content: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C. 20549
  
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
  
  
  Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
  
  Date of Report (Date of earliest event reported):     April 14, 1997
  
  
                    WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
               (Exact name of registrant as specified in its charter)
  
  
        California                       0-21897                  33-0707612
  (State or other jurisdiction          (Commission             (IRS Employer
   of incorporation)                     File Number)         Identification No.)
  
  
            3158 Redhill Avenue, Suite 120, Costa Mesa, California 92626
                 (Address of principal executive offices) (Zip Code)
  
  
  Registrant's telephone number, including area code:  (714) 662-5565
  
  
  
                                        N/A
            Former name or former address, if changed since last report)
  
  
  144.edg
  <PAGE>
  
  
  
  Item 2.  Acquisition or Disposition of Assets
  
           WNC Housing Tax Credit Fund V, L.P., Series 4 ("SERIES 4") has acquired
  a Local Limited  Partnership  Interest in D. Hilltop  Apartments,  Ltd., a Texas
  limited partnership ("HILLTOP" or the "Local Limited Partnership"). HILLTOP owns
  The Hilltop Apartments (the "Apartment Complex") in Palestine, Texas.
  
           The  following  tables  contain  information  concerning  the Apartment
  Complex and the Local Limited Partnership identified herein:
  
  <TABLE>
  
                                                                                                            LOCAL
                                                                                                            LIMITED        YEAR
                                       ESTIMATED                                                PERMANENT   PARTNERSHIP'S  CREDITS
              PROJECT                  CONSTRUC-    ESTIMATED                                   MORTGAGE    ANTICIPATED    TO BE
  LOCAL       NAME AND                 TION         DEVELOPMENT COST   NUMBER OF     BASIC      LOAN        AGGREGATE      FIRST
  LIMITED     NUMBER OF   LOCATION OF  COMPLETION   (INCLUDING         APARTMENT     MONTHLY    PRINCIPAL   TAX CREDITS    AVAIL-
  PARTNERSHIP BUILDINGS   PROPERTY     DATE         LAND COST)         UNITS         RENTS      AMOUNT      (1)            ABLE
  
  
  <S>                                                <C>                <C>           <C>        <C>          <C>           <C> 
  HILLTOP      The         Palestine    December     $596,919           8  1BR units  $262       $473,450     $221,880      1997
               Hilltop     (Anderson    1996                            16 2BR units  $320       RD(3)
               Apartments  County),
                           Texas
               4
               buildings
               (2)
  
  
  
  <FN>
  (1)      Low Income Housing Credits are available over a 10-year period. For the
           year in which the credit first becomes available, SERIES 3 will receive
           only that  percentage  of the annual  credit which  corresponds  to the
           number of months  during  which  SERIES 3 was a limited  partner of the
           Local Limited  Partnership,  and during which the Apartment Complex was
           completed and in service.
  
  (2)      Rehabilitation property.
  
  (3)      RD provides mortgage loans under the RD Section 515 Mortgage Loan 
           Program. This  mortgage  loan will be a 50-year  loan and will bear 
           annual interest at a market  rate prior to  reduction  of the interest
           rate by a mortgage  interest subsidy to an annual rate of 10%, with  
           principal and interest  payable  monthly based on a 50-year 
           amortization schedule.
  </FN>
  </TABLE>
  
           Palestine  (population  18,100) is in eastern Texas at the intersection
  of U. S. Highways 287, 79 and 84,  approximately  100 miles southeast of Dallas.
  The major employers for Palestine residents are Texas Department of Corrections,
  Memorial Hospital and Murray Corp (air conditioning compressors).
  
  <TABLE>
  
                                                                                 SHARING                      ESTIMATED
                                                                                 RATIOS:         SERIES   3'  ACQUISITION
                                                                                 ALLOCATIONS     s            FEES PAYABLE
  LOCAL           LOCAL                                             SHARING      (4) AND         CAPITAL      TO FUND
  LIMITED         GENERAL            PROPERTY        DEVELOPMENT    RATIOS:      SALE OR         CONTRI-BUTIONMANAGER
  PARTNERSHIP     PARTNER            MANAGER (1)     FEE (2)        CASH   FLOW  REFINANCING     (6)
                                                                    (3)          PROCEEDS (5)
  
  <S>                                                <C>                <C>      <C>             <C>          <C>    
  HILLTOP         Donald W. Sowell   Wilmic          $72,330        WNC:1st      99/1            $120,814     $12,100
                                     Ventures, Inc.                 $400         50/50
                                                                    LGP:    2nd
                                                                    $800
                                         The
                                      balance:
                                        99/1
  
  
  
  <FN>
  (1) The maximum annual  management fee payable to the property manager generally
  is  determined  pursuant to lender  regulations.  The Local  General  Partner is
  authorized to employ either itself or one of its  affiliates,  or a third party,
  as property manager for leasing and management of the Apartment  Complex so long
  as the fee therefor  does not exceed the amount  authorized  and approved by the
  lender for the Apartment Complex.
  
  (2)  The  Local  Limited  Partnership  will  pay its  Local  General  Partner  a
  development  fee  in  the  amount  set  forth,  for  services  incident  to  the
  development and construction of the Apartment  Complex,  which services include:
  negotiating  the  financing  commitments  for the  Apartment  Complex;  securing
  necessary  approvals and permits for the  development  and  construction  of the
  Apartment Complex; and obtaining allocations of Low Income Housing Credits. This
  payment will be made in  installments  after receipt of each  installment of the
  capital contributions made by SERIES 4.
  
                                         2
  <PAGE>
  
  (3)  Reflects  the amount of the net cash flow from  operations,  if any,  to be
  distributed  to SERIES 4 ("WNC") and the Local  General  Partner  ("LGP") of the
  Local Limited Partnership for each year of operations.  Generally, to the extent
  that  the  specific  dollar  amounts  which  are to be paid to WNC are not  paid
  annually,  they will accrue and be paid from sale or refinancing  proceeds as an
  obligation of the Local Limited Partnership.
  
  (4) Subject to certain special allocations,  reflects the respective  percentage
  interests in profits,  losses and Low Income Housing Credits of SERIES 4 and the
  Local General Partner.
  
  (5) Reflects the percentage  interests of SERIES 4 and the Local General Partner
  in any net cash proceeds  from sale or  refinancing  of the  Apartment  Complex,
  after  payment  of  the  mortgage  loan  and  other  Local  Limited  Partnership
  obligations (see, e.g., note 3), and the following,  in the order set forth: the
  capital  contributions  of SERIES 4; and the capital  contribution  of the Local
  General Partner.
  
  (6)  SERIES  4  will  make  its  capital  contributions  to  the  Local  Limited
  Partnership  in  stages,  with each  contribution  due when  certain  conditions
  regarding  construction  or  operations  of  the  Apartment  Complex  have  been
  fulfilled.
  </FN>
  </TABLE>
  
  
                                         3
  <PAGE>
  
  
  Item 7.  Financial Statements and Exhibits
  
           a.       Financial Statements of Businesses Acquired.
  
                    Inapplicable.
  
           b.       Proforma Financial Information
  
                    Proforma   Financial    Information   will   be   filed   upon
                    availability.
  
           c.       Exhibits
  
                    10.1     Amended and Restated Agreement of Limited Partnership
                             of D. Hilltop Apartments, Ltd.
  
                                         4
  <PAGE>
  
  
                                     SIGNATURES
  
           Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
  the  registrant  has duly  caused  this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
                    WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
  
  Date:  April 23, 1997                       By:      WNC &  Associates, Inc.,
                                                       General Partner
  
                                                       By: /s/ JOHN B. LESTER, JR.
                                                             John B. Lester, Jr.,
                                                             President
  
                                         5
  <PAGE>
  
  
                                   INDEX TO EXHIBITS
  
  
  Exhibit
  Number            Exhibit
  
  10.1              Amended and Restated Agreement of Limited Partnership of 
                    D. Hilltop Apartments, Ltd.
  
  <PAGE>
  
  
  
  
  
  
                                AMENDED AND RESTATED
  
                         AGREEMENT OF LIMITED PARTNERSHIP OF
  
                             D. HILLTOP APARTMENTS, LTD.
  
  
  
  
  <PAGE>
  
  
  
  
  
                                 TABLE OF CONTENTS
  
                                                                           Page
  
  I.       DEFINITIONS .........................................           1
  
           1.1      "Accountant" ...................................       1
           1.2      "Act" ..........................................       1
           1.3      "Actual Tax Credit".............................       1
           1.4      "Adjusted Capital Account Deficit" .............       1
           1.5      "Affiliate" ....................................       2
           1.6      "Agreement" or "Partnership Agreement"..........       2
           1.7      "Assignee" .....................................       2
           1.8      "Capital Account" ..............................       2
           1.9      "Capital Contribution" .........................       3
           1.10     "Cash Flow From Operations" ....................       3
           1.11     "Code" .........................................       3
           1.12     "Completion of Construction"....................       3
           1.13     "Compliance Period".............................       4
           1.14     "Construction Contract".........................       4
           1.15     "Construction Loan" ............................       4
           1.16     "Contractor" ...................................       4
           1.17     "Debt Service Coverage".........................       4
           1.18     "Development Fee" ..............................       5
           1.19     "Distributions" ................................       5
           1.20     "Equity Loan" ..................................       5
           1.21     "Event of Bankruptcy" ..........................       6
           1.22     "Fair Market Value" ............................       6
           1.23     "Financial Interest" ...........................       6
           1.24     "First Year Certificate" .......................       6
           1.25     "FmHA" .........................................       6
           1.26     "FmHA Interest Credit Agreement" ...............       6
           1.27     "FmHA Loan Agreement" ..........................       6
           1.28     "General Partner" ..............................       7
           1.29     "Gross Asset Value" ............................       7
           1.30     "Hazardous Substance"...........................       8
           1.31     "Income and Losses".............................       8
           1.32     "Insurance".....................................       9
           1.33     "Insurance Company".............................       10
           1.34     "Interest" .....................................       10
           1.35     "LIHC" .........................................       10
           1.36     "Limited Partner" ..............................       10
           1.37     "Liquidation" ..................................       10
           1.38     "Minimum Set-Aside Test" .......................       10
           1.39     "Mortgage" or "Mortgage Loan" ..................       10
           1.40     "Mortgage Note" ................................       11
           1.41     "Nonrecourse Deductions"........................       11
           1.42     "Nonrecourse Liability".........................       11
           1.43     "Operating Deficit" ............................       11
           1.44     "Operating Deficit Guarantee Period"............       11
  
                                         i
  <PAGE>
  
           1.45     "Original Limited Partner" .....................       11
           1.46     "Partner" ......................................       11
           1.47     "Partner Nonrecourse Debt" .....................       11
           1.48     "Partner Nonrecourse Debt Minimum Gain" ........       11
           1.49     "Partner Nonrecourse Deductions" ...............       11
           1.50     "Partnership" ..................................       12
           1.51     "Partnership Administration Fee" ...............       12
           1.52     "Partnership Minimum Gain" .....................       12
           1.53     "Permanent Mortgage Commencement" ..............       12
           1.54     "Person" .......................................       12
           1.55     "Project" ......................................       12
           1.56     "Project Documents" ............................       12
           1.57     "Projected Tax Credits" ........................       13
           1.58     "Qualified Income Offset Item" .................       13
           1.59     "Qualified Tenants" ............................       13
           1.60     "Refinancing" ..................................       13
           1.61     "Rent Restriction Test" ........................       13
           1.62     "Sale" .........................................       13
           1.63     "Sale or Refinancing Proceeds" .................       13
           1.64     "State" ........................................       14
           1.65     "State Tax Credit Agency" ......................       14
           1.66     "Substitute Limited Partner" ...................       14
           1.67     "Tax Credit" ...................................       14
           1.68     "Tax Credit Conditions".........................       14
           1.69     "TRA 1986" .....................................       14
           1.70     "Treasury Regulations" .........................       14
  
  II.      NAME ................................................           14
  
  III.     PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE ........           14
  
           3.1      Principal Executive Office .....................       14
           3.2      Agent for Service of Process ...................       15
  
  IV.      PURPOSE .............................................           15
  
  V.       TERM ................................................           15
  
  VI.      GENERAL PARTNER'S CONTRIBUTIONS AND LOANS ...........           15
  
           6.1      Capital Contribution of General Partner ........       15
           6.2      Construction and Operating Obligations .........       15
           6.3      General Partner Loans ..........................       16
  
  VII.     LIMITED PARTNER'S CAPITAL CONTRIBUTIONS .............           17
  
           7.1      Original Limited Partner .......................       17
           7.2      Capital Contribution of Limited Partner ........       17
           7.3      Repurchase of Limited Partner's Interest .......       19
           7.4      Reduction of Capital Contribution...............       20
           7.5      Return of Capital Contribution .................       21
           7.6      Liability of Limited Partner ...................       21
  
                                         ii
  <PAGE>
  
  
  VIII. WORKING CAPITAL AND RESERVES .......................               22
  
           8.1      Operation and Maintenance Reserve...............       22
           8.2      Reserve for Replacements........................       22
           8.3      Other Reserves..................................       22
  
  IX.      MANAGEMENT AND CONTROL ..............................           22
  
           9.1      Power and Authority of General Partner .........       22
           9.2      Payments to the General Partners and Others ....       23
           9.3      Specific Powers of the General Partner .........       25
           9.4      Authority Requirements..........................       25
           9.5      Limitations on General Partner's
                    Power and Authority ............................       26
           9.6      Restrictions on Authority of General Partner....       27
           9.7      Duties of General Partner ......................       28
           9.8      Partnership Expenses ...........................       28
           9.9      General Partner Expenses .......................       30
           9.10     Other Business of Partners .....................       30
           9.11     Covenants, Representations and Warranties.......       30
  
  X.       ALLOCATIONS OF INCOME, LOSSES AND CREDITS ...........           33
  
           10.1     General ........................................       33
           10.2     Allocations From Sale or Refinancing............       33
           10.3     Special Allocations.............................       35
           10.4     Curative Allocations............................       38
           10.5     Other Allocation Rules..........................       38
           10.6     Tax Allocations:  Code Section 704(c)...........       39
           10.7     Allocation Among Limited Partners
                    and Assignees ..................................       39
           10.8     Allocation Among General Partners ..............       40
           10.9     Modification of Allocations ....................       40
  
  XI.      DISTRIBUTION ........................................           40
  
           11.1     Distribution of Cash Flow From Operations ......       40
           11.2     Distribution Upon Sale or Refinancing ..........       41
  
  XII.     VOLUNTARY TRANSFERS OF LIMITED PARTNER'S INTEREST
           IN THE PARTNERSHIP...................................           41
  
           12.1     Assignment of Limited Partner's Interest .......       41
           12.2     Effective Date of Transfer .....................       42
           12.3     Invalid Assignment .............................       42
           12.4     Assignee's Rights to Allocations and
                    Distributions ..................................       42
           12.5     Substitution of Assignee as Limited Partner ....       43
           12.6     Death, Bankruptcy, Incompetency, etc.
                    of a Limited Partner ...........................       43
           12.7     Assignment .....................................       43
  
                                        iii
  <PAGE>
  
  
  XIII.    RESIGNATION, REMOVAL AND REPLACEMENT OF GENERAL
           PARTNER ............................................            44
  
           13.1     Resignation of General Partner .................       44
           13.2     Removal of General Partner .....................       44
           13.3     Admission of Substitute General Partner ........       45
           13.4     Continuing Liability ...........................       46
           13.5     Transfer of Interest ...........................       46
           13.6     Payment to General Partner Upon Resignation,
                    Death or Insanity ..............................       46
  
  XIV.     BOOKS AND ACCOUNTS, REPORTS, TAX RETURNS,
           FISCAL YEAR AND BANKING .............................           48
  
           14.1     Books and Accounts .............................       48
           14.2     Accounting Reports .............................       49
           14.3     Other Reports ..................................       50
           14.4     Late Reports ...................................       51
           14.5     Annual Site Visits .............................       52
           14.6     Tax Returns ....................................       52
           14.7     Fiscal Year ....................................       52
           14.8     Banking ........................................       52
           14.9     Certificates and Elections .....................       52
  
  XV.      DISSOLUTION, WINDING UP, TERMINATION AND
           LIQUIDATION OF THE PARTNERSHIP ......................           53
  
           15.1     Dissolution of Partnership .....................       53
           15.2     Return of Capital Contribution upon
                    Dissolution ....................................       53
           15.3     Distributions of Assets ........................       54
           15.4     Deferral of Liquidation.........................       55
           15.5     Liquidation Statement ..........................       55
           15.6     Certificates of Dissolution; Certificate of
                    Cancellation of Certificate of Limited
                    Partnership ...................................        56
  
  XVI.     AMENDMENTS ..........................................           56
  
  XVII. MISCELLANEOUS ......................................               57
  
           17.1      Voting Rights .................................       57
           17.2      Meeting of Partnership ........................       57
           17.3      Notices .......................................       58
           17.4      Successors and Assigns ........................       58
           17.5      FmHA Regulations ..............................       58
           17.6      Recording of Certificate of Limited
                     Partnership. ..................................       59
  
                                         iv
  
  <PAGE>
  
           17.7      Amendment of Certificate of Limited
                     Partnership ...................................       59
           17.8      Counterparts ..................................       60
           17.9      Captions ......................................       60
           17.10     Certain Provisions ............................       60
           17.11     Saving Clause .................................       60
           17.12     Number and Gender .............................       61
           17.13     Entire Agreement ..............................       61
           17.14     Governing Law .................................       61
           17.15     Attorney's Fees ...............................       61
           17.16     Receipt of FmHA Correspondence ................       61
           17.17     Security Interest and Right of Set-Off ........       61
  
  EXHIBIT A - Legal Description...................... A-1
  EXHIBIT B - Form of Opinion of Counsel............. B-1  -  B-4
  EXHIBIT C - Certification and Agreement............ C-1  -  C-4
  EXHIBIT D - General Partner Certification.......... D-1  -  D-3
  EXHIBIT E - Report of Operations................... E-1  -  E-9
  
  
                                         v
  <PAGE>
  
  
                           AMENDED AND RESTATED AGREEMENT
                              OF LIMITED PARTNERSHIP OF
                             D. HILLTOP APARTMENTS, LTD.
  
  
           D.  HILLTOP   APARTMENTS,   LTD.,  a  Texas  limited  partnership  (the
  "Partnership")  recorded a  certificate  of limited  partnership  with the Texas
  Secretary of State on July 25, 1994. A partnership  agreement dated July 1, 1994
  was entered  into by and between  DONALD W. SOWELL as the general  partner  (the
  "General  Partner") and BEATRICE W. SOWELL as the limited partner (the "Original
  Limited Partner").
  
           Effective as of the date written below,  WNC HOUSING TAX CREDIT FUND V,
  L.P.,  SERIES 4, a California  limited  partnership (the "Limited  Partner") has
  been admitted to the  Partnership as successor  limited partner and the Original
  Limited  Partner has  liquidated  its interest in the  Partnership.  The Limited
  Partner and the General  Partner  desire hereby to amend and restate the Limited
  Partnership Agreement of the Partnership dated July 1, 1994.
  
       NOW,  THEREFORE,  in  consideration of their mutual  agreements  herein set
  forth,  the Partners  hereby agree to amend and restate the Agreement of Limited
  Partnership  of D.  HILLTOP  APARTMENTS,  LTD.  in its  entirety  to  provide as
  follows:
  
                                      ARTICLE I
  
                                     DEFINITIONS
  
           Section 1.1  "Accountant"  shall mean H.D.  Morris Co.,  Inc.,  or such
  other firm of independent  certified public accountants as may be engaged by the
  General  Partner  with  the  consent  of the  Limited  Partner  to  prepare  the
  Partnership income tax returns.
  
           Section 1.2 "Act" shall mean the Revised Limited Partnership Act of the
  State.
  
           Section 1.3 "Actual Tax Credit" shall mean as of any point in time, the
  total amount of the LIHC actually  allocated by the  Partnership  to the Limited
  Partner,  representing  ninety-nine percent (99%) of the LIHCs actually received
  by the Partnership, as shown on the applicable tax return of the Partnership.
  
           Section 1.4 "Adjusted  Capital Account Deficit" shall mean with respect
  to any Partner,  the deficit balance,  if any, in such Partner's Capital Account
  as of the end of the relevant fiscal year,  after giving effect to the following
  adjustments:
  
  
  
                                         1
  <PAGE>
  
           (a) Credit to such  Capital  Account any amounts  which such Partner is
  obligated  to restore or is deemed to be  obligated  to restore  pursuant to the
  penultimate  sentences  of  Treasury  Regulations  Sections   1.704-2(g)(1)  and
  1.704-2(i)(5); and
  
           (b) Debit to such  Capital  Account  the items  described  in  Sections
  1.704-2(b)(2)(ii)(d)(4),  1.704-2(b)(2)(ii)(d)(5) and 1.704-2(b)(2)(ii)(d)(6) of
  the Treasury Regulations.
  
  The foregoing  definition  of Adjusted  Capital  Account  Deficit is intended to
  comply  with the  provisions  of Section  1.704-1(b)(2)(ii)(d)  of the  Treasury
  Regulations and shall be interpreted consistently therewith.
  
           Section  1.5  "Affiliate"   shall  mean  (i)  any  Person  directly  or
  indirectly  controlling,  controlled  by, or under  common  control with another
  Person;  (ii) any Person owning or  controlling  10% or more of the  outstanding
  voting securities of such other Person; (iii) any officer, director, trustee, or
  partner of such other Person;  and (iv) if such Person is an officer,  director,
  trustee or general  partner,  any company for which such Person acts in any such
  capacity.
  
           Section 1.6  "Agreement"  or  "Partnership  Agreement"  shall mean this
  Amended and Restated Agreement of Limited Partnership, as it may be amended from
  time to time.
  
           Section 1.7  "Assignee"  shall mean a Person who has  acquired all or a
  portion of the Limited Partner's  beneficial interest in the Partnership and has
  not become a substitute Limited Partner.
  
