FORM 10-Q



                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


          QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


(Mark One)
{ X }  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended         June 30, 1998

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

For the transition period from                     to


For Quarter Ended     June 30, 1998       Commission file number   000-17596

                 Meridian Healthcare Growth and Income Fund Limited Partnership
                      (Exact Name of Registrant as Specified in its Charter)


                 Delaware                                   52-1549486
         (State or Other Jurisdiction of                 (I.R.S. Employer
         Incorporation or Organization)               Identification Number)



     225 East Redwood Street, Baltimore, Maryland              21202
       (Address of Principal Executive Offices)             (Zip Code)

        Registrant's Telephone Number, Including Area Code:     (410) 727-4083

                                               N/A
                      (Former Name, Former Address, and Former Fiscal Year,
                                 if Changed Since Last Report.)

  Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                    Yes     X                             No



<PAGE>


                                                       INDEX


                                                                        Page No.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS                      2

Part I.  Financial Information


     Item 1.  Financial Statements

              Consolidated Balance Sheets                                      3
              Consolidated Statements of Operations                            4
              Consolidated Statements of Partners' Capital                     5
              Consolidated Statements of Cash Flows                            6
              Notes to Consolidated Financial Statements                     7-8


     Item 2.  Management's Discussion and Analysis of
                 Financial Condition and Results of Operations              9-10



Part II.   Other Information


     Item 1. through Item 6.                                                  11

     Signatures                                                               12




<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP






            Cautionary Statement Regarding Forward Looking Statements



Certain   statements   contained  herein,   including   certain   statements  in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"   concerning  the  Fund's   business   outlook  or  future  economic
performances,  anticipated profitability,  revenues, expenses or other financial
items  together  with  other  statements  that  are  not  historical  facts  are
"forward-looking   statements"  as  that  term  is  defined  under  the  Federal
Securities Law. Forward-looking  statements are necessarily estimates reflecting
the best  judgement  of the party  making  such  statements  based upon  correct
information and involve a number of risks, uncertainties and other factors which
could  cause  actual  results to differ  materially  from  those  stated in such
statements.  Risks, uncertainties and factors which could affect the accuracy of
such forward looking  statements are identified in the Fund's Prospectus and the
Fund's Registration Statement filed by the Fund with the Securities and Exchange
Commission,  and forward looking statements  contained herein or in other public
statements of the Fund should be considered in light of those factors. There can
be no  assurance  that  factors  will not affect the  accuracy  of such  forward
looking statements.


                                                        -2-

<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
                                                                June 30,
                                                                  1998       December 31,
                                                               (Unaudited)       1997
Assets
Current Assets
<S>                                                           <C>           <C>
 Cash and cash equivalents                                    $     3,082   $      2,275
 Accounts receivable, net                                           7,298          6,437
 Estimated third-party payor settlements                              346            343
 Prepaid expenses and other current assets                            361            565
   Total current assets                                            11,087          9,620

Property and equipment, net of accumulated depreciation            34,236         34,839

Other assets
 Goodwill, net                                                      5,118          5,239
 Loan acquisition costs, net                                            1              9
                                                                    5,119          5,248

   Total assets                                               $    50,442   $     49,707

Liabilities and Partners' Capital
Current liabilities
 Current portion of long-term debt                            $       699   $        707
 Accrued compensation and related costs                               673          1,054
 Accounts payable and other accrued expenses                        3,183          2,186
 Estimated third  party payor settlements                           5,071          4,234
   Total current liabilities                                        9,626          8,181

Deferred management fee payable                                       833            812
Loan payable to the Development General Partner                     1,061          1,035
Long-term debt                                                     22,947         23,328
                                                                   24,841         25,175

Partners' capital
 General partners                                                    (157)          (153)
 Assignee limited partners; 1,540,040
  units issued and outstanding                                     16,132         16,504
   Total partners' capital                                         15,975         16,351

   Total liabilities and
    partners' capital                                         $    50,442   $     49,707

</TABLE>

See accompanying notes to consolidated financial statements

-3-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Consolidated Statements of Earnings
(Unaudited)
(Dollars in thousands except per unit amounts)
<TABLE>
<CAPTION>

                                                              Three Months Ended    Six Months Ended

                                                              June 30,   June 30,   June 30,   June 30,
                                                                1998       1997       1998       1997

Revenues
<S>                                                          <C>        <C>        <C>        <C>
 Medicaid and Medicare patients                              $  9,821   $  9,657   $ 19,425   $ 18,660
 Private patients                                               2,677      2,641      5,469      5,487
 Investment and other income                                       57         83        133        187
                                                               12,555     12,381     25,027     24,334

