As filed with the Securities and Exchange Commission on December 13, 1996
                                                         Registration No. 333-
------------------------------------------------------------------------------

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


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ______________________

                                    FORM S-8


                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                             ______________________

                         INSIGNIA FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)


               Delaware                              13-3591193
    (State or other jurisdiction of        (I.R.S. Employer Identification
    incorporation or organization)                     Number)

                          One Insignia Financial Plaza
                                  P.O. Box 1089
                        Greenville, South Carolina 29602
               (Address of principal executive offices) (Zip code)

                               Warrant Agreements
                            (Full title of the Plan)

                               John K. Lines, Esq.
                                 General Counsel
                         Insignia Financial Group, Inc.
                          One Insignia Financial Plaza
                                  P.O. Box 1089
                        Greenville, South Carolina 29602
                                 (864) 239-1000
                      (Name, address and telephone number,
                   including area code, of agent for service)
                        _________________________________

                                   Copies to:
                             Arnold S. Jacobs, Esq.
                      Proskauer Rose Goetz & Mendelsohn LLP
                                  1585 Broadway
                            New York, New York 10036
                                 (212) 969-3000
                        _________________________________

                         CALCULATION OF REGISTRATION FEE


<TABLE>
<CAPTION>

Title of securities    Amount to be    Proposed maximum     Proposed maximum      Amount of
  be registered         registered      offering price     aggregate offering   registration
                                          per share              price               fee

<S>                      <C>             <C>                  <C>                 <C>   
Class A Common
Stock, par value
$0.01 per share          728,000shs(1)   $13.5845(2)          $9,889,500(2)       $2,996.82(2)
<FN>

(1)  Registered  to cover  shares  of Class A Common  Stock  underlying  warrant
     agreements (the "Warrants").

(2)  Estimated  solely  for the  purpose of  calculating  the  registration  fee
     pursuant to Rule 457(h) of the  Securities  Act of 1933.  The Warrants have
     varying  exercise  prices for shares of Class A Common Stock  ranging up to
     $13.6875 per share, with an average exercise price of $13.5845.
</FN>
</TABLE>

                                      1
<PAGE>

     Explanatory Note: Included in this Registration Statement, following Item 9
of Part II, is a "reoffer  prospectus"  relating to the resale of the securities
covered by this Registration Statement.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

      Item 3.  Incorporation of Documents By Reference.
      -------  ----------------------------------------

     The following  documents filed with the Securities and Exchange  Commission
by Insignia Financial Group, Inc., a Delaware  corporation (the  "Corporation"),
are incorporated herein by reference:

          (1) the  Corporation's  Annual  Report on Form 10-K for the year ended
     December 31, 1995;

          (2) the Corporation's  Quarterly Reports on Form 10-Q for the quarters
     ended March 31, June 30 and September 30, 1996;

          (3) the  Corporation's  Current  Reports on Form 8-K dated January 19,
     January  29,  July 1, July 1, and  December  6, 1996 and Form  8-K/A  dated
     September 13, 1996; and

          (4) the  description of the  Corporation's  Class A Common Stock,  par
     value $0.01 per share, included in the Corporation's Registration Statement
     on Form 8-A,  dated  September 19, 1995, on Form 8-A/A(1)  dated October 3,
     1995 and on Form 8-A/A(2) dated June 21, 1996.

     All documents  subsequently  filed by the  Corporation  with the Commission
pursuant to Sections 13(a),  13(c), 14, and 15(d) of the Securities Exchange Act
of 1934, as amended,  prior to the filing of a  post-effective  amendment  which
indicates that all securities  offered have been sold or which  deregisters  all
securities  then  remaining  unsold,  shall  be  deemed  to be  incorporated  by
reference in this Registration  Statement and to be part hereof from the date of
filing such documents.  Any statement in a document incorporated or deemed to be
incorporated  by reference  herein shall be deemed to be modified or  superseded
for the purposes of this  Registration  Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be  incorporated  by  reference  herein  modifies or  supersedes  such
statement.  Any statement so modified or superseded shall not be deemed,  except
as so modified or  superseded,  to  constitute  a part of this  Prospectus.  The
Company will provide  without  charge to each person to whom this  Prospectus is
delivered,  upon written request of such person,  a copy of any or all documents
incorporated herein by reference (other than exhibits to such documents,  unless
such exhibits are  specifically  incorporated by reference into such documents).
Requests for such copies should be delivered to John K. Lines,  General  Counsel
and Secretary,  Insignia  Financial Group,  Inc., One Insignia  Financial Plaza,
P.O. Box 1089, Greenville, South Carolina 29602 or telephone at (864) 239-1000.

      Item 4.  Description of Securities.
      -------  --------------------------

      Not applicable.




                                     II-1
<PAGE>

      Item 5.  Interest of Named Experts and Counsel.
      -------  --------------------------------------

      Not applicable.

      Item 6.  Indemnification of Directors and Officers.
      -------  ------------------------------------------

     The  Corporation  is  incorporated  in Delaware.  Under  Section 145 of the
General Corporation Law of the State of Delaware, a Delaware corporation has the
power,  under  specified  circumstances,  to indemnify its directors,  officers,
employees and agents in connection  with actions,  suits or proceedings  brought
against them by a third party or in the right of the  corporation,  by reason of
the fact that they were or are such  directors,  officers,  employees or agents,
against expenses incurred in any action, suit or proceeding.  Article Seventh of
the Certificate of Incorporation of the Corporation provides for indemnification
of  directors  and  officers  to the  fullest  extent  permitted  by the General
Corporation  Law of the State of Delaware,  and the Corporation has entered into
agreements  with  20  of  its  officers  and  directors  with  respect  to  such
indemnification.  Reference is made to the Certificate of  Incorporation  of the
Corporation  and such  agreements,  incorporated by reference as Exhibits to the
Corporation's Registration Statement on Form S-1, File No. 33-67486.

     Section  102(b)(7) of the General  Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting  the  personal  liability  of a director to the  corporation  or its
stockholders  for monetary  damages for breach of  fiduciary  duty as a director
provided  that such  provision  shall not  eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its  stockholders,  (ii) for  acts or  omissions  not in good  faith or which
involve  intentional  misconduct  or a knowing  violation  of law,  (iii)  under
Section 174 (relating to liability for unauthorized  acquisitions or redemptions
of, or dividends on, capital stock) of the General  Corporation Law of the State
of Delaware,  or (iv) for any  transaction  from which the  director  derived an
improper  personal benefit.  Article Eighth of the Corporation's  Certificate of
Incorporation contains such a provision.

     The Corporation  currently has a Directors and Officers Liability Insurance
Policy (the "Policy") in place with Federal Insurance  Company.  The Policy is a
"claims made" policy with a $5,000,000 policy aggregate.  However,  the Board of
Directors  believes that it serves the Corporation's best interest to supplement
this coverage or any coverage which the  Corporation  may maintain in the future
by agreeing by contract to indemnify  directors  and  executive  officers to the
fullest extent permitted under applicable law.

     The form of Indemnification Agreement to be entered into by the Corporation
with  directors  and  executive  officers  of the  Corporation  is  based on the
provisions of the General  Corporation  Law of the State of Delaware,  which are
contained  primarily in Section 145 of the General Corporate Law of the State of
Delaware, but is intended to provide broader  indemnification than that which is
specifically  provided by Section  145.  The form of  Indemnification  Agreement
provides  generally that the Corporation will to the fullest extent permitted by
applicable  law indemnify  the director or executive  officer  against  expenses
arising  from any  event or  occurrence,  either  prior to or after the time the
Indemnification  Agreement is executed,  related to the fact that such person is
or was  serving as a director or  executive  officer of the  Corporation  (or of
another entity at the Corporation's  request).  To be indemnified,  a party must
meet the relevant standards of conduct, but the form of Indemnification


                                     II-2
<PAGE>

Agreement  provides  that such  standard is presumed to have been met unless the
Corporation demonstrates otherwise.

      Item 7.  Exemption from Registration Claimed.
      -------  ------------------------------------

      Not applicable.

      Item 8.  Exhibits.
      -------  ---------

     4.1  Form of warrant  (incorporated by reference to the Corporation's Proxy
          Statement dated April 22, 1996).
 
     5    Opinion of Proskauer Rose Goetz & Mendelsohn LLP.

     23.1 Consent of Ernst & Young LLP (included on Page II-7).

     23.2 Consent of Coopers & Lybrand L.L.P. (included on Page II-8).

     23.3 Consent of Coopers & Lybrand L.L.P. (included on Page II-9).

     23.4 Consent of Imowitz Koenig & Co., LLP (included on Page II-10).

     23.5 Consent of Proskauer  Rose Goetz & Mendelsohn LLP (included in Exhibit
          5).

     24 Powers of Attorney.

      Item 9.  Undertakings.
      -------  -------------

     (a) The undersigned registrant hereby undertakes:

         (1) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this registration statement:

             (iii)  To include any material information with respect to the plan
          of distribution not previously disclosed in the registration statement
          or any  material  change  to  such  information  in  the  registration
          statement.

          (2) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment shall be deemed
     to be a new  registration  statement  relating  to the  securities  offered
     therein,  and the offering of such  securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (3) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

     (b) The  undersigned  registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section


                                     II-3
<PAGE>

13(a) or  Section  15(d) of the  Securities  Exchange  Act of 1934  (and,  where
applicable,  each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities  Exchange Act of 1934) that is  incorporated  by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  bona fide  offering
thereof.

     (h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers and controlling  persons of
the  registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by the registrant of expenses
incurred or paid by a director,  officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.




                                     II-4
<PAGE>


                                   PROSPECTUS


                                 728,000 Shares

                         INSIGNIA FINANCIAL GROUP, INC.

                                  Common Stock

                              ____________________



     All of the 728,000 shares of Class A Common Stock par value $0.01 per share
(the  "Common  Stock") of Insignia  Financial  Group,  Inc.  ("Insignia"  or the
"Company") are being sold by certain  stockholders  of the Company (the "Selling
Stockholders").  The shares offered hereby comprise shares which may be acquired
by the Selling  Stockholders  upon exercise of certain warrants received by them
as employees of the Company.  The Company will receive the exercise price on any
such exercise,  but will not receive any proceeds from the sale of shares by the
Selling Stockholders. See "Selling Stockholders."

                              ____________________


     See "Risk  Factors" on page P-5 for a discussion  of certain  factors to be
considered by prospective investors.

                              ____________________


THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE  COMMISSION OR ANY STATE  SECURITIES  COMMISSION NOR HAS THE SECURITIES
AND  EXCHANGE  COMMISSION  OR ANY STATE  SECURITIES  COMMISSION  PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.



                                December 13, 1996


                                     P-1
<PAGE>

                              AVAILABLE INFORMATION

     The Company has filed with the  Securities  and  Exchange  Commission  (the
"Commission")  a Registration  Statement (of which this Prospectus is a part) on
Form S-8 (the  "Registration  Statement")  under the  Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock offered hereby.
This Prospectus,  which constitutes part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement,  certain
portions of which have been omitted as permitted by the rules and regulations of
the  Commission.  For further  information  with  respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement, to
the  documents  incorporated  by reference  therein,  and to the  schedules  and
exhibits thereto.

     The Company is subject to the informational  requirements of the Securities
Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  and in  accordance
therewith,  files  reports,  proxy  statements  and other  information  with the
Commission.  The  Registration  Statement,  reports,  proxy statements and other
information  filed by the  Company  can be  inspected  and  copied at the public
reference  facilities of the  Commission  at its  principal  office at 450 Fifth
Street,  N.W.,  Room  1024,  Washington,  D.C.  20549,  and at the  Commission's
regional offices at Northwestern  Atrium Center, 500 West Madison Street,  Suite
1400, Chicago,  Illinois 60661, and at Seven World Trade Center, 13th Floor, New
York,  New  York  10048.  Copies  of such  materials  also  may be  obtained  at
prescribed  rates from the Public  Reference  Section of the  Commission  at its
principal office at 450 Fifth Street, N.W., Room 1024,  Washington,  D.C. 20549.
Such documents also are available  through the Commission's  World Wide Web site
(http://www.sec.gov).

     The  Common  Stock is  listed  on the New  York  Stock  Exchange  ("NYSE").
Reports,  proxy statements and other  information  concerning the Company can be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005.

