UNITED STATES
                                           SECURITIES AND EXCHANGE COMMISSION
                                                 Washington, D.C. 20549


                                                        FORM 10-K
(Mark One)


  x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 
1934 [FEE REQUIRED]

                  For the fiscal year ended       December 31, 1998
  
                                OR

          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                  to

        Commission file number              0-17690

            Krupp Insured Mortgage Limited Partnership
 (Exact name of registrant as specified in its charter)

 Massachusetts                                                    04-3021395
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                              Identification No.)

One Beacon Street, Boston, Massachusetts                                02108
(Address of principal executive offices)                             (Zip Code)

(Registrant's telephone number, including area code)              (617) 523-0066
                                                     ---------------------------

Securities registered pursuant to Section 12(b) of the Act:  None


Securities registered pursuant to Section 12(g) of the Act: Units of Depositary
                                                           Receipts representing
                                                           Units of Limited
                                                           Partner Interests

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ].

Aggregate  market  value  of  voting  securities  held  by  non-affiliates:  Not
applicable.

Documents incorporated by reference: See Part IV, Item 14

The exhibit index is located on pages 10-14.






                                                         PART I

This Form 10-K contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934.  Actual  results could differ  materially  from those  projected in the
forward-looking  statements as a result of a number of factors,  including those
identified herein.

ITEM 1.    BUSINESS

      Krupp  Insured  Mortgage  Limited  Partnership  (the  "Partnership")  is a
Massachusetts  limited  partnership  which was  formed on March  21,  1988.  The
Partnership  raised  approximately  $299  million  through a public  offering of
limited partner interests  evidenced by units of depositary  receipts ("Units"),
and  used  the  proceeds   available   for   investment   primarily  to  acquire
participating insured mortgages ("PIMs") and mortgage-backed securities ("MBS").
The Partnership  considers  itself to be engaged only in the industry segment of
investment in mortgages.

      The  Partnership's   investments  in  PIMs  on  multi-family   residential
properties  consist  of a MBS or an insured  mortgage  loan  (collectively,  the
"insured  mortgage")  guaranteed or insured as to principal and basic  interest.
These insured  mortgages were issued or originated  under or in connection  with
the housing programs of the Government National Mortgage  Association  ("GNMA"),
("Fannie Mae") or the Department of Housing and Urban Development ("HUD").  PIMs
provide the  Partnership  with monthly  payments of principal and basic interest
and also may provide the Partnership  with  participation in the current revenue
stream and in residual value, if any, from the sale or other  realization of the
underlying  property.  The  borrower  conveys  these  rights to the  Partnership
through a subordinated  promissory note and mortgage. The participation features
are neither insured nor guaranteed.

      The Partnership also acquired MBS collateralized by single-family mortgage
loans  issued or  originated  by Fannie Mae or the  Federal  Home Loan  Mortgage
Corporation  ("FHLMC").  Fannie Mae and FHLMC  guarantee the principal and basic
interest of the Partnership's FNMA and FHLMC MBS, respectively.

      Proceeds  received  from  prepayments  or other  realizations  of mortgage
assets will be distributed by the Partnership to investors  through quarterly or
special distributions.

      Although the  Partnership  will terminate no later than December 31, 2028,
the value of the PIMs may be realized by the  Partnership  through  repayment or
sale as early as ten years from the dates of the closing of the permanent  loans
and the  Partnership may realize the value of all its other  investments  within
that  time  frame.   Therefore,  it  is  anticipated  that  dissolution  of  the
Partnership could occur significantly prior to December 31, 2028.

      The  Partnership's  investments are not expected to be subject to seasonal
fluctuations.  However,  the future  performance of the Partnership  will depend
upon certain  factors  which  cannot be  predicted.  In  addition,  any ultimate
realization of the participation features of the PIMs will be subject to similar
risks associated with equity real estate investments, including: reliance on the
owner's  operating  skills,   ability  to  maintain  occupancy  levels,  control
operating  expenses,  maintain  the  property  and  provide  adequate  insurance
coverage;  adverse  changes  in  general  economic  conditions,   adverse  local
conditions, and changes in governmental regulations, real estate zoning laws, or
tax laws; and other  circumstances over which the Partnership may have little or
no control.

      The requirements for compliance with federal,  state and local regulations
to date have not had an adverse effect on the Partnership's operations,  and the
Partnership does not presently anticipate any adverse effect in the future.

As of  December  31,  1998  there were no  personnel  directly  employed  by the
Partnership.


ITEM 2.    PROPERTIES

      None.

ITEM 3.    LEGAL PROCEEDINGS

      There are no material  pending legal  proceedings to which the Partnership
is a party or to which any of its securities is the subject.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None.

                                                         PART II

ITEM 5.MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      There currently is no established trading market for the Units.

      The  number  of  investors  holding  Units  as of  December  31,  1998 was
approximately  14,600.  One of the  objectives of the  Partnership is to provide
quarterly  distributions of cash flow generated by its investments in mortgages.
The Partnership  presently  anticipates that future  operations will continue to
generate cash available for distribution.

      During 1998,  the  Partnership  made special  distributions  consisting of
principal proceeds from the Deering Place and Cross Creek PIM Prepayments.

      During  1997,  the  Partnership  made  special  distributions   consisting
primarily of principal proceeds from the Rock Creek,  Silver Spring, and Hampton
Ridge   Apartments  PIM   prepayments.   The   Partnership   will  make  special
distributions  in the future as PIMs  prepay or a  sufficient  amount of cash is
available from MBS and PIM principal collections.

      The Partnership  made  distributions to its Partners during the two years
 ended December 31, 1998 and 1997 as
follows:



                                                  1998                                1997
                                         -----------------------              ------------
                                                Amount          Per Unit            Amount          Per Unit

                                                                                                
Limited Partners                               $ 13,909,819     $ .93               $ 17,948,156          $1.20
General Partners                                    310,079                              386,086
                                               ------------                         ------------
                                                 14,219,898                           18,334,242

Special Distributions
Limited Partners                               $ 20,789,946        $1.39            $ 28,717,048          $1.92
                                               ------------                         ------------

                                               $ 35,009,844                         $ 47,051,290
                                               ============                         ============



   ITEM 6. SELECTED FINANCIAL DATA

   The following table sets forth selected financial  information  regarding the
Partnership's  financial position and operating results. This information should
be read in conjunction  with  Management's  Discussion and Analysis of Financial
Condition  and  Results  of  Operations   and  the  Financial   Statements   and
Supplementary  Data,  which are  included in Items 7 and 8 (Appendix  A) of this
report, respectively.


                                           Year Ended December 31,
                               1998                 1997                1996               1995                1994
                               ----                 ----                ----               ----                ----

                                                                                                        
Total revenues               $ 11,954,179          $ 16,679,293        $ 16,039,711      $ 17,325,924         $ 17,333,146

Net income                      9,100,138            12,188,074          11,372,365        13,270,482           13,039,155

Net income allocated
 to Partners:
  Limited Partners              8,827,134            11,822,432          11,031,194        12,872,368           12,647,980
  Average per Unit                    .59                   .79                .74                .86                  .85
  General Partners                273,004               365,642             341,171           398,114              391,175

Total assets at
 December 31                  135,213,294           161,358,290         195,755,977       228,653,458          232,892,400

Distributions to
 Partners:
  Limited Partners             13,909,819            17,948,156          17,948,153        17,948,156           24,879,313
  Average per Unit                    .93                  1.20               1.20               1.20                 1.66

  General Partners                310,079               386,086             431,074           455,696              450,239

 Special Distribution
  Limited Partners             20,789,946            28,717,048          25,426,553            -                      -
  Average Per Unit                   1.39                  1.92               1.70             -                      -



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
OF OPERATIONS

   Management's  Discussion  and Analysis of Financial  Condition and Results of
Operations  contains  forward-looking   statements  including  those  concerning
Management's  expectations regarding the future financial performance and future
events.   These   forward-looking   statements  involve   significant  risk  and
uncertainties,  including  those  described  herein.  Actual  results may differ
materially from those anticipated by such forward-looking statements.

The General  Partners of the  Partnership  have  conducted an  assessment of the
Partnership's core internal and external computer  information  systems and have
taken the further  necessary  steps to  understand  the nature and extent of the
work  required to make its systems Year 2000 ready in those  situations in which
it is required to do so. The Year 2000 readiness issue concerns the inability of
computerized  information systems to accurately  calculate,  store or use a date
after 1999.  This could result in a system  failure or  miscalculations  causing
disruptions of operations.  The Year 2000 issue affects  virtually all companies
and all organizations.

In this  regard,  the General  Partners of the  Partnership,  along with certain
affiliates,  began a computer systems project in 1997 to  significantly  upgrade
its existing hardware and software.  The General Partners  completed the testing
and conversion of the financial  accounting  operating systems in February 1998.
As a result,  the General  Partners have generated  operating  efficiencies  and
believe their financial  accounting  operating  systems are Year 2000 ready. The
General  Partners  of  the  Partnership  incurred  hardware  costs  as  well  as
consulting  and other  expenses  related to the  infrastructure  and  facilities
enhancements  necessary  to complete  the upgrade and prepare for the Year 2000.
There are no other significant internal systems or software that the Partnership
is using at the present time.

The General  Partners of the  Partnership  are in the process of evaluating  the
potential  adverse  impact  that  could  result  from the  failure  of  material
third-party  service  providers  (including  but not  limited  to its  banks and
telecommunications providers) and significant vendors to be Year 2000 ready. The
Trust is in the process of surveying  these third party  providers and assessing
their  readiness  with year 2000. To date,  the  Partnership is not aware of any
problems that would  materially  impact its results of operations,  liquidity or
capital  resources.  However,  the  Partnership has not yet obtained all written
assurances that these providers would be Year 2000 ready.

