PART I

ITEM 1. BUSINESS

General Development of Business

Uniprop Manufactured Housing Communities Income Fund, a Michigan Limited

Partnership (the "Partnership"), acquired, maintains, operates and ultimately

will dispose of income producing residential real properties consisting of four

manufactured housing communities (the "Properties"). The Partnership was

organized and formed under the laws of the State of Michigan on May 16, 1985.

Its principal offices are located at 280 Daines Street, Birmingham, Michigan

48009 and its telephone number is (248) 645-9261.

The Partnership filed an S-11 Registration Statement (Registration No.

2-98180) in June 1985 which was declared effective by the Securities and

Exchange Commission on September 24, 1985. The Partnership thereafter offered a

maximum of 30,000 units of limited partnership interest representing capital

contributions by the limited partners to the Partnership of $1,000 per unit (the

"Units"). The sale of all 30,000 Units was completed in March, 1986 generating

$30 million of contributed capital to the Partnership.

On February 10, 1986, the Partnership acquired Aztec Estates, a 645-space

manufactured housing community in Margate, Florida and Kings Manor, a 314-space

manufactured housing community in Ft. Lauderdale, Florida. On March 4, 1986, the

Partnership acquired Old Dutch Farms, a 293-space manufactured housing community

in Novi, Michigan. On March 27, 1986, the Partnership acquired The Park of the

Four Seasons, a 572-space manufactured housing community in Blaine, Minnesota.

The Partnership operates the Properties as manufactured housing communities

with the primary investment objectives of: (1) obtaining net cash from

operations; (2) obtaining capital appreciation; and (3) preserving capital.

There can be no assurance that such objectives can be achieved.

On March 25, 1997 the Partnership borrowed $33,500,000 from Nomura Asset

Capital Corporation and secured the borrowing with liens on its Properties. The

interest rate on the Nomura Financing is 8.24% and the term is 120 months. The

loan is amortized over 360 months. On March 26, 1997 the Partnership distributed

$30,000,000 to the Limited Partners, representing a full return of original

capital contributions of $1,000 per Unit held. The Partnership will continue to

own and operate its properties and expects to be able to continue to pay cash

distributions to the Limited Partners, although in amounts substantially lower

than in the past. Limited Partners will continue to have an interest in the

Partnership because their original capital contributions have appreciated since

their initial investments were made. Only the original capital contribution was

returned on March 26, 1997.

Financial Information About Industry Segment

The Partnership's business and only industry segment is the operation of

its four manufactured housing communities. Partnership operations commenced in

February 1986 upon the acquisition of the first two Properties. The

Partnership's first full year of operations was the fiscal year ended December

31, 1987. For a description of the Partnership's revenues, operating profit and

assets, please refer to Items 6 and 8.

Narrative Description of Business

General

The Properties were selected from 23 manufactured housing communities then

owned by affiliates of P.I. Associates Limited Partnership, a Michigan limited

partnership, the General Partner (the "General Partner") of the Partnership. The

Partnership rents space in the Properties to owners of manufactured homes

thereby generating rental revenues. It was intended that the Partnership would

hold the Properties for extended periods of time, originally anticipated to be

seven to ten years after their acquisition. The General Partner has the

discretion to determine when a Property is to be sold; provided, however, that

the determination of whether a particular Property should be disposed of will be

made by the General Partner only after consultation with Manufactured Housing

Services Inc. (the "Consultant"). In making their decisions they will consider

relevant factors, including, current operating results of the particular

Property, prevailing economic conditions and with a view to achieving maximum

capital appreciation to the Partnership considering relevant tax consequences

and the Partnership's investment objectives.

Competition

The business of owning and operating residential manufactured housing

communities is highly competitive, and the Partnership may be competing with a

number of established companies having greater financial resources. Moreover,

there has been a trend for manufactured housing community residents to purchase

(where zoning permits) their manufactured homesites on a collective basis. This

trend may result in increased competition with the Partnership for tenants. In

addition, the General Partner, its affiliates or both, have participated, and

may in the future participate, directly or through other partnerships or

investment vehicles in the acquisition, ownership, development, operation and

sale of projects which may be in direct competition with one or more of the

Properties.

Each of the Properties competes with numerous similar facilities located in

its geographic area. The Margate/Fort Lauderdale area contains approximately 12

communities offering approximately 5,435 housing sites competing with Aztec

Estates. The Davie/Fort Lauderdale area contains approximately five communities

offering approximately 1,765 housing sites competing with Kings Manor. Park of

the Four Seasons competes with approximately 11 communities offering

approximately 3,031 housing sites. Old Dutch Farms competes with approximately

eight communities offering approximately

3,592 housing sites. The Properties also compete against other forms of housing,

including apartment and condominium complexes.

Governmental Regulations

The Properties owned by the Partnership are subject to certain state

regulations regarding the conduct of the Partnership operations. For example,

the State of Florida regulates agreements and relationships between the

Partnership and the residents of Aztec Estates and Kings Manor. Under Florida

law, the Partnership is required to deliver to new residents of those Properties

a prospectus describing the Property and all tenant rights, Property rules and

regulations, and changes to Property rules and regulations. Florida law also

requires minimum lease terms, requires notice of rent increases, grants to

tenant associations certain rights to purchase the community if being sold by

the owner and regulates other aspects of the management of such properties. The

Partnership is required to give 90 days notice to the residents of Florida

properties of any rate increase, reduction in services or utilities or change in

rules and regulations. If a majority of the residents object to such changes as

unreasonable, the matter must be submitted to the Florida Department of Business

Regulations for mediation prior to any legal adjudication of the matter. In

addition, if the Partnership seeks to sell Florida Properties to the general

public, it must notify any homeowners association for the residents, and the

association shall have the right to purchase the Property for the price, terms

and conditions being offered to the public within 45 days of notification by the

owner. If the Partnership receives an unsolicited bona fide offer to purchase

the Property from any party that it is considering or negotiating, it must

notify any such homeowners association that it has received an offer, state to

the homeowners association the price, terms and conditions upon which the

Partnership would sell the Property, and consider (without obligation) accepting

an offer from the homeowners association. The Partnership has, to the best of

its knowledge, complied in all material respects with all requirements of the

States of Florida, Michigan and Minnesota, where its operations are conducted.

