<PAGE>

                                    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, 1997

{   }  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, 1997     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>
         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP






                                      INDEX


                                                                    Page No.
Part I.  Financial Information


     Item 1.  Financial Statements

              Consolidated Balance Sheets                                1
              Consolidated Statements of Operations                      2
              Consolidated Statements of Partners' Capital               3
              Consolidated Statements of Cash Flows                      4
              Notes to Consolidated Financial Statements                5-6


     Item 2.  Management's Discussion and Analysis of
                 Financial Condition and Results of Operations          7-9



Part II.   Other Information

     1. through Item 6.                                                 10

     Signatures                                                         11




<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>

                                                               June 30,   December 31,
                                                                 1997         1996
Assets
Current Assets
<S>                                                           <C>        <C>
 Cash and cash equivalents                                    $  3,333   $      3,962
 Accounts receivable, net                                        6,257          6,429
 Estimated third-party payor settlements                            --            105
 Prepaid expenses                                                  452            514
   Total current assets                                         10,042         11,010

Property and equipment, net of accumulated depreciation         35,345         35,680

Other assets
 Goodwill, net                                                   5,360          5,490
 Loan acquisition costs, net                                        41             64
 Other deferred charges                                              5             11
                                                                 5,406          5,565

   Total assets                                               $ 50,793   $     52,255

Liabilities and Partners' Capital
Current liabilities
 Current portion of long-term debt                            $ 24,297   $        621
 Accrued compensation and related costs                          2,078          2,415
 Accounts payable and other accrued expenses                     2,711          2,147
 Estimated third  party payor settlements                        3,425          2,958
   Total current liabilities                                    32,511          8,141

Deferred management fee payable                                    791            770
Loan payable to the Development General Partner                  1,009            984
Line of credit borrowings                                           --          1,000
Long-term debt                                                      --         23,971
                                                                 1,800         26,725

Partners' capital
 General partners                                                 (153)          (143)
 Assignee limited partners; 1,540,040
  units issued and outstanding                                  16,635         17,532
   Total partners' capital                                      16,482         17,389

   Total liabilities and
    partners' capital                                         $ 50,793   $     52,255

</TABLE>

See accompanying notes to financial statements

-1-

<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,
                                                                1997      1996       1997       1996


Revenues
<S>                                                          <C>       <C>        <C>        <C>
 Medicaid and Medicare patients                              $  9,657  $  8,932   $ 18,660   $ 17,545
 Private patients                                               2,641     2,724      5,487      5,597
 Investment and other income                                       83       122        187        244
                                                               12,381    11,778     24,334     23,386

Expenses
 Operating, including $1,890,  $1,139,
  $3,432 and $2,349 to related parties                          9,899     9,358     19,670     18,759
 Management and administration fees
  to related parties                                              799       775      1,561      1,509
 General and administrative                                       171       124        349        233
 Depreciation and amortization                                    496       476        984        965
 Interest expenses                                                506       531      1,024      1,043
                                                               11,871    11,264     23,588     22,509

Net earnings                                                 $    510  $    514   $    746   $    877




Net earnings per unit of assignee
 limited partnership interest                                $   0.32  $   0.33   $   0.47   $   0.56
</TABLE>

See accompanying notes to financial statements

-2-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
      Consolidated  Statements of Partners' Capital
     For the Six Months Ended June 30, 1997 and 1996
                       (Unaudited)
                   Dollars in thousands

<TABLE>
<CAPTION>
                                                                        Assignee
                                                             General    Limited
                                                             Partners   Partners    Total



<S>                                                         <C>        <C>        <C>
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





Balance at December 31, 1995                                $   (127)  $ 19,100   $ 18,973

Net earnings                                                       9        868        877

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

Balance at June 30, 1996                                    $   (135)  $ 18,332   $ 18,197


</TABLE>

      See accompanying notes to financial statements

                           -3-
<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>

                                                                 1997       1996

Cash flows from operating activities
<S>                                                           <C>        <C>
 Net earnings                                                 $    746   $    878
 Adjustments to reconcile net earnings to net
  cash provided by operating activities
   Depreciation and amortization                                   984        965
   Minority interest in net earnings of operating
    partnerships                                                     8         10
   Increase in loan payable to Development General Partner          25         26
   Increase in deferred management fee payable                      21         21
   Change in other assets and liabilities
    Accounts receivable                                            164     (1,004)
    Estimated third-party payor settlements                        572        252
    Prepaid expenses                                                64        167
    Accrued compensation and related costs                        (337)       439
    Accounts payable and other accrued expenses                    564        471

