================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ----------------------
                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                               ------------------    
                             DOWNEY FINANCIAL CORP.
             (Exact Name of Registrant as Specified in Its Charter)


    Delaware                 3501 Jamboree Road                  33-0633413
(State or Other            Newport Beach, CA 92660            (I.R.S. Employer
Jurisdiction of                                              Identification No.)
Incorporation or
 Organization)
              (Address of Principal Executive Offices Including Zip
                                      Code)
                               ------------------    
              Downey Savings and Loan Association, F.A. Employees'
                           Retirement and Savings Plan
                            (Full Title of the Plan)
                               ------------------    


                                 Donald E. Royer
                  Executive Vice President and General Counsel
                             Downey Financial Corp.
                               3501 Jamboree Road
                             Newport Beach, CA 92660
                     (Name and Address of Agent For Service)
                               ------------------    
                                 (714) 854-3100
          (Telephone Number, Including Area Code, of Agent For Service)
                               ------------------    
<TABLE>
<CAPTION>
                         CALCULATION OF REGISTRATION FEE

                                     Proposed       Proposed 
   Title of                          Maximum        Maximum     
   Securities                        Offering       Aggregate        
     to be         Amount to be        Price        Offering       Amount of
   Registered      Registered(3)    Per Share(1)    Price(1)    Registration Fee
--------------------------------------------------------------------------------
<S>                  <C>              <C>          <C>              <C>      
 Common Stock,       400,000          $23.06       $9,224,000       $2,795.15
  par value          
$.01 per share
--------------------------------------------------------------------------------
  Interests in         (2)             (2)             (2)            (2)
   the Downey   
Savings and Loan
Association, F.A.
   Employees' 
 Retirement and 
  Savings Plan
--------------------------------------------------------------------------------
</TABLE>


(1)  Estimated  solely for the  purposes of  determining  the  registration  fee
     pursuant  to Rules  457(h) and 457(c) and based on the  average of the high
     and low prices of the Common Stock of Downey Financial Corp. as reported on
     June 26, 1997 on the New York Stock Exchange.

(2)  Pursuant to Rule 416(c) under the Securities Act of 1933, this registration
     statement covers an indeterminate amount of interests to be offered or sold
     pursuant to the Plan. In accordance  with Rule  457(h)(2),  no separate fee
     calculation is made for Plan interests.

(3)  There is also being registered  hereunder such additional  shares as may be
     issued pursuant to the antidilution provisions of the Plan.

================================================================================


<PAGE>


                                  INTRODUCTION

     This Registration Statement on Form S-8 is filed by Downey Financial Corp.,
a Delaware  corporation  (the  "Registrant"),  relating to 400,000 shares of the
Registrant's  common  stock,  $.01 par  value  ("the  Common  Stock"),  issuable
pursuant to the Downey Savings and Loan Association,  F.A. Employees' Retirement
and Savings Plan ("the Plan.")


                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item 1. Plan Information.*

Item 2. Registrant Information and Employee Plan Annual Information.(1)



*    Information  required  by  Part I  of  Form S-8  to  be  contained  in  the
     Section 10(a)  prospectus  is omitted from this  Registration  Statement in
     accordance  with Rule 428 under the Securities Act of 1933, as amended (the
     "Securities Act"), and the Note to Part I of Form S-8.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

     The  following  documents  filed by the  Registrant  and the Plan  with the
Securities and Exchange Commission (the "Commission") are hereby incorporated by
reference into this Registration Statement:

1.   The Registrant's Annual Report on Form 10-K for the year ended December 31,
     1996;

2.   The  Registrant's  Quarterly  Report on  Form 10-Q  for the  quarter  ended
     March 31, 1997;

3.   The Plan's Annual Report on Form 11-K for the year ended December 31, 1995;
     and

4.   The  description  of  the  Registrant's   Common  Stock  contained  in  the
     Registrant's Registration Statement on Form 8-B (Registration No. 1-13578),
     including  any  amendment or report filed for the purpose of updating  such
     description.

     All reports and other documents that the Registrant subsequently files with
the Commission  pursuant to Sections 13(a),  13(c), 14, or 15(d) of the Exchange
Act, prior to the




                                       2
<PAGE>



filing of a post-effective amendment indicating that the Registrant has sold all
of the securities offered under this Registration  Statement or that deregisters
the distribution of all such securities then remaining  unsold,  shall be deemed
to be incorporated by reference into this  Registration  Statement from the date
that the Registrant files such report or document.