           Section 1.8 "Capital Account" shall mean, with respect to each Partner,
  the account  maintained  for such Partner  comprised of such  Partner's  Capital
  Contribution  as  increased  by  allocations  of  Partnership  Income  (or items
  thereof)  and any items in the  nature of  income  or gain  which are  specially
  allocated  pursuant  to  Article X hereof,  and  decreased  by the amount of any
  Distributions  made to such Partner,  and allocations of Partnership  Losses (or
  items  thereof)  and any items in the  nature of  expenses  or losses  which are
  specially allocated pursuant to Article X hereof.
  
           In the event of any  transfer  of an  interest  in the  Partnership  in
  accordance with the terms of this Agreement, the transferee shall succeed to the
  Capital  Account of the  transferor to the extent it relates to the  transferred
  interest,  provided that if the transfer of any interest causes a termination of
  the Partnership pursuant to Code Section  708(b)(1)(B),  the Capital Accounts of
  all Partners,  including the transferee, shall be redetermined as of the date of
  such  termination.  In such event,  the Capital Account of each Partner shall be
  
  
                                         2
  <PAGE>
  
  equal to the net fair market value of its  interest as of such date.  Subsequent
  to such  redetermination,  allocations of Income and Loss with respect to assets
  held by the Partnership on the date of such redetermination shall be governed by
  the principles set forth in Code Section 704(c) and the Treasury Regulations.
  
           The foregoing  definition  and the other  provisions of this  Agreement
  relating to the  maintenance  of Capital  Accounts  are  intended to comply with
  Treasury  Regulation  Section 1.704,  and shall be interpreted  and applied in a
  manner consistent with such Treasury Regulation.
  
           Section  1.9  "Capital  Contribution"  shall  mean the total  amount of
  money, or the initial Gross Asset Value of property (net of liabilities securing
  such  contributed  property that the Partnership is considered to assume or take
  subject to under Section 752 of the Code),  contributed to the  Partnership,  if
  any, by all the Partners or any class of Partners or any one Partner as the case
  may be (or by a predecessor-in-interest of such Partner or Partners), reduced by
  any of such capital which shall have been returned  pursuant to Section 7.3, 7.4
  or 7.5 of this  Agreement.  A loan to the  Partnership by a Partner shall not be
  considered as a Capital Contribution.
  
           Section 1.10 "Cash Flow From Operations" shall mean gross receipts (not
  including  Capital  Contributions,  Sale or Refinancing  Proceeds or proceeds of
  Partnership borrowings) from Partnership operations, determined on a cash basis,
  less debt payments,  capital expenditures to the extent not paid from borrowings
  or  reserves,  other  reserves  pursuant to Section 8.3 and  operating  expenses
  associated with rental and maintenance of the Project;  but excluding deductions
  for cost recovery of buildings,  improvements and personal property amortization
  of any financing fees.
  
           Section 1.11 "Code" shall mean the  Internal  Revenue Code of 1986,  as
  amended, or any successor statute.
  
           Section 1.12 "Completion of Construction"  shall mean the completion of
  construction  of the  Project  substantially  in  accordance  with  the  Project
  Documents in order to obtain the  required  certificates  of  occupancy  (or the
  local equivalent) for all (24) twenty-four units as evidenced by the issuance of
  the  certificate  of  occupancy  by the  inspecting  architect,  the FmHA of the
  governmental  agency having  jurisdiction over the Project of by the issuance of
  the inspecting architect's certification. The construction shall be completed in
  good  workmanlike  manner,  free and clear of all  mechanics,  materialmen's  or
  similar  liens  and the  Project  shall  be  equipped  with  all  necessary  and
  appropriate  fixtures,  equipment  and articles of personal  property  including
  refrigerators and ranges.
  
  
  
                                         3
  <PAGE>
  
           Section  1.13  "Compliance  Period"  shall mean the period set forth in
  Section 42 (i)(1) of the Code, as amended, or any successor statute.
  
           Section  1.14  "Construction  Contract"  shall  mean  the  construction
  contract in the amount of $354,700  entered into between the  Partnership and
  the Contractor pursuant to which the Project is being Constructed.
  
           Section 1.15  "Construction  Loan" shall mean the loan  obtained by the
  Partnership from Midland Mortgage Investment Corporation in the principal amount
  $371,450  at 8.75%  per annum for term of six  months to  provide  funds for the
  acquisitions, renovation, and/or construction and development of the Project.
  
           Section 1.16 "Contractor"  shall mean D.W. & S.  Construction,  Inc.,
  which is the  general  construction contractor of the Project.
  
           Section 1.17 "Debt Service  Coverage"  shall mean the ratio between the
  net  operating  income  and  the  debt  service  required  to  be  paid  on  the
  Mortgage(s); as example, a 1.15 Debt Service Coverage means that for every $1.00
  of debt service  required to be paid there must be $1.15 of net operating income
  available.  For purposes of this  definition net operating  income is the actual
  receipt on a cash basis by the  Partnership  of revenues from  operations of the
  Partnership,  including, without limitation,  rental income (but not any subsidy
  thereof  from the  General  Partner  or an  Affiliate  thereof),  but  excluding
  prepayments,  security  deposits and interest  thereon,  less all cash operating
  obligations  of the  Partnership  (other  than those  covered by  insurance)  in
  accordance  with the applicable  budget adopted by the Partnership in accordance
  with  Section  14.3(j) of this  Agreement  (the  "Budget"),  including,  without
  limitation,  the  payment of  Management  Agent fees  (which  shall be deemed to
  include that portion of such fees which is deferred and not currently  paid) and
  the funding of reserves in accordance with Article VIII of this Agreement, and a
  reserve for all taxes or payments in lieu of taxes and any other  expenses which
  may  reasonably  be expected to be paid in a  subsequent  period but which on an
  accrual  basis are  allocable  to the  period  in  question,  such as  insurance
  premiums, audit, tax or accounting expenses.  Without limiting the generality of
  the  foregoing,  the  Partnership's  gross revenues for purposes of this Section
  shall not include Capital Contributions, borrowings, any lump-sum payment or any
  other  extraordinary  receipt of funds thereby,  or interest or any other income
  earned on investment of its funds,  and unless  otherwise  provided in a Budget,
  the cash  operating  obligations of the  Partnership  shall be deemed to include
  real estate taxes for the period at the fully assessed rate. A worksheet for the
  
  
                                         4
  <PAGE>
  
  calculation  of Debt  Service  Coverage  is found in the  Report  of  Operations
  exhibit attached to this Agreement and incorporated herein by this reference.
  
           Section  1.18  "Development  Fee"  shall  mean the fee  payable  to the
  General  Partner or an  Affiliate  of the  General  Partner  pursuant to Section
  9.2(a) for services incident to the development and construction of the Project,
  which services shall include,  but not be limited to, the  negotiations  for the
  payment of any fees and for the permanent financing commitments for the Project;
  the securing of all  necessary  approvals  and permits for the  development  and
  construction of the Project; the selection and negotiation of contracts with the
  marketing  consultant,   engineer,   architect,  general  contractor  and  other
  professionals,  and the  supervision of such parties;  the payment of the market
  study or market  evaluation report or payment of other depreciable items for tax
  purposes;   the   advancing   of  risk   capital  to  pay  for  the  payment  of
  pre-development  activities;  and the  preparation  and  submission  of the LIHC
  application.
  
           Section 1.19  "Distributions"  shall mean the total amount of money, or
  the Gross Asset Value of property (net of liabilities  securing such distributed
  property  that such  Partner is  considered  to assume or take  subject to under
  Section  752 of the  Code),  distributed  to  Partners  with  respect  to  their
  interests in the Partnership,  but shall not include any payments to the General
  Partner or its  Affiliates  for fees or other  compensation  as provided in this
  Agreement or any guaranteed  payment within the meaning of Section 707(c) of the
  Code, as amended, or any successor thereto.
  
           Section 1.20 "Equity  Loan" shall mean any loan secured by  Partnership
  property  (excluding a Mortgage Loan,  Refinancing  or a Supplemental  Loan) for
  purpose  of  providing  a return  of,  or a return  on,  the  Partner's  Capital
  Contribution as provided for in FmHA  Regulations  Section  1965.201 et seq., 42
  U.S.C.  Section 1485 (Equity  Takeout  Incentive  Loan), as amended from time to
  time, or other loans approved by the FmHA and Limited  Partner.  The Equity Loan
  will not supersede the Mortgage Loan but will be an additional  indebtedness  on
  Partnership property.  All Equity Loans must be approved by the FmHA and Limited
  Partner  prior to funding of the Equity  Loan.  The Equity  Loan funds  shall be
  distributed as follows: (a) first, payment of pre-approved  expenses (which must
  be  commercially  reasonable and  substantiated)  paid to  non-Affiliated  third
  parties  (unless  the  Partners  consent  to the use an  Affiliated  party)  for
  packaging the Equity Takeout Loan  application  and for locating and closing the
  Equity  Takeout Loan; (b) second,  to the Limited  Partner in an amount equal to
  its Capital  Contribution;  (c) third, to the General Partner in an amount equal
  to its Capital Contribution;  (d) thereafter, 50% to the Limited Partner and 50%
  to the General Partner.
  
  
  
                                         5
  <PAGE>
  
           Section  1.21  "Event of  Bankruptcy"  shall mean the  adjudication  of
  bankruptcy or insolvency by a court of competent jurisdiction;  the making of an
  assignment  for the  benefit  of  creditors;  or the  filing  of a  petition  to
  accomplish  any of the  foregoing,  unless such petition is dismissed  within 60
  days thereafter; or a like event.
  
           Section  1.22 "Fair  Market  Value"  shall  mean,  with  respect to any
  property,  real or personal, the price a ready, willing and able buyer would pay
  to a ready, willing and able seller of the property, provided that such value is
  reasonably  agreed to between the parties in arm's-length  negotiations  and the
  parties have sufficiently adverse interests.
  
           Section  1.23  "Financial  Interest"  shall mean the General  Partner's
  capital interest in the Partnership to be contributed and maintained pursuant to
  the requirements of FmHA Instruction 1944-E, Section  1944.211(a)(13)(ii) or any
  amendments  thereto.  Such  Financial  Interest  shall not affect the  Partners'
  allocable share of the Profits, Losses, Tax Credits or Cash Flow From Operations
  as set forth in this Agreement.
  
           Section 1.24 "First Year Certificate"  shall mean the certificate to be
  filed by the General  Partner with the Secretary of the Treasury  within 90 days
  following the close of the first taxable year of the Project as required by Code
  Section 42(1)(1), as amended, or any successor thereto.
  
           Section  1.25  "FmHA"  shall  mean the  Rural  Economic  and  Community
  Development Services and any successor thereto.
  
           Section 1.26 "FmHA Interest Credit  Agreement"  shall mean the Multiple
  Family Housing Interest Credit and Rental Assistance Agreement (Form FmHA 1944-7
  or any successor thereof) between the FmHA and the Partnership  whereby the FmHA
  will provide a monthly credit subsidy to the Partnership's Mortgage account when
  the Partnership makes each monthly payment on the Mortgage.
  
           Section 1.27 "FmHA Loan Agreement" shall mean the Loan Agreement for an
  RRH Loan to a Limited Partnership Operating on a Limited Profit Basis (Form FmHA
  1944-34 or any successor  thereof)  between the FmHA and the Partnership made in
  consideration  of the Mortgage Loan to the  Partnership  by the FmHA pursuant to
  Section  515(b) of the  Housing  Act of 1949 to build a low to  moderate  income
  apartment complex.
  
           Section  1.28  "General  Partner"  shall mean DONALD W. SOWELL and such
  other  Persons as are admitted to the  Partnership  as  additional or substitute
  General Partners pursuant to this Agreement.
  
  
  
                                         6
  <PAGE>
  
           Section  1.29 "Gross Asset Value" shall mean with respect to any asset,
  the asset's adjusted basis for federal income tax purposes, except as follows:
  
           (a) The initial Gross Asset Value of any asset contributed by a Partner
  to the  Partnership  shall be the gross  fair  market  value of such  asset,  as
  determined by the contributing  Partner and the General Partner,  provided that,
  if the contributing  Partner is a General Partner, the determination of the fair
  market value of a contributed asset shall be determined by appraisal;
  
           (b) The Gross Asset Values of all Partnership  assets shall be adjusted
  to equal their respective gross fair market values, as determined by the General
  Partner,  as of the  following  times:  (i)  the  acquisition  of an  additional
  interest in the Partnership by any new or existing  Partner in exchange for more
  than a de minimis Capital Contribution; (ii) the distribution by the Partnership
  to a  Partner  of more  than a de  minimis  amount of  Partnership  property  as
  consideration  for an interest in the Partnership;  and (iii) the liquidation of
  the   Partnership   within  the   meaning  of   Treasury   Regulations   Section
  1.704-1(b)(2)(ii)(g):  provided,  however,  that  the  adjustments  pursuant  to
  clauses (i) and (ii) above shall be made only if the General Partner  reasonably
  determines  that such  adjustments  are necessary or  appropriate to reflect the
  relative economic interests of the Partners in the Partnership;
  
           (c) The Gross Asset Value of any Partnership  asset  distributed to any
  Partner  shall be adjusted to equal the gross fair market value of such asset on
  the date of  distribution  as  determined  by the  distributee  and the  General
  Partner,   provided  that,  if  the  distributee  is  a  General  Partner,   the
  determination  of the  fair  market  value  of the  distributed  asset  shall be
  determined by appraisal; and
  
           (d) The Gross Asset Values of Partnership assets shall be increased (or
  decreased)  to reflect  any  adjustments  to the  adjusted  basis of such assets
  pursuant to Code Section 734(b) or Code Section  743(b),  but only to the extent
  that such  adjustments  are taken into account in determining  Capital  Accounts
  pursuant  to  Treasury  Regulations  Section  1.704-1(b)(2)(iv)(m)  and  Section
  10.3(g) hereof;  provided however, that Gross Asset Values shall not be adjusted
  pursuant to this Section 1.29(d) to the extent the General  Partners  determines
  that  an  adjustment   pursuant  to  Section  1.29(b)  hereof  is  necessary  or
  appropriate in connection with a transaction  that would otherwise  result in an
  adjustment pursuant to this Section 1.29(d).
  
  
  
                                         7
  <PAGE>
  
  If the Gross Asset Value of an asset has been determined or adjusted pursuant to
  Section 1.29(a),  Section 1.29(b),  or Section 1.29(d) hereof,  such Gross Asset
  Value shall thereafter be adjusted by the  depreciation  taken into account with
  respect to such asset for purposes of computing Income and Losses.
  
           Section  1.30  "Hazardous   Substance"   shall  mean  and  include  any
  substance,  material  or waste,  including  asbestos,  petroleum  and  petroleum
  products  (including  crude oil), that is or becomes  designated,  classified or
  regulated  as  "toxic" or  "hazardous"  or a  "pollutant"  or that is or becomes
  similarly designated, classified or regulated, under any federal, state or local
  law, regulation or ordinance  including,  without  limitation,  Compensation and
  Liability Act of 1980, as amended,  the Hazardous Materials  Transportation Act,
  as amended,  the Resource  Conservation  and Recovery  Act, as amended,  and the
  regulations adopted and publications promulgated pursuant thereto.
  
           Section 1.31 "Income and Losses"  shall mean,  for each taxable year or
  other period,  an amount equal to the  Partnership's  taxable income or loss for
  such year or period, determined in accordance with Code Section 703(a) (for this
  purpose,  all items of income,  gain,  loss or  deduction  required to be stated
  separately  pursuant  to Code  Section  703(a)(1)  shall be  included in taxable
  income or loss), with the following adjustments:
  
           (i) Any income of the  Partnership  that is exempt from federal  income
  tax and not otherwise taken into account in computing  Income or Losses pursuant
  to this definition shall be added to such taxable income or loss;
  
           (ii) Any  expenditures  of the  Partnership  described  in Code Section
  705(a)(2)(B) or treated as Code Section  705(a)(2)(B)  expenditures  pursuant to
  Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in
  computing  Income and Losses  pursuant to this  definition,  shall be subtracted
  from such taxable income or loss;
  
           (iii) In the event the Gross  Asset Value of any  Partnership  asset is
  adjusted pursuant to subparagraphs (ii) or (iii) of the definition thereof,  the
  amount of such  adjustment  shall be taken into account as gain or loss from the
  disposition of such asset for purposes of computing Income and Losses;
  
           (iv) Gain or loss resulting from any disposition of Partnership  assets
  with respect to which gain or loss is  recognized  for federal  income  purposes
  shall be computed by reference to the Gross Asset Value of the property disposed
  of,  notwithstanding  that the adjusted tax basis of such property  differs from
  its Gross Asset Value;
  
  
  
                                         8
  <PAGE>
  
           (v) In lieu of the depreciation,  amortization, and other cost recovery
  deductions  taken into account in computing such taxable  income or loss,  there
  shall be taken into account  depreciation  for such fiscal year or other period,
  computed as provided below; and
  
           (vi) Notwithstanding any other provision of this definition,  any items
  which are specially  allocated  pursuant to Sections 10.3,  10.4, or 10.5 hereof
  shall not otherwise be taken into account in computing Income or Losses.
  
  Depreciation  for each  fiscal  year or other  period  shall  be  calculated  as
  follows:  an  amount  equal to the  depreciation,  amortization,  or other  cost
  recovery  deduction  allowable  with  respect to an asset for such year or other
  period for federal income tax purposes,  except that if the Gross Asset Value of
  an asset differs from its adjusted  basis for federal income tax purposes at the
  beginning of such year or other  period,  depreciation  shall be an amount which
  bears the same ratio to such  beginning  Gross Asset Value as the federal income
  tax depreciation,  amortization,  or other cost recovery deduction for such year
  or other period bears to such beginning adjusted tax basis.  Provided,  however,
  that if the  federal  income  tax  depreciation,  amortization,  or  other  cost
  recovery deduction for such year is zero,  depreciation shall be determined with
  reference  to such  beginning  Gross  Asset Value  using any  reasonable  method
  selected by the General Partner.
  
           Section 1.32 "Insurance"  shall mean casualty  coverage,  including but
  not limited to, fire or other  casualty loss to any structure or building on the
  Project in an amount equal to the full replacement value of the damaged property
  without  deduction  for  depreciation;   shall  include   comprehensive  general
  liability coverage against liability claims for bodily injury or property damage
  arising out of Project  operations in an amount equal to  $1,000,000;  and shall
  include an umbrella  liability  coverage  in an amount  equal to  $1,000,000  to
  protect  against  claims in excess of the limits of the other  primary  policies
  required herein.  All Insurance policies shall provide that they are not subject
  to cancellation  without 30 days prior written notice to the Limited Partner and
  shall not contain any co-insurance provisions.
  
           Section  1.33  "Insurance  Company"  shall mean any  insurance  company
  engaged by the  General  Partner  for the  Partnership  with the  Consent of the
  Limited  Partner  which  Insurance  Company shall have an A rating or better for
  financial safety by A.M. Best or Standard & Poor's.
  
  
  
                                         9
  <PAGE>
  
           Section 1.34 "Interest"  shall mean the entire interest of a Partner in
  the Partnership at any particular  time,  including the right of such Partner to
  any and all  benefits  to which a  Partner  may be  entitled  hereunder  and the
  obligation of such Partner to comply with the terms of this Agreement.
  
           Section  1.35  "LIHC"  shall  mean the  low-income  housing  tax credit
  established  by TRA 1986 and which is provided for in Section 42 of the Code, as
  amended, or any successor thereto.
  
           Section 1.36 "Limited  Partner"  shall mean WNC HOUSING TAX CREDIT FUND
  V, L.P., SERIES 4, a California limited  partnership,  and such other Persons as
  are admitted to the  Partnership  as additional or substitute  Limited  Partners
  pursuant to this Agreement.
  
           Section 1.37  "Liquidation"  shall mean with respect to the Partnership
  the orderly sale and liquidation of the Project and other  Partnership  property
  following  the first to occur of (a) the date  upon  which  the  Partnership  is
  terminated under Section 708(b)(1) of the Code unless continued by a vote of the
  Partners,  (b) the date upon which the Partnership  ceases to be a going concern
  (even  though it may  continue  in  existence  for the purpose of winding up its
  affairs,  paying  its  debts  and  distributing  any  remaining  balance  to its
  Partners),  or (c) the date this Agreement terminates pursuant to its terms; and
  means,  with  respect  to a  Partner  at a time when the  Partnership  is not in
  Liquidation, the liquidation of such Partner's interest in the Partnership under
  Treasury Regulation 1.761-1(d), as amended, or any successor thereto.
  
           Section 1.38 "Minimum  Set-Aside  Test" shall mean the 40-60  set-aside
  test  pursuant to Section  42(g),  as amended,  of the Code with  respect to the
  percentage  of  apartment  units in the Project to be occupied by tenants  whose
  incomes are less than the required percentage of the area median gross income.
  
           Section 1.39  "Mortgage"  or "Mortgage  Loan" shall mean the  permanent
  financing  of the  Project  to  replace  the  Construction  Loan to be  provided
  pursuant to the FmHA Loan Agreement and the FmHA Interest Credit Agreement,  and
  evidenced by the Mortgage Note.
  
           Section 1.40  "Mortgage  Note" shall mean the Multiple  Family  Housing
  Promissory  Note  (Form FmHA  1944-52  or any  successor  thereof)  whereby  the
  Partnership promises to pay to the FmHA the principal sum of $473,450,  plus
  interest on the principal at the effective  rate of one percent per annum over a
  term of fifty years on the first day of each month.
  
  
  
                                         10
  <PAGE>
  
           Section 1.41  "Nonrecourse  Deductions" shall have the meaning given it
  in Treasury Regulations Section 1.704-2(b)(1).
  
           Section 1.42 "Nonrecourse Liability" shall have the meaning given it in
  Treasury Regulations Section 1.704-2(b)(3).
  