                           INCORPORATION BY REFERENCE

     The  following  documents  filed by the  Company  with the  Commission  are
incorporated  herein by reference:  (i) the Company's Annual Report on Form 10-K
for the year ended December 31, 1995;  (ii) the Company's  Quarterly  Reports on
Form 10-Q for the quarters ended March 31, June 30 and September 30, 1996; (iii)
the proxy statement for the Company's Annual Meeting of Stockholders held on May
23, 1996;  (iv) the  Company's  Current  Reports on Form 8-K dated  September 1,
1995, January 19, 1996,  January 29, 1996, July 1, 1996, July 1, 1996,  December
9, 1996,  December 10, 1996 and December 10, 1996 and Form 8-K/A dated September
13, 1996;  (v) the combined  consolidated  financial  statements of NPI Property
Management  Corporation,  Inc.,  National  Property  Investors,  Inc. and NPI-CL
Management L.P.  contained in the Company's  Registration  Statement on Form S-3
filed with the  Securities  and Exchange  Commission  on  September 1, 1995,  as
amended by  Amendment  No. 1 to Form S-3 filed on September  19,  1995,  and the
final prospectus filed pursuant to Rule 424(b) on October 13, 1995; and (vi) the
description of the Common Stock contained in Insignia's  Registration  Statement
on Form 8-A,  dated  September 19, 1995, on Form 8-A/A(1)  dated October 3, 1995
and on Form 8-A/A(2)  dated June 21, 1996. All documents  subsequently  filed by
the Company with the Commission pursuant to Sections 13(a), 13(c), 14, and 15(d)
of the  Exchange  Act prior to the filing of a  post-effective  amendment  which
indicates that all securities  offered have been sold or which  deregisters  all
securities  then  remaining  unsold,  shall  be  deemed  to be  incorporated  by
reference in this Registration  Statement and to be part hereof from the date of
filing such documents. Any statement in a document incorporated or


                                     P-2
<PAGE>

deemed to be incorporated by reference  herein shall be deemed to be modified or
superseded for the purposes of this Registration  Statement to the extent that a
statement  contained  herein or in any other  subsequently  filed document which
also  is or is  deemed  to be  incorporated  by  reference  herein  modifies  or
supersedes such statement.  Any statement so modified or superseded shall not be
deemed,  except as so  modified  or  superseded,  to  constitute  a part of this
Prospectus.  The Company will provide without charge to each person to whom this
Prospectus is delivered,  upon written request of such person,  a copy of any or
all  documents  incorporated  herein by reference  (other than  exhibits to such
documents,  unless such exhibits are specifically incorporated by reference into
such documents).  Requests for such copies should be delivered to John K. Lines,
General  Counsel and Secretary,  Insignia  Financial  Group,  Inc., One Insignia
Financial Plaza, P.O. Box 1089, Greenville, South Carolina 29602 or telephone at
(864) 239-1000.


                                TABLE OF CONTENTS

                                                                          Page

The Company................................................................P-3
Risk Factors...............................................................P-5
Selling Stockholders..................................................... P-12
Legal Opinions........................................................... P-14
Experts...................................................................P-14


                                   THE COMPANY

General

     Insignia  is  a  fully   integrated  real  estate   services   organization
specializing  in the operation and ownership of securitized  real estate assets.
According to Commercial  Property News and the National  Multi-Housing  Council,
Insignia  is the largest  property  manager in the United  States,  has been the
largest manager of multi-family  residential properties since 1992, and is among
the largest managers of commercial  properties.  Insignia's real estate services
include property management,  providing all of the day-to-day services necessary
to operate a property,  whether  residential  or commercial;  asset  management,
including  long-term  financial  planning,  monitoring and implementing  capital
improvement   plans,   and  development   and  execution  of  refinancings   and
dispositions;  real estate leasing and brokerage;  maintenance and  construction
services;  marketing and  advertising;  investor  reporting and accounting;  and
investment banking, including assistance in workouts and restructurings, mergers
and acquisitions,  and debt and equity securitizations.  The Company through its
subsidiary,  Compleat Resource Group,  Inc. ("CRG"),  markets consumer goods and
services  to the  residents  and owners of  multi-family  properties,  including
properties which Insignia manages.  CRG has formed a strategic  alliance with GE
Capital - ResCom, L.P. for the purpose of providing  long-distance telephone and
cable television services.

     Insignia commenced  operations in December 1990 and since then has grown to
provide  property and/or asset  management  services for over 2,500  properties,
which include  approximately  283,000  residential  units, and approximately 107
million  square  feet of  commercial  space,  located  in over 500  cities in 48
states.  Insignia  currently  provides  partnership  administration  services to
approximately 900


                                     P-3
<PAGE>

limited  partnerships having  approximately  400,000 limited partners.  Insignia
also owns limited partner  interests  (ranging from 4% to 54% of the outstanding
interests) in 28 real estate limited partnerships which in the aggregate own 143
properties   with   approximately   38,100   residential   apartment  units  and
approximately 865,000 square feet of commercial space located in 83 cities in 28
states.

     Insignia's  principal  business  strategy  is to  expand  its  real  estate
services business in three primary ways. First, Insignia seeks to acquire, or to
have an affiliate acquire, controlling positions in entities that own or control
real estate  properties,  and then,  subject to their fiduciary  duties, to have
such entities engage  Insignia to provide  services.  Second,  Insignia seeks to
enter into special contractual  relationships with non-affiliated  third parties
that own or control  portfolios  of real  estate  properties  pursuant  to which
Insignia will provide management services.  Third,  Insignia seeks to expand its
management of properties that are owned by non-affiliated third parties, such as
large insurance companies,  banks, government or quasi-government  agencies, and
other institutional investors and lenders.

     The  Company is a Delaware  corporation  incorporated  in July 1990 and its
principal  executive  offices are located at One Insignia  Financial Plaza, P.O.
Box 1089,  Greenville,  South Carolina 29602,  and its telephone number is (864)
239-1000.

Recent Developments

      ESG Acquisition

     On June 30, 1996, the Company acquired the business and  substantially  all
of the  assets of Edward S.  Gordon  Company,  Incorporated  and its  affiliates
("ESG"), the fourth largest commercial real estate property services firm in the
United States. ESG's services include commercial real estate leasing,  including
tenant  and  landlord  representation,   real  estate  consulting  services  and
commercial real estate brokerage,  as well as commercial  property management in
the New York City metropolitan area. The purchase price was approximately  $73.8
million.  At closing,  ESG managed  approximately  25.5  million  square feet of
commercial  space  comprised  of 57  properties  in New  York,  New  Jersey  and
Connecticut.  The ESG acquisition  provided Insignia with a substantial presence
in the  commercial  segment  of the  metropolitan  New York City  market,  which
complements its leading presence in the residential segment.

      Paragon Acquisition

     On June 30, 1996, the Company  acquired the commercial real estate services
business of Paragon  Group,  Inc.  ("Paragon").  The  services  of the  acquired
business include commercial property management,  leasing and tenant improvement
services performed with respect to Paragon properties, as well as brokerage, fee
development  and  real  estate   consulting   services   performed  for  various
institutional  clients.  The purchase price paid was $18.5 million.  At closing,
the acquired business managed and leased approximately 22 million square feet of
commercial space comprised of 166 properties located in 17 states:  12.5 million
square  feet of  office  properties,  4.9  million  square  feet  of  industrial
properties,  and 4.5 million square feet of retail properties.  This acquisition
added  substantially  to the Company's  presence in the Southern  California and
Dallas  markets and  provided a  substantial  presence  in the  Central  Florida
market.



                                     P-4
<PAGE>


      Convertible Preferred Securities Offering

     On November 1 and 6, 1996,  Insignia Financing I, a Delaware business trust
(the "Trust"), issued and sold (the "Convertible Preferred Securities Offering")
2,990,000 of its 6 1/2% Trust Convertible Preferred Securities with an aggregate
liquidation amount of $149.5 million (the "Convertible  Preferred  Securities").
All of the  outstanding  common  securities  of the  Trust,  with  an  aggregate
liquidation value of approximately $4.6 million (the "Common  Securities"),  are
owned by the Company,  which entitles it to designate the trustees of the Trust.
The Convertible Preferred Securities were sold to Lehman Brothers,  Dillon, Read
& Co. Inc.,  Goldman,  Sachs & Co. and A.G.  Edwards & Sons,  Inc. (the "Initial
Purchasers") for an aggregate purchase price of $149.5 million. The Company paid
the Initial  Purchasers a commission of 3% of the aggregate  purchase price. The
Initial Purchasers resold the Convertible Preferred Securities (i) to "qualified
institutional  buyers"  (as  defined in Rule 144A under the  Securities  Act) in
compliance with Rule 144A, (ii) to other  institutional  "accredited  investors"
(as defined in Rule 501(A) (1),  (2),  (3) or (7) under the  Securities  Act) in
compliance  with  Regulation D under the  Securities  Act and (iii)  outside the
United  States to persons  other than U.S.  persons in reliance on  Regulation S
under the  Securities  Act.  The  Preferred  Securities  may be converted at the
option of the holder after  December 30, 1996 into shares of Common Stock at the
rate of 1.8868 shares of Common Stock for each  Convertible  Preferred  Security
(equivalent  to a  conversion  price of $26.50 per share of Common  Stock).  The
Convertible  Preferred  Securities and the Common Securities represent undivided
beneficial  interests in the assets of the Trust, which consist of approximately
$154.1 million  aggregate  principal  amount of the Company's 6 1/2% Convertible
Subordinated Debentures due September 30, 2016.



                                  RISK FACTORS

     Prospective  investors should consider carefully,  in addition to the other
information  contained in, and  incorporated by reference into, this Prospectus,
the following factors.

Dependence on Management Agreements

     Insignia is substantially dependent on revenues received for services under
property and asset management agreements.  On a pro forma basis giving effect to
the consummation of the ESG and Paragon acquisitions,  for the nine months ended
September  30, 1996,  revenues  from  property and asset  management  agreements
constituted  approximately 95% of total revenues, and, as of such date, property
and asset  management  agreements  constituted  approximately  28% of Insignia's
total assets.  There can be no assurance  that Insignia will be able to maintain
all such agreements. In particular, a majority of agreements with non-affiliated
parties have terms of one year, and many are cancelable by the property owner on
as little as 30 to 60 days' notice.  Approximately  78% of Insignia's  pro forma
revenues for the nine months ended  September  30, 1996,  giving  effect to such
acquisitions  as if effected at the beginning of such period,  were derived from
fees for services  provided to entities not  controlled  by  Metropolitan  Asset
Enhancement,  L.P. ("MAE") or Insignia. MAE is an entity in which Insignia holds
a 19.1% limited  partner  interest and the general  partner of which is owned by
Andrew L. Farkas.  The loss of a  substantial  number of  management  agreements
could have a material adverse effect on Insignia.



                                     P-5
<PAGE>

     After  giving  pro  forma  effect  to the  ESG  and  Paragon  acquisitions,
approximately  6% of Insignia's pro forma revenues  during the nine months ended
September  30,  1996  were  derived  from  services   performed  for  properties
controlled by a single client, The Balcor Company ("Balcor"). Insignia purchased
the right to manage such  properties  in 1994 and has  contractual  arrangements
with Balcor  that are  intended to reduce the  likelihood  that such  management
agreements  will be terminated.  As of September 30, 1996,  the Company  managed
approximately  178  properties,   comprising   approximately   30,200  units  of
multifamily  residential housing and 11 million square feet of commercial space,
associated with that acquisition (44 of the properties, comprising approximately
1,600 units of  multifamily  residential  housing and 4.9 million square feet of
commercial  space,  are not  controlled  by Balcor).  Insignia  also manages 6.1
million square feet of commercial space in properties controlled by Balcor which
produced $3.2 million in revenues for the nine months ended  September 30, 1996.
The Company believes such properties will be sold in the near future.

     During the first quarter of 1996,  Balcor announced its intention to sell a
significant number of its properties.  In connection with the potential sales of
such properties,  Balcor has entered into agreements with the Company to provide
additional services (the "Advisory  Agreements"),  including collection of data,
the  preparation  of materials for potential  purchasers,  and  assistance  with
regard to transition plans. The Advisory  Agreements have an initial term of one
year and  provide  for fees to be paid to the  Company if and when a property is
sold (the "Advisory  Fees"),  regardless of whether or not the purchaser retains
the Company to continue to manage the  property.  If all sales were  consummated
for the  properties  that Balcor is  marketing,  approximately  $14.4 million in
annual revenues would be lost while approximately $14.7 million in Advisory Fees
would be collected.  Through September 30, 1996, 48 properties comprising 14,800
units  producing  $4.9 million in annual  management  fees have been sold,  with
Advisory Fees received or due aggregating $4.6 million. There are proposed sales
of an additional 113 properties  comprising  25,800 units and 3.3 million square
feet of commercial space which generate approximately $9.5 million in management
revenues which would produce  Advisory Fees of $10.1 million.  The completed and
proposed sales are included in the totals mentioned above.  Management  believes
that the  unamortized  purchase price relating to properties  managed for Balcor
properly reflects the asset value and that no impairment exists.

     The number and timing of  property  sales by Balcor  during the term of the
Advisory Agreements cannot be predicted.  Therefore, the Company cannot estimate
with any reasonable accuracy the amount of any Advisory Fees it may receive, the
reduction of its management fees or the amount of unamortized  purchase price to
be written off. The Company  expects that any potential  impact to its EBITDA in
1996 from potential  property sales and resulting  terminations of the Company's
management  agreements  would not be material.  However,  revenues  lost and not
replaced through  acquisitions of incremental  third party servicing would fully
impact 1997 EBITDA.

     On a pro  forma  basis  giving  effect to the  consummation  of the ESG and
Paragon  acquisitions,  approximately  16% of  Insignia's  revenues for the nine
months ended September 30, 1996 were derived from fees for services  provided to
entities  controlled  by MAE.  MAE  has  agreed  to (i)  retain  Insignia  for a
substantial term as property manager for all properties  currently controlled by
MAE or of which MAE  acquires  control,  subject  to its  fiduciary  duties  and
certain  other  exceptions,  and (ii) make  certain  payments to Insignia on any
disposition by MAE of its assets.  However,  there can be no assurance that such
payments  will  adequately  compensate  Insignia  for  the  loss  of  management
agreements that may result from any properties being sold by MAE.


