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 June 30, 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                   (IRS Employer Identification No.)
 of incorporation 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: X   No

As of August 14, 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

                                              June 30,         December 31,
                                                2002               2001
                                           -------------      --------------
                                            (Unaudited)
ASSETS

Current assets:
  Cash                                       $     576          $      -
  Accounts receivable                               -              2,387
  Note receivable - related party              12,000             12,000
                                        ----------------  ----------------
    Total current assets                       12,576             14,387
                                        ----------------  ----------------

Property and equipment, net                    60,505             67,690
Note receivable -related party                218,654            230,654
                                        ----------------  ----------------
                                          $   291,735         $  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              9,903            11,339
  Deferred gain                                12,000            12,000
                                        --------------  ----------------
    Total current liabilities                  65,541            62,754
                                        --------------  ----------------

Notes payable                                  45,873            49,496
Deferred gain                                 218,654           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                     (1,983,819)       (1,961,169)
                                        --------------  ----------------
    Total stockholders' equity (deficit)     (38,333)          (30,173)
                                        --------------  ----------------
                                        $    291,735        $  312,731
                                        ==============  ================


            See accompanying notes to interim condensed consolidated
                             financial statements.

<PAGE>

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

                                                    Three months ended               Six months ended
                                                         June 30,                        June 30,
                                                         -------                        --------
                                                  2002           2001              2002          2001
                                              -----------     ----------        ----------    ----------
<S>                                           <C>             <C>                <C>           <C>

Revenues                                     $   6,000        $  17,638         $  12,000    $  108,151

Cost and Expenses:
  General and administrative                     5,518           37,378            26,064       97,027
  Depreciation and amortization                  3,000              178             7,185          356
                                            ------------  ---------------   ---------------  ----------
                                                 8,518           37,556            33,249       97,383
                                            ------------  ---------------   ---------------  ----------

Income (loss) from operations                    (2,518)         (19,918)          (21,249)     10,768

Interest expense, net                              701                -             1,401            -

                                            ------------  ---------------   ---------------  ----------
Net income (loss)                            $   (3,219)      $  (19,918)       $  (22,650)    $ 10,768
                                            ============  ===============   ===============  ==========

Basic and diluted income (loss) per common
share                                            $(0.00)          $(0.02)           $(0.03)       $0.00
                                            ============  ===============   ===============  ==========

Weighted average shares outstanding            869,100          822,088           857,857       822,088
                                            ============  ===============   ===============  ==========
</TABLE>


<PAGE>

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


                                                                            Six months ended
                                                                                June 30,
                                                                   -------------------------------------
                                                                        2002                2001
                                                                   ------------------------------------
<S>                                                                <C>                     <C>

Cash flows from operating activities:
  Net income (loss)                                                    $   (22,650)       $    10,768
    Adjustments to reconcile net income to net cash
      used in operating activities:
    Depreciation and amortization                                           7,185                 356
    Bad debts                                                               2,387                   -
    Stock issued for services                                                 243                   -
  Changes in operating assets and liabilities
    Accounts receivable                                                         -              57,613
    Accounts payable                                                         4,223            (60,623)
                                                                   ----------------   -----------------
        Net cash provided by (used in) operating activities                 (8,612)              8,144
                                                                   ----------------   -----------------

Cash flows from financing activities:
  Payments on notes payable                                                 (5,059)                 -
  Expenses paid by shareholders                                            14,247                   -
                                                                   ----------------   -----------------
                                                                            9,188                   -
                                                                   ----------------   -----------------

Net increase (decrease) in cash and cash equivalents                          576                8,144
Cash and cash equivalents at beginning of period                                -                 937
                                                                   ----------------   -----------------
Cash and cash equivalents at end of period                              $     576          $     9,051
                                                                   ================   =================

Cash paid for:
  Taxes                                                                 $       -            $      -
  Interest                                                              $     701            $      -
</TABLE>

<PAGE>


                         COVENANT FINANCIAL CORPORATION
                 NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2002

Note 1:Presentation

The  condensed  balance  sheet of the Company as of June 30,  2002,  the related
condensed  statements of operations  for the three and six months ended June 30,
2002 and 2001 and the statements of cash flows for the six months ended June 30,
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 and
six months ended June 30, 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.

<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 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  $11,638 to $6,000 for the three  months ended June 30, 2002
from $17,638 for the three months ended June 30, 2001.

Revenues  decreased  $96,151 to $12,000  for the six months  ended June 30, 2002
from $108,151 for the six months ended June 30, 2001.

Costs and Expenses  decreased to $8,518 for the three months ended June 30, 2002
from $37,556 for the three  months ended June 30, 2001.  The decrease was due to
the decrease in general and administrative  expenses principally associated with
the decrease in salaries and professional fees.

Costs and  Expenses  decreased to $33,249 for the six months ended June 30, 2002
from $97,383 for the six months ended June 30, 2001. The decrease was due to the
decrease in general and administrative  expenses principally associated with the
decrease in salaries and professional fees.

Loss from  operations  was  $2,518  for the three  months  ended  June 30,  2002
compared to a loss from  operations  of $19,918 for the three  months ended June
30, 2001.

Loss from operations was $21,249 for the six months ended June 30, 2002 compared
to an income from operations of $10,768 for the six months ended June 30, 2001.

The Company  recorded a net loss of $3,219 for the three  months  ended June 30,
2002 compared to a net loss of $19,918 for the three months ended June 30, 2001.

The  Company  recorded a net loss of $22,650  for the six months  ended June 30,
2002 compared to a net income of $10,768 for the six months ended June 30, 2001.

As of June 30, 2002, the Company had an accumulated deficit of $1,983,819.

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 $576 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.
<PAGE>

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.

PART II.  OTHER INFORMATION

Item  1.  Legal Proceedings.

The Company is not involved in any legal proceedings.

Item  2.  Changes in Securities.

None

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
         99.1     Certification of Principal Executive Officer

         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.

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:  August 14, 2002