U.S. SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                FORM 10Q-SB

            Quarterly Report Pursuant to Section 13 or 15(d) of
                    the Securities Exchange Act of 1934

For the six months ended                     Commission File Number
June 30, 1998                                33-48017-A

                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                          (a Florida corporation)
          (Exact name of Registrant as specified in its Charter)
              Florida                                  65-0025618
------------------------------       ---------------------
State or other jurisdiction of                    I.R.S. Employer
incorporation or organization               Identification Number

           1800 Second St., Suite 780, Sarasota, Florida  34231
           ----------------------------------------------------
            (Address of principal executive offices, zip code)

Registrant's telephone number, including area code:  (941) 365-4200

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

      Indicate  by  check mark whether the Registrant  (1)  has  filed  all
reports  required  to  be filed by Section 13 or 15(d)  of  the  Securities
Exchange  Act  of 1934 during the preceding 12 months (or for such  shorter
period that the Registrant was required to file such reports), and (2)  has
been subject to such filing requirements for the past 90 days.  Yes /  X  /
No /  /.

     For the six months ended June 30, 1998, the Registrant had revenues of
$225,504.

      As  of  June  30, 1998, the Company had 145 secured promissory  notes
payable (Notes) with a total of $2,368,500 principal balance outstanding.




PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

      Set forth below are the unaudited financial statements reflecting the
Company's  financial  condition  as of  June  30,  1998,  and  the  related
statements of operations and shareholders' equity for the six  months ended
June 30, 1998 and 1997.

                     FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
                               BALANCE SHEET
                                     
                         JUNE 30, 1998 (Unaudited)

<TABLE>
<CAPTION>
                                     ASSETS
<S>                                            <C>
CURRENT ASSET
      Cash                                     $  338,205
      Residential mortgage notes                  991,561
      Account receivable                           23,939
      Prepaid expenses                             43,000
      Certificates of deposit                     324,823
                                                ---------
                   Total current assets         1,721,528

OTHER ASSET
      Deferred financing costs, net of
       accumulated amortization                   482,892
      Equipment at cost, net of
       accumulated depreciation                    17,455
                                               ----------
                   Total other assets             500,347
                                               ----------

TOTAL ASSETS                                   $2,221,875
                                               ==========
                                     
                 LIABILITIES AND STOCKHOLDER'S DEFICIENCY
                                     
CURRENT LIABILITIES
      Accounts payable                         $   25,532
      Notes payable                             2,368,500
                                               ----------
                  TOTAL LIABILITIES             2,394,032
                                               ----------



STOCKHOLDERS EQUITY

      Common stock, $.01 par value
        1,000 shares authorized, 100 shares
          issued and outstanding                        1
      Additional paid-in capital                      999
       Accumulated deficit                       (173,157)
                                               -----------
       Total Stockholders deficiency             (172,157)
                                               -----------
TOTAL LIABILITIES AND STOCKHOLDERS DEFICIENCY  $2,221,875
                                               ===========
</TABLE>

                     FEDERAL MORTGAGE MANAGEMENT II INC.
                                     
                          STATEMENT OF OPERATIONS

                 Six Months and Three Months Ended June 30
                                (Unaudited)
<TABLE>
<CAPTION>

                          Six Months Ended    Three Months Ended
                        June 30 (Unaudited)  June 30 (Unaudited)

                          1998       1997       1998       1997
                          --------   --------   --------  -------
<S>                       <C>        <C>        <C>       <C>
REVENUE
  Interest income         $ 59,364   $  ---     $ 34,561  $  ---
  Gain on sale 
   of mtg loans            158,264      ---       80,341     ---
  Other income               7,876      ---        4,574     ---
                          --------   --------   --------   ------
     Total Revenue         225,504      ---      119,476     ---

EXPENSES
  Accounting and legal      11,097     2,508       3,210    1,707
  Advertising                7,170      ---        3,430     ---
  Amortization/
    Depreciation            17,527      ---       17,527     ---
  Commission                11,577      ---        7,792     ---
  Consulting                21,443      ---       11,516     ---
  Insurance                  1,122      ---          445     ---
  Interest                 107,259      ---       58,613     ---
  Licenses, fees/reports      ---        165        ---      ---
  Management fees           27,839      ---       27,839     ---
  Miscellaneous              3,213      ---        2,444     ---
  Office expenses            6,143        51       2,796        7
  Rent                       5,730      ---        2,865     ---
  Salaries and Wages        42,804      ---       19,638     ---
  Service fees              10,980      ---        5,378     ---
  Taxes                      4,550      ---        2,156     ---
  Travel                     2,890      ---        1,417     ---
                          --------   --------   --------  -------

