Exhibit 13.1

                     Senior Income Fund L.P.

                       1997 Annual Report







                    Senior Income Fund, L.P.



Senior Income Fund L.P. (the "Partnership") raised $48,275,000
during its offering period in 1987 and acquired four congregate
care facilities in Southern California.  During 1997, three of
the Partnership's properties were sold.  Please see the Message
to Investors for an update on the General Partner's efforts to
sell the remaining property and liquidate the Partnership in 1998.











                            Contents

                     1   Message to Investors

                     2   Consolidated Financial Statements

                     5   Notes to the Consolidated Financial Statements

                    11   Report of Independent Accountants


















         Administrative Inquiries      Performance Inquiries/Form 10-Ks
         Address Changes/Transfers     First Data Investor Services Group
         Service Data Corporation      P.O. Box 1527
         2424 South 130th Circle       Boston, Massachusetts 02104-1527
         Omaha, Nebraska 68144-2596    Attn.:  Financial Communications
         800-223-3464                  800-223-3464







                      Message to Investors

Presented for your review is the 1997 Annual Report for Senior
Income Fund L.P.  This report includes an overview of the property
sales which occurred in 1997, an update on our efforts to sell the
remaining property, and audited financial statements for the year
ended December 31, 1997.

Update on Property Sales
On August 1, 1997, the Partnership closed on the sale of three of
its four properties_Prell Gardens, Nohl Ranch and Pacific Inn, for
net proceeds of $30,148,357 (the "Sale").  A distribution in the
amount of $5.75 per Unit was paid to the Limited Partners in
accordance with the partnership agreement on August 25, 1997.  This
distribution represented the proceeds from the Sale less an amount
set aside as a contingency reserve in connection with the sale of
the Partnership's final property, Ocean House, and cash flow from
operations for the second quarter of 1997.  The sale of Ocean House
is subject to the satisfaction of certain conditions of the buyer
and approval of certain building repairs by the City of Santa
Monica.  Although there have been several unexpected delays, we
still anticipate that the sale of Ocean House will occur during
1998.  In the interim, the Partnership will continue to operate the
property and generate rental income from operations.  At
December 31, 1997, Ocean House was 98% occupied, compared with 93%
a year earlier.

Upon completion of the sale of Ocean House, the General Partner
will distribute the net proceeds from the sale together with the
Partnership's remaining cash reserves (after payment of, or
provision for, the Partnership's liabilities and expenses, and
establishment of a reserve for contingencies, if any) and
dissolve the Partnership.

Cash Distributions
Cash distributions for 1997 totaled $5.85 per $10.00 Unit.  Since
inception, limited partners have received cash distributions
totaling $11.235 per Unit.  As a result of the Sale, the
Partnership suspended the payment of quarterly distributions
beginning with the second quarter of 1997.  The timing and amount
of the final distribution are subject to operations at Ocean
House, the timing of the closing of the Ocean House Sale, closing
adjustments and other factors, all of which remain uncertain at
this time.

General Information
As you are probably aware, several third parties have commenced
tender offers to purchase Units of the Partnership at prices
which are below the Partnership's estimate of net asset value per
Unit.  In response, we recommended that limited partners reject
these offers because we believe that they do not reflect the
underlying value of the Partnership's assets.  According to
published industry sources, most of the investors who hold units
of limited partnerships similar to the Partnership have rejected
these types of tender offers due to their inadequacy.

Summary
We will continue to inform Limited Partners of developments
related to the sale of Ocean House in future reports.  In the
interim, any questions regarding the Partnership's performance
should be directed to your Financial Consultant or First Data
Investor Services Group.  All requests for transfer of ownership
or change of address must be submitted in writing to the
Partnership's transfer agent, Service Data Corporation, 2424
South 130th Circle, Omaha, Nebraska 68144-2596.  Both First Data
and Service Data Corporation can be reached at (800) 223-3464.