                                     P-6
<PAGE>

Risks Associated with Acquisitions

     Insignia's  growth since its  inception in 1990 has been based  principally
upon the acquisition of portfolios of general  partner  interests in real estate
limited  partnerships  and the provision by Insignia of  management  and related
services to such partnerships.  Since its inception, Insignia and its affiliates
have acquired control of, or management  rights to, 32 portfolios of properties.
The Company's ability to expand  successfully  through  acquisitions  depends on
many  factors,  including  the  successful  identification  and  acquisition  of
businesses  and  management's  ability  effectively  to  integrate  the acquired
businesses.  The future  growth of Insignia  will be  dependent in part upon the
ability  of  Insignia  or MAE to  acquire  control of real  estate  entities  at
favorable  prices and upon favorable  terms and  conditions,  and to continue to
manage such  entities  and the  properties  they own on a profitable  basis.  In
addition,  with respect to a limited portion of the managed  portfolio,  lenders
may  foreclose  upon  properties  which are  unable to  service  their  mortgage
indebtedness. In such event, there can be no assurance that Insignia will retain
the contracts to manage such properties.

     Acquisitions  entail  risks  that  investments  will  fail  to  perform  in
accordance  with  expectations,  and that business  judgments  with respect to a
property's  revenues,  operating  expenses,  and costs of  improvements  and the
Company's  ability to restructure  and benefit from  restructurings,  will prove
inaccurate. Acquisitions also involve the risks of the diversion of management's
attention,  the  assimilation  of the  operations  and personnel of the acquired
companies, the amortization of acquired intangible assets and the potential loss
of key employees,  each of which could adversely affect the Company's  operating
results.  In addition,  the success of any completed  acquisition will depend in
part on the Company's ability  effectively to integrate any acquired  businesses
into the Company.

     There can be no assurance that future  acquisition  opportunities,  if any,
can be  consummated  on favorable  terms,  that  Insignia  will be successful in
acquiring or integrating any businesses or in  restructuring  the liabilities of
any such  entities,  or that any such  acquisition  will  enhance the  Company's
business.

     On a pro forma basis giving effect to the Convertible  Preferred Securities
Offering and the use of the net proceeds  therefrom,  at September  30, 1996 the
Company had $161.4  million in funds  available  under its agreement  with First
Union National Bank of South  Carolina and an affiliate of Lehman  Brothers Inc.
with respect to a revolving  credit  facility for  acquisitions  and its working
capital needs, but there can be no assurance that Insignia's financing resources
will be sufficient  to finance  future  acquisitions,  if any. To the extent the
Company  issues  shares of its Common  Stock or rights to acquire  shares of its
Common Stock in connection with any such acquisitions, the ownership of existing
stockholders will be diluted.

Potential Conflicts of Interest; Dependence Upon and Control by Andrew L. Farkas

     Andrew L. Farkas,  the Chairman,  President and Chief Executive  Officer of
Insignia,  may be deemed to be in control of each of Insignia,  MAE, and certain
significant  stockholders of the Company.  Insignia has in the past engaged, and
expects  in the  future to engage,  in  certain  transactions  with each of such
affiliated  entities.  Such  transactions  could  result in actual or  potential
conflicts of interest between Insignia, on the one hand, and Mr. Farkas, MAE, or
such stockholders, as the case may be, on the other hand. In addition, conflicts
may  arise  between  Insignia  and the  partnerships  in which  MAE is a general
partner,  particularly  with respect to  determinations of whether to dispose of
properties. Insignia


                                     P-7
<PAGE>

has entered into  agreements  with MAE and Mr. Farkas to address certain of such
potential  conflicts.  Insignia  also has a policy  that all  transactions  with
affiliates  shall  be on terms  no less  favorable  to  Insignia  than  could be
obtained from an unaffiliated party and must be approved by either a majority of
independent  directors or the Audit  Committee of the Board of Directors.  There
are no other formal procedures for resolving such conflicts.

     As of December 1, 1996, Mr. Farkas  beneficially owned  approximately 28.4%
of the outstanding  Common Stock. Mr. Farkas continues to exercise a controlling
influence over the business and affairs of Insignia,  including, but not limited
to, having sufficient voting power to substantially  control the election of the
entire  Board of  Directors  of  Insignia  and,  in  general,  substantially  to
determine the outcome of any corporate  transaction or other matter submitted to
the stockholders for approval, including mergers, consolidations, or the sale of
substantially  all of Insignia's assets or preventing or causing a change in the
control of Insignia.

     Insignia is dependent upon the continued services of Mr. Farkas. Mr. Farkas
expects to continue to devote substantially all of his time to Insignia and MAE.
The loss of Mr. Farkas's  services could have a material adverse effect upon the
business and  financial  condition of Insignia.  Mr.  Farkas has entered into an
employment  agreement with Insignia,  expiring September 1, 1998, providing for,
among  other  things,  an  agreement  not to compete  with  Insignia  during his
employment  and for a period of one year  thereafter.  Insignia  maintains a $10
million key man life insurance policy on Mr. Farkas.

     Insignia is required to make certain payments to Mr. Farkas in the event of
certain changes in control which may constitute  excess  parachute  payments and
would not be  deductible  by  Insignia  for income tax  purposes.  In  addition,
Insignia may not be permitted to deduct for income tax purposes  that portion of
an  executive's  compensation  which exceeds  $1 million in any year,  excluding
certain performance based compensation.  There can be no assurance that Insignia
will be able to deduct the entire amount earned by Mr. Farkas in any year.

Dependence on Property Performance

     Insignia's   revenues  from  property  management  services  are  generally
percentages of aggregate rent collections from the properties.  Accordingly, the
continued  success  of  Insignia  will be  dependent  in  large  part  upon  the
performance of the properties it manages.  Such  performance in turn will depend
in part upon the ability of Insignia to attract and retain creditworthy tenants,
the magnitude of defaults by tenants under their respective  leases,  Insignia's
ability  to control  operating  expenses  (many of which are  subject to various
contingencies),  governmental  regulations,  local rent control or stabilization
ordinances  which  are or may be put into  effect,  various  uninsurable  risks,
financial  conditions  prevailing  generally  and in the  areas  in  which  such
properties are located,  the nature and extent of competitive  properties in the
areas where such properties are located, and the real estate market generally.

Risks Related to Investment in Limited Partner Interests

     The Company owns significant limited partner interests in 28 different real
estate limited partnerships (the "Partnerships")  directly or indirectly through
wholly owned  subsidiaries  and joint  ventures.  The Company's  limited partner
interests,  including the Company's interests in two limited  partnerships which
are consolidated in Insignia's financial statements, represent approximately 29%
of


                                     P-8
<PAGE>

the book  value of the  Company's  assets at  September  30,  1996.  All of such
limited partnerships own residential, and in some cases commercial, properties.

     Limited  partner  interests are subject to varying degrees of risk incident
to the  ownership  and  operation of  commercial  and  residential  real estate,
including  possible  environmental  liabilities.  See  "-Possible  Environmental
Liabilities." The success of an investment in a real estate limited  partnership
will depend on factors such as general economic  conditions,  both on a national
basis and in those areas where a limited  partnership's  properties are located,
the  availability   and  costs  of  borrowed  funds,   real  estate  tax  rates,
construction and property  management costs,  federal and state income tax laws,
operating  expenses,  energy  costs,  and  government  regulations.   Typically,
properties  held by the limited  partnerships  are subject to mortgages  and the
loss of a property  through  foreclosure  could adversely  affect the value of a
limited  partnership  interest.  In addition,  numerous  properties  compete for
tenants  with the  properties  owned by the  limited  partnerships  in which the
Company has limited partner interests.

     No active market for limited partner interests in the Partnerships  exists,
none is expected to develop and such interests are typically  only  transferable
at significant  discounts to underlying value. The Company may be limited in its
ability to vary its  portfolio  promptly  in  response to changes in economic or
other conditions.  The price to be paid for additional limited partner interests
may need to be increased,  and the  percentage of such  interests to be acquired
decreased, in response to competing offers for such interests that may be made.

     The  Company  participates  with other  entities  in  ownership  of limited
partner interests through partnerships and joint ventures. Partnership and joint
venture  investments  may,  under  certain  circumstances,   involve  risks  not
otherwise present,  including the possibility that such partners or co-venturers
might  at any time  have  business  interests  or  goals  inconsistent  with the
business   interests  or  goals  of  the  Company  and  that  such  partners  or
co-venturers  may be in a position  to take  action  contrary  to the  Company's
instructions, requests, policies, or objectives. The Company will, however, seek
to maintain  sufficient  influence over such  partnerships  or joint ventures to
permit the Company's business  objectives to be achieved.  The Company currently
owns limited partner interests in six real estate limited  partnerships in which
MAE is the general partner. There can be no assurance that MAE will not transfer
to a third party its general partner interests in those partnerships or that MAE
will not take actions contrary to the Company's  interests with respect to those
partnerships. See "-Potential Conflicts of Interests."

Potential Alternative Structuring of Certain Activities

     The Company actively is exploring a structure  whereby its multifamily real
estate  investment and ownership  activities would (a) qualify for United States
federal income tax purposes as a Real Estate Investment Trust ("REIT") under the
Internal  Revenue Code of 1986, as amended (the  "Code"),  and (b) obtain equity
and debt capital from parties other than Insignia to expand these activities.

     In this regard, Insignia formed Insignia Properties Corporation, a Delaware
corporation and wholly-owned subsidiary, in January 1996 and Insignia Properties
Trust, a Maryland real estate investment trust ("IPT"),  in April 1996, with the
intention  of  implementing  a series  of  transactions  that  would  result  in
substantially all of the Company's real estate limited partner interests in real
estate  limited  partnerships  being  conveyed to an entity that would intend to
qualify as a REIT. As of


                                     P-9
<PAGE>

the date of this Prospectus,  the Company is actively preparing to raise capital
through the private  placement of securities in IPT. Such  transaction  would be
structured  such that the Company  would  continue to own and control a majority
interest  in IPT.  In  addition,  the  Company  has  had  discussions  with  the
management of Angeles Mortgage  Investment Trust, a  publicly-traded  California
business trust and REIT  ("AMIT"),  regarding a potential  business  combination
transaction with IPT and has acquired the beneficial  ownership of approximately
6.0% of the Class A shares of AMIT. These discussions  principally have involved
whether  general  and  limited  partner  interests  owned by Insignia in certain
partnerships  which own real property could be transferred,  through a merger or
otherwise, to AMIT in exchange for securities in AMIT. The Company, however, has
no plans otherwise to dispose of its interests in such partnerships.

     There  can  be no  assurance  that  the  transactions  that  are  currently
contemplated  and that are discussed herein in connection with the proposed REIT
transaction  will  be  consummated  or,  if  consummated,   that  they  will  be
consummated on the terms described herein.

Tender Offer Litigation

     Since the latter part of 1994, Insignia, through various subsidiaries,  has
acquired limited partner interests in real estate limited  partnerships  through
public tender offers.  Insignia believes that there continue to be opportunities
to acquire limited partner  interests and it may acquire such interests  through
future public  tender  offers.  Tender  offers often result in competing  tender
offers,  as well as  litigation  initiated  by limited  partners  in the subject
partnerships or by competing bidders. In some of its tender offers, Insignia has
faced  competing  offers and  litigation  which alleged  breaches of the federal
securities  laws and  breaches  of  fiduciary  duties  by  Insignia.  Due to the
inherent  uncertainty  of  litigation,  the Company  could be subject to adverse
judgments in  substantial  amounts.  Litigation  costs and competing  offers are
factors  considered by the Company prior to initiating  tender offers.  Insignia
has settled all litigation  brought  against it in connection with tender offers
made by it with the exception of certain  litigation  in connection  with tender
offers for limited  partner  interests  in limited  partnerships  controlled  by
Balcor.

Competition for Personnel

     The continued  success of Insignia's  residential  and commercial  property
management  business will depend, in part, on Insignia's ability to maintain its
experienced  management  team and to attract  additional  managers as Insignia's
property management business expands.  Insignia believes that there is currently
a shortage of qualified property management  personnel.  To maintain and attract
qualified  individuals,  Insignia may be required to increase  substantially the
compensation to property managers.

Possible Environmental Liabilities

     Under  various  federal and state  environmental  laws and  regulations,  a
current or previous owner or operator of real estate property may be required to
investigate  and clean up certain  hazardous  or toxic  substances  or petroleum
product  releases  at the  property,  and may be held  liable to a  governmental
entity or to third parties for property damage and for investigation and cleanup
costs incurred by such parties in connection  with  contamination.  In addition,
some  environmental  laws create a lien on the contaminated site in favor of the
government for damages and costs it incurs in connection with the contamination.
The presence of contamination or the failure to remediate


                                     P-10
<PAGE>

contamination  may  adversely  affect the owner's  ability to sell or lease real
estate or to borrow using the real estate as  collateral.  The owner or operator
of a site may be liable  under  common  law to third  parties  for  damages  and
injuries  resulting from  environmental  contamination  emanating from the site.
There can be no assurance  that  Insignia,  or any assets owned or controlled by
Insignia,  currently are in compliance with all of such laws and regulations, or
that Insignia will not become subject to  liabilities  that arise in whole or in
part out of any such laws,  rules,  or  regulations.  Moreover,  there can be no
assurance that any of such liabilities to which Insignia may become subject will
not have a material  adverse effect upon the business or financial  condition of
Insignia.