Total expenses             281,344     2,724     167,066    1,714
                          --------   --------   --------  -------

NET LOSS/INCOME           $(55,840)  $(2,724)   $(47,590) $(1,714)
                          =========  ========   ========= ========
</TABLE>
                                     
                         FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
             STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIENCY
                                     
                  SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                (UNAUDITED)

<TABLE>
<CAPTION>
                                   Additional Accumu-
                         Common    Paid-In    lated
                         Stock     Capital    Deficit        Total
                         ------    ---------- ----------   -----------
<S>                      <C>       <C>        <C>          <C>
Balance January 1, 1997  $    1    $     999  $   (3,057)  $   (2,057)

Net Loss                                          (2,724)      (2,724)
                         ------    ---------- -----------   -----------

Balance
June 30, 1997            $    1    $     999  $   (5,781)   $  (4,781)
                         ======    ========== ===========   ===========
</TABLE>

<TABLE>
<CAPTION>
                                   Additional Accumu-
                         Common    Paid-In    lated
                         Stock     Capital    Deficit         Total
                         --------  ---------- ---------    ------------
<S>                      <C>       <C>        <C>          <C>
Balance January 1, 1998  $      1  $      999 $ (117,317)  $   (116,317)

Net Loss                                         (55,840)       (55,840)
                         --------  ---------- -----------   ------------
Balance
June 30, 1998            $      1  $      999 $ (173,157)   $  (172,157)
                         ========  ========== ===========   ============
</TABLE>

                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
                          STATEMENT OF CASH FLOWS
                                     
                  FOR THE SIX  MONTH PERIOD ENDED JUNE 30

                                (UNAUDITED)

<TABLE>
<CAPTION>

                                              1998           1997
                                          ------------   ------------
<S>                                       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                             $  (55,840)    $     (2,724)
                                          ------------   ------------

(Increase) decrease in operating assets:
     Accounts receivable                      17,769             ---
     Portfolio of residential 
       mortgage notes                         18,947             ---
     Prepaid expenses                        (43,000)           (7,500)
     Purchase of assets                      (18,330)            ---
     Depreciation/Amortization                17,527             ---
     Deferred financing costs               (190,582)           (5,607)
Increase (decrease) in 
     operating liabilities:
     Accounts payable                        (44,938)           15,666
                                           ------------   ------------
          Total adjustments                 (242,607)            2,559
                                           ------------   ------------
          Net cash used in operating 
             activities:                    (298,447)             (165)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of certificates of deposit    (324,822)            ---
     Sale of certificates of deposit         175,539             ---

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from note issuance             762,000             ---
                                          ------------   ------------
          Net cash provided by 
           financing activities              612,417             ---
                                          ------------   ------------


INCREASE IN CASH                             314,270             (165)

CASH AT BEGINNING OF PERIOD                   23,935              449
                                          ------------   ------------
CASH AT END OF PERIOD                     $  338,205       $      284
                                          ============   ============
</TABLE>
                           FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
                       NOTES TO FINANCIAL STATEMENTS
                                     
              FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                (UNAUDITED)

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Federal  Mortgage  Management  II, Inc.  (the  Corporation),  a  Florida
corporation, was organized in November 1995.  The Company was formed and
is  being capitalized primarily to originate, underwrite, acquire,  hold
and  deal  in  a portfolio of primarily first lien residential  mortgage
loans.   The  purchase  of  mortgage loans and  insured  instruments  of
deposit  have  been  acquired in accordance with a specific  acquisition
policy described in the registration statement.

Portfolio of Residential Mortgage Loans

Residential  mortgage loans are recorded at lower of cost  or  fair  market
value.  Purchase discounts are not amortized because the mortgage loans are
held  for  resale and typically sold after being owned by the  Company  for
several  months. The amortization of the discount would not  be  materially
significant to the operating results of the Corporation.

NOTE 2 -  INVESTMENT IN SECURITIES

The Corporation's investments in securities are classified in three
categories and accounted for as follows:

     Trading Securities.  Securities held for resale in the near term.
     Unrealized gains and losses on securities are included in other
     income.

     Securities  to  be  Held  to  Maturity.   Instruments  for  which  the
     Corporation  has the positive intent and ability to hold  to  maturity
     are  reported  at  cost,  adjusted for amortization  of  premiums  and
     accretion  of discounts which are recognized in interest income  using
     the interest method over the period to maturity.

     Securities Available for Sale.  Securities available for sale consist
     of zero coupon certificates of deposit which are not classified as
     trading securities nor as securities to be held to maturity.

Declines in the fair value of individual held-to-maturity and available-for-
sale securities below their costs that are other than temporary would
result in write-    downs of the individual securities to their fair value.
The Corporation presently     has experienced no such declines.

