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.  The Partnership has
retained Leisure Care, Inc., one of the leading retirement center
management companies in the country, to assist with the day-to-
day management of the facilities.

      

                        Average
                       Occupancy        Rental Income *   Percent
Property             1996      1995      1996      1995    change
Ocean House           91%       92%    $3,450    $3,417      1%
Pacific Inn           98%       97%     3,685     3,572      3%
Prell Gardens         72%       93%     1,294     1,675    (23%)
Nohl Ranch Inn        98%       95%     2,353     2,174      8%
* in thousands

              
                            Contents

                     1   Message to Investors

                     3   Consolidated Financial Statements

                     6   Notes to the Consolidated Financial Statements

                    14   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 1996 Annual Report for Senior
Income Fund L.P.  This report includes an update on the
Partnership's efforts to sell its properties, a review of the
Partnership's operations and audited financial statements for the
year ended December 31, 1996.

Update on Property Sales
As previously announced, the Partnership is marketing its four
properties for sale and expects to sell the properties in 1997.
As such, all of the Partnership's properties have been
reclassified on the Partnership's balance sheets as held for
disposition.  The General Partner has received numerous bids and
serious expressions of interest from unaffiliated third party
buyers, including ARV Assisted Living, Inc. ("ARV"), the entity
which previously commenced two tender offers for your units under
the name "LAVRA".  While the bids received are preliminary and
subject to further due diligence, all of the offers being
considered, including ARV's, are at prices that would result in
cash distributions to all Unitholders substantially in excess of
that previously offered by ARV.

The Partnership is in the process of analyzing the bids it
received.  It is the goal of the General Partner to weigh all of
the relevant factors and to structure the best transaction
possible for the Unitholders by examining, among other things,
the price offered and the probability of consummating a
transaction with each particular bidder.  The General Partner is
very pleased with the response to the competitive bidding
process, however, there can be no assurance that any transaction
will be consummated or as to the price of such a transaction.
Should a transaction be consummated, one or more cash
distributions of the net sale proceeds together with any
remaining cash on hand will be made to all Unitholders as soon as
practicable.

Cash Distributions
Cash distributions for 1996 totaled $0.90 per $10.00 Unit,
including the fourth quarter distribution which was paid to
limited partners on February 12, 1997, in the amount of $0.075
per $10.00 Unit.  On December 9, 1996, the Partnership paid a
special distribution in the amount of $0.60 per Unit from excess
cash reserves which had been held pending a resolution of the
Partnership's claim against its insurance carrier, as discussed
below.  Since inception, limited partners have received cash
distributions totaling $5.41 per Unit.  Until the sale of the
Partnership's properties is complete, the level of future
distributions will be determined on a quarterly basis and will be
based on cash flow from operations, tempered by the Partnership's
capital needs, including those necessitated by any earthquake
related repairs.

Earthquake Repairs
In January 1994, an earthquake struck the greater Los Angeles
area causing damage at two of the Partnership's properties, Prell
Gardens and Ocean House.  Earthquake related repairs are underway
at Prell Gardens and the General Partner is in the process of
obtaining contractor bids for the repairs to Ocean House.
However, in light of the Partnership's sales efforts and the
General Partner's receipt of several credible offers from
numerous purchasers, it is anticipated that the Partnership will
sell all of its properties prior to completion of the repair work
at Prell Gardens and prior to beginning work at Ocean House.  The
Partnership intends to sell Prell Gardens and Ocean House on an
"as is" and "where is" basis.

Insurance Settlement
As previously reported, in November 1995, the General Partner
initiated litigation against the insurance carrier and insurance
broker, as a result of the insurance carrier's refusal to
reimburse the Partnership for the cost of the earthquake related
repair work, less the deductible, under the Partnership's
insurance policy.  The Partnership reached a settlement with the
insurance carrier on November 19, 1996, whereby the Partnership
received a payment totaling $3.2 million.  Accordingly, the
Partnership was able to fund the special $0.60 per Unit
distribution, referred to above, from a portion of the cash
reserves it had retained to cover the necessary repairs pending
the outcome of the litigation.


