KRUPP INSURED PLUS LTD PARTNERSHIP - 10-K Annual Report

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

FORM 10-K
(Mark One)

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

For the fiscal year ended December 31, 1996

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 0-15815

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

Massachusetts 04-2915281
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

470 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)

(Registrant's telephone number, including area code) (617) 423-2233

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 9-13.

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

On December 20, 1985, The Krupp Corporation and The Krupp Company
Limited Partnership-IV (the "General Partners") formed Krupp Insured Plus
Limited Partnership (the "Partnership"), a Massachusetts Limited
Partnership. The Partnership raised approximately $149 million through a
public offering of limited partner interests evidenced by units of
depositary receipts ("Units") and used the net proceeds primarily to
acquire participating insured mortgages ("PIMs") and mortgage backed
securities ("MBS"). The Partnership considers itself to be engaged in the
industry segment of investment in mortgages.

The Partnership's investments in PIMs consist of a securitized multi-
family first mortgage loan or a sole participation interest in a Department
of Housing and Urban Development ("HUD") multi-family insured first
mortgage loan, and participation interests in the current revenue stream of
the mortgaged property and any increase in the mortgaged property's value
above certain specified base levels. The Partnership provided the funds
for the first mortgage loan made to the borrower by acquiring either a
securitized first mortgage loan ("MBS"), originated under the lending
programs of the Federal National Mortgage Association ("FNMA") or
Government National Mortgage Association ("GNMA"), or a sole participation
interest in a first mortgage loan originated under the Federal Housing
Administration ("FHA") lending program (collectively the "insured
mortgages"). The Partnership received the participation interests in the
mortgaged property as additional consideration for providing the funds for
the first mortgage loan and accepting a below market interest rate on the
insured mortgage, which provided the borrower with a below market interest
rate on the first mortgage loan. The borrower conveyed the participation
interests to the Partnership through either a subordinated promissory note
and mortgage or a shared income and appreciation agreement. FNMA
guarantees the principal and interest payments for the FNMA MBS and GNMA
guarantees the timely payment of principal and interest for the GNMA MBS.
HUD insures the first mortgage loan underlying the GNMA MBS and any first
mortgage loan originated under the FHA lending program. The participation
interests conveyed to the Partnership by the borrower are neither insured
nor guaranteed.

The Partnership also acquired MBS backed by single-family or multi-
family mortgage loans issued or originated by GNMA, FNMA or the Federal
Home Loan Mortgage Corporation ("FHLMC"). FNMA and FHLMC guarantee the
principal and basic interest of these FNMA and FHLMC MBS, respectively.
GNMA guarantees the timely payment of principal and interest of GNMA MBS,
and HUD insures the pooled first mortgage loans underlying the GNMA MBS.

Although the Partnership will terminate no later than December 31, 2025
the Partnership anticipates realizing the value of the PIMs through
repayment well before this date. In addition, the Partnership expects to
receive a significant portion of the value of its MBS within a ten year
holding period. Therefore, dissolution of the Partnership should occur
significantly prior to December 31, 2025, the stated termination date of
the Partnership.

The Partnership's investments are not subject to seasonal fluctuations.
However, the realization of the participation features of the PIMs are
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 adversely effected the Partnership's
operations and the Partnership anticipates no adverse effect in the future.

As of December 31, 1996, 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 investments 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 STOCK-
HOLDER MATTERS

There currently is no established trading market for the Units.

The number of investors holding Units as of December 31, 1996 was
approximately 7,100. One of the objectives of the Partnership is to
provide quarterly distributions of cash flow generated by its investments
in mortgages. The Partnership anticipates that future operations will
continue to generate cash available for distribution. Adjustments may be
made to the distribution rate in the future due to the realization and
payout of the existing mortgages.

During 1996, the Partnership made a special distribution consisting
primarily of principal proceeds from the Mandalay PIM prepayment. The
Partnership may make special distributions in the future if PIMs prepay or
a sufficient amount of cash is available from MBS and PIM principal
collections.

The Partnership made the following distributions, in quarterly
installments, and special distributions, to its Partners during the two
years ended December 31, 1996 and 1995:

1996 1995
Amount Per Unit Amount Per Unit

Quarterly Distributions:
Limited Partners $ 9,000,119 $1.20 $ 9,000,119 $1.20
General Partners 181,178 187,157

9,181,297 9,187,276

Special Distributions:
Limited Partners 16,500,218 $2.20 -

Total Distributions $25,681,515 $ 9,187,276

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 Item 7 and Item 8,
(Appendix A) of this report, respectively.

1996 1995 1994 1993 1992

Total revenues $ 7,216,716 $ 7,097,154 $ 7,688,593 $ 7,698,364 $8,697,559

Net income 5,329,348 5,247,543 5,682,819 5,642,527 5,413,709

Net income allocated to:

Limited Partners 5,169,468 5,090,117 5,512,334 5,473,251 5,251,298
Average Per Unit .69 .68 .73 .73 .70

General Partners 159,880 157,426 170,485 169,276 162,411

Total assets at
December 31 73,273,523 93,784,033 96,561,305 108,566,470 117,967,380

Distributions to:
Limited Partners 9,000,119 9,000,119 9,554,686 9,873,378 10,509,149
Quarterly
Average per Unit 1.20 1.20 1.28 1.32 1.40

Special 16,500,218 - 7,950,105 4,950,065 8,250,090
Average per Unit 2.20 - 1.06 .66 1.10

General Partners 181,178 187,157 192,551 203,481 228,198

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.

Liquidity and Capital Resources

The most significant demands on the Partnership's liquidity are regular
quarterly distributions of approximately $2.3 million paid to investors.
Commencing in February 1997 the Partnership will pay out approximately $1.4
million per quarter. Funds used for investor distributions come from
(I)interest received on the PIMs, MBS, cash and cash equivalents, (ii) the
principal collections received on the PIMs and MBS and (iii) cash reserves.
The Partnership funds a portion of the distribution from principal
collections and cash revenues causes the capital resources of the
Partnership to continually decrease. As a result of this decrease, the
total cash inflows to the Partnership also will decrease resulting in
periodic downward adjustments to the quarterly distributions paid to
investors.