Very truly yours,

Senior Income Fund Inc.
The General Partner


/s/Jeffrey C. Carter
Jeffrey C. Carter
President

March 27, 1998





Consolidated Balance Sheets                  At December 31,  At December 31,
                                                        1997             1996
Assets
Real estate assets held for disposition           $   21,542      $18,301,085
Cash and cash equivalents                          5,320,317        4,104,695
Prepaid expenses                                     204,867          168,259
  Total Assets                                    $5,546,726      $22,574,039

Liabilities and Partners' Capital (Deficit)
Liabilities:
 Accounts payable and accrued expenses            $  180,192      $ 1,033,316
 Deferred rent payable                             1,236,564        1,191,169
 Due to affiliates                                    61,973          190,609
 Security deposits payable                            56,831          148,700
 Distribution payable                                      _          365,720
  Total Liabilities                                1,535,560        2,929,514
Partners' Capital (Deficit):
 General Partner                                           _          (54,910)
 Limited Partners (4,827,500 units outstanding)    4,011,166       19,699,435
  Total Partners' Capital                          4,011,166       19,644,525
  Total Liabilities and Partners' Capital         $5,546,726      $22,574,039






Consolidated Statement of Partners' Capital (Deficit)
For the years ended December 31, 1997, 1996 and 1995

                                    General         Limited
                                    Partner        Partners            Total
Balance at December 31, 1994       $(27,938)    $30,246,779      $30,218,841
Net Loss                                  _      (7,877,298)      (7,877,298)
Distributions                       (14,630)     (1,448,250)      (1,462,880)
Balance at December 31, 1995        (42,568)     20,921,231       20,878,663
Net Income                           31,545       3,122,954        3,154,499
Distributions                       (43,887)     (4,344,750)      (4,388,637)
Balance at December 31, 1996        (54,910)     19,699,435       19,644,525
Net Income                          338,949      12,431,919       12,770,868
Distributions                      (284,039)    (28,120,188)     (28,404,227)
Balance at December 31, 1997       $      _     $ 4,011,166      $ 4,011,166





Consolidated Statements of Operations
For the years ended December 31,              1997          1996          1995

Income
Rental                                  $8,232,614   $10,782,123   $10,838,267
Insurance settlement, net                        _     2,318,387             _
Interest and other                         344,439       204,526       199,078
  Total Income                           8,577,053    13,305,036    11,037,345

Expenses
Payroll                                  2,574,322     3,074,006     2,967,168
General and administrative               1,527,054     1,774,183     1,633,797
Rent and utilities                       1,444,213     1,607,967     1,652,520
Depreciation                                     _     1,507,326     1,797,858
Supplies                                   890,148     1,136,163     1,122,448
Repairs and maintenance                    841,709       627,158       616,998
Real estate taxes                          290,595       380,439       375,926
Travel and entertainment                    29,958        43,295        35,636
Loss on real estate held for disposition    48,000             _             _
Loss on write-down of real estate                _             _     8,712,292
  Total Expenses                         7,645,999    10,150,537    18,914,643

  Net Income (Loss) from Operations     $  931,054   $ 3,154,499   $(7,877,298)

Other Income:
Gain on sale of properties              11,839,814             _             _

  Net Income (Loss)                    $12,770,868   $ 3,154,499   $(7,877,298)

Net Income (Loss) Allocated:
To the General Partner                 $   338,949   $    31,545   $         _
To the Limited Partners                 12,431,919     3,122,954    (7,877,298)
                                       $12,770,868   $ 3,154,499   $(7,877,298)
Per limited partnership unit
(4,827,500 outstanding)                      $2.58          $.65        $(1.63)







Consolidated Statements of Cash Flows
For the years ended December 31,               1997         1996          1995

Cash Flows From Operating Activities:
Net Income (Loss)                       $12,770,868   $3,154,499   $(7,877,298)
Adjustments to reconcile net income
(loss) to net cash provided by (used for)
operating activities:
 Gain on sale of properties             (11,839,814)           _             _
 Insurance settlement, net                        _   (2,318,387)            _
 Depreciation                                     _    1,507,326     1,797,858
 Loss on real estate assets held
 for disposition                             48,000            _             _
 Loss on write-down of real estate                _            _     8,712,292
 Loss on disposal of asset                        _            _         6,998
 Increase (decrease) in cash arising from changes
 in operating assets and liabilities:
  Prepaid expenses                          (36,608)     (31,977)       18,084
  Accounts payable and accrued expenses    (853,124)     124,883      (223,778)
  Deferred rent payable                      45,395       45,395        45,395
  Due to affiliates                        (128,636)         774         2,159
  Security deposits payable                 (91,869)       3,225          (300)
Net provided by (cash used) for operating
activities                                  (85,788)   2,485,738     2,481,410