Financial Highlights
For the years ended December 31,
                                            1996         1995
     Rental income                      $10,782,123  $10,838,267
     Total expenses                      10,150,537   18,914,643
     Net income (loss)                    3,154,499   (7,877,298)
     Cash distributions per Unit *             $.90         $.30
     * There are 4,827,500 Units outstanding

-    Rental income was slightly lower in 1996 due to lower
  average occupancy at Prell Gardens as a result of the earthquake
  related repair work at the property.  The decrease in rental
  income at Prell Gardens was partially offset by an increase in
  rental income from the other properties, particularly Nohl Ranch
  and Pacific Inn.

-    The change from net loss to net income in 1996 was primarily
  due to the recognition of net insurance settlement income of
  approximately $2.3 million in 1996, the recognition in 1995 of
  the above-mentioned loss on the write-down of real estate asset,
  and lower depreciation expense in 1996.

-    The decrease in total expenses was largely the result of the
  Partnership's recognition of a $8,712,292 loss on the write-down
  of real estate assets in compliance with Financial Accounting
  Standards No. 121 in 1995, and lower depreciation expense in 1996
  reflecting the adjusted basis of the properties required at year-
  end 1995 in connection with the write-down of the properties.

Summary
The General Partner is analyzing the bids received for the
properties and anticipates negotiating and closing a sale in
1997.  In the interim, the General Partner will continue to focus
on effectively managing the Partnership's properties.  An update
on our progress will be provided in future correspondence.

Very truly yours,

Senior Income Fund Inc.
The General Partner

/s/ Moshe Braver

Moshe Braver
President

March 27, 1997

Consolidated Balance Sheets                 At December 31,  At December 31,
                                                      1996             1995
Assets
Real estate:
 Land                                            $      -       $  4,824,699
 Buildings and improvements                             -         18,767,614
                                                        -         23,592,313
 Less accumulated depreciation                          -         (4,896,442)
                                                        -         18,695,871
Real estate assets held for disposition           18,301,085            -

Cash and cash equivalents                          4,104,695       4,143,727
Prepaid expenses                                     168,259         136,282
  Total Assets                                   $22,574,039    $ 22,975,880
Liabilities and Partners' Capital (Deficit)
Liabilities:
 Accounts payable and accrued expenses           $ 1,033,316    $    250,413
 Deferred rent payable                             1,191,169       1,145,774
 Due to affiliates                                   190,609         189,835
 Security deposits payable                           148,700         145,475
 Distribution payable                                365,720         365,720
  Total Liabilities                                2,929,514       2,097,217
Partners' Capital (Deficit):
 General Partner                                     (54,910)        (42,568)
 Limited Partners (4,827,500 units outstanding)   19,699,435      20,921,231
  Total Partners' Capital                         19,644,525      20,878,663
  Total Liabilities and Partners' Capital        $22,574,039     $22,975,880


                                                   

Consolidated Statement of Partners' Capital (Deficit)
For the years ended December 31, 1996, 1995 and 1994
                                    General      Limited
                                    Partner      Partners        Total
Balance at December 31, 1993       $(14,678)   $31,559,364    $31,544,686
Net income                            1,370        135,665        137,035
Distributions                       (14,630)    (1,448,250)    (1,462,880)
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


