FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1998 or
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number: 0-14314
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 47-0695511
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
Suite 400, 1004 Farnam Street, Omaha, Nebraska 68102
(Address of principal executive offices) (Zip Code)
(402) 444-1630
(Registrant's telephone number, including area code)
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
<PAGE> -i-
Part I. Financial Information
Item 1. Financial Statements
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, 1998 Dec. 31, 1997
-------------- --------------
<S> <C> <C>
Assets
Cash and temporary cash investments, at cost which
approximates market value (Note 4) $ 1,451,295 $ 1,522,893
Investment in tax-exempt mortgage bonds, at estimated fair value (Note 5) 71,126,000 71,126,000
Interest receivable 605,780 556,017
Other assets 28,283 8,106
-------------- --------------
$ 73,211,358 $ 73,213,016
============== ==============
Liabilities and Partners' Capital
Liabilities
Accounts payable (Note 6) $ 75,959 $ 156,569
Distribution payable (Note 3) 453,597 453,597
-------------- --------------
529,556 610,166
-------------- --------------
Partners' Capital
General Partner 11,262 10,473
Beneficial Unit Certificate Holders
($7.28 per BUC in 1998 and $7.27 in 1997) 72,670,540 72,592,377
-------------- --------------
72,681,802 72,602,850
-------------- --------------
$ 73,211,358 $ 73,213,016
============== ==============
The accompanying notes are an integral part of the financial statements.
</TABLE>
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the For the
Quarter Ended Quarter Ended
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Income
Mortgage bond investment income $ 1,584,569 $ 1,598,730
Interest income on temporary cash investments 11,776 11,090
Contingent interest income (Note 5) 26,733 42,890
-------------- --------------
1,623,078 1,652,710
Expenses
General and administrative expenses (Note 6) 176,855 185,545
-------------- --------------
Net income $ 1,446,223 $ 1,467,165
============== ==============
Net income allocated to:
General Partner $ 20,878 $ 24,965
BUC Holders 1,425,345 1,442,200
-------------- --------------
$ 1,446,223 $ 1,467,165
============== ==============
Net income, basic and diluted, per BUC $ .14 $ .14
============== ==============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> -1-
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' CAPITAL
FOR THE QUARTER ENDED MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Beneficial Unit
General Certificate
Partner Holders Total
-------------- --------------- --------------
<S> <C> <C> <C>
Partners' Capital (excluding net unrealized holding losses)
Balance at December 31, 1997 $ 10,473 $ 78,092,377 $ 78,102,850
Net income 20,878 1,425,345 1,446,223
Cash distributions paid or accrued (Note 3)
Income (20,089) (1,347,182) (1,367,271)
-------------- --------------- --------------
11,262 78,170,540 78,181,802
-------------- --------------- --------------
Net unrealized holding losses
Balance at December 31, 1997 and March 31, 1998 - (5,500,000) (5,500,000)
-------------- --------------- --------------
Balance at March 31, 1998 $ 11,262 $ 72,670,540 $ 72,681,802
============== =============== ==============
The accompanying notes are an integral part of the financial statements.
</TABLE>
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the For the
Quarter Ended Quarter Ended
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 1,446,223 $ 1,467,165
Adjustments to reconcile net income to net cash
from operating activities
Decrease (increase) in interest receivable (49,763) 68,333
Increase in other assets (20,177) (18,713)
Decrease in accounts payable (80,610) (135,092)
-------------- --------------
Net cash provided by operating activities 1,295,673 1,381,693
Cash flow used in financing activity
Distributions paid (1,367,271) (1,371,188)
-------------- --------------
Net increase (decrease) in cash and temporary cash investments (71,598) 10,505
Cash and temporary cash investments at beginning of period 1,522,893 1,379,560
-------------- --------------
Cash and temporary cash investments at end of period $ 1,451,295 $ 1,390,065
============== ==============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> -2-
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)
1. Organization
America First Tax Exempt Mortgage Fund Limited Partnership (the Partnership)
was formed on November 11, 1985, under the Delaware Revised Uniform Limited
Partnership Act for the purpose of acquiring a portfolio of federally
tax-exempt mortgage bonds collateralized by income-producing real estate
consisting of multifamily residential apartments. The Partnership will
terminate on December 31, 2015, unless terminated earlier under the provisions
of the Partnership Agreement. The General Partner of the Partnership is
America First Capital Associates Limited Partnership Two (AFCA 2).