     Except  for  (i)  environmental  audits  of  approximately  240  properties
conducted in connection with various  refinancings and reviews of sellers' files
with respect to  environmental  matters in connection with certain  acquisitions
and (ii) Phase I audits of properties owned by National Property Investors, Inc.
and certain  affiliates and related partners in which Insignia  acquired limited
partner interests (and certain other  investigations in the case of certain such
properties),  Insignia has not undertaken any review, on a  property-by-property
basis, of the extent of the presence of asbestos or other environmental risks at
any of its owned or controlled properties, the remedial or other requirements of
state  and local  environmental  laws,  rules,  and  regulations  in each of the
jurisdictions in which such properties are located, or the costs of any required
remedial work. Although the results of all but a few of the Company's audits did
not require any material  remedial work, there can be no assurance that remedial
work may not be required at these or other  properties.  Most of the  structures
situated upon such properties were  constructed  prior to 1978, in a period when
the use of asbestos in the construction of structures  similar to those situated
upon such properties was common. The presence of asbestos or other environmental
risks at any of such  properties  could result in the  incurrence of significant
cleanup costs therefor by Insignia or partnerships in which it owns interests or
the incurrence of toxic tort claims against Insignia or partnerships in which it
owns interests.

     There can be no assurance that Insignia will not  experience  difficulty in
reselling  real  estate  assets  owned  by   partnerships   or  refinancing  any
indebtedness  secured by their respective  assets as a result of the presence of
asbestos or other  environmental  risks on the  properties,  lose its management
contracts  with  respect  to such  properties,  or become  subject  to costs and
litigation  relating to the presence of asbestos or other environmental risks on
such  properties  that will have a material  adverse effect upon the business or
financial condition of Insignia or any of its affiliates.

Possible Loss of HUD Approval; Restructuring of HUD

     Approximately  17% of the  residential  units  which  Insignia  managed  at
September  30, 1996 were housing  projects  financed  under  various  government
programs  administered  by the United  States  Department  of Housing  and Urban
Development ("HUD"). As a result,  certain aspects of Insignia's  operations are
subject to  regulation  by HUD.  For the nine months ended  September  30, 1996,
revenues from the  management of HUD regulated or subsidized  units  constituted
approximately  7% of Insignia's  total pro forma  revenues  giving effect to the
Paragon and ESG  acquisitions.  If Insignia  were to lose its  qualification  to
manage HUD properties, Insignia could be precluded from obtaining HUD contracts,
could  lose the  contracts  to  manage  some or all of the HUD  properties  then
managed,  or could be  subject  to fines or other  penalties,  depending  on the
reason  for such loss of  qualification.  Such  results  could  have a  material
adverse effect on Insignia's business or financial condition.



                                     P-11
<PAGE>

     Congress is  currently  considering  various  proposals to  reorganize  and
restructure certain of HUD's housing assistance programs. One proposal calls for
the  elimination  of HUD  by  terminating,  privatizing,  and  transferring  its
functions.  Another proposal  contemplates  that, rather than providing specific
project-based  subsidies,  HUD would give qualified participants vouchers to use
at the  property  of their  choice.  Since the value of such a voucher  would be
fixed,  participants electing to move from their present apartment complex would
have to pay  the  difference  between  such  voucher  value  and the  rent at an
alternative property.  Due to a relative lack of amenities in most HUD projects,
residents  (if they could  afford the price  differential)  might be inclined to
move from such projects into  complexes with more  amenities.  If such residents
could not be replaced, the occupancy level or rental rates of such project could
be affected and,  accordingly,  the management fee paid to the property  manager
could be reduced.  The current proposals with regards to the  reorganization are
not  sufficiently  specific  to  determine  their  actual  impact,  if  any,  on
management  fee  revenue  paid to Insignia  by HUD  properties.  There can be no
assurance that the proposed  changes would not have a material adverse impact on
Insignia's business or financial condition.


                              SELLING STOCKHOLDERS

     The following  table sets forth certain  information as of the date of this
Prospectus  with  respect to the Selling  Stockholders.  All of the shares to be
sold by the Selling Stockholders  represent shares which may be acquired by them
on exercise of certain warrants issued to them as employees of the Company.  The
Company  will  receive  the  exercise  price on any such  exercise  but will not
receive any of the proceeds  from the sale of such  shares.  Each of the Selling
Stockholders  is an  officer  of  the  Company  as  indicated  below.  Based  on
information provided by the Selling Stockholders, as of December 1, 1996, Andrew
L. Farkas  beneficially  owned 28.4% and James A. Aston beneficially owned 1.3%,
respectively,  of the outstanding Common Stock.  Beneficial  ownership after the
offering will depend on the number of shares sold by each Selling Stockholder.



                                     P-12
<PAGE>


                                                    Beneficial         Number
 Selling Stockholder and Positions with             Ownership         of Shares
                Insignia                         Prior to Offering     Offered

Andrew L. Farkas                                     8,442,722(1)      628,000
      Chairman of the Board of Directors,
      President and Chief Executive Officer

James A. Aston                                         371,518(2)      100,000
      Office of the Chairman and Chief
      Financial Officer
_______________

(1)  Includes  shares owned by (i)  Metropolitan  Acquisition  Partners IV, L.P.
     ("MAP IV"), (ii) Metropolitan Acquisition Partners V, L.P. ("MAP V"), (iii)
     Metro Shelter Directives, Inc. and MV, Inc., the general partners of MAP IV
     and MAP V, respectively, (iv) certain stockholders who have granted proxies
     to MAP IV and MAP V,  and (v)  certain  stockholders  who  are  party  to a
     stockholders  agreement with Andrew L. Farkas.  Includes 928,000 shares, of
     which 628,000 are subject to this Registration Statement, which are subject
     to options and warrants.

(2)  Includes (i) 217,890  shares  subject to options which are  exercisable  or
     will become  exercisable  within 60 days,  (ii)  100,000  shares  which are
     subject to this  Registration  Statement,  of which  66,668 are  subject to
     warrants which are exercisable within 60 days and (iii) 20,000 shares owned
     by Mr. Aston's spouse, for which Mr. Aston disclaims beneficial ownership.

     The sale of the shares by the Selling  Stockholders  may be  effected  from
time to time in transactions (which may include block transactions by or for the
account of the Selling Stockholders) on the NYSE or in negotiated  transactions,
through the writing of options on such shares,  a combination of such methods of
sale, or otherwise.  Sales may be made at fixed prices which may be changed,  at
market prices prevailing at the time of sale, or at negotiated prices.

     Selling  Stockholders may effect such  transactions by selling their shares
directly to purchasers,  through broker-dealers acting as agents for the Selling
Stockholders,  or to  broker-dealers  who may purchase  shares as principals and
thereafter  sell  the  shares  from  time  to time  on the  NYSE  in  negotiated
transactions,   or  otherwise.   Such   broker-dealers,   if  any,  may  receive
compensation  in the form of discounts,  concessions,  or  commissions  from the
Selling  Stockholders and/or the purchasers for whom such broker-dealers may act
as agents or to whom they may sell as principals or both (which  compensation as
to a particular broker-dealer may be in excess of customary commissions).

     The Selling  Stockholders and broker-dealers,  if any, acting in connection
with  such sale  might be deemed to be  "underwriters"  within  the  meaning  of
Section 2(11) of the Securities Act and any commission  received by them and any
profit on the resale of such shares might be deemed to be underwriting discounts
and commissions under the Securities Act.



                                     P-13
<PAGE>

                                LEGAL OPINIONS

     The  validity of the shares of Common Stock  offered  hereby will be passed
upon for  Insignia  and the  Selling  Stockholders  by  Proskauer  Rose  Goetz &
Mendelsohn  LLP, New York,  New York.  The wife of a partner of  Proskauer  Rose
Goetz &  Mendelsohn  LLP is a  limited  partner  in  each  of two of  Insignia's
principal stockholders.


                                    EXPERTS

     The consolidated  financial  statements of Insignia  Financial Group,  Inc.
appearing in Insignia's  Annual  Report (Form 10-K) for the year ended  December
31, 1995, have been audited by Ernst & Young LLP, independent  auditors,  as set
forth in their  report  thereon  included  therein  and  incorporated  herein by
reference. Such financial statements are, and audited financial statements to be
included  in  subsequently  filed  documents  will be,  incorporated  herein  in
reliance  upon the  reports of Ernst & Young LLP  pertaining  to such  financial
statements  (to the extent  covered by consents  filed with the  Securities  and
Exchange  Commission)  given  upon the  authority  of such  firm as  experts  in
accounting and auditing.

     The combined  balance sheets of Edward S. Gordon Company,  Incorporated and
Edward S. Gordon  Company of New Jersey,  Inc. as of December 31, 1995 and 1994,
and the related combined statements of operations, shareholders' equity and cash
flows for each of the years ended December 31, 1995, 1994 and 1993  incorporated
by reference in this  Registration  Statement have been  incorporated  herein in
reliance on the report of Coopers & Lybrand L.L.P.,  given upon the authority of
that firm as experts in accounting and auditing.

     The  combined  consolidated  balance  sheets  of  NPI  Property  Management
Corporation,  Inc.  and  Subsidiaries,  National  Property  Investors,  Inc. and
Subsidiaries  and NPI-CL  Management  L.P. as of June 30, 1995 and 1994, and the
related  combined  consolidated  statements of operations and cash flows for the
years then ended and the consolidated  statement of operations and cash flows of
National Property Investors, Inc. for the year ended June 30, 1993, incorporated
herein by reference have been audited by Coopers & Lybrand  L.L.P.,  independent
auditors,  as set forth in their reports thereon and are incorporated  herein by
reference in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.

     The financial  statements of the NPI  Partnerships  appearing in Insignia's
Current  Report on Form 8-K dated  September 1, 1995 and appearing in Insignia's
Current  Report on Form 8-K dated December 10, 1996 have been audited by Imowitz
Koenig  &  Co.,  LLP  as  set  forth  in  their  reports  included  therein  and
incorporated  herein by reference in reliance  upon such reports  given upon the
authority of such firm as experts in accounting and auditing.

     No dealer, salesperson, or any other person has been authorized to give any
information or make any representations not contained in this Prospectus and, if
given or made, such  information or  representations  must not be relied upon as
having been authorized by Insignia or any Selling  Stockholder.  This Prospectus
does not  constitute  an offer of any  securities  other  than those to which it
relates or an offer to sell, or a solicitation of an offer to buy, to any person
in any  jurisdiction  where  such an offer or  solicitation  would be  unlawful.
Neither the delivery of this Prospectus nor


                                     P-14
<PAGE>

any sale made hereunder shall,  under any  circumstance,  create any implication
that the  information  contained  herein is correct as of any time subsequent to
the date hereof.


                                     P-15
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
certifies  that is has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Greenville, State of South Carolina, on this 13th day
of December, 1996.

                                          INSIGNIA FINANCIAL GROUP, INC.

                                          By: /s/ John K. Lines     
                                          ---------------------     
                                              John K. Lines
                                              General Counsel and
                                              Secretary

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been signed below by the  following  persons in the
capacities and on the dates indicated.