In November 1996, the underlying borrower of the Mandalay Apartments PIM
prepaid the insured mortgage and paid a portion of the accumulated
participation income. Following the prepayment, the Partnership made a
special
distribution of $2.20 per Unit to investors. As a result of the
prepayment, the Partnership adjusted the quarterly distribution rate to
$.19 per Unit per quarter beginning with the February 1997 distribution.

Three of the properties underlying the Partnership s PIMs operated at or
slightly better than break even during 1996, however, two properties
incurred operating deficits. Located in a seasonal market, Vista Montana s
challenge is to find and lease to prospective residents who will live at
the property year-round and who will qualify for tenancy under the
property s investment tax credit( ITC ) leasing restrictions. Inasmuch as
rental revenues were insufficient to cover all operating expenses and first
mortgage debt service, the annual ITC payment, part of the original
financing structure, funded the annual operating deficit. Royal Palm Place
Apartments is located in the very competitive Kendall, Florida market.
Deep rental concessions as well as increased operating and replacement
expenses needed to market the property to prospective residents resulted in
an operating deficit by year-end, which was funded by the borrower.

The General Partners periodically review the distribution rate to
determine whether an adjustment to the distribution rate is necessary based
on projected future cash flows. 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 quarterly distributions
differ from cash available for distribution, the General Partners may
adjust the distribution rate.

In the event of a sale or refinancing of the remaining PIMs, the
Partnership will distribute the proceeds to investors as a special
distribution and adjust the distribution rate as necessary to reflect the
anticipated cash inflows from the remaining mortgage investments.

For the first five years of the PIMs the borrowers were prohibited from
prepaying the insured mortgage loan. For the second five years, the
borrower can prepay the insured mortgage by incurring a prepayment penalty.
The Partnership has the option to call certain PIMs by accelerating their
maturity if the loans 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, interest rates and
available financing will have an impact on this decision.

Assessment of Credit Risk

The Partnership's investments in mortgages are guaranteed or insured by
the Federal National Mortgage Association ( FNMA ), the Government National
Mortgage Association ("GNMA"), the Federal Home Loan Mortgage Corporation
("FHLMC") or the United States Department of Housing and Urban Development
("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.

FNMA 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 represents interest 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.

Distributable Cash Flow and Net Cash Proceeds from Capital Transactions

Shown below is the calculation of Distributable Cash Flow and Net Cash
Proceeds from Capital Transactions, as defined by Section 17 of the
Partnership Agreement, and the source of cash distributions for the year
ended December 31, 1996 and the period from inception through December 31,
1996. The General Partners provide certain of the information below to
meet requirements of the Partnership Agreement and because they believe
that it is an appropriate supplemental measure of operating performance.
However, Distributable Cash Flow and Net Cash Proceeds from Capital
Transactions should not be considered by the reader as a substitute to net
income as an indicator of the Partnership's operating performance or to
cash flows as a measure of liquidity.

(Amounts in thousands, except per Unit amounts)
Year Inception
Ended Through
12/31/96 12/31/96

Distributable Cash Flow:
Income for tax purposes $ 5,426 $ 72,522
Items not requiring or (not providing)
the use of operating funds:

Amortization of prepaid fees and expenses 1,264 6,025
Amortization of MBS premiums - 284
Acquisition expenses paid from offering
proceeds charged to operations - 1,098
Gain on sale of MBS - (114)

Total Distributable Cash Flow ("DCF") $ 6,690 $ 79,815

Limited Partners Share of DCF $ 6,489 $ 77,420

Limited Partners Share of DCF per Unit $ .87 $ 10.32 (c)

General Partners Share of DCF $ 201 $ 2,395

Net Proceeds from Capital Transactions:
Insurance claim proceeds, prepayment
proceeds and PIM principal collections $16,543 $ 62,975
Principal collections on MBS 1,717 40,504
Insurance claim proceeds and principal
collections on PIMs and MBS reinvested
in PIMs and MBS - (40,775)
Gain on sale of MBS - 114

Total Net Proceeds from Capital
Transactions $18,260 $ 62,818

Cash available for distribution
(DCF plus Net Proceeds from Capital
Transactions) $24,950 $142,633

Distributions: (includes special distributions)
Limited Partners $24,676 (a) $139,513 (b)

Limited Partners Average per Unit $ 3.29 (a) $ 18.60 (b)(c)

General Partners 201 (a) 2,395 (b)

Total Distributions $24,877 $141,908

(a) Represents all distributions paid in 1996 except the February 1996
distribution and includes an estimate of the distribution to be
paid in February 1997.
(b) Includes an estimate of the distribution to be paid in February
1997.
(c) Limited Partners average per Unit return of capital as of February
1997 is $8.28 [$18.60 - $10.32]. Return of capital represents that
portion of distributions which is not funded from DCF such as
proceeds from the sale of assets and substantially all of the
principal collections received from MBS and PIMs.

Operations

The following discussion relates to the operation of the Partnership
during the years ended December 31, 1996, 1995 and 1994.

(Amounts in thousands)
1996 1995 1994

Interest income on PIMs:
Base interest $ 4,644 $ 4,471 $ 4,515
Participation interest income 379 - -
Interest income on MBS 2,315 2,473 2,662
Other interest income 143 153 262
Partnership expenses (791) (891) (1,048)

Distributable Cash Flow 6,690 6,206 6,391

Participation income receivable (265) - 265
Amortization of MBS premium - - (15)
Amortization of prepaid fees
and expenses (1,096) (958) (958)