Consolidated Statements of Operations
For the years ended December 31,              1996      1995      1994
Income
Rental                                  $10,782,123   $10,838,267  $ 10,386,764
Insurance settlement, net                 2,318,387          -            -
Interest                                    204,526       199,078        97,928
  Total Income                           13,305,036    11,037,345    10,484,692
Expenses
Payroll                                   3,074,006     2,967,168     2,884,586
General and administrative                1,774,183     1,633,797     1,427,356
Rent and utilities                        1,607,967     1,652,520     1,621,004
Depreciation                              1,507,326     1,797,858     1,790,033
Supplies                                  1,136,163     1,122,448     1,020,782
Repairs and maintenance                     627,158       616,998       490,095
Real estate taxes                           380,439       375,926       323,412
Travel and entertainment                     43,295        35,636        40,389
Earthquake loss                                -             -          750,000
Loss on write-down of real estate              -        8,712,292          -
  Total Expenses                         10,150,537    18,914,643    10,347,657
  Net Income (Loss)                     $ 3,154,499   $(7,877,298) $    137,035
Net Income (Loss) Allocated:
To the General Partner                  $    31,545   $      -     $      1,370
To the Limited Partners                   3,122,954    (7,877,298)      135,665
                                        $ 3,154,499   $(7,877,298) $    137,035
Per limited partnership unit
(4,827,500 outstanding)                        $.65        $(1.63)         $.03


Consolidated Statements of Cash Flows
For the years ended December 31,               1996         1995        1994
Cash Flows From Operating Activities:
Net income (loss)                         $3,154,499   $(7,877,298)  $  137,035
Adjustments to reconcile net
 income (loss) to net
cash provided by operating activities:
 Insurance settlement, net                (2,318,387)         -            -
 Depreciation                              1,507,326     1,797,858    1,790,033
 Provision for earthquake loss                  -             -         750,000
 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                           (31,977)       18,084       (5,408)
  Accounts payable and accrued expenses      124,883      (223,778)     225,864
  Deferred rent payable                       45,395        45,395       45,396
  Due to affiliates                              774         2,159         (628)
  Security deposits payable                    3,225          (300)       1,000
Net cash provided by operating activities  2,485,738     2,481,410    2,943,292
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                    (262,540)     (190,674)    (233,075)
Proceeds from disposal of asset                 -           10,000         -
Net cash provided by (used for)
 investing activities                      1,863,867      (180,674)    (233,075)
Cash Flows From Financing Activities:
Distributions paid to partners            (4,388,637)   (1,462,880)  (1,462,880)
Net cash used for financing activities    (4,388,637)   (1,462,880)  (1,462,880)
Net increase (decrease) in cash
 and cash equivalents                        (39,032)      837,856    1,247,337
Cash and cash equivalents,
 beginning of year                         4,143,727     3,305,871    2,058,534
Cash and cash equivalents,
 end of year                              $4,104,695    $4,143,727   $3,305,871
Supplemental Disclosure of Non-Cash
 Investing Activities:
Settlement costs funded through
 accounts payable                         $ 658,020     $     -      $     -
Capital expenditures funded
 through accounts payable                 $    -        $   33,500   $   47,829


Notes to the Consolidated Financial Statements
December 31, 1996, 1995 and 1994

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.  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 other general partner, through
November 21, 1996 as discussed below, of the Property Partnership
is August Financial Partners II ("AFP-II"), an affiliate of
August Financial Corporation ("August").  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 March 25, 1987, the Property Partnership acquired the
Properties from Senior Inns of America Venture, an affiliate of
August, for an aggregate purchase price of $40,400,000, which was
reduced by $1,491,664, the amount of purchase price holdback used
to cover the minimum yield guaranty (see Note 4).  In addition,
an affiliate of the General Partner received $2,400,000 (see Note
7) in connection with the acquisition of the Properties.  In
December 1986, August had purchased a 100% interest in Senior
Inns of America Venture for $38,000,000.

On July 31, 1993, Shearson Lehman Brothers Inc. sold certain of
its domestic retail brokerage and asset management businesses to
Smith Barney, Harris Upham & Co. Incorporated ("Smith Barney").
Subsequent to the sale, Shearson changed its name to Lehman
Brothers Inc. ("Lehman Brothers").  The transaction did not
affect the ownership of the General Partner.  However, the assets
acquired by Smith Barney included the name "Shearson."
Consequently, effective October 29, 1993, the Shearson Lehman
Senior Income Fund, Inc. General Partner changed its name to
Senior Income Fund Inc., and effective December 23, 1993,
Shearson Lehman Senior Income Fund Limited Partnership changed
its name to Senior Income Fund L.P.