Gains and losses on the sale of securities available for sale are
determined using the specific-identification method.

NOTE 3  -  PORTFOLIO OF RESIDENTIAL MORTGAGE LOANS

The  Corporation purchases residential mortgage loans at a discount from
the face amount of the loans with the intention of selling the loans  at
a  gain after servicing them for a relatively short period of time.  The
mortgage  loans  are  purchased by investors based  on  various  factors
inherent  in  the  group  of  mortgages presented  for  sale  which  are
considered  in the negotiating process.  The fair market  value  of  the
mortgage  loans at June 30, 1998 at a minimum, approximates  cost  after
assessing the credit risks associated with the portfolio.

The portfolio of residential mortgage loans consist of the following:

               Face value            $1,062,987
               Discount                 (53,861)
               Principal payments           (65)
               Allowances for losses    (17,500)
                                     -----------
               Carrying value        $  991,561
                                     ===========

The mortgages have various maturities ranging from 6 months to 30 years,
and  varying  interest rates ranging from 12% to 18%.   The  residential
mortgage  loans are secured by first liens on residential real property.
The  Corporation s policy is to acquire residential mortgage loans  with
balances  that do not exceed 90% of the fair market value  of  the  real
estate  or  the loan acquisition price does not exceed 80% of  the  fair
market  value  of  the collateral real estate at the time  of  the  loan
acquisition.

NOTE 4  -  NOTES PAYABLE

The  Corporation issued notes through a public offering to  finance  the
purchase  of residential mortgage loans.  The notes have interest  rates
ranging  from 8.0% to 10.0% depending on the terms which range  from  48
months to 72 months.  Interest is paid monthly with principal being paid
at maturity.  Aggregate principal maturities on notes are as follows:

          2001                         38,000
          2002                         99,000
          2003                      2,231,500
                                  -----------
          Notes payable            $2,368,500
                                  ===========

The  notes are collateralized by all the assets of the Corporation.  For
the  six  months ended June 30, 1998, the Corporation incurred  interest
expense of $107,259 related to the notes payable.

                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
               NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
                                     
              FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                (UNAUDITED)



NOTE 5 -  RELATED PARTY TRANSACTIONS

The  sole  stockholder and affiliated entities enter  into  transactions
with the Corporation as follows.

The  stockholder  is  the  majority stockholder  in  the   best  efforts
managing  underwriter  broker/dealer  which  received  compensation   of
$90,580 during the six months ended June 30, 1998. The $90,580 consisted
of $52,480 in commissions, $22,860 in  note offering management fees and
$15,240 in non-accountable expense allowance.

For  the six months ended June 30, 1998, the Corporation utilized office
space  rented from an affiliate for which it paid $5,730, and  none  for
the same period ended 1997.

An  affiliated  company services the mortgages of the Corporation.   For
the  six months ended June 30, 1998, the Corporation paid servicing fees
to the affiliate in the amount of $10,980.  The Company did not have any
mortgages  for the same period ended 1997, hence, there were no  service
fees paid during that period.

NOTE 6  -  STOCKHOLDER'S EQUITY

Preferred Stock

The  Board  of  Directors will establish the dividend  rate,  redemption
price and rights of the holders of preferred stock prior to the date  of
issuance of the shares of stock.  No preferred stock has been issued  as
of  June  30,  1998.   The Board of Directors has  not  established  the
preferred  stockholders' preferences and rights as of the date  of  this
report.

NOTE 7  -  DEFERRED FINANCING COSTS

Deferred financing costs consist of legal and accounting fees associated
with  the  filing of the registration statement with the Securities  and
Exchange Commission as well as costs incurred for the promotion  of  the
issuance of the promissory notes.

NOTE 8  -  INCOME TAXES

The  Corporation  is  recognized as a sub-chapter S Corporation  by  the
Internal  Revenue Service.  Therefore, the financial statements  include
no  provision  for  federal income taxes since the  income  or  loss  is
reportable on the tax return of the stockholder.

NOTE 9 -  FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

In  addition  to the portfolio of residential mortgage loans,  financial
instruments  that  also  subject the Corporation  to  concentrations  of
credit  risk  consist  principally of cash  deposits.   The  Corporation
places  these investments with a single financial institution.  Deposits
are  insured up to $100,000.  At any time, the Corporation may have cash
deposits   exceeding  the  uninsured  amount.   The  following   details
financial  instruments with off balance sheet risk for  the  Company  at
June 30, 1998:

          Certificate of deposit face            $373,379
          Certificate of deposit discount         (48,556)
                                               -----------
          Carrying value at March 31, 1998     $  324,823
                                               ===========