Net income $ 5,329 $ 5,248 $ 5,683

Net income increased slightly in 1996 as compared to 1995 due primarily
to an increase in interest income on PIMs and lower Partnership expenses
which were offset by lower interest income on MBS and an increase in
amortization expense. Base interest income on PIMs increased in 1996 as
compared to 1995 as a result of fully amortizing the remaining unamortized
discount on the Mandalay Apartments PIM of approximately $411,000 upon its
prepayment in November 1996, net of a decrease in base interest income of
approximately $100,000 resulting from the prepayment, a decrease of
approximately $83,000 resulting from the modification of the Royal Palm
Apartments PIM, and a decrease resulting from the scheduled amortization of
the underlying mortgages. In 1995, the Royal Palm Apartments PIM was
modified and the interest rate on the FNMA MBS was reduced from 7.75% to
6.25% per annum. The Partnership saw an increase in participation interest
income of approximately $114,000 in 1996 versus 1995 due to participation
interest income received from the prepayment of the Mandalay Apartments
PIM. Interest income on MBS declined approximately $158,000 due to
principal collections reducing the outstanding MBS portfolio. Interest
income on MBS and base interest income on PIMs will continue to decline as
principal collections reduce the outstanding balance of these investments.
As the Partnership distributes principal collections on MBS and PIMs
through quarterly or special distributions, the invested assets of the
Partnership will decline which should result in a continuing decline in
interest income. Amortization expense increased in 1996 as compared to
1995 due to fully amortizing the remaining prepaid fees and expenses
related to the Mandalay Apartments PIM. Partnership expenses decreased
approximately $100,000 in 1996 versus 1995 as result of lower asset
management fees caused by a declining asset base and decreases of
approximately $34,000 in expense reimbursements to affiliates and $27,000
in general and administrative expenses.

Net income decreased approximately $435,000 in 1995 as compared to 1994
due primarily to lower participation income accrued in 1995, interest
income on MBS, and interest income on cash and short-term investments.

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 The Krupp Corporation, which is
a General Partner of the Partnership and is a general partner of The Krupp
Company Limited Partnership-IV, the other General Partner of the
Partnership, is as follows:

Position with
Name and Age The Krupp Corporation

Douglas Krupp (50) Co-Chairman of the Board
George Krupp (52) Co-Chairman of the Board
Laurence Gerber (40) President
Robert A. Barrows (39) Vice President and Chief
Accounting Officer

Douglas Krupp is Co-Chairman and Co-Founder of The Berkshire Group.
Established in 1969 as the Krupp Companies, this real estate-based firm
expanded over the years within its areas of expertise including investment
program sponsorship, property and asset management, mortgage banking and
healthcare facility ownership. Today, The Berkshire Group is an integrated
real estate, mortgage and healthcare company which is headquartered in
Boston with regional offices throughout the country. A staff of 3,400 are
responsible for the more than $3 billion under management for institutional
and individual clients. Mr. Krupp is a graduate of Bryant College. In
1989 he received an honorary Doctor of Science in Business Administration
from this institution and was elected trustee in 1990. Mr. Krupp is
Chairman of the Board and Director of Berkshire Realty Company, Inc. (NYSE-
BRI). Mr. Krupp also serves as Chairman of the Board and Trustee of
Krupp Government Income Trust II and Krupp Government Income Trust.

George Krupp is the Co-Chairman and Co-Founder of The Berkshire Group.
Established in 1969 as the Krupp Companies, this real estate-based firm
expanded over the years within its areas of expertise including investment
program sponsorship, property and asset management, mortgage banking and
healthcare facility ownership. Today, The Berkshire Group is an integrated
real estate, mortgage and healthcare company which is headquartered in
Boston with regional offices throughout the country. A staff of 3,400 are
responsible for more than $3.0 billion under management for institutional
and individual clients. Mr. Krupp attended the University of Pennsylvania
and Harvard University.

Laurence Gerber is the President and Chief Executive Officer of The
Berkshire Group. Prior to becoming President and Chief Executive Officer
in 1991, Mr. Gerber held various positions with The Berkshire Group which
included overall responsibility at various times for: strategic planning
and product development, real estate acquisitions, corporate finance,
mortgage banking, syndication and marketing. Before joining The Berkshire
Group in 1984, he was a management consultant with Bain & Company, a
national consulting firm headquartered in Boston. Prior to that, he was a
senior tax accountant with Arthur Andersen & Co., an international
accounting and consulting firm. Mr. Gerber has a B.S. degree in Economics
from the University of Pennsylvania, Wharton School and an M.B.A. degree
with high distinction from Harvard Business School. He is a Certified
Public Accountant. Mr. Gerber also serves as President and a Director of
Berkshire Realty Company, Inc. (NYSE-BRI), and President and Trustee of
Krupp Government Income Trust and Krupp Government Income Trust II.

Robert A. Barrows is Senior Vice President and Chief Financial Officer
of Berkshire Mortgage Finance and The Berkshire Group. Mr. Barrows has
held several positions within The Berkshire Group since joining the company
in 1983 and is currently responsible for accounting and financial
reporting, treasury, tax, payroll and office administrative activities.
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.

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, 1996 no person owned of record or was known by the
General Partners to own beneficially more than 5% of the Partnership's
7,499,999 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 SCHEDULE 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) Amended Agreement of Limited Partnership dated as of
June 27, 1986 [Exhibit A to Prospectus included in Amendment
No. 1 of Registrant's Registration Statement on Form S-11
dated July 2, 1986 (File No. 33-2520)].*

(4.2) Subscription Agreement whereby a subscriber agrees to
purchase Units and adopts the provisions of the Amended
Agreement of Limited Partnership [Exhibit D to Prospectus
included in Amendment No. 1 of Registrant's Registration
Statement on Form S-11 dated July 2, 1986 (File No. 33-
2520)].*

(4.3) Eighth Amendment and Restatement of Certificate of Limited
Partnership filed with the Massachusetts Secretary of State
on February 6, 1987 [Exhibit 4.3 to Registrant's Report on
Form 10-K for the year ended December 31, 1986 (File No. 33-
2520)].*

(10) Material Contracts:

La Costa Apartments

(10.1) Prospectus for GNMA Pool No. 168416 (PL). [Exhibit 19.1 to
Registrant's Report on Form 10-Q for the quarter ended March
31, 1987 (File No. 33-2520)].*

(10.2) Shared Income and Appreciation Agreement, dated March 18,
1987 between International Plaza Associates, Ltd., A
Florida limited partnership, and DRG Funding Corporation, a
Delaware corporation. [Exhibit 19.2 to Registrant's Report
on Form 10-Q for the quarter ended March 31, 1987 (File No.
33-2520)].*

(10.3) Multifamily Mortgage, Assignment of Rents and Security
Agreement, dated March 18, 1987 between International Plaza
Associates, Ltd., a Florida limited partnership, and DRG
Funding Corporation, a Delaware corporation. [Exhibit 19.3
to Registrant's Report on Form 10-Q for the quarter ended
March 31, 1987 (File No. 33-2520)].*