The  Partnership  currently  does not have a contingency  plan in the event of a
particular  provider  or system  not being  Year 2000  ready.  Such plan will be
developed  if it  becomes  clear that a  provider  is not going to  achieve  its
scheduled  readiness  objectives by June 30, 1999. The inability of one of these
providers  to  complete  its Year  2000  resolution  process  could  impact  the
Partnership.  In addition,  the  Partnership is also subject to external  forces
that  might  generally  affect  industry  and  commerce,  such  as  utility  and
transportation   company  Year  2000  readiness  failures  and  related  service
interruptions.  To date, the  Partnership  has not incurred any cost  associated
with being Year 2000 ready. All costs have been incurred by the General Partners
and it is estimated that any future Year 2000  readiness  costs will be borne by
the General  Partners.  No estimate can be made at this time as to the impact of
the readiness of such third parties.

Liquidity and Capital Resources

The most  significant  demands on the  Partnership's  liquidity  are the regular
quarterly  distributions  paid to investors of  approximately  $3.1 million each
quarter.  Funds for the investor  distributions  come from monthly principal and
basic interest payments received on the PIMs and MBS, the principal  prepayments
on the PIMs and MBS,  and  interest  earned on the  Partnership's  cash and cash
equivalents.  In general,  the General  Partners try to set a distribution  rate
that  provides  for  level  quarterly   distributions   of  cash  available  for
distribution.  To the extent that quarterly  distributions  do not fully utilize
the cash available for  distributions  and cash balances  increase,  the General
Partners may adjust the  distribution  rate or  distribute  such funds through a
special distribution. The portion of distributions attributable to the principal
collections  reduces the capital  resources of the  Partnership.  As the capital
resources  decrease,  the total cash flows to the Partnership also will decrease
and over time will result in periodic  adjustments to the distributions  paid to
investors.  The General Partners  periodically  review the distribution  rate to
determine  whether an  adjustment  is necessary  based on projected  future cash
flows.  At this time the General  Partners have  determined that the Partnership
can maintain its current dividend rate of $.84 per Unit per year.

The  Partnership  made two special  distributions  during  1998 and  anticipates
making a special distribution during the first quarter of 1999. In January 1998,
a $1.12 per Unit special  distribution was made with the prepayment  proceeds of
the Paddock Club and Southland Station PIMs that were received during the fourth
quarter 1997. In September 1998, a $.27 per Unit special  distribution  was made
with the prepayment proceeds of the Deering Place PIM prepayment received during
the third  quarter  1998.  The  Partnership  anticipates  making a $.63 per Unit
special  distribution during the first quarter 1999 with the prepayment proceeds
of the Cross Creek PIM that was received  during the fourth quarter 1998. In the
event of further PIM  prepayments,  the General  Partners may determine  that an
adjustment  to the  distribution  rate will be  necessary to reflect the reduced
future cash flows from the remaining mortgage investments.

In addition to  providing  insured or  guaranteed  monthly  principal  and basic
interest payments, the Partnership's PIM investments also may provide additional
income through its  participation  feature in the underlying  properties if they
operate successfully.  The Partnership may receive a share in any operating cash
flow that exceeds debt service  obligations  and capital needs or a share in any
appreciation in value when the properties are sold or refinanced.  However, this
participation  is neither  guaranteed  nor  insured,  and it is  dependent  upon
whether property operations or its terminal value meet certain criteria.  During
1998, the Partnership  received a total of $278,467 in participation income from
operating cash flow that exceeded the  established  thresholds from eight of its
PIM investments:  Bell Station,  Creekside, Cross Creek, Deering Place, Enclave,
Marina Shores, Pope Building and Salishan. The Partnership also received a total
of $586,560  in  participation  income  when Cross Creek and Deering  Place were
refinanced and the PIMs were paid off.

Most of the  properties  had stable  operating  results in 1998.  High occupancy
rates  were  maintained  at more  than half of the  properties  due to stable or
improving markets. However, due to poor operating performance, the General
Partners are closely monitoring two properties.  Remington Place is located in a
competitive market in the Washington,  D.C.  metropolitan area. The property did
not generate  sufficient  operating  income to both maintain the asset and cover
the debt service obligations. Consequently, the borrower on the PIM defaulted on
the underlying  first mortgage loan in November 1997.  However,  the Partnership
has continued to receive its full principal and basic interest  payments  during
the default because GNMA guaranteed those payments. The borrower worked with HUD
to  structure a  modification  to the  mortgage  which  resulted in a March 15th
prepayment  of the  outstanding  principal  balance  then  due on  the PIM. The
Partnership will not receive any participation income.  Wildflower is located in
the  thriving  Las Vegas  market,  but it has  suffered  a  dramatic  decline in
occupancy to the mid-80%  range at year-end  that is not  representative  of the
rest of the market.  Wildflower,  which offers only a basic apartment,  does not
compete  successfully  with the newer  apartment  properties with many amenities
that  have been  built  since  the  strong  Las Vegas  economy  has  fostered  a
tremendous construction boom.

The underlying  loans on two of the  Partnership's  PIM investments were prepaid
during 1998.  During the second quarter,  Deering Place was refinanced,  and the
first mortgage loan  underlying the PIM was prepaid.  The  Partnership  received
approximately  $3,636,000  in  principal  as well as a  prepayment  penalty  and
accrued participation income earned on operations prior to the prepayment, which
together  totaled another  $360,000.  During the third quarter,  Cross Creek was
refinanced,  and the first mortgage loan  underlying  that PIM was prepaid.  The
Partnership received approximately  $9,415,000 in principal as well as its share
in the increase in the property's value and accrued  participation income earned
on operations prior to the prepayment, which together totaled another $377,000.

The General  Partners  expect that there will be more  prepayments  during 1999.
During the first quarter 1999, the Pope Building was  refinanced,  and the first
mortgage  loan  underlying  the  PIM  was  prepaid.   The  Partnership  received
approximately  $3,170,000  in  principal as well as its share in the increase in
the property's value and accrued participation income earned on operations prior
to  the  prepayment,  which  together  totaled  another  $920,000.  Four  of the
Partnership's  other PIM  investments  may be prepaid during 1999. The owners of
Marina  Shores,  Salishan,  Saratoga,  and Valley  Manor have all  notified  the
General  Partners of their intention to refinance their  properties if favorable
refinancing conditions persist.

During the first five years,  owners are  prohibited  from  prepaying  the first
mortgage  loans  underlying the PIMs.  During the second five years,  owners may
prepay the loans by  incurring a prepayment  penalty.  The  Partnership  has the
option to call  certain  PIMs by  accelerating  their  maturity  if they are not
prepaid  by the  tenth  year  after  permanent  funding.  The  Partnership  will
determine  the merits of  exercising  the call  option for each PIM as  economic
conditions  warrant.  Such factors as the  condition of the asset,  local market
conditions,  the interest rate  environment  and  availability of financing will
affect those decisions.



Assessment of Credit Risk

The  Partnership's  investments in mortgages are guaranteed or insured by Fannie
Mae, GNMA,  FHLMC or HUD and therefore the certainty of their cash flows and the
risk of material loss of the amounts invested depends on the creditworthiness of
these entities.

Fannie  Mae  is  a  federally  chartered  private  corporation  that  guarantees
obligations  originated  under  its  programs.  FHLMC is a  federally  chartered
corporation  that guarantees  obligations  originated  under its programs and is
wholly-owned  by the twelve Federal Home Loan Banks.  These  obligations are not
guaranteed  by the U.S.  Government  or the Federal  Home Loan Bank Board.  GNMA
guarantees  the full and timely  payment of principal and basic  interest on the
securities it issues,  which represent  interests in pooled mortgages insured by
HUD. Obligations insured by HUD, an agency of the U.S. Government, are backed by
the full faith and credit of the U.S.
Government.


Operations

     The following discussion relates to the operation of the Partnership during
the years ended December 31, 1998, 1997 and 1996.



                                                                       (Amounts in thousands)
                                                             1998           1997                1996

   Interest income on PIMs:
                                                                                            
   Basic interest                                           $ 9,089          $10,887            $ 12,953
   Participation interest                                       865            3,710               1,176
   Interest income on MBS                                     1,595            1,493               1,498
   Other interest income                                        406              589                 413
   Partnership expenses                                      (1,219)          (1,574)             (1,655)
   Amortization of prepaid fees and
    expenses                                                 (1,636)          (2,917)             (3,013)
                                                             ------          -------              ------

          Net income                                        $ 9,100          $12,188             $11,372
                                                            =======          =======             =======


    Net income decreased by approximately  $3,088,000 during 1998 as compared to
1997. The decrease was primarily due to lower basic  interest and  participation
interest.  The  decrease in basic  interest of  approximately  $1,798,000  was a
result of the Deering Place and Cross Creek PIM prepayments during 1998, and the
prepayments of the Rock Creek, Silver Springs,  Hampton Ridge, Southland Station
and  Paddock  Club PIM's  during  1997 and the  Patrician  PIM  converting  to a
non-participating   insured   mortgage   during  the  fourth  quarter  of  1997.
Participation  interest declined by approximately  $2,845,000 as a result of the
significant level of PIM prepayments in 1997 mentioned above exceeding the level
of  participation  interest  received by the Deering  Place and  Crosscreek  PIM
prepayments  occuring  in  1998.  Other  interest  income  decreased  in 1998 as
compared to 1997 due to lower average short-term investment balances during 1998
when compared to 1997.

    Amortization  expense  decreased  for the twelve month period ending 1998 as
compared  to the  same  period  in 1997 as a  result  of the  Partnership  fully
amortizing  the costs  associated  with the PIM's that were prepaid in 1997. The
decrease in  Partnership  expenses was due  primarily to lower asset  management
fees resulting from the  prepayments of the Deering Place and Crosscreek PIMs in
1998 and the  Rock  Creek,  Silver  Springs,  Hampton  Ridge,  Paddock  Club and
Southland PIMs in 1997. In addition, lower transfer agent costs were incurred in
1998 and a rebate was received for expense reimbursements related to 1997 during
the second quarter of 1998.