     Any  statement  contained in this  Registration  Statement or any report or
document  incorporated into this Registration  Statement by reference,  however,
shall be deemed to be modified or superseded  for purposes of this  Registration
Statement  to the extent  that a statement  contained  in a  subsequently  dated
report or document that is also considered part of this Registration  Statement,
or in any amendment to this  Registration  Statement,  is inconsistent with such
prior statement.

Item 4. Description of Securities.

        Not  applicable.

Item 5. Interests of Named Experts and Counsel.

        Not applicable.

Item 6. Indemnification of Directors and Officers.

     The  Registrant  is a Delaware  corporation.  Section  145 of the  Delaware
General  Corporation  Law  ("GCL")  permits   indemnification  of  officers  and
directors of the  Registrant  under  certain  conditions  and subject to certain
limitations.  Section 145 of the GCL also provides  that a  corporation  has the
power to purchase and maintain insurance on behalf of its officers and directors
against any liability asserted against such person and incurred by him or her in
such capacity,  or arising out of his or her status as such,  whether or not the
corporation  would have the power to indemnify him or her against such liability
under the  provisions of Section 145 of the GCL.  Article 6 of the  Registrant's
By-laws provides for indemnification of the Registrant's  officers and directors
to the fullest extent provided by the GCL and other applicable laws as currently
in effect and as they may be amended in the future.

     Article  Seventeenth  of  the  Registrant's  Certificate  of  Incorporation
exonerates the Registrant's  directors from personal liability to the Registrant
or its  shareholders  for monetary  damages for breach of the fiduciary  duty of
care as a director,  provided  that Article  Seventeenth  does not  eliminate or
limit  liability  for any breach of the  directors'  duty of loyalty for acts or
omissions not in good faith or which involve  intentional  misconduct or knowing
violations  of  law,  for  any  improper  declaration  of  dividends  or for any
transaction  from which the  director  derived  an  improper  personal  benefit.
Article   Seventeenth   does  not  eliminate  a  shareholder's   right  to  seek
non-monetary,  equitable  remedies,  such as an  injunction  or  rescission,  to
redress  an action  taken by the  directors.  However,  as a  practical  matter,
equitable  remedies  may not be available  in all  situations,  and there may be
instances in which no effective remedy is available.




                                       3
<PAGE>



Item 7. Exemption from Registration Claimed.

        Not applicable.

Item 8. Exhibits.

        Exhibit No.             Description

          4.1  Certificate of Incorporation of the Registrant(1)

          4.2  Bylaws of the Registrant(2)

          4.3  Downey Savings and Loan Association,  F.A. Employees'  Retirement
               and Savings Plan

          4.4  Directed Employee Benefit Trust Agreement dated November 16, 1994

          23.1 Consent of KPMG Peat Marwick LLP
 
          23.2 Consent of Scott Bankhead & Co.

          24   Powers of Attorney (contained on signature page hereto)

(1)  Filed as part of the  Registrant's  Form S-8 filed on February 3,  1995 and
     incorporated herein by reference.

(2)  Filed as part of the Registrant's Form 8-B/A filed on January 17,  1995 and
     incorporated herein by reference.

     The  Registrant  hereby  undertakes  to submit the Plan and any  amendments
thereto  to  the  Internal  Revenue  Service  ("IRS")  in a  timely  manner  and
undertakes to make all changes required by the IRS in order to qualify the Plan.

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:

               (i)  to include any prospectus  required by  Section 10(a)(3)  of
                    the Securities Act;

               (ii) to reflect  in the  prospectus  any facts or events  arising
                    after the effective date of the  Registration  Statement (or
                    the most recent  post-effective  amendment  thereof)  which,
                    individually  or in the  aggregate,  represent a fundamental
                    change  in the  information  set  forth in the  Registration
                    Statement; and


                                       4
<PAGE>

              (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;

               provided,  however,  that paragraphs  (a)(1)(i) and (a)(2)(ii) do
               not  apply  if  the  information  required  to be  included  in a
               post-effective  amendment  by those  paragraphs  is  contained in
               periodic reports filed with or furnished to the Commission by the
               Registrant  pursuant to Section 13 or 15(d) of the  Exchange  Act
               that are incorporated by reference in the Registration Statement;

                    (2) That, for the purpose of determining any liability under
               the Securities Act, 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; and

                    (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,  each  filing  of  the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Exchange Act (and, where  applicable,  each filing of an employee benefit plan's
annual  report  pursuant  to   Section 15(d)   of  the  Exchange  Act)  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.