(10.4) Assignment of Mortgage, dated March 18, 1987, between DRG
Funding Corporation, a Delaware corporation, (Mortgagee) and
Krupp Insured Plus Limited Partnership, a Massachusetts
limited partnership, (Assignee). [Exhibit 19.4 to
Registrant's Report on Form 10-Q for the quarter ended March
31, 1987 (File No. 33-2520)].*

Greentree Apartments

(10.5) Prospectus for GNMA Pool No. 238744-(PL). [Exhibit 1 to
Registrant's Report on Form 8-K dated December 10, 1987
(File No. 0-15815)].*

(10.6) Mortgage Note, dated October 22, 1987, between Greentree
Associates, Ltd. and DRG Funding Corporation. [Exhibit 2 to
Registrant's Report on Form 8-K dated December 10, 1987
(File No.0-15815)].*

(10.7) Mortgage, dated October 22, 1987, between Greentree
Associates, Ltd. and DRG Funding Corporation. [Exhibit 3 to
Registrant's Report on Form 8-K dated December 10, 1987
(File No. 0-15815)].*

(10.8) Shared Income and Appreciation Agreement, dated October 22,
1987, between Greentree Associates, Ltd. and DRG Funding
Corporation. [Exhibit 4 to Registrant's Report on Form 8-K
dated December 10, 1987 (File No. 0-15815)].*

(10.9) Assignment of Shared Income and Appreciation Agreement,
dated October 22, 1987, between DRG Funding Corporation and
Krupp Insured Plus Limited Partnership (as "Assignee").
[Exhibit 5 to Registrant's Report on Form 8-K dated December
10, 1987 (File No. 0-15815)].*

(10.10) Multifamily Mortgage, Assignment of Rents and Security
Agreement, dated October 22, 1987, between Greentree
Associates, Ltd. and DRG Funding Corporation. [Exhibit
6 to Registrant's Report on Form 8-K dated December 10,
1987 (File No. 0-15815)].*

(10.11) Assignment of Mortgage (the Multifamily Mortgage,
Assignment of Rents and Security Agreement), dated
November 23, 1987, between DRG Funding Corporation (as
"Mortgagee") and Krupp Insured Plus Limited Partnership
(as "Assignee"). [Exhibit 7 to Registrant's Report on
Form 8-K dated December 10, 1987 (File No. 0-15815)].*

Pine Hills Apartments

(10.12) Prospectus for GNMA Pool No. 238825-(PL). [Exhibit 10.27
to Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1987 (File No. 0-15815)].*

(10.13) Subordinated Promissory Note, dated November 20, 1987,
between Pine Hill Partners ("Maker" or "Mortgagor") and
York Associates, Inc., ("Holder" or "First-Mortgagee")
as assigned to Krupp Insured Plus Limited Partnership.
[Exhibit 10.28 to Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1987 (File No. 0-
15815)].*

(10.14) Subordinated Multifamily Mortgage, Assignment of Rents
and Security Agreement, dated November 20, 1987, between
Pine Hill Partners ("Borrower") and York Associates,
Inc., ("Lender"). [Exhibit 10.29 to Registrant's Report
on Form 10-K for the fiscal year ended December 31, 1987
(File No. 0-15815)].*

(10.15) Assignment of Subordinated Mortgage, dated November 23,
1987 between York Associates, Inc., ("Assignor") and
Krupp Insured Plus Limited Partnership ("Assignee").
[Exhibit 10.30 to Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1987 (File No. 0-
15815)].*

(10.16) Modification to the loan and participation workout
agreement, dated March 31, 1992, by and between Krupp
Insured Plus Limited Partnership and Pine Hill Partners.
[Exhibit 10.19 to Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1994 (File No. 0-
15815)].*

Vista Montana

(10.17) Subordinated Promissory Note, dated March 31, 1988,
between VM Associates Limited Partnership, an Arizona
Limited Partnership and GMAC Mortgage Corporation of PA.
[Exhibit 19.7 to Registrant's Report on Form 10-Q for
the Quarter Ended March 31, 1988 (File No. 0-15815)].*

(10.18) Subordinated Multi-family Deed of Trust, dated March 31,
1988, between VM Associates Limited Partnership, an
Arizona Limited Partnership, and GMAC Mortgage
Corporation of PA [Exhibit 19.8 to Registrant's Report
on Form 10-Q for the Quarter Ended March 31, 1988 (File
No. 0-15815)].*

(10.19) Assignment of Subordinated Deed of Trust, dated March
31, 1988, between GMAC Mortgage Corporation of PA, and
Krupp Insured Plus-II Limited Partnership, a
Massachusetts Limited Partnership. [Exhibit 19.9 to
Registrant's Report on Form 10-Q for the Quarter Ended
March 31, 1988 (File No. 0-15815)].*

(10.20) Assignment of Closing Documents, dated July 12, 1988 by
and between Krupp Insured Plus-II Limited Partnership
("KIP-II"), a Massachusetts limited partnership, and
Krupp Insured Plus Limited Partnership ("KIP-I"), a
Massachusetts limited partnership. [Exhibit 19.10 to
Registrant's Report on Form 10-Q for the Quarter Ended
June 30, 1988 (File No. 0-15815)].*

(10.21) Deed of Trust, dated March 31, 1988 between VM
Associates Limited Partnership, an Arizona limited
partnership and Transamerica Title Insurance Company, a
California corporation. [Exhibit 19.11 to Registrant's
Report on Form 10-Q for the Quarter Ended September 30,
1988 (File No. 0-15815)].*

(10.22) Deed of Trust Note, dated March 31, 1988, between VM
Associates Limited Partnership, an Arizona limited
partnership and GMAC Mortgage Corporation of PA, a
Pennsylvania corporation. [Exhibit 19.12 to Registrant's
Report on Form 10-Q for the Quarter Ended September 30,
1988 (File No. 0-15815)].*

(10.23) Assignment of Mortgage and Collateral Documents, dated
March 31, 1988 by and between Krupp Insured Plus-II
Limited Partnership, a Massachusetts limited partnership
and GMAC Mortgage Corporation of PA, a Pennsylvania
corporation. [Exhibit 19.13 to Registrant's Report on
Form 10-Q for the Quarter Ended September 30, 1988 (File
No. 0-15815)].*