Net income increased during 1997 as compared to 1996 by approximately  $816,000.
Participation  Income  increased  $2,534,000  which  was  primarily  a result of
receiving shared appreciation income, accrued additional interest and prepayment
penalties from the prepayment of the Silver  Springs,  Hampton Ridge,  Southland
and Paddock Club Apartment PIMs totaling  $3,389,000.  In addition,  $321,000 of
additional  interest was received from five of the Partnerships other PIMs. As a
result of the four above mentioned  repayments and the Rock Creek PIM prepayment
by  FNMA,  basic  interest  decreased  approximately  $2,066,000  or 16%.  Other
interest  income  increased  in 1997 as compared  to 1996 due to the  short-term
investment of the proceeds from the prepayments until such funds were ultimately
distributed to the investors. Partnership expenses have decreased when comparing
1997 to 1996, due primarily to lower asset management fees.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      See Appendix A to this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
FINANCIAL DISCLOSURE

   None.
                                                      PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

   The Partnership has no directors or executive officers. Information as to the
directors and executive  officers of Krupp Plus  Corporation  which is a General
Partner of the  Partnership  and is the  general  partner of  Mortgage  Services
Partners  Limited  Partnership  which  is  the  other  General  Partner  of  the
Partnership, is as follows:
                                           Position with
            Name and Age                   Krupp Plus Corporation

            Douglas Krupp (52)             President, Co-Chairman of the Board
                                           and Director
            George Krupp (54)              Co-Chairman of the Board and Director
            Peter F. Donovan (45)          Senior Vice President
            Ronald Halpern (57)            Senior Vice President
            Carol J. C. Mills (49)         Vice President
            Robert A. Barrows (41)         Vice President and Treasurer


         Douglas Krupp co-founded and serves as Co-Chairman and Chief Executive
Officer of The Berkshire  Group,  an integrated real estate  financial  services
firm  engaged in real  estate  acquisition  and  property  management,  mortgage
banking and  financial  management.  The  Berkshire  Group's  interests  include
ownership of a mortgage company  specializing in commercial  mortgage  financing
with a portfolio of approximately $6.0 billion. In addition, The Berkshire Group
has  a  significant   ownership  interest  in  Berkshire  Realty  Company,  Inc.
(NYSE-BRI),   a  real  estate   investment   trust   specializing  in  apartment
investments.  Mr. Krupp has held the position of Co-Chairman since The Berkshire
Group was  established  as The Krupp  Companies in 1969 and he has served as the
Chief  Executive  Officer since 1992.  Mr. Krupp serves as Chairman of the Board
and Director of  Berkshire  Realty  Company,  Inc.  (NYSE-BRI)  and he is also a
member of the Board of Trustees at Brigham & Women's Hospital.  He is a graduate
of Bryant  College  where he received an honorary  Doctor of Science in Business
Administration in 1989 and was elected trustee in 1990. Mr. Krupp also serves as
Chairman of the Board and  Trustee of Krupp  Government  Income  Trust and Krupp
Government Income Trust II.

         George Krupp is the Co-Founder and Co-Chairman of The Berkshire  Group,
an  integrated  real  estate  financial  services  firm  engaged in real  estate
acquisition, mortgage banking, investment sponsorship, venture capital investing
and financial  management.  Mr. Krupp has held the position of Co-Chairman since
The Berkshire  Group was  established as The Krupp  Companies in 1969. Mr. Krupp
has been an  instructor  of history at the New Jewish  High  School in  Waltham,
Massachusetts  since  September of 1997.  Mr. Krupp  attended the  University of
Pennsylvania and Harvard  University and holds a Master's Degree in History from
Brown University.

      Peter F. Donovan is Chief Executive Officer of Berkshire  Mortgage Finance
which  position  he has held  since  January  of 1998 and in this  capacity,  he
oversees the  strategic  growth plans of this mortgage  banking firm.  Berkshire
Mortgage Finance is the 16th largest in the United States based on servicing and
asset  management  of a $5.7 billion  loan  portfolio.  Previously  he served as
President of Berkshire  Mortgage Finance from January of 1993 to January of 1998
and in that  capacity he directed the  production,  underwriting,  servicing and
asset  management  activities  of the firm.  Prior to that,  he was Senior  Vice
President  of  Berkshire   Mortgage   Finance  and  was   responsible   for  all
participating  mortgage  originations.  Before  joining the firm in 1984, he was
Second Vice  President,  Real Estate Finance for Continental  Illinois  National
Bank & Trust,  where he managed a $300 million  construction  loan  portfolio of
commercial  properties.  Mr. Donovan received a B.A. from Trinity College and an
M.B.A. degree from Northwestern University.

         Ronald  Halpern  (age 57) is President  and COO of  Berkshire  Mortgage
Finance.  He has  served in these  positions  since  January of 1998 and in this
capacity, he is responsible for the overall operations of the Company.  Prior to
January of 1998, he was Executive  Vice  President,  managing the  underwriting,
closing,  portfolio management and servicing  departments for Berkshire Mortgage
Finance.  Before joining the firm in 1987, he held senior  management  positions
with the  Department of Housing and Urban  Development  in  Washington  D.C. and
several HUD regional  offices.  Mr.  Halpern has over 30 years of  experience in
real estate finance. He is currently a member of the Advisory Council for Fannie
Mae and  Freddie  Mac and was  prior  Chairman  of the MBA  Multifamily  Housing
Committee.  He holds a B.A.  degree from the  University of the City of New York
and J.D.
degree from Brooklyn Law School.

      Robert A. Barrows is Senior Vice President and Chief Financial  Officer of
 Berkshire  Mortgage  Finance. Mr.Barrows has held several positions within The
 Berkshire  Group since joining the company in 1983 and is currently responsible
for accounting,financial reporting, treasury and management  information  
systems for  Berkshire Mortgage  Finance.  Prior to joining The Berkshire Group,
 he was an audit  supervisor for Coopers & Lybrand L.L.P.in Boston. He received
 a B.S. degree from Boston College and is a Certified Public Accountant.

     Carol J.C.  Mills is Senior Vice  President  for Loan  Management of
Berkshire  Mortgage  Finance and in this capacity,  she is responsible  for the
Loan Servicing and Asset  Management  functions of the Boston,  Bethesda and
Seattle  offices of  Berkshire  Mortgage  Finance.  She manages the estimated 
$6 billion  portfolio of loans.  Ms.Mills joined Berkshire in December 1997 as 
Vice President  and was promoted to Senior Vice  President in January 1999.From
January 1989 through  November 1997, Ms. Mills was Vice  President of First  
Winthrop Corporation and Winthrop Financial  Associates,  in Cambridge,  MA. 
Ms. Mills earned a B.A. degree from Mount Holyoke College and a Master  of  
Architecture degree from Harvard University. Ms. Mills is a member of the Real  
Estate Finance Association, New England Women in Real Estate and the Mortgage 
Bankers Association.


ITEM 11.  EXECUTIVE COMPENSATION

     The Partnership has no directors or executive officers.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of December 31, 1998, no person of record  owned or was known by the
General Partners to own beneficially more than 5% of the Partnership's
14,956,896 outstanding Units. The only interests held by management or its
affiliates consist of its General Partner and Corporate Limited Partner
Interests.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  Information required under this Item is contained in Note F to the
Partnership's Financial Statements presented in Appendix A to this report.

                                                       PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)            1. Financial  Statements - see Index to Financial  Statements and
               Schedule  included  under Item 8, Appendix A, on page F-2 of this
               report.

        2.     Financial Statement Schedule - see Index to Financial  Statements
               and Schedule  included  under Item 8,  Appendix A, on page F-2 of
               this  report.  All other  schedules  are  omitted as they are not
               applicable,  not required or the  information  is provided in the
               Financial Statements or the Notes thereto.

(b)     Exhibits:
        Number and Description
        Under Regulation S-K

        The following  reflects all applicable  Exhibits required under Item 601
of Regulation S-K:

     (4)  Instruments   defining  the  rights  of  security  holders   including
indentures:


            (4.1)       Agreement  of Limited  Partnership  dated as of July 19,
                        1988   [Exhibit  A  included  in  Amendment   No.  1  of
                        Registrant's  Registration  Statement on Form S-11 dated
                        July 20, 1988 (File No. 33-21201)].*

            (4.2)       Subscription  Agreement  whereby a subscriber  agrees to
                        purchase   Units  and  adopts  the   provisions  of  the
                        Agreement of Limited Partnership  [Exhibit D included in
                        Amendment No. 1 of Registrant's  Registration  Statement
                        on Form S-11 dated July 20, 1988 (File No.
                        33-21201)].*

            (4.3)       Copy  of  First  Amended  and  Restated  Certificate  of
                        Limited   Partnership   filed  with  the   Massachusetts
                        Secretary  of State  on July 1,  1988.  [Exhibit  4.4 to
                        Amendment No. 1 of Registrant's  Registration  Statement
                        on Form S-11 dated July 20, 1988 (File No.
                        33-21201)].*



     (10)   Material Contracts:

            (10.1)      Form of  agreement  between  the  Partnership  and Krupp
                        Mortgage   Corporation  [Exhibit  10.2  to  Registrant's
                        Registration Statement on Form S-11 dated April 20, 1988
                        (File No.
                        33-21201)].*

            Richmond Park Apartments

            (10.2)      Prospectus  for GNMA Pool No.  260865 (PL)  [Exhibit 1 
                        to Registrant's report on Form 8-K dated August 30, 
                        1989 (File No. 0-17690)].*

            (10.3)      Subordinated  Multifamily  Open-End Mortgage  (including
                        Subordinated   Promissory  Note)  dated  July  14,  1989
                        between Carl Milstein,  Trustee,  Irwin  Obstgarten,  Al
                        Simmon and Krupp Insured  Plus-II  Limited  Partnership.
                        [Exhibit  2 to  Registrant's  report  on Form 8-K  dated
                        August 30, 1989 (File No. 0-17690)].*

            (10.4)      Participation  Agreement  dated  July 31,  1989  between
                        Krupp Insured  Mortgage  Limited  Partnership  and Krupp
                        Insured  Plus-II  Limited  Partnership   [Exhibit  3  to
                        Registrant's  report on Form 8-K dated  August 30,  1989
                        (File No. 0-17690)].*