     (c) 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  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.



                                       5
<PAGE>





                                   SIGNATURES

     Pursuant  to  the  requirements  of  the  Securities  Act,  the  Registrant
certifies  that it 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 Newport Beach, State of California, on 1 day of July,
1997.

                                              DOWNEY FINANCIAL CORP.


                             By:                /s/ JAMES W. LOKEY              
                                ------------------------------------------------
                                                   James W. Lokey
                                        President and Chief Executive Officer

                                                 POWER OF ATTORNEY

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.  Each of the directors  and/or officers of
the Registrant whose signature appears below hereby appoints James W.  Lokey and
Thomas E.  Prince, and each of them severally as his or her  attorney-in-fact to
sign his or her name and on his or her behalf,  in any and all capacities stated
below,  and to file with the  Securities  and  Exchange  Commission  any and all
amendments,  including post-effective  amendments to this Registration Statement
as  appropriate,  and  generally  to do all such things in their behalf in their
capacities  as officers and  directors to enable  Registrant  to comply with the
provisions of the Securities Act of 1933, and all requirements of the Securities
and Exchange Commission.


     Name and Signature               Title                          Date


     /s/ JAMES W. LOKEY     President and Chief Executive          July 1, 1997
--------------------------  Officer (Principal Executive Officer)
      James W. Lokey        

   /s/ THOMAS E. PRINCE     Executive Vice President and Chief     July 1, 1997
--------------------------  Financial Officer (Principal
     Thomas E. Prince       Financial and Accounting Officer)              
                                        
                                        


                                       6
<PAGE>



 /s/ MAURICE L. McALISTER   Chairman of the Board                  July 1, 1997
--------------------------
   Maurice L. McAlister  

   /s/ CHERYL E. JONES      Vice Chairman of the Board             July 1, 1997
--------------------------
     Cheryl E. Jones  

 /s/ DR. DENNIS J. AIGNER   Director                               July 1, 1997
--------------------------
  Dr. Dennis J. Aigner           

   /s/ DR. PAUL KOURI       Director                               July 1, 1997
--------------------------
    Dr. Paul Kouri                   

    /s/ SAM YELLEN          Director                               July 1, 1997
--------------------------
      Sam Yellen                    

                            Director                               July 1, 1997 
--------------------------
    Brent McQuarrie                   

  /s/ LESTER C. SMULL       Director                               July 1, 1997
-------------------------- 
    Lester C. Smull                   


     Pursuant to the  requirements  of the  Securities Act of 1933, the trustees
(or other persons who  administer  the Plan) have duly caused this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Newport Beach, State of California, on July 1, 1997.

                                DOWNEY SAVINGS AND LOAN 
                                ASSOCIATION, F.A. EMPLOYEES'
                                RETIREMENT AND SAVINGS PLAN



                                By:              /s/ THOMAS E. PRINCE          
                                      ------------------------------------------
                                      Name:    Thomas E. Prince
                                      Title:   Member, Administrative Committee



                                       7
<PAGE>


                                  EXHIBIT INDEX


 Exhibit No.                       Description

     4.1     Certificate of Incorporation of the Registrant(1)

     4.2     Bylaws of the Registrant(2)

     4.3     Downey Savings and Loan Association, F.A. Employees' Retirement and
             Savings Plan 

     4.4     Directed  Employee Benefit Trust Agreement dated  November 16, 1994

     23.1    Consent of KPMG Peat Marwick LLP 

     23.2    Consent of Scott Bankhead & Co. 

     24      Powers of Attorney (contained on signature page hereto)

(1)  Filed as part of the  Registrant's  Form S-8 filed on February 3,  1995 and
     incorporated herein by reference.

(2)  Filed as part of the Registrant's Form 8-B/A filed on January 17,  1995 and
     incorporated herein by reference.