   Signatures                   Title                          Date

 /s/ Andrew L. Farkas*          Officer and Director           December 13, 1996
 --------------------          
     Andrew L. Farkas           (Principal Executive Officer)

 /s/ James A. Aston             Chief Financial Officer        December 13, 1996
 ------------------             
     James A. Aston             (Principal Financial and
                                 Accounting Officer)

 /s/ Robert J. Denison*         Director                       December 13, 1996
 ----------------------         
     Robert J. Denison

 /s/ Robin L. Farkas*           Director                       December 13, 1996
 --------------------           
     Robin L. Farkas

/s/ Merril M. Halpern*          Director                       December 13, 1996
----------------------  
    Merril M. Halpern

 /s/ John F. Jacques*           Director                       December 13, 1996
 --------------------  
     John F. Jacques

 /s/ Robert G. Koen*            Director                       December 13, 1996
 -----------------------
     Robert G. Koen

 /s/ Michael I. Lipstein*       Director                       December 13, 1996
 ------------------------       
     Michael I. Lipstein



                                     II-5
<PAGE>

   Signatures                   Title                          Date

 /s/ Buck Mickel*               Director                       December 13, 1996
 ----------------               --------                       -----------------
     Buck Mickel


*By /s/ John K. Lines   
---------------------   
    John K. Lines
    Attorney-in-fact



                                     II-6
[{"type": "S-8", "sequence": "1", "description": "REGISTRATION OF WARRANT AGREEMENTS", "secsgml_size_bytes": 67688}]
{"company-data": {"conformed-name": "INSIGNIA FINANCIAL GROUP INC", "cik": "0000870480", "assigned-sic": "6552", "irs-number": "133591193", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-17791", "film-number": "96680250"}, "business-address": {"street1": "ONE INSIGNIA FINANCIAL PLZ", "street2": "PO BOX 1089", "city": "GREENVILLE", "state": "SC", "zip": "29602", "phone": "8032391000"}, "mail-address": {"street1": "ONE INSIGNIA FINANCIAL PLZ", "street2": "PO BOX 1089", "city": "GREENVILLE", "state": "SC", "zip": "29602"}, "former-company": {"former-conformed-name": "METSOUTH FINANCIAL CORPORATION", "date-changed": "19600201"}}
As filed with the Securities and Exchange Commission on December 13, 1996
                                                         Registration No. 333-
------------------------------------------------------------------------------

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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ______________________

                                    FORM S-8

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                             ______________________

                         INSIGNIA FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)

               Delaware                              13-3591193
    (State or other jurisdiction of        (I.R.S. Employer Identification
    incorporation or organization)                     Number)

                          One Insignia Financial Plaza
                                  P.O. Box 1089
                        Greenville, South Carolina 29602
               (Address of principal executive offices) (Zip code)

                               Warrant Agreements
                            (Full title of the Plan)

                               John K. Lines, Esq.
                                 General Counsel
                         Insignia Financial Group, Inc.
                          One Insignia Financial Plaza
                                  P.O. Box 1089
                        Greenville, South Carolina 29602
                                 (864) 239-1000
                      (Name, address and telephone number,
                   including area code, of agent for service)
                        _________________________________

                                   Copies to:
                             Arnold S. Jacobs, Esq.
                      Proskauer Rose Goetz & Mendelsohn LLP
                                  1585 Broadway
                            New York, New York 10036
                                 (212) 969-3000
                        _________________________________

                         CALCULATION OF REGISTRATION FEE
Title of securities    Amount to be    Proposed maximum     Proposed maximum      Amount of
  be registered         registered      offering price     aggregate offering   registration
                                          per share              price               fee
Class A Common
Stock, par value
$0.01 per share          728,000shs(1)   $13.5845(2)          $9,889,500(2)       $2,996.82(2)
(1)  Registered  to cover  shares  of Class A Common  Stock  underlying  warrant
     agreements (the "Warrants").

(2)  Estimated  solely  for the  purpose of  calculating  the  registration  fee
     pursuant to Rule 457(h) of the  Securities  Act of 1933.  The Warrants have
     varying  exercise  prices for shares of Class A Common Stock  ranging up to
     $13.6875 per share, with an average exercise price of $13.5845.
1
Explanatory Note: Included in this Registration Statement, following Item 9
of Part II, is a "reoffer  prospectus"  relating to the resale of the securities
covered by this Registration Statement.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

      Item 3.  Incorporation of Documents By Reference.
      -------  ----------------------------------------

     The following  documents filed with the Securities and Exchange  Commission
by Insignia Financial Group, Inc., a Delaware  corporation (the  "Corporation"),
are incorporated herein by reference:

          (1) the  Corporation's  Annual  Report on Form 10-K for the year ended
     December 31, 1995;

          (2) the Corporation's  Quarterly Reports on Form 10-Q for the quarters
     ended March 31, June 30 and September 30, 1996;

          (3) the  Corporation's  Current  Reports on Form 8-K dated January 19,
     January  29,  July 1, July 1, and  December  6, 1996 and Form  8-K/A  dated
     September 13, 1996; and

          (4) the  description of the  Corporation's  Class A Common Stock,  par
     value $0.01 per share, included in the Corporation's Registration Statement
     on Form 8-A,  dated  September 19, 1995, on Form 8-A/A(1)  dated October 3,
     1995 and on Form 8-A/A(2) dated June 21, 1996.

     All documents  subsequently  filed by the  Corporation  with the Commission
pursuant to Sections 13(a),  13(c), 14, and 15(d) of the Securities Exchange Act
of 1934, as amended,  prior to the filing of a  post-effective  amendment  which
indicates that all securities  offered have been sold or which  deregisters  all
securities  then  remaining  unsold,  shall  be  deemed  to be  incorporated  by
reference in this Registration  Statement and to be part hereof from the date of
filing such documents.  Any statement in a document incorporated or deemed to be
incorporated  by reference  herein shall be deemed to be modified or  superseded
for the purposes of this  Registration  Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be  incorporated  by  reference  herein  modifies or  supersedes  such
statement.  Any statement so modified or superseded shall not be deemed,  except
as so modified or  superseded,  to  constitute  a part of this  Prospectus.  The
Company will provide  without  charge to each person to whom this  Prospectus is
delivered,  upon written request of such person,  a copy of any or all documents
incorporated herein by reference (other than exhibits to such documents,  unless
such exhibits are  specifically  incorporated by reference into such documents).
Requests for such copies should be delivered to John K. Lines,  General  Counsel
and Secretary,  Insignia  Financial Group,  Inc., One Insignia  Financial Plaza,
P.O. Box 1089, Greenville, South Carolina 29602 or telephone at (864) 239-1000.

      Item 4.  Description of Securities.
      -------  --------------------------

      Not applicable.

                                     II-1
Item 5.  Interest of Named Experts and Counsel.
      -------  --------------------------------------

      Not applicable.

      Item 6.  Indemnification of Directors and Officers.
      -------  ------------------------------------------

     The  Corporation  is  incorporated  in Delaware.  Under  Section 145 of the
General Corporation Law of the State of Delaware, a Delaware corporation has the
power,  under  specified  circumstances,  to indemnify its directors,  officers,
employees and agents in connection  with actions,  suits or proceedings  brought
against them by a third party or in the right of the  corporation,  by reason of
the fact that they were or are such  directors,  officers,  employees or agents,
against expenses incurred in any action, suit or proceeding.  Article Seventh of
the Certificate of Incorporation of the Corporation provides for indemnification
of  directors  and  officers  to the  fullest  extent  permitted  by the General
Corporation  Law of the State of Delaware,  and the Corporation has entered into
agreements  with  20  of  its  officers  and  directors  with  respect  to  such
indemnification.  Reference is made to the Certificate of  Incorporation  of the
Corporation  and such  agreements,  incorporated by reference as Exhibits to the
Corporation's Registration Statement on Form S-1, File No. 33-67486.

     Section  102(b)(7) of the General  Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting  the  personal  liability  of a director to the  corporation  or its
stockholders  for monetary  damages for breach of  fiduciary  duty as a director
provided  that such  provision  shall not  eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its  stockholders,  (ii) for  acts or  omissions  not in good  faith or which
involve  intentional  misconduct  or a knowing  violation  of law,  (iii)  under
Section 174 (relating to liability for unauthorized  acquisitions or redemptions
of, or dividends on, capital stock) of the General  Corporation Law of the State
of Delaware,  or (iv) for any  transaction  from which the  director  derived an
improper  personal benefit.  Article Eighth of the Corporation's  Certificate of
Incorporation contains such a provision.

     The Corporation  currently has a Directors and Officers Liability Insurance
Policy (the "Policy") in place with Federal Insurance  Company.  The Policy is a
"claims made" policy with a $5,000,000 policy aggregate.  However,  the Board of
Directors  believes that it serves the Corporation's best interest to supplement
this coverage or any coverage which the  Corporation  may maintain in the future
by agreeing by contract to indemnify  directors  and  executive  officers to the
fullest extent permitted under applicable law.

     The form of Indemnification Agreement to be entered into by the Corporation
with  directors  and  executive  officers  of the  Corporation  is  based on the
provisions of the General  Corporation  Law of the State of Delaware,  which are
contained  primarily in Section 145 of the General Corporate Law of the State of
Delaware, but is intended to provide broader  indemnification than that which is
specifically  provided by Section  145.  The form of  Indemnification  Agreement
provides  generally that the Corporation will to the fullest extent permitted by
applicable  law indemnify  the director or executive  officer  against  expenses
arising  from any  event or  occurrence,  either  prior to or after the time the
Indemnification  Agreement is executed,  related to the fact that such person is
or was  serving as a director or  executive  officer of the  Corporation  (or of
another entity at the Corporation's  request).  To be indemnified,  a party must
meet the relevant standards of conduct, but the form of Indemnification

                                     II-2
Agreement  provides  that such  standard is presumed to have been met unless the
Corporation demonstrates otherwise.

      Item 7.  Exemption from Registration Claimed.
      -------  ------------------------------------

      Not applicable.

      Item 8.  Exhibits.
      -------  ---------

     4.1  Form of warrant  (incorporated by reference to the Corporation's Proxy
          Statement dated April 22, 1996).
 
     5    Opinion of Proskauer Rose Goetz & Mendelsohn LLP.

     23.1 Consent of Ernst & Young LLP (included on Page II-7).

     23.2 Consent of Coopers & Lybrand L.L.P. (included on Page II-8).

     23.3 Consent of Coopers & Lybrand L.L.P. (included on Page II-9).

     23.4 Consent of Imowitz Koenig & Co., LLP (included on Page II-10).

     23.5 Consent of Proskauer  Rose Goetz & Mendelsohn LLP (included in Exhibit
          5).

     24 Powers of Attorney.

      Item 9.  Undertakings.
      -------  -------------

     (a) The undersigned registrant hereby undertakes:

         (1) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this registration statement:

             (iii)  To include any material information with respect to the plan
          of distribution not previously disclosed in the registration statement
          or any  material  change  to  such  information  in  the  registration
          statement.

          (2) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment shall be deemed
     to be a new  registration  statement  relating  to the  securities  offered
     therein,  and the offering of such  securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (3) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

     (b) The  undersigned  registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section

                                     II-3
13(a) or  Section  15(d) of the  Securities  Exchange  Act of 1934  (and,  where
applicable,  each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities  Exchange Act of 1934) that is  incorporated  by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  bona fide  offering
thereof.

     (h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers and controlling  persons of
the  registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by the registrant of expenses
incurred or paid by a director,  officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                     II-4
PROSPECTUS

                                 728,000 Shares

                         INSIGNIA FINANCIAL GROUP, INC.

                                  Common Stock

                              ____________________

     All of the 728,000 shares of Class A Common Stock par value $0.01 per share
(the  "Common  Stock") of Insignia  Financial  Group,  Inc.  ("Insignia"  or the
"Company") are being sold by certain  stockholders  of the Company (the "Selling
Stockholders").  The shares offered hereby comprise shares which may be acquired
by the Selling  Stockholders  upon exercise of certain warrants received by them
as employees of the Company.  The Company will receive the exercise price on any
such exercise,  but will not receive any proceeds from the sale of shares by the
Selling Stockholders. See "Selling Stockholders."

                              ____________________

     See "Risk  Factors" on page P-5 for a discussion  of certain  factors to be
considered by prospective investors.

                              ____________________

THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE  COMMISSION OR ANY STATE  SECURITIES  COMMISSION NOR HAS THE SECURITIES
AND  EXCHANGE  COMMISSION  OR ANY STATE  SECURITIES  COMMISSION  PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                                December 13, 1996

                                     P-1
AVAILABLE INFORMATION

     The Company has filed with the  Securities  and  Exchange  Commission  (the
"Commission")  a Registration  Statement (of which this Prospectus is a part) on
Form S-8 (the  "Registration  Statement")  under the  Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock offered hereby.
This Prospectus,  which constitutes part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement,  certain
portions of which have been omitted as permitted by the rules and regulations of
the  Commission.  For further  information  with  respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement, to
the  documents  incorporated  by reference  therein,  and to the  schedules  and
exhibits thereto.

     The Company is subject to the informational  requirements of the Securities
Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  and in  accordance
therewith,  files  reports,  proxy  statements  and other  information  with the
Commission.  The  Registration  Statement,  reports,  proxy statements and other
information  filed by the  Company  can be  inspected  and  copied at the public
reference  facilities of the  Commission  at its  principal  office at 450 Fifth
Street,  N.W.,  Room  1024,  Washington,  D.C.  20549,  and at the  Commission's
regional offices at Northwestern  Atrium Center, 500 West Madison Street,  Suite
1400, Chicago,  Illinois 60661, and at Seven World Trade Center, 13th Floor, New
York,  New  York  10048.  Copies  of such  materials  also  may be  obtained  at
prescribed  rates from the Public  Reference  Section of the  Commission  at its
principal office at 450 Fifth Street, N.W., Room 1024,  Washington,  D.C. 20549.
Such documents also are available  through the Commission's  World Wide Web site
(http://www.sec.gov).

     The  Common  Stock is  listed  on the New  York  Stock  Exchange  ("NYSE").
Reports,  proxy statements and other  information  concerning the Company can be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005.

