applicable.

          (h)  Section 16(a) Beneficial  Ownership Reporting  Compliance - Based
               solely on its review of Forms 3, 4, and 5 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, 2000.


ITEM 11.   EXECUTIVE COMPENSATION

     The  Partnership  does not  have any  directors  or  officers.  None of the
directors  or officers  of the General  Partner  receive  compensation  from the
Partnership,  and the General  Partner does not receive  reimbursement  from the
Partnership for any portion of their  salaries.  Other  information  required by
Item 11 is hereby  incorporated  by  reference  herein to Note 5 of the Notes to
Financial Statements of the Partnership.


ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)  As of December 31, 2000, no person was known by the  Partnership  to be the
     beneficial owner of more than five percent (5%) of the outstanding Units of
     the Partnership.

(b)  The following table sets forth certain information regarding the beneficial
     ownership  of the  Partnership's  Units  as of  February  16,  2001 by each
     director  of the  General  Partner,  each  Named  Executive  Officer of the
     General  Partner,  and by affiliates of the  Partnership.  Unless otherwise
     indicated,  each  Unitholder  has sole  voting  and  investment  power with
     respect  to the  Units  beneficially  owned.
<TABLE>
<CAPTION>
                                        Amount  and  Nature
                                             of Units                Percentage of Units
         Name                           Beneficially Owned               Outstanding
         ----                           ------------------               -----------
         <S>                                  <C>                             <C>
         William B. Dockser                   3,000                           *
         CRIIMI MAE                             744                           *

         * Less than 1%
</TABLE>

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


ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a)  Transactions with management and others.

     Note 7 of the  Notes  to  Financial  Statements  of the  Partnership  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,  and is  hereby  incorporated  by
     reference herein.

(b)  Certain business relationships.

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

(c)  Indebtedness of management.

     None.

(d)  Transactions with promoters.

     Not applicable.


                                     PART IV

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

(a)(1)     Financial Statements:
<TABLE>
<CAPTION>
                                                                                                         Page
Description                                                                                             Number
-----------                                                                                             ------
<S>                                                                                                       <C>
Balance Sheets as of December 31, 2000 and 1999......................................................     22

Statements of Income and Comprehensive Income for the years ended December 31, 2000,
   1999 and 1998.....................................................................................     23

Statements of Changes in Partners' Equity for the years ended December 31, 2000, 1999
    and 1998.........................................................................................     24

Statements of Cash Flows for the years ended December 31, 2000, 1999 and 1998........................     25

Notes to Financial Statements........................................................................     26


(a)(2)   Financial Statement Schedules:

         IV - Mortgage Loans on Real Estate..........................................................     35
</TABLE>

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

(a)(3)   Exhibits:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         10.19 Amendment No. 3 to Reimbursement Agreement by Integrated Funding,
               Inc.  and  the AIM  Funds,  effective  January  1,  2000,  (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>
                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

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

                                                     By:    CRIIMI, Inc.
                                                     General Partner


/s/ March 12, 2001                             /s/ William B. Dockser
------------------                             ----------------------
DATE                                           William B. Dockser
                                               Chairman of the Board

/s/ March 08, 2001                             /s/ H. William Willoughby
------------------                             -------------------------
DATE                                           H. William Willoughby
                                               President and Secretary


/s/ March 26, 2001                             /s/ Cynthia O. Azzara
------------------                             ---------------------
DATE                                           Cynthia O. Azzara
                                               Senior Vice President,
                                               Chief Financial Officer and
                                               Treasurer


/s/ March 07, 2001                             /s/ Garrett G. Carlson, Sr.
------------------                             ---------------------------
DATE                                           Garrett G. Carlson, Sr.
                                               Director


/s/ March 12, 2001                             /s/ G. Richard Dunnells
------------------                             -----------------------
DATE                                           G. Richard Dunnells
                                               Director


/s/ March 08, 2001                             /s/ Robert J. Merrick
------------------                             ---------------------
DATE                                           Robert J. Merrick
                                               Director


/s/ March 09, 2001                             /s/ Robert E. Woods
------------------                             -------------------
DATE                                           Robert E. Woods
                                               Director
<PAGE>









              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88



                              Financial Statements

                        as of December 31, 2000 and 1999


                             and for the Years Ended

                        December 31, 2000, 1999 and 1998

<PAGE>

                    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, 2000
and 1999, and the related statements of income and comprehensive income, changes
in partners'  equity and cash flows for the years ended December 31, 2000,  1999
and 1998. 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  auditing  standards  generally
accepted in the United States.  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, 2000 and 1999, and the results of its operations and its cash flows
for the years  ended  December  31,  2000,  1999 and 1998,  in  conformity  with
accounting principles generally accepted in the United States.

     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,  2000 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
Vienna, Virginia
February 23, 2001
<PAGE>

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                   December 31,      December 31,
                                                                       2000              1999
                                                                   ------------      ------------
                                     ASSETS

<S>                                                                <C>               <C>
Investment in FHA-Insured Certificates and GNMA
   Mortgage-Backed Securities, at fair value:
      Acquired insured mortgages                                   $ 44,649,442      $ 54,329,225
      Originated insured mortgages                                    8,492,111         8,452,851
                                                                   ------------      ------------

                                                                     53,141,553        62,782,076

Investment in FHA-Insured Loans, at amortized cost,
   net of unamortized discount and premium:
      Originated insured mortgages                                    5,627,149         5,676,336
      Acquired insured mortgages                                              -           461,081
                                                                   ------------      ------------

                                                                      5,627,149         6,137,417

Cash and cash equivalents                                             7,605,734         9,412,244

Investment in affiliate                                               1,825,772         1,250,860

Notes receivable from affiliates and due from affiliates                 53,437           658,493

Receivables and other assets                                          3,034,464         3,213,483
                                                                   ------------      ------------

      Total assets                                                 $ 71,288,109      $ 83,454,573
                                                                   ============      ============



                LIABILITIES AND PARTNERS' EQUITY

Distributions payable                                              $  7,774,718      $  9,625,841

Accounts payable and accrued expenses                                   382,663           126,648
                                                                   -----------       ------------

      Total liabilities                                               8,157,381         9,752,489
                                                                   ------------      ------------

Partners' equity:
   Limited partners' equity, 15,000,000 Units authorized,
      8,802,091 Units issued and outstanding                         69,011,402        80,173,264
   General partner's deficit                                         (5,582,223)       (5,007,111)
   Less:  Repurchased Limited Partnership
      Units - 50,000 Units                                             (618,750)         (618,750)
   Accumulated other comprehensive income (loss)                        320,299          (845,319)
                                                                   ------------      ------------

