SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark One)

[ X ]QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2002

                                       OR

[  ]TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

          From the transition period from ___________ to ____________.

                         Commission File Number 33-19961


                         COVENANT FINANCIAL CORPORATION
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

             Delaware                                        01-0623010
---------------------------------------------   --------------------------------
(State or other jurisdiction of incorporation  (IRS Employer Identification No.)
 or  organization)

           6060 North Central Freeway, Suite 560, Dallas, Texas 75206
           ----------------------------------------------------------
                    (Address of principal executive offices)

                                 (214) 800-2842
                           (Issuer's telephone number)

                                       N/A
              (Former name, former address and former fiscal year,
                         if changed since last report)

         Indicate  by check mark  whether the  registrant  (1) filed all reports
required to be filed by Section 13 or 15(d) of the  Exchange Act during the past
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 :    No 9

As of May 15,  2002  there  were  869,100  shares of Common  Stock of the issuer
outstanding.


<PAGE>


                               TABLE OF CONTENTS

                          PART I FINANCIAL STATEMENTS



Item 1     Financial Statements                                             2

Item 2     Management's Discussion and Analysis or Plan of Operation        7

                           PART II OTHER INFORMATION

Item 1     Legal Proceedings                                                7
Item 2     Changes in Securities                                            7
Item 3     Default upon Senior Securities                                   7
Item 4     Submission of Matters to a Vote of Security Holders              7
Item 5     Other Information                                                7
Item 6     Exhibits and Reports on Form 8-K                                 7

<PAGE>


                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements
                         COVENANT FINANCIAL CORPORATION
                             CONDENSED BALANCE SHEET
<TABLE>


                                                          March 31,         December 31,
                                                             2002               2001
                                                        ----------------------------------
                                                         (Unaudited)
<S>                                                      <C>                <C>

ASSETS

Current assets:
  Cash                                                      $    1,107          $      -
  Accounts receivable                                           2,387              2,387
  Note receivable - related party                              12,000             12,000
                                                        ----------------  ----------------
    Total current assets                                       15,494             14,387
                                                        ----------------  ----------------

Property and equipment, net                                    63,505             67,690
Note receivable -related party                                224,654            230,654
                                                        ----------------
                                                          $   303,653         $  312,731
                                                        ================  ================


    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Accounts payable                                         $   12,951          $   8,728
  Accounts payable - related party                             30,687             30,687
  Current portion of notes payable                              9,755             11,339
  Deferred gain                                                12,000             12,000
                                                        ----------------  ----------------
                                                        ----------------  ----------------
    Total current liabilities                                  65,393             62,754
                                                        ----------------  ----------------

Notes payable                                                  48,721             49,496
Deferred gain                                                 224,654            230,654

Stockholders' equity (deficit):
  Common stock, $0.001, 50,000,000 shares authorized:
  869,100 and 844,843 shares issued and outstanding:              869                845
  Additional paid-in capital                                1,944,617          1,930,151
  Accumulated deficit                                       (1,980,601)       (1,961,169)
                                                        ----------------  ----------------
    Total stockholders' equity (deficit)                       (35,115)          (30,173)
                                                        ----------------  ----------------
                                                          $   303,653         $  312,731
                                                        ================  ================

</TABLE>

            See accompanying notes to interim condensed consolidated
                             financial statements.
<PAGE>
                         COVENANT FINANCIAL CORPORATION
                        CONDENSED STATEMENT OF OPERATIONS
                                   (Unaudited)
<TABLE>

                                                             Three months ended
                                                                 March 31,
                                                          2002              2001
                                                     ---------------  ------------------
<S>                                                    <C>                <C>

Revenues                                                  $  6,000         $    90,513

Cost and Expenses:
  General and administrative                                20,546              59,649
  Depreciation and amortization                              4,185                 178
                                                     ---------------  ------------------
                                                            24,731              59,827
                                                     ---------------  ------------------

Income (loss) from operations                               (18,731)            30,686

Interest expense, net                                          701                   -

                                                     ---------------  ------------------
Net income (loss)                                        $  (19,432)       $    30,686
                                                     ===============  ==================

Basic and diluted income (loss) per common share             $(0.02)             $0.04
                                                     ===============  ==================

Weighted average shares outstanding                        844,843             822,088
                                                     ===============  ==================
</TABLE>


            See accompanying notes to interim condensed consolidated
                             financial statements.
<PAGE>

                        COVENANT FINANCIAL CORPORATION
                        CONDENSED STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>

                                                               Three months ended March 31,
                                                             -----------------------------------
                                                                 2002                2001
                                                             -----------------------------------
<S>                                                            <C>                 <C>

Cash flows from operating activities:
  Net income                                                    $   (19,432)       $    30,686
    Adjustments to reconcile net income to net cash
      used in operating activities:
    Depreciation and amortization                                    4,185                 178
    Stock issued for services                                          243
  Changes in operating assets and liabilities
    Accounts receivable                                                  -              57,613
    Accounts payable                                                 18,470            (90,124)
                                                             ---------------   -----------------
        Net cash provided by (used in) operating activities           3,466              (1,647)
                                                             ---------------   -----------------

Cash flows from financing activities:
  Payments on notes payable                                          (2,359)                 -

Net increase (decrease) in cash and cash equivalents                 1,107               (1,647)
Cash and cash equivalents at beginning of period                         -                 937
                                                             ---------------   -----------------
Cash and cash equivalents at end of period                      $    1,107           $     (710)
                                                             ===============   =================

Cash paid for:
  Taxes                                                          $       -            $      -
  Interest                                                       $     701            $      -

</TABLE>

            See accompanying notes to interim condensed consolidated
                             financial statements.