NOTE 10 - FAIR VALUE OF FINANCIAL INSTRUMENTS IN ACCORDANCE WITH
THE REQUIREMENTS OF SFAS NO. 107

The Corporation's financial instruments consist of all of its assets and
liabilities  with  the  exception  of other  real  estate  and  deferred
financing costs.  The Corporation's management has determined  that  the
fair  value  of  all of its financial instruments is equivalent  to  the
carrying cost.  The mortgage portfolio is purchased with the intent of a
relatively  short  holding  period of several  months.   Therefore,  any
differences  in the value of the mortgage portfolio due  to  changes  in
market interest rates are minimal.  Furthermore, each purchase and  sale
of  mortgages  by the Corporation is a private, negotiated  transaction.
There  is  no readily established market for the Corporation's  mortgage
portfolio.


NOTE 11 -  CLASSIFICATION OF MORTGAGE PORTFOLIO IN ACCORDANCE
WITH  THE REQUIREMENTS OF SFAS NO. 115

The Corporation's mortgage portfolio is a trading security.  As such, it
is  required  to  be carried at fair value, with any unrealized  holding
gains  or  losses included in earnings.  For the reasons,  discussed  in
Note 3, the carrying value of the mortgage portfolio has been determined
by the Partnership's management to be equivalent to its carrying cost.
Management's Discussion and Analysis of Financial Condition and Results of
Operations

The Company, utilizing the Note proceeds from the public offering, has
acquired mortgage loans secured by first liens on real estate, as well as
insured certificates and instruments of deposit or debt securities issued by
the United States and instrumentality s thereof in accordance with an
expressed Acquisition Policy.  On November 26, 1997, the Company had received
gross proceeds in excess of the minimum amount of $1,500,000 to break escrow
under the Prospectus dated July 15, 1997, Commission Number 333-15151.  As of
June 30, 1998, the Company had received gross note proceeds of $2,368,500.
Presented below is a summary of the use of proceeds from the Note offering as
of June 30, 1998:
 
     Selling commissions                          $  161,800
     Offering management fee                          71,055
     Non-accountable expense allowance                47,370
     Organizational and offering expense             219,319
     Purchase of assets                               18,330
     Purchase of federal instruments                 322,367
     Purchase of residential mortgages
       and interim financings                      1,016,121
     Payment of note interest                        141,383
     Organizational expense reimbursement             32,550
     Cash remaining                                  338,205
                                                  ----------
               Gross offering proceeds            $2,368,500
                                                  ==========

Scheduled principal and interest payments on portfolio loans at June 30, 1998,
represent an annualized rate of return of approximately 18% on the basis of
the Company s cost in acquiring such portfolio loans and an annualized rate of
return of approximately 17% (stated rate) on the basis of the unpaid principal
balance of the portfolio loans at June 30, 1998.

At June 30, 1998 the portfolio of the Company consisted  of mortgage notes
with a carrying value of $991,561.  The following table shows the mortgage
notes at face value and carrying value which takes into consideration the
discount and principal payments:

                                       Principal  Allowance
Face Value            Discount          Payments  For Losses     Carrying Value
$1,062,988            ($53,861)         ($66)      $(17,500)      $ 991,561

At June 30, 1998, the underlying real estate collateral of the Company's
portfolio of mortgage loans have an appraised value of approximately
$1,561,600, or a loan value to appraised value ratio of 66%.  The collateral
real estate securing such loans as of June 30, 1998 was residential real
estate.  The Company held no unimproved real estate loans as of June 30, 1998.

There  are  3  mortgage  loans  with a carrying value  of  $123,150  that  are
delinquent (in terms of scheduled principal and interest payments) as of  June
30,  1998.   These loans represent 13% of the carrying value of the portfolio.
The  Company  has  initiated foreclosure procedures on  2  of  the  delinquent
mortgage  loans.   These  loans  have a fair market  value  of   approximately
$100,600, with a carrying value of $52,650.  Upon successful foreclosure,  the
Company expects to recognize a gain on the subsequent sale of the properties.

The Company began operations in December 1997, after attaining the minimum
gross proceeds on November 26, 1997.  The second quarter ended June 30, 1998,
reflects the Company s swing into full operations.  All revenue and most all
expenses were up substantially over 1997 figures for the same quarter.  (See
Statement of Operations, page 4).

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.
               Not applicable

Item 2.  Changes in Securities.
               Not applicable

Item 3.  Defaults Upon Senior Securities.
               Not applicable

Item 4.  Other Information.
               Not applicable

Item 5.  Exhibits and Reports on Form 8-K.
               None


     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

                         FEDERAL MORTGAGE MANAGEMENT II, INC.




August  1998             By  Guy. S. Della Penna
                             --------------------
                           Guy S. Della Penna, President &
                           Chief Executive Officer