On February 20, 1996, based upon, among other things, the advice
of legal counsel, Skadden, Arps, Slate, Meagher & Flom, the
General Partner adopted a resolution that states, among other
things, if a Change of Control (as defined below) occurs, the
General Partner may distribute the Partnership's cash balances
not required for its ordinary course day-to-day operations.
"Change of Control" means any purchase or offer to purchase more
than 10% of the Units that is not approved in advance by the
General Partner.  In determining the amount of the distribution,
the General Partner may take into account all material factors.
In addition, the Partnership will not be obligated to make any
distribution to any partner and no partner will be entitled to
receive any distribution until the General Partner has declared
the distribution and established a record date and distribution
date for the distribution.

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 will be dissolved and
all of its assets will be 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.

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 and all of 1995.  At December 31, 1996, 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 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. Minimum Yield Guaranty and Litigation Settlement
In connection with the acquisition of the Properties, AFP-II,
through December 31, 1989, provided the Partnership a minimum
yield guaranty that the Properties would generate sufficient
revenues to fund all operating expenses and pay the Partnership a
minimum 9.09% yield on its Invested Capital, as defined.  To the
extent net operating cash flows were not sufficient to provide
the minimum yield, additional amounts were to be funded by
AFP-II.  On February 15, 1989, the Partnership was informed by
AFP-II and August that they were financially unable to meet any
continuing minimum yield obligations.  Subsequently, several
class action lawsuits were commenced against the Partnership.  In
October 1989, the Partnership entered into a Stipulation and
Agreement of Compromise and Settlement (the "Settlement").  Under
the terms of the Settlement, AFP-II was required to pay
$2,500,000 which amount was deemed to be additional invested
capital and was fully offset by an expense allocation.  AFP-II
has no further obligation to fund any amounts under the minimum
yield guaranty.  Additional amounts owed to the partners under
the minimum yield guaranty for the default period amounted to
$1,750,000 and were paid directly by the Lehman Brothers Group,
Inc. ("Group"), an affiliate of the General Partner in February
1990.  The Group's share of the minimum yield guaranty has not
been reflected in the accompanying financial statements, since
Group, while an affiliate of the General Partner, is not a
partner.

Additional terms of the Settlement stipulate the following:  (1)
Group will provide a minimum yield guaranty to the partners of
4.5% and 5.25% for the years ended December 31, 1990 and 1991,
respectively; (2) the Property Partnership Agreement has been
amended, reducing to 5% AFP-II's share of potential distributions
on dissolution and liquidation of the Property Partnership (see
Note 3); and (3) any amounts of unpaid Preferred Return (see Note
3) which accrue after January 1, 1990 through the dissolution and
liquidation of the Partnership shall earn a 9% return, up to a
maximum of $10,000,000.  Previously, the unpaid preferred return
was non-interest bearing

5. Property Management
As of April 6, 1988, the Partnership entered into a Property
Management Agreement with Leisure Care, Inc., (the "Operator"),
which is not affiliated with the General Partner or AFP-II.  The
Operator supervises the day-to-day management of the Properties
and acts as nonexclusive leasing agent for the Properties.

On December 31, 1993, the original Property Management Agreement
expired and an extension was executed between the General Partner
and the Operator effective through June 30, 1995.  Certain terms
of the original Property Management Agreement have been modified
as set forth in the extension.  Changes with respect to
compensation and/or fees are summarized herein:

(i) for services rendered by the Operator, a base monthly management fee will
be paid for each property equal to 3% of the monthly collected gross income
from each property;

(ii) for any remodel or addition to any of the properties costing in excess of
$10,000, the Owner shall pay Operator additional fees equal to 10% of the total
cost of the work managed by Operator.  The fees shall be paid  monthly to
Operator as costs are incurred;