            Saratoga Apartments

            (10.5)      Prospectus  for GNMA Pool No.  280643 (PL)  [Exhibit 4
                        to Registrant's report on Form 8-K dated August 30,1989
                        (File No. 0-17690)].*

            (10.6)      Subordinated Multifamily Mortgage(including Subordinated
                        Promissory Note) dated July 27, 1989 between  American  
                        National Bank and Trust Company of Chicago,  as Trustee 
                        and Krupp Insured  Mortgage Limited Partnership.  
                        [Exhibit 5 to Registrant's  report on Form
                        8-K dated August 30, 1989 (File No. 0-17690)].*

            (10.7)      Participation  Agreement  dated  July 31,  1989  between
                        Krupp  Insured  Plus-II  Limited  Partnership  and Krupp
                        Insured  Mortgage  Limited  Partnership  [Exhibit  6  to
                        Registrant's  report on Form 8-K dated  August 30,  1989
                        (File No. 0-17690)].*


            Valley Manor Apartments

            (10.8)      Prospectus  for GNMA Pool No.  272541 (PL)  [Exhibit 7
                        to Registrant's report on Form 8-K dated August 30,1989
                       (File No. 0-17690)].*


            (10.9)      Subordinated     Multifamily     Mortgage     (including
                        Subordinated   Promissory  Note)  dated  June  28,  1989
                        between New Valley Manor  Associates  and Krupp  Insured
                        Mortgage Limited Partnership  [Exhibit 8 to Registrant's
                        report  on Form 8-K  dated  August  30,  1989  (File No.
                        0-17690)].*

            Remington Place Apartments

            (10.10)     Prospectus to GNMA Pool No.  280644(PL)[Exhibit  10.14 
                        to Registrant's Annual Report on Form 10-K for the 
                      fiscal year ended December 31, 1989 (File No. 0-17690)].*

            (10.11)     Subordinated  Promissory  Note dated  September 21, 1989
                        between Brinkley Towers Associates  Limited  Partnership
                        and Krupp Insured Mortgage Limited Partnership  [Exhibit
                        10.15 to Registrant's Annual Report on Form 10-K for the
                        fiscal   year  ended   December   31,   1989  (File  No.
                        0-17690)].*

            (10.12)     Subordinated  Multifamily  Deed of Trust dated September
                        21, 1989  between  Brinkley  Towers  Associates  Limited
                        Partnership   and   Krupp   Insured   Mortgage   Limited
                        Partnership [Exhibit 10.16 to Registrant's Annual Report
                        on Form 10-K for the fiscal year ended December 31, 1989
                        (File No. 0-17690)].*

            (10.13)     Workout  Agreement  and  Subordinated   Promissory  Note
                        Modification  Agreement for the interest rate  reduction
                        dated  December  23,  1993  by  and  between   Berkshire
                        Mortgage  Finance  Corporation,  Krupp Insured  Mortgage
                        Limited   Partnership  and  Brinkly  Towers   Associates
                        Limited  Partnership.  [Exhibit  10.16  to  Registrant's
                        Annual  Report on Form 10-K for the  fiscal  year  ended
                        December 31, 1994 (File No. 0-17690)].*

            The Patrician

            (10.14)     Supplement to Prospectus dated November 1, 1989 for FNMA
                        Pool No MX-073008 [Exhibit 10.20 to Registrant's  Annual
                        Report on Form 10-K for the fiscal  year ended  December
                        31, 1989 (File No. 0-17690)].*

            Wildflower Apartments

            (10.15)     Prospectus for GNMA Pool No.  280652(PL) [Exhibit 10.30 
                        to Registrant's Annual Report on Form 10-K for the 
                      fiscal year ended December 31, 1989 (File No. 0-17690)].*

            (10.16)     Subordinated  Multifamily  Deed of Trust dated  December
                        12,  1989  (including   Subordinated   Promissory  Note)
                        between Lincoln Wildflower Limited Partnership and Krupp
                        Insured Mortgage Limited  Partnership  [Exhibit 10.31 to
                        Registrant's  Annual  Report on Form 10-K for the fiscal
                        year ended December 31, 1989 (File No. 0-17690)].*


            Brookside Apartments

            (10.17)     Supplement  to  Prospectus  dated  November  1, 1989 for
                        Federal  National   Mortgage   Association  Pool  Number
                        MX-073009  [Exhibit 19.1 to Registrant's  report on Form
                        10-Q for the  quarter  ended  March 31,  1990  (File No.
                        0-17690)].*

            (10.18)     Subordinated Multifamily Deed of Trust dated January 30,
                        1990  between  Brookside  Manzanita  and  Krupp  Insured
                        Mortgage   Limited   Partnership    [Exhibit   19.2   to
                        Registrant's  report on Form 10-Q for the quarter  ended
                        March 31, 1990 (File No. 0-17690)].*

            (10.19)     Subordinated  Promissory  Note dated  January  30,  1990
                        between  Brookside  Manzanita and Krupp Insured Mortgage
                        Limited Partnership [Exhibit 19.3 to Registrant's report
                        on Form 10-Q for the quarter  ended March 31, 1990 (File
                        No. 0-17690)].*


            Bell Station Apartments

            (10.20)     Supplement to Prospectus dated April 1, 1990 for Federal
                        National  Mortgage  Association  Pool  Number  MX-073011
                        [Exhibit  19.4 to  Registrant's  report on Form 10-Q for
                        the quarter ended June 30, 1990 (File No. 0-17690)].*

            (10.21)     Subordinated  Multifamily  Mortgage dated March 28, 1990
                        between Bell Station Associates,  L.P. and Krupp Insured
                        Mortgage   Limited   Partnership    [Exhibit   19.4   to
                        Registrant's  report on Form 10-Q for the quarter  ended
                        March 31, 1990 (File No. 0-17690)].*

            (10.22)     Subordinated   Promissory  Note  dated  March  28,  1990
                        between Bell Station Associates,  L.P. and Krupp Insured
                        Mortgage   Limited   Partnership    [Exhibit   19.5   to
                        Registrant's  report on Form 10-Q for the quarter  ended
                        March 31, 1990 (File No. 0-17690)].*

            The Enclave Apartments

            (10.23)     Supplement to Prospectus dated April 1, 1990 for Federal
                        National  Mortgage  Association  Pool  Number  MX-073013
                        [Exhibit  19.1 to  Registrant's  report on Form 10-Q for
                        the quarter ended June 30, 1990 (File No. 0-17690)].*

            (10.24)     Subordinated  Multifamily  Open-End Mortgage dated April
                        26,  1990  between  Beavercreek   Associates  and  Krupp
                        Insured  Mortgage Limited  Partnership  [Exhibit 19.2 to
                        Registrant's  report on Form 10-Q for the quarter  ended
                        June 30, 1990 (File No. 0-17690)].*

            (10.25)     Subordinated   Promissory  Note  dated  April  26,  1990
                        between   Beavercreek   Associates   and  Krupp  Insured
                        Mortgage   Limited   Partnership    [Exhibit   19.3   to
                        Registrant's  report on Form 10-Q for the quarter  ended
                        June 30, 1990 (File No. 0-17690)].*

            Creekside Apartments

            (10.26)     Subordinated Promissory Note dated June 28, 1990 between
                        Creekside   Associates  Limited  Partnership  and  Krupp
                        Insured  Mortgage Limited  Partnership  [Exhibit 19.6 to
                        Registrant's  report on Form 10-Q for the quarter  ended
                        June 30, 1990 (File No. 0-17690)].*


            (10.27)     Subordinated  Multifamily  Deed of Trust  dated June 28,
                        1990 between Creekside  Associates  Limited  Partnership
                        and Krupp Insured Mortgage Limited Partnership  [Exhibit
                        19.7 to Registrant's report on Form 10-Q for the quarter
                        ended June 30, 1990 (File No. 0-17690)].*

            (10.28)     Participation  Agreement  dated  June 28,  1990  between
                        Krupp Mortgage  Corporation  and Krupp Insured  Mortgage
                        Limited Partnership [Exhibit 19.1 to Registrant's report
                        on Form 10-Q for the quarter  ended  September  30, 1990
                        (File No. 0-17690)].*

            Salishan Apartments

            (10.29)     Supplement to Prospectus  dated July 1, 1990 for Federal
                        National  Mortgage  Association  Pool  Number  MX-073017
                        [Exhibit  19.2 to  Registrant's  report on Form 10-Q for
                        the  quarter   ended   September   30,  1990  (File  No.
                        0-17690)].*

            (10.30)     Subordinated Promissory Note dated June 20, 1990 between
                        Dale A. Williams and D.R. Salishan (the "Mortgagor") and
                        Krupp  Insured   Mortgage   Limited   Partnership   (the
                        "Holder")  [Exhibit 19.3 to Registrant's  report on Form
                        10-Q for the quarter ended  September 30, 1990 (File No.
                        0-17690)].*

            (10.31)     Subordinated  Multifamily  Deed of Trust  dated June 20,
                        1990 between Dale A.  Williams  and D.R.  Salishan  (the
                        "Borrower")   and   Krupp   Insured   Mortgage   Limited
                        Partnership (the "Lender") [Exhibit 19.4 to Registrant's
                        report on Form 10-Q for the quarter ended  September 30,
                        1990 (File No. 0-17690)].*

            Marina Shores Apartments

            (10.32)     Participation  Agreement  dated  June  29,  1990  by and
                        between Krupp Insured Plus-III  Limited  Partnership and
                        Krupp Insured Mortgage Limited Partnership [Exhibit 19.9
                        to  Registrant's  report  on Form  10-Q for the  quarter
                        ended September 30, 1990 (File No. 0-17690)].*

            Pope Building

            (10.33)     Subordinated  Promissory Note dated May 30, 1991 between
                        Pope  Building   Associates  Limited   Partnership  (the
                        "Mortgagor")   and  Krupp   Insured   Mortgage   Limited
                        Partnership (the "Holder") [Exhibit 19.1 to Registrant's
                        report on Form 10-Q for the quarter ended  September 30,
                        1991 (File No. 0-17690)].*

            (10.34)     Subordinated  Multi-family  Mortgage  dated May 31, 1991
                        between  American  National  Bank and Trust  Company  of
                        Chicago  (the  "Borrower")  and  Krupp  Insured  Limited
                        Partnership   (the   "Mortgagee").   [Exhibit   19.2  to
                        Registrant's  report on Form 10-Q for the quarter  ended
                        September 30, 1991 (File No. 0-17690)].*

            (10.35)     Supplement  to  Prospectus  for  Government  National  
                        Mortgage Association Pool Number 280842. [Exhibit  19.3 
                        to Registrant's report on Form 10-Q for the quarter  
                        ended September 30, 1991 (File No. 0-17690)].*

            * Incorporated by reference.