Expenses
 Operating, including $1,712,  $1,890,
  $3,528 and $3,432 to related parties                          9,963      9,899     19,836     19,670
 Management and administration fees
  to related parties                                              825        799      1,623      1,561
 General and administrative                                       204        171        384        349
 Depreciation and amortization                                    483        496        969        984
 Interest expenses                                                399        506        938      1,024
                                                               11,874     11,871     23,750     23,588

Net earnings                                                 $    681   $    510   $  1,277   $    746




Net earnings per unit of assignee
 limited partnership interest - basic                        $   0.44   $   0.32   $   0.82   $   0.47
 (computed based on 1,540,040 units)

</TABLE>

See accompanying notes to consolidated financial statements

-4-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
      Consolidated  Statements of Partners' Capital
     For the Six Months Ended June 30, 1998 and 1997
                       (Unaudited)
                   Dollars in thousands
<TABLE>
<CAPTION>

                                                                        Assignee
                                                             General    Limited
                                                             Partners   Partners    Total


<S>                                                         <C>        <C>        <C>
Balance at December 31, 1997                                $   (153)  $ 16,504   $ 16,351

Net earnings                                                      13      1,264      1,277

Distributions to partners                                        (17)    (1,636)    (1,653)

Balance at June 30, 1998                                    $   (157)  $ 16,132   $ 15,975





Balance at December 31, 1996                                $   (143)  $ 17,532   $ 17,389

Net earnings                                                       7        739        746

Distributions to partners                                        (17)    (1,636)    (1,653)

Balance at June 30, 1997                                    $   (153)  $ 16,635   $ 16,482

</TABLE>

See accompanying notes to consolidated financial statements

                           -5-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMTIED PARTNERSHIP
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(Unaudited)
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                 1998       1997

Cash flows from operating activities
<S>                                                           <C>        <C>
 Net earnings                                                 $  1,277   $    746
 Adjustments to reconcile net earnings to net
  cash provided by operating activities
   Depreciation and amortization                                   969        984
   Minority interest in net earnings of operating
    partnerships                                                    12          8
   Increase in loan payable to Development General Partner          26         25
   Increase in deferred management fee payable                      21         21
   Change in other assets and liabilities
    Accounts receivable                                           (873)       164
    Estimated third-party payor settlements                        834        572
    Prepaid expenses                                               204         64
    Accrued compensation and related costs                        (381)      (337)
    Accounts payable and other accrued expenses                    997        564

Net cash provided by operating activities                        3,086      2,811

Cash flows from investing activities-
 additions to property and equipment                              (237)      (492)


Cash flows from financing activities
 Line of credit borrowings                                         -       (1,000)
 Repayment of long-term debt                                      (389)      (295)
 Distributions to partners                                      (1,653)    (1,653)

Net cash used in financing activities                           (2,042)    (2,948)

Net increase (decrease) in cash and cash equivalents               807       (629)
Cash and cash equivalents
 Beginning of period                                             2,275      3,962

 End of period                                                $  3,082   $  3,333

</TABLE>


See accompanying notes to consolidated financial statements

-6-
<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                                    Notes to Consolidated Financial Statements
                                                   June 30, 1998
                                                    (Unaudited)


NOTE 1 - THE FUND AND BASIS OF PREPARATION

The Fund, through its seven operating partnerships, derives substantially all of
its  revenue  from  extended  healthcare  provided to nursing  center  residents
including room and board, nursing care, drugs and other medical services.

The accompanying  financial  statements of Meridian Healthcare Growth and Income
Fund Limited  Partnership (the "Fund") do not include all of the information and
note  disclosures   normally  included  in  financial   statements  prepared  in
accordance with generally accepted accounting principles.  The unaudited interim
consolidated  financial  statements  reflect all  adjustments  which are, in the
opinion of  management,  necessary  to a fair  statement  of the results for the
interim  periods  presented.  All such  adjustments  are of a  normal  recurring
nature.  Certain amounts included in the 1997 Consolidated Statement of Earnings
have been  reclassified  to  conform  to the 1998  presentation.  The  unaudited
interim financial information contained in the consolidated financial statements
should  be  read in  conjunction  with  the  consolidated  financial  statements
contained in the 1997 Annual Report.