<PAGE>

                         COVENANT FINANCIAL CORPORATION
                 NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
                                 March 31, 2002


Note 1:Presentation

The  condensed  balance  sheet of the Company as of March 31, 2002,  the related
condensed statements of operations for the three months ended March 31, 2002 and
2001 and the  statements of cash flows for the three months ended March 31, 2002
and 2001 included in the condensed  financial  statements  have been prepared by
the Company  without  audit.  In the  opinion of  management,  the  accompanying
condensed  financial  statements include all adjustments  (consisting of normal,
recurring  adjustments)  necessary to summarize  fairly the Company's  financial
position  and results of  operations.  The results of  operations  for the three
months  ended March 31, 2002 are not  necessarily  indicative  of the results of
operations  for the full  year or any  other  interim  period.  The  information
included in this Form 10-QSB  should be read in  conjunction  with  Management's
Discussion and Analysis and Financial  Statements and notes thereto  included in
the Company's December 31, 2001 Form 10-KSB.

NOTE 2 - Note Receivable - Related Party

The Company has a note receivable  dated July 25, 2001 in the original amount of
$268,000 from the Wilkerson Group, an affiliated group. The note is non-interest
bearing,  and  payable in 44  monthly  installments  of $1,000  and 112  monthly
installments of $2,000. The Company acquired the note in exchange for management
contracts.  The  Company  recorded a deferred  gain and  records  revenue as the
installments are received.

NOTE 3 - Reverse Stock Split

In March 2002, the Company effected a 1:10 reverse stock split. Accordingly, all
amounts have been restated to reflect the reverse stock split.

NOTE 4 - Expenses Paid By Shareholder

Douglas A.  Larson,  the  Company's  President,  paid  expenses on behalf of the
Company  totaling  $14,247  during  the first  quarter  of 2002.  The amount was
recorded as additional paid in capital.

<PAGE>


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

This report contains  forward looking  statements  within the meaning of Section
27A of the  Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934,  as amended.  The  Company's  actual  results could differ
materially from those set forth on the forward looking statements as a result of
the risks set forth in the Company's  filings with the  Securities  and Exchange
Commission,  general economic conditions, and changes in the assumptions used in
making such forward looking statements.

Overview

HMGT was  incorporated  in the State of Delaware on February  25, 2000 under the
name of HMGT  Management  Corporation.  On July 6, 2000,  HMGT  merged  into the
Company, then named Spartan Oil Corporation.  This transaction was accounted for
as a reverse merger. On August 1, 2000, the Company changed its name to HomeGate
Corporation.  On March  28,  2002,  the  Company  changed  its name to  Covenant
Financial Corporation.

The  Company  manages  hotels  but  currently  has no  hotels  under  management
contract.  The Company had as many as ten under  management  contracts until the
owners of those hotels encountered  financial problems and lost ownership of the
hotels.  The Company is currently in negotiations to acquire three hotels and to
have  management  contracts  with these hotels and believes  that it will secure
some in the near future.

Comparison of Operating Results

Revenues  decreased  $84,513 to $6,000 for the three months ended March 31, 2002
from $90,513 for the three months ended March 31, 2001.

Costs and  Expenses  decreased  to $24,731 for the three  months ended March 31,
2002 from $59,827 for the three  months  ended March 31, 2001.  The decrease was
principally due to the decrease in general and administrative expenses.

Income (loss) from operations was $(18,731) for the three months ended March 31,
2002  compared to income from  operations  of $30,686 for the three months ended
March 31, 2001.

The Company  recorded a net loss of  $(19,432)  for the three months ended March
31, 2002  compared to net income of $30,686 for the three months ended March 31,
2001.

As of March 31, 2002, the Company had an accumulated deficit of $1,980,601.

Liquidity and Capital Resources

The cash position of the Company increased during the first quarter,  going from
$0 at the beginning of the quarter to $1,107 at the end of the quarter.  Douglas
A.  Larson,  the  Company's  President,  paid  expenses on behalf of the Company
totaling  $14,247  during the first  quarter of 2002.  The Company sold an asset
producing  no revenue  for a note  receivable  which gives the Company a monthly
cash flow.  This monthly  cash flow will help the Company  cover the expenses of
soliciting new hotel management contracts and general operating costs.

We assigned a  management  contract  for a $268,000  note which pays $1,000 each
Monday  starting July 23, 2001 for thirty weeks and then pays $2,000 each Monday
thereafter until the note is paid in full. No interest is attached to the note.

<PAGE>


PART II.  OTHER INFORMATION


Item  1.  Legal Proceedings.

The Company is not involved in any legal proceedings.

Item  2.  Changes in Securities.

During the first quarter of 2002,  we issued 27,500 shares to three  individuals
in  consideration  for  services   rendered.   The  Company  believes  that  the
transactions  were exempt  from  registration  pursuant  to Section  4(2) of the
Securities Act as transactions by an Issuer not involving a public offering.

Item  3.  Defaults Upon Senior Securities.

Registrant has no senior securities and accordingly no defaults.

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

None

Item  5.     Other Information.

None.

Item 6.      Exhibits and Reports on Form 8-K.

a)       Exhibits

         None.

         b) Reports on Form 8-K

On April 1, 2002 and April 2, 2002,  the Company  filed  reports on Form 8-K and
Form 8-K/A relating to a change in auditors from J.S.  Osborn,  P.C. to Malone &
Bailey, PLLC.


                                   Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned there unto duly authorized.



                                    Covenant Financial Corporation
                                    ---------------------------------
                                    (Registrant)


                                    BY: /s/  Douglas A. Larson
                                    ------------------------------
                                    Douglas A. Larson
                                    President

DATE:  May 15, 2002