                           INCORPORATION BY REFERENCE

     The  following  documents  filed by the  Company  with the  Commission  are
incorporated  herein by reference:  (i) the Company's Annual Report on Form 10-K
for the year ended December 31, 1995;  (ii) the Company's  Quarterly  Reports on
Form 10-Q for the quarters ended March 31, June 30 and September 30, 1996; (iii)
the proxy statement for the Company's Annual Meeting of Stockholders held on May
23, 1996;  (iv) the  Company's  Current  Reports on Form 8-K dated  September 1,
1995, January 19, 1996,  January 29, 1996, July 1, 1996, July 1, 1996,  December
9, 1996,  December 10, 1996 and December 10, 1996 and Form 8-K/A dated September
13, 1996;  (v) the combined  consolidated  financial  statements of NPI Property
Management  Corporation,  Inc.,  National  Property  Investors,  Inc. and NPI-CL
Management L.P.  contained in the Company's  Registration  Statement on Form S-3
filed with the  Securities  and Exchange  Commission  on  September 1, 1995,  as
amended by  Amendment  No. 1 to Form S-3 filed on September  19,  1995,  and the
final prospectus filed pursuant to Rule 424(b) on October 13, 1995; and (vi) the
description of the Common Stock contained in Insignia's  Registration  Statement
on Form 8-A,  dated  September 19, 1995, on Form 8-A/A(1)  dated October 3, 1995
and on Form 8-A/A(2)  dated June 21, 1996. All documents  subsequently  filed by
the Company with the Commission pursuant to Sections 13(a), 13(c), 14, and 15(d)
of the  Exchange  Act prior to the filing of a  post-effective  amendment  which
indicates that all securities  offered have been sold or which  deregisters  all
securities  then  remaining  unsold,  shall  be  deemed  to be  incorporated  by
reference in this Registration  Statement and to be part hereof from the date of
filing such documents. Any statement in a document incorporated or

                                     P-2
deemed to be incorporated by reference  herein shall be deemed to be modified or
superseded for the purposes of this Registration  Statement to the extent that a
statement  contained  herein or in any other  subsequently  filed document which
also  is or is  deemed  to be  incorporated  by  reference  herein  modifies  or
supersedes such statement.  Any statement so modified or superseded shall not be
deemed,  except as so  modified  or  superseded,  to  constitute  a part of this
Prospectus.  The Company will provide without charge to each person to whom this
Prospectus is delivered,  upon written request of such person,  a copy of any or
all  documents  incorporated  herein by reference  (other than  exhibits to such
documents,  unless such exhibits are specifically incorporated by reference into
such documents).  Requests for such copies should be delivered to John K. Lines,
General  Counsel and Secretary,  Insignia  Financial  Group,  Inc., One Insignia
Financial Plaza, P.O. Box 1089, Greenville, South Carolina 29602 or telephone at
(864) 239-1000.

                                TABLE OF CONTENTS

                                                                          Page

The Company................................................................P-3
Risk Factors...............................................................P-5
Selling Stockholders..................................................... P-12
Legal Opinions........................................................... P-14
Experts...................................................................P-14

                                   THE COMPANY

General

     Insignia  is  a  fully   integrated  real  estate   services   organization
specializing  in the operation and ownership of securitized  real estate assets.
According to Commercial  Property News and the National  Multi-Housing  Council,
Insignia  is the largest  property  manager in the United  States,  has been the
largest manager of multi-family  residential properties since 1992, and is among
the largest managers of commercial  properties.  Insignia's real estate services
include property management,  providing all of the day-to-day services necessary
to operate a property,  whether  residential  or commercial;  asset  management,
including  long-term  financial  planning,  monitoring and implementing  capital
improvement   plans,   and  development   and  execution  of  refinancings   and
dispositions;  real estate leasing and brokerage;  maintenance and  construction
services;  marketing and  advertising;  investor  reporting and accounting;  and
investment banking, including assistance in workouts and restructurings, mergers
and acquisitions,  and debt and equity securitizations.  The Company through its
subsidiary,  Compleat Resource Group,  Inc. ("CRG"),  markets consumer goods and
services  to the  residents  and owners of  multi-family  properties,  including
properties which Insignia manages.  CRG has formed a strategic  alliance with GE
Capital - ResCom, L.P. for the purpose of providing  long-distance telephone and
cable television services.

     Insignia commenced  operations in December 1990 and since then has grown to
provide  property and/or asset  management  services for over 2,500  properties,
which include  approximately  283,000  residential  units, and approximately 107
million  square  feet of  commercial  space,  located  in over 500  cities in 48
states.  Insignia  currently  provides  partnership  administration  services to
approximately 900

                                     P-3
limited  partnerships having  approximately  400,000 limited partners.  Insignia
also owns limited partner  interests  (ranging from 4% to 54% of the outstanding
interests) in 28 real estate limited partnerships which in the aggregate own 143
properties   with   approximately   38,100   residential   apartment  units  and
approximately 865,000 square feet of commercial space located in 83 cities in 28
states.

     Insignia's  principal  business  strategy  is to  expand  its  real  estate
services business in three primary ways. First, Insignia seeks to acquire, or to
have an affiliate acquire, controlling positions in entities that own or control
real estate  properties,  and then,  subject to their fiduciary  duties, to have
such entities engage  Insignia to provide  services.  Second,  Insignia seeks to
enter into special contractual  relationships with non-affiliated  third parties
that own or control  portfolios  of real  estate  properties  pursuant  to which
Insignia will provide management services.  Third,  Insignia seeks to expand its
management of properties that are owned by non-affiliated third parties, such as
large insurance companies,  banks, government or quasi-government  agencies, and
other institutional investors and lenders.

     The  Company is a Delaware  corporation  incorporated  in July 1990 and its
principal  executive  offices are located at One Insignia  Financial Plaza, P.O.
Box 1089,  Greenville,  South Carolina 29602,  and its telephone number is (864)
239-1000.

Recent Developments

      ESG Acquisition

     On June 30, 1996, the Company acquired the business and  substantially  all
of the  assets of Edward S.  Gordon  Company,  Incorporated  and its  affiliates
("ESG"), the fourth largest commercial real estate property services firm in the
United States. ESG's services include commercial real estate leasing,  including
tenant  and  landlord  representation,   real  estate  consulting  services  and
commercial real estate brokerage,  as well as commercial  property management in
the New York City metropolitan area. The purchase price was approximately  $73.8
million.  At closing,  ESG managed  approximately  25.5  million  square feet of
commercial  space  comprised  of 57  properties  in New  York,  New  Jersey  and
Connecticut.  The ESG acquisition  provided Insignia with a substantial presence
in the  commercial  segment  of the  metropolitan  New York City  market,  which
complements its leading presence in the residential segment.

      Paragon Acquisition

     On June 30, 1996, the Company  acquired the commercial real estate services
business of Paragon  Group,  Inc.  ("Paragon").  The  services  of the  acquired
business include commercial property management,  leasing and tenant improvement
services performed with respect to Paragon properties, as well as brokerage, fee
development  and  real  estate   consulting   services   performed  for  various
institutional  clients.  The purchase price paid was $18.5 million.  At closing,
the acquired business managed and leased approximately 22 million square feet of
commercial space comprised of 166 properties located in 17 states:  12.5 million
square  feet of  office  properties,  4.9  million  square  feet  of  industrial
properties,  and 4.5 million square feet of retail properties.  This acquisition
added  substantially  to the Company's  presence in the Southern  California and
Dallas  markets and  provided a  substantial  presence  in the  Central  Florida
market.

                                     P-4
Convertible Preferred Securities Offering

     On November 1 and 6, 1996,  Insignia Financing I, a Delaware business trust
(the "Trust"), issued and sold (the "Convertible Preferred Securities Offering")
2,990,000 of its 6 1/2% Trust Convertible Preferred Securities with an aggregate
liquidation amount of $149.5 million (the "Convertible  Preferred  Securities").
All of the  outstanding  common  securities  of the  Trust,  with  an  aggregate
liquidation value of approximately $4.6 million (the "Common  Securities"),  are
owned by the Company,  which entitles it to designate the trustees of the Trust.
The Convertible Preferred Securities were sold to Lehman Brothers,  Dillon, Read
& Co. Inc.,  Goldman,  Sachs & Co. and A.G.  Edwards & Sons,  Inc. (the "Initial
Purchasers") for an aggregate purchase price of $149.5 million. The Company paid
the Initial  Purchasers a commission of 3% of the aggregate  purchase price. The
Initial Purchasers resold the Convertible Preferred Securities (i) to "qualified
institutional  buyers"  (as  defined in Rule 144A under the  Securities  Act) in
compliance with Rule 144A, (ii) to other  institutional  "accredited  investors"
(as defined in Rule 501(A) (1),  (2),  (3) or (7) under the  Securities  Act) in
compliance  with  Regulation D under the  Securities  Act and (iii)  outside the
United  States to persons  other than U.S.  persons in reliance on  Regulation S
under the  Securities  Act.  The  Preferred  Securities  may be converted at the
option of the holder after  December 30, 1996 into shares of Common Stock at the
rate of 1.8868 shares of Common Stock for each  Convertible  Preferred  Security
(equivalent  to a  conversion  price of $26.50 per share of Common  Stock).  The
Convertible  Preferred  Securities and the Common Securities represent undivided
beneficial  interests in the assets of the Trust, which consist of approximately
$154.1 million  aggregate  principal  amount of the Company's 6 1/2% Convertible
Subordinated Debentures due September 30, 2016.

                                  RISK FACTORS

     Prospective  investors should consider carefully,  in addition to the other
information  contained in, and  incorporated by reference into, this Prospectus,
the following factors.

Dependence on Management Agreements

     Insignia is substantially dependent on revenues received for services under
property and asset management agreements.  On a pro forma basis giving effect to
the consummation of the ESG and Paragon acquisitions,  for the nine months ended
September  30, 1996,  revenues  from  property and asset  management  agreements
constituted  approximately 95% of total revenues, and, as of such date, property
and asset  management  agreements  constituted  approximately  28% of Insignia's
total assets.  There can be no assurance  that Insignia will be able to maintain
all such agreements. In particular, a majority of agreements with non-affiliated
parties have terms of one year, and many are cancelable by the property owner on
as little as 30 to 60 days' notice.  Approximately  78% of Insignia's  pro forma
revenues for the nine months ended  September  30, 1996,  giving  effect to such
acquisitions  as if effected at the beginning of such period,  were derived from
fees for services  provided to entities not  controlled  by  Metropolitan  Asset
Enhancement,  L.P. ("MAE") or Insignia. MAE is an entity in which Insignia holds
a 19.1% limited  partner  interest and the general  partner of which is owned by
Andrew L. Farkas.  The loss of a  substantial  number of  management  agreements
could have a material adverse effect on Insignia.

                                     P-5
After  giving  pro  forma  effect  to the  ESG  and  Paragon  acquisitions,
approximately  6% of Insignia's pro forma revenues  during the nine months ended
September  30,  1996  were  derived  from  services   performed  for  properties
controlled by a single client, The Balcor Company ("Balcor"). Insignia purchased
the right to manage such  properties  in 1994 and has  contractual  arrangements
with Balcor  that are  intended to reduce the  likelihood  that such  management
agreements  will be terminated.  As of September 30, 1996,  the Company  managed
approximately  178  properties,   comprising   approximately   30,200  units  of
multifamily  residential housing and 11 million square feet of commercial space,
associated with that acquisition (44 of the properties, comprising approximately
1,600 units of  multifamily  residential  housing and 4.9 million square feet of
commercial  space,  are not  controlled  by Balcor).  Insignia  also manages 6.1
million square feet of commercial space in properties controlled by Balcor which
produced $3.2 million in revenues for the nine months ended  September 30, 1996.
The Company believes such properties will be sold in the near future.

     During the first quarter of 1996,  Balcor announced its intention to sell a
significant number of its properties.  In connection with the potential sales of
such properties,  Balcor has entered into agreements with the Company to provide
additional services (the "Advisory  Agreements"),  including collection of data,
the  preparation  of materials for potential  purchasers,  and  assistance  with
regard to transition plans. The Advisory  Agreements have an initial term of one
year and  provide  for fees to be paid to the  Company if and when a property is
sold (the "Advisory  Fees"),  regardless of whether or not the purchaser retains
the Company to continue to manage the  property.  If all sales were  consummated
for the  properties  that Balcor is  marketing,  approximately  $14.4 million in
annual revenues would be lost while approximately $14.7 million in Advisory Fees
would be collected.  Through September 30, 1996, 48 properties comprising 14,800
units  producing  $4.9 million in annual  management  fees have been sold,  with
Advisory Fees received or due aggregating $4.6 million. There are proposed sales
of an additional 113 properties  comprising  25,800 units and 3.3 million square
feet of commercial space which generate approximately $9.5 million in management
revenues which would produce  Advisory Fees of $10.1 million.  The completed and
proposed sales are included in the totals mentioned above.  Management  believes
that the  unamortized  purchase price relating to properties  managed for Balcor
properly reflects the asset value and that no impairment exists.

     The number and timing of  property  sales by Balcor  during the term of the
Advisory Agreements cannot be predicted.  Therefore, the Company cannot estimate
with any reasonable accuracy the amount of any Advisory Fees it may receive, the
reduction of its management fees or the amount of unamortized  purchase price to
be written off. The Company  expects that any potential  impact to its EBITDA in
1996 from potential  property sales and resulting  terminations of the Company's
management  agreements  would not be material.  However,  revenues  lost and not
replaced through  acquisitions of incremental  third party servicing would fully
impact 1997 EBITDA.