           Section  1.43  "Operating  Deficit"  for any fiscal year shall mean the
  total amount by which the sum of the Partnership's  operating  expenses (defined
  solely as the expenses incurred in connection with the operation and maintenance
  of the Project),  debt service on the Mortgage Loan and other  Partnership  debt
  and net additions to Partnership reserves required or permitted to be maintained
  under this Agreement for such fiscal year, exceeds the cash revenues received in
  respect of the  operation  of the Project  for such  fiscal  year and  available
  reserves.
  
           Section 1.44 "Operating Deficit Guarantee Period" shall mean the period
  commencing  with the date of this  Agreement  and ending  four  years  following
  Completion of Construction.
  
           Section 1.45 "Original Limited Partner" shall mean BEATRICE W. SOWELL.
  
           Section  1.46  "Partner"  shall mean either the General  Partner or the
  Limited Partner.
  
           Section 1.47 "Partner  Nonrecourse  Debt" shall mean the definition set
  forth in Section 1.704-2(b)(4) of the Treasury Regulations.
  
           Section 1.48  "Partner  Nonrecourse  Debt  Minimum  Gain" shall mean an
  amount,  with respect to each Partner Nonrecourse Debt, equal to the Partnership
  Minimum Gain that would result if such Partner  Nonrecourse Debt were treated as
  a Nonrecourse  Liability (as defined in Section  1.704-2  (b)(3) of the Treasury
  Regulations),  determined  in  accordance  with  Section  1.704-2(i)(3)  of  the
  Treasury Regulations.
  
           Section 1.49 "Partner Nonrecourse Deductions" shall mean the definition
  set  forth  in  Sections   1.704-2(i)(1)   and  1.704-2(i)(2)  of  the  Treasury
  Regulations.
  
           Section 1.50 "Partnership" shall mean the limited partnership continued
  under this Agreement.
  
           Section  1.51  "Partnership  Administration  Fee"  shall  mean  the fee
  payable to the General Partner pursuant to Section 9.2 for services  incident to
  the  administration  of the  business  and  affairs  of the  Partnership,  which
  services shall include, but not be limited to, maintaining the books and records
  of the  Partnership,  selecting and supervising the  Partnership's  accountants,
  
  
                                         11
  <PAGE>
  
  bookkeepers  and other Persons  required to prepare and audit the  Partnership's
  financial statements and tax returns, and preparing and disseminating reports on
  the status of the Project and the Partnership, all as required by Article XIV of
  this Agreement.
  
           Section  1.52   "Partnership   Minimum  Gain"  shall  mean  the  amount
  determined  by  computing,  with  respect to each  nonrecourse  liability of the
  Partnership,  the  amount  of  gain,  if any,  that  would  be  realized  by the
  Partnership  if a  reduction  occurs  in the  amount  by which  the  nonrecourse
  liability  exceeds  the  adjusted  basis  in  the  Project   encumbered  by  the
  nonrecourse  liability.  Such computation  shall be made in a manner  consistent
  with Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).
  
           Section 1.53 "Permanent Mortgage Commencement" shall mean the first day
  on which all of the following have  occurred:  (a) the  Construction  Loan shall
  have been repaid in full; (b) the principal  amount,  interest and maturity date
  of the Mortgage and the Mortgage  Note shall have been finally  determined;  and
  (c) amortization of the Mortgage shall have commenced.
  
           Section 1.54 "Person" shall mean an individual,  proprietorship, trust,
  estate, partnership,  joint venture, association,  company, corporation or other
  entity.
  
           Section 1.55 "Project" shall mean the approximately 2.554 acres of land
  in Palestine,  Anderson  County,  Texas,  as more fully described in Exhibit "A"
  attached  hereto  and  incorporated  herein by this  reference,  and any and all
  improvements now or hereafter to be constructed thereon,  specifically including
  a twenty-four (24) unit low to moderate income housing complex for family.
  
           Section 1.56 "Project  Documents"  shall mean and include all documents
  delivered to or required by the  construction  lender  and/or FmHA in connection
  with the development,  construction and financing of the Project,  including but
  not limited to, the construction  loan agreement,  construction  contract,  FmHA
  Loan  Agreement and FmHA Interest  Credit  Agreement and the approved  plans and
  specifications for the development and construction of the Project.
  
           Section  1.57  "Projected  Annual Tax  Credits"  shall mean LIHC in the
  amount of  $21,966  per year for each of the years 1997  through  2006 which the
  General  Partner  has  projected  to be the total  amount of LIHC  which will be
  allocated to the Limited Partner by the  Partnership,  constituting  ninety-nine
  percent (99%) of the aggregate amount of LIHC of $221,880 to be available to the
  Partnership;  provided,  however,  that if the  Actual  Tax  Credit  for 1997 is
  greater (or less than) $21,966 the Projected Annual Tax Credit for the year 2006
  
  
                                         12
  <PAGE>
  
  shall be  reduced  (increased)  by an  amount  equal to the  amount by which the
  Actual Credit for 1997 exceeds (is less than) $21,966.
  
           Section 1.58 "Qualified  Income Offset Item" shall have the meaning set
  forth in Treasury  Regulation  Section  1.704-1(b)(2)(ii)(d),  or any  successor
  provision.
  
           Section  1.59  "Qualified  Tenants"  shall  mean any  tenants  who have
  incomes of 60% or less of the area median gross  income,  as adjusted for family
  size, so as to make the Project eligible for LIHC.
  
           Section 1.60 "Refinancing" shall mean the refinancing of the Project so
  as to retire the Mortgage Note and create a new permanent  lender who shall hold
  a first deed of trust on the Project.  No Refinancing shall be permitted without
  approval from the Limited Partner.
  
           Section 1.61 "Rent  Restriction  Test" shall mean the test  pursuant to
  Section  42 of the Code  whereby  the  gross  rent  charged  to  tenants  of the
  low-income  apartment units in the Project must not exceed 30% of the applicable
  income standards.
  
           Section  1.62  "Sale"  shall  mean  and  include  the  sale,  exchange,
  condemnation or similar eminent domain taking,  casualty or other disposition of
  all or any  portion  of the  Project  which  is not in the  ordinary  course  of
  business,  and the sale of easements,  rights of way or similar interests in the
  Project or any other  similar  items  which in  accordance  with the  accounting
  methods used by the Partnership are attributable to capital; provided,  however,
  that "Sale" shall not refer to any transaction to the extent gain or loss is not
  recognized, or is elected not to be recognized,  under any applicable section of
  the Code.
  
           Section  1.63 "Sale or  Refinancing  Proceeds"  shall mean the net cash
  (including both principal and interest)  realized by the Partnership from a Sale
  or Refinancing,  after  retirement of applicable  Mortgage debt,  payment of all
  expenses related to the transaction,  other than the sales preparation fee which
  may be payable to the General Partner or its Affiliates pursuant to Section 9.2,
  and payment of or provision for other Partnership debts and obligations.
  
           Section 1.64 "State" shall mean the State of Texas.
  
           Section 1.65 "State Tax Credit Agency" shall mean the allocation by the
  appropriate state agency of LIHC with respect to the Project.
  
  
  
                                         13
  <PAGE>
  
           Section 1.66 "Substitute  Limited Partner" shall mean any Person who is
  admitted to the  Partnership  as a Limited  Partner  pursuant to Section 12.5 or
  acquires  the  Interest of the Limited  Partner  pursuant to Section 7.3 of this
  Agreement.
  
           Section 1.67 "Tax  Credit"  shall mean any credit  permitted  under the
  Code or the law of any state against the federal or a state income tax liability
  of any Partner as a result of  activities  or  expenditures  of the  Partnership
  including, without limitation, LIHC.
  
           Section 1.68 "Tax Credit  Conditions"  shall mean,  for the duration of
  the Compliance Period, any and all restrictions  including,  but not limited to,
  applicable federal,  state and local laws, rules and regulations,  which must be
  complied  with in order to qualify  for the Tax  Credits or to avoid an event of
  recapture in respect of the Tax Credits.
  
           Section 1.69 "TRA 1986" shall mean the Tax Reform Act of 1986.
  
           Section  1.70  "Treasury   Regulations"   shall  mean  the  Income  Tax
  Regulations  promulgated under the Code, as such regulations may be amended from
  time to time (including corresponding provisions of succeeding regulations).
  
                                     ARTICLE II
  
                                        NAME
  
           The name of the Partnership shall be "D. HILLTOP APARTMENTS, LTD."
  
                                     ARTICLE III
  
                    PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE
  
           Section 3.1 Principal  Executive Office. The principal executive office
  of the  Partnership  is located at 509 Ellen Powell Drive,  Prairie View,  Texas
  77446,  or at such other place or places within the State as the General Partner
  may hereafter designate.
  
           Section  3.2 Agent for  Service of  Process.  The name of the agent for
  service of process on the Partnership is Donald W. Sowell,  whose address is 509
  Ellen Powell Drive, Prairie View, Texas 77446.
  
  
  
                                         14
  <PAGE>
  
  
                                     ARTICLE IV
  
                                       PURPOSE
  
           The  purpose  of the  Partnership  is to  acquire,  construct,  own and
  operate the Project in order to provide, in part, Tax Credits to the Partners in
  accordance  with  the  provisions  of the  Code  and  the  Treasury  Regulations
  applicable to LIHC,  the rules and  regulations of FmHA relating to rural rental
  housing  projects  financed or  subsidized by FmHA and to sell the Project after
  the 15-year Tax Credit  compliance  period.  The Partnership shall not engage in
  any  business  or  activity  which is not  incident  to the  attainment  of such
  purpose.
  
                                      ARTICLE V
  
                                        TERM
  
           The  Partnership  term commenced upon the filing of the  Certificate of
  Limited  Partnership  in the  office  of,  and on the form  prescribed  by,  the
  Secretary  of State of the State,  and shall  continue  until  December 31, 2050
  unless terminated earlier in accordance with the provisions of this Agreement or
  as otherwise provided by law.
  
                                     ARTICLE VI
  
                      GENERAL PARTNER'S CONTRIBUTIONS AND LOANS
  
           Section  6.1  Capital  Contribution  of General  Partner.  The  General
  Partner shall make a Capital Contribution in the amount of $14,645.
  
           Section 6.2 Construction and Operating Obligations.
  
           (a) The General  Partner  shall cause  Completion  of  Construction  in
  accordance with the Project Documents,  and shall equip the Project or cause the
  same to be equipped with all necessary and appropriate  fixtures,  equipment and
  articles of personal property,  including refrigerators and ranges. If costs and
  expenses  necessary to effect  Completion of Construction  exceed the sum of the
  Capital Contributions and the proceeds of the Mortgage Note, the General Partner
  shall be  responsible  for and shall be obligated to pay such  deficiencies  and
  shall, to the extent  permitted  under the Project  Documents and any applicable
  regulations or  requirements of the FmHA, be reimbursed at or prior to Permanent
  Mortgage  Commencement  only out of the  proceeds  designated  in this  sentence
  available  from  time to time  after  payment  of all  costs  described  in this
  sentence.   Any  such  advances  not  reimbursed   through  Permanent   Mortgage
  
  
                                         15
  <PAGE>
  
  Commencement  shall not be reimbursable or otherwise  change the Interest of any
  Partner  in the  Partnership  but  shall be borne by the  General  Partner  as a
  Capital  Contribution.  In the event the General  Partner shall fail to fund any
  such  deficiency  as  required by this  Section  6.2(a),  any amounts  otherwise
  payable to the General  Partner or any of its  Affiliates as a  Development  Fee
  pursuant to Section 9.2 or any other fee  pursuant to this  Agreement,  shall be
  applied by the Partnership to meet such obligation of the General  Partner.  Any
  such  application of funds as described in the  immediately  preceding  sentence
  shall  constitute a payment of the  obligation  of the fee which such funds have
  been earmarked to pay, and the obligation of the General Partner to advance such
  amount  under  this  Section  6.2(a)  shall be  satisfied  to the extent of such
  application.
  
           (b) During the Operating Deficit Guarantee Period, the General Partner,
  as  required  from  time to time,  shall  provide  Operating  Loans  in  amounts
  necessary  to  cover  any  Operating  Deficits.  Each  Operating  Loan  shall be
  nonrecourse  to the Partners and shall be repayable  out of 50% of the available
  Cash Flow From  Operations or Sale or  Refinancing  Proceeds in accordance  with
  Article XI of this  Agreement.  In the event the General  Partner  shall fail to
  make any Operating Loans required by this Section 6.2(b),  the Partnership shall
  withhold those funds otherwise  payable to the General Partner or its Affiliates
  pursuant to Section 9.2 ("General Partner Funds") and utilize the withheld funds
  to meet the obligations of the General Partner  pursuant to this Section 6.2(b);
  any such use of General  Partner  Funds will be deemed an Operating  Loan of the
  General  Partner  repayable  to the General  Partner as  aforesaid.  Such use of
  General Partner Funds shall also constitute  payment and satisfaction of amounts
  payable to the General  Partner or Affiliates  thereof  pursuant to Section 9.2,
  and the  obligation  of the  Partnership  to make such  payments  to the General
  Partner or its  Affiliates  pursuant  to Section 9.2 shall  therefore  be deemed
  satisfied.
  
           Section  6.3  General  Partner  Loans.  With the prior  consent  of the
  Limited  Partner,  and if approved by the FmHA in accordance with FmHA rules and
  regulations,  the General  Partner may loan to the Partnership any sums required
  by the  Partnership and not otherwise  reasonably  available to it, at a rate of
  interest  not to exceed  the  lesser of 2% per annum  above the then  prevailing
  prime or reference rate charged by Bank of America N.T. & S.A., Main Office, San
  Francisco,  California,  or the maximum legal rate. The amount and maturity date
  of any such  loan and the  rate of  interest  thereon  shall be  evidenced  by a
  written instrument. The General Partner shall not charge a prepayment penalty on
  any such loan.
  
  
                                         16
  <PAGE>
  
                                     ARTICLE VII
  
                       LIMITED PARTNER'S CAPITAL CONTRIBUTIONS
  
           Section 7.1 Original Limited Partner. The Original Limited Partner made
  a Capital Contribution of $100. Effective as of the date of this Agreement,  the
  Original Limited Partner's  Interest has been liquidated and the Partnership has
  reacquired the Original Limited Partner's Interest in the Partnership.
  
           Section  7.2  Capital  Contribution  of Limited  Partner.  The  Limited
  Partner  shall make a total  Capital  Contribution  in the amount of $120,814 in
  cash on the dates and subject to the conditions hereinafter set forth:
  
           (a)      The  obligation  of the  Limited  Partner  to pay the  
  aforesaid  Capital  Contribution  shall be subject to the satisfaction of the 
  following conditions:
  
                    (1) prior to the initial  payment of the Capital  Contribution
  only,  the  issuance to the Limited  Partner of an opinion of the  Partnership's
  legal counsel,  in a form substantially  similar to the form of opinion attached
  hereto as Exhibit "B" and incorporated herein by this reference;
  
                    (2) prior to the initial  payment of the Capital  Contribution
  only, the General  Partner shall deliver to the Limited Partner a fully executed
  Certificate  and  Agreement  in the form  attached  hereto  as  Exhibit  "C" and
  incorporated herein by this reference;
  
                    (3) prior to the initial  payment of the Capital  Contribution
  only, the Limited Partner shall obtain from the General Partner, with respect to
  the Project,  Form FmHA 1924-13  (Estimate and  Certificate  of Actual Cost) and
  Form FmHA 1930-7  (Statement of Budget,  Income and Expenses) a construction pro
  forma reflecting payment of the construction expenses and an operation pro forma
  reflecting income and expenses;
  
                    (4) prior to the due date of each  installment of such Capital
  Contribution except the first payment,  the issuance to the Limited Partner of a
  certificate  signed by or on behalf of the General  Partner in the form attached
  hereto as Exhibit "D" and incorporated herein by this reference,  dated not more
  than  five  days  prior  to  such  due  date,  to  the  effect  that  all of the
  representations and warranties set forth in Section 9.11 are accurate;
  
  
  
                                         17
  <PAGE>
  
                    (5) not later than the Capital Contribution payment referenced
  in Section  7.2(b)(5),  the General Partner shall deliver to the Limited Partner
  the following:  (A)  Certificate of Occupancy on all the apartment  units in the
  Project;  (B) copy of the recorded grant deed (warranty  deed);  (C) copy of the
  policy of title  insurance  issued at Permanent  Mortgage  Commencement;  (D) an
  audited  construction cost  certification  with an itemized cost breakdown;  (E)
  copies of all Mortgage Loan  agreements;  (F) copies of all Mortgage Notes;  and
  (G) copy of the  Declaration  of  Restrictive  Covenants/Extended  Use Agreement
  entered into between the Partnership and the State Tax Credit Agency responsible
  for allocating the LIHC; and
  
                    (6) not later than the Capital Contribution payment referenced
  in Section  7.2(b)(5),  the General Partner shall deliver to the Limited Partner
  Internal Revenue Code Form 8609, or any successor form.
  
           (b)  Provided  the  conditions  of Section  7.2(a) of this  Partnership
  Agreement  have been met, the Limited  Partner shall make the following  Capital
  Contributions:
  
                    (1) The first  payment shall equal $24,163 and will be payable
  upon  verification  of Tax  Credit  reservation,  receipt  of a  commitment  for
  permanent financing,  commencement of construction and admittance of the Limited
  Partner into the Partnership,  provided the conditions of Section 7.2(a) of this
  Agreement have been met;
  
                    (2) The second payment shall equal $24,163 and will be payable
  upon 50% Completion of Construction  as evidenced by the inspecting  architect's
  certification  and the  construction  draw requests,  provided the conditions of
  Section 7.2(a) of this Agreement have been met;
  
                    (3) The third  payment shall equal $24,163 and will be payable
  upon  Completion  of  Construction  as evidenced by the  inspecting  architect's
  certification  or the issuance of a  certificate  of occupancy  and receipt of a
  letter from the  Contractor  stating that all amounts  payable to the Contractor
  have  been  paid in full and that the  Partnership  is not in  violation  of the
  Construction  Contract,  provided  the  conditions  of  Section  7.2(a)  of this
  Agreement have been met;
  
                    (4) The fourth payment shall equal $24,163 and will be payable
  the date the Project  maintains a debt coverage ratio of 1.15 for 60 consecutive
  days,  delivery to the Limited Partner of all income  verification data insuring
  that 100% of the units in the Project  qualify  under Section 42 of the Code and
  delivery  to the  Limited  Partner  of the  final  Mortgage  closing  documents,
  
  
                                         18
  <PAGE>
  
  provided the conditions of Section 7.2(a) of this Agreement have been met; and
  
                    (5) The final  payment shall equal $24,162 and will be payable
  after the above conditions have been met and delivery of the Accountant's  final
  tax  return in which Tax  Credits  are taken and  Internal  Revenue  Form  8609,
  provided the conditions of Section 7.2(a) of this Agreement have been met.
  
           Section 7.3 Repurchase of Limited  Partner's  Interest.  Within 60 days
  after  receipt  of  written  demand  therefor  from  the  Limited  Partner,  the
  Partnership shall repurchase the Limited  Partner's  interest in the Partnership
  by refunding to it in cash the full amount of the Capital Contribution which the
  Limited  Partner has  theretofore  made in the event that,  for any reason,  the
  Partnership shall fail to:
  
           (a)      receive an allocation of LIHC;
  
           (b)      cause the Project to be placed in service by December 31, 
  1996;
  
           (c)      achieve 90% occupancy of the Project by Qualified Tenants by 
  January 1997;
  
           (d)      obtain the closing of the permanent Mortgage Loan by December 
  31, 1996;
  
           (e) meet both the Minimum  Set-Aside Test and the Rent Restriction Test
  not later  than  December  31 of the first year the  Partners  elect the LIHC to
  commence in accordance with the Code;
  
           (f)  continue  to meet  both the  Minimum  Set-Aside  Test and the Rent
  Restriction  Test during the period when the Limited Partner is required to make
  its Capital Contribution to the Partnership;
  
           (g)      obtain the 1994 Tax Credit carry over allocation; and
  
           (h)      obtain the approval of FmHA, if required, to the amendment of
  the Limited Partnership  Agreement reflected in this Agreement.
  
           Section 7.4 Reduction of Capital Contribution.
  
           (a) As  evidenced  by IRS Form 8609 and the audited  construction  cost
  certification,  if the Limited  Partner's 99% interest in the Tax Credit is less
  than $219,661 then the Capital Contribution provided for in Section 7.2 shall be
  reduced by the amount which will make the total Capital  Contribution to be paid
  by the Limited Partner to the Partnership  equal to 55% of the total Tax Credits
  
  
                                         19
  <PAGE>
  
  allocated  to the Limited  Partner.  In the event  there is a  reduction  in the
  Capital  Contribution  pursuant to this Section 7.4, Projected Tax Credits shall
  thereafter be referred to as the "Revised Projected Tax Credits."
  
           (b) If the Capital Contribution of the Limited Partner is to be reduced
  pursuant  to this  Section  7.4 during the period  when the  Limited  Partner is
  required  to make its  Capital  Contribution,  then the amount of the  reduction
  shall be applied to the next Capital  Contribution  owed by the Limited Partner.
  If the Capital Contribution  reduction referenced in this Section 7.4 is greater
  than  the  balance  of  the  Limited  Partner's  Capital  Contribution  payments
  ("Reduction Shortfall") then the amount of the Reduction Shortfall shall be paid
  by the General  Partner to the Limited Partner within ninety days of the General
  Partner receiving notice of the Reduction Shortfall from the Limited Partner.
  