(c)  Reports on Form 8-K

            During the last quarter of the year ended  December  31,  1998,  the
            Partnership did not file any reports on Form 8-K.





                                                     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,  on the 5th day of
March, 1999.

                                   KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

                                   By:    Krupp Plus Corporation, a General
                                          Partner


                                   By:/s/Douglas Krupp
                                    Douglas Krupp, President, Co-Chairman 
                                   (Principal Executive Officer), and 
                                   Director of Krupp Plus Corporation


   Pursuant to the  requirements  of the Securities  Exchange Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated, on the 5th day of March, 1999.

            Signatures                                          Title(s)


/s/Douglas Krupp                   President, Co-Chairman (Principal Executive
Douglas Krupp                      Officer),  and  Director  of Krupp Plus  
                                   Corporation,  a General Partner


/s/George Krupp                       Co-Chairman (Principal Executive Officer)
George Krupp                         and Director of Krupp Plus Corporation, a 
                                     General Partner


/s/Peter F. Donovan                  Senior Vice President of Krupp Plus
Peter F. Donovan                     Corporation, a General Partner



 /s/Robert A. Barrows                Vice President and Treasurer of Krupp Plus
 Robert A. Barrows                   Corporation, a General Partner






                                                          

                                   APPENDIX A

                   KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP











                        FINANCIAL STATEMENTS AND SCHEDULE
                               ITEM 8 of FORM 10-K

             ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
                      For the Year Ended December 31, 1998


                                     


                   KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES




Report of Independent Accountants                                       F-3

Balance Sheets at December 31, 1998 and 1997                            F-4

Statements of Income for the Years Ended December 31, 1998,
1997 and 1996                                                           F-5

Statements of Changes in Partners' Equity for the Years Ended
December 31, 1998, 1997 and 1996                                        F-6

Statements of Cash Flows for the Years Ended December 31, 1998,
1997 and 1996                                                           F-7

Notes to Financial Statements                                    F-8 - F-15

Schedule IV - Mortgage Loans on Real Estate                     F-16 - F-18


All other  schedules are omitted as they are not applicable or not required, or
the information is provided in the financial statements or the notes thereto.







                        REPORT OF INDEPENDENT ACCOUNTANTS



To the Partners of
Krupp Insured Mortgage Limited Partnership:

In our opinion,  the accompanying  Financial  Statements  listed on the index on
Page F-2 of this  Form  10-K  present  fairly,  in all  material  respects,  the
financial   position  of  Krupp  Insured  Mortgage   Limited   Partnership  (the
"Partnership")  at December 31, 1998 and 1997 and the results of its  operations
and its cash flows for each of the three years in the period ended  December 31,
1998  in  conformity  with  generally  accepted  accounting  principles.   These
financial statements are the responsibility of the Partnership's management; our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We conducted  our audits of these  statements  in  accordance  with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable  assurance about whether the financial statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe  that our audits  provide a  reasonable  basis for the  opinion  express
above.



                                                 PricewaterhouseCoopers LLP





Boston, Massachusetts
March 12, 1999






                                                          F-6



                                      KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

                                                    BALANCE SHEETS

                                              December 31, 1998 and 1997


                                                        ASSETS

                                                                               1998                  1997
                                                                               ----                  ----

   Participating Insured Mortgages ("PIMs")
                                                                                                       
   (Notes B, C and H)                                                         $ 98,950,663          $113,051,723
   Mortgage-Backed Securities ("MBS")
    (Notes B, D and H)                                                          18,806,870            23,700,858
                                                                              ------------          ------------

        Total mortgage investments                                             117,757,533           136,752,581

   Cash and cash equivalents (Notes B and H)                                    15,117,466            20,480,666
   Interest receivable and other assets                                            786,165               936,883
   Prepaid acquisition fees and expenses, net of
    accumulated amortization of $7,184,808 and
    $6,944,814 respectively (Note B)                                             1,167,020             2,393,273
   Prepaid participation servicing fees, net of
    accumulated amortization of $2,170,982 and
    $2,293,034, respectively (Note B)                                              385,110               794,887
                                                                              ------------          ------------

        Total assets                                                          $135,213,294          $161,358,290
                                                                              ============          ============

                                           LIABILITIES AND PARTNERS' EQUITY

   Liabilities                                                                $     30,794          $    120,966
                                                                              ------------          ------------

   Partners' equity (deficit) (Notes A and E):

     Limited Partners                                                          134,849,373           160,722,004
      (14,956,796 Limited Partner interests
         outstanding)
     General Partners                                                             (312,060)             (274,985)

   Acumulated Comprehensive Income  (Note B)                                       645,187               790,305
                                                                              ------------          ------------

        Total Partners' equity                                                 135,182,500           161,237,324
                                                                              ------------          ------------

        Total liabilities and Partners' equity                                $135,213,294          $161,358,290
                                                                              ============          ============

                     Theaccompanying notes are an integral
                        part of the financial statements.








                                   KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

                                              STATEMENTS OF INCOME

                              For the Years Ended December 31, 1998, 1997 and 1996


                                                                    1998              1997              1996
                                                               -----------        -----------       --------
Revenues (Note B):
 Interest income - PIMs (Note C):
                                                                                                         
 Basic interest                                                    $ 9,088,624         $10,887,208        $12,952,992
 Participation interest                                                865,027           3,709,622          1,176,169
 Interest income - MBS (Note D)                                      1,594,765           1,493,309          1,497,760
 Other interest income                                                 405,763             589,154            412,790
                                                                   -----------         -----------        -----------

             Total revenues                                         11,954,179          16,679,293         16,039,711
                                                                  ------------         -----------        -----------

Expenses:
 Asset management fee to an
  affiliate (Note F)                                                   918,778           1,129,880          1,311,377
 Expense reimbursements to affiliates
  (Note F)       58,391                                                164,813             156,784
 Amortization of prepaid fees and expenses
 (Note B)      1,636,030                                             2,916,678           3,013,133
 General and administrative                                            240,842             279,848            186,052
                                                                   -----------         -----------        -----------

             Total expenses                                          2,854,041           4,491,219          4,667,346
                                                                   -----------         -----------        -----------

Net income (Note G)                                                $ 9,100,138         $12,188,074        $11,372,365
                                                                   ===========         ===========        ===========

Allocation of net income (Note E):

 Limited Partners                                                  $ 8,827,134         $11,822,432        $11,031,194
                                                                   ===========         ===========        ===========

 Average net income per Limited Partner
  interests  $       .59                                       $       .79$       .74
             ===========                                       ======================
 (14,956,796 Limited Partner interests
  outstanding)

 General Partners                                                  $   273,004         $   365,642        $   341,171
                                                                   ===========         ===========        ===========





                     The accompanying notes are an integral
                        part of the financial statements.








                                      KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

                                       STATEMENTS OF CHANGES IN PARTNERS' EQUITY

                                 For the Years Ended December 31, 1998, 1997 and 1996


                                                                                    Accumulated      Total
                                                  Limited             General     Comprehensive          Partners'
                                                Partners             Partners           Income            Equity


                                                                                                        
Balance at December 31, 1995                       $227,908,288         $ (164,638)       $ 895,050        $228,638,700

Net income                                           11,031,194            341,171            -              11,372,365

Quarterly distributions                             (17,948,153)          (431,074)           -             (18,379,227)

Special Distributions                               (25,426,553)            -                 -             (25,426,553)

Change in unrealized
  gain on MBS                                            -                    -            (468,281)           (468,281)
                                                   ------------          ---------       ----------        ------------

Balance at December 31, 1996                        195,564,776           (254,541)         426,769         195,737,004

Net income                                           11,822,432            365,642           -               12,188,074

Quarterly distributions                             (17,948,156)          (386,086)          -              (18,334,242)

Special Distributions                               (28,717,048)            -                -              (28,717,048)

Change in unrealized
  gain on MBS                                            -                    -             363,536             363,536
                                                   ------------          ---------       ----------        ------------

Balance at December 31, 1997                        160,722,004           (274,985)         790,305         161,237,324

Net income                                            8,827,134            273,004           -                9,100,138

Quarterly distributions                             (13,909,819)          (310,079)          -              (14,219,898)

Special Distributions                               (20,789,946)            -                -              (20,789,946)

Change in unrealized
  loss on MBS                                             -                 -              (145,118)           (145,118)
                                                     ---------------------                 ----------      -------------

Balance at December 31, 1998                      $ 134,849,373          $(312,060)      $  645,187        $135,182,500
                                                   =============          ==========      ==========  ==================






                     The accompanying notes are an integral
                        part of the financial statements.