2. Summary of Significant Accounting Policies
A)Financial Statement Presentation
The financial statements of the Partnership are prepared without audit on
the accrual basis of accounting in accordance with generally accepted
accounting principles. The financial statements should be read in
conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K for the year ended
December 31, 1997. In the opinion of management, all normal and recurring
adjustments necessary to present fairly the financial position at
March 31, 1998, and results of operations for all periods presented
have been made.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
B)Investment in Tax-Exempt Mortgage Bonds
Investment securities are classified as held-to-maturity, available-for-
sale or trading. Investments classified as available-for-sale are reported
at fair value with any unrealized gains or losses excluded from earnings
and reflected as a separate component of partners' capital. Subsequent
increases and decreases in the net unrealized gain/loss on available-for-
sale securities are reflected as adjustments to the carrying value of the
portfolio and adjustments to the component of partners' capital. The
Partnership does not have investment securities classified as held-to-
maturity or trading. The carrying value of tax-exempt mortgage bonds is
periodically reviewed and adjusted when there are significant changes in
the estimated net realizable value of the underlying collateral.
Accrual of mortgage bond investment income is excluded from income, when,
in the opinion of management, collection of related interest is doubtful.
This interest is recognized as income when it is received.
C)Income Taxes
No provision has been made for income taxes since the Beneficial Unit
Certificate (BUC) Holders are required to report their share of the
Partnership's taxable income for federal and state income tax purposes.
D)Temporary Cash Investments
Temporary cash investments are invested in federally tax-exempt securities
purchased with an original maturity of three months or less.
E)Net Income per BUC
Net income per BUC has been calculated based on the number of BUCs
outstanding (9,979,128) for all periods presented.
F)Comprehensive Income
In the first quarter of 1998, the Partnership adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
(SFAS 130). SFAS 130 requires the display and reporting of comprehensive
income, which includes all changes in partners' capital with the exception
of additional investments by partners or distributions to partners.
Comprehensive income for the Partnership includes net income and
unrealized holding losses on investments charged or credited to
<PAGE> -3-
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)
Partners' Capital. Comprehensive income for the quarters ended
March 31, 1998 and 1997 equaled net income as there were no changes in the
net unrealized holding losses for the respective periods.
3. Partnership Income, Expenses and Cash Distributions
The Partnership Agreement contains provisions for the distribution of Net
Interest Income and Net Residual Proceeds and for the allocation of income and
expenses for tax purposes among AFCA 2 and BUC Holders.
Cash distributions included in the financial statements represent the actual
cash distributions made during each period and the cash distributions accrued
at the end of each period.
4. Partnership Reserve Account
The Partnership maintains a reserve account which totaled $1,555,703 at
March 31, 1998. The reserve account was established to maintain working
capital for the Partnership and is available to supplement distributions to
BUC Holders or for any other contingencies related to the ownership of the
mortgage bonds and the operation of the Partnership.
5. Investment in Tax-Exempt Mortgage Bonds
Descriptions of the tax-exempt mortgage bonds owned by the Partnership at
March 31, 1998, are as follows:
<TABLE>
Base
Number Maturity Interest Carrying
Property Name Location of Units Date Rate1 Amount
- ------------------------ ----------------- -------- -------- --------- --------------
<S> <C> <C> <C> <C> <C>
Performing:
Shoals Crossing Atlanta, GA 176 12/01/09 8.5% $ 4,500,000
Arama Apartments Miami, FL 293 07/01/10 8.5% 12,100,000
Woodbridge Apts. of
Bloomington III Bloomington, IN 280 12/01/15 8.5% 12,600,000
--------------
29,200,000
--------------
Nonperforming:2
Ashley Pointe at
Eagle Crest Evansville, IN 150 12/01/15 8.5% 6,700,000
Woodbridge Apts. of
Louisville II Louisville, KY 190 12/01/15 8.5% 8,976,000
Northwoods Lake
Apartments Duluth, GA 492 12/01/06 8.5% 25,250,000
Ashley Square Des Moines, IA 144 12/01/09 8.5% 6,500,000
--------------
47,426,000
--------------
76,626,000
Unrealized holding losses (5,500,000)
--------------
Balance at March 31, 1998 (at estimated fair value) $ 71,126,000
==============
</TABLE>
1 In addition to the base interest rates shown, the bonds bear additional
contingent interest as defined in each revenue note which, when combined with
the base interest, is limited to a cumulative, noncompounded amount not greater
than 16% per annum. The Partnership received additional contingent interest
from Arama Apartments of $26,733 during 1998.