      Total Partners' equity                                         63,130,728        73,702,084
                                                                   ------------      ------------

      Total liabilities and partners' equity                       $ 71,288,109      $ 83,454,573
                                                                   ============      ============
</TABLE>

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


              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
                                                     For the years ended December 31,
                                                   2000            1999            1998
                                                -----------     -----------     -----------

<S>                                             <C>             <C>             <C>
Income:
  Mortgage investment income                    $ 5,276,523     $ 6,848,840     $ 9,606,555
  Interest and other income                         224,751         444,944         391,565
                                                -----------     -----------     -----------

                                                  5,501,274       7,293,784       9,998,120
                                                -----------     -----------     -----------

Expenses:
  Asset management fee to related parties           712,869         942,910       1,287,672
  General and administrative                        437,036         369,751         287,395
                                                -----------     -----------     -----------

                                                  1,149,905       1,312,661       1,575,067
                                                -----------     -----------     -----------

Earnings before gains (losses) on
  mortgage dispositions                           4,351,369       5,981,123       8,423,053


Mortgage dispositions:
  Gains                                             386,654       1,072,589       1,106,588
  Losses                                                  -            (422)       (350,159)
                                                -----------     -----------     -----------

Net earnings                                    $ 4,738,023     $ 7,053,290     $ 9,179,482
                                                ===========     ===========     ===========

Other comprehensive income (loss)                 1,165,618        (960,003)     (1,545,152)
                                                -----------     -----------     -----------

Comprehensive income                            $ 5,903,641     $ 6,093,287     $ 7,634,330
                                                ===========     ===========     ===========

Net earnings allocated to:
  Limited partners - 95.1%                      $ 4,505,860     $ 6,707,679     $ 8,729,687
  General Partner -   4.9%                          232,163         345,611         449,795
                                                -----------     -----------     -----------

                                                $ 4,738,023     $ 7,053,290     $ 9,179,482
                                                ===========     ===========     ===========

Net earnings per Limited Partnership
  Unit outstanding - Basic                      $      0.51     $      0.76     $      0.99
                                                ===========     ===========     ===========
</TABLE>

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

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                    STATEMENTS OF CHANGES IN PARTNERS' EQUITY

              For the years ended December 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>
                                                                               Repurchased     Accumulated
                                                                                 Limited          Other          Total
                                                 General        Limited        Partnership    Comprehensive     Partners'
                                                 Partner        Partners          Units       Income (Loss)      Equity
                                              -------------   -------------   -------------   -------------   -------------
<S>                                           <C>             <C>             <C>             <C>             <C>
Balance, January 1, 1998                      $  (1,539,380)  $ 147,475,554   $    (618,750)  $   1,659,836   $ 146,977,260

  Net Earnings                                      449,795       8,729,687               -               -       9,179,482
  Adjustment to unrealized gains (losses)
     on investments in insured mortgages                  -               -               -      (1,545,152)     (1,545,152)
  Distributions paid or accrued of $4.34
     per Unit, including return of capital
     of $3.35 per Unit                           (1,968,300)    (38,201,074)              -               -     (40,169,374)
                                              -------------   -------------   -------------   -------------   -------------

Balance, December 31, 1998                       (3,057,885)    118,004,167        (618,750)        114,684     114,442,216

  Net Earnings                                      345,611       6,707,679               -               -       7,053,290
  Adjustment to unrealized gains (losses) on
     investments in insured mortgages                     -               -               -        (960,003)       (960,003)
  Distributions paid or accrued of $5.06
     per Unit, including return of capital of
     $4.30 per Unit                              (2,294,837)    (44,538,582)              -               -     (46,833,419)
                                              -------------   -------------   -------------   -------------   --------------

Balance, December 31, 1999                       (5,007,111)     80,173,264        (618,750)       (845,319)     73,702,084

  Net Earnings                                      232,163       4,505,860               -               -       4,738,023
  Adjustment to unrealized gains (losses) on
     investments in insured mortgages                     -               -               -       1,165,618       1,165,618
  Distributions paid or accrued of $1.78
     per Unit, including return of capital of
     $1.27 per Unit                                (807,275)    (15,667,722)              -               -     (16,474,997)
                                              -------------   -------------   -------------   -------------   -------------

Balance, December 31, 2000                    $  (5,582,223)  $  69,011,402   $    (618,750)  $     320,299   $  63,130,728
                                              =============   =============   =============   =============   =============

Limited Partnership Units outstanding -
   basic, as of December 31, 2000, 1999,
   and 1998                                                       8,802,091
                                                                  =========
</TABLE>

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

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                               For the years ended December 31,
                                                                            2000             1999             1998
                                                                         -----------      -----------      -----------
<S>                                                                      <C>              <C>              <C>
Cash flows from operating activities:
   Net earnings                                                          $ 4,738,023      $ 7,053,290      $ 9,179,482
   Adjustments to reconcile net earnings to net cash provided by
      operating activities:
      Gain on mortgage dispositions                                         (386,654)      (1,072,589)      (1,106,588)
      Loss on mortgage dispositions                                                -              422          350,159
      Changes in assets and liabilities:
         Decrease in investment in affiliate, note
           receivable from affiliates and due from affiliates                 17,412           63,125           38,090
         Decrease in receivables and other assets                            179,019          132,524          354,296
         Increase (decrease) in accounts payable and accrued expenses        256,015           48,919          (43,602)
                                                                         -----------      -----------      -----------

         Net cash provided by operating activities                         4,803,815        6,225,691        8,771,837
                                                                         -----------      -----------      -----------

Cash flows provided by investing activities:
   Proceeds from dispositions of Insured mortgages                        11,008,711       35,966,462       33,845,966
   Receipt of mortgage principal from scheduled payments                     707,084          847,024        1,928,044
                                                                         -----------      -----------      -----------

         Net cash provided by investing activities                        11,715,795       36,813,486       35,774,010
                                                                         -----------      -----------      -----------

Cash flows used in financing activities:
   Distributions paid to partners                                        (18,326,120)     (39,151,257)     (41,742,829)
                                                                         -----------      -----------      -----------

Net (decrease) increase in cash and cash equivalents                      (1,806,510)       3,887,920        2,803,018
                                                                         -----------      -----------      -----------

Cash and cash equivalents, beginning of year                               9,412,244        5,524,324        2,721,306
                                                                         -----------      -----------      -----------

Cash and cash equivalents, end of year                                   $ 7,605,734      $ 9,412,244      $ 5,524,324
                                                                         ===========      ===========      ===========
Non cash investing activity:
    Increased receivable due from Patrician as a result of the
    foreclosure and sale of the property underlying the mortgage on
    St. Charles Place-Phase II                                           $         -      $   706,765      $         -
                                                                         ===========      ===========      ===========
</TABLE>
                   The accompanying notes are an integral part
                         of these financial statements.