Net cash provided by operating activities                        2,811      2,225

Cash flows from investing activities-
 additions to property and equipment                              (492)      (192)


Cash flows from financing activities
 Line of credit borrowings                                      (1,000)     1,100
 Repayment of long-term debt                                      (295)      (267)
 Distributions to partners                                      (1,653)    (1,653)

Net cash used in financing activities                           (2,948)      (820)

Net increase in cash and cash equivalents                         (629)     1,213
Cash and cash equivalents
 Beginning of period                                             3,962      1,539

 End of period                                                $  3,333   $  2,752

</TABLE>

See accompanying notes to financial statements

-4-

<PAGE>
         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                                    Notes to Consolidated Financial Statements
                                                   June 30, 1997
                                                    (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  1996  Consolidated  Statement  of
Operations  have been  reclassified  to  conform to the 1997  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 1996 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,
1997 and 1996 are as follows:
<TABLE>
<CAPTION>

                                                                       1997                  1996

<S>                                                             <C>                     <C>
         Management and administration fees                     $ 799,000               $ 775,000
         Drug and medical supplies purchases                      596,000                 447,000
         Nursing and rehabilitation services                    1,294,000                 692,000
         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  $1,009,000  at June 30, 1997 and $984,000 at December 31,
1996.


NOTE 3 - DEBT

At December  31, 1996,  the  Randallstown  facility  failed to meet the required
ratio of cash flow to debt service.  Effective March 14, 1997, the lender agreed
under a Limited  Forbearance  Agreement to refrain and forbear  temporarily from
exercising  and enforcing any of its remedies for a period of time ending on and
including May 15, 1997. The agreement provides that should Randallstown not meet
all its covenants for the quarter ended March 31, 1997, the lender shall require
that  certain  partnerships  and/or the Fund  become  either  joint and  several
co-obligors  or  guarantors of  Randallstown's  obligation,  note and loan.  The
Randallstown  facility  did not meet  the  required  ratio of cash  flow to debt
service at March 31,  1997.  On July 2, 1997  under the terms of the  agreement,
Caton  Manor  Meridian   Limited   Partnership,   Frederick   Meridian   Limited
Partnership, and Hamilton Meridian


                                                      -5-


<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                                    Notes to Consolidated Financial Statements
                                                   June 30, 1997
                                                    (Unaudited)

NOTE 3 - DEBT  (continued)

Limited Partnership jointly and severally guaranteed  Randallstown's  obligation
and  secured  such  guaranty  with an  indemnity  deed of  trust  lien on  their
respective facilities and properties.

Effective June 30, 1997, an amendment to the Limited  Forbearance  Agreement was
signed  which  requires  Caton Manor  Meridian  Limited  Partnership,  Frederick
Meridian  Limited   Partnership,   Hamilton  Meridian  Limited  Partnership  and
Randallstown  Meridian  Limited  Partnership to maintain a combined Debt Service
Coverage  Ratio of 1.7 to 1.0. At June 30, 1997 the Fund was in compliance  with
all of its debt covenants.


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 Operations and is based upon 1,540,040 units.



                                                      -6-

<PAGE>
         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                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.

         At  December  31,  1996,  the  Randallstown  facility  did not meet its
required  ratio of cash flow to debt  service.  Effective  March 14,  1997,  the
lender  agreed  under a Limited  Forbearance  Agreement  to refrain  and forbear
temporarily  from  exercising  and enforcing any of its remedies for a period of
time ending on and  including May 15, 1997.  The agreement  provides that should
Randallstown  not meet all its  covenants  for the quarter ended March 31, 1997,
the lender shall require that certain partnerships and/or the Fund become either
joint and several co-obligors or guarantors of Randallstown's  obligation,  note
and loan. The Randallstown facility did not meet the required ratio of cash flow
to debt  service  at March  31,  1997.  On July 2,  1997  under the terms of the
agreement, Caton Manor Meridian Limited Partnership,  Frederick Meridian Limited
Partnership  and Hamilton  Meridian  Limited  Partnership  jointly and severally
guaranteed Randallstown's obligation and secured such guaranty with an indemnity
deed of trust lien on their respective facilities and properties. Effective June
30, 1997 an amendment  to the Limited  Forebearance  Agreement  was signed which
requires Caton Manor Meridian Limited  Partnership,  Frederick  Meridian Limited
Partnership,  Hamilton  Meridian Limited  Partnership and Randallstown  Meridian
Limited  Partnership to maintain a Debt Service Coverage Ratio of 1.7 to 1.0. At
June 30, 1997 the Fund was in compliance with all its debt covenants.