(iii) the performance incentive fee has been replaced with the
following terms:  The Operator shall be entitled to payment of
three different types of performance incentive fees which shall
be paid on an estimated basis each month based on the year-to-
date figures available for that month.  The Net Profit Incentive
Fee, as defined in the Property Management Agreement, equals 100%
of the amount, if any, by which net profit for all properties
exceeds a yearly threshold amount.  The Post-Replacement Reserve
Incentive Fee, as defined in the Property Management Agreement,
equals 100% of the total excess net profit, if any, for all of
the properties after deducting an amount equal to 2% of the gross
income.  The Profit Sharing Incentive Fee, as defined in the
Property Management Agreement, equals 25% of the final profit
amount, if any, for all of the properties.  However, each of the
three incentive fees will not exceed 1% of the total gross income
for all of the properties in any one year.  Each of the parties
may terminate the agreement for any reason or no reason at all,
upon 60 days prior written notice to the other party.  In
addition, the Operator will also be reimbursed for certain
expenses incurred in connection with the Properties.

On June 30, 1995, the extension to the original Property
Management Agreement expired and a new extension was executed
between the General Partner and the Operator which was effective
through July 1, 1996.  Effective June 30, 1996, a new extension was
executed between the General Partner and the Operator for an
additional year which expires on July 1, 1997.  All of the terms
and conditions of the original extension of the Management
Agreement shall remain in full force and effect through the new
expiration date.

Management fees for the years ended December 31, 1996, 1995 and
1994 amounted to approximately $323,000, $325,000 and $312,000,
respectively.  The Operator was owed approximately $87,000,
$59,000 and $55,000 at December 31, 1996, 1995 and 1994,
respectively.

For the years ended December 31, 1996, 1995 and 1994, the
Operator earned $169,545, $298,415 and $264,953, respectively, in
performance incentive fees.

6. Transactions with Related Parties
The Partnership reimburses the General Partner or its affiliates
for certain administrative expenses.  For the years ended
December 31, 1996, 1995 and 1994, the General Partner or its
affiliates were reimbursed approximately $27,000, $13,000, and
$8,000, respectively.  The General Partner or its affiliates were
owed approximately $191,000, $190,000 and $188,000 at December
31, 1996, 1995 and 1994, respectively.

7. Real Estate
The following table sets forth the purchase price for each of the
Properties, which amounts do not include the amount of the
purchase price holdback and related acquisition expenses:
                                                                Initial
                   # of                                       Acquisition
Property Name     Units         Location                         Cost
Pacific Inn        134          Torrance, California          $13,927,368
Nohl Ranch Inn     133          Anaheim, California            12,864,211
Ocean House        121          Santa Monica, California        7,761,053
Prell Gardens      102          Van Nuys, California            5,847,368
                                                              $40,400,000

The acquisition fee of $2,400,000 paid to Lehman Brothers, and
certain other costs of $631,868 related to the acquisition of the
Properties have been allocated on a pro rata basis to the assets
acquired.

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 11), during the fourth quarter of
1995 the Partnership obtained preliminary estimates of fair
market value from an independent appraiser.  Such estimates of
fair value make 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 11).  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.

The General Partner is currently marketing the Properties for
sale and it is expected that a sale will be completed during
1997.  Accordingly, the Properties have been reclassified on the
Consolidated Balance Sheet as "Real estate assets held for
disposition".

8. 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
1996      $365,720        $4,388,637       $4,388,637         $365,720
1995       365,720         1,462,880        1,462,880          365,720
1994      $365,720        $1,462,880       $1,462,880         $365,720

9. 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.  Under the
ground lease, a sale of Ocean House by the Partnership will
require the consent of the lessor, which consent shall not be
unreasonably withheld.  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, 1996 are as follows:

               Year                         Amount
               1997                       $876,000
               1998                        876,000
               1999                        876,000
               2000                        876,000
               2001                        876,000
               Thereafter               14,855,000
                                       $19,235,000

10. 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,
1996, 1995 and 1994:

                                                1996         1995         1994
Net income (loss) per consolidated
financial statements                      $3,154,499  $(7,877,298)    $137,035

Depreciation deducted for tax
purposes in excess of
depreciation expense per
consolidated financial statements          (172,815)     (48,925)      (69,673)