                                       8
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 19288}]
{"company-data": {"conformed-name": "DOWNEY FINANCIAL CORP", "cik": "0000935063", "assigned-sic": "6035", "irs-number": "951953342", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-30483", "film-number": "97633749"}, "business-address": {"street1": "3501 JAMBOREE ROAD", "city": "NEWPORT BEACH", "state": "CA", "zip": "92660", "phone": "7148540300"}, "mail-address": {"street1": "3501 JAMBOREE RD", "city": "NEWPORT BEACH", "state": "CA", "zip": "92660"}}
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ----------------------
                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                               ------------------    
                             DOWNEY FINANCIAL CORP.
             (Exact Name of Registrant as Specified in Its Charter)

    Delaware                 3501 Jamboree Road                  33-0633413
(State or Other            Newport Beach, CA 92660            (I.R.S. Employer
Jurisdiction of                                              Identification No.)
Incorporation or
 Organization)
              (Address of Principal Executive Offices Including Zip
                                      Code)
                               ------------------    
              Downey Savings and Loan Association, F.A. Employees'
                           Retirement and Savings Plan
                            (Full Title of the Plan)
                               ------------------    

                                 Donald E. Royer
                  Executive Vice President and General Counsel
                             Downey Financial Corp.
                               3501 Jamboree Road
                             Newport Beach, CA 92660
                     (Name and Address of Agent For Service)
                               ------------------    
                                 (714) 854-3100
          (Telephone Number, Including Area Code, of Agent For Service)
                               ------------------
CALCULATION OF REGISTRATION FEE

                                     Proposed       Proposed 
   Title of                          Maximum        Maximum     
   Securities                        Offering       Aggregate        
     to be         Amount to be        Price        Offering       Amount of
   Registered      Registered(3)    Per Share(1)    Price(1)    Registration Fee
--------------------------------------------------------------------------------
Common Stock,       400,000          $23.06       $9,224,000       $2,795.15
  par value          
$.01 per share
--------------------------------------------------------------------------------
  Interests in         (2)             (2)             (2)            (2)
   the Downey   
Savings and Loan
Association, F.A.
   Employees' 
 Retirement and 
  Savings Plan
--------------------------------------------------------------------------------
(1)  Estimated  solely for the  purposes of  determining  the  registration  fee
     pursuant  to Rules  457(h) and 457(c) and based on the  average of the high
     and low prices of the Common Stock of Downey Financial Corp. as reported on
     June 26, 1997 on the New York Stock Exchange.

(2)  Pursuant to Rule 416(c) under the Securities Act of 1933, this registration
     statement covers an indeterminate amount of interests to be offered or sold
     pursuant to the Plan. In accordance  with Rule  457(h)(2),  no separate fee
     calculation is made for Plan interests.

(3)  There is also being registered  hereunder such additional  shares as may be
     issued pursuant to the antidilution provisions of the Plan.

================================================================================
INTRODUCTION

     This Registration Statement on Form S-8 is filed by Downey Financial Corp.,
a Delaware  corporation  (the  "Registrant"),  relating to 400,000 shares of the
Registrant's  common  stock,  $.01 par  value  ("the  Common  Stock"),  issuable
pursuant to the Downey Savings and Loan Association,  F.A. Employees' Retirement
and Savings Plan ("the Plan.")

                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item 1. Plan Information.*

Item 2. Registrant Information and Employee Plan Annual Information.(1)

*    Information  required  by  Part I  of  Form S-8  to  be  contained  in  the
     Section 10(a)  prospectus  is omitted from this  Registration  Statement in
     accordance  with Rule 428 under the Securities Act of 1933, as amended (the
     "Securities Act"), and the Note to Part I of Form S-8.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

     The  following  documents  filed by the  Registrant  and the Plan  with the
Securities and Exchange Commission (the "Commission") are hereby incorporated by
reference into this Registration Statement:

1.   The Registrant's Annual Report on Form 10-K for the year ended December 31,
     1996;

2.   The  Registrant's  Quarterly  Report on  Form 10-Q  for the  quarter  ended
     March 31, 1997;

3.   The Plan's Annual Report on Form 11-K for the year ended December 31, 1995;
     and

4.   The  description  of  the  Registrant's   Common  Stock  contained  in  the
     Registrant's Registration Statement on Form 8-B (Registration No. 1-13578),
     including  any  amendment or report filed for the purpose of updating  such
     description.

