CAPITAL SOURCE II L P A
10-Q, 1996-05-16
REAL ESTATE
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                            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, 1996 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:  0-16862

                    CAPITAL SOURCE II L.P.-A                 
     (Exact name of registrant as specified in its charter)

          Delaware                        38-2684691                    
(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
CAPITAL SOURCE II L.P.-A
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                            March 31, 1996       Dec. 31, 1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>           
Assets                                                                                                                        
  Investment in real estate:                                                                                                   
    Land                                                                                    $    2,800,750       $   2,800,750
    Buildings                                                                                   23,011,123          22,994,698
    Personal property                                                                            1,506,066           1,495,374
                                                                                            --------------       -------------
                                                                                                27,317,939          27,290,822
    Less accumulated depreciation                                                               (5,159,344)         (4,989,699)
                                                                                            --------------       -------------
    Net investment in real estate                                                               22,158,595          22,301,123
                                                                                                                               
  Cash and temporary cash investments, at cost                                                                                  
    which approximates market value (Note 5)                                                     2,955,027             757,381
  Escrow deposits and property reserves                                                            994,198             828,470
  Investment in U.S. government securities                                                            -              2,512,500
  Investment in mortgage-backed securities (Note 5)                                              1,280,238           1,326,114
  Interest and other receivables                                                                    17,489              59,367
  Deferred mortgage issuance costs net of accumulated                                                                         
    amortization of $597,696 in 1996 and $570,002 in 1995                                        1,784,155           1,811,849
  Other assets                                                                                     191,801             198,366
                                                                                            --------------      --------------
                                                                                            $   29,381,503      $   29,795,170
                                                                                            ==============      ==============
Liabilities and Partners' Capital (Deficit)                                                                                    
  Liabilities                                                                                                                   
    Accounts payable and accrued expenses                                                   $      861,139      $      852,710
    Distribution payable (Note 3)                                                                  546,968             546,968
    Due to general partners and their affiliates (Note 4)                                        1,001,313           1,084,619
                                                                                            --------------      --------------
                                                                                                 2,409,420           2,484,297
                                                                                            --------------      --------------
  Minority interest                                                                                206,715             207,068
                                                                                            --------------      --------------
  Partners' Capital (Deficit)                                                                                                   
    General Partners                                                                              (298,804)           (295,420)
    Limited Partners ($6.75 per BAC in 1996 and $6.83 in 1995)                                  27,064,172          27,399,225
                                                                                            --------------      --------------
                                                                                                26,765,368          27,103,805
                                                                                            --------------      --------------
                                                                                            $   29,381,503      $   29,795,170
                                                                                            ==============      ==============
                                                                                                                              
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>






















<PAGE>                               -1-
CAPITAL SOURCE II L.P.-A
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                   For the             For the
                                                                                             Quarter Ended       Quarter Ended
                                                                                            March 31, 1996      March 31, 1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>           
Income                                                                                                                         
  Rental income                                                                             $    1,206,419      $    1,090,913
  Interest income on temporary cash investments and                                                                            
    U.S. government securities                                                                      49,628              49,598
  Mortgage-backed securities income                                                                 23,945              35,979
  Other income                                                                                      34,157              25,974
                                                                                            --------------      --------------
                                                                                                 1,314,149           1,202,464
                                                                                            --------------      --------------
Expenses                                                                                                                       
  Real estate operating expenses                                                                   472,591             476,885
  Depreciation                                                                                     169,645             188,196
  Property development and management fees (Note 4)                                                   -                  9,391
  General and administrative expenses (Note 4)                                                                               
    Investor servicing                                                                              66,620              47,418
    Professional fees                                                                               12,450              12,375
    Other expenses                                                                                   4,337               2,308
  Asset management and partnership administration fee (Note 4)                                      41,500              41,500
  Amortization                                                                                      27,694              31,204
                                                                                            --------------      --------------
                                                                                                   794,837             809,277
                                                                                            --------------      --------------
Minority interest in losses of Operating Partnerships                                                  353                 750
                                                                                            --------------      --------------
Net income                                                                                  $      519,665      $      393,937
                                                                                            ==============      ==============
Net income allocated to:                                                                                                       
  General Partners                                                                          $        5,197      $        3,939
  Limited Partners                                                                                 514,468             389,998
                                                                                            --------------      --------------
                                                                                            $      519,665      $      393,937
                                                                                            ==============      ==============
Net income per BAC                                                                          $          .13      $          .10
                                                                                            ==============      ==============
</TABLE>

CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
FOR THE QUARTER ENDED MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                               General             Limited                      
                                                                              Partners            Partners               Total
                                                                        --------------      --------------      --------------
<S>                                                                     <C>                 <C>                 <C>           
Partners' Capital (Deficit) (excluding net unrealized holding gain)                                                           
  Balance at December 31, 1995                                          $     (296,207)     $   27,321,270      $   27,025,063
  Net income                                                                     5,197             514,468             519,665
  Cash distributions paid or accrued (Note 3)                                   (8,205)         (  812,247)         (  820,452)
                                                                        --------------      --------------      --------------
                                                                              (299,215)         27,023,491          26,724,276
                                                                        --------------      --------------      --------------
Net unrealized holding gain                                                                                                   
  Balance at December 31, 1995                                                     787              77,955              78,742
  Net change                                                                      (376)            (37,274)            (37,650)
                                                                        --------------      --------------      --------------
                                                                                   411              40,681              41,092
                                                                        --------------      --------------      --------------
Balance at March 31, 1996                                               $     (298,804)     $   27,064,172      $   26,765,368
                                                                        ==============      ==============      ==============
                                                                                                                              
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>



<PAGE>                               -2-
CAPITAL SOURCE II L.P.-A
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                   For the             For the
                                                                                             Quarter Ended       Quarter Ended
                                                                                            March 31, 1996      March 31, 1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>           
Cash flows from operating activities                                                                                          
  Net income                                                                                $      519,665      $      393,937 
  Adjustments to reconcile net income to net cash                                                                             
    provided by operating activities                                                                                          
      Depreciation and amortization                                                                197,339             219,400 
      Amortization of discount on government securities                                             (8,247)               (415)
      Property development and management fees                                                        -                  9,391 
      Minority interest in losses of Operating Partnerships                                           (353)               (750) 
      Decrease in interest and other receivables                                                    41,878                 687
      Increase in escrow deposits and property reserves                                           (165,728)           (121,272)
      Decrease (increase) in other assets                                                            6,565             (10,351)
      Increase in accounts payable and accrued expenses                                              8,429             198,218
      Decrease in due to Operating Partnerships'                                                                              
        general partners and their affiliates                                                      (83,306)           (170,728)
                                                                                            --------------      --------------
    Net cash provided by operating activities                                                      516,242             518,117 
                                                                                            --------------      --------------
Cash flows from investing activities                                                                                           
  Maturity of U.S. government securities                                                         2,500,000                -
  Principal payments on mortgage-backed securities                                                  28,973              30,484 
  Acquisition of U.S. government securities                                                           -             (2,468,945)
  Acquisition of buildings and construction in progress                                            (16,425)               -   
  Acquisition of personal property                                                                 (10,692)               (286)
                                                                                            --------------      --------------
    Net cash provided by (used in) investing activities                                          2,501,856          (2,438,747)
                                                                                            --------------      --------------
Cash flow used in financing activity                                                                                           
  Distributions                                                                                   (820,452)           (817,717)
                                                                                            --------------      --------------
Net increase (decrease) in cash and temporary cash investments                                   2,197,646          (2,738,347)
Cash and temporary cash investments at beginning of period                                         757,381           3,588,037 
                                                                                            --------------      --------------
Cash and temporary cash investments at end of period                                        $    2,955,027      $      849,690
                                                                                            ==============      ==============
                                                                                                                              
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>





























<PAGE>                               -3-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)

1. Organization

Capital Source II L.P.-A (the Partnership) was formed on August 22, 1986, 
under the Delaware Uniform Limited Partnership Act.  The General Partners of 
the Partnership are Insured Mortgage Equities II L.P. and America First 
Capital Source II, L.L.C. (the General Partners).  