                                                                 F-19




                                            KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

                                                     STATEMENTS OF CASH FLOWS

                                       For the Years Ended December 31, 1998, 1997 and 1996


                                                                        1998                   1997                  1996
                                                                        ----                   ----                  ----
Operating activities:
                                                                                                                 
   Net income                                                       $ 9,100,138               $12,188,074         $11,372,365
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Amortization of prepaid expenses and
       fees                                                           1,636,030                 2,916,678           3,013,133
      Shared appreciation income and prepayment
         penalities                                                    (586,560)               (2,620,113)           (982,845)
    Changes in assets and liabilities:
         Decrease in interest receivable
            and other assets                                            150,718                   355,951             820,544
         Increase (decrease) in liabilities                             (90,172)                  101,993               4,215
                                                                       ---------                ----------          ---------

            Net cash provided by operating
             activities                                              10,210,154                12,942,583          14,227,412
                                                                    -----------               -----------          -----------

Investing activities:
   Principal collections on PIMs including
     shared appreciation income and prepayment
      penalities of $586,560 in 1998,
      $2,620,113 in 1997 and $982,845 in 1996,
       respectively                                                  14,687,620                46,486,602          26,365,229
      Principal collections on MBS                                    4,748,870                 2,045,694           3,299,457
                                                                     -----------              -----------         -----------

            Net cash provided by investing
            activities                                               19,436,490                48,532,296          29,664,686
                                                                    -----------               -----------         -----------

Financing activities:
   Quarterly distributions                                          (14,219,898)              (18,334,242)           (18,379,227)
   Special distributions                                            (20,789,946)              (28,717,048)           (25,426,553)
                                                                    -----------               ------------           -----------

        Net cash used for financing
             activities                                             (35,009,844)              (47,051,290)           (43,805,780)
                                                                    -----------               -----------            -----------

Net (decrease)increase in cash and
      cash equivalents                                               (5,363,200)               14,423,589                 86,318

Cash and cash equivalents, beginning of year                         20,480,666                 6,057,077              5,970,759
                                                                    -----------               -----------            -----------

Cash and cash equivalents, end of year                              $15,117,466               $20,480,666            $ 6,057,077
                                                                     ==========               ===========            ===========

Supplemental disclosure of non-cash investing
   activities:                                                                                           
Reclassification of investment in PIM to
   a MBS                                                            $     -                   $ 8,024,709            $     -
                                                                     ===========              ===========             =======






                          Theaccompanying notes are an
                         integral part of the financial
                                   statements.






                                     KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

                                      NOTES TO FINANCIAL STATEMENTS, Continued


A.      Organization

        Krupp Insured  Mortgage  Limited  Partnership  (the  "Partnership")  was
        formed on March 21, 1988 by filing a Certificate of Limited  Partnership
        in The Commonwealth of Massachusetts.  The Partnership was organized for
        the  purpose of  investing  in  commercial  and  multi-family  loans and
        mortgage backed  securities.  The Partnership  issued all of the General
        Partner  Interests  to two  General  Partners  in  exchange  for capital
        contributions  aggregating  $3,000.  Krupp Plus Corporation and Mortgage
        Services  Partners  Limited  Partnership are the General Partners of the
        Partnership and Krupp  Depositary  Corporation is the Corporate  Limited
        Partner.  Except under certain limited circumstances upon termination of
        the  Partnership,  the  General  Partners  are not  required to make any
        additional capital contributions. The Partnership terminates on December
        31,  2028,  unless  terminated  earlier upon the  occurrence  of certain
        events as set forth in the Partnership Agreement.

        The Partnership  commenced the public offering of Units on July 22, 1988
        and completed its public offering on May 23, 1990 having sold 14,956,796
        Units for $298,678,321 net of purchase volume discounts of $457,599.

B.      Significant Accounting Policies

        The  Partnership  uses the following  accounting  policies for financial
        reporting purposes, which may differ in certain respects from those used
        for federal income tax purposes (see Note G):

            MBS

            The Partnership,  in accordance with Financial  Accounting Standards
            Board=s  Special  Report on Statement 115,  "Accounting  for Certain
            Investments in Debt and Equity  Securities" (AFAS 115@),  classifies
            its MBS  portfolio as  available-for-sale.  As such the  Partnership
            carries its MBS at fair market  value and  reflects  any  unrealized
            gains  (losses) as a separate  component  of Partners'  Equity.  The
            Partnership  amortizes  purchase premiums or discounts over the life
            of the underlying mortgages using the effective interest method.

           Effective  January 1, 1998, the Partnership  adopted the Statement of
           Financial  Accounting  Standards  No. 130,  'Reporting  Comprehensive
           Income' (FAS 130),  was issued  establishing  standards for reporting
           and  displaying  comprehensive  income  and its  components.  FAS 130
           requires comprehensive income and its components, as recognized under
           accounting  standards,  to be displayed in a financial statement with
           the same prominence as other financial statements,  if material.  FAS
           130 had no material effect on the Partnership's financial position or
           results of operations.

            PIMs

            The Partnership  accounts for its MBS portion of a PIM in accordance
            with FAS 115  under  the  classification  of held to  maturity.  The
            Partnership  carries the Government  National  Mortgage  Association
            (AGNMA@) or Fannie Mae MBS at amortized cost.

           The Federal Housing  Administration  PIM is carried at amortized cost
           unless the General  Partners of the  Partnership  believe there is an
           impairment  in value,  in which case a valuation  allowance  would be
           established in accordance with Financial Accounting
                                                     continued






B.      Significant Accounting Policies, continued

            PIMs, continued

            Standards No.114, Accounting  by Creditors for Impairment of a 
            Loan,@ and Financial Accounting Standard No.118, Accounting  by  
            Creditors for Impairment of a Loan -  Income  Recognition  and
            Disclosures.

            Basic interest on PIMs is recognized based on the stated rate of the
            Federal  Housing  Administration  ("FHA")  mortgage  loan  (less the
            servicer's  fee) or the stated coupon rate of the GNMA or Fannie Mae
            MBS.  Participation interest is recognized as earned and when deemed
            collectible by the Partnership.

            Cash and Cash Equivalents

            The Partnership includes all short-term  investments with maturities
            of three  months  or less from the date of  acquisition  in cash and
            cash  equivalents.  The  Partnership  invests its cash  primarily in
            commercial  paper and money market funds with a commercial  bank and
            has not experienced any loss to date on its invested cash.

            Prepaid Fees and Expenses

            Prepaid  fees  and  expenses  represent  prepaid  acquisition  fees,
            expenses  and  prepaid  participation  servicing  fees  paid for the
            acquisition and servicing of PIMs. The Partnership amortizes prepaid
            acquisition  fees and expenses using a method that  approximates the
            effective  interest  method  over a period of ten to  twelve  years,
            which represents the actual maturity or anticipated repayment of the
            underlying  mortgage.  Acquisition  expenses  incurred on  potential
            acquisitions which were not consummated were charged to operations.

            The Partnership amortizes prepaid participation servicing fees using
            a method that  approximates  the  effective  interest  method over a
            ten-year  period  beginning  at final  endorsement  of the loan if a
            Department  of Housing and Urban  Development  ("HUD")  loan or GNMA
            loan and at closing if a Fannie Mae loan.

            Income Taxes

            The  Partnership  is not liable for federal or state income taxes as
            Partnership  income is  allocated  to the  partners  for  income tax
            purposes.  In the  event  that the  Partnership's  tax  returns  are
            examined by the Internal  Revenue Service or state taxing  authority
            and the  examination  results  in a change  in  Partnership  taxable
            income, such change will be reported to the partners.

            Estimates and Assumptions

           The preparation of financial  statements in accordance with generally
           accepted accounting  principles requires management to make estimates
           and assumptions that affect the reported amount of assets and

                                                           continued






B.     Significant Accounting Policies, continued

            Estimates and Assumptions, continued

            liabilities,  contingent  assets and  liabilities  and  revenues and
            expenses  during the period.  Actual results could differ from those
            estimates.

C.      PIMs

        At December 31, 1998, the  Partnership  has  investments in 12 PIMs. The
        Partnership's  PIMs consist of (a) a GNMA or Fannie Mae MBS representing
        the securitized first mortgage loan on the underlying property or a sole
        participation  interest in the mortgage loan originated  under HUD's FHA
        lending  program  (collectively  the  "insured   mortgages"),   and  (b)
        participation  interests in the revenue stream and  appreciation  of the
        underlying  property above specified base levels.  The borrower  conveys
        these  participation  features to the  Partnership  generally  through a
        subordinated promissory note and mortgage (the "Agreement").

        The Partnership  receives  guaranteed  monthly payments of principal and
        interest  on the  GNMA  and  Fannie  Mae MBS,  and HUD  insures  the FHA
        mortgage  loan  and the  mortgage  loan  underlying  the GNMA  MBS.  The
        borrower  usually cannot prepay the first mortgage loan during the first
        five years and may prepay the first mortgage loan thereafter  subject to
        a 9%  prepayment  penalty in years six  through  nine,  a 1%  prepayment
        penalty  in  year  ten  and  no  prepayment  penalty   thereafter.   The
        Partnership may receive interest related to its participation  interests
        in the underlying property,  however,  these amounts are neither insured
        nor guaranteed.

        Generally,  the  participation  features  consist of the following:  (i)
        "Minimum  Additional  Interest"  which  is at the  rate of .5% to 1% per
        annum calculated on the unpaid  principal  balance of the first mortgage
        on the underlying  property,  (ii) "Shared Income Interest" which is 25%
        to 35% of the monthly  gross rental income  generated by the  underlying
        property in excess of a specified  base,  but only to the extent that it
        exceeds the amount of Minimum  Additional  Interest  earned  during such
        month, (iii) "Shared  Appreciation  Interest" which is 25% to 35% of any
        increase  in the  value  of  the  underlying  property  in  excess  of a
        specified base. Payment of participation interest from the operations of
        the  property  is limited  in any year to 50% of net  revenue or surplus
        cash as defined by Fannie Mae or HUD, respectively. The aggregate amount
        of  Minimum  Additional  Interest,  Shared  Income  Interest  and Shared
        Appreciation Interest payable by the underlying borrower on the maturity
        date  generally  cannot  exceed  50% of any  increase  in  value  of the
        property.   However,  generally  any  net  proceeds  from  the  sale  or
        refinancing of the property will be available to satisfy any accrued but
        unpaid Shared Income or Minimum Additional Interest.