     All reports and other documents that the Registrant subsequently files with
the Commission  pursuant to Sections 13(a),  13(c), 14, or 15(d) of the Exchange
Act, prior to the

                                       2
filing of a post-effective amendment indicating that the Registrant has sold all
of the securities offered under this Registration  Statement or that deregisters
the distribution of all such securities then remaining  unsold,  shall be deemed
to be incorporated by reference into this  Registration  Statement from the date
that the Registrant files such report or document.

     Any  statement  contained in this  Registration  Statement or any report or
document  incorporated into this Registration  Statement by reference,  however,
shall be deemed to be modified or superseded  for purposes of this  Registration
Statement  to the extent  that a statement  contained  in a  subsequently  dated
report or document that is also considered part of this Registration  Statement,
or in any amendment to this  Registration  Statement,  is inconsistent with such
prior statement.

Item 4. Description of Securities.

        Not  applicable.

Item 5. Interests of Named Experts and Counsel.

        Not applicable.

Item 6. Indemnification of Directors and Officers.

     The  Registrant  is a Delaware  corporation.  Section  145 of the  Delaware
General  Corporation  Law  ("GCL")  permits   indemnification  of  officers  and
directors of the  Registrant  under  certain  conditions  and subject to certain
limitations.  Section 145 of the GCL also provides  that a  corporation  has the
power to purchase and maintain insurance on behalf of its officers and directors
against any liability asserted against such person and incurred by him or her in
such capacity,  or arising out of his or her status as such,  whether or not the
corporation  would have the power to indemnify him or her against such liability
under the  provisions of Section 145 of the GCL.  Article 6 of the  Registrant's
By-laws provides for indemnification of the Registrant's  officers and directors
to the fullest extent provided by the GCL and other applicable laws as currently
in effect and as they may be amended in the future.

     Article  Seventeenth  of  the  Registrant's  Certificate  of  Incorporation
exonerates the Registrant's  directors from personal liability to the Registrant
or its  shareholders  for monetary  damages for breach of the fiduciary  duty of
care as a director,  provided  that Article  Seventeenth  does not  eliminate or
limit  liability  for any breach of the  directors'  duty of loyalty for acts or
omissions not in good faith or which involve  intentional  misconduct or knowing
violations  of  law,  for  any  improper  declaration  of  dividends  or for any
transaction  from which the  director  derived  an  improper  personal  benefit.
Article   Seventeenth   does  not  eliminate  a  shareholder's   right  to  seek
non-monetary,  equitable  remedies,  such as an  injunction  or  rescission,  to
redress  an action  taken by the  directors.  However,  as a  practical  matter,
equitable  remedies  may not be available  in all  situations,  and there may be
instances in which no effective remedy is available.

                                       3
Item 7. Exemption from Registration Claimed.

        Not applicable.

Item 8. Exhibits.

        Exhibit No.             Description

          4.1  Certificate of Incorporation of the Registrant(1)

          4.2  Bylaws of the Registrant(2)

          4.3  Downey Savings and Loan Association,  F.A. Employees'  Retirement
               and Savings Plan

          4.4  Directed Employee Benefit Trust Agreement dated November 16, 1994

          23.1 Consent of KPMG Peat Marwick LLP
 
          23.2 Consent of Scott Bankhead & Co.

          24   Powers of Attorney (contained on signature page hereto)

(1)  Filed as part of the  Registrant's  Form S-8 filed on February 3,  1995 and
     incorporated herein by reference.

(2)  Filed as part of the Registrant's Form 8-B/A filed on January 17,  1995 and
     incorporated herein by reference.

     The  Registrant  hereby  undertakes  to submit the Plan and any  amendments
thereto  to  the  Internal  Revenue  Service  ("IRS")  in a  timely  manner  and
undertakes to make all changes required by the IRS in order to qualify the Plan.