(10.24) Servicing Agreement, dated March 31, 1988 by and between
Krupp Insured Plus-II Limited Partnership, a
Massachusetts limited partnership and GMAC Mortgage
Corporation of PA, a Pennsylvania corporation. [Exhibit
19.14 to Registrant's Report on Form 10-Q for the
Quarter Ended September 30, 1988 (File No. 0-15815)].*

(10.25) Modification to the First mortgage loan and subordinated
Promissory Note, dated June 7, 1993, by and between
Krupp Insured Plus-II Limited Partnership and V.M.
Associates Limited Partnership. [Exhibit 10.28 to
Registrant's Report on Form 10-K for the Year Ended
December 31, 1994 (File No. 0-15815)].*

(10.26) Assignment of interest from Krupp Insured Plus Limited
Partnership II to Krupp Insured Plus Limited
Partnership, dated February 6, 1995. [Exhibit 10.29 to
Registrant's Report on Form 10-K for the Year Ended
December 31, 1994 (File No. 0-15815)].*

Royal Palm Place

(10.27) Supplement to Prospectus for FNMA Pool No. MB-109057.
[Exhibit 10.30 to Registrant s Report on Form 10-K for
the year ended December 31, 1995(File No. 0-15815)].*

(10.28) Subordinated Multifamily Mortgage dated March 20, 1991
between Royal Palm Place, Ltd., a Florida limited
partnership (the "Mortgagor") and Krupp Insured Plus-III
Limited Partnership (the "Mortgagee"). [Exhibit 19.2 to
Registrant's Report on Form 10-Q for the Quarter Ended
June 30, 1991 (File No. 0-15815)].*

(10.29) Amended and Restated Subordinated Promissory Note dated
December 1, 1995 between Royal Palm Place, Ltd., a
Florida limited partnership (the "Mortgagor") and Krupp
Insured Plus-III Limited Partnership (the "Holder")
[Exhibit 10.32 to Registrant s Report on Form 10-K for
the year ended December 31, 1995(File No.0-15815)].*

(10.30) Modification Agreement dated March 20, 1991 by and
between Royal Palm Place, Ltd., a Florida limited
partnership and Krupp Insured Plus-III Limited
Partnership. [Exhibit 19.4 to Registrant's Report on
Form 10-Q for the Quarter Ended June 30, 1991 (File No.
0-15815)].*

(10.31) Participation Agreement dated March 20, 1991 between
Krupp Insured Plus-III Limited Partnership and Krupp
Insured Plus Limited Partnership. [Exhibit 19.1 to
Registrant's Report on Form 10-Q for the Quarter Ended
September 30, 1991 (File No. 0-15815)].*

* Incorporated by reference.

(c) Reports on Form 8-K

During the last quarter of the year ended December 31, 1996 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 February, 1997.

KRUPP INSURED PLUS LIMITED PARTNERSHIP

By: The Krupp Corporation,
a General Partner

By: /s/ Douglas Krupp
Douglas Krupp, Co-Chairman
(Principal Executive Officer) and Director of The
Krupp 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 February,
1997.

Signatures Title(s)

/s/ Douglas Krupp Co-Chairman (Principal Executive
Douglas Krupp (Officer) and Director of The
Krupp Corporation, a
General Partner of the Registrant.

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

/s/Laurence Gerber President of The Krupp Corporation, a
Laurence Gerber General Partner of the Registrant.

/s/ Robert A. Barrows Vice President and Chief Accounting Officer
Robert A. Barrows of The Krupp Corporation, a General
Partner of the Registrant.

APPENDIX A

KRUPP INSURED PLUS 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, 1996

KRUPP INSURED PLUS LIMITED PARTNERSHIP

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

Report of Independent Accountants F-3

Balance Sheets at December 31, 1996 and 1995 F-4

Statements of Income for the Years Ended
December 31, 1996, 1995 and 1994 F-5

Statements of Changes in Partners' Equity for the Years
Ended December 31, 1996, 1995 and 1994 F-6

Statements of Cash Flows for the Years
Ended December 31, 1996, 1995 and 1994 F-7

Notes to Financial Statements F-8 - F-14

Schedule IV - Mortgage Loans on Real Estate F-15 - F-16

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 Plus Limited Partnership:

We have audited the financial statements and the financial statement
schedule of Krupp Insured Plus Limited Partnership (the "Partnership")
listed in the index on page F-2 of this Form 10-K. These financial
statements and financial statement schedule are the responsibility of the
General Partners of the Partnership. Our responsibility is to express an
opinion on these financial statements and financial statement 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
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation. 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 Krupp Insured
Plus Limited Partnership as of December 31, 1996 and 1995, and the results
of its operations and its cash flows for each of the three years in the
period ended December 31, 1996 in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedule referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information required to be included therein.

COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
January 30, 1997

KRUPP INSURED PLUS LIMITED PARTNERSHIP

BALANCE SHEETS

December 31, 1996 and 1995

ASSETS

1996 1995

Participating Insured Mortgages
("PIMs") (Notes B, C and H) $ 42,745,790 $ 59,289,135
Mortgage-Backed Securities and insured
mortgage ("MBS") (Notes B, D and H) 27,147,213 29,026,838

Total mortgage investments 69,893,003 88,315,973

Cash and cash equivalents (Notes B and H) 1,757,197 2,394,592
Interest receivable and other assets 517,476 871,942
Prepaid acquisition fees and expenses, net of
accumulated amortization of $4,196,787 and
$4,423,897, respectively (Note B) 832,838 1,696,611
Prepaid participation servicing fees, net of
accumulated amortization of $802,641 and
$1,895,084, respectively (Note B) 273,009 504,915

Total assets $ 73,273,523 $ 93,784,033

LIABILITIES AND PARTNERS' EQUITY

Liabilities $ 18,468 $ 14,454

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

Limited Partners 72,448,679 92,779,548
(7,500,099 Limited Partner interests
outstanding)

General Partners (194,008) (172,710)

Unrealized gain on MBS (Note B) 1,000,384 1,162,741

Total Partners' equity 73,255,055 93,769,579

Total liabilities and Partners' equity $ 73,273,523 $ 93,784,033

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

KRUPP INSURED PLUS LIMITED PARTNERSHIP

STATEMENTS OF INCOME

For the Years Ended December 31, 1996, 1995 and 1994

1996 1995 1994

Revenues:

Interest income - PIMs
Base interest $4,644,184 $4,470,937 $4,517,722
Participation Income 114,331 - 262,069
Interest income - MBS 2,315,136 2,472,826 2,647,031
Other interest income 143,065 153,391 261,771

Total revenues 7,216,716 7,097,154 7,688,593

Expenses:
Asset management fee to an
affiliate (Note F) 626,375 665,051 686,828
Expense reimbursements to affiliates
(Note F) 73,323 107,019 222,785
Amortization of prepaid expenses and
fees (Note B) 1,095,679 958,502 958,502
General and administrative expenses 91,991 119,039 137,659

Total expenses 1,887,368 1,849,611 2,055,774

Net income (Note G) $5,329,348 $5,247,543 $5,682,819

Allocation of net income (Note E):

Limited Partners $5,169,468 $5,090,117 $5,512,334

Average net income per Limited
Partner interest $ .69 $ .68 $ .73
(7,500,099 Limited Partner
interests outstanding)

General Partners $ 159,880 $ 157,426 $ 170,485

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

KRUPP INSURED PLUS LIMITED PARTNERSHIP

STATEMENTS OF CHANGES IN PARTNERS' EQUITY

For the Years Ended December 31, 1996, 1995 and 1994

Total
Limited General Unrealized Partners'
Partners Partners Gain Equity

Balance at December 31, 1993 $ 108,682,007 $ (120,913) $ - $ 108,561,094

Net income 5,512,334 170,485 - 5,682,819

Quarterly distributions (9,554,686) (192,551) - (9,747,237)

Special distributions (7,950,105) - - (7,950,105)

Balance at December 31, 1994 96,689,550 (142,979) - 96,546,571

Net income 5,090,117 157,426 - 5,247,543

Quarterly distributions (9,000,119) (187,157) - (9,187,276)

Unrealized gain on MBS - - 1,162,741 1,162,741

Balance at December 31, 1995 92,779,548 (172,710) 1,162,741 93,769,579

Net income 5,169,468 159,880 - 5,329,348

Quarterly distributions(Note E) (9,000,119) (181,178) - (9,181,297)

Special distributions (Note E) (16,500,218) - - (16,500,218)

Change in Unrealized gain
on MBS - - (162,357) (162,357)

Balance at December 31, 1996 $ 72,448,679 $(194,008) $ 1,000,384 $ 73,255,055

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

KRUPP INSURED PLUS LIMITED PARTNERSHIP

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 1996, 1995 and 1994

1996 1995 1994
Operating activities:

Net income $ 5,329,348 $ 5,247,543 $ 5,682,819
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of prepaid fees and expenses 1,095,679 958,502 958,502
Premium amortization on MBS - - 14,986
Changes in assets and liabilities:
Decrease (increase) in interest receivable
and other assets 354,466 111,188 (285,736)
Increase (decrease) in liabilities 4,014 (280) 9,358

Net cash provided by operating activities 6,783,507 6,316,953 6,379,929

Investing activities:
Principal collections and prepayments on PIMs 16,543,345 548,811 484,586
Principal collections on MBS 1,717,268 1,784,581 4,988,553

Net cash provided by investing activities 18,260,613 2,333,392 5,473,139

Financing activities:
Quarterly distributions (9,181,297) (9,187,276) (9,747,237)
Special distributions (16,500,218) - (7,950,105)

Net cash used for financing activities (25,681,515) (9,187,276) (17,697,342)

Net decrease in cash and cash
equivalents (637,395) (536,931) (5,844,274)

Cash and cash equivalents, beginning
of period 2,394,592 2,931,523 8,775,797

Cash and cash equivalents, end of period $ 1,757,197 $ 2,394,592 $ 2,931,523

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

KRUPP INSURED PLUS LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

A. Organization

Krupp Insured Plus Limited Partnership (the "Partnership") is a
Massachusetts Limited Partnership. The General Partners of the
Partnership are The Krupp Corporation and The Krupp Company Limited
Partnership-IV and the Corporate Limited Partner is Krupp Depositary
Corporation. The Partnership terminates on December 31, 2025,
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 7,
1986 and completed its public offering having sold 7,499,999 Units
for $149,489,830 net of purchase volume discounts of $510,150 as of
January 27, 1987.

B. Significant Accounting Policies

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

PIMs

The Partnership carries its investments in PIMs at amortized cost
as it has the ability and intention to hold these investments.
Basic interest is recognized at the stated rate of the Department
of Housing and Urban Development ("HUD") insured mortgage (less
the servicer's fee) or the stated coupon rate of the Government
National Mortgage Association ("GNMA") or Federal National
Mortgage Association ("FNMA") MBS. The Partnership recognizes
interest related to the participation features as earned and when
it deems these amounts as collectible.

MBS

At December 31, 1995, the Partnership in accordance with the
Financial Accounting Standards Board s Special Report on Statement
115, "Accounting for Certain Investments in Debt and Equity
Securities", reclassified its MBS portfolio from held-to-maturity
to available-for-sale. The Partnership carries its MBS at fair
market value and reflects any unrealized gains (losses) as a
separate component of Partners' Equity. Prior to December 31,
1995, the Partnership carried its MBS portfolio at amortized cost.
The Partnership amortizes purchase premiums or discounts over the
life of the underlying mortgages using the effective interest
method.

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 deposits 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 and
expenses and prepaid participation servicing fees paid for the
acquisition and servicing of PIMs. The Partnership amortizes the
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
call date of the underlying mortgage.

The Partnership amortizes the prepaid participation servicing fees
using a method that approximates the effective interest method
over a ten year period beginning from the acquisition of the GNMA
or FNMA MBS or final endorsement of the FHA loan.

Income Taxes

The Partnership is not liable for federal or state income taxes
because Partnership income is allocated to the partners for income
tax purposes. If the Partnership's tax returns are examined by
the Internal Revenue Service or state taxing authority and such an
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 liabilities, contingent assets and liabilities and
revenues and expenses during the period. Actual results could
differ from those estimates.