<PAGE>

              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%
and 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.  The general partner of the Advisor is AIM Acquisition  Corporation
("AIM  Acquisition") and the limited partners  include,  but are not limited to,
AIM Acquisition,  The Goldman Sachs Group, L.P., Sun America Investments,  Inc.,
(successor to Broad, Inc.) and CRI/AIM Investment,  L.P., an affiliate of CRIIMI
MAE. AIM  Acquisition is a Delaware  corporation  that is primarily owned by Sun
America Investments, Inc. and The Goldman Sachs Group, L.P.

     Under the  Advisory  Agreement,  the Advisor  will  render  services to the
Partnership,  including but not limited to, the management of the  Partnership's
portfolio of mortgages and the disposition of the Partnership's mortgages.  Such
services  will be subject to the review and  ultimate  authority  of the General
Partner.  However, the General Partner is required to receive the consent of the
Advisor prior to taking certain significant  actions,  including but not limited
to the  disposition of mortgages,  any transaction or agreement with the General
Partner,  or its  affiliates,  or any material  change as to policies  regarding
distributions  or  reserves of the  Partnership.  The  Advisor is  permitted  to
delegate the performance of services  pursuant to a sub-advisory  agreement (the
"Sub-Advisory Agreement").  The delegation of such services will not relieve the
Advisor of its obligation to perform such services.  CRIIMI MAE Services Limited
Partnership  ("CMSLP"),  an affiliate of CRIIMI MAE,  manages the  Partnership's
portfolio,  pursuant to the Sub-Advisory Agreement. The general partner of CMSLP
is CRIIMI MAE Services, Inc., an affiliate of CRIIMI MAE.

     Prior  to  the  expiration  of the  Partnership's  reinvestment  period  in
December 1996, 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").  In accordance  with the  partnership  agreement,  the
Partnership is no longer  authorized to originate or acquire  Insured  Mortgages
and, consequently,  its primary objective is to manage its portfolio of mortgage
investments, all of 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  agreement states
that the  Partnership  will  terminate on December 31, 2021,  unless  previously
terminated under the provisions of the partnership agreement.

     On October 5, 1998,  CRIIMI  MAE,  the parent of the General  Partner,  and
CRIIMI  MAE  Management,  Inc.,  an  affiliate  of CRIIMI  MAE and  provider  of
personnel  and  administrative  services  to the  Partnership,  filed  voluntary
petitions for relief under chapter 11 of title 11 of the United States Code (the
"Bankruptcy  Code").  Such  bankruptcy  filings could result in certain  adverse
effects to the Partnership.  For example, as a debtor-in-possession,  CRIIMI MAE
will not be permitted to provide any available capital to the General Partner or
to the general partner of CMSLP, the Partnership's sub-advisor, without approval
from the Bankruptcy Court. Even though this restriction or potential loss of the
availability of a potential  capital resource could adversely affect the General
Partner  and the  Partnership,  CRIIMI MAE has not  historically  represented  a
significant  source of capital for the General Partner or the Partnership.  Such
bankruptcy filings could also result in the potential need to replace CRIIMI MAE
Management,  Inc. as a provider of personnel and administrative  services to the
Partnership.

     On November 22, 2000, the United States  Bankruptcy  Court for the District
of Maryland,  in Greenbelt,  Maryland (the "Bankruptcy  Court") confirmed CRIIMI
MAE's  and  CRIIMI  MAE   Management,   Inc.'s  Third   Amended  Joint  Plan  of
Reorganization  (as  amended  and  supplemented  by  praecipes  filed  with  the
Bankruptcy  Court on July 13, 14 and 21, and  November  22,  2000,  the "Plan").
CRIIMI MAE is working to complete the debt documentation, evidencing the secured
financings to be provided by (1) the unsecured creditors,  and (2) Merrill Lynch
Mortgage Capital, Inc. and German American Capital Corporation (collectively the
"New Debt  Documents").  On March 9, 2001,  the  Bankruptcy  Court  approved  an
extension of the date by which the Plan must be effective to April 13, 2001. The
Official  Committee of Unsecured  Creditors had previously filed its own plan of
reorganization and proposed disclosure  statement,  but has asked the Bankruptcy
Court, subject to completion of mutually acceptable debt documentation, to defer
consideration  of its plan and proposed  disclosure  statement.  There can be no
assurance  at this time that  CRIIMI MAE will be able to  complete  the New Debt
Documents and effectuate the Plan by April 13, 2001.



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.

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

     As of  December  31,  2000,  the  weighted  average  remaining  term of the
Partnership's  investments in GNMA  Mortgage-Backed  Securities and  FHA-Insured
Certificates is  approximately  28 years.  However,  the  partnership  agreement
states  that the  Partnership  will  terminate  in  approximately  21 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 its investment in GNMA  Mortgage-Backed
Securities  and  FHA-Insured  Certificates,  the  Partnership  does not have the
ability  or  intent,  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, 2000 and 1999,
the Partnership's investments in GNMA Mortgage-Backed Securities and FHA-Insured
Certificates  are  recorded at fair  value,  with the net  unrealized  gains and
losses on these assets reported as other comprehensive  income and as a separate
component of  partners'  equity.  Subsequent  increases or decreases in the fair
value  of  GNMA   Mortgage-Backed   Securities  and  FHA-Insured   Certificates,
classified  as available for sale,  will be included as a separate  component of
partners' equity.  Realized gains and losses on GNMA Mortgage-Backed  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, and repurchase  agreements with original maturities
of three months or less.

Investment in affiliate
-----------------------

     Represents an investment in Integrated Funding,  Inc. ("IFI"), an affiliate
of the  Partnership.  This  investment  is accounted for under the equity method
which  results  in  the  original   invested  amount  being  increased  for  the
Partnership's  share of income  and  decreased  for the  Partnership's  share of
losses and distributions.

Income Taxes
------------

     No provision has been made for Federal,  state or local income taxes in the
accompanying  statements of income and  comprehensive  income since they are the
responsibility of the Unitholders.