Employees

The Partnership employs three part-time employees to perform Partnership

management and investor relations services. The Partnership retains an

affiliate, Uniprop, Inc., as the property manager for each of its Properties.

Uniprop, Inc. is paid a fee equal to the lesser of 5% of the annual gross

receipts from each of the Properties or the amount which would be payable to

unaffiliated third parties for comparable services. Uniprop, Inc. retains local

managers on behalf of the Partnership at each of the Properties. Salaries and

fringe benefits of such local managers are paid by the Partnership and are not

included in any property management fee payable to Uniprop, Inc. Local managers

are employees of the Partnership and are paid semi-monthly. The yearly salaries

and expenses for local managers range from $20,000 to $40,000. Local managers

have no direct management authority, make no decisions regarding operations and

act only in accordance with instructions from the property manager. They are

utilized by the Partnership to provide on-site maintenance and administrative

services. Uniprop, Inc., as property manager, has overall management authority

for each Property.

ITEM 2. PROPERTIES

The Partnership purchased all four manufactured housing communities for

cash. As a result of the Financing, the Properties are now encumbered with

mortgages.

Each of the Properties is a modern manufactured housing community

containing lighted and paved streets, side-by-side off-street parking and

complete underground utility systems. The Properties consist of only the

underlying real estate and improvements, not the actual homes themselves. Each

of the Properties has a community center which includes offices, meeting rooms

and game rooms. Each of the Properties, except Old Dutch Farms, has a swimming

pool and tennis courts.

Overall, as illustrated in the table below, the Properties reported, as of

December 31, 1997, a combined occupancy of 98.3% and an average monthly homesite

rent of $386.

ITEM 3. LEGAL PROCEEDINGS

In the opinion of the Partnership and its legal counsel, there are no

material legal proceedings pending except such ordinary routine matters as are

incident to the kind of business conducted by the Partnership. To the knowledge

of the Partnership and its counsel, no legal proceedings have been instituted or

are being contemplated by any governmental authority against the Partnership.

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

The voting privileges of the limited partners are restricted to certain

matters of fundamental significance to the Partnership. The Limited Partners

must approve certain major decisions of the General Partner if the General

Partner proposes to act without the approval of the Consultant. The Limited

Partners also have a right to vote upon removal and replacement of the General

Partner, dissolution of the Partnership, material amendments to the partnership

agreement and the sale or other disposition of all or substantially all of the

Partnership's assets, except in the ordinary course of the Partnership's

disposing of the Properties. Such matters must be approved by Limited Partners,

as a group, holding more than 50% of the then outstanding Units.

On February 6, 1997, the Limited Partners voted at a special meeting

("Special Meeting") and approved: (i) the Financing; (ii) the amendment of the

Partnership Agreement; (iii) the payment, on an on-going basis, of a Partnership

Management Distribution; and (iv) payment of certain specified fees to an

affiliate of the General Partner.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER

MATTERS

There is no established public trading market for the Units and it is not

anticipated that one will ever develop. During the last two years, less than

three percent of the Units have been transferred each year, excluding transfers

on account of death or intra-family transfers. The Partnership believes there is

no secondary market, or the substantial equivalent thereof, and none will

develop.

The General Partner calculates the estimated net asset value of each Unit

by dividing the amount of distributions that would be made to the Limited

Partners in the event of the current sale of the Properties at their current

appraised value, less sales expenses (but without consideration to tax

consequences of the sale), by 30,000. In March 1998, the Properties were

appraised at an aggregate fair market value of $55,800,000. Assuming a sale of

the four properties at the appraised value in March 1998, less payment of 3.0%

selling expenses, mortgage debt of $33,500,000, the $1,970,000 Contingent

Purchase Price due to certain partners of the General Partner, and after the

80/20% split of sale or financing proceeds with the General Partner, the net

aggregate proceeds available for distribution to the Limited Partners is

estimated to be $14,924,800 or $497 per unit as of March 31, 1998. There can be

no assurance that the estimated net asset value could ever be realized. As of

March 31, 1998, the Partnership had approximately 2,750 limited partners holding

Units.

ITEM 6. SELECTED FINANCIAL DATA

The following table summarizes selected financial data for Uniprop Manufactured

Housing Communities Income Fund, a Michigan Limited Partnership, for the periods

ended December 31, 1997, 1996, 1995, 1994 and 1993:

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATION

Liquidity

The Partnership has, since inception, generated adequate amounts of cash to

meet its operating needs. The Partnership retains cash reserves which it

considers adequate to maintain the Properties. All funds in excess of the

operating needs and cash reserves have been distributed to the Partners,

quarterly. While the Partnership is not required to maintain a working capital

reserve, the Partnership has not distributed all the cash generated from

operations in order to build cash reserves. For the year ended December 31, 1997

the Partnership added $650,476 to reserves. This amount was funded from the

March 25, 1997 Financing proceeds. The amount of any funds placed in reserves is

at the discretion of the General Partner. The Partnership expects to generate

adequate amounts of cash to meet its operating needs during the next fiscal

year.

On July 17, 1997, the Partnership replaced an existing $600,000 line of

credit with Comerica Bank with a renewable line of credit of $600,000 with First

of America Bank.