     On a pro  forma  basis  giving  effect to the  consummation  of the ESG and
Paragon  acquisitions,  approximately  16% of  Insignia's  revenues for the nine
months ended September 30, 1996 were derived from fees for services  provided to
entities  controlled  by MAE.  MAE  has  agreed  to (i)  retain  Insignia  for a
substantial term as property manager for all properties  currently controlled by
MAE or of which MAE  acquires  control,  subject  to its  fiduciary  duties  and
certain  other  exceptions,  and (ii) make  certain  payments to Insignia on any
disposition by MAE of its assets.  However,  there can be no assurance that such
payments  will  adequately  compensate  Insignia  for  the  loss  of  management
agreements that may result from any properties being sold by MAE.

                                     P-6
Risks Associated with Acquisitions

     Insignia's  growth since its  inception in 1990 has been based  principally
upon the acquisition of portfolios of general  partner  interests in real estate
limited  partnerships  and the provision by Insignia of  management  and related
services to such partnerships.  Since its inception, Insignia and its affiliates
have acquired control of, or management  rights to, 32 portfolios of properties.
The Company's ability to expand  successfully  through  acquisitions  depends on
many  factors,  including  the  successful  identification  and  acquisition  of
businesses  and  management's  ability  effectively  to  integrate  the acquired
businesses.  The future  growth of Insignia  will be  dependent in part upon the
ability  of  Insignia  or MAE to  acquire  control of real  estate  entities  at
favorable  prices and upon favorable  terms and  conditions,  and to continue to
manage such  entities  and the  properties  they own on a profitable  basis.  In
addition,  with respect to a limited portion of the managed  portfolio,  lenders
may  foreclose  upon  properties  which are  unable to  service  their  mortgage
indebtedness. In such event, there can be no assurance that Insignia will retain
the contracts to manage such properties.

     Acquisitions  entail  risks  that  investments  will  fail  to  perform  in
accordance  with  expectations,  and that business  judgments  with respect to a
property's  revenues,  operating  expenses,  and costs of  improvements  and the
Company's  ability to restructure  and benefit from  restructurings,  will prove
inaccurate. Acquisitions also involve the risks of the diversion of management's
attention,  the  assimilation  of the  operations  and personnel of the acquired
companies, the amortization of acquired intangible assets and the potential loss
of key employees,  each of which could adversely affect the Company's  operating
results.  In addition,  the success of any completed  acquisition will depend in
part on the Company's ability  effectively to integrate any acquired  businesses
into the Company.

     There can be no assurance that future  acquisition  opportunities,  if any,
can be  consummated  on favorable  terms,  that  Insignia  will be successful in
acquiring or integrating any businesses or in  restructuring  the liabilities of
any such  entities,  or that any such  acquisition  will  enhance the  Company's
business.

     On a pro forma basis giving effect to the Convertible  Preferred Securities
Offering and the use of the net proceeds  therefrom,  at September  30, 1996 the
Company had $161.4  million in funds  available  under its agreement  with First
Union National Bank of South  Carolina and an affiliate of Lehman  Brothers Inc.
with respect to a revolving  credit  facility for  acquisitions  and its working
capital needs, but there can be no assurance that Insignia's financing resources
will be sufficient  to finance  future  acquisitions,  if any. To the extent the
Company  issues  shares of its Common  Stock or rights to acquire  shares of its
Common Stock in connection with any such acquisitions, the ownership of existing
stockholders will be diluted.

Potential Conflicts of Interest; Dependence Upon and Control by Andrew L. Farkas

     Andrew L. Farkas,  the Chairman,  President and Chief Executive  Officer of
Insignia,  may be deemed to be in control of each of Insignia,  MAE, and certain
significant  stockholders of the Company.  Insignia has in the past engaged, and
expects  in the  future to engage,  in  certain  transactions  with each of such
affiliated  entities.  Such  transactions  could  result in actual or  potential
conflicts of interest between Insignia, on the one hand, and Mr. Farkas, MAE, or
such stockholders, as the case may be, on the other hand. In addition, conflicts
may  arise  between  Insignia  and the  partnerships  in which  MAE is a general
partner,  particularly  with respect to  determinations of whether to dispose of
properties. Insignia

                                     P-7
has entered into  agreements  with MAE and Mr. Farkas to address certain of such
potential  conflicts.  Insignia  also has a policy  that all  transactions  with
affiliates  shall  be on terms  no less  favorable  to  Insignia  than  could be
obtained from an unaffiliated party and must be approved by either a majority of
independent  directors or the Audit  Committee of the Board of Directors.  There
are no other formal procedures for resolving such conflicts.

     As of December 1, 1996, Mr. Farkas  beneficially owned  approximately 28.4%
of the outstanding  Common Stock. Mr. Farkas continues to exercise a controlling
influence over the business and affairs of Insignia,  including, but not limited
to, having sufficient voting power to substantially  control the election of the
entire  Board of  Directors  of  Insignia  and,  in  general,  substantially  to
determine the outcome of any corporate  transaction or other matter submitted to
the stockholders for approval, including mergers, consolidations, or the sale of
substantially  all of Insignia's assets or preventing or causing a change in the
control of Insignia.

     Insignia is dependent upon the continued services of Mr. Farkas. Mr. Farkas
expects to continue to devote substantially all of his time to Insignia and MAE.
The loss of Mr. Farkas's  services could have a material adverse effect upon the
business and  financial  condition of Insignia.  Mr.  Farkas has entered into an
employment  agreement with Insignia,  expiring September 1, 1998, providing for,
among  other  things,  an  agreement  not to compete  with  Insignia  during his
employment  and for a period of one year  thereafter.  Insignia  maintains a $10
million key man life insurance policy on Mr. Farkas.

     Insignia is required to make certain payments to Mr. Farkas in the event of
certain changes in control which may constitute  excess  parachute  payments and
would not be  deductible  by  Insignia  for income tax  purposes.  In  addition,
Insignia may not be permitted to deduct for income tax purposes  that portion of
an  executive's  compensation  which exceeds  $1 million in any year,  excluding
certain performance based compensation.  There can be no assurance that Insignia
will be able to deduct the entire amount earned by Mr. Farkas in any year.

Dependence on Property Performance

     Insignia's   revenues  from  property  management  services  are  generally
percentages of aggregate rent collections from the properties.  Accordingly, the
continued  success  of  Insignia  will be  dependent  in  large  part  upon  the
performance of the properties it manages.  Such  performance in turn will depend
in part upon the ability of Insignia to attract and retain creditworthy tenants,
the magnitude of defaults by tenants under their respective  leases,  Insignia's
ability  to control  operating  expenses  (many of which are  subject to various
contingencies),  governmental  regulations,  local rent control or stabilization
ordinances  which  are or may be put into  effect,  various  uninsurable  risks,
financial  conditions  prevailing  generally  and in the  areas  in  which  such
properties are located,  the nature and extent of competitive  properties in the
areas where such properties are located, and the real estate market generally.

Risks Related to Investment in Limited Partner Interests

     The Company owns significant limited partner interests in 28 different real
estate limited partnerships (the "Partnerships")  directly or indirectly through
wholly owned  subsidiaries  and joint  ventures.  The Company's  limited partner
interests,  including the Company's interests in two limited  partnerships which
are consolidated in Insignia's financial statements, represent approximately 29%
of

                                     P-8
the book  value of the  Company's  assets at  September  30,  1996.  All of such
limited partnerships own residential, and in some cases commercial, properties.

     Limited  partner  interests are subject to varying degrees of risk incident
to the  ownership  and  operation of  commercial  and  residential  real estate,
including  possible  environmental  liabilities.  See  "-Possible  Environmental
Liabilities." The success of an investment in a real estate limited  partnership
will depend on factors such as general economic  conditions,  both on a national
basis and in those areas where a limited  partnership's  properties are located,
the  availability   and  costs  of  borrowed  funds,   real  estate  tax  rates,
construction and property  management costs,  federal and state income tax laws,
operating  expenses,  energy  costs,  and  government  regulations.   Typically,
properties  held by the limited  partnerships  are subject to mortgages  and the
loss of a property  through  foreclosure  could adversely  affect the value of a
limited  partnership  interest.  In addition,  numerous  properties  compete for
tenants  with the  properties  owned by the  limited  partnerships  in which the
Company has limited partner interests.

     No active market for limited partner interests in the Partnerships  exists,
none is expected to develop and such interests are typically  only  transferable
at significant  discounts to underlying value. The Company may be limited in its
ability to vary its  portfolio  promptly  in  response to changes in economic or
other conditions.  The price to be paid for additional limited partner interests
may need to be increased,  and the  percentage of such  interests to be acquired
decreased, in response to competing offers for such interests that may be made.

     The  Company  participates  with other  entities  in  ownership  of limited
partner interests through partnerships and joint ventures. Partnership and joint
venture  investments  may,  under  certain  circumstances,   involve  risks  not
otherwise present,  including the possibility that such partners or co-venturers
might  at any time  have  business  interests  or  goals  inconsistent  with the
business   interests  or  goals  of  the  Company  and  that  such  partners  or
co-venturers  may be in a position  to take  action  contrary  to the  Company's
instructions, requests, policies, or objectives. The Company will, however, seek
to maintain  sufficient  influence over such  partnerships  or joint ventures to
permit the Company's business  objectives to be achieved.  The Company currently
owns limited partner interests in six real estate limited  partnerships in which
MAE is the general partner. There can be no assurance that MAE will not transfer
to a third party its general partner interests in those partnerships or that MAE
will not take actions contrary to the Company's  interests with respect to those
partnerships. See "-Potential Conflicts of Interests."

Potential Alternative Structuring of Certain Activities

     The Company actively is exploring a structure  whereby its multifamily real
estate  investment and ownership  activities would (a) qualify for United States
federal income tax purposes as a Real Estate Investment Trust ("REIT") under the
Internal  Revenue Code of 1986, as amended (the  "Code"),  and (b) obtain equity
and debt capital from parties other than Insignia to expand these activities.

     In this regard, Insignia formed Insignia Properties Corporation, a Delaware
corporation and wholly-owned subsidiary, in January 1996 and Insignia Properties
Trust, a Maryland real estate investment trust ("IPT"),  in April 1996, with the
intention  of  implementing  a series  of  transactions  that  would  result  in
substantially all of the Company's real estate limited partner interests in real
estate  limited  partnerships  being  conveyed to an entity that would intend to
qualify as a REIT. As of

                                     P-9
the date of this Prospectus,  the Company is actively preparing to raise capital
through the private  placement of securities in IPT. Such  transaction  would be
structured  such that the Company  would  continue to own and control a majority
interest  in IPT.  In  addition,  the  Company  has  had  discussions  with  the
management of Angeles Mortgage  Investment Trust, a  publicly-traded  California
business trust and REIT  ("AMIT"),  regarding a potential  business  combination
transaction with IPT and has acquired the beneficial  ownership of approximately
6.0% of the Class A shares of AMIT. These discussions  principally have involved
whether  general  and  limited  partner  interests  owned by Insignia in certain
partnerships  which own real property could be transferred,  through a merger or
otherwise, to AMIT in exchange for securities in AMIT. The Company, however, has
no plans otherwise to dispose of its interests in such partnerships.

     There  can  be no  assurance  that  the  transactions  that  are  currently
contemplated  and that are discussed herein in connection with the proposed REIT
transaction  will  be  consummated  or,  if  consummated,   that  they  will  be
consummated on the terms described herein.

Tender Offer Litigation

     Since the latter part of 1994, Insignia, through various subsidiaries,  has
acquired limited partner interests in real estate limited  partnerships  through
public tender offers.  Insignia believes that there continue to be opportunities
to acquire limited partner  interests and it may acquire such interests  through
future public  tender  offers.  Tender  offers often result in competing  tender
offers,  as well as  litigation  initiated  by limited  partners  in the subject
partnerships or by competing bidders. In some of its tender offers, Insignia has
faced  competing  offers and  litigation  which alleged  breaches of the federal
securities  laws and  breaches  of  fiduciary  duties  by  Insignia.  Due to the
inherent  uncertainty  of  litigation,  the Company  could be subject to adverse
judgments in  substantial  amounts.  Litigation  costs and competing  offers are
factors  considered by the Company prior to initiating  tender offers.  Insignia
has settled all litigation  brought  against it in connection with tender offers
made by it with the exception of certain  litigation  in connection  with tender
offers for limited  partner  interests  in limited  partnerships  controlled  by
Balcor.

Competition for Personnel

     The continued  success of Insignia's  residential  and commercial  property
management  business will depend, in part, on Insignia's ability to maintain its
experienced  management  team and to attract  additional  managers as Insignia's
property management business expands.  Insignia believes that there is currently
a shortage of qualified property management  personnel.  To maintain and attract
qualified  individuals,  Insignia may be required to increase  substantially the
compensation to property managers.