Statements of Cash Flows
------------------------

     No cash  payments  were made for  interest  expense  during the years ended
December  31,  2000,  1999,  and 1998.  Since the  statements  of cash flows are
intended to reflect only cash receipt and cash payment activity,  the statements
of cash flows do not reflect operating  activities that affect recognized assets
and liabilities while not resulting in cash receipts or cash payments.


3.   FAIR VALUE OF FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>
                                          As of December 31, 2000          As of December 31, 1999
                                         Amortized          Fair          Amortized          Fair
                                           Cost             Value           Cost             Value
                                       ------------     ------------     ------------     ------------
<S>                                    <C>              <C>              <C>              <C>
 Investment in FHA-Insured
  Certificates and GNMA
  Mortgage-Backed Securities:
  Originated Insured Mortgages         $ 45,000,295     $ 44,649,442     $ 55,763,736     $ 54,329,225
  Acquired Insured Mortgages              7,808,228        8,492,111        7,863,659        8,452,851
                                       ------------     ------------     ------------     ------------

                                       $ 52,808,523     $ 53,141,553     $ 63,627,395     $ 62,782,076
                                       ============     ============     ============     ============

Investment in FHA-Insured Loans:
  Acquired Insured Mortgages           $  5,627,149     $  5,248,132     $  5,676,336     $  5,169,038
  Originated Insured Mortgage                    --               --          461,081          459,177
                                       ------------     ------------     ------------     ------------

                                       $  5,627,149     $  5,248,132     $  6,137,417     $  5,628,215
                                       ============     ============     ============     ============

Cash and cash equivalents              $  7,605,734     $  7,605,734     $  9,412,244     $  9,412,244

Accrued interest receivable            $    394,719     $    394,719     $    466,974     $    466,974

GNMA Mortgage-Backed Security
  contributed to affiliate             $  1,838,504     $  1,825,772     $  1,250,860     $  1,250,860
</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  FHA-Insured  Certificates,  GNMA  Mortgage-Backed
Securities and FHA-Insured  Loans is priced  internally.  The Partnership used a
discounted cash flow methodology to estimate the fair value; the cash flows were
discounted  using  a  discount  rate  that,  in  the  Partnership's   view,  was
commensurate  with the market's  perception of risk and value.  The  Partnership
used a variety  of  sources  to  determine  its  discount  rate  including:  (i)
institutionally-available research reports, (ii) a relative comparison of dealer
provided  quotes from the previous  year to those  disclosed in recent  research
reports and  incorporating  adjustments  to reflect  changes in the market,  and
(iii) communications with dealers and active insured mortgage security investors
regarding the valuation of comparable securities.

Cash and cash equivalents and accrued interest receivable
---------------------------------------------------------

     The carrying amount  approximates  fair value because of the short maturity
of these instruments.


4.   COMPREHENSIVE INCOME

     Comprehensive  Income  includes net  earnings as currently  reported by the
Partnership adjusted for other comprehensive  income. Other comprehensive income
for the Partnership  consists of changes in unrealized  gains and losses related
to the  Partnership's  mortgages  accounted for as available for sale. The table
below breaks out other  comprehensive  income for the periods presented into the
following two  categories:  (1) the change to  unrealized  gains and losses that
relate to mortgages  which were disposed of during the period with the resulting
realized gain or loss reflected in net earnings  (reclassification  adjustments)
and (2) the change in the unrealized  gain or loss related to those  investments
that were not disposed of during the period.

<TABLE>
<CAPTION>
                                                                   2000            1999            1998
                                                               ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>
Reclassification adjustment for losses
  included in net income                                       $    187,450    $  1,577,427    $    146,033
Unrealized holding gains (losses) arising during
  the period                                                        978,168      (2,537,430)     (1,691,185)
                                                               ------------    ------------    ------------

Net adjustment to unrealized gains (losses) on mortgages       $  1,165,618    $   (960,003)   $ (1,545,152)
                                                               ============    ============    ============
</TABLE>


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

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

Fully Insured Originated Insured Mortgages and Acquired Insured Mortgages
-------------------------------------------------------------------------

     Listed below is the  Partnership's  aggregate  investment  in Fully Insured
Mortgages as of December 31, 2000 and 1999:
<TABLE>
<CAPTION>
                                                                          December 31,
                                                                   2000                     1999
                                                               ------------             ------------
<S>                                                            <C>                      <C>
 Number of:
  GNMA Mortgage-Backed Securities(1)(3)(4)                               18                       20
  FHA-Insured Certificates(2)                                             1                        2
Amortized Cost                                                 $ 45,000,295             $ 55,763,736
Face Value                                                       44,953,069               55,736,170
Fair Value                                                       44,649,442               54,329,225
</TABLE>

(1)  In March 2000, the mortgage on Linville Manor was prepaid.  The Partnership
     received net proceeds of  approximately  $2.0 million and recognized a gain
     of  approximately  $107,000  for  the  year  ended  December  31,  2000.  A
     distribution of  approximately  $0.22 per Unit related to the prepayment of
     this  mortgage  was  declared in March and was paid to  Unitholders  in May
     2000.
(2)  In May 2000, the mortgage on Park Avenue Plaza was prepaid. The Partnership
     received net proceeds of  approximately  $2.0 million and recognized a gain
     of  approximately   $95,000  for  the  year  ended  December  31,  2000.  A
     distribution of  approximately  $0.22 per Unit related to the prepayment of
     this  mortgage  was declared in May and was paid to  Unitholders  in August
     2000.
(3)  In November 2000, the mortgage on Lioncrest Towers  Apartments was prepaid.
     The  Partnership  received net proceeds of  approximately  $6.5 million and
     recognized a gain of approximately $180,000 for the year ended December 31,
     2000.  A  distribution  of  approximately  $0.70  per Unit  related  to the
     prepayment  of this  mortgage was declared in December 2000 and was paid to
     Unitholders in February 2001.
(4)  In January 2001, the mortgage on Silver Lake Plaza  Apartments was prepaid.
     The  Partnership  received net proceeds of  approximately  $5.2 million and
     expects to recognize a gain of  approximately  $83,000.  A distribution  of
     approximately $0.56 per Unit related to the prepayment of this mortgage was
     declared in February 2001 and will be paid to Unitholders in May 2001.