2 Nonperforming bonds are bonds which are not fully current as to interest
payments. The amount of foregone interest on nonperforming bonds for 1998 was
$82,834.
<PAGE> -4-
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)
6. Transactions with Related Parties
Substantially all of the Partnership's general and administrative expenses are
paid by AFCA 2 or an affiliate and are reimbursed by the Partnership. The
amount of such expenses reimbursed to AFCA 2 during 1998 was $284,286. The
reimbursed expenses are presented on a cash basis and do not reflect accruals
made at quarter end.
AFCA 2 received from property owners administrative fees of $13,613 during
1998. Since these fees are not Partnership expenses, they have not been
reflected in the accompanying financial statements.
AFCA 2 is entitled to an administrative fee from the Partnership in the event
the Partnership becomes the equity owner of a property by reason of
foreclosure. AFCA 2 was not entitled to any administrative fees from the
Partnership during 1998. AFCA 2 was entitled to receive approximately $359,000
in administrative fees from the Partnership for the year ended December 31,
1989. The payment of these fees, which has been deferred by AFCA 2, is
contingent upon, and will be paid only out of future profits realized by the
Partnership from the disposition of any Partnership assets. This amount will
be recorded as an expense by the Partnership when it is probable that these
fees will be paid.
An affiliate of AFCA 2 was retained to provide property management services
for Ashley Square, Northwoods Lake Apartments, Ashley Pointe at Eagle Crest
and Shoals Crossing. The fees for services provided represent the lower of
(i) costs incurred in providing management of the property, or (ii) customary
fees for such services determined on a competitive basis, and amounted to
$75,821 in 1998.
7. Subsequent Event
On April 10, 1997, the Partnership entered into a Merger Agreement with
America First Tax Exempt Investors, L.P., a newly formed Delaware limited
partnership, (the New Fund) pursuant to which the Partnership will merge with
and into the New Fund and the New Fund will be the surviving limited
partnership. The merger is subject to numerous conditions, including the
consent of the holders of a majority of the BUCs of the Partnership. A
consent solicitation statement relating to the solicitation of BUC holder
consent has been filed with the Securities and Exchange Commission. As a
result of the merger, each BUC holder of the Partnership will receive a
similar BUC in the New Fund. The General Partner of the New Fund is AFCA 2
and, accordingly, the merger will not result in a change of control. The New
Fund will have additional authority to reconfigure its assets and sell
interests therein and to reinvest the proceeds of such sales in additional
tax exempt bonds secured by multifamily housing properties.
<PAGE> -5-
Item 2.
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Liquidity and Capital Resources
The Partnership originally acquired 14 tax-exempt mortgage bonds, the proceeds
of which were used to provide construction and/or permanent financing for 14
multifamily housing properties. The Partnership subsequently acquired seven
of the properties (Acquired Properties) through foreclosure or deed in lieu of
foreclosure of the tax-exempt mortgage bonds collateralized thereby. The
Acquired Properties were transferred to America First REIT, Inc. on
June 1, 1993. At December 31, 1997, the Partnership continued to hold seven
tax-exempt mortgage bonds with a carrying value (at estimated fair value) of
$71,126,000.
The following table shows the various occupancy levels of the properties
financed by the Partnership at March 31, 1998.
<TABLE>
Number Percentage
Number of Units of Units
Property Name Location of Units Occupied Occupied
- ------------------------------------- ------------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
Woodbridge Apts. of Bloomington III Bloomington, IN 280 258 92%
Ashley Pointe at Eagle Crest Evansville, IN 150 146 97%
Woodbridge Apts. of Louisville II Louisville, KY 190 183 96%
Northwoods Lake Apartments Duluth, GA 492 472 96%
Shoals Crossing Atlanta, GA 176 151 86%
Ashley Square Des Moines, IA 144 134 93%
Arama Apartments Miami, FL 293 289 99%
-------------- -------------- --------------
1,725 1,633 95%
============== ============== ==============
</TABLE>
The tax-exempt mortgage bonds bear interest at a fixed base rate and provide
for the payment of additional contingent interest based on a participation in
the net cash flow and net sale or refinancing proceeds from the financed
properties. The base interest rate on each tax-exempt bond held by the
Partnership is 8.5% per annum. Contingent interest, when combined with base
interest, may be earned up to a maximum of 16% per annum on each of the
bonds. The principal amounts of the tax-exempt bonds do not amortize over
their terms. Principal is due and payable to the Partnership after 12 years.