Possible Environmental Liabilities

     Under  various  federal and state  environmental  laws and  regulations,  a
current or previous owner or operator of real estate property may be required to
investigate  and clean up certain  hazardous  or toxic  substances  or petroleum
product  releases  at the  property,  and may be held  liable to a  governmental
entity or to third parties for property damage and for investigation and cleanup
costs incurred by such parties in connection  with  contamination.  In addition,
some  environmental  laws create a lien on the contaminated site in favor of the
government for damages and costs it incurs in connection with the contamination.
The presence of contamination or the failure to remediate

                                     P-10
contamination  may  adversely  affect the owner's  ability to sell or lease real
estate or to borrow using the real estate as  collateral.  The owner or operator
of a site may be liable  under  common  law to third  parties  for  damages  and
injuries  resulting from  environmental  contamination  emanating from the site.
There can be no assurance  that  Insignia,  or any assets owned or controlled by
Insignia,  currently are in compliance with all of such laws and regulations, or
that Insignia will not become subject to  liabilities  that arise in whole or in
part out of any such laws,  rules,  or  regulations.  Moreover,  there can be no
assurance that any of such liabilities to which Insignia may become subject will
not have a material  adverse effect upon the business or financial  condition of
Insignia.

     Except  for  (i)  environmental  audits  of  approximately  240  properties
conducted in connection with various  refinancings and reviews of sellers' files
with respect to  environmental  matters in connection with certain  acquisitions
and (ii) Phase I audits of properties owned by National Property Investors, Inc.
and certain  affiliates and related partners in which Insignia  acquired limited
partner interests (and certain other  investigations in the case of certain such
properties),  Insignia has not undertaken any review, on a  property-by-property
basis, of the extent of the presence of asbestos or other environmental risks at
any of its owned or controlled properties, the remedial or other requirements of
state  and local  environmental  laws,  rules,  and  regulations  in each of the
jurisdictions in which such properties are located, or the costs of any required
remedial work. Although the results of all but a few of the Company's audits did
not require any material  remedial work, there can be no assurance that remedial
work may not be required at these or other  properties.  Most of the  structures
situated upon such properties were  constructed  prior to 1978, in a period when
the use of asbestos in the construction of structures  similar to those situated
upon such properties was common. The presence of asbestos or other environmental
risks at any of such  properties  could result in the  incurrence of significant
cleanup costs therefor by Insignia or partnerships in which it owns interests or
the incurrence of toxic tort claims against Insignia or partnerships in which it
owns interests.

     There can be no assurance that Insignia will not  experience  difficulty in
reselling  real  estate  assets  owned  by   partnerships   or  refinancing  any
indebtedness  secured by their respective  assets as a result of the presence of
asbestos or other  environmental  risks on the  properties,  lose its management
contracts  with  respect  to such  properties,  or become  subject  to costs and
litigation  relating to the presence of asbestos or other environmental risks on
such  properties  that will have a material  adverse effect upon the business or
financial condition of Insignia or any of its affiliates.

Possible Loss of HUD Approval; Restructuring of HUD

     Approximately  17% of the  residential  units  which  Insignia  managed  at
September  30, 1996 were housing  projects  financed  under  various  government
programs  administered  by the United  States  Department  of Housing  and Urban
Development ("HUD"). As a result,  certain aspects of Insignia's  operations are
subject to  regulation  by HUD.  For the nine months ended  September  30, 1996,
revenues from the  management of HUD regulated or subsidized  units  constituted
approximately  7% of Insignia's  total pro forma  revenues  giving effect to the
Paragon and ESG  acquisitions.  If Insignia  were to lose its  qualification  to
manage HUD properties, Insignia could be precluded from obtaining HUD contracts,
could  lose the  contracts  to  manage  some or all of the HUD  properties  then
managed,  or could be  subject  to fines or other  penalties,  depending  on the
reason  for such loss of  qualification.  Such  results  could  have a  material
adverse effect on Insignia's business or financial condition.

                                     P-11
Congress is  currently  considering  various  proposals to  reorganize  and
restructure certain of HUD's housing assistance programs. One proposal calls for
the  elimination  of HUD  by  terminating,  privatizing,  and  transferring  its
functions.  Another proposal  contemplates  that, rather than providing specific
project-based  subsidies,  HUD would give qualified participants vouchers to use
at the  property  of their  choice.  Since the value of such a voucher  would be
fixed,  participants electing to move from their present apartment complex would
have to pay  the  difference  between  such  voucher  value  and the  rent at an
alternative property.  Due to a relative lack of amenities in most HUD projects,
residents  (if they could  afford the price  differential)  might be inclined to
move from such projects into  complexes with more  amenities.  If such residents
could not be replaced, the occupancy level or rental rates of such project could
be affected and,  accordingly,  the management fee paid to the property  manager
could be reduced.  The current proposals with regards to the  reorganization are
not  sufficiently  specific  to  determine  their  actual  impact,  if  any,  on
management  fee  revenue  paid to Insignia  by HUD  properties.  There can be no
assurance that the proposed  changes would not have a material adverse impact on
Insignia's business or financial condition.

                              SELLING STOCKHOLDERS

     The following  table sets forth certain  information as of the date of this
Prospectus  with  respect to the Selling  Stockholders.  All of the shares to be
sold by the Selling Stockholders  represent shares which may be acquired by them
on exercise of certain warrants issued to them as employees of the Company.  The
Company  will  receive  the  exercise  price on any such  exercise  but will not
receive any of the proceeds  from the sale of such  shares.  Each of the Selling
Stockholders  is an  officer  of  the  Company  as  indicated  below.  Based  on
information provided by the Selling Stockholders, as of December 1, 1996, Andrew
L. Farkas  beneficially  owned 28.4% and James A. Aston beneficially owned 1.3%,
respectively,  of the outstanding Common Stock.  Beneficial  ownership after the
offering will depend on the number of shares sold by each Selling Stockholder.

                                     P-12
Beneficial         Number
 Selling Stockholder and Positions with             Ownership         of Shares
                Insignia                         Prior to Offering     Offered

Andrew L. Farkas                                     8,442,722(1)      628,000
      Chairman of the Board of Directors,
      President and Chief Executive Officer

James A. Aston                                         371,518(2)      100,000
      Office of the Chairman and Chief
      Financial Officer
_______________

(1)  Includes  shares owned by (i)  Metropolitan  Acquisition  Partners IV, L.P.
     ("MAP IV"), (ii) Metropolitan Acquisition Partners V, L.P. ("MAP V"), (iii)
     Metro Shelter Directives, Inc. and MV, Inc., the general partners of MAP IV
     and MAP V, respectively, (iv) certain stockholders who have granted proxies
     to MAP IV and MAP V,  and (v)  certain  stockholders  who  are  party  to a
     stockholders  agreement with Andrew L. Farkas.  Includes 928,000 shares, of
     which 628,000 are subject to this Registration Statement, which are subject
     to options and warrants.

(2)  Includes (i) 217,890  shares  subject to options which are  exercisable  or
     will become  exercisable  within 60 days,  (ii)  100,000  shares  which are
     subject to this  Registration  Statement,  of which  66,668 are  subject to
     warrants which are exercisable within 60 days and (iii) 20,000 shares owned
     by Mr. Aston's spouse, for which Mr. Aston disclaims beneficial ownership.

     The sale of the shares by the Selling  Stockholders  may be  effected  from
time to time in transactions (which may include block transactions by or for the
account of the Selling Stockholders) on the NYSE or in negotiated  transactions,
through the writing of options on such shares,  a combination of such methods of
sale, or otherwise.  Sales may be made at fixed prices which may be changed,  at
market prices prevailing at the time of sale, or at negotiated prices.

     Selling  Stockholders may effect such  transactions by selling their shares
directly to purchasers,  through broker-dealers acting as agents for the Selling
Stockholders,  or to  broker-dealers  who may purchase  shares as principals and
thereafter  sell  the  shares  from  time  to time  on the  NYSE  in  negotiated
transactions,   or  otherwise.   Such   broker-dealers,   if  any,  may  receive
compensation  in the form of discounts,  concessions,  or  commissions  from the
Selling  Stockholders and/or the purchasers for whom such broker-dealers may act
as agents or to whom they may sell as principals or both (which  compensation as
to a particular broker-dealer may be in excess of customary commissions).

     The Selling  Stockholders and broker-dealers,  if any, acting in connection
with  such sale  might be deemed to be  "underwriters"  within  the  meaning  of
Section 2(11) of the Securities Act and any commission  received by them and any
profit on the resale of such shares might be deemed to be underwriting discounts
and commissions under the Securities Act.

                                     P-13
LEGAL OPINIONS

     The  validity of the shares of Common Stock  offered  hereby will be passed
upon for  Insignia  and the  Selling  Stockholders  by  Proskauer  Rose  Goetz &
Mendelsohn  LLP, New York,  New York.  The wife of a partner of  Proskauer  Rose
Goetz &  Mendelsohn  LLP is a  limited  partner  in  each  of two of  Insignia's
principal stockholders.

                                    EXPERTS

     The consolidated  financial  statements of Insignia  Financial Group,  Inc.
appearing in Insignia's  Annual  Report (Form 10-K) for the year ended  December
31, 1995, have been audited by Ernst & Young LLP, independent  auditors,  as set
forth in their  report  thereon  included  therein  and  incorporated  herein by
reference. Such financial statements are, and audited financial statements to be
included  in  subsequently  filed  documents  will be,  incorporated  herein  in
reliance  upon the  reports of Ernst & Young LLP  pertaining  to such  financial
statements  (to the extent  covered by consents  filed with the  Securities  and
Exchange  Commission)  given  upon the  authority  of such  firm as  experts  in
accounting and auditing.

     The combined  balance sheets of Edward S. Gordon Company,  Incorporated and
Edward S. Gordon  Company of New Jersey,  Inc. as of December 31, 1995 and 1994,
and the related combined statements of operations, shareholders' equity and cash
flows for each of the years ended December 31, 1995, 1994 and 1993  incorporated
by reference in this  Registration  Statement have been  incorporated  herein in
reliance on the report of Coopers & Lybrand L.L.P.,  given upon the authority of
that firm as experts in accounting and auditing.

     The  combined  consolidated  balance  sheets  of  NPI  Property  Management
Corporation,  Inc.  and  Subsidiaries,  National  Property  Investors,  Inc. and
Subsidiaries  and NPI-CL  Management  L.P. as of June 30, 1995 and 1994, and the
related  combined  consolidated  statements of operations and cash flows for the
years then ended and the consolidated  statement of operations and cash flows of
National Property Investors, Inc. for the year ended June 30, 1993, incorporated
herein by reference have been audited by Coopers & Lybrand  L.L.P.,  independent
auditors,  as set forth in their reports thereon and are incorporated  herein by
reference in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.

     The financial  statements of the NPI  Partnerships  appearing in Insignia's
Current  Report on Form 8-K dated  September 1, 1995 and appearing in Insignia's
Current  Report on Form 8-K dated December 10, 1996 have been audited by Imowitz
Koenig  &  Co.,  LLP  as  set  forth  in  their  reports  included  therein  and
incorporated  herein by reference in reliance  upon such reports  given upon the
authority of such firm as experts in accounting and auditing.

     No dealer, salesperson, or any other person has been authorized to give any
information or make any representations not contained in this Prospectus and, if
given or made, such  information or  representations  must not be relied upon as
having been authorized by Insignia or any Selling  Stockholder.  This Prospectus
does not  constitute  an offer of any  securities  other  than those to which it
relates or an offer to sell, or a solicitation of an offer to buy, to any person
in any  jurisdiction  where  such an offer or  solicitation  would be  unlawful.
Neither the delivery of this Prospectus nor

                                     P-14
any sale made hereunder shall,  under any  circumstance,  create any implication
that the  information  contained  herein is correct as of any time subsequent to
the date hereof.

                                     P-15
SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
certifies  that is has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Greenville, State of South Carolina, on this 13th day
of December, 1996.

                                          INSIGNIA FINANCIAL GROUP, INC.

                                          By: /s/ John K. Lines     
                                          ---------------------     
                                              John K. Lines
                                              General Counsel and
                                              Secretary

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been signed below by the  following  persons in the
capacities and on the dates indicated.

   Signatures                   Title                          Date

 /s/ Andrew L. Farkas*          Officer and Director           December 13, 1996
 --------------------          
     Andrew L. Farkas           (Principal Executive Officer)

 /s/ James A. Aston             Chief Financial Officer        December 13, 1996
 ------------------             
     James A. Aston             (Principal Financial and
                                 Accounting Officer)

 /s/ Robert J. Denison*         Director                       December 13, 1996
 ----------------------         
     Robert J. Denison

 /s/ Robin L. Farkas*           Director                       December 13, 1996
 --------------------           
     Robin L. Farkas

/s/ Merril M. Halpern*          Director                       December 13, 1996
----------------------  
    Merril M. Halpern

 /s/ John F. Jacques*           Director                       December 13, 1996
 --------------------  
     John F. Jacques

 /s/ Robert G. Koen*            Director                       December 13, 1996
 -----------------------
     Robert G. Koen

 /s/ Michael I. Lipstein*       Director                       December 13, 1996
 ------------------------       
     Michael I. Lipstein

                                     II-5
Signatures                   Title                          Date

 /s/ Buck Mickel*               Director                       December 13, 1996
 ----------------               --------                       -----------------
     Buck Mickel

*By /s/ John K. Lines   
---------------------   
    John K. Lines
    Attorney-in-fact

                                     II-6