           (c) The General  Partner  will use its best efforts to rent 100% of the
  Project's  apartment units to Qualified  Tenants over the fifteen (15) year LIHC
  life. If at any time the  Accountants  determine  that the Actual Tax Credit for
  any fiscal year or portion thereof is less than the Projected Tax Credit, or the
  Revised Projected Tax Credit,  if applicable,  pertaining to such fiscal year or
  portion thereof,  then the Capital  Contribution of the Limited Partner shall be
  reduced by an amount equal to the difference  between (A) Projected Tax Credits,
  or the Revised  Projected  Tax Credits,  if  applicable,  and (B) the Actual Tax
  Credit.  Any reduction in Capital  Contribution shall first be applied to reduce
  the  Limited  Partner's  next  Capital  Contribution,  and any  portion  of such
  reduction  in excess of such  Capital  Contribution  shall be  applied to reduce
  succeeding Capital  Contributions of the Limited Partner.  If no further Capital
  Contribution  payments  are due and owing  from the  Limited  Partner,  then the
  entire  amount  of such  reduction  shall be repaid  by the  Partnership  to the
  Limited Partner  promptly after demand is made therefore.  During the first five
  calendar years of Partnership  operations,  the General  Partner is obligated to
  provide  such  funds  to the  Partnership  as shall be  necessary  to cause  the
  aforesaid payment to be made by the Partnership to the Limited Partner.
  
           (d) In the event that, for any reason, at any time after the first five
  calendar years of Partnership operations, if the amount of the Actual Tax Credit
  shall be less than the  Projected  Tax  Credit  (or the  Revised  Projected  Tax
  Credit,  if  applicable)  (the  "Credit   Shortfall")  then  there  shall  be  a
  corresponding reduction in the General Partner's Cash Flow From Operations in an
  amount  equal  to the  Credit  Shortfall  and said  amount  shall be paid to the
  Limited  Partner.  In the event  there is not  sufficient  funds to pay the full
  Credit Shortfall to the Limited Partner at the time of the next  Distribution of
  Cash Flow From  Operations  then the Limited  Partner shall be treated as having
  
  
                                         20
  <PAGE>
  
  made a  constructive  advance to the  Partnership  with  respect to such year (a
  "Credit Shortfall  Loan"),  which shall be deemed to have been made on January 1
  of such year.  Credit  Shortfall  Loans shall be deemed to bear simple  interest
  (not compounded) from the respective dates on which such principal  advances are
  deemed to have been made  under  this  Section  7.4(d) at 7% per  annum.  Credit
  Shortfall Loans shall be repaid in the next year in which sufficient  moneys are
  available from the General  Partner's Cash Flow From Operations.  In the event a
  Sale or  Refinancing  of the Project  occurs  prior to  repayment in full of the
  Credit  Shortfall  Loan then the excess will be paid in accordance  with Section
  11.2(c).
  
           Section  7.5  Return  of  Capital  Contribution.  From time to time the
  Partnership  may have cash in excess of the amount  required  for the conduct of
  the  affairs  of the  Partnership,  and the  General  Partner  may,  in its sole
  discretion, determine that such cash should, in whole or in part, be returned to
  the Limited Partner in reduction of its Capital  Contribution.  Any Distribution
  to the Limited Partner pursuant to this Section 7.5, or pursuant to Section 7.4,
  shall be deemed to have been consented to by the Limited Partner. No such return
  shall be made:
  
           (a) Until this Agreement has been amended to reflect such reduction of
   capital; and
  
           (b) Unless all liabilities of the Partnership (except those to Partners
  on account of amounts  credited to them  pursuant to this  Agreement)  have been
  paid  or  there  remain  assets  of the  Partnership  sufficient,  in  the  sole
  discretion of the General Partner, to pay such liabilities.
  
           Section 7.6 Liability of Limited Partner. The Limited Partner shall not
  be liable for any of the debts,  liabilities,  contracts or other obligations of
  the  Partnership.  The Limited  Partner shall be liable only to make its Capital
  Contribution  in the amounts and on the dates  specified in this  Agreement  and
  shall not be required to lend any funds to the Partnership or, after its Capital
  Contribution  has been paid,  to make any further  Capital  Contribution  to the
  Partnership.
  
                                    ARTICLE VIII
  
                            WORKING CAPITAL AND RESERVES
  
           Section 8.1  Operation and  Maintenance  Reserve.  The General  Partner
  shall deposit in the Partnership's  general fund account, or provide a letter of
  credit,  in an amount  required by the FmHA,  to be used for  initial  operating
  capital as permitted or required by  applicable  FmHA  regulations.  Said amount
  
  
                                         21
  <PAGE>
  
  shall  be  reimbursed,  without  interest,  out of  Project  funds  as  shall be
  authorized  in  accordance  with  applicable  FmHA  regulations,  and  if not so
  reimbursed within five years of the deposit,  any amount remaining  unreimbursed
  shall be forgiven  and shall  constitute  an  ordinary  and  necessary  business
  expense of the  General  Partner as part  consideration  for the  payment of the
  Development Fee.
  
           Section 8.2 Reserve for  Replacements.  The General Partner shall fund,
  establish and maintain a reserve  account in an amount required by the FmHA Loan
  Agreement  which funds shall be used in  accordance  with FmHA  Regulation 7 CFR
  Part 1930-C, or any successor thereof, as evidenced by the FmHA Loan Agreement.
  
           Section 8.3 Other Reserves.  The General Partner shall establish out of
  funds  available to the  Partnership  a reserve  account  sufficient in its sole
  discretion to pay any unforeseen  contingencies  which might arise in connection
  with the furtherance of the Partnership business including,  but not limited to,
  (a) any rent subsidy  required to maintain  rent levels in  compliance  with the
  Code and applicable FmHA regulations;  and (b) any real estate taxes, insurance,
  debt  service or other  payments  for which  other  funds are not  provided  for
  hereunder or otherwise expected to be available to the Partnership.  The General
  Partner shall not be liable for any  good-faith  estimate which it shall make in
  connection  with  establishing  or  maintaining  any such reserves nor shall the
  General  Partner be required to establish  or maintain any such  reserves if, in
  its sole discretion, such reserves do not appear to be necessary.
  
                                     ARTICLE IX
  
                               MANAGEMENT AND CONTROL
  
           Section 9.1 Power and Authority of General Partner. The General Partner
  shall have complete and exclusive control over the management of the Partnership
  business and affairs,  and shall have the right, power and authority,  on behalf
  of the Partnership,  and in its name, to exercise all of the rights,  powers and
  authority of a partner of a partnership  without limited  partners.  If there is
  more than one General  Partner,  all acts,  decisions or consents of the General
  Partners  shall  require  the  concurrence  of all of the General  Partners.  No
  actions taken without the  authorization  of all the General  Partners  shall be
  deemed valid actions taken by the General  Partners  pursuant to this Agreement.
  If any General  Partner should violate this  Agreement,  he shall  indemnify and
  hold the other General Partners harmless against all obligations and liabilities
  arising or resulting from or incidental to said  violation.  No Limited  Partner
  
  
                                         22
  <PAGE>
  
  (except one who may also be a General Partner,  and then only in its capacity as
  General  Partner  within the scope of its  authority  hereunder)  shall have any
  right  to  be  active  in  the  management  of  the  Partnership's  business  or
  investments or to exercise any control thereover, nor have the right to bind the
  Partnership in any contract, agreement, promise or undertaking, or to act in any
  way  whatsoever  with  respect to the control or conduct of the  business of the
  Partnership, except as otherwise specifically provided in this Agreement.
  
           Section 9.2 Payments to the General Partners and Others.
  
           (a) The Partnership shall pay to the General Partner or an Affiliate of
  the General Partner, a Development Fee in the amount of $72,330,  which includes
  interest on the unpaid portion thereof.
  
           (b) The  Partnership  shall retain the sum of $48,484 from the proceeds
  established  in Section  7.2(b) of this  Agreement  to be used for  supplemental
  development costs including, but not limited to, land costs, architectural fees,
  survey and engineering costs,  financing cost, loan fees, building materials and
  labor, but only to the extent of the difference  between the  Construction  Loan
  and the  Mortgage.  If any funds in this  Section  9.2(b)  are  remaining  after
  Completion of Construction and all  construction  costs are paid in full and the
  Construction Loan retired, then the remainder shall first be paid to the General
  Partner as payment toward any unpaid  Development  Fee and the balance,  if any,
  shall be paid to the  General  Partner as a reduction  of the General  Partner's
  Capital Contribution.
  
           (c) The  Partnership  shall  pay to an  independent  third  party,  the
  General Partner or an Affiliate of the General Partner a property management fee
  for the leasing and  management of the Project  ("Management  Agent") so long as
  such fee does not exceed  the amount  authorized  and  approved  by FmHA for the
  Project.
  
                    (i) The General  Partner  may,  upon  receiving  any  required
  approval of the  Mortgage  lender,  dismiss the  Management  Agent as the entity
  responsible  for  the  Project  under  the  terms  of  the  property  management
  agreement;  and,  at the  request  of the  Limited  Partner,  shall  remove  the
  Management Agent in the event that the Management Agent  experiences an Event of
  Bankruptcy,  is  dissolved,  or  makes  an  assignment  for the  benefit  of its
  creditors,  or for any intentional misconduct by the Management Agent or failure
  to exercise  reasonable  care in the discharge of its duties and  obligations as
  Management  Agent,  including without  limitation,  for any action or failure to
  take any action which:
  
                             (A)  violates in any material respect any provision 
  of the  property  management agreement or
  
  
  
                                         23
  <PAGE>
  
                             (B)  violates in any material respect any provision 
  of this  Agreement or provision of applicable law.
  
           (d)  The  Partnership  shall  pay to the  Limited  Partner  a fee  (the
  "Reporting  Fee")  commencing  in 1997 for its services in  connection  with the
  Partnership's  accounting  matters relating to the Limited Partner and assisting
  with the  preparation  of tax returns and the reports  required in Sections 14.2
  and 14.3 in the annual amount of $400. The Reporting Fee shall be payable within
  seventy-five  (75) days  following  each calendar year and shall be payable from
  Cash Flow From  Operations in the manner and priority set forth in Section 11.1;
  provided, however, that if in any fiscal year commencing in 1997, Cash Flow From
  Operations  is  insufficient  to pay the full amount of the  Reporting  Fee, the
  unpaid portion thereof shall accrue and be payable on a cumulative  basis in the
  first year in which there is  sufficient  Cash Flow From  Operations or from the
  proceeds of a Sale or Refinancing, as provided in Section 11.2(c).
  
           (e) The  Partnership  shall pay to the  General  Partner a  Partnership
  Administration  Fee  equal  to $800  for  each  fiscal  year of the  Partnership
  commencing in 1997 for services  incident to the  administration of the business
  and affairs of the Partnership, which services shall include, but not be limited
  to,  maintaining  the  books  and  records  of the  Partnership,  selecting  and
  supervising  the  Partnership's  accountants,   bookkeepers  and  other  Persons
  required to prepare and audit the  Partnership's  financial  statements  and tax
  returns,  and preparing and  disseminating  reports on the status of the Project
  and the  Partnership,  all as  required by Article  XIV of this  Agreement.  The
  Partnership  Administration  Fee shall be payable within  seventy-five (75) days
  following each calendar year and shall be payable from Cash Flow From Operations
  in the  manner  and  priority  set forth in  Section  11.1.  If the  Partnership
  Administration  Fee is not paid in any year it shall not accrue  for  payment in
  subsequent years.
  
           Section 9.3 Specific  Powers of the General  Partner.  Subject to other
  provisions  of this  Agreement,  the General  Partner  shall have the  following
  powers:
  
           (a) In the  Partnership's  name and  behalf,  the  General  Partner may
  acquire  (including  by fee or real  estate  contract),  hold,  sell,  transfer,
  assign,  lease or  otherwise  deal with any real,  personal  or mixed  property,
  interest therein or appurtenance thereto.
  
           (b) In the  Partnership's  name and  behalf,  the  General  Partner may
  employ,  contract and  otherwise  deal with,  from time to time,  Persons  whose
  services  are  necessary  or  appropriate  in  connection  with  management  and
  operation  of  the  Partnership   business,   including,   without   limitation,
  
  
                                         24
  <PAGE>
  
  contractors,  agents,  brokers,  accountants and attorneys, on such terms as the
  General Partner shall determine.
  
           (c) In the Partnership's name and behalf, the General Partner may bring
  or  defend,  pay,  collect,  compromise,  arbitrate,  resort to legal  action or
  otherwise adjust claims or demands of or against the Partnership.
  
           (d) In the Partnership's  name and behalf,  the General Partner may pay
  as a  Partnership  expense any and all costs and  expenses  associated  with the
  formation, development, organization and operation of the Partnership, including
  the expense of annual audits, tax returns and FmHA, LIHC compliance.
  
           (e) In the  Partnership's  name and  behalf,  the  General  Partner may
  deposit, withdraw, invest, pay, retain and distribute the Partnership's funds in
  a manner consistent with the provisions of this Agreement.
  
           (f) The General Partner may require in any or all Partnership contracts
  that the General  Partner shall not have any personal  liability  thereunder but
  that the  Person  contracting  with the  Partnership  shall  look  solely to the
  Partnership and its assets for satisfaction.
  
           (g) In the Partnership's name and behalf, the General Partner may 
  execute,  acknowledge and deliver any and all instruments to effectuate any of 
  the foregoing.
  
           Section 9.4 Authority Requirements.  During the Compliance Period, the
  following provisions shall apply:
  
           (a) Each of the provisions of this  Agreement  shall be subject to, and
  the  General  Partner  covenants  to act in  accordance  with,  the  Tax  Credit
  Conditions and all applicable federal, state and local laws and regulations;
  
           (b) The Tax Credit  Conditions  and all such laws and  regulations,  as
  amended  or  supplemented,  shall  govern  the  rights  and  obligations  of the
  Partners,  their heirs,  executors,  administrators,  successor and assigns, and
  they shall  control  as to any terms in this  Agreement  which are  inconsistent
  therewith,   and  any  such  inconsistent  terms  of  this  Agreement  shall  be
  unenforceable by or against any of the Partners;
  
           (c) Upon any  dissolution  of the  Partnership  or any  transfer of the
  Project,  no title or right to the  possession and control of the Project and no
  right to collect rent therefrom shall pass to any Person who is not, or does not
  become,  bound by the Tax Credit  Conditions in a manner that, in the opinion of
  
  
                                         25
  <PAGE>
  
  counsel to the Partnership,  would not avoid a recapture  thereof on the part of
  the former owners; and
  
           (d) Any  conveyance  or  transfer of title to all or any portion of the
  Project  required or  permitted  under this  Agreement  shall in all respects be
  subject to the Tax Credit  Conditions  and all  conditions,  approvals  or other
  requirements of the rules and regulations of any authority applicable thereto.
  
           Section  9.5  Limitations  on General  Partner's  Power and  Authority.
  Notwithstanding the foregoing provisions of this Article IX, the General Partner
  shall not:
  
           (a)      Except as required by Section 9.4, act in contravention of 
  this Agreement;
  
           (b)      Act in any manner  which  would  make it  impossible to carry
  on the  ordinary  business  of the Partnership;
  
           (c)      Confess a judgment against the Partnership;
  
           (d)      Possess Partnership  property,  or assign the Partner's right 
  in specific  Partnership  property, for other than the exclusive benefit of the 
  Partnership;
  
           (e)      Admit a Person as a General Partner except as provided in 
  this Agreement;
  
           (f)      Admit a Person as a Limited Partner except as provided in this
  Agreement;
  
           (g)      Violate the Mortgage Loan or Mortgage Note;
  
           (h)      Cause the Project apartment units to be rented to anyone 
  other than Qualified Tenants;
  
           (i)      Violate the Minimum Set-Aside Test for the Project;
  
           (j)      Cause any recapture of the Tax Credits;
  
           (k) Permit any creditor who makes a nonrecourse loan to the Partnership
  to have,  or to acquire at any time as a result of making such loan,  any direct
  or indirect  interest in the profits,  income,  capital or other property of the
  Partnership, other than as a secured creditor; or
  
           (l)  Commingle  funds  of the  Partnership  with the  funds of  another
  Person;  provided,  however,  that the General  Partner  may  establish a master
  fiduciary  account pursuant to which separate  subtrust accounts are established
  
  
                                         26
  <PAGE>
  
  for the benefit of affiliated  limited  partnerships,  provided that Partnership
  funds  are  protected  from  claims  of such  other  partnerships  and/or  their
  creditors.
  
           Section 9.6 Restrictions on Authority of General  Partner.  Without the
  prior approval of the Limited Partner the General Partner shall not:
  
           (a)      Sell,  exchange,  lease or otherwise  dispose of all or a  
  substantial  part of the assets of the Partnership;
  
           (b)      Incur  indebtedness  other than the Mortgage Loan in the name
  of the Partnership,  other than in the ordinary course of the Partnership's 
  business;
  
           (c)      Engage in any  transaction  not  expressly  contemplated  by 
  this Agreement in which the General Partner has an actual or potential conflict
  of interest with the Limited Partner;
  
           (d) Admit a General  Partner,  or elect to continue  the  Partnership's
  business after a General  Partner ceases to be a General  Partner (other than by
  removal) where there is no remaining or surviving General Partner;
  
           (e)      Contract away the fiduciary duty owed to the Limited Partner 
  at common law; or
  
           (f) Take any action  which  would cause the Project to fail to qualify,
  or which would cause a termination or discontinuance of the qualification of the
  Project,  as a "qualified low income housing  project" under Section 42(g)(1) of
  the Code, as amended, or any successor thereto, or which would cause the Limited
  Partner to fail to obtain the  Projected  Tax  Credits or which  would cause the
  recapture of any LIHC.
  
           Section 9.7 Duties of General Partner. The General Partner agrees that
  it shall at all times:
  
           (a) Use its best  efforts to rent 100% of the  apartments  to Qualified
  Tenants  during the Project's  "compliance  period" for purposes of Code Section
  42.
  
           (b) Diligently  and faithfully  devote such of its time to the 
  business of the Partnership as may be necessary to properly conduct the affairs 
  of the Partnership;
  
           (c) File and publish all certificates, statements or other instruments
  required by law for the formation and operation of the Partnership as a limited
  partnership in all appropriate jurisdictions;
  
  
  
                                         27
  <PAGE>
  
           (d) Cause the Partnership to carry adequate public liability insurance,
  comprehensive  casualty  insurance for not less than the full insurable value of
  the Project and such other  insurance as is generally  maintained for properties
  similar to the Project;
  
           (e) Have a fiduciary  responsibility for the safekeeping and use of all
  funds and assets of the Partnership,  whether or not in its immediate possession
  or control  and not employ or permit  another to employ  such funds or assets in
  any manner except for the benefit of the Partnership;
  
           (f) Comply with all FmHA, Code and state rules and regulations for 
  rural rental housing, LIHC; and
  
           (g) Perform such other acts as may be expressly required of it under 
  the terms of this Agreement.
  
           Section 9.8 Partnership Expenses.
  
           (a) All of the  Partnership's  expenses shall be billed directly to and
  paid by the Partnership to the extent practicable. Reimbursements to the General
  Partner or any of its  Affiliates by the  Partnership  shall be allowed only for
  the Partnership's operating cash expenses and only subject to the limitations on
  the reimbursement of such expenses set forth herein. As used in this Section 9.8
  the term  "operating  cash  expenses"  shall  mean,  with  respect to any fiscal
  period,  the amount of cash  disbursed by the  Partnership in that period in the
  ordinary course of business for the payment of its operating  expenses,  such as
  expenses  for  advertising  and  promotion,  management,  utilities,  repair and
  maintenance,  insurance, Partner communications,  legal, accounting, statistical
  and bookkeeping services,  use of computing or accounting equipment,  travel and
  telephone expenses,  salaries and direct expenses of Partnership employees while
  engaged in Partnership  business,  and any other operational and  administrative
  expenses  necessary  for  the  prudent  operation  of the  Partnership.  Without
  limiting the  generality  of the  foregoing,  "operating  cash  expenses"  shall
  include fees paid by the  Partnership to the General Partner or any Affiliate of
  the General  Partner  permitted by this  Agreement and the actual cost of goods,
  materials and  administrative  services used for or by the Partnership,  whether
  incurred by the  General  Partner,  an  Affiliate  of the  General  Partner or a
  nonaffiliated  Person in  performing  the  foregoing  functions.  As used in the
  preceding  sentence,  "actual cost of goods and materials" means the actual cost
  of goods and materials used for or by the Partnership and obtained from entities
  not affiliated with the General  Partner,  or goods and materials  obtained from
  
  
                                         28
  <PAGE>
  
  the General Partner or an Affiliate at competitive rates, provided the same does
  not violate FmHA rules and regulations,  Actual cost of administrative  services
  means the pro rata cost of personnel  (as if such persons were  employees of the
  Partnership)  associated  therewith,  but in no event to exceed the amount which
  would be charged by nonaffiliated Persons for comparable goods and services.
  
           (b)  Reimbursement  to the General  Partner or any of its Affiliates of
  operating  cash expenses  pursuant to Subsection  (a) hereof shall be subject to
  the following:
  
                    (i)  No such reimbursement shall be permitted for services for
  which the General Partner or any of its Affiliates is entitled to compensation 
  by way of a separate fee; and
  
                    (ii) No such  reimbursement  shall  be  made  for (a)  rent or
  depreciation,  utilities,  capital equipment or other such administrative items,
  and (b) salaries,  fringe  benefits,  travel  expenses and other  administrative
  items incurred or allocated to any  "controlling  person" of the General Partner
  or any  Affiliate  of the General  Partner.  For the  purposes  of this  Section
  9.7(b)(ii),  "controlling  person" includes,  but is not limited to, any Person,
  however titled,  who performs functions for the General Partner or any Affiliate
  of the General  Partner  similar to those of: 1) chairman or member of the board
  of directors;  (2) executive  management,  such as president,  vice president or
  senior vice president,  corporate secretary or treasurer; (3) senior management,
  such as the vice  president  of an operating  division  who reports  directly to
  executive  management;  or (4) those holding 5% or more equity  interest in such
  General  Partner or any such Affiliate of the General Partner or a person having
  the power to direct or cause the  direction of such General  Partner or any such
  Affiliate  of the  General  Partner,  whether  through the  ownership  of voting
  securities, by contract or otherwise.
  
           Section 9.9 General Partner Expenses. The General Partner or Affiliates
  of the  General  Partner  shall  pay  all  Partnership  expenses  which  are not
  permitted to be reimbursed  pursuant to Section 9.8 and all other expenses which
  are unrelated to the business of the Partnership.
  