Cash Flows From Investing Activities:
 Proceeds from insurance settlement               _    3,200,000             _
 Legal fees and payment on construction contract  _     (223,593)            _
 Purchase of general partnership interest         _     (850,000)            _
 Additions to real estate                   (77,000)    (262,540)     (190,674)
 Proceeds from disposal of asset         30,148,357            _        10,000
Net cash provided by (used for) investing
activities                               30,071,357    1,863,867      (180,674)

Cash Flows From Financing Activities:
 Distributions paid to partners         (28,769,947)  (4,388,637)   (1,462,880)
Net cash used for financing activities  (28,769,947)  (4,388,637)   (1,462,880)

Net increase (decrease) in cash and
cash equivalents                          1,215,622      (39,032)      837,856
Cash and cash equivalents,
beginning of year                         4,104,695    4,143,727     3,305,871
Cash and cash equivalents, end of year  $ 5,320,317   $4,104,695   $ 4,143,727

Supplemental Disclosure of Non-Cash Investing Activities:
Settlement costs funded
through accounts payable                $         _   $  658,020   $         _
Capital expenditures funded
through accounts payable                $         _   $        _   $    33,500




Notes to the Consolidated Financial Statements
December 31, 1997, 1996 and 1995

1. Organization
Senior Income Fund L.P. (the "Partnership"), a Delaware limited
partnership (see below), was formed on October 14, 1986 for the
purpose of acquiring a general partnership interest in Shearson
August Property Partnership (the "Property Partnership"), a
California general partnership.  As discussed below, through
November 21, 1996, the other general partner of the Property
Partnership was August Financial Partners II ("AFP-II"), an
affiliate of August Financial Corporation ("August").  The
Property Partnership was formed to acquire and operate four
specified senior residential properties (the "Properties", see
Note 7).  The General Partner of the Partnership is Senior Income
Fund Inc., (the "General Partner"), a Delaware corporation, and
an affiliate of Lehman Brothers Inc. (see below).  The
Partnership will continue until December 31, 2036, unless
terminated sooner in accordance with the terms of the Partnership
Agreement.

The initial capital contributions to the Partnership totaled
$110, representing capital contributions of $100 by the General
Partner and $10 by Senior Income Depositary Inc., formerly known
as Shearson Lehman Senior Depositary, Inc. (the Assignor Limited
Partner).

The agreement of limited partnership authorized the issuance of
4,827,500 depositary units at $10 per unit, which represent
assignments of economic and certain other rights attributable to
the partnership interests.  The offering period ended on March
17, 1987, at which time 4,827,500 depositary units had been
issued.

On November 21, 1996, the Partnership purchased the general
partnership interest of the successor to AFP-II for a purchase
price of $850,000.  The Partnership's purchase of the general
partnership interest was funded from cash reserves.  As a result
of such purchase, the Property Partnership was dissolved in 1997
and all of its assets were distributed to the Partnership.
Accordingly, all sale proceeds received upon a sale of any
property will belong to the Partnership and no amount will be
owed to AFP-II.

On August 1, 1997, the Partnership closed the sale of three of
its four Properties, Prell Gardens, Nohl Ranch and Pacific Inn to
MBK Senior Properties, Ltd. (the "Buyer"), for net proceeds of
$30,148,357 (the "Sale") and a gain on the Sale of $11,839,814.
The sale of the Partnership's fourth property, Ocean House, is
subject to the satisfaction of certain conditions of the buyer
and approval of certain building repairs by the City of Santa
Monica.  Although there have been several unexpected delays, the
General Partner anticipates that the sale of Ocean House will
occur during 1998.  In the meantime, the Partnership will
continue to operate the property and generate rental income from
operations.

2. Significant Accounting Policies

Financial Statements - The consolidated financial statements
include the accounts of the Partnership and the Property
Partnership from inception through November 21, 1996.  The effect
of transactions between the Partnership and the Property
Partnership have been eliminated in consolidation.  As described
in Note 1, as of November 21, 1996, the Property Partnership will
be dissolved.

Cash and Cash Equivalents - Cash and cash equivalents consist of
short-term highly liquid investments, including commercial paper,
which have maturities of three months or less from the date of
purchase.  The carrying value approximates fair value because of
the short maturity of these instruments.  Certain cash and cash
equivalents reflected on the Partnership's balance sheet were on
deposit with an affiliate of the General Partner during a portion
of 1996.  Since that point, no cash and cash equivalents were on
deposit with an affiliate of the General Partner.