Tax basis Property Partnership
net income (loss) in excess of GAAP
basis Property Partnership consolidated
net income                               (1,548,903)   1,228,748      1,003,399

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

Other                                          -             861            514
Taxable net income                       $1,432,781   $2,015,678     $1,071,275


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, 1996, 1995 and 1994:

                                               1996         1995         1994
Partners' capital per consolidated
financial statements                    $19,644,525  $20,878,663    $30,218,841

Adjustment for cumulative
difference between tax basis
net income and net income (loss)
per consolidated financial statements     5,714,323    7,436,041     (2,456,074)
Partners' capital per tax return        $25,358,848  $28,314,704    $27,762,767

11. Earthquake Loss and 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
Partnership has earthquake insurance with a deductible equal to
5% of the replacement costs of the properties, as determined by
an independent appraisal.  The General Partner engaged an
independent appraiser to determine the replacement costs, and the
Partnership's deductibles, which were estimated not to exceed
$500,000 and $250,000 for Ocean House and Prell Gardens,
respectively.  The provision for earthquake loss of $750,000,
which was recorded in 1994, represents the estimated insurance
deductibles for the two properties.

The Partnership engaged an independent structural and seismic
engineer who advised the General Partner, and the City of Santa
Monica as it relates to Ocean House, that the repairs to date, at
both Ocean House and Prell Gardens, have rendered both buildings
safe for continued occupancy.  However, the engineer concluded
that additional structural improvements would be needed to make
both buildings less vulnerable to future earthquakes, and to
bring them into compliance with building codes enacted subsequent
to the construction of the properties (the "Retrofit Work") and
building codes that were enacted after the January 1994
earthquake (the "Structural Enhancements").  The total revised
cost to complete the work at both buildings is estimated to be
approximately $2,850,000.  This revised total is inclusive of the
cost of the initial work already completed, the estimated cost of
the Retrofit Work and Structural Enhancements and the cost to
complete other less immediate earthquake-related repair work.
The total revised approximate cost is based on the most recent
contract as it relates to Prell Gardens and engineering estimates
as it relates to Ocean House.  The repairs are structural in
nature, and are not expected to enhance the overall value of the
buildings.

With respect to Prell Gardens, the City of Los Angeles recently
approved the Partnership's plans and granted the Partnership the
necessary permits to begin work, which is currently underway.
The Partnership's contractor estimates that the work will cost
approximately $360,000 and will require 3 to 6 months to
complete.  The Retrofit Work and Structural Enhancements have not
yet begun at the Ocean House property.  Plans pertaining to the
repairs at Ocean House have been prepared and submitted to the
City of Santa Monica, where the property is located.  In June
1994, the City of Santa Monica enacted a new building ordinance
as a result of the Northridge Earthquake.  However, due to
pressure from numerous Santa Monica property owners, the City is
currently considering a revision of this new ordinance and to
date no revision has been made.  The Partnership's construction
plans have been prepared in accordance with the new ordinance.
The possible revision being considered by the City of Santa
Monica could reduce the scope and final cost of the work.

The General Partner pursued reimbursement from the insurance
carrier for the additional 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.

During November 1995, the insurance carrier determined that the
damage sustained at the Prell Gardens property was in excess of
the applicable $250,000 deductible, leaving a net claim of
$28,531 which was paid to the Partnership and applied against
building basis.  The net claim of $28,531 represents the
undisputed amount under this claim, notwithstanding the separate
claims relating to the structural improvements required at Prell
Gardens.  The insurance carrier determined for the Ocean House
property that the damage sustained was less than the applicable
deductible of $500,000.

The building basis costs of Ocean House and Prell Gardens were
reduced by the $750,000 provision for earthquake loss in 1994.
As repairs were incurred, the basis of the buildings were being
restored to their original levels.  At December 31, 1996, Ocean
House and Prell Gardens have, cumulatively, incurred earthquake
repairs of $231,163 and $40,039, respectively, which primarily
represents initial earthquake repairs incurred in 1994 and 1995.