           Section  9.10  Other  Business  of  Partners.  Any  Partner  may engage
  independently  or with others in other  business  ventures  of every  nature and
  description,  including,  without  limitation,  the  acquisition,   development,
  construction,  operation and management of real estate projects and developments
  of every  type on their own  behalf or on  behalf of other  partnerships,  joint
  ventures,  corporations  or other business  ventures  formed by them or in which
  they may have an interest,  including,  without  limitation,  business  ventures
  similar  to,  related to or in direct or indirect  competition  with the Project
  except if prohibited under a non-competition agreement.  Neither the Partnership
  
  
                                         29
  <PAGE>
  
  nor any  Partner  shall  have  any  right by  virtue  of this  Agreement  or the
  partnership  relationship  created  hereby  in  or to  such  other  ventures  or
  activities or to the income or proceeds derived therefrom.
  
           Section 9.11 Covenants,  Representations  and  Warranties.  The General
  Partner covenants, represents and warrants that the following are presently true
  and  will  be  true  during  the  term of this  Agreement,  to the  extent  then
  applicable:
  
           (a) The  Partnership is a duly organized  limited  partnership  validly
  existing  under  the  laws  of the  State  and  has  complied  with  all  filing
  requirements  necessary  for the  protection  of the  limited  liability  of its
  Limited Partners.
  
           (b) This  Partnership  Agreement and the Project  Documents are in full
  force and effect and  neither  the  Partnership  nor the  General  Partner is in
  material  breach  or  violation  of  any  provisions  thereof  or  of  any  FmHA
  regulation.
  
           (c) Existing  improvements,  if any, on the Project have been completed
  substantially in conformity with the Project Documents, and the Project is being
  operated in  accordance  with  standards  and  procedures  which are prudent and
  customary for the operation of properties similar to the Project.
  
           (d) Additional  construction on the Project, if any, shall be completed
  substantially   in  conformity   with  the  Project   Documents  and  any  other
  requirements necessary to obtain Completion of Construction.
  
           (e) The Project is being  operated in  accordance  with  standards  and
  procedures  which are prudent and  customary  for the  operation  of  properties
  similar to the Project.
  
           (f)      No Partner has any personal  liability with respect to or has
  personally  guaranteed the payment of the permanent Mortgage.
  
           (g) The Partnership is in material compliance with all construction and
  use codes  applicable  to the  Project  and is not in  violation  of any zoning,
  environmental or similar regulations applicable to the Project.
  
           (h) All  appropriate  public  utilities,  including  sanitary and storm
  sewers,  water,  gas  and  electricity,  are  currently  available  and  will be
  operating  properly for all units in the Project at the time of first  occupancy
  and throughout the term of the Partnership.
  
           (i) The Project has obtained,  or will obtain before Permanent Mortgage
  Commencement,  and  will  maintain  throughout  the  term  of  this  Partnership
  Insurance written by an Insurance Company.
  
  
  
                                         30
  <PAGE>
  
           (j) The  Partnership  owns  the fee  simple  interest  in the  Project,
  subject only to liens  (except  those with respect to which an adequate  bond or
  other financial security has been issued) which, in the aggregate, do not exceed
  $10,000 and the Mortgage Loan.
  
           (k) The  Construction  Contract  has  been  entered  into  between  the
  Partnership and the Contractor;  no other  consideration or fee shall be paid to
  the Contractor other than amounts set forth in the Construction Contract.
  
           (l) Except as  otherwise  disclosed  to the Limited  Partner in writing
  prior to the execution of this Agreement,  to the best of the General  Partner's
  knowledge:  (1) no Hazardous  Substance  has been disposed of, or released to or
  from,  or otherwise  now exists in, on, under or around,  the Project and (2) no
  aboveground or underground storage tanks are now or have ever been located on or
  under the Project. The General Partner will not install or allow to be installed
  any aboveground or underground storage tanks on the Project. The General Partner
  covenants  that the Project shall be kept free of Hazardous  Materials and shall
  not be used to generate,  manufacture,  refine, transport, treat, store, handle,
  dispose  of,  transfer,  produce  or  process  Hazardous  Materials,  except  in
  connection  with the normal  maintenance  and  operation  of any  portion of the
  Project. The General Partner shall comply, or cause there to be compliance, with
  all applicable Federal, state and local laws, ordinances,  rules and regulations
  with respect to Hazardous  Materials  and shall keep,  or cause to be kept,  the
  Project free and clear of any liens imposed  pursuant to such laws,  ordinances,
  rules and  regulations.  The General  Partner must  promptly  notify the Limited
  Partner in writing (3) if it knows,  or  suspects  or believes  there may be any
  Hazardous  Substance  in or around  any part of the  Project,  any  Improvements
  constructed on the Project,  or the soil,  groundwater or soil vapor, (4) if the
  General  Partner or the  Partnership may be subject to any threatened or pending
  investigation by any governmental  agency under any law, regulation or ordinance
  pertaining to any Hazardous  Substance,  and (5) of any claim made or threatened
  by any Person,  other than a  governmental  agency,  against the  Partnership or
  General Partner  arising out of or resulting from any Hazardous  Substance being
  present or released in, on or around any part of the Project.
  
           (m) As of the date hereof, at funding of the Construction Loan and upon
  Permanent  Mortgage  Commencement,  fire and extended coverage insurance for the
  full  replacement  value of the Project  (excluding the value of the land,  site
  utilities,  landscaping and  foundations)  and worker's  compensation and public
  liability  insurance,  all in favor of the  Partnership,  is and will be in full
  force and effect  and will be kept in full  force and effect  during the term of
  
  
                                         31
  <PAGE>
  
  the  Partnership;   all  such  policies  shall  be  amounts  and  with  insurers
  satisfactory  to the  permanent  lender  and  shall be paid  out of  Partnership
  assets.
  
           (n) The Partnership will allocate to the Limited Partner the Projected 
  Annual Tax Credits.
  
           (o) No charges or encumbrances  exist with respect to the Project other
  than those which are created or permitted by the Project  Documents or are noted
  or excepted in the title policy for the Project.
  
           (p) The  buildings  on the Project  site shall  constitute a "qualified
  low-income  housing  project"  as defined in Section  42(g) of the Code,  and as
  amplified by the Treasury Regulations thereunder. In this connection,  not later
  than  December  31 of the  first  year in which the  Partners  elect the LIHC to
  commence in accordance the Code.
  
           (q) No event or  proceeding,  including,  but not  limited  to, any (A)
  legal actions or proceedings before any court,  commission,  administrative body
  or other  governmental  authority,  and (B) acts of any  governmental  authority
  having  jurisdiction over the zoning or land use laws applicable to the Project,
  has occurred the  continuing  effect of which has: (i)  materially  or adversely
  affected the operation of the  Partnership or the Project  (except to the extent
  that funds are  available  to the  Partnership  to correct or cure such event or
  proceeding);  (ii)  materially or adversely  affected the ability of the General
  Partner to perform its  obligations  hereunder or under any other agreement with
  respect to the Project; or (iii) prevented the completion of construction of the
  improvements in substantial  conformity with the Project  Documents,  other than
  legal  proceedings which have been bonded against (or as to which other adequate
  financial  security has been issued) in a manner as to indemnify the Partnership
  against loss;  provided that the foregoing  does not apply to matters of general
  applicability which would adversely affect the Partnership, the General Partner,
  Affiliates of the General  Partner or the Project only insofar as they or any of
  them are part of the general public.
  
           (r)  Neither  the   Partnership   nor  the  General   Partner  has  any
  liabilities,  contingent or otherwise,  which have not been disclosed in writing
  to the Limited  Partner and which in the  aggregate do not affect the ability of
  the Limited Partner to obtain the anticipated  benefits of its investment in the
  Partnership.
  
           (s)  The General Partner has and shall maintain a net worth equal to at
  least $500,000.
  
  
  
                                         32
  <PAGE>
  
           The  General  Partner  shall be liable to the  Limited  Partner for any
  costs,  damages,  loss of profits,  diminution in the value of its investment in
  the Partnership, or other losses, of every nature and kind whatsoever, direct or
  indirect,  realized  or  incurred  by the  Limited  Partner  as a result  of any
  material breach of the  representations and warranties set forth in this Section
  9.10.
  
                                      ARTICLE X
  
                      ALLOCATIONS OF INCOME, LOSSES AND CREDITS
  
           Section 10.1 General. All items includable in the calculation of Income
  or Loss not arising from a Sale or  Refinancing,  and all Tax Credits,  shall be
  allocated 99% to the Limited Partner and 1% to the General Partner.
  
           Section  10.2  Allocations  From Sale or  Refinancing.  All  Income and
  Losses  arising  from a Sale or  Refinancing  shall  be  allocated  between  the
  Partners as follows:
  
           (a)      As to Income:
  
                    (1) First, an amount of Income equal to the aggregate negative
  balances  (if any) in the  Capital  Accounts  of all  Partners  having  negative
  Capital  Accounts  (prior to taking into account the Sale or Refinancing and the
  Distribution  of Sale or  Refinancing  Proceeds,  but  after  giving  effect  to
  Distributions  of Cash Flow From Operations and allocations of Income and Losses
  pursuant to Section 10.1 for the year) shall be  allocated  to such  Partners in
  proportion to their  negative  Capital  Account  balances until all such Capital
  Accounts shall have zero balances; and
  
                    (2) Second,  an amount of Income  sufficient  to increase  the
  Partner's  positive  Capital  Account  balance to an amount equal to its Capital
  Contribution,  determined  prior to taking into account the Distribution of Sale
  or Refinancing  Proceeds from the Sale or Refinancing but after giving effect to
  allocations  pursuant to Section 10.2(a) resulting from the Sale or Refinancing;
  and
  
                    (3) the balance, if any, of such Income shall be allocated 99%
  to the Limited  Partner and 1% to the General Partner.
  
           (b)      As to Losses:
  
                    (1) an  amount  of  Losses  equal  to the  aggregate  positive
  balances  (if any) in the  Capital  Accounts  of all  Partners  having  positive
  Capital  Accounts  (prior to taking into account the Sale or Refinancing and the
  Distribution  of Sale or  Refinancing  Proceeds,  but  after  giving  effect  to
  
  
                                         33
  <PAGE>
  
  Distributions  of Cash Flow From Operations and allocations of Income and Losses
  pursuant to Section 10.1 for the year) shall be  allocated  to such  Partners in
  proportion to their  positive  Capital  Account  balances until all such Capital
  Accounts shall have zero balances; and
  
                    (2) the balance of any such Losses shall be allocated 99% to 
  the Limited  Partner and 1% to the General Partner.
  
           (c)  Notwithstanding  the foregoing  provisions of Section  10.2(a) and
  (b), in no event shall any Losses be  allocated  to a Limited  Partner if and to
  the extent that such  allocation  would  create or increase an Adjusted  Capital
  Account Deficit for such Limited  Partner.  In the event an allocation of 99% of
  each item  includable  in the  calculation  of Income or Loss not arising from a
  Sale or  Refinancing,  would  create or  increase an  Adjusted  Capital  Account
  Deficit for the Limited  Partner,  then so much of the items of deduction  other
  than projected depreciation shall be allocated to the General Partner instead of
  the Limited Partner as is necessary to allow the Limited Partner to be allocated
  99% of the  items  of  income  and  Project  depreciation  without  creating  or
  increasing an Adjusted Capital Account Deficit for the Limited Partner, it being
  the intent of the parties that the Limited  Partner  always be allocated  99% of
  the  items of  Income  not  arising  from a Sale or  Refinancing  and 99% of the
  Project depreciation.
  
           Section 10.3  Special  Allocations.  The following special allocations
  shall be made in the  following order:
  
           (a) Except as otherwise  provided in Section 1.704-2(f) of the Treasury
  Regulations, notwithstanding any other provisions of this Article X, if there is
  a net decrease in Partnership  Minimum Gain during any Partnership  fiscal year,
  each Partner shall be specially  allocated items of Partnership  Income and gain
  for such fiscal year (and, if necessary,  subsequent  fiscal years) in an amount
  equal to such Person's  share of the net decrease in  Partnership  Minimum Gain,
  determined  in  accordance  with  Treasury   Regulations   Section   1.704-2(g).
  Allocations pursuant to the previous sentence shall be made in proportion to the
  respective  amounts  required  to be  allocated  to each  Partner  and  pursuant
  thereto.  The items to be so allocated  shall be determined  in accordance  with
  Section  1.704-2(f)(6)  and  1.704-2(j)(2)  of the  Treasury  Regulations.  This
  Section  10.3(a)  is  intended  to  comply  with  the  minimum  gain  chargeback
  requirement  in Section  1.704-2(f)  of the  Treasury  Regulations  and shall be
  interpreted consistently therewith.
  
           (b)  Except as  otherwise  provided  in  Section  1.704-2(i)(4)  of the
  Treasury Regulations,  notwithstanding any other provision of this Article X, if
  there is a net decrease in Partner Nonrecourse Debt Minimum Gain attributable to
  
  
                                         34
  <PAGE>
  
  a Partner  Nonrecourse Debt during any Partnership  fiscal year, each Person who
  has a share of the Partner  Nonrecourse  Debt Minimum Gain  attributable to such
  Partner Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of
  the Treasury  Regulations,  shall be specially  allocated  items of  Partnership
  Income and gain for such  fiscal  year (and,  if  necessary,  subsequent  fiscal
  years) in an amount equal to such Person's  share of the net decrease in Partner
  Nonrecourse  Debt Minimum Gain  attributable to such Partner  Nonrecourse  Debt,
  determined  in  accordance  with  Treasury  Regulations  Section  1.704-2(i)(4).
  Allocations pursuant to the previous sentence shall be made in proportion to the
  respective  amounts required to be allocated to each Partner  pursuant  thereto.
  The items to be so allocated  shall be determined  in  accordance  with Sections
  1.704-2(i)(4)  and  1.704-2(j)(2)  of the  Treasury  Regulations.  This  Section
  10.3(b) is intended to comply with the minimum gain  chargeback  requirement  in
  Section  1.704-2(i)(4)  of the  Treasury  Regulations  and shall be  interpreted
  consistently therewith.
  
           (c) In the event any Partner  unexpectedly  receives  any  adjustments,
  allocations,   or  distributions   described  in  Treasury  Regulations  Section
  1.704-1(b)(2)(ii)(d)(4),    Section    1.704-1(b)(2)(ii)(d)(5),    or    Section
  1.704-1(b)(2)(ii)(d)(6), items of Partnership Income and gain shall be specially
  allocated to each such Partner in an amount and manner  sufficient to eliminate,
  to the extent required by the Treasury Regulations, the Adjusted Capital Account
  Deficit of such  Partner as quickly as  possible,  provided  that an  allocation
  pursuant to this  Section  10.3(c)  shall be made if and only to the extent that
  such  Partner  would  have  Adjusted  Capital  Account  Deficit  after all other
  allocations  provided for in this Section 10.3 have been  tentatively made as if
  this Section 10.3(c) were not in the Agreement.
  
           (d) In the event any Partner has a deficit  Capital  Account at the end
  of any  Partnership  fiscal year which is in excess of the sum of (i) the amount
  such Partner is obligated to restore, and (ii) the amount such Partner is deemed
  to be obligated  to restore  pursuant to the  penultimate  sentences of Treasury
  Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be
  specially  allocated items of Partnership  Income and gain in the amount of such
  excess as quickly as  possible,  provided  that an  allocation  pursuant to this
  Section  10.3(d) shall be made if and only to the extent that such Partner would
  have a deficit Capital Account in excess of such sum after all other allocations
  provided for in this Section 10.3 have been  tentatively made as if this Section
  10.3(d) and Section 10.3(c) hereof were not in the Agreement.
  
           (e)  Nonrecourse  Deductions  for any fiscal  year  shall be  specially
  allocated 99% to the Limited Partner and 1% to the General Partner.
  
  
  
                                         35
  <PAGE>
  
           (f) Any  Partner  Nonrecourse  Deductions  for any fiscal year shall be
  specially  allocated  to the  General  Partner or Limited  Partner who bears the
  economic risk of loss with respect to the Partner Nonrecourse Debt to which such
  Partner  Nonrecourse  Deductions are  attributable  in accordance  with Treasury
  Regulations Section 1.704-2(i)(1).
  
           (g) To the  extent  an  adjustment  to the  adjusted  tax  basis of any
  Partnership  asset  pursuant to Code  Section  743(b) is  required,  pursuant to
  Treasury  Regulations  Section  1.704-1(b)(2)(iv)(m)(2)  or Regulations  Section
  1.704-1(b)(2)(iv)(m)(4),  to  be  taken  into  account  in  determining  Capital
  Accounts as the result of a distribution to a Partner in complete liquidation of
  his interest in the  Partnership,  the amount of such  adjustment to the Capital
  Accounts  shall be treated as an item of gain (if the  adjustment  increases the
  basis of the asset) or Loss (if the  adjustment  decreases  such basis) and such
  gain or Loss shall be specially allocated to the General Partner and the Limited
  Partner in accordance  with their interests in the Partnership in the event that
  Treasury Regulations Section 1.704-1 (b)(2)(iv)(m)(2) applies, or to the Partner
  to whom  such  distribution  was made in the  event  that  Treasury  Regulations
  Section 1.704-1(b)(2)(iv)(m)(4) applies.
  
           (h) To the extent the  Partnership  has  taxable  interest  income with
  respect to any  promissory  note pursuant to Section 483 or Section 1271 through
  1288 of the Code:
  
                    (a) Such interest income shall be specially allocated to the  
  Limited  Partner to whom such promissory note relates; and
  
                    (b) The amount of such interest  income shall be excluded from
  the  Capital  Contributions  credited  to  such  Partner's  Capital  Account  in
  connection with payments of principal with respect to such promissory note.
  
           (i) In the event the adjusted tax basis of any Code Section 38 property
  that has been placed in service by the Partnership is increased pursuant to Code
  Section 50(c), such increase shall be specially allocated among the Partners (as
  an item in the  nature  of  income  or  gain)  in the  same  proportions  as the
  investment tax credit that is recaptured with respect to such property is shared
  among the Partners.
  
           (j) Any  reduction in the  adjusted tax basis (or cost) of  Partnership
  Code  Section 38 property  pursuant  to Code  Section  50(c) shall be  specially
  allocated among the Partners (as an item in the nature of expenses or losses) in
  the same  proportions  as the  basis  (or cost) of such  property  is  allocated
  pursuant to Treasury Regulations Section 1.46-3(f)(2)(i).
  
  
  
                                         36
  <PAGE>
  
           (k) Any Income,  Loss,  or  deduction  realized as a direct or indirect
  result of the issuance of an Interest in the Partnership by the Partnership to a
  Partner (the "Issuance  Items") shall be allocated  amount the Partners so that,
  to the extent possible, the net amount of such Issuance Items, together with all
  other  allocations  under this Agreement to each Partner,  shall be equal to the
  net amount that would have been  allocated  to each such Partner if the issuance
  items had not been realized.
  
           (l)  If any  Partnership  expenditure  treated  as a  deduction  on its
  federal  income  tax  return is  disallowed  as a  deduction  and  treated  as a
  distribution  pursuant to Section  731(a) of the Code,  there shall be a special
  allocation  of  gross  income  to the  Partner  deemed  to  have  received  such
  distribution equal to the amount of such distribution.
  
           (m) The  allocation  to the General  Partner of each  material  item of
  Partnership income,  loss,  deduction or credit will not be less than 1% of each
  such item at all times during the existence of the Partnership.
  
           (n) Interest deduction on the Partnership indebtedness referred to in 
  Section  6.3  shall  be allocated 100% to the General Partner.
  
           Section  10.4  Curative  Allocations.  The  allocations  set  forth  in
  Sections 10.3(a),  10.3(b),  10.3(c),  10.3(d),  10.3(e),  10.3(f),  and 10.3(g)
  hereof (the  "Regulatory  Allocations")  are  intended  to comply  with  certain
  requirements of the Treasury Regulations. It is the intent of the Partners that,
  to the extent possible,  all Regulatory  Allocations shall be offset either with
  other  Regulatory  Allocations  or with  special  allocations  of other items of
  Partnership  Income,  gain,  Loss,  or deduction  pursuant to this Section 10.4.
  Therefore,  notwithstanding any other provision of the Article X (other than the
  Regulatory Allocations),  the General Partner shall make such offsetting special
  allocations of Partnership  Income,  gain, Loss, or deduction in whatever manner
  the  General  Partner  determines  appropriate  so that,  after such  offsetting
  allocations are made,  each Partner's  Capital Account balance is, to the extent
  possible,  equal to the Capital  Account  balance such Partner would have had if
  the Regulatory  Allocations  were not part of the Agreement and all  Partnership
  items were allocated pursuant to Sections 10.3(h), 10.3(i), 10.3(j), 10.3(k) and
  10.5. In exercising its discretion under Section 10.4, the General Partner shall
  take into  account  future  Regulatory  Allocations  under  Section  10.3(a) and
  10.3(b)  that,  although  not yet made,  are likely to offset  other  Regulatory
  Allocations previously made under Sections 10.3(e) and 10.3(f).
  
  
  
                                         37
  <PAGE>
  
           Section 10.5 Other Allocation Rules.
  
           (a) The basis (or cost) of any  Partnership  Code  Section 38  property
  shall be allocated  among the Partners in accordance  with Treasury  Regulations
  Section 1.46-3 (f)(2)(i). All Tax Credits (other than the investment tax credit)
  shall be  allocated  among the  Partners  in  accordance  with  applicable  law.
  Consistent with the foregoing,  the Partners intend that LIHTC will be allocated
  99% to the Limited Partner and 1% to the General Partner.
  