Concentration of Credit Risk - Financial instruments which
potentially subject the Partnership to a concentration of credit
risk principally consist of cash and cash equivalents in excess
of the financial institutions' insurance limits.  The Partnership
invests available cash with high credit quality financial
institutions.

Real Estate Investments - Real estate investments are stated at the
lower of cost, less accumulated depreciation, or fair value.
Cost includes the initial purchase price of the property, legal
fees, acquisition and closing costs.  Depreciation is computed
using the straight-line method based upon the estimated useful
lives of the properties.  Maintenance and repairs are charged to
operations as incurred.  Significant betterments and improvements
are capitalized and depreciated over their useful lives.

For assets sold or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts, and any
resulting gain or loss is reflected in income for the period.  In
1994, (see Note 11), two of the Partnership's properties suffered
earthquake damages and consequently, a net building basis
adjustment and corresponding reduction in depreciation expense
resulted.

Accounting for Impairment - In March 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" ("FAS 121"),
which requires impairment losses to be recorded on long-lived
assets used in operations when indicators of impairment are
present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount.  FAS
121 also addresses the accounting for long-lived assets that are
expected to be disposed of.  The Partnership adopted FAS 121 in
the fourth quarter of 1995.

Real Estate Assets Held for Disposition - Real estate assets held
for disposition are carried at the lower of carrying value or
fair market value less costs to sell.  During the fourth quarter
of 1996, all real estate assets were reclassified as held for
disposition and will no longer be depreciated.  No adjustment to
carrying value resulted from the reclassification.

Leases - Leases are accounted for under the operating method.
Under this method, revenue is recognized as rentals are earned
and expenses (including depreciation) are charged to operations
when incurred.  Leases are generally for terms of one year or
less.

Fair Value of Financial Instruments - Statement of Financial
Accounting Standards No. 107, "Disclosures about Fair Value of
Financial Instruments" ("FAS 107"), requires that the Partnership
disclose the estimated fair values of its financial instruments.
Fair values generally represent estimates of amounts at which a
financial instrument could be exchanged between willing parties
in a current transaction other than in forced liquidation.

Fair value estimates are subjective and are dependent on a number
of significant assumptions based on management's judgment
regarding future expected loss experience, current economic
conditions, risk characteristics of various financial
instruments, and other factors.  In addition, FAS 107 allows a
wide range of valuation techniques, therefore, comparisons
between entities, however similar, may be difficult.

Income Taxes - No provision for income taxes has been made in the
consolidated financial statements since income, losses and tax
credits are passed through to the individual partners.

Use of Estimates - The preparation of consolidated financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual
results could differ from those estimates.

Reclassifications - Certain prior year amounts have been
reclassified in order to conform to the current year's
presentation.

3. Property Partnership and Partnership Agreements

Property Partnership Agreement
With respect to the Property Partnership, the Partnership had a
100% interest, during the guaranty period (through December 31,
1989), in the income, losses and cash distributions of the
Property Partnership, other than expenses and deductions
allocable to AFP-II to the extent of its funding of the Minimum
Yield Guaranty (see Note 4).  After the guaranty period, all
income, losses and cash distributions were to be allocated 100%
to the Partnership until it received its Cumulative Preferred
Return, as defined, and thereafter 99.5% to the Partnership and
 .5% to AFP-II.

Distributions of Net Cash Flow from Operations, Net Proceeds from
Interim Capital Transactions and Net Proceeds upon Dissolution
were to be distributed 95% to the Partnership and 5% to AFP-II.

On November 21, 1996, the Partnership purchased AFP-II's interest
in the Property Partnership.  Accordingly, all Net Cash Flow from
Operations, Net Proceeds from Interim Capital Transactions and
Net Proceeds from Dissolution will be paid to the Partnership and
no amount will be owed to AFP-II.

Partnership Agreement
The Partnership Agreement provides for the allocation of Income,
Losses, Net Cash Flow from Operations, Net Proceeds from Interim
Capital Transactions and Net Proceeds upon Dissolution, as
follows:

Income is generally allocated 99% to the Limited Partners and 1%
to the General Partner until the Limited Partners have received
their Preferred Return, as defined.  The balance is allocated 95%
to the Limited Partners and 5% to the General Partner.