NOTE 2 - RELATED PARTY TRANSACTIONS

The Fund is  obligated  to pay the  Administrative  General  Partner  an  annual
administration fee of the greater of $75,000 per year or 1/2 of 1% of the Fund's
annual  revenues.  The nursing centers owned by the operating  partnerships  are
managed by Meridian  Healthcare,  Inc., an affiliate of the Development  General
Partner,  under the terms of ten year  management  agreements  which provide for
management  fees  equal to 6% of the annual  revenues  of each  nursing  center.
Certain of the operating  partnerships  also purchase drugs and medical supplies
and other services from  affiliates of the  Development  General  Partner.  Such
purchases  are in turn billed to patients or third party  payors at prices which
on average approximate the nursing center's cost.

     Transactions with these related parties for the three months ended June 30,
1998 and 1997 are as follows:
<TABLE>
<CAPTION>
                                                                     1998             1997

<S>                                                             <C>                     <C>
         Management and administration fees                     $ 825,000               $ 799,000
         Drug and medical supplies purchases                      478,000                 596,000
         Nursing and rehabilitation services                    1,234,000               1,294,000
         Interest expense on borrowings                            23,000                  23,000
</TABLE>

Loans outstanding  under an arrangement with the Development  General Partner to
fund operating  deficits  generated by the Mooresville,  Salisbury and Woodlands
nursing  centers were $1,061,000 at June 30, 1998 and $1,035,000 at December 31,
1997.


NOTE 3 - DEBT

On March 3, 1998,  the Fund  entered  into a renewal  commitment  with a bank to
refinance all of the existing indebtedness.  Under the terms of the refinancing,
the  mortgages  will mature on February 28, 2000 and will bear interest at LIBOR
(5.66%  at June  30,  1998)  plus  1.55%.  The  refinancing  also  extended  the
$4,000,000  line of credit  commitment  until  February 28, 2000.  There were no
borrowings outstanding under the line of credit commitment at June 30, 1998.






                                                        -7-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                                    Notes to Consolidated Financial Statements
                                                   June 30, 1998
                                                    (Unaudited)


NOTE 4 - NET EARNINGS PER UNIT OF ASSIGNEE LIMITED PARTNERSHIP INTEREST

Net earnings per unit of assignee limited  partnership  interest is disclosed on
the Consolidated Statements of Earnings and is based upon 1,540,040 units.



                                                        -8-

<PAGE>


                              Management's Discussion and Analysis of Financial
                                        Condition and Results of Operations

Liquidity and Capital Resources

         The Fund has  sufficient  liquid  assets  and  other  available  credit
resources to satisfy its operating  expenditures and anticipated routine capital
improvements at each of the seven nursing home facilities.

         On March 3, 1998,  the Fund  entered into a renewal  commitment  with a
bank to  refinance  all of the  existing  indebtedness.  Under  the terms of the
refinancing,  the  mortgages  will  mature on  February  28,  2000 and will bear
interest  at LIBOR plus  1.55%.  The  refinancing  will also  extend the line of
credit  commitment  until February 28, 2000.  The Fund has a $4,000,000  line of
credit which is designated for working capital needs and is primarily secured by
the accounts receivable of the Fund. At June 30, 1998, there were no outstanding
borrowings under this line of credit.

         Between 1988 and 1989 the  Development  General Partner loaned the Fund
$597,000 to support operating deficits  generated by the Mooresville,  Salisbury
and Woodlands nursing centers during each center's first two years of operation.
Loans outstanding under this  arrangement,  including  interest at 9% per annum,
were  $1,060,500  at June 30,  1998.  The Fund is obligated to repay these loans
when certain specified financial criteria are met, the most significant of which
is the payment of a preferred return to the assignee limited partners as defined
in the Fund's partnership agreement.

         On August 13, 1998, the Fund will make a cash  distribution of $826,410
to its partners  which will be funded from second  quarter  1998 nursing  center
operations after payment of approximately $70,000 of upper tier expenses.

         Based on a review of the 1998 operating  budget,  operating results are
projected to improve over 1997 results.  Distributions  to partners are expected
to remain at current  levels and cash flow is  expected to  completely  fund the
distributions.  The major challenge to the Fund in the foreseeable  future is to
control   operating   expenses  while  maximizing   revenues  through  strategic
admissions policies.

Results of Operations

      Three Months Ended June 30, 1998 vs. Three Months Ended June 30, 1998

         Net earnings increased to $681,000 during the second quarter of 1998 as
compared to $510,000 during the second quarter of 1997, representing an increase
of $171,000 or 33%.

         The Fund's revenues  increased by approximately  $174,000 (or 1.4%) for
the three months ended June 30, 1998 as compared to the same period in the prior
year.  The increase is primarily due to increased  room rates and an increase in
the number of Medicaid  residents.  Rate increases  accounted for  approximately
$411,000 of additional revenue.  The rate increases are primarily a result of an
increase in the acuity level of the residents. Offsetting the rate increase is a
decrease in overall census resulting in a revenue decrease of $210,000. Overall,
census for the quarter  decreased to 92% as compared to 93% in 1997.  Investment
and other income  decreased  $26,000 for the three months ended June 30, 1998 in
comparison  to the same  period last year as  interest  earned on invested  cash
decreased due to lower interest rates.

