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                  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 three months ended                   Commission File Number
March 31, 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  34236
            ---------------------------------------------------
            (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 three months ended March 31, 1998, the Registrant had revenues
of $99,989.

      As  of  March 31, 1998, the Company had 141 secured promissory  notes
payable (Notes) with a total of $2,242,500 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 March  31,  1998,  and  the  related
statements  of  operations and shareholders' equity for the  three   months
ended March 31, 1998 and 1997.


      [THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                     
                                     
                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
                               BALANCE SHEET
                                     
                        MARCH 31, 1998 (Unaudited)

<TABLE>
<CAPTION>

ASSETS
<S>                                           <C>
CURRENT ASSET
      Cash                                    $  198,877
      Residential mortgage notes                 991,938
      Account receivable                          23,219
      Prepaid expenses                             3,000
      Certificates of deposit                    427,975
                                              ----------
                   Total current assets        1,645,009

OTHER ASSET
      Deferred financing costs                   484,584
      Equipment at cost, net
      of accumulated depreciation                 17,100
                                              ----------
                   Total other assets            501,684
                                              ----------

TOTAL ASSETS                                  $2,146,693
                                              ==========


LIABILITIES AND STOCKHOLDER'S DEFICIENCY
                                     
CURRENT LIABILITIES
      Accounts payable                        $   28,761
      Notes payable                            2,242,500
                                              ----------
                  TOTAL LIABILITIES            2,271,261

STOCKHOLDER S EQUITY

      Common stock, $.01 par value
        1,000 shares authorized, 100 shares
          issued and outstanding                       1
      Additional paid-in capital                     999
       Accumulated deficit                      (125,568)
                                              -----------
          Total Stockholders deficiency         (124,568)
                                              -----------

TOTAL LIABILITIES AND STOCKHOLDERS DEFICIENCY $2,146,693
                                              ===========

</TABLE>


                                     
                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
                          STATEMENT OF OPERATIONS
                                     
                        THREE MONTHS ENDED MARCH 31
                                (UNAUDITED)

<TABLE>
<CAPTION>


                                     1998           1997
                                     ----           ----
<S>                                <C>            <C>
REVENUE
   Interest income                 $  24,803      $   ---
   Gain on Sale of mortgage           77,924          ---
   Other income                        3,300          ---
                                     106,027          ---
EXPENSES
   Accounting and legal                7,887          800
    Insurance                            677          ---
   Interest                           48,646          ---
   Licenses, fees and reports            618          165
   Promotion and marketing             3,740          ---
   Miscellaneous                         151        1,407
   Office expenses                     3,347           45
   Salaries and wages                 23,166          ---
   Service fees                        5,602          ---
   Taxes                               2,394          ---
   Travel                              1,473          ---
   Commission                          3,785          ---
   Rent                                2,865          ---
   Consulting                          9,927          ---
                                   ----------     -------

                                     114,278        1,010
                                   ----------     -------

NET(LOSS)/INCOME                     $(8,251)     $(1,010)
                                   ==========     =======
</TABLE>
                                     
                                     
                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
             STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIENCY
                                     
                THREE MONTHS ENDED MARCH 31, 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                                         (1,010)   (1,010)
                          ------    ----------  -------   ---------

Balance
March 31, 1997            $    1    $     999   $(4,067)  $(3,067)
                          ======    ==========  =======   =========


                                    Additional   Accumu-
                          Common    Paid-In      lated
                          Stock     Capital      Deficit    Total
                          ------    ----------   -------  ----------

Balance January 1, 1998  $    1    $     999   $(117,317)   $(116,317)

Net Loss                                          (8,251)      (8,251)
                         ------    ----------  ----------   ----------

Balance
March 31, 1998           $    1    $     999   $(125,568)   $(124,568)
                         ======    ==========  ==========   ==========

</TABLE>


                                     
                                     
                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
                          STATEMENT OF CASH FLOWS
                                     
                FOR THE THREE  MONTH PERIOD ENDED MARCH 31

                                (UNAUDITED)

<TABLE>
<CAPTION>


                                            1998           1997
                                          ----------     ---------
<S>                                       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                             $ (8,251)      $(1,010)
                                          ----------     ---------

(Increase) decrease in operating assets:
     Accounts receivable                     6,489           ---
     Portfolio of residential
             mortgage notes                 18,570           ---
     Prepaid expenses                        9,000        (3,005)
     Purchase of assets                    (17,100)          ---
     Deferred financing costs             (175,620)          ---
Increase (decrease) in
          operating liabilities:
     Accounts payable                      (41,710)         4,015
                                          ----------     --------
          Total adjustments               (200,371)         1,010
                                          ----------     --------
          Net cash used in
          operating activities:           (208,622)          ---


CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of certificates of deposit  (252,436)          ---

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from note issuance           636,000           ---
                                          ----------     --------
          Net cash provided by
         financing activities              636,000           ---
                                          ----------     --------


INCREASE IN CASH                           174,942           ---

CASH AT BEGINNING OF PERIOD                 23,935            449
                                          ---------      --------

CASH AT END OF PERIOD                     $198,877       $   449
                                          =========      ========
</TABLE>
                                     
                                     
                                     
                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
                       NOTES TO FINANCIAL STATEMENTS
                                     
            FOR THE THREE MONTHS ENDED MARCH 31, 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.