Losses are allocated to the General Partner and Limited Partners
in proportion to, and to the extent of their positive capital
account balances, as defined.  At such time as the partners'
capital account balances are zero, losses will be allocated in
the same proportion as distributions.

Net Cash Flow from Operations with respect to each fiscal year
will generally be distributed 99% to the Limited Partners and 1%
to the General Partner, until such time as each Limited Partner
has received an amount equal to his Preferred Return, as defined.
The Partnership's share of any remaining Net Cash Flow from
Operations will be distributed 95% to the Limited Partners and 5%
to the General Partner.

Net Proceeds from Interim Capital Transactions, as defined,
generally will be distributed 99% to the Limited Partners and 1%
to the General Partner until each Limited Partner has received an
amount equal to his unpaid Cumulative Preferred Return and
Unrecovered Capital, as defined.  The Partnership's share of any
excess Net Proceeds will be distributed 95% to the Limited
Partners and 5% to the General Partner.

Net Proceeds upon Dissolution will be made in proportion to
partners' capital accounts.  It is anticipated that Net Proceeds
from any final liquidation of the Partnership's assets generally
will be distributed 99% to the Limited Partners and 1% to the
General Partner until each Limited Partner has received an amount
equal to any unpaid Preferred Return and his Unrecovered Capital
as defined.  The Partnership's share of any excess Net Proceeds
generally will be distributed 95% to the Limited Partners and 5%
to the General Partner.

4. Property Management
From April 6, 1988 through July 31, 1997, the Partnership's
properties were managed by Leisure Care, Inc. ("Leisure Care"),
an unaffiliated third party.  On August 1, 1997, simultaneous
with the sale of three of the Partnership's four properties, MBK
Senior Living Communities, Ltd., an affiliate of the Buyer, was
retained to manage Ocean House, the remaining Property.

Management fees for the years ended December 31, 1997, 1996 and
1995 amounted to approximately $291,660, $323,000 and $325,000,
respectively.  Leisure Care was owed approximately, $87,000 and
$59,000 at December 31, 1996 and 1995, respectively.

For the years ended December 31, 1997, 1996 and 1995, Leisure
Care earned $197,796, $169,545 and $298,415, respectively, in
performance incentive fees.

5. Transactions with Related Parties
The Partnership reimburses the General Partner or its affiliates
for certain administrative expenses.  For the years ended
December 31, 1997, 1996 and 1995, the General Partner or its
affiliates were reimbursed approximately $179,000, $27,000 and
$13,000, respectively.  The General Partner or its affiliates
were owed approximately $62,000, $191,000 and $190,000 at
December 31, 1997, 1996 and 1995, respectively.

Relating to the sale of the three properties, a brokerage
commission was received by an affiliate of the General Partner in
the amount of $233,454.

6. Real Estate
On August 1, 1997, the Partnership closed the Sale of three of
its four Properties, Prell Gardens, Nohl Ranch and Pacific Inn,
to the Buyer for net proceeds of $30,148,357 and a gain on the
sale of the properties of $11,839,814.  The sale of the
Partnership's fourth property, Ocean House, is subject to the
satisfaction of certain conditions of the Buyer and approval of
certain building repairs by the City of Santa Monica.  Although
there have been several unexpected delays, the General Partner
anticipates that the sale of Ocean House will occur in the first
half of 1998.  In the meantime, the Partnership will continue to
operate the property and generate rental income from operations.

The initial acquisition cost of Ocean House was $7,761,053 which
does not include the amount of the purchase price holdback and
other related acquisition expenses.  Ocean House is a 121-unit
building in Santa Monica, California.

Pursuant to the requirements of FAS 121 and to obtain further
support in connection with the Partnership's insurance claim and
engineering studies (see Note 10), during the fourth quarter of
1995 the Partnership obtained preliminary estimates of fair
market value from an independent appraiser.  Such estimates of
fair value made use of a combination of certain generally
accepted valuation techniques, including direct capitalization
and comparative sales analyses, and, in the instances of
Ocean House and Prell Gardens, have considered the structural
damage caused by the Northridge earthquake (see Note 10).  As a
consequence of this valuation process, and pursuant to the
requirements of FAS 121, the Partnership recognized an impairment
loss of $8,712,292 as of December 31, 1995.  The losses of $4,809,497,
$2,081,900 and $1,820,895, aggregating the $8,712,292, are
attributable to Ocean House, Prell Gardens and Nohl Ranch Inn,
respectively.