The Partnership provided virtually 100% of the debt and equity financing for 
five multifamily rental housing properties.  The Partnership's investment in 
the properties consisted of:  (i) approximately 85% in the form of permanent 
mortgages and/or loans to fund construction, and (ii) the balance to purchase 
up to a 99% limited partnership interest in the Operating Partnerships which 
developed, own and operate the properties.  Each loan is insured or 
guaranteed, in an amount substantially equal to the face amount of the 
mortgage, by the Federal Housing Administration (FHA) or the Government 
National Mortgage Association (GNMA).  The Partnership has been repaid by GNMA 
on one of its GNMA Certificates and the related property has been deeded to 
GNMA in lieu of foreclosure thus eliminating the Partnership's Equity 
Investment.  The four remaining Operating Partnerships are geographically 
located as follows:  (i) two in Michigan; and, (ii) one each in Florida and 
North Carolina.

CS Properties II, Inc. which is owned by affiliates of the General Partners, 
serves as the Special Limited Partner for the Operating Partnerships.  The 
Special Limited Partner has the power, among other things, to remove the 
general partners of the Operating Partnerships under certain circumstances and 
to consent to the sale of the Operating Partnerships' assets.  

The Partnership will terminate subsequent to the sale of all properties but in 
no event will the Partnership continue beyond December 31, 2035.

2. Summary of Significant Accounting Policies 

 A)Financial Statement Presentation
   The consolidated financial statements include the accounts of the 	 	 	 
   Partnership and four subsidiary Operating Partnerships.  The Partnership is 
   a limited partner with an ownership interest in three of the subsidiary 
   Operating Partnerships of up to 99%.  The Partnership's ownership interest 
   in The Ponds at Georgetown L.P. is 68.70%.  The remaining limited partner 
   interest of 30.29% is owned by Capital Source L.P., an affiliate of the 
   General Partners.  All significant intercompany accounts and transactions 
   have been eliminated in consolidation.

   The consolidated financial statements 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, 1995.  In the opinion of management, all normal and recurring 
   adjustments necessary to present fairly the financial position at 
   March 31, 1996, 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 Real Estate
   The Partnership's investment in real estate is carried at cost less 
   accumulated depreciation.  The carrying value of each property does not 
   exceed net realizable value.






<PAGE>                               -4-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)


 C)Investments in U.S. Government Securities and Mortgage-Backed Securities 	
   Investment securities are	classified as held-to-maturity, available-for- 
   sale or trading.  Investments classified as held-to-maturity are carried at 
   amortized cost.  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 the 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 trading.  

 D)Depreciation and Amortization
  	Depreciation of real estate is based on the estimated useful life of the 
   properties using the straight-line method.  Deferred mortgage issuance 
   costs are being amortized using the effective yield method over the 
   40 year term of the respective loan.

 E)Revenue Recognition
  	The Operating Partnerships lease multifamily rental units under operating 
   leases with terms of one year or less.  Rental revenue is recognized net 
   of	any vacancy losses and rental concessions offered.

 F)Income Taxes
  	No provision has been made for income taxes since BAC Holders are required 
  	to report their share of the Partnership's income for federal and state 
  	income tax purposes.

 G)Temporary Cash Investments
  	Temporary cash investments are invested in short-term debt securities 
	  purchased with original maturities of three months or less.

 H)New Accounting Pronouncement
   On January 1, 1996, the Partnership adoptes Statement of Financial 
   Accounting Standards No. 121 (FAS 121), "Accounting for the Impairment of 
   Long-Lived Assets and for Long-Lived Assets to be Disposed of."  Among 
   other things, FAS 121 requires that long-lived assets and certain 
   identifiable intangibles to be held and used by an entity be reviewed for 
   impairment whenever events or circumstances indicate that the carrying 
   value of an asset may not be recoverable.  The adoption of FAS 121 did not 
   have a material impact on the financial statements.