                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
               NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
                                     
            FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                (UNAUDITED)


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 March 31, 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:

<TABLE>
<CAPTION>

               <S>                  <C>
               Face value            $1,067,007
               Discount                 (57,693)
               Principal payments           124
               Allowances for losses    (17,500)
                                     -----------
               Carrying value        $  991,938
                                     ===========
</TABLE>

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:


<TABLE>
<CAPTION>

          <S>                     <C>
          2001                         34,000
          2002                         99,000
          2003                      2,109,500
                                   ----------
          Notes payable            $2,242,500
                                   ==========

</TABLE>

The  notes are collateralized by all the assets of the Corporation.  For
the three months ended March 31, 1998, the Corporation incurred interest
expense of $48,646 related to the notes payable.
                                     
                                     
                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
               NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
                                     
            FOR THE THREE MONTHS ENDED MARCH 31, 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
$75,620  during  the  three months ended March  31,  1998.  The  $75,620
consisted   of  $43,820  in  commissions,  $19,080  in   note   offering
management fees and $12,720 in non-accountable expense allowance.

For  the  three  months  ended March 31, 1998, the Corporation  utilized
office space rented from an affiliate for which it paid $2,865, and none
for the same period ended 1997.

An  affiliated  company services the mortgages of the Corporation.   For
the  three  months ended March 31, 1998, the Corporation paid  servicing
fees to the affiliate in the amount of $5,602.  The Company did not have
any  mortgages for the same period ended, 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  March  31,  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.

                                     
                                     
                   FEDERAL MORTGAGE MANAGEMENT II, INC.
                                     
               NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
            FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                (UNAUDITED)



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
March 31, 1998:

<TABLE>
<CAPTION>
     <S>                                <C>
     Certificate of deposit face        $508,379
     Certificate of deposit discount    (80,404)
                                        ---------
     Carrying value at March 31, 1998   $427,975
                                        =========
</TABLE>

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
March 31, 1998, the Company had received gross note proceeds of $2,242,500.
Presented below is a summary of the use of proceeds from the Note offering as
of March 31, 1998:


<TABLE>
<CAPTION>
     <S>                                          <C>
     Selling commissions                          $  153,140
     Offering management fee                          67,275
     Non-accountable expense allowance                44,850
     Organizational and offering expense             219,319
     Purchase of federal instruments                 427,975
     Purchase of residential mortgages
     and interim financings                        1,015,744
     Payment of note interest                         82,770
     Organizational expense reimbursement             32,550
     Cash remaining                                  198,877
                                                  ----------
               Gross offering proceeds            $2,242,500
                                                  ==========
</TABLE>

Scheduled principal and interest payments on portfolio loans at March 31,
1998, represent an annualized rate of return of approximately 16% on the basis
of the Company s cost in acquiring such portfolio loans and an annualized rate
of return of approximately 16% (stated rate) on the basis of the unpaid
principal balance of the portfolio loans at March 31, 1998.

At March 31, 1998 the portfolio of the Company consisted  of mortgage notes
with a carrying value of $991,938.  The following table shows the mortgage
notes at face value and carrying value which takes into consideration the
discount and principal payments:

<TABLE>
<CAPTION>

                              Principal Allowance
Face Value     Discount       Payments  For Losses     Carrying Value
----------     --------       --------- ----------     --------------
<S>            <C>            <C>       <C>            <C>
$ 991,938      ($57,693)        ($124)   $(17,500)     $   991,938

</TABLE>

At March 31, 1998, the underlying real estate collateral of the Company's
portfolio of mortgage loans have an appraised value of approximately
$1,600,241, or a loan value to appraised value ratio of 65%.  The collateral
real estate securing such loans as of March 31, 1998 was residential real
estate.  The Company held no unimproved real estate loans as of March 31,
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
March  31,  1998.   These  loans represent 12% of the carrying  value  of  the
portfolio.   The  Company has initiated foreclosure procedures  on  3  of  the
delinquent  mortgage  loans.   These  loans  have  a  fair  market  value   of
approximately  $101,254,  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 first quarter ended March 31, 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).



            (THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK)


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





            (THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK)





        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.
                                 



May 13, 1998           By     Guy. S. Della Penna
                       -------------------------------------
                              Guy S. Della Penna, President &
                              Chief Executive Officer