The interest rate floats 180 basis points above 1 month LIBOR, which on December

31, 1997 was 5.74%. The sole purpose for the line of credit is to purchase new

and used homes to be used as model homes and offered for sale with the

Partnership's communities. Over the past two years, sales of the new and used

model homes has been growing and the General Partner believes that continuing

the model home program is in the best interest of the Partnership. As of

December 31, 1997, the outstanding balance on the line of credit was $358,916.

On March 25, 1997 the Partnership completed the Financing that the Limited

Partners approved at the Special Meeting held on February 6, 1997, as described

in Item 4. The Partnership borrowed $33,500,000 from Nomura Asset Capital

Corporation (the "Lender") on March 25, 1997 and secured the borrowing with

liens on its Properties. The interest rate on the Financing is 8.24%, and the

term is 120 months. The loan is amortized over 360 months. As contemplated in

the Proxy Statement, on March 26, 1997 the Partnership distributed $30,000,000

to the Limited Partners, representing a full return of original capital

contributions of $1,000 per Unit held. The Partnership will continue its

operations and expects to be able to continue to pay cash distributions to the

Limited Partners, although, due to payment of debt service resulting from the

Financing, in amounts substantially lower than in the past. Limited Partners

will continue to have an interest in the Partnership because their original

capital contributions have appreciated since their initial investments were

made. Only the original capital contribution was returned on March 26, 1997.

Capital Resources

The capital formation phase of the Partnership began on February 10, 1986,

when Aztec Estates and Kings Manor were purchased by the Partnership and

operations commenced. On March 4, 1986, and March 27, 1986, Old Dutch Farms and

Park of the Four Seasons were purchased, respectively. From the $30,000,000

capital raised from the sale of the Units, $26,400,000 was used to purchase the

four Properties after deducting sales commissions, advisory fees and other

organization and offering costs. The Partnership had no capital expenditure

commitments as of December 31, 1997 and does not anticipate any during the next

fiscal year.

In an effort to provide Limited Partners with a full return of original

capital contributions of $1000 per unit held, the General Partner, with majority

consent from the Limited Partners, mortgaged the four Properties owned by the

Partnership on March 25, 1997.

The General Partner acknowledges that the mortgages impose some risks to

the Parntership, but that such risks are not greater than risks typically

associated with real estate financing.

Results of Operations

a. Distributions

For the years ended December 31, 1997, 1996 and 1995, respectively, the

Partnership made distributions to Limited Partners equal, on an annualized

basis, to 10.0% of their original capital contributions (their 10.0% Preferred

Return). These distributions totaled $1,568,400, $3,000,000, and $3,000,000 in

each year respectively. The General Partner received distributions totaling

$871,000, $600,000, and $595,000 during the same periods. As a result of the

March 25, 1997 Financing, also distributed in 1997 was $30,000,000, which

consitutes a complete return of the Limited Partners original capital

contributions of $30,000,000 or $1,000 per unit.

b. Net Income

For the years ended December 31, 1997, 1996 and 1995 net income was

$1,059,785, $2,974,453 and $2,989,190 on total revenues of $8,234,904,

$7,751,358 and $7,502,221. The decline in net income from 1995 to 1996 was the

result of higher operating and administrative expenses. The decline in net

income from 1996 to 1997 was due to approximately $2,142,196 of mortgage

interest related to the March 25, 1997 Financing.

Net income, plus depreciation and amortization, and the $33,500,000

Financing proceeds, less distributions to all Partners, payment for Financing

costs and the partial payment towards the Contingent Purchase Price was

$650,476, $159,195 and $178,017, for the same periods.

c. Partnership Management

Net expenses for the management of the Partnership (i.e. gross expenses for

such management, less transfer fees, interest on reserves and interest on funds

awaiting distribution) were $459,343 in 1997, $357,469 in 1996 and $249,760 in

1995.

The increase in net expenses for the management of Partnership from 1996 to

1997 is a result of higher legal expenses associated with the Proxy Statement

that was submitted to the Limited Partners, as described in Item 4.

d. Property Operations

Overall, the four Properties had a combined average occupancy of 98.3%

(1,792/1,824 sites) as of December 1997; 97.0% as of December 1996; and 95.1% as

of December 1995. The average collected monthly rent as of December 1997 was

approximately $386 per homesite versus $373 as of December 1996 and $362 as of

December 1995, an increase each year of 3.5% and 3.0%, respectively.

During the 1997, 1996 and 1995 fiscal years, the Properties generated a net

operating income of $4,325,089 or 52.6% of total revenues; $4,420,836 or 57.1%

of total revenues; and $4,253,489 or 56.7% of total revenues, respectively. Net

operating income is computed before deduction of (i) certain non-recurring

expenses of $231,970, $304,172 and $230,712, respectively, (ii) depreciation and

amortization of $891,138, $784,743, and $783,827, and (iii) partnership

management expenses of $463,119, $357,469, and $249,760.

Aztec Estates, in Margate, Florida, had an occupancy of 97.4% (628/645

sites) as of December 1997 compared to 94.3% as of December 1996 and 95.9% in

1995. The average rent in December 1996 was $427 per homesite versus $411 in

December 1996 and $395 in December 1995, an increase each year of 3.9% and 4.0%,

respectively.

The property's 1997 net operating income of $1,643,833 represented 53.0% of

revenues versus $1,587,687 or 52.4% of revenues in 1996, and $1,614,553 or 53.7%

of revenues in 1995. The increase in income is a result of higher occupancy and

higher average rents.

Kings Manor, in Fort Lauderdale, Florida, had an occupancy of 98.1%

(308/314 sites) as of December 1997 compared to 96.8% as of December 1996 and

96.5% in 1995. The average rent in December 1997 was $405 per homesite versus

$388 in December 1996 and $372 in December 1995, an increase each year of 4.1%

and 4.3% respectively.