 I)Net Income per Beneficial Assignment Certificate (BAC)
  	Net income per BAC was calculated based on the number of BACs outstanding 
	  (4,011,101) for all periods presented.

3. Partnership Income, Expenses and Cash Distributions

Profits and losses from normal operations and cash available for distribution 
will be allocated 99% to the investors and 1% to the General Partners.  
Certain fees payable to the General Partners will not become due until 
investors have received certain priority returns.  Cash distributions included 
in the consolidated financial statements represent the actual cash 
distributions made during each period and the cash distributions accrued at 
the end of each period.

The General Partners will receive 1% of the net proceeds from any sale of 
Partnership assets.  The General Partners will receive a termination fee equal 
to 3% of all sales proceeds less actual costs incurred in connection with all 
sales transactions, payable only after the investors have received a return of 
their capital contributions and an 11.5% annual return on a cumulative basis.  
The General Partners will also receive a fee equal to 9.1% of all cash 
available for distribution and sales proceeds (after deducting from cash 
available or sales proceeds any termination fee paid therefrom) after 
investors have received a return of their capital contributions and an 11.5% 
annual return on a cumulative basis.





<PAGE>                               -5-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)

4. Transactions with Related Parties

The General Partners, certain of their affiliates and the operating 
partnerships' general partners have received or may receive fees, 
compensation, income, distributions and payments from the Partnership in 
connection with the offering and the investment, management and sale of the 
Partnership's assets (other than disclosed elsewhere) as follows.

The Operating Partnerships' general partners provide various on-site property 
development and management services.  There were no property development and 
management fees incurred in 1996.  Unpaid fees which are non-interest bearing 
are included in amounts due to general partners and their affiliates on the 
accompanying consolidated balance sheets and will be paid as the Operating 
Partnerships reach specified performance standards, or upon sale of the 
related property. 

The General Partners are entitled to receive an asset management and 
partnership administrative fee equal to 0.5% of invested assets per annum, the 
first $50,000 of which will be paid each year with the balance payable only 
during such years that a 6.5% annual return has been paid to investors on a 
noncumulative basis.  An additional fee equal to 0.5% of invested assets per 
annum will be payable only during those years that an 11.5% annual return has 
been paid to investors on a noncumulative basis.  Any unpaid amounts will 
accrue and be payable only after an 11.5% annual return to investors has been 
paid on a cumulative basis and the investors have received the return of their 
capital contributions.  Asset management and partnership administration fees 
of $41,500 were incurred during 1996.

Amounts due to general partners and their affiliates consisted of the 
following at March 31, 1996:

Unpaid property development and management fees                 $       85,619
Operating deficit and construction loans                               874,194
Unpaid asset management and partnership administrative fees             41,500
                                                                --------------
                                                                $    1,001,313
                                                                ==============

Substantially all of the Partnership's general and administrative expenses are 
paid by a General Partner or an affiliate and reimbursed by the Partnership.  
The amount of such expenses reimbursed to the General Partner during 1996 was 
$107,470.  The reimbursed expenses are presented on a cash basis and do not 
reflect accruals made at quarter end.

5. Partnership Reserve Account

The Partnership maintains a reserve account which consisted of the following 
at March 31, 1996:

Cash and temporary cash investments                             $    2,320,502
GNMA Certificates                                                    1,280,238
                                                                --------------
                                                                $    3,600,740
                                                                ==============

The reserve account was established to maintain working capital for the 
Partnership and is available to supplement distributions to investors or for 
other contingencies related to the ownership of investments and the operation 
of the Partnership.  The GNMA Certificates mature between 2008 and 2009.  At 
March 31, 1996, the total amortized cost, gross unrealized holding gains and 
aggregate fair value of available-for-sale securities were $1,239,146, $41,092 
and $1,280,238, respectively.  