           (b) In the event  Partnership  Code  Section 38 property is disposed of
  during any taxable year,  profits for such taxable year (and, to the extent such
  profits are  insufficient,  profits for  subsequent  taxable years) in an amount
  equal to the excess,  if any, of (i) the reduction in the adjusted tax basis (or
  cost) of such property pursuant to Code Section 50(c), over (ii) any increase in
  the adjusted tax basis of such property pursuant to Code Section 50(c) caused by
  the disposition of such property,  shall be excluded from the profits  allocated
  pursuant  to Section  10.1  hereof  and shall  instead  be  allocated  among the
  Partners in proportion  to their  respective  shares of such excess,  determined
  pursuant to Section 10.3(i) and 10.3(j) hereof.  In the event more than one item
  of such property is disposed of by the Partnership, the foregoing sentence shall
  apply  to  such  items  in the  order  in  which  they  are  disposed  of by the
  Partnership,  so the  profits  equal to the entire  amount of such  excess  with
  respect to the first such property  disposed of shall be allocated  prior to any
  allocations with respect to the second such property disposed of, and so forth.
           (c) For purposes of determining the Income,  Losses, or any other items
  allocable  to any  period,  Income,  Losses,  and any such other  items shall be
  determined  on a daily,  monthly,  or other basis,  as determined by the General
  Partners  using any  permissible  method under Code Section 706 and the Treasury
  Regulations thereunder.
  
           Section 10.6 Tax Allocations:  Code Section 704(c).  In accordance with
  Code Section 704(c) and the Treasury Regulations  thereunder,  Income, Loss, and
  deduction  with  respect  to any  property  contributed  to the  capital  of the
  Partnership shall,  solely for tax purposes,  be allocated among the Partners so
  as to take account of any variation  between the adjusted basis of such property
  to the  Partnership  for federal income tax purposes and its initial Gross Asset
  Value (computed in accordance with this Agreement).
  
  In the event the Gross Asset Value of any Partnership asset is adjusted pursuant
  hereto, subsequent allocations of Income, gain, Loss, and deduction with respect
  to such asset shall take account of any variation  between the adjusted basis of
  
  
                                         38
  <PAGE>
  
  such asset for federal income tax purposes and its Gross Asset Value in the same
  manner as under Code Section 704(c) and the Treasury Regulations thereunder.
  
  Any elections or other decisions  relating to such allocations  shall be made by
  the  General  Partner in any manner  that  reasonably  reflects  the purpose and
  intention  of this  Agreement.  Allocations  pursuant to this  Section  10.6 are
  solely for purposes of federal,  state, and local taxes and shall not affect, or
  in any way be taken into account in computing,  any Person's  Capital Account or
  share of Income, Losses, other items, or distributions pursuant to any provision
  of this Agreement.
  
           Section 10.7 Allocation  Among Limited  Partners and Assignees.  In the
  event that the Interest of the Limited Partner  hereunder is at any time held by
  more than one Limited  Partner or Assignee all tax items which are  specifically
  allocated to the Limited  Partner for any month pursuant to this Article X shall
  be  apportioned  among such Persons  according to the ratio of their  respective
  profit-sharing interests in the Partnership at the last day of such month.
  
           Section 10.8 Allocation Among General  Partners.  In the event that the
  Interest of the General  Partner  hereunder is at any time held by more than one
  General  Partner all tax items which are  specifically  allocated to the General
  Partner for any month pursuant to this Article X shall be apportioned among such
  Persons in such  percentages as may from time to time be determined by agreement
  among them  without  amendment  to this  Agreement  or  consent  of the  Limited
  Partner.
  
           Section 10.9 Modification of Allocations.  The provisions of Articles X
  and XI and other  provisions  of this  Agreement  are  intended  to comply  with
  Treasury  Regulation  Section  1.704 and shall be  interpreted  and applied in a
  manner  consistent with such section of the Treasury  Regulations.  In the event
  that the General Partner determines, in its sole discretion,  that it is prudent
  to  modify  the  manner  in which  the  Capital  Accounts  of the  Partners  and
  Assignees,  or any debit or credit thereto, are computed in order to comply with
  such  section of the  Treasury  Regulations,  the General  Partner may make such
  modification, to the minimum extent necessary, to effect the plan of allocations
  and Distributions provided for elsewhere in this Agreement. Further, the General
  Partner shall make any  appropriate  modifications  in the event it appears that
  unanticipated  events (e.g., the existence of a Partnership election pursuant to
  Code  Section  754) might  otherwise  cause this  Agreement  not to comply  with
  Treasury Regulation Section 1.704.
  
  
                                         39
  <PAGE>
  
                                     ARTICLE XI
  
                                    DISTRIBUTION
  
           Section 11.1 Distribution of Cash Flow From Operations.
  
           Cash Flow From  Operations  for each fiscal  year shall be  distributed
  within  seventy-five (75) days following each calendar year and shall be applied
  in the following order of priority:
  
                    (a) To the  payment of the current  Reporting  Fee and then to
  the payment of any accrued  Reporting Fees which have not been paid in full from
  previous years;
  
                    (b) To the payment of the Partnership Administration Fee; and
  
                    (c) The balance thereof, if any, shall be distributed annually
  99% to the Limited Partner and 1% to the General Partner.
  
           Section  11.2  Distribution  Upon  Sale or  Refinancing.  Provided  the
  Distribution  is not  determined  to be a liquidating  distribution  pursuant to
  Treasury Regulation 1.704-1(b)(2)(ii)(g),  funds available for distribution upon
  Sale or Refinancing shall be distributed in the following order:
  
           (a)      To the payment of the Mortgage Note and other matured debts 
  and  liabilities of the  Partnership, if applicable;
  
           (b)      To the payment of any other priority debt in accordance with 
  State law;
  
           (c)      To any accrued payments or loan repayments owing to the  
  Partners,  to be paid  prorata  if necessary;
  
           (d)      To the  establishment  of any reserves which the General 
  Partner shall deem reasonably  necessary for contingent, unmatured or unforeseen
  liabilities or obligations of the Partnership;
  
           (e)      To the Limited Partner in an amount equal to its Capital 
  Contribution;
  
           (f)      To the General Partner in an amount equal to its Capital 
  Contribution; and
  
           (g)      Thereafter, 50% to the Limited Partner and 50% to the General
  Partner.
  
  
                                         40
  <PAGE>
  
                                     ARTICLE XII
  
                           VOLUNTARY TRANSFERS OF LIMITED
                        PARTNER'S INTEREST IN THE PARTNERSHIP
  
           Section 12.1  Assignment  of Limited  Partner's  Interest.  The Limited
  Partner  shall not have the right to assign all or any part of its  interest  in
  the Partnership to any other Person, whether or not a Partner, except:
  
           (a) By a written  instrument in form and substance  satisfactory to the
  General  Partner  and its  counsel,  setting  forth the name and  address of the
  proposed transferee,  the nature and extent of the interest which is proposed to
  be transferred  and the terms and conditions upon which the transfer is proposed
  to be made,  stating that the Assignee  accepts and agrees to be bound by all of
  the terms and provisions of this Agreement, and providing for the payment of all
  reasonable  expenses  incurred  by  the  Partnership  in  connection  with  such
  assignment,  including but not limited to the cost of preparing any necessary or
  appropriate amendment to this Agreement;
  
           (b) Upon consent of the General Partner to such assignment, which  
  shall  not be  unreasonably withheld;
  
           (c) Upon  receipt  by the  General  Partner  of an  opinion  of counsel
  acceptable  to the  General  Partner  that  such  assignment  complies  with all
  applicable federal and state securities laws; and
  
           (d) Upon  receipt  by the  General  Partner of the  Assignee's  written
  representation  that the  Partnership  interest is to be acquired by him for his
  own  account  for  long-term  investment  and  not  with a view  toward  resale,
  fractionalization, division or distribution thereof.
  
           THE  LIMITED  PARTNERSHIP   INTEREST  DESCRIBED  HEREIN  HAS  NOT  BEEN
  REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933 AS  AMENDED  OR UNDER  ANY STATE
  SECURITIES  LAW. THE INTEREST  MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED  UNLESS
  REGISTERED  UNDER  APPLICABLE  FEDERAL  AND STATE  SECURITIES  LAWS OR UNLESS AN
  EXEMPTION FROM REGISTRATION IS AVAILABLE.
  
           Section 12.2  Effective  Date of Transfer.  Any assignment of a Limited
  Partner's  interest  pursuant to Section 12.1 shall  become  effective as of the
  last day of the calendar  month in which the last of the  conditions  in Section
  12.1 to such assignment are satisfied.
  
  
  
                                         41
  <PAGE>
  
           Section  12.3  Invalid  Assignment.  Any  purported  assignment  of  an
  interest of a Limited Partner  otherwise than in accordance with Section 12.1 or
  Section 12.6 shall be of no effect as between the  Partnership and the purported
  assignee and shall be disregarded by the General  Partner in making  allocations
  and Distributions hereunder.
  
           Section 12.4  Assignee's  Rights to Allocations and  Distributions.  An
  Assignee shall be entitled to receive  allocations of Partnership  tax items and
  Distributions  from the Partnership  attributable  to the  Partnership  interest
  acquired by reason of any permitted  assignment  from and after the first day of
  the calendar month following the month which ends with the effective date of the
  transfer of such interest as provided in Section 12.2. The  Partnership  and the
  General  Partner  shall be  entitled to treat the  assignor of such  Partnership
  interest  as the  absolute  owner  thereof in all  respects,  and shall incur no
  liability for allocations of Partnership  items and  Distributions  made in good
  faith to such assignor,  until such time as the written instrument of assignment
  has been received by the Partnership.
  
           Section 12.5 Substitution of Assignee as Limited Partner.
  
           (a) An Assignee shall not have the right to become a substitute Limited
  Partner in place of his  assignor  unless  the  written  consent of the  General
  Partner to such  substitution  shall have been obtained,  which consent,  in the
  General  Partner's  absolute  discretion,  may be withheld.  No consent or other
  action of any non-assigning  Limited Partner shall be required for the admission
  to the Partnership of any substitute Limited Partner.
  
           (b) A  nonadmitted  Assignee  of a Limited  Partner's  interest  in the
  Partnership  under an  assignment  complying  with  Section  12.1  shall only be
  entitled to receive that share of allocations,  Distributions  and the return of
  Capital  Contribution  to which its transferor  would otherwise be entitled with
  respect  to the  interest  transferred,  and shall  have no right to obtain  any
  information  on  account  of the  Partnership's  transactions,  to  inspect  the
  Partnership's  books and records or have any other of the rights and  privileges
  of a Limited  Partner,  provided,  however,  that the  Partnership  shall, if an
  Assignee  and  assignor  jointly  advise  the  General  Partner  in writing of a
  transfer of an interest in the Partnership  complying with Section 12.1, furnish
  the Assignee with  pertinent tax  information  at the end of each fiscal year of
  the Partnership.
  
           (c) The General Partner may elect to treat an Assignee of a Partnership
  interest who has not become a substitute Limited Partner as a substitute Limited
  
  
                                         42
  <PAGE>
  
  Partner in the place of its Assignor  should it deem in its absolute  discretion
  that such treatment is in the best interest of the Partnership.
  
           Section  12.6  Death,  Bankruptcy,  Incompetency,  etc.  of  a  Limited
  Partner. Upon the death,  dissolution,  adjudication of bankruptcy,  insanity or
  adjudication  of incompetency of a Limited  Partner,  such Partner's  executors,
  administrators or legal  representatives  shall have all the rights of a Limited
  Partner for the purpose of settling or managing such Partner's estate, including
  such  power as such  Partner  possessed  to assign  his  Interest  as a Partner.
  However,  such executors,  administrators or legal representatives will not have
  the  right  to  become  substitute  Limited  Partners  in  the  place  of  their
  predecessor-in-interest  unless the General Partner  consents in accordance with
  Section 12.5(a).
  
           Section 12.7 Assignment. For purposes of this Article XII, "assign" and
  "assignment" shall mean any grant, vesting,  conveyance,  or transfer whatsoever
  of any interest whatsoever  (including without limitations  security interests),
  whether by operation of law or consensually, gratuitously or for considerations.
  
                                    ARTICLE XIII
  
                       RESIGNATION, REMOVAL AND REPLACEMENT OF
                                   GENERAL PARTNER
  
           Section 13.1  Resignation of General  Partner.  The General Partner may
  resign  only with the prior  written  approval of the  Limited  Partner  and, if
  required by applicable  FmHA  regulations,  the FmHA. The Consent of the Limited
  Partner shall be conditioned upon the agreement of one or more successor General
  Partners who satisfy the  requirements  of Section 13.3 of this  Agreement to be
  admitted as substitute General Partner(s).
  
           Section 13.2 Removal of General Partner.
  
           (a)  Subject  to  the  limitations  imposed  on  the  Project  and  the
  Partnership by applicable FmHA  regulations,  the Limited Partner may remove the
  General Partner:
  
                    (1)      For cause if such General Partner has:
  
                             (A)      Been subject to an Event of Bankruptcy;
  
                             (B)      Committed  any fraud,  willful  misconduct,
  breach of fiduciary  duty or other grossly negligent conduct in the performance 
  of its duties under this Agreement;
  
  
  
                                         43
  <PAGE>
  
                             (C)      Convicted of, or entering into a plea of 
  guilty to a felony;
  
                             (D)      Made personal use of Partnership funds or 
  properties;
  
                             (E)      Violated  the  terms of the FmHA  loan  
  Agreement,  the  FmHA  Interest  Credit Agreement or any FmHA rule or regulation
  applicable to the Partnership Mortgage Note,  and  such  violation  prompts the 
  FmHA to  issue a  default  letter  or acceleration  notice to the  Partnership 
  or General  Partner  and such  conduct caused the Partnership to suffer an 
  uninsurable loss;
  
                             (F)      Breached any  representation,  warranty or 
  covenant contained in this Agreement or failed to perform any action which may 
  be required by this Agreement and such conduct caused the Partnership to suffer 
  an uninsurable loss;
  
                             (G)      Violated any federal or state tax law which
  causes a recapture of LIHC; or
  
                             (H)      Failed  during  any  six-month  period  
  during  the  first 15 years of  Project operations to cause at least 85% of the 
  total  apartment units in the Project to qualify for LIHC, unless such failure 
  is the result of fire,  flood,  earthquake or other act of God or unless  such 
  failure is cured  within 120 days after the end of the six-month period.
  
           (b) Written  notice of the  removal  for cause of the  General  Partner
  shall be served upon the General  Partner  either by certified or by  registered
  mail, return receipt  requested,  or by personal service.  Such notice shall set
  forth the reasons for the  removal,  if any, and the date upon which the removal
  is to become effective.
  
           (c) Upon  receipt of such the notice of removal for cause,  the General
  Partner shall cause an accounting to be prepared  covering the  transactions  of
  the  Partnership  from the end of the  previous  fiscal year through the date of
  receipt  of such  notice,  and  thereafter  it  shall  not  sell or  dispose  of
  Partnership  assets in the  ordinary  course of business of the  Partnership  or
  otherwise  unless such sale or disposition is subject to a contract entered into
  by and binding upon the Partnership prior to the date upon which such notice was
  received by the General Partner. If possible,  the accounting shall be completed
  by the  effective  date of the  removal  and  shall be in  sufficient  detail to
  accurately  and fully  reflect  the  earnings  or losses  for the period and the
  financial condition of the Partnership.  The expenses of the accounting shall be
  borne by the General Partner.
  
  
  
                                         44
  <PAGE>
  
           (d) The removal of the General Partner for cause shall become effective
  upon the date set forth in the notice.  Such General  Partner shall (i) cease to
  be a Partner  of, or have any further  interest  in, the  Partnership  as of the
  effective  date  of the  removal;  (ii)  be  entitled  to  receive  as its  sole
  compensation  for its interest in the Partnership an amount equal to its Capital
  Account  balance  as of the  effective  date of the  removal,  payable  upon the
  dissolution and  termination of the  Partnership  after all of the Partners have
  been  distributed  the positive  balances in their Capital  Accounts;  and (iii)
  remain  liable to restore any deficit  balance in its Capital  Account as of the
  date of its removal as provided in Section 15.3(b) of this Agreement.
  
           Section 13.3 Admission of Substitute  General Partner.  No Person shall
  be admitted as a substitute  General  Partner  unless (i) such Person shall have
  agreed to become a  substitute  General  Partner by a written  instrument  which
  shall include the  acceptance and adoption of this  Agreement;  (ii) the Limited
  Partner and, if required by FmHA regulations applicable to the Partnership, FmHA
  shall have  consented in writing to the admission of such Person as a substitute
  General  Partner;  (iii) such Person  shall  acquire  and agree to maintain  the
  Financial  Interest in the  Partnership,  if any,  required by  applicable  FmHA
  regulations; (iv) such Person, if a corporation, shall satisfy the "safe harbor"
  guidelines  established  by  Revenue  Procedure  89-12,  1989-7  I.R.B.  or  any
  successor  Revenue  Procedure;  and (v) such  Person  shall  have  executed  and
  acknowledged any other instruments  which the withdrawing  General Partner shall
  reasonably  deem necessary or appropriate to affect the admission of such Person
  as a substitute General Partner. If the foregoing conditions are satisfied, this
  Agreement shall be amended in accordance with the provisions of the Act, and all
  other  steps  shall be taken  which  are  reasonably  necessary  to  effect  the
  withdrawal  of the  withdrawing  General  Partner  and the  substitution  of the
  substitute  General Partner.  Nothing  contained herein shall reduce the Limited
  Partner's interest in the Partnership.
  
           Section 13.4  Continuing  Liability.  In the event a General Partner is
  removed or  otherwise  withdraws  from the  Partnership  or sells,  transfers or
  assigns its entire interest  pursuant to this Article XIII, such General Partner
  shall be, and shall remain,  liable for all obligations and liabilities incurred
  as General  Partner prior to the effective  date of such event to the extent the
  time for  performance  thereof has accrued by such date, but shall  otherwise be
  free of any obligation or liability incurred as General Partner.
  
           Section 13.5 Transfer of Interest. Except as otherwise provided herein,
  the General  Partner may not assign,  transfer,  mortgage or sell any portion of
  
  
                                         45
  <PAGE>
  
  its interest in the  Partnership,  or enter into any  agreement as the result of
  which any Person shall become interested in the Partnership, without the consent
  of the Limited Partner.  A transferee of the General  Partner's  interest in the
  Partnership  shall not become a General  Partner  unless  admitted in accordance
  with Section 13.3.
  
           Section 13.6 Payment to General Partner Upon Resignation, Death or 
  Insanity.
  
           (a) Upon the  resignation  of the General  Partner  pursuant to Section
  13.1,  or the death or  insanity  of the General  Partner if an  individual,  or
  dissolution of the General Partner if a corporation, partnership, trust or other
  form of legal entity,  and if the business of the Partnership is to be continued
  with one or more successor or additional  General  Partner(s),  the  Partnership
  shall have the right,  with the  approval  of the Limited  Partner and FmHA,  if
  required,   but  not  the  obligation,   to  liquidate  such  General  Partner's
  Partnership  Interest  upon payment to such  General  Partner of the Fair Market
  Value of such  Interest as  determined  by two  independent  appraisers.  If the
  Partnership  does not  liquidate  the  General  Partner's  Partnership  Interest
  pursuant to the previous  sentence,  then the General  Partner  shall retain the
  same Interest in the Income,  Losses, Tax Credits,  Distributions and Capital of
  the Partnership as it previously  held under this  Agreement,  but such Interest
  shall be held as a special limited partner; and the General Partner shall not be
  personally  liable for Partnership  debts incurred after such General  Partner's
  general  partner  Interest is liquidated.  The resigning  General Partner or its
  representative  as the case may be shall choose one  appraiser and the successor
  or continuing General Partner(s) shall choose one appraiser.  If such appraisers
  cannot  agree upon the Fair Market  Value of the General  Partner's  Partnership
  Interest within 30 days after liquidation of the General Partner's Interest, the
  two appraisers so chosen shall jointly choose a third appraiser. The Fair Market
  Value of the  General  Partner's  Partnership  Interest  shall be the  appraisal
  submitted by the third appraiser whose determination shall be final and binding.
  Each of the parties shall  compensate its own appraiser and the  compensation of
  the third appraiser shall be borne equally by such parties. If the continuing or
  successor General Partner(s) fail to choose an appraiser,  the Fair Market Value
  of the  General  Partner's  Partnership  Interest  shall  be  determined  by the
  appraiser chosen by the resigning  General Partner or its  representative as the
  case may be. If the  General  Partner  fails to choose  an  appraiser,  the Fair
  Market Value of the General Partner's  Partnership  Interest shall be determined
  by the appraiser chosen by the continuing or successor General Partner(s).
  
  
  
                                         46
  <PAGE>
  
           (b) The purchase price of the General  Partner's  Partnership  Interest
  upon  resignation,  dissolution,  death or insanity,  as determined  pursuant to
  Section  13.6(a),  shall be paid by the Partnership by delivering to the General
  Partner or its  representative  as the case may be the  Partnership's  unsecured
  promissory  note  bearing  interest at a rate which is equal to the lesser of 2%
  per annum in excess of the then  prevailing  prime or reference  rate charged by
  Bank of America N.T. & S.A.,  Main Office,  San  Francisco,  California,  or the
  maximum legal rate.  Said note shall be payable upon  Liquidation  in accordance
  with state law priority.  The note shall also provide that the  Partnership  may
  prepay all or any part thereof without penalty.  Notwithstanding  the foregoing:
  if such note is delivered  following the resignation of the General Partner then
  (i) such note  shall not bear  interest  and (ii) the  principal  payable to the
  resigned  General  Partner  shall be  limited  in amount  and date of payment to
  Distributions which such resigned General Partner would have received under this
  Agreement had the General Partner not resigned.
  
                                     ARTICLE XIV
  
                            BOOKS AND ACCOUNTS, REPORTS,
                        TAX RETURNS, FISCAL YEAR AND BANKING
  
           Section 14.1 Books and Accounts.
  