         The Fund's  long-term debt is scheduled to mature February 28, 1998. As
a result  of this  maturity  date  being  less than one year from the end of the
current  reporting  period,  the Fund has  classified  the balance of this debt,
$24,297,000, as a current liability on its June 30, 1997 balance sheet. The Fund
is currently considering several financial options for the repayment of the loan
balances.

         On July 29, 1996 the Fund modified the revolving  credit facility ("The
Facility") by  increasing  the maximum  amount to  $4,000,000  and extending the
maturity date until  February 28, 1998.  The Facility is designated  for working
capital  needs and  issuance of letters of credit.  The  Facility  is  primarily
secured by the accounts  receivable of the Fund. Any outstanding cash borrowings
under the Facility  bear interest at LIBOR plus 1.75%.  At June 30, 1997,  there
were no  outstanding  borrowings  under  this  Facility.  The Fund is  currently
considering options to replace this credit facility.

         The  State  of  North  Carolina  has  delayed  the  effective  date  of
elimination  in its  Medicaid  methodology  of the  current  reimbursement  rate
component  for equity until July 1, 1998.  Future  action by the North  Carolina
Medicaid  Agency  could  affect  the  reimbursement  component  for  equity  and
therefore reduce Medicaid reimbursement for the Fund by up to $240,000 annually.

         On August 14, 1997 the Fund will make a cash  distribution  of $826,410
of which  $660,951,  or 71%,  will be  funded  from  nursing  center  operations
generated  during the second  quarter  of 1997  after  payment of  approximately
$75,000 of upper tier expenses.

         While  future  distributions  will remain  dependent  on the  operating
performance of the properties, Fund management expects distributions will remain
at current  levels.  Second half  operating  results are expected to improve and
fully fund the distribution at its current level. Based upon results through the
first  half of the year,  the  remaining  1997  budget  and  updated  settlement
projections, we expect the operating income of the seven nursing home facilities
will fund approximately 86% of the annual 1997  distribution,  while the balance
will be funded by reserves.


                                                      -7-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

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



Results of Operations

      Three Months Ended June 30, 1997 vs. Three Months Ended June 30, 1996

         The Fund's patient revenues increased by approximately $642,000 (or 6%)
for the three  months  ended June 30, 1997 as compared to the three months ended
June 30, 1996. An effective  rate increase of 12% resulted in revenue  growth of
$715,000 during the second quarter of 1997 when compared to the same period last
year. This  significant  increase was largely the result of an increased  acuity
level of the residents.  Also  contributing to the increase in patient  revenues
was an increase in Medicare ancillary revenues of approximately  $226,000 in the
second  quarter of 1997 versus the  corresponding  period in 1996. The ancillary
revenue increase was primarily a result of increased therapy utilization.  Total
occupancy for the quarter decreased to 92.9% from 96.7% in 1996 largely due to a
census decline in the state of Maryland.  However,  Medicare census increased to
9.5% of  total  patient  days in the  second  quarter  of 1997  from 9% of total
patient  days in the second  quarter of 1996 and more than  offset the effect of
the census decline.  These increases  resulting from the effective rate increase
and  increased  ancillary  utilization  were offset in part by a decrease in the
amount of favorable prior year cost settlements  recorded in 1997 as compared to
1996.  During the three month period ended June 30, 1997,  favorable  prior year
settlements of $49,000 were recorded as compared to $348,000 in the three months
ended June 30, 1996.

