SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, D.C.  20549

                            FORM 8-K
                         CURRENT REPORT


             PURSUANT TO SECTION 13 OR 15(D) OF THE
                SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 1,  1996


             MUTUAL BENEFIT MORTGAGE INVESTORS 1985
                    Exact Name of Registrant


      Rhode Island                           0-14501
State or other jurisdiction of          Commission File Number
organization


520 Broad Street
Newark, New Jersey  07102                          05-0417572
Address of principal executive          IRS Employer I.D. Number
offices

Registrant's telephone number:  (201) 481-7813


Item 2.  Acquisition or Disposition of Assets.

     On October 1, 1996 the Registrant concluded the sale of its
mortgage loan participation in the Radnor Loan owned by MBL  Life
Assurance  Corporation.  The participation was sold to  M.G.  St.
David,  LLC  for  a  total  price of approximately  $1,213,000.00
(being  a per unit amount of more than $52, far in excess of  the
amount  previously approved by limited partners to authorize  the
sale).

     The Registrant will now be dissolved.  Upon dissolution the
Registrant  will distribute to partners the net proceeds  of  the
sale  of the Radnor Loan participation, plus all other assets  of
the  Registrant, less amounts needed to complete the  liquidation
of  the  Registrant.  Additionally, upon dissolution, the general
partner is required to make a payment to the Registrant equal  to
the  amount  of any negative balance in its capital account  (but
limited to a maximum of 1.01% of the total capital contributed by
limited   partners  to  the  Registrant).   The  general  partner
estimates that the total cash distribution to limited partners as
a  result  of the sale of the Radnor Loan participation  and  the
dissolution of the Registrant will be approximately  $60  to  $62
per limited partner unit.

     Lastly,  upon dissolution, partners will receive a pro-rate
share  of  the  Registrant's  Class Four  Claim  awarded  in  the
Rehabilitation  of  The  Mutual Benefit Life  Insurance  Company.
Notices of the exact amount of each partner's share of the  Class
Four  Claim  will  be  sent directly to partners  by  The  Mutual
Benefit  Claims Administrator.  It is expected that these notices
will be mailed prior to November 15, 1996.

                           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 hereunto duly authorized.

Mutual Benefit Mortgage Investors 1985

By:  MB Mortgage, Inc.
     General Partner

By:   /S/ THOMAS G. MORGAN
     Thomas G. Morgan
     Vice President and Treasurer


Date:  October 10, 1996