The property's 1997 net operating income of $892,472 represented 63.5% of

revenues, versus $843,448 or 62.1% in 1996, and $821,053 or 60.6% in 1995. The

increase in income is a result of lower operating expenses.

Old Dutch Farms, in Novi, Michigan, had an occupancy of 98.3% (288/293

sites) as of December 1997 compared to 99.0% in 1996 and 96.9% in 1995. The

average rent in December 1997 was $393 per homesite versus $381 in December 1996

and $371 in December 1995, an increase each year of 3.1% and 2.7%, respectively.

The property's 1997 net operating income of $873,242 represented 66.2% of

revenues, versus $770,431 or 62.1% in 1996, and $731,943 or 61.5% in 1995. The

increase in income was the result of higher occupancy.

The Park of the Four Seasons, in Blaine, Minnesota, had an occupancy of

99.3% (568/572 sites) as of December 1997, the same as reported in 1996 and

92.5% in 1995. The average rent in December 1997 was $332 per homesite versus

$321 in December 1996 and $312 in December 1995, an increase each year of 3.4%

and 2.9%, respectively.

The property's 1997 net operating income of $1,378,661 represented 58.77%

of revenues versus $1,219,270 or 57.9% in 1996, and $1,085,940 or 56.1% in 1995.

The increase in income is a result of higher occupancy and higher rents.

Year 2000 Costs

The Partnership, like most users of computer software, will be required to

modify certain portions of its software so that it will function properly in the

year 2000. Maintenance or modification costs will be expensed as incurred, while

the costs of any new software will be capitalized and amortized over the

software's useful life. Management believes these "year 2000" costs will be

immaterial.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Partnership's financial statements for the fiscal years ended December

31, 1997, 1996 and 1995, and supplementary data are filed with this Report under

Item 14.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes in the Partnership's independent public

accountants nor have there been any disagreements during the past two fiscal

years.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Partnership, as an entity, does not have any officers or directors. The

General Partner of the Partnership is P.I. Associates Limited Partnership. P.I.

Associates is a Michigan limited partnership. From November, 1985 until March

19, 1997, Paul M. Zlotoff served as the sole general partner of P.I. Associates.

In order to address concerns raised by the Lender in connection with the

Financing, on March 19, 1997, GP P.I. Associates Corp. was admitted as a

corporate General Partner of the Partnership. GP P.I. Associates Corp. is

wholly-owned by Paul M. Zlotoff. Under the amended partnership agreement of P.I.

Associates, all actions taken by P.I. Associates must be approved by both

general partners.

Information concerning Mr. Zlotoff's age and principal occupations during

the last five years or more is as follows:

Paul M. Zlotoff, 48, is and has been an individual general partner of P.I.

Associates since its inception in May 1985. Mr. Zlotoff became the Chairman of

Uniprop, Inc. in May 1986 and was its President from 1979 through 1997. He is

also an individual general partner of Genesis Associates Limited Partnership,

the general partner of Uniprop Manufactured Housing Communities Income Fund II,

a public limited partnership which owns and operates nine manufactured housing

communities. Mr. Zlotoff currently, and in the past, has acted as the general

partner for various other limited partnerships owning manufactured home

communities, as well as some commercial properties.

The following individuals are the directors and officer of GP P.I.

Associates Corp.:

Arthur Weiss, 49 has been practicing law at Jaffe, Raitt, Heuer & Weiss,

P.C. ("JRH&W") which represents the company in various matters, since 1976. Mr.

Weiss is currently a shareholder, director and vice president of JRH&W.

Arthur Weiss is an Independent Director, meaning that he has not been, at

any time, in the five years preceding his appointment: (a) a stockholder,

director, officer, employee, or partner of GP P.I. Associates Corp., P.I.

Associates, or the Partnership; (b) a customer, supplier, or other person who

derives more than 10% of its purchases or revenues from its activities with GP

P.I. Associates Corp., P.I. Associates, or the Partnership; (c) a person or

other entity controlling or under common control with any such stockholder,

partner, customer, supplier or other person referenced in subparagraph (a) or

(b) above; or (d) a member of the immediate family of any such stockholder,

director, officer employee, partner, customer, supplier or other person

referenced in subparagraph (a) or (b) above.

Steve Adler, 47, became President of Uniprop, Inc. on January 1, 1998.

Previously, Mr. Adler had been Vice President of acquisitions and development

and director of operations for Uniprop since 1984 when he joined Uniprop. As an

officer of Uniprop, he became president of Uniprop Homes, the marketing

affiliate of Uniprop. In this capacity, he is responsible for developing new

home sales, and establishing resale operations in each of Uniprop's 40 family

and adult retirement communities.

Under the Articles of Incorporation of GP P.I. Associates Corp., until such

time as the notes payable to the Lender have been discharged and the liens have

been released from the Properties, certain major corporate actions may be taken

only with the unanimous vote of the directors of GP P.I. Associates Corp. These

actions include:

a) filing or consenting to the filing of any bankruptcy, insolvency or

reorganization case or proceeding, instituting any proceedings under any

applicable insolvency law or otherwise seeking relief under any laws relating to

the relief from debts or the protection of debtors generally;

b) seeking or consenting to the appointment of a receiver, liquidator,

assignee, trustee, sequestrator, custodian or any similar official for GP P.I.

Associates Corp., P.I. Associates, or the Partnership or a substantial portion

of any of their properties;

c) making any assignment for the benefit of the creditors of GP P.I.

Associates Corp., P.I. Associates, or the Partnership; or

d) taking any action in furtherance of the foregoing subparagraphs (a)

through (c).