        Shared  Appreciation  Interest  is  payable  when  one of the  following
        occurs:  (1) the sale of the underlying  property to an unrelated  third
        party on a date  which is later  than  five  years  from the date of the
        Agreement,  (2) the maturity  date or  accelerated  maturity date of the
        Agreement,  or (3) prepayment of amounts due under the Agreement and the
        insured mortgage.




                                                         Continued


  C.    PIM's continued

        The  Partnership,   upon  giving  twelve  months  written  notice,   can
        accelerate the maturity date of the Agreement to a date not earlier than
        ten years  from the date of the  Agreement  for (a) the  payment  of all
        participation  interest due under the  Agreement  as of the  accelerated
        maturity  date,  or (b) the payment of all  participation  interest  due
        under the Agreement  plus all amounts due on the first  mortgage note on
        the property.

       During  January  1998,  the  Partnership  made a $1.12  per Unit  special
       distribution  with  the  prepayment  proceeds  of the  Paddock  Club  and
       Southland  Station PIMs that were received  during the fourth  quarter of
       1997.

       On July 27, 1998 and August 26, 1998, the Partnership  received a partial
       prepayment  and  final   prepayment  of   approximately   $654,000,   and
       $2,985,000,  respectively,  for the Deering Place  Apartments PIM. During
       July of 1998 the Partnership  received  minimum  additional  interest and
       shared  interest  income of $90,195 and a prepayment  penalty of $268,638
       from the Deering Place  Apartment PIM. The  Partnership  distributed  the
       capital transaction  proceeds from this prepayment to investors through a
       special  distribution  on  September  18,  1998 in the amount of $.27 per
       Limited Partner interest.

        On November 16, 1998, the Partnership received a prepayment of the Cross
        Creek PIM in the amount of approximately $9,414,586. Additional interest
        in lieu of a prepayment  penalty of  approximately  $318,000  along with
        shared interest income of approximately $60,000 was also received during
        1998.  The  Partnership  expects to make a special  distribution  in the
        amount of $.63 per unit during the first quarter of 1999.

        On February 25, 1997, the Partnership  received a prepayment of the Rock
        Creek Apartments PIM. The Partnership received the outstanding principal
        balance of $11,139,968  plus outstanding  interest.  The Partnership did
        not receive any  prepayment  penalty or  participation  income from this
        PIM.  The Borrower of the Rock Creek  Springs PIM  defaulted on its debt
        service  obligation  during the third  quarter of 1996.  Fannie Mae, the
        guarantor  of the MBS  portion  of the PIM,  was unable to  negotiate  a
        workout plan with the borrower and exercised its option to repay the MBS
        in  February  1997 and  pursue a  foreclosure.  On March 21,  1997,  the
        Partnership  made a special  distribution  of $.75 per  Limited  Partner
        interest with the proceeds from the Rock Creek payoff.

       On April 25, 1997,  the  Partnership  received a prepayment of the Silver
       Springs PIM. The Partnership  received the outstanding  principal balance
       of $7,249,479 plus outstanding interest on April 25, 1997, while on March
       31, 1997, the Partnership  had received a prepayment  penalty of $652,453
       and Minimum Additional and Shared Income Interest of $41,173.  On May 23,
       1997 the Partnership made a special  distribution of $.53 per unit to the
       Limited Partners from the proceeds of the Silver Springs PIM prepayment.

       During the second  quarter of 1997, the  Partnership  received a $100,000
       payment for all additional  interest  earned on the Patrician  Apartments
       PIM though the date of  discharge.  The  Partnership  then  converted the
       investment in the PIM to a multi-family insured mortgage.



                                                     Continued

C.      PIMs, continued

       On October 27, 1997, the Partnership received a prepayment of the Hampton
       Ridge Apartments PIM. The Partnership received the outstanding  principal
       balance of $9,067,437 plus outstanding interest. The Partnership received
       a   prepayment   penalty  of   approximately   $508,000  in  addition  to
       participation income of approximately $249,000. On November 21, 1997, the
       Partnership  made a special  distribution of $.64 per unit to the Limited
       Partners from the proceeds of the Hampton Ridge PIM prepayment.

        During  December,  1997,  the  Partnership  received  prepayments of the
        Southland   Station   Apartments  and  Paddock  Club  Apartments   PIMs,
        respectively.   The  Partnership  received  the  outstanding   principal
        balances of $5,254,302  and  $9,942,697 on the Southland  Apartments and
        Paddock Club Apartments  PIMs,  respectively.  The Partnership  received
        shared  appreciation  and prepayment  penalties of $565,195 and $894,843
        from  the  prepayment  of the  Southland  Apartments  and  Paddock  Club
        Apartments PIMs,  respectively.  In addition,  the Partnership  received
        participation  income of $83,441 and  $296,799  from the  Southland  and
        Paddock Club Apartment PIMs, respectively.

        At  December   31,  1998  and  1997  there  were  no  loans  within  the
        Partnerships portfolio that were delinquent as to principal or interest.

        The  Partnership's  PIMs consisted of the following at December 31, 1998
and 1997:




                              Aggregate        Permanent      Maturity
                               Original     Number             Interest                Date    Investment
Basis
Issuer     Principal          of PIMs      Rate Range           Range                at December 31,
                                                                                       1998                1997
                                                                                                
GNMA           $61,897,932          7    7.50% - 8%          2024 to 2032            $57,833,529          $67,900,036
                              (a)            (b)
Fannie Mae      35,143,543          4          7.5%          1999 to 2000             33,010,473           37,000,564
                                             (c)
FHA              8,354,500          1          8.305%              2031                8,106,661            8,151,123
               -----------         --                                            ---------------          -----------

              $105,395,975         12                                                $98,950,663         $113,051,723




   (a)Includes three  PIMs - Richmond  Park,  Saratoga,  and Marina  Shores - in
           which  the  Partnership  holds  38%,  50% and 29% of the  total  PIM,
           respectively.  The  remaining  portion is held by an affiliate of the
           Partnership.
   (b)The  Partnership  had eight  GNMA PIMs as of  December  31,  1997.  During
           November  1998,  the  Partnership  received a prepayment of the Cross
           Creek GNMA PIM.
   (c)The  Partnership had five Fannie Mae PIMs as of December 31, 1997.  During
           1998 the  Partnership  received a  prepayment  of the  Deering  Place
           Apartments PIM.

The  underlying  mortgages  of  the  PIMs  are  collateralized  by  multi-family
apartment  complexes located in 9 states. The apartment  complexes range in size
from 92 to 736 units.



                                                 Continued


D.    MBS

      At December 31, 1998,  the  Partnership's  MBS  portfolio has an amortized
      cost of $18,161,683 and gross  unrealized  gains of $645,187.  At December
      31,  1997,  the  Partnership's  MBS  portfolio  had an  amortized  cost of
      $22,910,553 and gross unrealized gains of $790,305.  The MBS portfolio has
      maturity dates ranging from 1999 to 2024.

E.    Partners' Equity

      Profits  from  Partnership  operations  and  Distributable  Cash  Flow are
      allocated  97% to the  Unitholders  and  Corporate  Limited  Partner  (the
      "Limited Partners") and 3% to the General Partners.

      Upon  the  occurrence  of  a  capital  transaction,   as  defined  in  the
      Partnership  Agreement,  net cash  proceeds  and profits  from the capital
      transaction will be distributed  first, to the Limited Partners until they
      have received a return of their total  invested  capital,  second,  to the
      General Partners until they have received a return of their total invested
      capital, third, 99% to the Limited Partners and 1% to the General Partners
      until the Limited  Partners  receive an amount equal to any  deficiency in
      the 11% cumulative  return on their  invested  capital that exists through
      fiscal years prior to the date of the capital transaction,  fourth, to the
      class of General  Partners  until they have received an amount equal to 4%
      of all  amounts of cash  distributed  under all capital  transactions  and
      fifth, 96% to the Limited Partners and 4% to the General Partners.  Losses
      from a capital  transaction  will be allocated 97% to the Limited Partners
      and 3% to the General Partners.

As of December 31, 1998,  the following  cumulative  partner  contributions  and
allocations have been made since inception of the Partnership:



                                                       Corporate                      Accumulated
                                                        Limited         General          Comprehensive
                                 Unitholders           Partners         Partners            Income         Total

Capital
                                                                                                         
contributions                        $298,678,321         $ 2,000        $     3,000           $   -           $298,683,321

Syndication costs                     (20,431,915)             -                -                  -            (20,431,915)

Quarterly
   Distributions                     (202,070,617)         (1,465)        (4,447,223)                          (206,519,305)

Special
   Distributions                      (74,933,046)           (501)              -                  -            (74,933,547)

Net income                            133,605,663             933          4,132,163               -            137,738,759

Unrealized
   gain on MBS                             -                 -                   -              645,187             645,187
                                     ------------        --------           ----------        ---------         -----------

Balance,
   December 31, 1998                 $134,848,406        $    967         $ (312,060)         $ 645,187        $135,182,500
                                     ============        ========         ==========          =========        ============




                                                     Continued


F.     Related Party Transactions

       Under the terms of the  Partnership  Agreement,  the General  Partners or
       their affiliates  receive an Asset Management Fee equal to .75% per annum
       of the value of the Partnership's invested assets payable quarterly.  The
       General  Partners  may also  receive an  incentive  management  fee in an
       amount equal to .3% per annum on the Partnership's  Total Invested Assets
       providing  the  Unitholders  receive a  specified  non-cumulative  annual
       return on their  Invested  Capital.  Total fees  payable  to the  General
       Partners  as asset  management  or  incentive  management  fees shall not
       exceed 9.05% of distributable cash flow over the life of the Partnership.

       Additionally,  the  Partnership  reimburses  affiliates  of  the  General
       Partners for certain expenses incurred in connection with maintaining the
       books and records of the  Partnership  and the preparation and mailing of
       financial reports, tax information and other communications to investors.

