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<PAGE> PAGE 2
012 A000001 PRUDENTIAL MUTUAL FUND SERVICES LLC
012 B000001 85-4110019
012 C010001 NEW BRUNSWICK
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013 A000001 PRICE WATERHOUSE LLP
013 B010001 NEW YORK
013 B020001 NY
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014 B000001 8-27154
014 A000002 PRUCO SECURITIES CORPORATION
014 B000002 8-16402
014 A000003 DELETE
015 A000001 STATE STREET BANK AND TRUST COMPANY
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<PAGE> PAGE 3
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SIGNATURE GRACE TORRES
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000700662
<NAME> PRUDENTIAL MORTGAGE INCOME FUND, INC.
<SERIES>
<NUMBER> 001
<NAME> PRUDENTIAL MORTGAGE INCOME FUND, INC. (CLASS A)
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 188,059,732
<INVESTMENTS-AT-VALUE> 189,741,449
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<OTHER-ITEMS-LIABILITIES> 604,122
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<SENIOR-EQUITY> 0
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (24,882,331)
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 190,425,087
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15,686,706
<OTHER-INCOME> 0
<EXPENSES-NET> 2,959,417
<NET-INVESTMENT-INCOME> 12,727,289
<REALIZED-GAINS-CURRENT> 186,036
<APPREC-INCREASE-CURRENT> (6,315,745)
<NET-CHANGE-FROM-OPS> 6,597,580
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (12,234,464)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,736,035
<NUMBER-OF-SHARES-REDEEMED> (45,644,609)
<SHARES-REINVESTED> 7,670,064
<NET-CHANGE-IN-ASSETS> (34,875,394)
<ACCUMULATED-NII-PRIOR> 742,368
<ACCUMULATED-GAINS-PRIOR> (25,068,367)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,021,621
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,830,420
<AVERAGE-NET-ASSETS> 93,766,000
<PER-SHARE-NAV-BEGIN> 14.61
<PER-SHARE-NII> 0.93
<PER-SHARE-GAIN-APPREC> (0.39)
<PER-SHARE-DIVIDEND> (0.90)
<PER-SHARE-DISTRIBUTIONS> 0.00
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<PER-SHARE-NAV-END> 14.25
<EXPENSE-RATIO> 1.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000700662
<NAME> PRUDENTIAL MORTGAGE INCOME FUND, INC.
<SERIES>
<NUMBER> 002
<NAME> PRUDENTIAL MORTGAGE INCOME FUND, INC. (CLASS B)
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 188,059,732
<INVESTMENTS-AT-VALUE> 189,741,449
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<OTHER-ITEMS-ASSETS> 0
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<TOTAL-LIABILITIES> 880,625
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 213,485,704
<SHARES-COMMON-STOCK> 13,379,580
<SHARES-COMMON-PRIOR> 15,447,408
<ACCUMULATED-NII-CURRENT> 139,997
<OVERDISTRIBUTION-NII> 0
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<EXPENSES-NET> 2,959,417
<NET-INVESTMENT-INCOME> 12,727,289
<REALIZED-GAINS-CURRENT> 186,036
<APPREC-INCREASE-CURRENT> (6,315,745)
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<DISTRIBUTIONS-OF-INCOME> (12,234,464)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,736,035
<NUMBER-OF-SHARES-REDEEMED> (45,644,609)
<SHARES-REINVESTED> 7,670,064
<NET-CHANGE-IN-ASSETS> (34,875,394)
<ACCUMULATED-NII-PRIOR> 742,368
<ACCUMULATED-GAINS-PRIOR> (25,068,367)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
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<PER-SHARE-NII> 0.84
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000700662
<NAME> PRUDENTIAL MORTGAGE INCOME FUND, INC.
<SERIES>
<NUMBER> 003
<NAME> PRUDENTIAL MORTGAGE INCOME FUND, INC. (CLASS C)
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 188,059,732
<INVESTMENTS-AT-VALUE> 189,741,449
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<DISTRIBUTIONS-OTHER> 0
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<INTEREST-EXPENSE> 0
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<AVERAGE-NET-ASSETS> 746,000
<PER-SHARE-NAV-BEGIN> 14.57
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<PER-SHARE-DIVIDEND> (0.81)
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</TABLE>
For the fiscal year ended (a) December 31, 1996
File number: 811-3397
SUB-ITEM 77C
Submission of Matters to a Vote of Security Holders
A Special Meeting of Shareholders was held on
October 30, 1996. At such meeting the
shareholders approved the following proposals:
a) Approval of the election of Edward D.