Accordingly, principal and accrued interest on six of the bonds became due on
December 1, 1997 and principal and interest on the remaining bond will become
due on July 1, 1998. The sole source of payment of principal and accrued
interest of any bond is the net proceeds from the sale or refinancing of the
underlying property. The value of the underlying properties is currently less
than the outstanding principal of the bonds. In order to avoid a potential
loss of principal resulting from the sale or refinancing of the properties,
the General Partner has proposed that the tax-exempt bonds continue to be held
by the Partnership. In order to do this, the General Partner has proposed
that each of the bonds be reissued pursuant to the provisions thereof. In
order to maintain the tax-exempt nature of the interest payments on the
reissued mortgage bonds, the interest rates on the bonds will be set at rates
which will allow debt service on the bonds to be paid from the projected net
revenues from the underlying properties. Accordingly, the General Partner
anticipates that the base and contingent interest rates on the reissued bonds
will be less than the current base and contingent interest rates on the
bonds. Interest payments on the tax-exempt bonds and interest on temporary
cash investments represent the principal sources of the Partnership's income
and distributable cash. However, the General Partner does not anticipate that
the reduction in base and contingent interest rates on the Partnership's
tax-exempt bonds will have a significant effect on the amount of interest
income earned by the Partnership since the Partnership has been accepting
payment of less than the full amount of base interest on four of the
tax-exempt bonds for some time. In addition, only one of the tax-exempt bonds
has generated contingent interest to date and the amount paid to the
Partnership has been below the maximum rate which will be charged on the
reissued bonds. However, a reduction in base and contingent interest rates
will limit the Partnership's potential participation in future increases, if
any, in the net cash flow generated by the financed properties and in the net
proceeds generated by the ultimate sale or refinancing of these properties.
<PAGE> -6-
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
In addition to current interest income, the Partnership may draw on its
reserve to pay operating expenses or to supplement cash distributions to
Beneficial Unit Certificate (BUC) holders.
During the quarter ended March 31, 1998, a net amount of undistributed income
totaling $78,952 was placed in reserves. The total amount held in reserves at
March 31, 1998, was $1,555,703. Future distributions to BUC Holders will
depend upon the amount of base and contingent interest received on the
mortgage bonds, the size of the reserves established by the Partnership and
the extent to which withdrawals are made from reserves.
The Partnership believes that cash provided by operating activities and, if
necessary, withdrawals from the Partnership's reserves will be adequate to
meet its short-term and long-term liquidity requirements, including the
payments of distributions to BUC Holders. Under the terms of the Partnership
Agreement, the Partnership has the authority to enter into short- and
long-term debt financing arrangements; however, the Partnership currently does
not anticipate entering into such arrangements. The Partnership is not
authorized to issue additional BUCs to meet short-term and long-term liquidity
requirements.
Distributions
Cash distributions paid or accrued per BUC were as follows:
<TABLE>
For the For the
Quarter Ended Quarter Ended
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Regular monthly distributions
Income $ .1350 $ .1350
============== ==============
Distributions
Paid out of current and prior undistributed cash flow $ .1350 $ .1350
============== ==============
</TABLE>
Asset Quality
It is the policy of the Partnership to make a periodic review of the real
estate collateralizing the Partnership's mortgage bonds in order to adjust,
when necessary, the carrying value of the mortgage bonds. Adjustments are
made to the carrying value when there are significant changes in the estimated
net realizable value of the underlying collateral. Internal property
valuations and reviews performed during the three months ended March 31, 1998,
indicated that the mortgage bonds recorded on the balance sheet at
March 31, 1998, required no adjustments to their current carrying amounts.
The overall status of the Partnership's mortgage bonds has generally remained
constant since December 31, 1997.
<PAGE> -7-
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Results of Operations
The table below compares the results of operations for each period shown.
<TABLE>
For the For the Increase
Quarter Ended Quarter Ended (Decrease)
March 31, 1998 March 31, 1997 From 1997
-------------- -------------- --------------
<S> <C> <C> <C>
Mortgage bond investment income $ 1,584,569 $ 1,598,730 $ (14,161)
Interest income on temporary cash investments 11,776 11,090 686
Contingent interest income 26,733 42,890 (16,157)
-------------- -------------- --------------
1,623,078 1,652,710 (29,632)
General and administrative expenses 176,855 185,545 (8,690)
-------------- -------------- --------------
Net income $ 1,446,223 $ 1,467,165 $ (20,942)
============== ============== ==============
</TABLE>
The decrease in mortgage bond investment income for the quarter ended
March 31, 1998, compared to the quarter ended March 31, 1997, is attributable
to decreased cash flow from properties collateralizing the tax-exempt mortgage
bonds. Mortgage bond investment income earned from Ashley Square and
Northwoods Lake Apartments decreased approximately $17,000 and $13,000 for the
quarter ended March 31, 1998 compared to the same period in 1997,
respectively. These decreases were partially offset by increases in income
earned of approximately $9,000 from Ashley Pointe at Eagle Crest and $7,000
from Woodbridge Apartments of Louisville II.