<PAGE>                               -6-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)

6.	Parent Company Only Financial Information

Generally accepted accounting principles require that the Partnership`s 
financial statements consolidate the Operating Partnerships since the 
Partnership holds a majority ownership interest and, through CS Properties II, 
Inc., it can influence decisions of the general partners in certain 
circumstances.  In the consolidated financial statements, the Partnership`s 
investment in FHA Loans and GNMA Certificates is eliminated against the 
related mortgage payable recorded by the operating partnership.  If a mortgage 
loan goes into default and is foreclosed upon by FHA or GNMA, the respective 
agency may, at their discretion, repay the FHA Loan or the GNMA Certificate.  
If this occurs, the Partnership`s investment in the operating partnership 
would be eliminated, resulting in the recognition of a gain on the 
Partnership`s financial statements.  This arises because consolidation 
accounting does not allow the Partnership to stop recording losses from the 
Operating Partnerships when the net investment is reduced to zero.  

The parent company only financial information below represents the condensed 
financial information of the Partnership using the equity method of accounting 
for the investment in Operating Partnerships, rather than the consolidation of 
those partnerships.  Under the equity method of accounting, the Partnership`s 
capital contributions are adjusted to reflect its share of operating 
partnership profits or losses and distributions.  The investment in operating 
partnerships represents the Partnership`s limited partnership interest in the 
accumulated deficits of those Operating Partnerships.  The parent company only 
information is provided to more clearly present the Partnership`s investment 
in the Operating Partnerships.  Since the Partnership is not a general 
partner, it is not obligated to fund the negative balances.  If the 
investments in all Operating Partnerships were eliminated at March 31, 1996, 
Partnership capital would increase by $4,693,706 ($1.16 per BAC).

The FHA Loans and the GNMA Certificates are collateralized by first mortgage 
loans on the properties owned by the Operating Partnerships and are guaranteed 
or insured as to principal and interest by FHA or GNMA.  The FHA insured 
mortgage loans are subject to a 1% assignment fee.  The obligations of FHA and 
GNMA are backed by the full faith and credit of the United States government.  

Parent Company Only
Condensed Balance Sheets
<TABLE>
<CAPTION>
                                                                                            March 31, 1996       Dec. 31, 1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>           
Assets                                                                                                                         
  Cash and temporary cash investments                                                       $    2,955,027      $      757,381
  Investment in U.S. government securities                                                            -              2,512,500
  Investment in FHA Loan                                                                         6,588,703           6,595,251
  Investment in GNMA Certificates                                                               22,074,388          22,142,421
  Investment in Operating Partnerships                                                          (4,693,706)         (4,674,357)
  Interest receivable                                                                              212,358             246,315
  Other assets                                                                                     278,780             287,899
                                                                                            --------------      --------------
                                                                                            $   27,415,550      $   27,867,410
                                                                                            ==============      ==============
Liabilities and Partners' Capital                                                                                              
  Liabilities                                                                                                                   
    Accounts payable                                                                        $      103,214      $      216,637
    Distribution payable                                                                           546,968             546,968
                                                                                            --------------      --------------
                                                                                                   650,182             763,605
                                                                                            --------------      --------------
  Partners' Capital                                                                             26,765,368          27,103,805
                                                                                            --------------      --------------
                                                                                            $   27,415,550      $   27,867,410
                                                                                            ==============      ==============
</TABLE>




<PAGE>                               -7-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)

Parent Company Only
Condensed Statements of Income
<TABLE>
<CAPTION>
                                                                                                   For the             For the
                                                                                             Quarter Ended       Quarter Ended
                                                                                            March 31, 1996      March 31, 1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>           
Income                                                                                                                        
  Mortgage and mortgage-backed securities income                                            $      632,116      $      646,596
  Interest income on temporary cash investments                                                                               
    and U.S. government securities                                                                  46,549              47,160
  Equity in losses of Operating Partnerships                                                       (19,349)           (181,574)
  Other income                                                                                         850                 950
                                                                                            --------------      --------------
                                                                                                   660,166             513,132
Expenses                                                                                                                      
  Operating and administrative                                                                     140,501             119,195
                                                                                            --------------      --------------
Net income                                                                                  $      519,665      $      393,937
                                                                                            ==============      ==============
</TABLE>