Beach, Eugene C. Dorsey, Delayne D.
Gold, Robert F. Gunia, Harry A. Jacobs,
Jr., Donald D. Lennox, Mendal A. Melzer,
Thomas T. Mooney, Thomas H. O'Brien,
Richard A. Redeker, Nancy H. Teeters,
and Louis A. Weil as Directors of the
Fund each to hold office until the
earlier to occur of (i) the next meeting
of Shareholders at which Directors are
elected and until his or her successor
shall have been duly elected and shall
have qualified or (ii) their terms
expire in accordance with the Fund's
retirement policy.
b) Approval of an amendment of the Fund's
fundamental investment restriction
regarding unseasoned issuers which would
prohibit the Fund from purchasing any
security if as a result the Fund would
have more than 5% of its total assets
invested in securities of companies less
than three years old.
Affirmative Negative
votes cast votes cast
Abstain
5,391,135 411,674
548,765
c) Approval of the selection of independent
accountants for the Fund conditioned
upon the right by vote of a majority of
such Fund's outstanding voting shares at
any meeting called for the purpose to
terminate such employment forthwith
without penalties.
Affirmative Negative
votes cast votes cast
Abstain
7,308,654 89,392
370,958
For the period ended (a) 12/31/96
File number (c) 811-3397
SUB-ITEM 77 D
Policies with Respect to Security
Investments
On October 30, 1996, shareholders of the Fund
approved an amendment of the Fund's fundamental
investment restriction regarding unseasoned
issuers which would prohibit the Fund from
purchasing any security if as a result the Fund
would have more than 5% of its total assets
invested in securities of companies less than
three years old.
For the fiscal year ended (a) 12/31/96
File number (c) 811-3397
SUB-ITEM 77 I
Terms of New or Amended Securities
On May 9, 1996, the Board of Directors
authorized the issuance of a fourth class of
shares designated Class Z. Class Z shares are not
subject to either an initial or contingent
deferred sales charge nor are they subject to any
Rule 12b-1 fees. Class Z shares will be offered to
a limited group of eligible investors.
February 27, 1997
To the Board of Directors of
Prudential Mortgage Income Fund, Inc.
In planning and performing our audit of the
financial statements of Prudential Mortgage Income
Fund, Inc. (the "Fund") for the year ended
December 31, 1996, we considered its internal
control structure, including procedures for
safeguarding securities, in order to determine our
auditing procedures for the purposes of expressing
our opinion on the financial statements and to
comply with the requirements of Form N-SAR, and
not to provide assurance on the internal control
structure.
The management of the Fund is responsible for
establishing and maintaining an internal control
structure. In fulfilling this responsibility,
estimates and judgments by management are required
to assess the expected benefits and related costs
of internal control structure policies and
procedures. Two of the objectives of an internal
control structure are to provide management with
reasonable, but not absolute, assurance that
assets are appropriately safeguarded against loss
from unauthorized use or disposition and that
transactions are executed in accordance with
management's authorization and recorded properly
to permit preparation of financial statements in
conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal
control structure, errors or irregularities may
occur and may not be detected. Also, projection
of any evaluation of the structure to future
periods is subject to the risk that it may become
inadequate because of changes in conditions or
that the effectiveness of the design and operation
may deteriorate.
Our consideration of the internal control
structure would not necessarily disclose all
matters in the internal control structure that
might be material weaknesses under standards
established by the American Institute of Certified
Public Accountants. A material weakness is a
condition in which the design or operation of the
specific internal control structure elements does
not reduce to a relatively low level the risk that
errors or irregularities in amounts that would be
material in relation to the financial statements
being audited may occur and not be detected within
a timely period by employees in the normal course
of performing their assigned functions. However,
we noted no matters involving the internal control
structure, including procedures for safeguarding
securities, that we consider to be material
weaknesses as defined above as of December 31,
1996.
This report is intended solely for the information
and use of management and the Securities and
Exchange Commission.
PRICE WATERHOUSE LLP