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:

               (i)  to include any prospectus  required by  Section 10(a)(3)  of
                    the Securities Act;

               (ii) to reflect  in the  prospectus  any facts or events  arising
                    after the effective date of the  Registration  Statement (or
                    the most recent  post-effective  amendment  thereof)  which,
                    individually  or in the  aggregate,  represent a fundamental
                    change  in the  information  set  forth in the  Registration
                    Statement; and

                                       4
(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;

               provided,  however,  that paragraphs  (a)(1)(i) and (a)(2)(ii) do
               not  apply  if  the  information  required  to be  included  in a
               post-effective  amendment  by those  paragraphs  is  contained in
               periodic reports filed with or furnished to the Commission by the
               Registrant  pursuant to Section 13 or 15(d) of the  Exchange  Act
               that are incorporated by reference in the Registration Statement;

                    (2) That, for the purpose of determining any liability under
               the Securities Act, 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; and

                    (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,  each  filing  of  the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Exchange Act (and, where  applicable,  each filing of an employee benefit plan's
annual  report  pursuant  to   Section 15(d)   of  the  Exchange  Act)  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.

     (c) 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  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.

                                       5
SIGNATURES

     Pursuant  to  the  requirements  of  the  Securities  Act,  the  Registrant
certifies  that it 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 Newport Beach, State of California, on 1 day of July,
1997.

                                              DOWNEY FINANCIAL CORP.

                             By:                /s/ JAMES W. LOKEY              
                                ------------------------------------------------
                                                   James W. Lokey
                                        President and Chief Executive Officer

                                                 POWER OF ATTORNEY

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.  Each of the directors  and/or officers of
the Registrant whose signature appears below hereby appoints James W.  Lokey and
Thomas E.  Prince, and each of them severally as his or her  attorney-in-fact to
sign his or her name and on his or her behalf,  in any and all capacities stated
below,  and to file with the  Securities  and  Exchange  Commission  any and all
amendments,  including post-effective  amendments to this Registration Statement
as  appropriate,  and  generally  to do all such things in their behalf in their
capacities  as officers and  directors to enable  Registrant  to comply with the
provisions of the Securities Act of 1933, and all requirements of the Securities
and Exchange Commission.

     Name and Signature               Title                          Date

     /s/ JAMES W. LOKEY     President and Chief Executive          July 1, 1997
--------------------------  Officer (Principal Executive Officer)
      James W. Lokey        

   /s/ THOMAS E. PRINCE     Executive Vice President and Chief     July 1, 1997
--------------------------  Financial Officer (Principal
     Thomas E. Prince       Financial and Accounting Officer)              
                                        
                                        

                                       6
/s/ MAURICE L. McALISTER   Chairman of the Board                  July 1, 1997
--------------------------
   Maurice L. McAlister  

   /s/ CHERYL E. JONES      Vice Chairman of the Board             July 1, 1997
--------------------------
     Cheryl E. Jones  

 /s/ DR. DENNIS J. AIGNER   Director                               July 1, 1997
--------------------------
  Dr. Dennis J. Aigner           

   /s/ DR. PAUL KOURI       Director                               July 1, 1997
--------------------------
    Dr. Paul Kouri                   

    /s/ SAM YELLEN          Director                               July 1, 1997
--------------------------
      Sam Yellen                    

                            Director                               July 1, 1997 
--------------------------
    Brent McQuarrie                   

  /s/ LESTER C. SMULL       Director                               July 1, 1997
-------------------------- 
    Lester C. Smull                   

     Pursuant to the  requirements  of the  Securities Act of 1933, the trustees
(or other persons who  administer  the Plan) have duly caused this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Newport Beach, State of California, on July 1, 1997.

                                DOWNEY SAVINGS AND LOAN 
                                ASSOCIATION, F.A. EMPLOYEES'
                                RETIREMENT AND SAVINGS PLAN

                                By:              /s/ THOMAS E. PRINCE          
                                      ------------------------------------------
                                      Name:    Thomas E. Prince
                                      Title:   Member, Administrative Committee

                                       7
EXHIBIT INDEX

 Exhibit No.                       Description

     4.1     Certificate of Incorporation of the Registrant(1)

     4.2     Bylaws of the Registrant(2)

     4.3     Downey Savings and Loan Association, F.A. Employees' Retirement and
             Savings Plan 

     4.4     Directed  Employee Benefit Trust Agreement dated  November 16, 1994

     23.1    Consent of KPMG Peat Marwick LLP 

     23.2    Consent of Scott Bankhead & Co. 

     24      Powers of Attorney (contained on signature page hereto)

(1)  Filed as part of the  Registrant's  Form S-8 filed on February 3,  1995 and
     incorporated herein by reference.

(2)  Filed as part of the Registrant's Form 8-B/A filed on January 17,  1995 and
     incorporated herein by reference.

                                       8