C. PIMs

At December 31, 1996, the Partnership has investments in five PIMs.
The Partnership's PIMs consist of (a) a GNMA or FNMA MBS
representing the securitized first mortgage loan on the underlying
property or a sole participation interest in a first mortgage loan
originated under the FHA lending program on the underlying property
(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 FNMA MBS and HUD insures the FHA mortgage
loan and the mortgage loan underlying the GNMA MBS. 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% per annum
calculated on the unpaid principal balance of the first mortgage on
the underlying property, (ii) "Shared Income Interest" which is 25%
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% 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 to 50% of net revenue or
surplus cash as defined by FNMA 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 a 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.

The borrower may prepay the first mortgage loan subject to a 9%
prepayment penalty in years six through nine, a 1% prepayment
penalty in year ten and no prepayment penalty thereafter.

Under the Agreement, 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.

In November, 1996, the borrower of the Mandalay Apartments PIM
completed a refinancing of the property and prepaid the insured
mortgage. The borrower a l s o paid $379,000 representing a
portion of accumulated participation income. The Partnership made
a special distribution of $2.20 per Unit to investors from the
proceeds of the payoff. In November 1996, the Partnership fully
amortized the remaining prepaid fees and expenses of the Mandalay
Apartments PIM and retired them from the books.

The Partnership's PIMs consist of the following at December 31, 1996
and 1995:

Aggregate Range of Range of
Original Number Interest Maturity Investment Basis at
Issurer Principal of PIMs Rates Dates (a) December 31,
1996 1995

GNMA $25,046,270
(b)(c) 3(d) 7 - 8.5% 4/22-12/22 $23,277,507 $39,754,953

FHA 13,814,400
(e) 1 7.375% 12/33 13,630,602 13,696,501

FNMA 6,021,258
(f) 1 6.25%
(g) 4/06 5,837,681 5,837,681

$44,881,928 5 $42,745,790 $59,289,135

(a) The range of maturity dates for PIMs issued by GNMA and FHA represent
the stated maturity date of the security or insured mortgage, however,
the Partnership anticipates realizing amounts due under these PIMs
well before these stated maturity dates.

(b) Includes a PIM with a prepayment penalty of 9% in year 6 through 7, 3%
in year 8 and 9, with no penalty thereafter.

(c) On January 1, 1992, the Partnership entered into an agreement which
provided for a reduction in the permanent interest rate on a GNMA PIM
having an original face value of $4,900,000, which reduced the
interest rate from 8.5% to 7% for a period of four years. The
reduction in the permanent interest rate was granted in exchange for a
reduction of the Shared Appreciation Interest Base from $5,700,000 to
$4,900,000.

(d) At December 31, 1995 there were four GNMA PIMs.
(e) On November 30, 1993, the Partnership entered into an agreement with
the underlying borrower of the FHA PIM for a permanent interest rate
reduction from 8.875% per annum to 7.375% per annum, retroactive to
January 1, 1992. In exchange for the interest rate reduction, the
Partnership received an increase in Shared Appreciation Income from
25% in excess of the base amount of $15,410,000 to 25% of the net
sales proceeds over the outstanding indebtedness at the time of sale
($13,630,602 as of December 31, 1996). In the event of a refinancing,
Shared Appreciation Income is 25% of the appraised value over the
outstanding indebtedness at the time of refinance. In addition,
Shared Income Interest increased from 25% of rental income in excess
of the base amount of $175,000 to 25% of all distributable surplus
cash.
(f) The total PIM on the underlying property is $22,000,000 of which 73%
or $15,978,742 is held by Krupp Insured Plus III Limited Partnership.
(g) During December 1995, the Partnership agreed to a modification of the
Royal Palm PIM. The Partnership received a reissued Federal National
Mortgage Association ("FNMA") mortgage-backed security ("MBS") and
increased its participation percentage in income and appreciation from
25% to 30%. During December 1995, the Partnership received its pro-
rata share of a $90,644 principal payment and will receive interest
only payments on the FNMA MBS at interest rates ranging from 6.25% to
8.775% per annum through maturity. Also, the Partnership will receive
its pro-rata share of annual principal payments totaling $250,000 due
each year for four years beginning in January 1997.

The underlying mortgages of the PIMs are collateralized by multi-family
apartment complexes located in four states. The apartment complexes range
in size from 207 to 352 units.

D. MBS

At December 31, 1996, the Partnership's MBS portfolio had an amortized
cost of $26,146,829 and gross unrealized gains of $1,000,384. At
December 31, 1995, the Partnership s MBS portfolio had an amortized
cost of $27,864,097 and gross unrealized gains of $1,162,741. The MBS
portfolio has maturities ranging from 2004 to 2033.

E. Partners' Equity

Profits and losses 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 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 10% 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.

Profits arising from a capital transaction will be allocated in the
same manner as related cash distributions. Losses from a capital
transaction will be allocated 97% to the Limited Partners and 3% to
the General Partners.

During 1996, 1995 and 1994, the Partnership made quarterly
distributions totaling $1.20, $1.20 and $1.28 per Unit, respectively.
The Partnership made special distributions of $2.20 and $1.06 per Unit
in 1996 and 1994, respectively.

As of December 31, 1996, the following cumulative partner
contributions and allocations have been made since inception of the
Partnership:

Corporate
Limited General Unrealized
Unitholders Partner Partners gain on MBS Total
>
Capital $149,489,830 $ 2,000 $ 3,000 $ _ $149,494,830
contributions

Syndication (7,906,604) - - - ( 7,906,604)
Costs

Quarterly (100,436,030) (1,383) (2,329,525) - (102,766,938)
distributions

Special (37,649,976) (502) - - (37,650,478)
distributions

Net income 68,950,415 929 2,132,517 - 71,083,861

Unrealized
gains on MBS - - - 1,000,384 1,000,384

Balance at
December 31,
1996 $72,447,635 $ 1,044 $(194,008) $1,000,384 $ 73,255,055

F. Related Party Transactions

Under the terms of the Partnership Agreement, the General Partners
receive an Asset Management Fee equal to .75% per annum of the value of
the Partnership's total 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 for asset management and incentive
management fees shall not exceed 10% 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 net income reported in the Partnership's
1996 federal income tax return is as follows:

Net income from statement of operations $ 5,329,348

Add: Book to tax difference for participation
income 265,684

Less: Book to tax difference for amortization of
prepaid expenses and fees (168,817)

Net income for federal income tax purposes $ 5,426,215

The allocation of the 1996 net income for federal income tax purposes
is as follows:

Portfolio
Income

Unitholders $ 5,263,357
Corporate Limited Partner 71
General Partners 162,787

$ 5,426,215

For the years Ended December 31, 1996, 1995 and 1994 the
average per unit net income to the Unitholders for federal
income tax purposes was $.71, $.79 and $.81, respectively.