     As of February 16, 2001, all of the  Partnership's  fully insured  mortgage
investments are 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
HUD. The property underlying this construction loan is a nursing home located in
Trenton,  New Jersey.  As of December 31,  2000,  the  Partnership  had received
approximately  $10.2  million  of the  assignment  proceeds,  including  partial
repayment of the outstanding principal and accrued interest.  HUD has disallowed
approximately  $1.65  million of the  assignment  claim,  which is  included  in
Receivables  and Other  Assets.  The General  Partner  retained  counsel in this
matter and is actively pursuing litigation against the loan servicer,  Greystone
Servicing Corporation, Inc. ("Greystone"),  for the amount disallowed by HUD. On
July 30, 1998, the Partnership  filed a Motion for Judgment against Greystone in
the Circuit Court of Fauquier  County,  Virginia (the  "Court").  The Motion for
Judgment alleges breach of contract and negligence claims and seeks judgment for
$1,653,396,  the amount  disallowed by HUD, plus interest,  attorneys'  fees and
costs.  In the Motion for  Judgement,  the General  Partner  alleges as follows:
Pursuant to a mortgage  servicing  contract,  the  Participation  and  Servicing
Agreement  ("PSA"),  Greystone was obligated to ensure that the requirements for
preserving  HUD  insurance  on the loan  were satisfied.  Specifically,  the PSA
required  Greystone  to  prepare a written  notice of  default  in the event the
borrower defaulted on the mortgage loan repayment  obligation and to file notice
of such  default  with HUD within  thirty (30) days after an uncured  borrower's
cure period. Due to Greystone's  failure to timely file a notice of default with
HUD, HUD applied a surcharge of $1,653,396 to the insurance proceeds due AIM 88,
as permitted pursuant to the FHA Insurance  Contract.  On February 28, 2000, AIM
88 and  Greystone  Servicing  Corporation,  Inc.  presented  oral  arguments for
summary  judgement  before  the Court in this  matter.  In May  2000,  the Court
granted the motion for summary  judgement  of the  Partnership,  in part.  Final
judgement  is still  outstanding.  The trial date has been  continued  until May
2001. The Partnership believes that the allowance for loan losses of $375,000 as
of December  31,  2000,  is  sufficient  to provide for amounts  that may not be
recovered from the servicer.

Coinsured FHA-Insured Certificate
---------------------------------

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

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

     As of December 31, 2000 and 1999, the Partnership  held one investment in a
coinsured  FHA-Insured  Certificate  secured  by a  coinsured  mortgage.  As  of
December 31, 2000 and 1999,  the remaining  single  FHA-Insured  Certificate  is
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 affiliate
----------------------

     As of December 31, 2000 and 1999, the Partnership  held one investment in a
coinsured  FHA-Insured  Certificate secured by a coinsured  mortgage,  where the
coinsurance lender is Integrated Funding, Inc. ("IFI"). This investment was made
on  behalf  of the  Partnership  by the  former  managing  general  partner.  As
structured  by the  former  managing  general  partner,  with  respect  to  this
mortgage,  the Partnership bears the risk of loss upon default for IFI's portion
of the coinsurance loss on this mortgage investment.

<TABLE>
<CAPTION>
                                            December 31, 2000                              December 31, 1999
                                 Amortized        Face           Fair           Amortized        Face           Fair
                                   Cost           Value       Mkt. Value          Cost           Value       Mkt. Value
                                -----------    -----------    -----------      -----------    -----------    -----------

<S>                             <C>            <C>            <C>              <C>            <C>            <C>
 Summerwind Apts.-Phase II      $ 7,808,228    $ 9,148,110    $ 8,492,111      $ 7,863,659    $ 9,231,460    $ 8,452,851
</TABLE>

     As of February 16, 2001,  the mortgagor was current with respect to payment
of principal and interest on this mortgage.

     There was no loan loss  recognized  for the years ended 2000 and 1999.  The
cumulative  loan loss  recognized in prior years was  $1,511,743  for Summerwind
Apartments - Phase II.

Coinsured by third party
------------------------

     The previously owned 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.  On October 14,  1993,
Patrician filed a foreclosure  action on the property  underlying this coinsured
mortgage.  On November 2, 1993, the mortgagor filed for protection under chapter
11 of the U.S.  Bankruptcy  Code.  The  property  was  acquired  and vested with
Patrician in November 1998 and subsequently sold on October 12, 1999.  Patrician
filed a coinsurance  claim for insurance  benefits with HUD in October 1999, for
remaining  amounts due,  including  past due  interest.  In November  1999,  the
Partnership  received sales proceeds of approximately $3 million. A distribution
of  approximately  $0.32 per Unit  related to the sale was  declared in November
1999 and was paid to  Unitholders  in  February  2000.  In  February  2001,  the
Partnership received claim proceeds from Patrician of approximately $2.2 million
and expects to recognize a gain of  approximately  $822,000.  The claim proceeds
represent the remaining  balance due on the  mortgage,  including  interest from
November  1, 1995  through  the date of  receipt.  The  Partnership  expects  to
distribute  approximately  $0.24 per Unit  related  to the  disposition  of this
mortgage in May 2001.  As of December  31, 2000,  approximately  $1.4 million of
this amount is included on the balance  sheet in  Receivables  and other assets.
The amount of the  Partnership's  investment  in this  mortgage  represents  the
Partnership's  approximate 55% ownership interest in the mortgage. The remaining
45% ownership interest is held by AIM 86, an affiliate of the Partnership.



6.   INVESTMENT IN FHA-INSURED LOANS

     Listed below is the  Partnership's  aggregate  investment  in fully insured
Originated Insured Mortgages as of December 31, 2000 and 1999:
<TABLE>
<CAPTION>
                                                                            December 31,
                                                                   2000                     1999
                                                               ------------             ------------
<S>                                                            <C>                      <C>
Number of Mortgages(1)                                                    1                        1
Amortized Cost                                                 $  5,627,149             $  5,676,336
Face Value                                                        5,627,149                5,676,336
Fair Value                                                        5,248,132                5,169,038
</TABLE>

     As of February 16, 2001,  the  Partnership's  FHA-Insured  Loan was current
with respect to payment of principal and interest.

     Listed below is the  Partnership's  aggregate  investment  in fully insured
Acquired Insured Mortgages as of December 31, 2000 and 1999:
<TABLE>
<CAPTION>
                                                                              December 31,
                                                                       2000                  1999
                                                                    ----------            ----------
<S>                                                                 <C>                   <C>
Number of Mortgages(1)                                                       -                     1
Amortized Cost                                                      $        -            $  461,081
Face Value                                                                   -               460,441
Fair Value                                                                   -               459,177
</TABLE>

(2)  In  May  2000,  the  mortgage  on  Kingsway  Apartments  was  prepaid.  The
     Partnership received net proceeds of approximately  $455,000 and recognized
     a gain of  approximately  $4,600 for the year ended  December  31,  2000. A
     distribution of  approximately  $0.05 per Unit related to the prepayment of
     this  mortgage  was declared in May and was paid to  Unitholders  in August
     2000.