Parent Company Only
Condensed Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                                   For the             For the
                                                                                             Quarter Ended       Quarter Ended
                                                                                            March 31, 1996      March 31, 1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>           
Cash flows from operating activities                                                                                           
  Net income                                                                                $      519,665      $      393,937 
    Adjustments to reconcile net income to net cash                                                                           
      provided by operating activities                                                                                        
      Equity in losses of Operating Partnerships                                                    19,349             181,574
      Amortization                                                                                  15,594              15,594  
      Other non-cash adjustments                                                                   (94,188)            (99,493)
                                                                                            --------------      --------------
    Net cash provided by operating activities                                                      460,420             491,612 
                                                                                            --------------      --------------
Cash flows from investing activities                                                                                           
  FHA Loan and GNMA Certificate principal payments                                                  57,678              56,703
  Maturity (acquisition) of U.S. government securities                                           2,500,000          (2,468,945)
                                                                                            --------------      --------------
    Net cash provided by (used in) investing activities                                          2,557,678          (2,412,242)
                                                                                            --------------      --------------
Cash flow used in financing activity                                                                                           
  Distributions                                                                                   (820,452)           (817,717)
                                                                                            --------------      --------------
Net increase (decrease) in cash and temporary cash investments                                   2,197,646          (2,738,347)
Cash and temporary cash investments at beginning of period                                         757,381           3,588,037 
                                                                                            --------------      --------------
Cash and temporary cash investments at end of period                                        $    2,955,027      $      849,690 
                                                                                            ==============      ==============
</TABLE>













<PAGE>                               -8-
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Liquidity and Capital Resources

The Partnership originally acquired: (i) four GNMA Certificates which are 
guaranteed as to principal and interest by the Government National Mortgage 
Association (GNMA) collateralized by first mortgage loans on multifamily 
housing properties located in three states; (ii) an FHA Loan which is insured 
as to principal and interest by the Federal Housing Administration (FHA) on a 
multifamily housing property; and (iii) Partnership Equity Investments in five 
Operating Partnerships which own the multifamily properties financed by the 
GNMA Certificates and the FHA Loan.  During 1992, one of the properties was 
deeded to GNMA in lieu of foreclosure, thus eliminating the Partnership Equity 
Investment in this Property.  In March 1993, the GNMA Certificate related to 
this property was paid in full.  Collectively, the remaining GNMA 
Certificates, the FHA Loan, and the Partnership Equity Investments are 
referred to as the "Permanent Investments".  The Partnership has also invested 
amounts held in its reserve account in certain GNMA securities backed by pools 
of single-family mortgages and in U.S. government securities ("Reserve 
Investments").  The obligations of GNMA and FHA are backed by the full faith 
and credit of the United States government.  

The FHA Loan, GNMA Certificates and Partnership Equity Investments in 
Operating Partnerships represent the Partnership's principal assets as shown 
in the Parent Company Only Financial Information in Note 6 to the financial 
statements.  The parent company information is presented using the equity 
method of accounting for the investment in Operating Partnerships.  Generally 
accepted accounting principles, however, require that the Partnership's 
financial statements consolidate the Operating Partnerships, since the 
Partnership holds a majority ownership interest in each Operating Partnership, 
and can influence decisions of the general partners in certain circumstances.  

The following FHA Loan and GNMA Certificates were owned by the Partnership at 
March 31, 1996.  Interest income from the FHA Loan and GNMA Certificates is 
the primary source of cash available for distribution to investors.