ITEM 11. EXECUTIVE COMPENSATION

The Partnership has no executive officers and therefore, no officers

received a salary or remuneration exceeding $100,000 during the last fiscal

year. The General Partner of the Partnership and an affiliate, Uniprop, Inc.,

received certain compensation and fees during the fiscal year in the amounts

described in Item 13. The Partnership anticipates that it will provide similar

compensation to the General Partner and Uniprop, Inc. during the next fiscal

year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND MANAGEMENT

The Partnership is a limited partnership formed pursuant to the Michigan

Uniform Limited Partnership Act, as amended. The General Partner, P.I.

Associates Limited Partnership, is vested with full authority as to the general

management and supervision of the business and other affairs of the Partnership,

subject to certain constraints in the partnership agreement and consulting

agreement. Limited Partners have no right to participate in the management of

the Partnership and have limited voting privileges only on certain matters of

fundamental significance. No person owns of record or beneficially, more than

five percent of the Partnership's Units.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following discussion describes all of the types of compensation, fees

or other distributions paid by the Partnership or others to the General Partner

or its affiliates from the operations of the Partnership during the last fiscal

year, as well as certain of such items which may be payable during the next

fiscal year. Certain of the following arrangements for compensation and fees

were not determined by arm's length negotiations between the General Partner,

its affiliates and the Partnership.

Paul M. Zlotoff has an interest in the successors to the sellers of all the

Properties acquired by the Partnership and may be entitled to share in a

contingent purchase price with respect to each Property, when and if the

successors to the sellers become entitled thereto. Each of the sellers has been

dissolved and liquidated and their interests in the Contingent Purchase Price

have been assigned to certain partners of the General Partner. The contingent

purchase price for each Property was determined by reference to the average of

two independent real estate appraisals which were obtained by the General

Partner. Such appraisals are only estimates of value and are not necessarily

indicative of the actual real estate value. Each seller becomes entitled to any

unpaid contingent purchase price upon the sale, financing or other disposition

of one or more Properties, but,

only after the receipt by each Limited Partner of any shortfall in his 9%

cumulative preferred return plus the return of his adjusted capital

contribution. Because the Financing resulted in a complete return of the Limited

Partners' capital contributions, and because the Limited Partners have received

their cumulative preferred return in full, the successors to the sellers did

receive $1,500,000 in partial payment of the Contingent Purchase Price on or

about May 15, 1997. The maximum amounts which could be payable to the successors

to the sellers are as follows: Aztec Estates, $1,374,323; Kings Manor, $529,724;

Old Dutch Farms, $452,359; and Park of the Four Seasons, $1,113,594. The partial

payment made for each property was as follows: Aztec Estates, $594,088; Kings

Manor, $228,987; Old Dutch Farms, $195,544; and Park of the 4 Seasons, $481,381.

The maximum amount remaining which could be payable to the successors of the

sellers are as follows: Aztec Estates, $780,235; Kings Manor, $300,737; Old

Dutch Farms, $256,815; and Park of the Four Seasons, $632,213. The actual

amounts to be received, if any, will depend upon the results of the

Partnership's operations and the amounts received upon the sale, financing or

other disposition of the Properties and are not determinable at this time.

The Partnership paid and will continue to pay an Incentive Management Interest

to the General Partner for managing the Partnership's affairs, including:

determining distributions, negotiating agreements, selling or financing

properties, preparing records and reports, and performing other ongoing

Partnership responsibilities. As a result of the March 25, 1997 Financing and

full return of the $30,000,000 original capital contributions of the Limited

Partners, no further Preferred Return or Cumulative Return will apply, and the

payment of the Incentive Management Interest will not be contingent on the

satisfaction of those returns. As of April 1, 1997, the Incentive Management

Interest is 20% of the net cash from operations (cash revenues less cash

operating expenses and specified reserves) in any taxable year. During 1997, the

General Partner earned and was entitled to an incentive management interest of

$195,000. The actual amount of Incentive Management Interest paid to the General

Partner during 1997 was $605,000, all of which was earned during prior years but

not paid. The Partnership anticipates payment of the $195,000 Incentive

Management Interest from cash reserves during 1998. The actual amount to be

received in future years will depend upon the results of the Partnership's

operations and is not determinable at this time. The General Partner also has a

right to receive 20% of any sale or financing proceeds remaining after each

limited partner has received an amount equal to any shortfall in his 9%

cumulative preferred return, plus the return of his adjusted capital

contribution.

At the Special Meeting, the Limited Partners approved an amendment to the

Partnership Agreement to provide that the Partnership will pay the General

Partner a quarterly Partnership Management Distribution equal to one-fourth of

1% of the most recent appraised value of the Properties of the Partnership. The

Partnership Management Distribution for each quarter will be paid in arrears, 45

days after the end of each fiscal quarter. The General Partner proposed the

Partnership Management Distribution to compensate, in part, for the substantial

reduction in the amounts expected to be paid to the General Partner pursuant to

the Incentive Management Interest following the Financing. Based on the

Properties' March 1997 aggregate appraised value of

$53,200,000, the Partnership Management Distribution due to the General Partner

was $399,000 ($53,200,000 x 1.0% = $532,000 x 75.0% = $399,000). The Partnership

Management Distribution paid to the General Partner during 1997 was $266,000. As

of December 31, 1997, the Partnership Management Distribution due the General

Partner totaled $133,000. This amount was paid to the General Partner on

February 15, 1998 from cash reserves. Based on the Properties' March 1998

aggregate appraised value of $55,800,000, the Partnership Management

Distribution due the General Partner for the Partnership's 1998 fiscal year will

be $558,000 ($55,800,000 x 1.0% = $558,000).