     In  addition  to  base  interest  payments  from  FHA-Insured   Loans,  the
Partnership is entitled to additional  interest based on a percentage of the net
cash flow  from the  underlying  development  and of the net  proceeds  from the
refinancing,  sale or other disposition of the underlying  development (referred
to as  "Participations").  During the years ended  December 31,  2000,  1999 and
1998,  the  Partnership  received  additional  interest  of $0, $0 and  $69,820,
respectively,  from the FHA-Insured Loans, through these  Participations.  These
amounts,  if any, are included in mortgage investment income on the accompanying
statements of income and comprehensive income.


7.   TRANSACTIONS WITH RELATED PARTIES

     The General  Partner,  and certain  affiliated  entities,  during the years
ended December 31, 2000, 1999 and 1998, have earned or received  compensation or
payments for services from the Partnership as follows:

                 COMPENSATION PAID OR ACCRUED TO RELATED PARTIES
                 -----------------------------------------------
<TABLE>
<CAPTION>
                                 Capacity in Which                      For the years ended December 31,
Name of Recipient                   Served/Item                     2000              1999              1998
-----------------                -----------------               ----------        ----------        ----------
<S>                        <C>                                   <C>               <C>               <C>
CRIIMI, Inc.(1)            General Partner/Distribution          $  807,275        $2,294,837        $1,968,300

AIM Acquisition            Advisor/Asset Management Fee             712,869           942,910         1,287,672
  Partners, L.P.(2)

CRIIMI MAE                 Affiliate of General Partner/             46,164            45,757            68,010
  Management, Inc.           Expense Reimbursement
</TABLE>


(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 Advisor's  Asset  Management
     Fee. Of the amounts paid to the Advisor,  CMSLP, the Sub-advisor,  earned a
     fee equal to $210,081,  $277,888 and $379,506 for the years ended  December
     31, 2000,  1999 and 1998,  respectively.  The limited partner of CMSLP is a
     wholly  owned  subsidiary  of CRIIMI MAE Inc.,  which filed for  protection
     under Chapter 11 of the U.S. Bankruptcy Code.


8.   DISTRIBUTIONS TO UNITHOLDERS

     The  distributions  paid or accrued to  Unitholders on a per Unit basis for
the years ended December 31, 2000, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
                                              2000                    1999                    1998
                                           ----------              ----------              ----------
<S>                                        <C>                     <C>                     <C>
Quarter ended March 31                     $     0.37 (1)          $     0.61 (5)          $     1.21 (12)(13)
Quarter ended June 30,                           0.42 (2)(3)             3.26 (6)(7)(8)          1.50 (14)(15)
Quarter ended September 30,                      0.15                    0.15                    1.42 (16)
Quarter ended December 31,                       0.84 (4)                1.04 (9)(10)(11)        0.21
                                           ----------              ----------              ----------
                                           $     1.78              $     5.06              $     4.34
                                           ==========              ==========              ==========
</TABLE>


     The following disposition proceeds are included in the distributions listed
above:
<TABLE>
<CAPTION>

                                                             Date                             Net
                                                           Proceeds          Type of        Proceeds
                   Complex Name                            received        Disposition      Per Unit
                   ------------                            --------        -----------      --------
         <S>       <C>                                     <C>             <C>               <C>
         (1)       Linville Manor                          Mar. 2000       Prepayment        $ 0.22
         (2)       Park Avenue Plaza                       May 2000        Prepayment          0.22
         (3)       Kingsway Apartments                     May 2000        Prepayment          0.05
         (4)       Lioncrest Towers                        Nov. 2000       Prepayment          0.70
         (5)       Olde Mill Apartments                    Dec. 1998       Prepayment          0.37
         (6)       Seven Springs Apartments                April 1999      Prepayment          0.53
         (7)       Kon Tiki Apartments                     May 1999        Prepayment          0.06
         (8)       The Breakers at Golf Mill               May 1999        Prepayment          2.43
         (9)       Oak Grove Apartments                    Oct. 1999       Prepayment          0.06
         (10)      Heather Ridge Apartments                Nov. 1999       Prepayment          0.49
         (11)      St. Charles Place - Phase II            Nov. 1999       Sale                0.32
         (12)      Northpoint Apartments                   Jan. 1998       Prepayment          0.19
         (13)      Olmstead Apartments                     Feb. 1998       Prepayment          0.73
         (14)      Olde Mill Apartments                    May 1998        Curtailment         0.08
         (15)      Arbor Village                           June 1998       Prepayment          1.18
         (16)      Water's Edge II Apartments             Sept. 1998       Prepayment          1.19
</TABLE>

     The basis for paying  distributions  to  Unitholders  is net proceeds  from
mortgage  dispositions  and cash flow from  operations,  which includes  regular
interest income and principal from Insured Mortgages. Although 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  payment
receipts   are   temporarily   invested   prior  to  the  payment  of  quarterly
distributions,  (2) the  reduction  in the asset  base  resulting  from  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  costs  incurred  in  connection  with those
Insured Mortgages and (4) variations in the Partnership's operating expenses.


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

     In addition to the related party transactions described in Note 7, in order
to capitalize  IFI with  sufficient  net worth under HUD  regulations,  in April
1994, the Partnership transferred a GNMA Mortgage-Backed  Security in the amount
of  approximately  $2.0  million to IFI.  As of  December  31,  2000,  this GNMA
Mortgage-Backed Security had a face value and a fair value of approximately $1.8
million.  As of December 31,  1999,  it had a face value of  approximately  $1.9
million  and a fair  value of  approximately  $1.8  million.  The  Partnership's
interest in this  security is included  on the balance  sheet in  Investment  in
affiliate. As of December 31, 2000, the Partnership along with AIM 85 and AIM 86
equally own AIM  Mortgage,  Inc. In turn,  AIM  Mortgage,  Inc.  owns all of the
outstanding preferred stock and common stock of IFI.