           (a) The  General  Partner  shall  cause  the  Partnership  to keep  and
  maintain at its principal  executive  office full and complete books and records
  which shall include each of the following:
  
                    (1) a current list of the full name and last known business or
  residence address of each Partner set forth in alphabetical  order together with
  the Capital Contribution and the share in profits and losses of each Partner;
  
                    (2) a copy of the  Certificate of Limited  Partnership and all
  certificates of amendment  thereto,  together with executed copies of any powers
  of attorney pursuant to which any certificate has been executed;
  
                    (3) copies of the  Partnership's  federal,  state and local 
  income tax  information  returns and reports, if any, for the six most recent 
  taxable years;
  
                    (4) copies of the original of this Agreement and all 
  amendments thereto;
  
                    (5) financial statements of the Partnership for the six most 
  recent fiscal years; and
  
  
  
                                         47
  <PAGE>
  
                    (6) the  Partnership's  books and records  for at least the  
  current  and past three  fiscal years.
  
           (b) Upon the request of the Limited Partner,  the General Partner shall
  promptly  deliver to the Limited Partner,  at the expense of the Partnership,  a
  copy of the information set forth in Section  14.1(a)(1),  (2) or (4) above. The
  Limited Partner shall have the right upon  reasonable  request and during normal
  business  hours to  inspect  and copy any of the  foregoing  or any of the other
  books and records of the  Partnership  or the Project at its own  expense,  and,
  upon  reasonable  request,  to obtain  from the  General  Partner  copies of the
  Partnership's  federal,  state  and local  income  tax or  information  returns,
  promptly after such returns become available.
  
           Section 14.2 Accounting Reports.
  
           (a) By March 1 of each calendar year the General  Partner shall provide
  to each  Person  who was a Limited  Partner at any time  during the fiscal  year
  ending  during  that  calendar  year  all  tax  information  necessary  for  the
  preparation  of his federal  and state  income tax returns and other tax returns
  with regard to the  jurisdiction(s)  in which the  Partnership  is formed and in
  which the Project is located.
  
           (b) By March 1 of each calendar year the General  Partner shall send to
  each Person who was a Limited Partner at any time during such fiscal year: (i) a
  balance  sheet as of the end of such  fiscal  year  and  statements  of  income,
  Partners,  equity and changes in financial position of such fiscal year prepared
  in accordance with generally accepted  accounting  principles and accompanied by
  an auditor's report containing an opinion of the Partnership's accountants; (ii)
  a report  (which need not be audited) of any  Distributions  made to Persons who
  were Limited Partners at any time during the fiscal year, separately identifying
  Distributions from Cash Flow From Operations for the fiscal year, Cash Flow From
  Operations for prior years, Sale or Refinancing  Proceeds and reserves;  (iii) a
  report  setting  forth  the  amount  of all  fees  and  other  compensation  and
  Distributions  and reimbursed  expenses paid by the  Partnership  for the fiscal
  year to the  General  Partner  or  Affiliates  of the  General  Partner  and the
  services performed in consideration therefor,  which report shall be verified by
  the Partnership's accountants,  with the method of verification to include, at a
  minimum,  a review of the time  records of  individual  employees,  the costs of
  whose services were reimbursed,  and a review of the specific nature of the work
  performed by each such  employee,  all in  accordance  with  generally  accepted
  auditing  standards  and,  accordingly,  including  such tests of the accounting
  records  and  such  other  auditing  procedures  as  the  accountants   consider
  
  
                                         48
  <PAGE>
  
  appropriate in the circumstances; (iv) a copy of the Project's rent roll for the
  most recent  calendar  quarter;  (v) a statement  signed by the General  Partner
  indicating  the  number of  apartment  units  which are  occupied  by  Qualified
  Tenants;  and (vi) a report of the  significant  activities  of the  Partnership
  during the quarter.
  
           (c) Within 60 days after the end of each fiscal quarter in which a Sale
  or Refinancing  of the Project  occurs,  the General  Partner shall send to each
  Person who was a Limited Partner at the time of the Sale or Refinancing a report
  as to the nature of the Sale or Refinancing and as to the profits and losses for
  tax  purposes  and  Sale  or  Refinancing  Proceeds  arising  from  the  Sale or
  Refinancing.
  
           (d) By March 1 of each  calendar year of the  Partnership,  the General
  Partner  shall  provide  to each  person  who was a Limited  Partner at any time
  during such fiscal year an audited  report of the  Project's  financial  affairs
  provided the FmHA requires an audit of the Project pursuant to FmHA regulations.
  
           Section 14.3 Other Reports. The General Partner shall also provide to 
  the Limited Partner:
  
           (a)  During  the  period  of  construction,   a  copy  of  the  initial
  construction schedule and any updates to the construction  schedule,  and by the
  tenth day of each month a copy of the previous  month's  Construction  Loan draw
  request and the inspecting architect's  application and certification of payment
  (AIA Document G702, or similar form acceptable to the Limited Partner);
  
           (b) During  the  rent-up  phase,  and for a term equal to six months of
  sustained  occupancy of 95% or better,  a copy of the previous month's rent roll
  (through  the  last  day of the  month)  and a copy  of the  tenant  tax  credit
  compliance  worksheet  similar to the form in Exhibit "E" attached hereto.  Upon
  request the General  Partner will provide to the Limited Partner the information
  collected by the property management company, or General Partner,  verifying the
  tenant's  eligibility  for  LIHC  purposes.  The  Limited  Partner  will ask for
  information on approximately 10% of the tenants unless the circumstances warrant
  a more thorough review;
  
           (c) A quarterly tax credit  compliance  report similar to the worksheet
  included  in  Exhibit  "E" due on or before  April 30 of each year for the first
  quarter,  July 31 of each year for the second  quarter,  October 31 of each year
  for the third  quarter  and January 31 of each year for the fourth  quarter.  In
  order to  verify  the  reliability  of the  information  being  provided  on the
  compliance  report the Limited  Partner  may request a small  sampling of tenant
  files to be provided.  The sampling will include,  but not be limited to, copies
  
  
                                         49
  <PAGE>
  
  of tenant  applications,  certifications  and third party  verifications used to
  qualify  tenants.  If any  inaccuracies  are  found to  exist on the tax  credit
  compliance report or any items of noncompliance are discovered then the sampling
  will be expanded as determined by the Limited Partner.
  
           (d) By September 15 of each year, an estimate of LIHC for that year;
  
           (e) If the  Project  receives  a  reservation  of LIHCs in one year but
  cannot  complete the  construction  and rent-up until the next year, the General
  Partner will provide to the Limited Partner an audited cost  certification  (and
  backup  documents)  verifying the  Partnership has expended the requisite 10% of
  the reasonably  expected cost basis to meet the carryover test provisions of the
  Code;
  
           (f) During the Compliance Period,  copies of any  certifications  which
  the  Partnership  must  furnish  to federal  or state  governmental  authorities
  administering  the Tax Credit  programs under Section 42 of the Code  including,
  but not limited to, copies of all annual tenant recertification;
  
           (g) A quarterly  report on operations,  in the form attached  hereto as
  Exhibit  "E",  due on or before  April 30 of each year for the first  quarter of
  operations,  July 31 of each year for the second quarter of operations,  October
  31 of each year for the third quarter of operations  and January 31 of each year
  for the fourth quarter of operations which shall include, but is not limited to,
  an  unaudited  income  statement  showing all  activity in the reserve  accounts
  required to be maintained pursuant to Section VIII of this Agreement,  statement
  of income and expenses,  balance sheet, rent roll as of the end of each calendar
  quarter of each year, and third party verification of current utility allowance;
  
           (h) By the annual  renewal  date of each and every  year,  an  executed
  original or certified  copy of each and every  Insurance  policy or  certificate
  required by the terms of this Agreement;
  
           (i) On or before March 15th of each calendar year, the General  Partner
  shall send to the  Limited  Partner  the  General  Partner's  updated  financial
  statement as of December 31 of the previous year;
  
           (j) On or  before  November  1 of  each  calendar  year,  a copy of the
  following year's proposed  operating  budget.  Each such budget shall contain an
  amount required for reserves in accordance with Article VIII and for the payment
  of real estate taxes, insurance, debt service and other payments; and
  
  
  
                                         50
  <PAGE>
  
           (k) Notice of the  occurrence,  or of the likelihood of occurrence,  of
  any event which has had or is likely to have a material  adverse effect upon the
  Project or the Partnership,  including, but not limited to, any breach of any of
  the  representations and warranties set forth in Section 9.10 of this Agreement,
  and any inability of the Partnership to meet its cash obligations as they become
  payable, within ten days after the occurrence of such event.
  
           Section 14.4 Late  Reports.  If the General  Partner does not cause the
  Partnership to fulfill its  obligations  under Sections 14.2 and 14.3 within the
  time periods set forth therein, the General Partner shall pay as damages the sum
  of  $100.00  per  week  (plus  interest)  to  the  Limited  Partner  until  such
  obligations  shall have been fulfilled.  Such damages shall be paid forthwith by
  the General  Partner,  and failure to so pay shall constitute a material default
  of the General Partner hereunder.  In addition,  if the General Partner shall so
  fail to pay, the General partner and its Affiliates  shall forthwith cease to be
  entitled to the annual Partnership Management Fee and to the payment of any Cash
  Flow From  Operations  to which the General  Partner may  otherwise  be entitled
  hereunder.  Such payments of the annual Partnership  Administration Fee and Cash
  Flow From Operations shall be suspended, and shall be restored only upon payment
  of such  damages in full,  and any amount of such  damages  not so paid shall be
  deducted against suspended payments of the annual Partnership Administration Fee
  and Cash Flow From Operations otherwise due to the General Partner under Section
  11.1.
  
           Section 14.5 Annual Site Visits. On an annual basis a representative of
  the Limited Partner, at the Limited Partner's expense, will conduct a site visit
  which will include,  in part,  an  examination  of the grounds,  a review of the
  office and tenant files and an interview with the property manager.
  
           Section 14.6 Tax Returns.  The General  Partner shall cause income tax
  returns for the Partnership to be prepared and timely filed with the appropriate
  federal,  state and local taxing  authorities.  The General Partner shall be the
  tax matters partner for purposes of Section 6231(a)(7) of the Code.
  
           Section 14.7 Fiscal Year. The fiscal year of the  Partnership  shall be
  the  calendar  year or such  other  period as may be  approved  by the  Internal
  Revenue Service for federal income tax purposes.
  
           Section 14.8 Banking.  All funds of the Partnership  shall be deposited
  in a separate  bank  account or accounts as shall be  determined  by the General
  Partner in accordance with FmHA rules and regulations. All withdrawals therefrom
  shall be made  upon  checks  signed  by the  General  Partner  or by any  person
  authorized to do so by the General Partner. The General Partner shall provide to
  
  
                                         51
  <PAGE>
  
  any Partner who requests same the name and address of the financial institution,
  the account number and other relevant information regarding any Partnership bank
  account.
  
           Section 14.9 Certificates and Elections.
  
           (a) The General Partner shall file the First Year Certificate within 90
  days  following  the  close of the  taxable  year  during  which  Completion  of
  Construction  occurs and thereafter shall timely file any certificates which the
  Partnership   must  furnish  to  federal  or  state   governmental   authorities
  administering the Tax Credit programs under Section 42 of the Code.
  
           (b)  The  General  Partner  may,  but is not  required  to,  cause  the
  Partnership  to make or revoke the  election  referred  to in Section 754 of the
  Code, as amended, or any similar provisions enacted in lieu thereof.
  
                                     ARTICLE XV
  
                        DISSOLUTION, WINDING UP, TERMINATION
                         AND LIQUIDATION OF THE PARTNERSHIP
  
           Section 15.1  Dissolution  of  Partnership.  The  Partnership  shall be
  dissolved  upon the  expiration of its term or the earlier  occurrence of any of
  the following events:
  
           (a) The retirement, removal, Event of Bankruptcy, dissolution, death or
  insanity  of the General  Partner,  unless (i) at the time there is at least one
  other General Partner who will continue as General  Partner,  or (ii) within 120
  days  after  the  occurrence  of any such  event  all of the  Partners  elect to
  continue the business of the Partnership;
  
           (b)      The Sale of the Project and the receipt in cash of the full 
  amount of the proceeds of such Sale;
  
           (c)      The written election to do so of the Limited Partner; or
  
           (d)      The Partnership becomes subject to an Event of Bankruptcy.
  
           Notwithstanding   the  foregoing,   however,  in  no  event  shall  the
  Partnership  terminate  prior to the expiration of its term if such  termination
  would result in a violation of the FmHA Loan Agreement, the FmHA Interest Credit
  Agreement or any other agreement with or rule or regulation of FmHA to which the
  Partnership is subject.
  
  
  
                                         52
  <PAGE>
  
           Section 15.2 Return of Capital Contribution upon Dissolution. Except as
  provided  in  Sections  7.3 and  7.4 of  this  Agreement,  which  provide  for a
  reduction or refund of the Limited Partner's Capital  Contribution under certain
  circumstances,  and which shall represent the personal obligation of the General
  Partner,  as  well  as the  obligation  of the  Partnership,  each  holder  of a
  Partnership  interest shall look solely to the assets of the Partnership for all
  Distributions  with  respect  to the  Partnership  (including  the return of its
  Capital  Contribution)  and shall have no recourse therefor (upon dissolution or
  otherwise) against the General Partner or any Limited Partner.  No Partner shall
  have any right to demand or receive  property other than money upon  dissolution
  and termination of the Partnership.
  
           Section  15.3  Distributions  of  Assets.  Upon  a  dissolution  of the
  Partnership,  the  General  Partner  (or,  if there is no General  Partner  then
  remaining,  such other Person(s) designated as the liquidator of the Partnership
  by the  Limited  Partner or by the court in a judicial  dissolution)  shall take
  full account of the  Partnership  assets and liabilities and shall liquidate the
  assets as promptly as is consistent with obtaining the fair value thereof.
  
           (a) Upon  dissolution  and  termination,  after payment of, or adequate
  provision for, the debts and obligations of the Partnership  pursuant to Section
  11.2(a) through and including  11.2(d),  the remaining assets of the Partnership
  (or  the  proceeds  of  sales  or  other  dispositions  in  liquidation  of  the
  Partnership  assets,  as may be  determined  by the  General  Partner  or  other
  liquidator) shall be distributed to the Partners in accordance with the positive
  balances in their Capital  Accounts.  In order to make a final  determination of
  the Capital Account of each Partner:
  
                    (1)      the allocations  pursuant to Section 11.2(e),  
  Section 11.2(f) and Section 11.2(g) shall be made, but not distributed; and
  
                    (2)      the Income and Losses of the  Partnership  upon  
  Liquidation or dissolution and winding up shall then be allocated among the 
  Partners as set forth in Section 10.2.
  
           (b) In the event that a General  Partner  has a deficit  balance in its
  Capital Account following the Liquidation of the Partnership or its interest, as
  determined  after taking into account all Capital  Account  adjustments  for the
  Partnership  taxable year in which such Liquidation occurs, such General Partner
  shall pay to the  Partnership  the  amount  necessary  to restore  such  deficit
  balance   to   zero   in   compliance   with   Treasury    Regulation    Section
  1.704-1(b)(2)(ii)(b)(3).
  
  
  
                                         53
  <PAGE>
  
                    (1) The deficit  reduction amount shall be paid by the General
  Partner by the end of such taxable year (or, if later,  within 90 days after the
  date of Liquidation) and shall, upon Liquidation of the Partnership,  be paid to
  creditors of the Partnership or distributed to other Partners in accordance with
  their positive Capital Account balances.
  
           (c)      With respect to assets distributed in kind to the Partners in 
  Liquidation or otherwise:
  
                    (1) unrealized  appreciation or unrealized depreciation in the
  values of such  assets  shall be deemed to be Income and Losses  realized by the
  Partnership  immediately prior to the Liquidation or other  Distribution  event;
  and
  
                    (2) such Income and Losses  shall be allocated to the Partners
  in accordance with Section 10.2 hereof, and any property so distributed shall be
  treated as a Distribution  of an amount in cash equal to the excess of such Fair
  Market Value over the outstanding  principal  balance of and accrued interest on
  any debt by which the property is encumbered.
  
           (d) For the purposes of Section 15.3(c),  "unrealized  appreciation" or
  "unrealized  depreciation"  shall mean the  difference  between  the Fair Market
  Value  of such  assets,  taking  into  account  the  Fair  Market  Value  of the
  associated financing but subject to Section 7701(g) of the Code, and the asset's
  Gross  Asset  Value.  Section  15.3(c) is merely  intended to provide a rule for
  allocating  unrealized Income and Losses upon Liquidation or other  Distribution
  event,  and nothing  contained in Section 15.3(c) or elsewhere in this Agreement
  is  intended  to treat or cause  such  Distributions  to be treated as sales for
  value.  The  Fair  Market  Value  of  such  assets  shall  be  determined  by an
  independent appraiser to be selected by the General Partner.
  
           Section 15.4 Deferral of Liquidation. If at the time of Liquidation the
  General  Partner or other  liquidator  shall determine that an immediate sale of
  part or all of the  Partnership  assets could cause undue loss to the  Partners,
  the liquidator may, in order to avoid loss,  either defer Liquidation and retain
  all or a portion of the assets or  distribute  all or a portion of the assets to
  the Partners in kind. In the event that the liquidator elects to distribute such
  assets in kind,  the assets shall first be assigned a value (by  appraisal by an
  independent appraiser) and the unrealized  appreciation or depreciation in value
  of the assets shall be allocated to the Partners,  Capital Accounts,  as if such
  assets had been sold, in the matter  described in Section 10.2,  and such assets
  shall then be  distributed to the Partners as provided  herein.  In applying the
  
  
                                         54
  <PAGE>
  
  preceding  sentence,  the  Project  shall not be  assigned a value less than the
  unamortized principal balance of any loan secured thereby.
  
           Section  15.5  Liquidation  Statement.  Each of the  Partners  shall be
  furnished  with a  statement  prepared  or caused to be  prepared by the General
  Partner or other liquidator, which shall set forth the assets and liabilities of
  the Partnership as of the date of complete Liquidation. Upon compliance with the
  distribution  plan as outlined in Sections  15.3 and 15.4,  the Limited  Partner
  shall cease to be such and the General  Partner shall execute,  acknowledge  and
  cause to be filed those certificates referenced in Section 15.6.
  
           Section  15.6  Certificates  of  Dissolution;  Certificate  of  
  Cancellation  of  Certificate  of Limited Partnership.
  
           (a) Upon the dissolution of the Partnership,  the General Partner shall
  cause to be filed in the office of, and on a form prescribed by the Secretary of
  State of the State, a certificate of dissolution. The certificate of dissolution
  shall set forth the Partnership's name, the Secretary of State's file number for
  the Partnership, the event causing the Partnership's dissolution and the date of
  the dissolution.
  
           (b) Upon the completion of the winding up of the Partnership's affairs,
  the  General  Partner  shall  cause to be filed in the  office of, and on a form
  prescribed   by,  the  Secretary  of  State  of  the  State,  a  certificate  of
  cancellation  of the  Certificate  of Limited  Partnership.  The  certificate of
  cancellation  of the  Certificate  of  Limited  Partnership  shall set forth the
  Partnership's  name,  the Secretary of State's file number for the  Partnership,
  and any other  information  which the  General  Partner  determines  to  include
  therein.
  
                                     ARTICLE XVI
  
                                     AMENDMENTS
  
           Subject to FmHA's consent and approval, if required under the FmHA Loan
  Agreement or applicable FmHA  regulations,  this Agreement may be amended at any
  time by the Limited  Partner;  provided,  however,  that this  Agreement  may be
  amended to add a substitute  Limited Partner only as set forth in Article XII of
  this Agreement; and provided,  further, that, this Agreement may be amended from
  time to time by the General Partner, without the consent of the Limited Partner,
  to add to the  representations,  duties or obligations of the General Partner or
  its Affiliates or surrender any right or power granted to the General Partner or
  Affiliates  herein which may be inconsistent  with any other  provision  herein.
  Notwithstanding  the foregoing,  no amendment  shall change the Partnership to a
  
  
                                         55
  <PAGE>
  
  general partnership; extend the term of the Partnership beyond the date provided
  for in this  Agreement;  modify the limited  liability  of the Limited  Partner;
  allow the Limited Partner to take control of the  Partnership's  business within
  the  meaning  of the Act;  reduce  or defer  the  realization  of any  Partner's
  interest  in  Income,  Losses,  Tax  Credits,   Distributions,  or  compensation
  hereunder, or increase any Partner's obligations hereunder,  without the consent
  of the Partner so affected; or change the provisions of this Article XVI.
  
                                    ARTICLE XVII
  
                                    MISCELLANEOUS
  
           Section 17.1 Voting Rights.
  
           (a) The  Limited  Partner  shall have no right to vote upon any matters
  affecting the Partnership, except as provided in this Agreement. Notwithstanding
  the foregoing,  the Limited Partner may,  without the concurrence of the General
  Partner:
  
                    (1)      Approve, but not initiate, the Sale or Refinancing of
  the Project;
  
                    (2)      Remove the General  Partner for cause  pursuant to 
  this Agreement and elect a substitute General Partner;
  
                    (3)      Approve, but not initiate, the dissolution of the 
  Partnership; or
  
                    (4)      Subject to the provisions of Article XVI hereof, 
  amend this Agreement.
  
           (b) On any  matter  where the  Limited  Partner  has the right to vote,
  votes may only be cast at a duly called  meeting of the  Partnership  or through
  written action without a meeting.
  
           Section 17.2 Meeting of Partnership. Meetings of the Partnership may be
  called either: at any time by the General Partner; or upon the General Partner's
  receipt of a written  request from the Limited Partner setting forth the purpose
  of such meeting.  Within ten days after receipt of the Limited Partner's written
  request for a meeting,  the General  Partner  shall  provide all  Partners  with
  written notice of the meeting (which shall be at the principal place of business
  of the  Partnership or such other location  referenced in the notice) to be held
  not less  than 15 days nor  more  than 30 days  after  receipt  of such  written
  request from the Limited Partner,  which notice shall specify the time and place
  of such  meeting  and the purpose or purposes  thereof.  If the General  Partner
  fails to provide the written notice of the meeting within ten days after receipt
  of the Limited Partner's request to hold a meeting, then the Limited Partner may
  
  
                                         56
  <PAGE>
  
  provide the  written  notice of the meeting to all the  Partners,  which  notice
  shall  specify  the time and place of such  meeting  and the purpose or purposes
  thereof.  All meetings and actions of the Limited  Partner  shall be governed in
  all  respects,  including  matters  relating  to  notice,  quorum,  adjournment,
  proxies,  record  dates  and  actions  without  a  meeting,  by  the  applicable
  provisions of the Act, as shall be amended from time to time.
  