On November 21, 1996, the Partnership purchased the general
partnership interest of the successor to AFP-II for a purchase
price of $850,000.  Accordingly, the purchase resulted in an
additional investment of $850,000 in the Properties.

7. Distributions Paid
Cash distributions, per the consolidated statements of partners'
capital, are recorded on the accrual basis, which recognize
specific record dates for payments within each calendar year.
The consolidated statements of cash flows recognize actual cash
distributions paid during the calendar year.  The following table
discloses the annual amounts as presented on the consolidated
financial statements:

            Distributions                                     Distributions
               Payable        Distributions    Distributions      Payable
          Beginning of Year      Declared           Paid        December 31
1997         $365,720         $28,404,227       $28,769,947      $       _
1996          365,720           4,388,637         4,388,637        365,720
1995          365,720           1,462,880         1,462,880        365,720

8. Commitments
The land on which Ocean House is located is leased to the
Partnership under a ground lease which expires in 2016.  The
lease carries renewal options for two 33-year periods.  The
Partnership is recording ground rent expense on a straight-line
basis, at an annual amount of $921,396, resulting in deferred
ground rent payable.  Future minimum rental payments to be paid
under the ground lease at December 31, 1997 are as follows:

               Year                         Amount
               1998                    $   876,000
               1999                        876,000
               2000                        876,000
               2001                        876,000
               2002                        896,667
               Thereafter               13,866,667
                                       $18,267,334

9. Reconciliation of Net Income (Loss) to Taxable Income
The following is a reconciliation of the net income (loss) for
consolidated financial statement purposes to net income for
federal income tax purposes for the years ended December 31,
1997, 1996 and 1995:

                                          1997         1996           1995
Net income (loss) per consolidated
financial statements               $12,770,868   $3,154,499    $(7,877,298)

Depreciation deducted for tax
purposes in excess of
depreciation expense per
consolidated financial statements     (590,360)    (172,815)       (48,925)

Tax basis Property Partnership
net income (loss) in excess of
GAAP basis Property Partnership
consolidated net income                      _   (1,548,903)     1,228,748

Gain on sale per consolidated
financial statements in excess
of tax basis gain on sale             (898,326)           _              _

Consolidated financial statement
loss on write-down of real estate
over tax basis loss on write-down
of real estate                          48,000            _      8,712,292

Other                                  (49,017)           _            861
Taxable net income                 $11,281,165   $1,432,781    $ 2,015,678


The following is a reconciliation of consolidated partners' capital for
consolidated financial statement purposes to partners' capital for federal
income tax purposes as of December 31, 1997, 1996 and 1995:

                                             1997          1996          1995
Partners' capital per consolidated
financial statements                   $4,011,166   $19,644,525   $20,878,663
Adjustment for cumulative
difference between tax basis
net income and net income (loss)
per consolidated financial statements   4,224,620     5,714,323     7,436,041
Partners' capital per tax return       $8,233,786   $25,358,848   $28,314,704

10. Insurance Settlement
As a result of the Northridge earthquake that struck the greater
Los Angeles area on January 17, 1994, damages were sustained at
two of the properties, Ocean House and Prell Gardens.

The General Partner pursued reimbursement from the insurance
carrier for the repair costs, less the deductible, under the
Partnership's insurance policy.  However, the insurance carrier
refused to cover the cost to bring the buildings into compliance
with building codes enacted after the Northridge Earthquake.  The
insurance carrier also disputed the amount of damage the
buildings sustained.  As a result, on September 15, 1995, the
General Partner initiated litigation against the insurance
carrier and insurance broker.  On November 19, 1996, the
Partnership and General Partner, executed a Mutual Release and
Settlement Agreement (the "Settlement Agreement") with the
Insurance Company of North America ("INA"), whereby the
Partnership agreed to release INA from all claims pending under
the lawsuit and to assign its remaining claim against the
insurance broker to the insurance carrier.  The Partnership
received $3,200,000 from INA pursuant to the Settlement
Agreement.  Costs associated with the litigation which include
legal, expert witness and engineering fees and a payment on the
construction contract for Prell Gardens were offset against the
$3,200,000 resulting in net insurance settlement income of
$2,318,387.