Also at the Special Meeting, the Limited Partners approved the payment of a

one time finance fee to Uniprop, Inc., an affiliate of the General Partner,

equal to 1% of the amount borrowed in the Financing. Because the amount borrowed

was $33,500,000, the finance fee paid to Uniprop, Inc. on March 25, 1997 was

$335,000. The finance fee is payable for unusual services rendered in arranging

financing for all the Properties.

Uniprop, Inc., an affiliate of the General Partner, received and will

receive property management fees for each Property managed by it. Uniprop, Inc.

is primarily responsible for the day-to-day management of the Properties and for

the payment of the costs of operating each Property out of the rental income

collected. The property management fees are equal to the lesser of 5% of the

annual gross receipts from the Properties managed by Uniprop, Inc., or the

amount which would be payable to an unaffiliated third party for comparable

services. During the last fiscal year, Uniprop, Inc. received the following

property management fees totaling $404,514: Aztec Estates, $155,265; Kings

Manor, $70,227; Old Dutch Farms, $65,960; and Park of the Four Seasons,

$113,062. In addition, certain employees of the Partnership are also employees

of affiliates of the General Partner. During the last fiscal year, these

employees received an aggregate of $128,094 for performing local property

management, data processing and investor relations services for the Partnership.

The actual amounts to be received during the next fiscal year will depend upon

the results of the Partnership's operations and are not determinable at this

time.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS

ON FORM 8-K

(a) Financial Statements

The following financial statements and related documents are filed with

this Report:

(1) Report of Independent Certified Public Accountants

(2) Balance Sheets as of December 31, 1997 and 1996 and Statements of

Income for the fiscal years ended December 31, 1997, 1996 and

1995

(3) Statements of Partners' Equity for the fiscal years ended

December 31, 1997, 1996 and 1995

(4) Statements of Cash Flows for the fiscal years ended December 31,

1997, 1996 and 1995

(5) Schedule III - Real Estate and Accumulated Depreciation for the

fiscal years ended December 31, 1997, 1996 and 1995

(b) Reports on Form 8-K

The Partnership did not file any Forms 8-K during the fourth quarter of

1997.

(c) Exhibits

The following exhibits are incorporated by reference to the S-11

Registration Statement of the Partnership filed June 4, 1985, as amended on

August 1, 1985 and September 11, 1985:

3(a) Amended Certificate of Limited Partnership for the Partnership

3(b) Agreement of Limited Partnership for the Partnership

10(a) Form of Management Agreement between the Partnership and Uniprop,

Inc.

10(b) Form of Consulting Agreement between the Partnership, the General

Partner and Consultant

The following exhibits are attached to this Report:

3(c) Certificate of Amendment to the Certificate of Limited Partnership

for the Partnership (originally filed with Form 10-Q for the fiscal

quarter ended June 30, 1986).

4 Form of Certificate of Limited Partnership Interest in the

Partnership (As last submitted with Form 10-K for the fiscal year

ended December 31, 1992 and originally filed with Form 10-K for the

fiscal year ended December 31, 1986)

10(c) Contingent Purchase Price Agreement between the Partnership, Aztec

Estates (As last submitted with Form 10-K for the fiscal year ended

December 31, 1992 and originally filed with Form 10-K for the fiscal

year ended December 31, 1987)

10(d) Contingent Purchase Price Agreement between the Partnership and

O.D.F. Mobile Home Park (As last submitted with Form 10-K for the

fiscal year

ended December 31, 1992 and originally filed with Form 10-K for the

fiscal year ended December 31, 1987)

10(e) Contingent Purchase Price Agreement between the Partnership and The

Park of the Four Seasons (As last submitted with Form 10-K for the

fiscal year ended December 31, 1992 and originally filed with Form

10-K for the fiscal year ended December 31, 1987)

27 Financial Data Schedule

28 Letter summary of the estimated fair market values of the

Partnership's four manufactured housing communities, as of March 1,

1998.

(d) Other Financial Statements

There are no other financial statements required by the instructions

contained in Regulation S-X or, the information is included elsewhere in the

financial statements or the notes thereto.

SIGNATURES

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

Exchange Act of 1934, Uniprop Manufactured Housing Communities Income Fund, a

Michigan Limited Partnership, has duly caused this report to be signed on its

behalf by the undersigned, thereunto duly authorized.

Uniprop Manufactured Housing Communities

Income Fund, a Michigan Limited Partnership

BY: P.I. Associates Limited Partnership,

General Partner

Dated: March 31, 1998 BY: /s/ Paul M. Zlotoff

--------------------------------

Paul M. Zlotoff, General Partner

BY: GP P.I. Associates Corp.

BY: /s/ Paul M. Zlotoff

---------------------------------

Paul M. Zlotoff, President

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners

Uniprop Manufactured Housing

Communities Income Fund

(a Michigan limited partnership)

We have audited the accompanying balance sheets of Uniprop Manufactured Housing

Communities Income Fund (a Michigan limited partnership), as of December 31,

1997 and 1996, and the related statements of income, partners' equity and cash

flows for each of the three years in the period ended December 31, 1997. We have

also audited the schedule listed under Item 14 of Form 10-K. These financial

statements and the schedule are the responsibility of the Partnership's

management. Our responsibility is to express an opinion on these financial

statements and the schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing

standards. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements and the schedule are

free of material misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements and

the schedule. An audit also includes assessing the accounting principles used

and significant estimates made by management, as well as evaluating the overall

presentation of the financial statements and the schedule. We believe that our

audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in

all material respects, the financial position of Uniprop Manufactured Housing

Communities Income Fund at December 31, 1997 and 1996 and the results of its

operations and its cash flows for each of the three years in the period ended

December 31, 1997 in conformity with generally accepted accounting principles.

Also, in our opinion, the schedule listed under Item 14 of Form 10-K presents

fairly, in all material respects, the information set forth therein.