<TABLE>
<CAPTION>
                                                  Guaranteed              Interest                Maturity           Principal
Property Name                                  or Insured by                  Rate                    Date             Balance
- -----------------------------------          ---------------          ------------          --------------      --------------
<S>                                          <C>                      <C>                   <C>                 <C>           
Crane's Landing                                         GNMA                 8.75%              12-15-2030      $   10,310,580
Delta Crossing                                           FHA                 9.10%              10-01-2030           6,588,703
Monticello Apartments                                   GNMA                 8.75%              11-15-2029           5,375,349
The Ponds at Georgetown                                 GNMA                 9.00%              12-15-2029           5,108,221
Pools of single family properties                       GNMA                 7.58% (1)        2008 to 2009           1,280,238
                                                                                                                --------------
                                                                                                                $   28,663,091
                                                                                                                ==============
(1)Represents yield to the Partnership.
</TABLE>






















<PAGE>                               -9-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

DISTRIBUTIONS

Cash distributions paid or accrued per BAC were as follows:
<TABLE>
<CAPTION>
                                                                                                   For the             For the
                                                                                             Quarter Ended       Quarter Ended
                                                                                            March 31, 1996      March 31, 1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>           
Regular monthly distributions                                                                                                 
  Income                                                                                    $        .1283      $        .0972
  Return of capital                                                                                  .0742               .1053
                                                                                            --------------      --------------
                                                                                            $        .2025      $        .2025
                                                                                            ==============      ==============
Distributions                                                                                                                  
  Paid out of cash flow                                                                     $        .1511      $        .1599
  Paid out of reserves                                                                               .0514               .0426
                                                                                            --------------      --------------
                                                                                            $        .2025      $        .2025
                                                                                            ==============      ==============
</TABLE>
Regular monthly distributions to BAC Holders consist primarily of  interest 
received on the FHA Loan, GNMA Certificates and U.S. government securities.  
Additional cash for distributions is received from other investments.  The 
Partnership may draw on reserves to pay operating expenses or to supplement 
cash distributions to investors.  The Partnership is permitted to replenish 
reserves with cash flows in excess of distributions paid.  For the quarter 
ended March 31, 1996, $208,166 was withdrawn from reserves to supplement 
regular monthly cash distributions.  The total amount held in reserves at 
March 31, 1996, was $3,600,740 of which $1,280,238 was invested in government 
securities.

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 BAC Holders.  The Partnership has no other 
internal or external sources of liquidity.  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 BACs to meet short-term and long-term liquidity 
requirements.

Asset Quality

The FHA Loan and GNMA Certificates owned by the Partnership are guaranteed as 
to principal and interest by FHA and GNMA, respectively.  The obligations of 
FHA and GNMA are backed by the full faith and credit of the United States 
government.  The Partnership Equity Investments, however, are not insured or 
guaranteed.  The value of these investments is a function of the value of the 
real estate owned by the Operating Partnerships.

The overall status of the Partnership's investments has remained relatively 
constant since December 31, 1995.

















<PAGE>                               -10-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following table shows the occupancy levels of the properties financed by 
the Partnership as of March 31, 1996:

<TABLE>
<CAPTION>
                                                                                                     Number         Percentage
                                                                                 Number            of Units           of Units
Property Name                                Location                          of Units            Occupied           Occupied
- -------------------------------------        ------------------               ---------          ----------         ----------
<S>                                          <C>                              <C>                <C>                <C>
Crane's Landing                              Winter Park, FL                        252                 238                 94%
Delta Crossing                               Charlotte, NC                          178                 169                 95%
Monticello Apartments                        Southfield, MI                         106                 102                 96%
The Ponds at Georgetown                      Ann Arbor, MI                          134                 130                 97%
                                                                              ---------          ----------         ----------
                                                                                    670                 639                 95%
                                                                              =========          ==========         ==========
</TABLE>