         Second quarter 1997 operating expenses increased approximately $541,000
(or 6%) as  compared  to the same period in 1996.  As a  percentage  of revenue,
operating  expenses  increased  to 80% of revenue in the second  quarter of 1997
from 79% of  revenue  in the  second  quarter  of 1996.  Salaries  and  benefits
increased  $144,000 (or 2.3%) as a result of normal wage increases.  As a result
of a shortage of certified nursing assistants in the state of Maryland,  nursing
agency usage  increased  $61,000 in the second quarter of 1997 versus the second
quarter of 1996.  Total nursing  costs,  as a result,  are $3.08 per patient day
higher in the second quarter of 1997 as compared to the same period in 1996.

         Another factor  contributing to the operating  expense increase and the
decrease in  profitability  was increased  ancillary  expenses due to the higher
acuity levels of the residents along with increased utilization.  As compared to
the second  quarter  of 1996,  a greater  percentage  of  ancillaries  are being
utilized by the Medicaid  population in the  facilities  and are not  reimbursed
under the Medicaid programs.  On a gross revenue basis,  Medicaid ancillaries in
the second  quarter of 1997  accounted  for 20% of the total as  compared to 17%
during  the same  period  in 1996.  On a per  patient  day  basis,  there was an
increase in Medicaid utilization of approximately $3 per day. The effect of this
is a revenue decline of approximately $220,000.

         General  and  administrative  expenses  for the second  quarter of 1997
increased  $47,000 as compared to the same period in 1996.  This was largely the
result of increases in professional and consulting fees.


        Six Months Ended June 30, 1997 vs. Six Months Ended June 30, 1996

         Patient revenues for the Fund's seven operating  partnerships increased
approximately  $1,005,000  (or 4%) for the six months ended June 30, 1997 versus
the  same  period  in  1996.   Approximately  $1,046,000  of  the  increase  was
attributable  to rate increases  which resulted in an effective rate increase of
7% from the corresponding  prior year period.  Also contributing to the increase
in patient  revenues  was an increase in  ancillary  revenue of $303,000 for the
first six months  ended June 30,  1997 as  compared  to the same period in 1996.
Total  occupancy  for the first six months of 1997  decreased  to 92.5% of total
patient  days in 1997 as  compared  to 94.0% for the  first six  months of 1996.
However,  Medicare  census  increased  to 9.7% of total  patient days in 1997 as
compared  to 9.2% in 1996.  These  increases  were offset by a decrease in prior
year cost report settlements of $344,000 in 1997.



                                                      -8-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

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

Results of Operations (continued)

         Operating   expenses  for  the  first  six  months  of  1997  increased
approximately  $911,000 (or 5%) versus the same period in 1996.  As a percentage
of  revenue,  operating  expenses  increased  to 81% of revenue in the first six
months of 1997 as  compared  to 80% of revenue in 1996.  Salaries  and  benefits
increased $299,000 (or 2.4%) as a result of normal salary increases. As a result
of the shortage in certified nursing assistants,  nursing agency usage increased
$103,000 in 1997 versus 1996.  Total nursing costs,  as a result,  are $1.98 per
patient higher in 1997 versus 1996.

         Another factor  contributing to the operating  expense increase and the
decrease in  profitability  was  increased  ancillary  expense due to the higher
acuity levels of the residents along with increased utilization.  As compared to
the first six months of 1996,  a greater  percentage  of  ancillaries  are being
utilized by the Medicaid  population in the  facilities  and are not  reimbursed
under the Medicaid programs.  On a gross revenue basis,  Medicaid ancillaries in
the first half of 1997  accounted for 19% of the total as compared to 17% during
the same period in 1996.  On a per  patient day basis,  there was an increase in
Medicaid  utilization  of  approximately  $3 per day.  The  effect  of this is a
revenue decline of approximately $417,000.

         General and  administrative  expenses  for the first six months of 1997
increased  $116,000  as  compared  to the  first six  months  of 1996.  This was
primarily a result of increased professional and consulting fees.

                                                      -9-

<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








                                                        -10-

<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:    8/13/97                 By:             /s/ John M.  Prugh
                                         John M. Prugh
                                         President and Director
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner




DATE:    8/13/97                 By:           /s/ Timothy M.  Gisriel
                                         Timothy M. Gisriel
                                         Treasurer
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner





                                                     -11-

<PAGE>