     As part of the Partnership's transfer of the GNMA to IFI, AIM 85 and AIM 86
each issued a demand note payable to the  Partnership and recorded an investment
in IFI through AIM Mortgage,  Inc. at an amount  proportionate  to each entity's
coinsured  mortgages  for which IFI was the  mortgagee  of record as of April 1,
1994. In April 1997, the GNMA  Mortgage-Backed  Security was reallocated between
the Partnership  and AIM 86 as AIM 85 no longer held any mortgages  coinsured by
IFI.  As a result,  a new  demand  note  payable  from AIM 86 was issued and the
investment in IFI was  reallocated.  As of December 31, 2000, the  Partnership's
demand  note  receivable  from AIM 86 was  cancelled  as AIM 86 no longer  holds
mortgages  coinsured by IFI. As a result, the investment in IFI was reallocated.
Interest  income on these notes,  which are based on an annual  interest rate of
7.25%  (representing  the  interest  rate on the GNMA  Mortgage-Backed  Security
transferred  by the  Partnership),  was $45,994,  $47,740 and $47,740 during the
years ended December 31, 2000, 1999 and 1998,  respectively,  and is included in
interest  and  other  income  on  the  accompanying  statements  of  income  and
comprehensive income.

     In connection with these transfers, the expense reimbursement agreement was
amended  as  of  April  1,  1997,  to  adjust  the  allocation  of  the  expense
reimbursement  to the AIM  Funds to an  amount  proportionate  to each  entity's
coinsured  mortgage  investments for which IFI was the mortgagee of record as of
April  1,  1997.  The  expense   reimbursement,   as  amended,  along  with  the
Partnership's  interest income from the notes receivable,  and the Partnership's
equity interest in IFI's net income or loss,  substantially  equals the mortgage
interest on the GNMA Mortgage-Backed Security transferred to IFI. In April 1997,
this  agreement  was amended to exclude AIM 85, which no longer holds  mortgages
coinsured by IFI. In December  2000,  this  agreement was amended to exclude AIM
86, which no longer holds mortgages  coinsured by IFI. The Partnership  received
expense  reimbursements  of $89,336,  $92,656 and $92,656 during the years ended
December 31, 2000, 1999 and 1998,  respectively,  and is included in general and
administrative   expense   on  the   accompanying   statements   of  income  and
comprehensive income.



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.


11.   SUMMARY OF QUARTERLY RESULTS OF OPERATIONS
      (Dollars In Thousands, Except Per Unit Data)

     The following is a summary of unaudited quarterly results of operations for
the years ended December 31, 2000, 1999 and 1998:

<TABLE>
<CAPTION>
                                                                      2000
                                                                  Quarter ended
                                           March 31          June 30         September 30      December 31
                                           --------          -------         ------------      -----------
<S>                                       <C>               <C>               <C>               <C>
Income                                    $   1,464         $   1,383         $   1,339         $   1,315
Net earnings                                  1,329             1,252             1,117             1,040
Net gains from mortgage
  dispositions                                  107               100                --               180
Net earnings per
  Limited Partnership Unit - Basic             0.14              0.14              0.12              0.11
</TABLE>

<TABLE>
<CAPTION>
                                                                      1999
                                                                  Quarter ended
                                          March 31           June 30         September 30      December 31
                                          --------           -------         ------------      -----------
<S>                                      <C>                <C>               <C>               <C>
Income                                   $    2,091         $   2,004         $   1,671         $   1,528
Net earnings                                  1,657             2,550             1,398             1,448
Net gains from mortgage
  dispositions                                   --               877                --               195
Net earnings per
  Limited Partnership Unit - Basic             0.18              0.27              0.16              0.15
</TABLE>

<TABLE>
<CAPTION>
                                                                      1998
                                                                  Quarter ended
                                          March 31           June 30         September 30      December 31
                                          --------           -------         ------------      -----------
<S>                                      <C>                <C>               <C>               <C>
Income                                   $    2,812         $   2,625         $   2,342         $   2,219
Net earnings                                  3,170             1,778             2,174             2,057
Net gains (losses) from
  mortgage dispositions                         786              (350)              223                97
Net earnings per
  Limited Partnership Unit - Basic             0.34              0.19              0.24              0.22
</TABLE>
<PAGE>
              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
              NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 2000
<TABLE>
<CAPTION>
                                                                   Interest                                        Annual Payment
                                                                   Rate on         Face              Net           Principal and
                                                      Maturity     Mortgage      Value of       Carrying Value        Interest
Development Name/Location                               Date        (5)(6)       Mortgage       (3)(8)(9)(11)        (5)(6)(10)
-------------------------                             --------     --------     -----------      --------------    --------------
<S>                                                    <C>          <C>         <C>              <C>                <C>
ACQUIRED INSURED MORTGAGES:
FHA-Insured Certificate (carried at fair value)

Sylvan Manor, Silver Spring, MD                         5/21        7.500%      $ 2,964,135      $ 2,767,200        $  284,523
                                                                                -----------      -----------

GNMA Mortgage-Backed Securities (carried at fair value)

Beauvoir Manor Apts, Biloxi, MS                         9/18        8.875%        1,177,264        1,184,795           127,640
Burlwood Apts., Portland, OR                            8/15        9.000%          574,901          571,731            61,888
Collin Care Centers, Plano, TX                          9/30        8.125%        1,661,801        1,649,194           144,255
Garden Terrace, Douglasville, GA                        1/20        7.125%        2,526,383        2,510,718           236,477
Greenview Garden, Butler, PA                            7/33        9.000%          868,971          873,200            78,282
Hewitt Gardens Apts., Wheaton, MD                      10/29        8.750%        4,367,097        4,389,307           405,012
Holton Manor, Elkhorn, WI                              11/21        8.250%          962,980          956,469            94,456
Lamplighter Apts., Port Arthur, TX                     10/29        9.000%        2,184,001        2,195,040           207,195
Lorenzo Carolina Apts, Tampa, FL                        6/26        8.250%          989,146          981,924            89,266
Oaklawn Apts., Boise, ID                                8/24        9.000%          463,240          459,887            40,342
Oakwood Gardens, San Jose, CA                          10/23        7.750%        1,103,104        1,095,466            97,665
Orchard Creek Apts., Farmington Hills, MI               1/30        8.625%        1,254,425        1,260,805           113,194
San Jose South, San Jose, CA                           10/23        7.750%        7,888,106        7,833,492           698,388
Silver Lake Plaza Apts, Los Angeles, CA                11/35        7.950%        5,242,219        5,244,550           431,705
Stoney Creek, Washington Township, MI                   2/29        7.500%        5,232,571        5,193,902           427,305
Tehama Estates, Sacramento, CA                          7/29        8.750%        1,320,940        1,327,678           122,752
Westview Terrace Apts., Tacoma, WA                      4/30        8.550%        1,121,034        1,126,730           101,094
Woodcrest Townhomes, Chaska, MN                         8/31        8.375%        3,050,751        3,027,354           269,378
                                                                                -----------      -----------
Total Investment in GNMA Mortgage-
  Backed Securities, carried at fair value                                       41,988,934       41,882,242
                                                                                -----------      -----------
Total Investment in Acquired Insured
  Mortgages, carried at fair value                                               44,953,069       44,649,442
                                                                                -----------      -----------