BDO SEIDMAN, LLP

Troy, Michigan

February 12, 1998

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

BALANCE SHEETS

See accompanying notes to financial statements.

<PAGE> 20

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

STATEMENTS OF INCOME

See accompanying notes to financial statements.

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

See accompanying notes to financial statements.

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS

- --------------------------------------------------------------------------------

See accompanying notes to financial statements.

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------

1. SUMMARY OF ORGANIZATION AND BUSINESS

ACCOUNTING

POLICIES Uniprop Manufactured Housing Communities Income Fund, a

Michigan Limited Partnership (the "Partnership") acquired,

maintains, operates and will ultimately dispose of income

producing residential real properties consisting of four

manufactured housing communities (the "properties") located

in Florida, Minnesota and Michigan. The Partnership was

organized and formed under the laws of the State of Michigan

on May 16, 1985.

The general partner of the Partnership is P. I. Associates

Limited Partnership. Taxable investors acquired 20,230 Class

A units, and 9,770 Class B units were acquired by tax exempt

investors. Depreciation is allocated only to holders of

Class A units and to the general partner.

USE OF ESTIMATES

In preparing financial statements in conformity with

generally accepted accounting principles, management is

required to make estimates and assumptions that affect (1)

the reported amounts of assets and liabilities and the

disclosure of contingent assets and liabilities as of the

date of the financial statements, and (2) revenues and

expenses during the reporting period. Actual results could

differ from these estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of the Partnership's financial

instruments, which consist of the line of credit and note

payable, approximate their fair values.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is

provided using the straight-line method over the following

estimated useful lives:

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------

Accumulated depreciation for tax purposes was $10,060,608

and $9,169,549 as of December 31, 1997 and 1996,

respectively.

Long-lived assets, such as property and equipment, are

evaluated for impairment when events or changes in

circumstances indicate that the carrying amount of the

assets may not be recoverable through the estimated

undiscounted future cash flows from the use of these assets.

When any such impairment exists, the related assets will be

written down to fair value. No impairment loss recognition

has been required through December 31, 1997.

FINANCING COSTS

As a result of management's present intent to refinance the

note payable after ten years, costs to obtain the 1997

financing (see Note 2) are amortized over a ten-year period.

INCOME TAXES

Federal income tax regulations provide that any taxes on

income of a partnership are payable by the partners as

individuals. Therefore, no provision for such taxes has been

made at the partnership level.

2. NOTE PAYABLE On March 24, 1997, the Partnership entered into a

$33,500,000 note payable agreement. The borrowings are

secured by mortgages on the Partnership's properties and the

assignment of all current and future leases and rents. The

note is payable in monthly installments of $251,439,

including interest, through March 2027. The interest rate is

8.24% per annum through June 2007; thereafter, the interest

rate will be adjusted based on the provisions of the note

agreement. The loan may be prepaid without penalty beginning

in January 2007. These are certain requirements and

restrictions contained in the note payable agreement. The

Partnership is in compliance with these requirements.

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------

The proceeds of the note were used primarily to return to

the limited partners their original $30,000,000 capital

contribution, to pay certain amounts to the general partner

and affiliates of the general partner as described in Notes

6 and 8, and to pay related financing costs.

Future maturities on the note payable for the next five

years are as follows:

1998 - $230,000; 1999 - $250,000; 2000 - $265,000; 2001 -

$295,000; and 2002 - $320,000.

3. OTHER ASSETS At December 31, 1997 and 1996, "Other assets" included cash

of $211,000 and $171,000, respectively, in a security

deposit escrow account for two of the Partnership's

properties, as required by the laws of the state in which

they are located, which is restricted from operating use.

4. LINE-OF-CREDIT The Partnership currently has an unsecured $600,000

revolving line-of-credit agreement with a bank. Interest on

outstanding balances is charged at 1.80% in excess of LIBOR;

the Partnership's interest rate at December 31, 1997 was

7.54%.

5. OTHER Other liabilities consisted of:

LIABILITIES

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------

6. RELATED PARTY MANAGEMENT AGREEMENT

TRANSACTIONS

The Partnership has an agreement with an affiliate of the

general partner to manage the properties owned by the

Partnership. The management agreement is automatically

renewable annually, but may be terminated by either party

upon sixty days written notice. The property management fee

is the lesser of 5% of annual gross receipts from the

properties managed, or the amount which would be payable to

an unaffiliated third party for comparable services.

REPORT OF FEES

During the years ended December 31, 1997, 1996 and 1995, the

affiliate earned property management fees of $404,514,

$387,855 and $371,984, respectively, as permitted in the

Agreement of Limited Partnership. These operating expenses

are included with "Administrative" expenses in the

respective statements of income. The Partnership was owed

$9,230 and $6,945 by the affiliate at December 31, 1997 and

1996, respectively.

Certain employees of the Partnership are also employees of

affiliates of the general partner. These employees were paid

by the Partnership the amounts of $128,094, $130,321 and

$105,798, in 1997, 1996 and 1995, respectively, to perform

local property management and investor relations services

for the Partnership.

CONTINGENT PURCHASE PRICE

The general partner of P.I. Associates has an interest in

the sellers of all the properties acquired by the

Partnership and is entitled to share in a contingent

purchase price with respect to each property. Each seller

will become entitled to any unpaid contingent purchase price

upon the sale, financing or other distribution of one or

more of the properties, but, only after the receipt by the

limited partners of any shortfall in their 9% cumulative

preferred return, plus the return of their adjusted capital

contribution.

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------

Since inception of the Partnership, there has been no

shortfall in the 9% cumulative return and, as described in

Note 2, the Partnership used a portion of the proceeds from

the 1997 financing to return the limited partners' original

capital contribution. As a result, $1,500,000 of the

proceeds from the financing transaction were used to make a

partial payment on the contingent purchase price. This

amount has been capitalized as "Buildings and Improvements"

in the accompanying December 31, 1997 balance sheet.