                Report of Independent Accountants





To the Partners of
Senior Income Fund Limited Partnership:

We have audited the consolidated balance sheets of Senior Income
Fund Limited Partnership, a Delaware limited partnership, and
Consolidated Venture as of December 31, 1997 and 1996, and the
related consolidated statements of operations, partners' capital
(deficit) and cash flows for each of the three years in the
period ended December 31, 1997.  These consolidated financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Senior Income Fund Limited Partnership, a
Delaware limited partnership and Consolidated Venture as of
December 31, 1997 and 1996, and the consolidated results of their
operations and their cash flows for each of the three years in
the period ended December 31, 1997, in conformity with generally
accepted accounting principles.

As discussed in Notes 1 and 6 to the financial statements, the
Partnership entered into a Purchase and Sale Agreements for its
four real estate properties.  The Partnership sold three of the
four properties on August 1, 1997.  The sale of the fourth
property is expected in 1998, pending determination of the extent
of certain required building repairs from earthquake damage by
applicable governmental authorities.  Upon completion of the sale
of the fourth property, the Partnership will commence liquidation
shortly thereafter.

                                         COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
February 27, 1998




 Schedule III - Real Estate and Accumulated Depreciation
 December 31, 1997

 Real Estate Assets held for Disposition:
 Residential Property (1):               Ocean House
 Location                           Santa Monica, CA
 Construction date                                NA
 Acquisition date                           03-25-87
 Life on which depreciation
 in latest income statements
 is computed                                     (2)
 Encumbrances (3)                         $        _
 Initial cost to Partnership:
      Land                                         _
      Buildings and
      improvements                         7,496,394
 Costs capitalized
 subsequent to acquisition:
      Land                                         _
      Buildings
      and improvements                     1,134,934
 Other charges (4):
      Land                                         _
      Buildings
      and improvements                    (8,609,786)
 Gross amount at which
 carried at close of period:
      Land                                $        _
      Buildings and
      improvements                            21,542
                                              21,542
 Accumulated depreciation                 $        _

 (1)  This property is a senior residential property.  Also, note that
      Prell Gardens, Pacific Inn and Nohl Ranch Inn were sold in 1997.
 (2)  Buildings and improvements - 40 years; personal property - 10 years.
 (3)  The property partnership purchased the property on an all cash basis.
 (4)  a) In 1994, the building basis cost of Ocean House was reduced by the
      provision for earthquake loss in the amount of  $750,000 and increased
      by earthquake repairs of $271,202, resulting in a net building basis
      reduction of $478,798.
      b) During 1995, the Partnership recognized a write-down of the carrying
      value of Ocean House of $4,809,497.  The net book value adjusted for the
      write-down, becomes the new carrying value for the property.
      c) The balance represents prior years accumulated depreciation.

 A reconciliation of the carrying amount of real estate and accumulated
 depreciation for the years ended December 31, 1997, 1996, and 1995
 is as follows:
                                      1997           1996           1995
 Real estate investments:
 Beginning of year             $18,301,085    $23,592,313    $42,664,480
 Additions                          77,000      1,112,540         99,636
 Reclass to held for sale                _     (6,403,768)             _
 Less disposition              (18,308,543)             _        (25,820)
 Write down of real estate         (48,000)             _    (19,270,521)
 Write down for earthquake               _              _        124,538
 End of year                   $    21,542    $18,301,085    $23,592,313

 Accumulated depreciation:
 Beginning of year             $         _    $ 4,896,442    $13,665,635
 Depreciation expense                    _      1,507,326      1,797,858
 Reclass to held for sale                _     (6,403,768)             _
 Disposition                             _              _         (8,822)
 Write down of real estate               _              _    (10,558,229)
 End of year                   $         _    $         _    $ 4,896,442



                Report of Independent Accountants



Our report on the consolidated financial statements of Senior
Income Fund Limited Partnership, a Delaware limited partnership,
and Consolidated Venture has been incorporated by reference in
this Form 10-K from the Annual Report to Unitholders of Senior
Income Fund Limited Partnership for the year ended
December 31, 1997.  In connection with our audit of such
financial statements, we have also audited the related financial
statement schedule listed in the index of this Form 10-K.

In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material
respects, the information required to be included therein.



                                         COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
February 27, 1998