G.     Federal Income Taxes

       The  reconciliation  of the  net  income  reported  in  the  accompanying
       statement of income with the income  reported in the  Partnership's  1998
       federal income tax return is as follows:

        Net income per statement of income             $9,100,138

        Book to tax difference for timing of PIM
         income                                           (47,386)
        Book to tax difference for amortization of
         prepaid expenses and fees                        156,210

        Net income for federal income tax purposes     $9,208,962
                                                       ==========

        The allocation of the 1998 net income for federal income tax purposes is
as follows:
                                    Portfolio
                                     Income

              Unitholders                           $8,950,230
              Corporate Limited Partner                     60
              General Partners                         258,672
                                                    ----------
                                                    $9,208,962



      For the years ended December 31, 1998,  1997 and 1996 the average per unit
      income to the  Unitholders  for federal income tax purposes was $.60, $.83
      and $.76 respectively.

      The basis of the Partnership=s  assets for financial reporting purposes is
      less than its tax basis by  approximately  $3,823,000  and  $3,547,000  at
      December 31, 1998 and 1997,  respectively.  The basis of the Partnership's
      liabilities  for  financial  reporting  purposes  are the same for its tax
      basis at December 31, 1998 and 1997, respectively.


                                                     Continued



H. Fair Value Disclosure of Financial Instruments

      The Partnership uses the following methods and assumptions to estimate the
      fair value of each class of financial instruments:

              Cash and cash equivalents

              The  carrying  amount  approximates  fair  value  due to the short
maturity of those instruments.

              MBS

              The  Partnership  estimates  the fair value of MBS based on quoted
market prices.

              PIMs

              There  is  no  active  trading   market  for  these   investments.
              Management  estimates  the fair  value of the  PIMs  using  quoted
              market   prices  of  MBS  having  the  same  stated  coupon  rate.
              Management  does  not  include  any  participation  income  in the
              Partnership's  estimated fair value arising from  appreciation  of
              the properties, because Management does not believe it can predict
              the time of realization  of the feature with any certainty.  Based
              on the  estimated  fair value  determined  using these methods and
              assumptions,  the Trust's investments in PIMs had gross unrealized
              gains of approximately  $2,527,000 at December 31, 1998, and gross
              unrealized gains of approximately $2,596,000 at December 31, 1997.

      At  December  31,  1998  and  1997,  the  estimated  fair  values  of  the
      Partnership's financial instruments are as follows:



                             (Amounts in thousands)
                                    1998 1997
                                                 Fair           Carrying          Fair           Carrying
                                                 Value            Value           Value            Value

                                                                                           
  Cash and cash equivalents                        $15,117           $15,117       $20,481         $20,481

  MBS                                               18,807            18,807        23,701          23,701

  PIMS                                             101,478            98,951       115,648         113,052
                                                   -------            ------       -------         -------

                                                  $135,402          $132,875      $159,830        $157,234
                                                  ========          ========      ========        ========













                                KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

                                SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE




                                                                           Normal                                  Carrying
                                                                           Monthly       Original                  Amount at
                                      Interest        Maturity             Payment         Face                Current
Face               12/31/98
PIMs (a)           Rate (b)           Date (j)        (k)(l)(m)            Amount           Amount                (p)
- - --------           --------           --------        ---------            ------        ------------          ------

GNMA

                         
Marina Shores Apts        8.00%
                                                                                                        
Virginia Beach, VA       (c) (g) (h)     5/15/32         $ 43,100          $6,200,300          $6,040,948          $6,040,948

Pope Building Apts.       8.00%
Chicago, IL              (c) (e) (f)    6/15//26           23,800           3,349,600           3,179,305
3,179,305

Remington Place Apts.     7.50%
Fort Washington, MD        (d) (e)
                                                          (f) (n)                  10/15/24        89,000          13,200,000
12,224,217               12,224,217

Richmond Park Apts.       7.50%
Richmond Heights,       (c) (e) (f)      8/15/24           67,400          10,000,000           9,241,813           9,241,813
OH

Saratoga Apts.            7.875%
Rolling Meadow, IL      (c) (e) (f)      8/15/24           47,300           6,750,000           6,274,040           6,274,040

Valley Manor Apts.        8.00%
Dover Township, PA      (c) (g) (h)      7/15/24           34,000           4,798,032           4,465,473           4,465,473

Wildflower Apts.          7.75%
Las Vegas, NV               (c) (i)      1/15/25          122,000          17,600,000          16,407,733          16,407,733
                                                                         ------------         -----------        ------------

                                                                           61,897,932          57,833,529          57,833,529

Fannie Mae

Bell Station Apts.        7.50%                            35,700
Montgomery, AL          (c) (g) (h)      4/1/00              (o)            5,300,000           4,971,611           4,971,611

Brookside Apts.           7.50%                            33,000
Carmichael, CA          (c) (e) (f)      2/1/00              (o)            4,900,000           4,588,174           4,588,174

Salishan Apts.            7.50%                           106,000
Sacramento, CA          (c) (f) (g)      7/1/00              (o)           15,743,543          14,813,085          14,813,085

The Enclave Apts.         7.50%                            62,000
Beavercreek, OH         (c) (e) (h)      5/1/00              (o)            9,200,000           8,637,603           8,637,603
                                                                         ------------        ------------        ------------
                                                                           35,143,543          33,010,473          33,010,473
FHA

Creekside Apts.           8.305%
Portland, OR            (c) (e) (f)     11/1/31            61,600           8,354,500           8,106,661           8,106,661
                                                                         ------------        ------------        ------------

                                     Total                               $105,395,975         $98,950,663         $98,950,663


                                                     Continued






                                KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

                           NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE


(a)     The  Participating  Insured  Mortgages  ("PIMs")  consist  of  either  a
        mortgage-backed security ("MBS") issued and guaranteed by Fannie Mae, an
        MBS  issued  and   guaranteed  by  the  Government   National   Mortgage
        Association  ("GNMA")  or a  sole  participation  interest  in  a  first
        mortgage  loan insured by the United  States  Department  of Housing and
        Urban  Development  ("HUD")  and  a  subordinated  promissory  note  and
        mortgage or shared income and appreciation agreement with the underlying
        Borrower that conveys participation  interests in the revenue stream and
        appreciation  of the underlying  property  above certain  specified base
        levels.

(b)     Represents the permanent  interest rate of the GNMA or Fannie Mae MBS or
        the HUD-insured first mortgage less the servicers fee. The Partnership 
        may also receive  additional  interest which consists of (i) Minimum  
        Additional Interest based on a  percentage  of the unpaid  principal
        balance of the first mortgage on the property, (ii) Shared Income  
        Interest based on a percentage  of  monthly  gross  income  generated  
        by the underlying property in excess of a specified  base  amount  
       (but only to the  extent it exceeds  the  amount of Minimum  Additional
        Interest received during such month),(iii)Shared Appreciation  Interest
        based on a percentage of any increase in the value of the underlying 
        property in excess of a specified base value.

(c)     Minimum additional interest is at a rate of .5% per annum calculated on
        the unpaid principal balance of the first mortgage note.

(d)     Minimum additional interest is at a rate of 1% per annum calculated on
        the unpaid principal balance of the first mortgage note.

(e)     Shared income interest is based on 25% of monthly  gross rental income 
        over a specified base amount.

(f)     Shared appreciation interest is based on 25% of any  increase in the 
        value of the project over the specified base value.

(g)     Shared income interest is based on 30% of monthly gross rental income 
        over a specified base amount.

(h)     Shared appreciation interest is based on 30% of any  increase in the
        value of the project over the specified base value.

(i)     Shared income interest is based on 35% of monthly  gross rental income
        over a specified base amount and shared appreciation interest is based
        on 35% of any  increase in the value of the project over the specified
        base value.

(j)     The  Partnership's  GNMA  MBS  and  HUD  direct  mortgages  have  call
        provisions, which allow the Partnership to accelerate  their respective
        maturity date.

(k)     The normal monthly payment consisting  of  principal  and interest is
        payable monthly at level amounts over the term of the GNMA MBS and the
        HUD direct mortgages.

(l)     PIMs generally may not be prepaid during the first five years and may be
        prepaid subject to a 9% prepayment  penalty in years six through nine,a
        1% prepayment  penalty in year ten and no prepayment  penalty after year
        ten.

                                                        Continued






                          KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP

             NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE, Continued
                                               ----------

(m)     The normal  monthly  payment  consisting of principal and interest for a
        Fannie  Mae  PIM  is  payable  at  level  amounts  based  on  a  35-year
        amortization.  All unpaid  principal and accrued  interest is due at the
        end of year ten.

(n)     The  Partnership  agreed to reduce the permanent  loan rate to 6.75% per
        annum from January 1, 1994 through  December 31, 1995,  with an increase
        then to 7% per annum beginning January 1, 1996 through December 31, 1996
        and thereafter 7.5% per annum until maturity.  This was done in exchange
        for a lower Shared Appreciation  Interest base value of $13,200,000 from
        $15,450,000  and an  obligation  from the borrower to repay the interest
        not paid under the interest rate reduction upon the sale of the property
        or the maturity or prepayment of subordinated promissory note.

(o)  The   approximate   principal   balance  due  at  maturity  for  each  PIM,
respectively, is as follows:

                            PIM                                 Amount

                     Bell Station Apartments                  $ 4,897,000
                     Brookside Apartments                     $ 4,527,000
                     Salishan Apartments                      $14,546,000
                     The Enclave Apartments                   $ 8,500,000

(p) The aggregate cost of PIMs for federal income tax purposes is $98,950,663.

A  reconciliation  of the carrying  value of PIMs for each of the three years in
the period ended December 31, is as follows:



                                                       1998                   1997                 1996
                                                       ----                   ----                 ----

                                                                                                  
Balance at beginning of period                       $113,051,723           $164,942,921          $190,325,305

Deductions during period:
     Reclassification                                      -                  (8,024,709)               -
     Prepayments and
       principal collections                          (14,101,060)           (43,866,489)          (25,382,384)
                                                     ------------           ------------          ------------

Balance at end of period                             $ 98,950,663           $113,051,723          $164,942,921
                                                     ============           ============          ============