H. Fair Value Disclosures of Financial Instruments

The Partnership used 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 because of the short
maturity of those instruments.

MBS

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

PIMs

There is no established 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 Parnership 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
Partnership's investments in PIMs had gross unrealized gains and
losses of approximately $474,000 and $652,000 at December 31, 1996,
respectively, and unrealized gains and losses of approximately
$1,628,000 and $148,000 at December 31, 1995.

At December 31, 1996 and 1995, the Partnership estimates fair value
of its financial instruments as follows:

(Rounded to $1,000)
1996 1995

Cash and cash equivalents $ 1,757 $ 2,395

MBS 27,147 29,027

PIMs 42,568 60,769

$71,472 $92,191

KRUPP INSURED PLUS LIMITED PARTNERSHIP

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

Normal Carrying
Interest Monthly Amount at
Rate Maturity Payment Original Current 12/31/96
PIMs (a)(b) (c) Date (d) (e)(f) Face Amount Face Amount (j)

GNMA
La Costa Apts.
Miami, FL 7.5% 4/15/22 $ 74,500 $11,050,000 $10,169,756 $10,169,756

Greentree Apts.
Hoover, AL 8% 11/15/22 64,600 9,096,270 8,497,603 8,497,603

Pine Hills Apts.
Howell, MI 7%
(h) 12/15/22 36,600 4,900,000 4,610,148 4,610,148

25,046,270 23,277,507 23,277,507

FHA
Vista Montana Apts.
Val Vista Lakes, AZ 7.375%
(i) 12/1/33 86,000 13,814,400 13,630,602 13,630,602

FNMA
Royal Palm Place (g)
Kendall, FL 6.25%
(k) 4/1/06 (k) 6,021,258 5,837,681 5,837,681

$44,881,928 $42,745,790 $42,745,790

(a) The Participating Insured Mortgages ("PIMs") consist of either a
mortgage-backed security ("MBS") issued and guaranteed by the Federal
National Mortgage Association ("FNMA"), a securitized mortgage loan
insured by the Department of Housing and Urban Development ("HUD") and
issued and guaranteed as to the timely payment of principal and
interest by the Government National Mortgage Association ("GNMA") or a
first mortgage issued by the Federal Housing Authority ("FHA") and
insured by 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 base levels.
(b) The GNMA MBS, FNMA MBS and FHA mortgage loans may generally 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.
(c) Represents only the stated interest rate of the GNMA or FNMA MBS or
the stated interest rate of the FHA mortgage loan less the servicing
fee. In addition, the Partnership may receive participation interest,
consisting 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) and (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.
Minimum Additional Interest is at a rate of .5% per annum calculated
on the unpaid
principal balance of the first mortgage note. Shared Income Interest
is generally based on 25% of the monthly gross rental income generated
by the underlying property in excess of a specified base, but only to
the extent it exceeds the amount of Minimum Additional Interest earned
during the month. Shared Appreciation Interest is generally based on
25% of any increase in the value of the project over the base value.
(d) The Partnership's GNMA MBS and FHA mortgage loan have call provisions,
which allow the Partnership to accelerate their respective maturity
dates to as early as ten years from the date of the loan closing.
(e) The normal monthly payment consisting of principal and interest is
payable monthly at level amounts over the term of the GNMA MBS and the
FHA direct mortgages.
(f) The normal monthly payment consisting of principal and interest for
FNMA MBS is payable at level amounts based on a 35-year amortization.
All unpaid principal and accrued interest is due at maturity.
(g) The total PIM on the underlying property is $22,000,000 of which
72.63% or $15,978,742 is held by Krupp Insured Plus-III Limited
Partnership. The Partnership's share of the principal balance due at
maturity for the Royal Palm PIM is approximately $5,564,000.
(h) On January 1, 1992, the Partnership entered into an agreement which
provided for a reduction in the permanent interest rate from 8.5% to
7% per annum for a period of four years. The reduction in the
permanent interest rate was granted in exchange for a reduction of the
Shared Appreciation Interest Base from $5,700,000 to $4,900,000.
(i) On November 30, 1993, the Partnership entered into an agreement with
the underlying borrower for a permanent interest rate reduction from
8.75% per annum to 7.375% per annum retroactive to January 1, 1992.
In exchange for the interest rate reduction, the Partnership received
an increase in Shared Appreciation Income from 25% in excess of the
base amount of $15,410,000 to 25% of the net sales proceeds over the
outstanding indebtedness at sale ($13,630,602 at December 31, 1996).
In the event of a refinancing, Shared Appreciation Income is 25% of
the appraised value over the outstanding indebtedness at refinance.
In addition, Shared Income Interest increased from 25% of rental
income in excess of the base amount of $175,000 to 25% of all
distributable surplus cash.
(j) The aggregate cost of PIMs for federal income tax purposes is
$42,745,790.
(k) During December 1995, the Partnership agreed to a modification of the
Royal Palm PIM. The Partnership received a reissued Federal National
Mortgage Association ("FNMA") mortgage-backed security ("MBS") and
increased its participation percentage in income and appreciation from
25% to 30%. During December 1995, the Partnership received its pro-
rata share of a $90,644 principal payment and will receive interest
only payments on the FNMA MBS at interest rates ranging from 6.25% to
8.775% per annum through maturity. Also, the Partnership will receive
its pro-rata share of annual principal payments $250,000 due each year
for four years beginning in January 1997.

A reconciliation of the carrying value of Mortgages for each of the three
years in the period ended December 31, 1996 is as follows:

1996 1995 1994

Balance at beginning of period $ 59,289,135 $ 59,837,946 $60,322,532

Deductions during period:
Prepayment and principal collections (16,543,345) (548,811) (484,586)

Balance at end of period $ 42,745,790 $ 59,289,135 $59,837,946