                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, 1996 and 1995, 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, 1996.  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, 1996 and 1995, and the consolidated results of their
operations and their cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally
accepted accounting principles.

                                         COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
March 19, 1997


Schedule III - Real Estate and Accumulated Depreciation
December 31, 1996

Real Estate Assets held for Disposition:
Residential
 Property (1):             Ocean       Prell                     Nohl
                           House      Gardens    Pacific Inn   Ranch Inn   Total
Location           Santa Monica, CA  Van Nuys, CA  Torrance, CA  Anaheim, CA  NA
Construction date           NA         NA           NA         NA             NA
Acquisition date         03-25-87   03-25-87     03-25-87   03-25-87          NA
Life on which
 depreciation
in latest income
statements is computed     (2)        (2)          (2)        (2)             NA
Encumbrances (3)           $-         $-           $-          $-             $-
Initial cost to
  Partnership:
   Land                     -       1,441,614    2,402,690    816,915  4,661,219
   Buildings and
   improvements          7,496,394  4,613,166   11,436,807 12,157,614 35,703,981
Costs capitalized
subsequent to
 acquisition:
   Land                      -        103,834     173,057      58,840    335,731
   Buildings and
   improvements          1,134,934  1,102,629   1,006,076   1,122,879  4,366,518
Other charges (4):
   Land                      -        (53,274)    (79,703)    (30,188) (163,165)
   Buildings and
   improvements         (8,607,013)(4,579,455)   418,274 (7,431,237)(20,199,431)
Gross amount at which
carried at close of period (5):
   Land                     $-     $1,492,174  $2,496,044   $845,567  $4,833,785
   Buildings and
   improvements            24,315   1,136,340   12,861,157  5,849,256 19,871,068
                           24,315   2,628,514   15,357,201  6,694,823 24,704,853
Accumulated
 depreciation (5)          $2,773     $53,384   $6,144,159   $203,452 $6,403,768

(1) These properties are senior residential properties.
(2) Buildings and improvements - 40 years; personal property - 10 years.
(3) The property partnership purchased the properties on an all cash basis.
(4) a) In 1990, the purchase price was reduced by the amount of the purchase
price holdback used to cover the minimum yield guaranty in the amount of
$1,491,664; b) In 1994, the building basis costs of Ocean House and Prell
Gardens were 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.  The balance at Nohl Ranch Inn includes
the disposition of transportation equipment; c) During 1995, the Partnership
recognized a write-down of the carrying value of Ocean House, Prell Gardens and
Nohl Ranch Inn of $4,809,497, $2,081,900 and $1,820,895, respectively,
aggregating $8,712,292.  The net book value adjusted for the write-down,
becomes the new carrying value for the properties; d) In 1996, the Partnership
purchased the general partnership interest of the successor to AFP-II for a
purchase price of $850,000.  The building basis and land of Pacific Inn were
increased by $840,914 and $9,086, respectively.
(5) For Federal income tax purposes, the aggregate cost of real estate and the
amount of accumulated depreciation is $40,972,953 and $18,248,682,
respectively.

A reconciliation of the carrying amount of real estate and
accumulated depreciation for the years ended
December 31, 1996, 1995, and 1994 follows:
                                          1996           1995          1994
Real estate investments:
Beginning of year                  $23,592,313    $42,664,480   $43,133,576
Additions                          1,112,540           99,636        80,031
Less disposition                          -          (25,820)          -
Write down of real estate                 -       (19,270,521)         -
Write down for earthquake                 -           124,538      (549,127)
End of year                        $24,704,853    $23,592,313   $42,664,480

Accumulated depreciation:
Beginning of year                  $  4,896,442   $13,665,635   $11,875,602
Depreciation expense               1,507,326        1,797,858     1,790,033
Disposition                               -            (8,822)         -
Write down of real estate                 -       (10,558,229)         -
End of year                        $  6,403,768   $ 4,896,442   $13,665,635


                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, 1996.  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
March 19, 1997