RESULTS OF OPERATIONS

The table below compares the results of operations for each period shown.
<TABLE>
<CAPTION>
                                                                               For the             For the            Increase
                                                                         Quarter Ended       Quarter Ended          (Decrease)
                                                                        March 31, 1996      March 31, 1995           From 1995
                                                                        --------------      --------------      --------------
<S>                                                                     <C>                 <C>                 <C>           
Rental income                                                           $    1,206,419      $    1,090,913      $      115,506
Interest income on temporary cash investments                                                                                 
  and U.S. government securities                                                49,628              49,598                  30
Mortgage-backed securities income                                               23,945              35,979             (12,034)
Other income                                                                    34,157              25,974               8,183
                                                                        --------------      --------------      --------------
                                                                             1,314,149           1,202,464             111,685
                                                                        --------------      --------------      --------------
Real estate operating expenses                                                 472,591             476,885              (4,294)
Depreciation                                                                   169,645             188,196             (18,551) 
Property development and management fees                                          -                  9,391              (9,391)
Investor servicing                                                              66,620              47,418              19,202
Professional fees                                                               12,450              12,375                  75
Other expenses                                                                   4,337               2,308               2,029
Asset management and partnership administration fees                            41,500              41,500                -   
Amortization                                                                    27,694              31,204              (3,510)
                                                                        --------------      --------------      --------------
                                                                               794,837             809,277             (14,440)
                                                                        --------------      --------------      --------------
Minority interest in losses of Operating Partnerships                              353                 750                (397)
                                                                        --------------      --------------      --------------
Net income                                                              $      519,665      $      393,937      $      125,728
                                                                        ==============      ==============      ==============
</TABLE>

Rental income is recognized net of any vacancy losses and rental concessions 
offered.  Rental income, net of real estate operating expenses, depreciation, 
and amortization, increased $141,861 for the quarter ended March 31, 1996, 
compared to the same period in 1995.  Rental income increased for the quarter 
ended March 31, 1996, compared to the same period in 1995, primarily due to an 
increase of approximately 14% in the average occupancy of Crane's Landing.  
The occupancy of Crane's Landing has been improving since construction on the 
road adjacent to the property was completed during the third quarter of 1995.  

Mortgage-backed securities income decreased for the quarter ended March 31, 
1996, compared to the same period in 1995, due to the continued amortization 
of the principal balances of the Partnership's mortgage-backed securities.

Other income increased for the quarter ended March 31, 1996, compared to the 
same period in 1995, due to an increase in income such as garage rentals, 
washer/dryer and vending income earned by the properties.  



<PAGE>                               -11-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Property development and management fees decreased for the quarter ended March 
31, 1996, compared to the same period in 1995, as the general partners of the 
Operating Partnerships did not perform services to earn such fees during the 
first quarter of 1996.  Investor servicing expenses increased for the quarter 
ended March 31, 1996, compared to the same period in 1995, due primarily to an 
increase in salaries and related expenses.



































































<PAGE>                               -12-
PART II.  OTHER INFORMATION

     Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

               None.

          (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>                               -13-
                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                           CAPITAL SOURCE II L.P. A

                           By	America First Capital
                            		Source II, L.L.C., General	
                               Partner


                           By	/s/ Michael Thesing                              
                           			Michael Thesing,
                            		Vice President

Date:  May 15, 1996


                                  























































<PAGE>                               -14-

<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
CONSOLIDATED STATEMENTS
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               MAR-31-1996
<CASH>                                       2,955,027
<SECURITIES>                                 1,280,238
<RECEIVABLES>                                   17,489
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                             3,966,714
<PP&E>                                      27,317,939
<DEPRECIATION>                              (5,159,344)
<TOTAL-ASSETS>                              29,381,503
<CURRENT-LIABILITIES>                        1,449,607
<BONDS>                                              0
<COMMON>                                             0
                                0
                                          0
<OTHER-SE>                                  26,765,368
<TOTAL-LIABILITY-AND-EQUITY>                29,381,503
<SALES>                                              0
<TOTAL-REVENUES>                             1,314,149
<CGS>                                                0
<TOTAL-COSTS>                                  794,837
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                                519,665
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   519,665
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
        

</TABLE>


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