         Second quarter 1998 expenses were relatively unchanged,  as compared to
the same  period in 1997.  Operating  expenses  increased  $64,000 due to higher
benefits  expense  for  insurance,   retirement  plan  and  nonproductive  time.
Management  and  administration  fees  (calculated  as a percentage  of revenue)
increased  $26,000  (or 3.3%) for the second  quarter of 1998 as compared to the
second quarter of 1997. General and  administrative  costs increased $34,000 (or
20%) for the three  months ended June 30, 1998 as compared to the same period in
1997,  due to increased  consulting  and  professional  fees.  Offsetting  these
increases is a decrease in interest expense of $107,000  related to the  
refinancing of the Fund's debt which became  effective
February 22, 1998.
                                       9
<PAGE>



                             Management's Discussion and Analysis of Financial
                                        Condition and Results of Operations

Results of Operations (continued)

        Six Months Ended June 30, 1998 vs. Six Months Ended June 30, 1997

         Net earnings for the six months ended June 30, 1998 were  $1,277,000 as
compared to $746,000  for the same  period in 1997  representing  an increase of
$531,000 or 71%.

         Fund  revenues  increased  $693,000  (or 2.9%) for the six months ended
June 30, 1998  versus the same period in 1997.  The  increase is  primarily  the
result of rate  increases  and an increase in the number of Medicaid  residents.
Rate increases account for $1,173,000 of additional revenue. Increased rates are
the result of higher  acuity  residents  at the  nursing  facilities.  Partially
offsetting  the  positive  rate  variance is a decrease in overall  census and a
shift away from the higher  paying  Private and Medicare  residents to Medicaid,
resulting in a revenue decrease of $390,000. Overall census decreased to 92% for
the six months  ended June 30,  1998 as  compared  to 93% for the same period in
1997.  Medicaid census  increased to 73% of the overall census for the first six
months of 1998 as compared to 69% in 1997.  Both Private and Medicare census has
decreased  as a  percentage  of  the  overall  total  with  the  Private  census
representing  17% and  Medicare  10% for the six months  ended June 30,  1998 as
compared  to 21%  and  10%,  respectively,  during  the  same  period  in  1997.
Investment and other income decreased  $54,000 for the first half of 1998 versus
1997 as interest rates on invested cash declined.

         Overall  expenses  increased  $162,000 (or .69%) to $23,750,000 for the
six months ended June 30, 1998 as compared to $23,588,000 for the same period in
1997. Operating expenses increased $166,000 (or .84%) to $19,836,000 for the six
months  ended June 30, 1998 as compared  to  $19,670,000  for the same period in
1997. As a percentage of revenue,  operating  expenses  decreased to 79% for the
first  six  months  of  1998  as  compared  to  81%  in  1997.   Management  and
administration  fees (calculated as a percentage of revenues)  increased $62,000
or 4% reflecting  the increase in patient  revenue.  General and  administrative
costs  increased  $35,000  (or 10%) for the six months  ended  June 30,  1998 as
compared  to  the  same  period  in  1997,  due  to  increased   consulting  and
professional fees. Interest expense for the first half of 1998 decreased $86,000
(or 9%) versus 1997 due to the lower interest rates  resulting from the February
22, 1998 refinancing of the Fund's long term debt.


                                       10


<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP



                           PART II. OTHER INFORMATION




Item 1.     Legal Proceedings

                  Inapplicable

Item 2.     Changes in Securities

                  Inapplicable

Item 3.     Defaults upon Senior Securities

                  Inapplicable

Item 4.     Submission of Matters to a Vote of Security Holders

                  Inapplicable

Item 5.     Other Information

                  Inapplicable

Item 6.     Exhibits and Reports on Form 8-K

                  a)  Exhibits:    None

                  b)  Reports on Form 8-K:     None




                                                       -11-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP




                                                    SIGNATURES




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


                                MERIDIAN HEALTHCARE GROWTH AND INCOME FUND
                               LIMITED PARTNERSHIP




DATE:    08/11/98                        By:             /s/ John M.  Prugh
                                         John M. Prugh
                                         President and Director
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner




DATE:    08/11/98                        By:           /s/ Timothy M.  Gisriel
                                         Timothy M. Gisriel
                                         Treasurer
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner




                                                       -12-