ORIGINATED INSURED MORTGAGES:
Coinsured FHA-Insured Certificate, (carried at fair value)

Summerwind Apartments-Phase II, Naples, FL(1)(4)(7)     6/30        8.500%        9,148,110        8,492,111           865,175
                                                                                -----------      -----------

Total Investment in FHA-Insured Certificates
  and GNMA Mortgage-Backed Securities,
  carried at fair value                                                          54,101,179       53,141,553
                                                                                -----------      -----------
Fully Insured FHA-Insured Loan, (carried at amortized cost)(2)

The Turn at Gresham, Gresham, Oregon(1)                 8/29        8.000%        5,627,149        5,627,149 (2)       501,516
                                                                                -----------      -----------
TOTAL INVESTMENT IN INSURED MORTGAGES                                           $59,728,328      $58,768,702
                                                                                ===========      ===========
</TABLE>
<PAGE>

              AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 88
              NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 2000


(1)  Two  Insured  Mortgages, Summerwind  Apartments - Phase II and  The Turn at
     Gresham,  possess a special assignment option, pursuant to certain mortgage
     documents,  which allows the Partnership,  anytime after a certain date, to
     require payment of the unpaid principal  balance of the 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)  In connection  with  Summerwind  Apartments - Phase II, the Partnership has
     recorded a  cumulative  loan loss of  $1,511,743  in prior  years.  No loan
     losses were recognized for the years ended 2000 and 1999.

(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
     2000,  1999 and 1998,  additional  interest was recognized in the amount of
     $0, $0 and $69,820,  respectively.  These amounts,  if any, are included in
     mortgage  investment  income on the  accompanying  statements of income and
     comprehensive income.

(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)  This  mortgage is 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)  A reconciliation of the carrying value of the  Partnership's  investment in
     Insured  Mortgages,  for the years ended  December 31, 2000 and 1999, is as
     follows:
<TABLE>
<CAPTION>
                                                                         2000             1999
                                                                    ------------      ------------
<S>                                                                 <C>               <C>
  Beginning balance                                                 $ 68,919,493      $106,327,580

  Principal receipts on mortgages                                       (707,084)         (847,024)

  Proceeds from mortgages assigned
    or sold                                                          (11,008,711)      (35,966,462)

  Net gains on mortgage
    dispositions                                                         386,654         1,072,167

  Coinsurance claims due from HUD                                             --          (706,765)

  Net unrealized gains (losses) on investment in FHA-Insured
    Certificates and GNMA Mortgage-Backed Securities                   1,178,350          (960,003)
                                                                    ------------      ------------

  Ending balance                                                    $ 58,768,702      $ 68,919,493
                                                                    ============      ============
</TABLE>


(9)  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.

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

(11) As of December  31, 2000 and 1999,  the tax basis of the Insured  Mortgages
     was approximately $60 million and $71 million, respectively.
<PAGE>

                                  EXHIBIT 10.19


                   THIRD AMENDMENT TO REIMBURSEMENT AGREEMENT


     THIS THIRD  AMENDMENT TO  REIMBURSEMENT  AGREEMENT is made  effective as of
January 1, 2000 by and among  Integrated  Funding,  Inc., a New York corporation
("IFI"),  American Insured  Mortgage  Investors L.P. - Series 86 ("AIM 86"), and
American Insured Mortgage  Investors L.P. - Series 88 ("AIM 88") (AIM 86 and AIM
88 collectively referred to as the "AIM Funds").

                                    RECITALS

     A. The parties  hereto  entered  into the Expense  Reimbursement  Agreement
effective as of December 31, 1992 (the  "Agreement") in order to allocate to IFI
a portion  of the  expenses  incurred  by the AIM Funds in  connection  with the
Subadvisor's management of the funds.

     B. The parties hereto entered into the amendment to Reimbursement Agreement
effective  as of April 1, 1994 (the  "First  Amendment")  in order to change the
allocation of expenses to each fund based on the outstanding  principal  balance
of coinsured  loans for which IFI acts as the mortgagee of record as of April 1,
1994.

     C. The parties hereto entered into the amendment to Reimbursement Agreement
effective  as of April 1, 1997 (the "Second  Amendment")  in order to change the
allocation of expenses to each fund based on the outstanding  principal  balance
of coinsured  loans for which IFI acts as the mortgagee of record as of April 1,
1997.

     D. The parties seek to change the allocation of expenses to each fund based
on the  outstanding  principal  balance of coinsured loans for which IFI acts as
the mortgagee of record as of January 1, 2000.


     NOW  THEREFORE,  for good  and  valuable  consideration,  the  receipt  and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

     1.  Section 1 of the  Agreement  is hereby  deleted in its entirety and the
following is substituted in lieu thereof:

          "1.  Reimbursement.  IFI will  reimburse the AIM Funds a total expense
          amount  calculated as .95793%  annually of the  outstanding  principal
          balance of the  coinsured  loans for which IFI acts the  mortgagee  of
          record  (approximately  $14 million as of January 1, 2000).  The total
          expense reimbursement shall be allocated to each AIM Fund as follows:

                   AIM FUND                  % of Coinsured Loan Balance
                   --------                  ---------------------------
                    AIM 86                               34%
                    AIM 88                               66%

     2. Except as modified  above,  all other  provisions of the Agreement shall
remain in full force and effect.

     IN WITNESS WHEREOF,  the parties have executed this Amendment as of the day
and year first above written.

                                           INTEGRATED FUNDING, INC.

                                           By:      /s/ William B. Dockser
                                                    ----------------------
                                                    William B. Dockser
                                                    Chairman of the Board




                                           AMERICAN INSURED MORTGAGE
                                           INVESTORS L.P. - Series 86

                                           By:      CRIIMI, Inc.,
                                                    General Partner



                                           By:      /s/ Cynthia O. Azzara
                                                    ---------------------
                                                    Cynthia O. Azzara
                                                    Senior Vice President,
                                                    Chief Financial Officer and
                                                    Treasurer



                                           AMERICAN INSURED MORTGAGE
                                           INVESTORS L.P. - Series 88

                                           By:      CRIIMI, Inc.,
                                                    General Partner



                                           By:      /s/ Cynthia O. Azzara
                                                    ---------------------
                                                    Cynthia O. Azzara
                                                    Senior Vice President,
                                                    Chief Financial Officer and
                                                    Treasurer