The decrease in contingent interest income is attributable to a reduction in
net operating income generated by the Arama Apartments primarily due to a
decrease in average occupancy and an increase in repairs and maintenance
expenses. General and administrative expenses decreased primarily as a result
of decreases in salaries and related expenses.
This report contains forward looking statements that reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, the Partnership's performance and financial results. All
statements, trend analysis and other information concerning possible or
assumed future results of operations of the Partnership and the real estate
investments it has made (including, but not limited to, the information
contained in Management's Discussion and Analysis of Financial Condition and
Results of Operations"), constitute forward-looking statements. BUC holders
and others should understand that these forward looking statements are subject
to numerous risks and uncertainties and a number of factors could affect the
future results of the Partnership and could cause those results to differ
materially from those expressed in the forward looking statements contained
herein.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The requirements of Item 3 of Form 10-Q are not applicable to the Partnership
prior to its Annual Report on Form 10-K for the year ending December 31, 1998.
<PAGE> -8-
PART II. OTHER INFORMATION
Item 5. Other Information
On April 10, 1997, the Partnership entered into a Merger Agreement with
America First Tax Exempt Investors, L.P., a newly formed Delaware limited
partnership, (the New Fund) pursuant to which the Partnership will merge with
and into the New Fund and the New Fund will be the surviving limited
partnership. The merger is subject to numerous conditions, including the
consent of the holders of a majority of the BUCs of the Partnership. A
consent solicitation statement relating to the solicitation of BUC holder
consent has been filed with the Securities and Exchange Commission. As a
result of the merger, each BUC holder of the Partnership will receive a
similar BUC in the New Fund. The General Partner of the New Fund is AFCA 2
and, accordingly, the merger will not result in a change of control. The New
Fund will have additional authority to reconfigure its assets and sell
interests therein and to reinvest the proceeds of such sales in additional
tax exempt bonds secured by multifamily housing properties.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4(a) Agreement of Limited Partnership dated November 11, 1985
(incorporated herein by reference to Form 10-K dated
December 31, 1986 filed pursuant to Section 13 or 15(d) of
the Securities Act of 1934 by America First Tax Exempt
Mortgage Fund Limited Partnership (Commission File
No. 0-14314)).
4(b) Form of Certificate of Beneficial Unit Certificate
(incorporated herein by reference to Form S-11
Registration Statement filed August 30, 1985 with the
Securities and Exchange Commission by America First Tax
Exempt Mortgage Fund Limited Partnership (Commission File
No. 2-99997)).
4(c) Agreement of Merger, dated April 10, 1997, between the
Registrant and America First Tax Exempt Investors, L.P.
(incorporated herein by reference to Exhibit 4.33 of Form
S-4, dated April 17, 1998, filed pursuant to the
Securities Act of 1933 by America First Tax Exempt
Investors, L.P.).
(b) Form 8-K
The registrant did not file a report on Form 8-K during the
quarter for which this report is filed.
<PAGE> -9-
SIGNATURES
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, thereunto duly authorized.
Dated: May 13, 1998 AMERICA FIRST TAX EXEMPT MORTGAGE
FUND LIMITED PARTNERSHIP
By America First Capital
Associates Limited
Partnership Two, General
Partner of the Registrant
By America First Companies L.L.C.,
General Partner of America First
Capital Associates Limited
Partnership Two
By /s/ Michael Thesing
Michael Thesing
Vice President
and Principal Financial Officer
<PAGE> -10-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,451,295
<SECURITIES> 0
<RECEIVABLES> 605,780
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,057,075
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 73,211,358
<CURRENT-LIABILITIES> 529,556
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 72,681,802
<TOTAL-LIABILITY-AND-EQUITY> 73,211,358
<SALES> 0
<TOTAL-REVENUES> 1,623,078
<CGS> 0
<TOTAL-COSTS> 176,855
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,446,223
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,446,223
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