Management estimates that the total remaining contingent

purchase price at December 31, 1997 is approximately

$1,970,000. Additional amounts to be paid, if any, would

depend upon the results of the Partnership's operations and

the amounts received upon the sale, financing or other

disposition of the properties; such amounts are not

determinable at this time. Therefore, no liability related

to this remaining contingency has been recorded at December

31, 1997.

FINANCING COSTS

As part of the financing transaction described in Note 2,

the Partnership paid approximately $335,000 in financing

costs to an affiliate of the general partner.

7. RECONCILIATION

OF FINANCIAL

INCOME AND

TAXABLE

INCOME

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------

8. PARTNERS' Subject to the orders of priority under certain specified

CAPITAL conditions more fully described in the Agreement of Limited

Partnership (as amended on February 6, 1997), distributions

of partnership funds and allocations of net income from

operations are principally determined as follows:

DISTRIBUTIONS

Net cash from operations (generally defined in the Agreement

as net income plus depreciation and amortization) is to be

distributed first to the limited partners until they have

received their 10% preferred return plus any shortfall in

their 9% cumulative return. Second, the general partner will

receive a Partnership Management Distribution equal to .25%

quarterly of the appraised value of the properties of the

Partnership (equal to $532,000 annually based on current

appraisals). Thereafter, remaining net cash from operations

is to be distributed 20% to the general partner as an

Incentive Management Interest and 80% to the limited

partners.

The Partnership Management Distribution and the Incentive

Management Interest represent payment for managing the

Partnership's affairs. At December 31, 1997, the general

partner had earned but not yet received a Partnership

Management Distribution and an Incentive Management Interest

of approximately $133,000 and $195,000, respectively. These

amounts are not yet considered payable at 1997 year-end;

they will be charged to the general partner's capital

account when paid.

At December 31, 1996, the general partner had earned but not

yet received an Incentive Management Interest of $605,000.

This $605,000 was paid in 1997 from a portion of the

proceeds of the financing transaction described in Note 2.

ALLOCATION OF NET INCOME

Net income is to be allocated in the same manner as

distributions except that:

a) Depreciation expense is allocated only to the general

partner and the Class A (taxable) limited partners and,

b) In all cases, the general partner is to be allocated at

least 1% of all Partnership items.

UNIPROP MANUFACTURED

HOUSING COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------

9. SUPPLEMENTAL Cash paid for interest totaled approximately $1,984,000,

CASH FLOW $35,000 and $15,000 in 1997, 1996 and 1995, respectively.

INFORMATION

UNIPROP MANUFACTURED HOUSING

COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1997

- --------------------------------------------------------------------------------

UNIPROP MANUFACTURED HOUSING

COMMUNITIES INCOME FUND

(A MICHIGAN LIMITED PARTNERSHIP)

NOTES TO SCHEDULE III

DECEMBER 31, 1997

- --------------------------------------------------------------------------------

1. RECONCILIATION OF The following table reconciles buildings and

BUILDINGS AND improvements from January 1, 1995 to December 31, 1997:

IMPROVEMENTS

There were no additions to land during this three-year

period.

2. RECONCILIATION OF The following table reconciles the accumulated

ACCUMULATED depreciation from January 1, 1995 to December 31, 1997:

DEPRECIATION

3. TAX BASIS OF The aggregate cost of buildings and improvements for

BUILDINGS AND federal income tax purposes is equal to the cost basis

IMPROVEMENTS used for financial statement purposes.

EXHIBIT INDEX

EPS Primary are earnings per Class A unit

EPS Diluted are earnings per Class B unit

</FN>

EXHIBIT 28

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND

1998 PROPERTY APPRAISALS

Cushman & Wakefield recently completed market value appraisals of UMHCIF's four

properties as of March 1998. The table below sets forth certain appraisal

information for each property, as well as relevant comparisons:

<TABLE>

<CAPTION>

MARCH 98 OCTOBER 96 VARIANCE

PROPERTY APPRAISALS APPRAISALS IN %

<S> <C> <C> <C>

Aztec Estates, FL $21,000,000 $20,500,000 2.4%

Kings Manor, FL 10,400,000 9,900,000 5.1%

Park of Four Seasons, MN 14,700,000 13,750,000 6.9%

Old Dutch Farms, MI 9,700,000 9,050,000 7.2%

----------- ----------- -----

GRAND TOTAL: $55,800,000 $53,200,000 4.9%

Other Comparisons versus March 1998 Appraisal:

Original Cash Purchase Price of Properties: 26,400,000 +111.3%

</TABLE>

1998 ESTIMATED NET ASSET VALUE OF UNITS

Based on the March 1998 appraisal of the Partnership's properties, the General

Partner has calculated the estimated net asset value of each Unit, based on the

following assumptions:

- - Sale of the Properties in March 1998 for their appraised value.

- - Costs and selling expenses are 3.0% of the sale price.

- - Amount payable to creditors of the Partnership are negligible.

- - Tax consequences of a sale are not taken into consideration.

Calculations:

<TABLE>

<S> <C>

March 1998 appraised value of the properties: $55,800,000

-----------

Minus: Costs and selling expenses (3.0%): 1,674,000

Mortgage Debt: 33,500,000

Sellers' Contingent Purchase Price: 1,970,000 *

-----------

Net Sale Proceeds: 18,656,000

===========

Limited Partners' Share of Net Sales Proceeds (80.0%) $14,924,800

ESTIMATED CURRENT NET ASSET VALUE PER UNIT: $497

====

</TABLE>

* Reflects the $1,500,000 partial payment of Contingent Purchase Price which

was paid on May 15, 1997 out of operating cash reserves.