           Section 17.3 Notices.  Any notice given  pursuant to this Agreement may
  be served  personally  on the Partner to be  notified,  or may be mailed,  first
  class postage prepaid,  to the following address,  or to such other address as a
  party may from time to time designate in writing:
  
           To the General Partner:    DONALD W. SOWELL
                                      509 Ellen Powell Drive
                                      Prairie View, TX  77446
  
  
           To the Limited Partner:    WNC HOUSING TAX CREDIT FUND
                                      V, L.P., SERIES 4
                                      3158 Redhill Ave., Suite 120
                                      Costa Mesa, CA   92626-3416
  
           Section 17.4  Successors  and Assigns.  All the terms and conditions of
  this Agreement shall be binding upon the successors and assigns of the Partners,
  but shall not inure to the benefit of the  successors or assigns of the Partners
  except as otherwise expressly provided in this Agreement.
  
           Section 17.5 FmHA Regulations.  Notwithstanding any other provisions of
  this Agreement, the following will take precedence:
  
           (a) The Partnership is authorized to execute any documents  required by
  FmHA in connection  with the FmHA Loan  Agreement.  The General  Partner  hereby
  covenants to act in accordance with the Project Documents.  Any incoming General
  Partner shall, as a condition of receiving a Partnership  interest,  agree to be
  bound by the Project  Documents,  and all other documents executed in connection
  with the FmHA Loan  Agreement  to the same  extent  and on the same terms as any
  other General Partner. Upon any dissolution, no title or right to possession and
  control of the Project, and no right to collect the rents therefrom,  shall pass
  to any Person who is not bound in a manner  consistent  with  Section 515 of the
  Housing Act and the rules and regulations thereunder.
  
  
  
                                         57
  <PAGE>
  
           (b) In the event that any provision of this  Agreement in any way tends
  to contradict, modify or in any way change the terms of the Project Documents or
  any other agreement  related to the Project entered into, or to be entered into,
  by or on behalf of the Partnership with FmHA, the terms of the Project Documents
  or such other agreements with FmHA shall prevail and govern.
  
           (c)  Any  amendment  or  revision  of  this  Agreement,  transfer  of a
  Partnership  interest or other action requiring approval shall be subject to the
  written  approval of FmHA,  if such  approval  is  required,  and any  amendment
  without the prior written  approval of FmHA shall be subject to later  amendment
  to  comply  with the  requirements  of  FmHA;  provided,  however,  that no such
  approval of FmHA shall be required for any amendment of this  Agreement the sole
  purpose of which is to provide for the admission of  additional  or  substituted
  limited  partners so long as any such additional or substituted  limited partner
  so admitted shall own in the aggregate less than a 10% limited partner  interest
  in the Partnership.
  
           (d) Any  conveyance  or  transfer of title to all or any portion of the
  Project  required or  permitted  under this  Agreement  shall in all respects be
  subject to all  conditions,  approvals and other  requirements of FmHA rules and
  regulations applicable thereto.
  
           (e) The General Partner will at all times maintain the FmHA required  
  Financial  Interest in the Partnership.
  
           The foregoing paragraphs (a), (b), (c), (d), and (e) will automatically
  become void and of no further force and effect with respect to FmHA at such time
  as the Mortgage is no longer being provided by FmHA.
  
           Section 17.6 Recording of Certificate  of Limited  Partnership.  If the
  General Partner should deem it advisable to do so, the Partnership  shall record
  in the office of the County  Recorder of the county in which the principal place
  of business of the Partnership is located a certified copy of the Certificate of
  Limited  Partnership,  or any  amendment  thereto,  after  such  Certificate  or
  amendment has been filed with the Secretary of State of the State.
  
           Section 17.7 Amendment of Certificate of Limited Partnership.
  
           (a) The General  Partner shall cause to be filed,  within 30 days after
  the happening of any of the following events, an amendment to the Certificate of
  Limited Partnership reflecting the occurrence thereof:
  
                    (1)      A change in the name of the Partnership.
  
  
  
                                         58
  <PAGE>
  
                    (2)      A change in the street address of the Partnership's 
  principal executive office.
  
                    (3) A change in the address,  or the withdrawal,  of a General
  Partner, or a change in the address of the agent for service of process,  unless
  a corporate  agent is  designated,  or appointment of a new agent for service of
  process.
  
                    (4)      The admission of a General Partner and that Partner's
  address.
  
                    (5) The  discovery  by the  General  Partner  of any  false or
  erroneous  material  statement  contained in the  Certificate  or any  amendment
  thereto.
  
           (b) The  Certificate  of  Limited  Partnership  may also be  amended in
  conformity with this Agreement at any time in any other respect that the General
  Partner determines.
  
           (c)  The  General  Partner  shall  cause  the  Certificate  of  Limited
  Partnership to be amended, when required or permitted as aforesaid,  by filing a
  certificate of amendment  thereto in the office of, and on a form prescribed by,
  the  Secretary of State of the State.  The  certificate  of amendment  shall set
  forth the  Partnership's  name,  the  Secretary  of State's  file number for the
  Partnership and the text of the amendment.
  
           Section 17.8  Counterparts.  This  Agreement  may be executed in one or
  more  counterparts,  each of  which  shall  be  deemed  an  original,  and  said
  counterparts  shall  constitute  but one  and  the  same  instrument  which  may
  sufficiently be evidenced by one counterpart.
  
           Section  17.9  Captions.  Captions  to and  headings  of the  Articles,
  Sections and  subsections of this Agreement are solely for the  conveniences  of
  the  parties,  are not a part of this  Agreement,  and shall not be used for the
  interpretation  or  determination  of the  validity  of  this  Agreement  or any
  provision hereof.
  
           Section 17.10 Certain Provisions.  If the operation of any provision of
  this  Agreement  would  contravene  the  provisions of applicable  law, or would
  result in the  imposition  of general  liability  on any Limited  Partner,  such
  provisions shall be void and ineffectual.
  
           Section 17.11 Saving Clause. If any provision of this Agreement, or the
  application  of such  provision  to any  Person or  circumstance,  shall be held
  invalid,  the remainder of this Agreement,  or the application of such provision
  
  
                                         59
  <PAGE>
  
  to Persons  or  circumstances  other than those as to which it is held  invalid,
  shall not be affected thereby.
  
           Section  17.12  Number and  Gender.  All  pronouns  and any  variations
  thereof shall be deemed to refer to the masculine, feminine, neuter, singular or
  plural as the identity of the Person or Persons may require.
  
           Section 17.13 Entire Agreement.  This Agreement  constitutes the entire
  understanding  between the parties with respect to the subject matter hereof and
  all prior  understandings and agreements  between the parties,  written or oral,
  respecting this transaction are merged in this Agreement.
  
           Section 17.14  Governing  Law. This  Agreement  and its  application  
  shall be governed by the laws of the State.
  
           Section  17.15  Attorney's  Fees.  If a suit or action is instituted in
  connection  with an  alleged  breach of any  provision  of this  Agreement,  the
  prevailing party shall be entitled to recover,  in addition to costs,  such sums
  as the court may adjudge  reasonable as attorney's  fees,  including fees on any
  appeal.
  
           Section  17.16  Receipt  of FmHA  Correspondence.  By their  signatures
  below,  the Partners  agree that the FmHA and the General  Partner shall send to
  the  Limited  Partner a copy of any  correspondence  relative  to the  Project's
  noncompliance with the Mortgage Note and FmHA rules and regulations, relative to
  the  acceleration  of the Mortgage Note and relative to the  disposition  of the
  Project.
  
           Section 17.17 Security  Interest and Right of Set-Off.  As security for
  the  performance of the respective  obligations to which it may be subject under
  this Agreement,  the  Partnership  shall have (and each Partner hereby grants to
  the Partnership) a security interest in all funds  distributable to said Partner
  to the extent of the amount of such obligation.  Each Partner,  by the execution
  of this  Agreement,  irrevocably  constitutes  and  appoints  each of the  other
  Partners,  with full power of substitution in the premises,  his true and lawful
  attorney-in-fact  with full power and authority in his name,  place and stead to
  execute,  acknowledge,  deliver,  swear to,  file and record at the  appropriate
  public  offices  all  financing  statements,  continuation  statements  or other
  documents and amendments  thereto which such other Partner deems  appropriate to
  perfect or continue the  perfection  of the  aforesaid  security  interest.  The
  appointment of each such attorney-in-fact  shall be deemed to be a power coupled
  with an interest,  in  recognition  of the fact that each of the Partners  under
  this  Agreement  will be relying upon its power to act as  contemplated  by this
  
  
                                         60
  <PAGE>
  
  Agreement in any such filing, and shall survive and shall not be affected by the
  subsequent  bankruptcy,   death,   adjudication  of  incompetence  or  insanity,
  disability,  incapacity or dissolution of any Person hereby giving the power nor
  by  the  transfer  or  assignment  of all or any  part  of the  interest  in the
  Partnership of any such Person.
  
           IN WITNESS  WHEREOF,  this  Amended and  Restated  Agreement of Limited
  Partnership of D. HILLTOP APARTMENTS, LTD., a Texas limited partnership, is made
  and entered into as of the 14th day of April 1997.
  
                                      GENERAL PARTNER
  
  
                                      /s/ Donald W. Sowell
                                      DONALD W. SOWELL
  
  
                                      WITHDRAWING ORIGINAL LIMITED PARTNER
  
  
                                      /s/ Beatrice W. Sowell
                                      BEATRICE W. SOWELL
  
  
                                      LIMITED PARTNER
  
  
                                      WNC HOUSING TAX CREDIT FUND V,
                                      L.P., SERIES 4
                                      a California limited partnership
  
                                              By:      WNC & ASSOCIATES, INC.
                                                       General Partner
  
                                                       By: /s/ John B. Lester, Jr.
                                                           John B. Lester, Jr.
                                                           President
  
                                         61
  <PAGE>
  
  
                         EXHIBIT A TO PARTNERSHIP AGREEMENT
  
                                  LEGAL DESCRIPTION
  
       All that certain tract or parcel of land, a part of the S.G.  Wells Survey,
  Abstract  No. 65,  Anderson  County,  Texas,  also being a part of that  certain
  called  80.54  acre  tract  conveyed  to  James  R.  Paxton  et al by  Palestine
  Industrial Foundation, Inc., August 2, 1977, recorded in Volume 866, Page 397 of
  the Deed Records of Anderson County,  Texas, and being more completely described
  as follows, to wit:
  
       BEGINNING at a 1/2" Iron Rod for corner at the Northeast corner of Lot 1 of
  Bill Richbourg's  Addition as Recorded in Envelope No. 159-A of the Plat Records
  of Anderson  County,  Texas, in the West  Right-of-Way of State Highway Loop No.
  256.
  
       THENCE S 86-9-41 W with the North  line of Lot 1 and 2 at Bill  Richbourg's
  Addition and the North line of Academy Apartments a distance of 752.67 feet to a
  1/2" Iron Rod for corner;
  
       THENCE N 3-50-19 W a distance of 260.00 feet to a 1/2" Iron Rod for corner;
  
       THENCE N 86-9-41 E a distance of 289.34 feet to a 1/2" Iron Rod for corner;
  
       THENCE S 28-13-35 E a distance of 345.46 feet to a 1/2" Iron Rod for corner
  in the West R.O.W. line of State Highway Loop No. 256;
  
       THENCE S 28-13-35 E with the West R.O.W. line of State Highway Loop No. 256
  a distance of 65.88 feet to the place of  beginning,  containing  2.554 acres of
  land.
  
                                        A-1
  <PAGE>
  
  
                         EXHIBIT B TO PARTNERSHIP AGREEMENT
  
                                FORM OF LEGAL OPINION
  
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4 
  WNC & Associates, Inc.
  3158 Redhill Avenue, Suite 120
  Costa Mesa, California  92626
  
  RE:      D. HILLTOP APARTMENTS, LTD.
  
  Ladies and Gentlemen:
  
  You have  requested  our opinion with respect to certain  matters in  connection
  with the  investment  by WNC  HOUSING  TAX  CREDIT  FUND V,  L.P.,  SERIES  4, a
  California limited partnership (the "Limited Partner") in D. HILLTOP APARTMENTS,
  LTD. (the  "Partnership"),  a Texas limited  partnership formed to own, develop,
  (construct/rehabilitate) finance and operate an apartment complex for low-income
  persons (the "Apartment  Complex") in Palestine,  Anderson  County,  Texas.  The
  general partner(s) of the Partnership (is/are) DONALD W.
  SOWELL (the "General Partner(s)").
  
  In rendering  the opinions  stated  below,  we have examined and relied upon the
  following:
  
           (i)               [Certificate of Limited Partnership];
  
           (ii)              [Agreement of Limited Partnership] (the "Partnership 
                             Agreement");
  
           (iii)             A  preliminary  reservation  letter from [State
                             Allocating   Agency]  (the  "State   Agency")   dated
                             _________,      199___     conditionally     awarding
                             $_______________  in Federal tax credits annually for
                             each of ten years and  $_______________ in California
                             tax credits  annually  for each of four years for the
                             Apartment Complex; and
  
           (iv)              Such other documents, records and instruments as
                             we have  deemed  necessary  in order to  enable us to
                             render the opinions referred to in this letter.
  
  
                                        B-1
  <PAGE>
  
  For purposes of rendering  the opinions  stated below we have assumed  that,  in
  those  cases in which we have not been  involved  directly  in the  preparation,
  execution or the filing of a document,  that (a) the document  reviewed by us is
  an original document, or a true and accurate copy of the original document,  and
  has not been subsequently  amended, (b) the signatures on each original document
  are genuine,  and (c) each party who executed the document had proper  authority
  and capacity.
  
  Based on the foregoing we are of the opinion that:
  
           (a)  ________________________,  one  of  the  General  Partners,  is  a
  [corporate/partnership]  duly formed and validly  existing under the laws of the
  State of  _____________________  and has full power and  authority to enter into
  and    perform    its    obligations    under   the    Partnership    Agreement.
  _____________________,    one   of   the   other   General   Partners,    is   a
  [corporation/partnership] duly formed and validly existing under the laws of the
  State of  __________________  and has full power and authority to enter into and
  perform its obligations under the Partnership Agreement.
  
           (b) The  Partnership  is and after the  [filing  or  execution]  of the
  Amended  [Partnership  Agreement]  [Certificate]  will  continue to be a limited
  partnership  duly  formed and  validly  existing  under the laws of the State of
  Texas.
  
           (c) The Partnership is and after the filing of the Amended [Partnership
  Agreement]  [Certificate] will continue to be validly existing under and subject
  to  the  laws  of  Texas  with  full  power  and  authority  to  own,   develop,
  [construct/rehabilitate],  finance  and  operate  the  Apartment  Complex and to
  otherwise conduct business under the Partnership Agreement.
  
           (d) Execution of the  Partnership  Agreement by the General  Partner(s)
  has been duly and validly  authorized by or on behalf of the General  Partner(s)
  and,  having been  executed and  delivered  in  accordance  with its terms,  the
  Partnership Agreement constitutes the valid and binding agreement of the General
  Partner(s), enforceable in accordance with its terms.
  
           (e) The execution and delivery of the Amended and Restated Agreement of
  Limited  Partnership by the General Partners does not conflict with and will not
  result  in a  breach  of any of  the  terms,  provisions  or  conditions  of any
  agreement or instrument known to counsel to which any of the General Partners or
  the  Partnership is a party or by which any of them may be bound,  or any order,
  rule,  or  regulation  to be  applicable  to any of such parties of any court or
  
  
                                        B-2
  <PAGE>
  
  governmental body or administrative  agency having jurisdiction over any of such
  parties or over the property.
  
           (f) To the best of counsel's knowledge,  after due inquiry, there is no
  litigation  or  governmental   proceeding  pending  or  threatened  against,  or
  involving  the  Project,  the  Partnership  or any General  Partner  which would
  materially  adversely affect the condition  (financial or otherwise) or business
  of the Project,  the Partnership or any of the Partners of the Partnership prior
  to or following  execution  and filing of the Amended and Restated  Agreement of
  Limited Partnership, or the Limited Partner or the Special Limited Partner.
  
           (g) Upon  the  execution  and  delivery  of the  Amended  and  Restated
  Agreement  of Limited  Partnership  providing  for the  admission of the Limited
  Partner as substitute  limited partner [and the filing] the Limited Partner will
  be the  limited  partners  of the  Partnership  entitled to all of the rights of
  limited   partners   under  the  Amended  and  Restated   Agreement  of  Limited
  Partnership.  Except as  described  in the Amended  and  Restated  Agreement  of
  Limited  Partnership,  no person is a partner  of or has any legal or  equitable
  interest  in the  Partnership,  and all  former  partners  of record or known to
  counsel have validly withdrawn from the Partnership and have released any claims
  against the Partnership arising out of their participation as partners therein.
  
           (h) Liability of the Limited Partner for obligations of the Partnership
  is limited to the amount of the Limited Partner's capital contributions required
  by the Partnership Agreement.
  
           (i) Neither the General  Partner(s) of the  Partnership nor the Limited
  Partner  will have any  liability  for the Mortgage  Note or the  Mortgage  Loan
  represented  thereby (as those  terms are  defined in the  Amended and  Restated
  Agreement of Limited Partnership), and the lender of the Mortgage Loan will look
  only to its security in the Project for repayment of the Mortgage Loan.
  
           (j)      The Partnership owns a fee simple interest in the Project.
  
           (k) To the best of our actual knowledge and belief,  after due inquiry,
  the Partnership has obtained all consents, permissions,  licenses, approvals, or
  orders required by all applicable  governmental  or regulatory  agencies for the
  development, [construction/rehabilitation] and operation of the Project, and the
  Project  conforms to all applicable  Federal,  state and local land use, zoning,
  
  
                                        B-3
  <PAGE>
  
  health, building and safety laws, ordinances, rules and regulations.
  
           (l) The Project has obtained a  preliminary  reservation  of low income
  housing tax credits ("LIHTC") from the State Agency. The final allocation of the
  LIHTC and ultimately  eligibility  of the Project for such final  allocation are
  subject to a series of requirements  which must be met, performed or achieved at
  various  times  prior to and after  such  final  allocation.  Assuming  all such
  requirements  are met,  performed  or achieved at the time or times  provided by
  applicable laws and regulations, the Project will qualify for LIHTC.
  
  All of the  opinions  set  forth  above are  qualified  to the  extent  that the
  validity  of any  provision  of any  agreement  may be subject to or affected by
  applicable bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
  affecting the rights of creditors generally. We do not express any opinion as to
  the  availability  of any equitable or specific remedy upon any breach of any of
  the covenants,  warranties or other  provisions  contained in any agreement.  We
  have not examined,  and we express no opinion with respect to the  applicability
  of, or liability under, any Federal, state or local law, ordinance or regulation
  governing or  pertaining  to  environmental  matters,  hazardous  wastes,  toxic
  substances or the like.
  
  We  express no opinion as to any  matter  except  those set forth  above.  These
  opinions are rendered for use by the Limited  Partner and its legal counsel.  We
  understand  that WNC HOUSING TAX CREDIT FUND V, L.P.,  SERIES 4's legal  counsel
  will rely on this opinion in connection  with federal  income tax opinions to be
  rendered by that firm.  This  opinion may not be  delivered to or relied upon by
  any other person or entity without our express written consent.
  
  Sincerely,
  
  
  
  
  --------------------
  
  
                                        B-4
  <PAGE>
  
  
  
                       EXHIBIT C TO THE PARTNERSHIP AGREEMENT
  
  
                             CERTIFICATION AND AGREEMENT
  
  
           CERTIFICATION  AND  AGREEMENT  made as of the date written  below by D.
  HILLTOP  APARTMENTS,  LTD., a Texas  limited  partnership  (the  "Partnership");
  DONALD W. SOWELL (the "General Partner");  and BEATRICE W. SOWELL (the "Original
  Limited Partner") for the benefit of WNC HOUSING TAX CREDIT FUND V, L.P., SERIES
  4, a California limited  partnership (the "Investment  Partnership"),  and WNC &
  ASSOCIATES, INC. ("WNC").
  
           WHEREAS, the Partnership  proposes to admit the Investment  Partnership
  as a limited  partner thereof  pursuant to an Amended and Restated  Agreement of
  Limited  Partnership  of  the  Partnership  (the  "Partnership  Agreement"),  in
  accordance with which the Investment  Partnership will make substantial  capital
  contributions to the Partnership; and
  
           WHEREAS,  the Investment  Partnership  and WNC have relied upon certain
  information  and  representations  described  herein in evaluating the merits of
  investment by the Investment Partnership in the Partnership;
  
           NOW, THEREFORE,  to induce the Investment Partnership to enter into the
  Partnership  Agreement and become a limited partner of the Partnership,  and for
  $1.00 and other good and  valuable  consideration,  the receipt and  adequacy of
  which are hereby  acknowledged,  the  Partnership,  the General  Partner and the
  Original  Limited  Partner  hereby  agree  as  follows  for the  benefit  of the
  Investment Partnership and WNC.
  
           1.       Representations,  Warranties  and  Covenants of the  
                    Partnership,  the General Partners and the Original Limited 
                    Partners
  
           The  Partnership,  the General Partner and the Original Limited Partner
  jointly  and  severally  represent,   warrant  and  certify  to  the  Investment
  Partnership  and WNC  that,  with  respect  to the  Partnership,  as of the date
  hereof:
  
                    1.1 The  Partnership is duly organized and in good standing as
  a limited  partnership  pursuant to the laws of the state of its formation  with
  full power and authority to own its apartment complex (the "Apartment  Complex")
  and conduct its business; the Partnership,  the General Partner and the Original
  Limited  Partner  have the power and  authority  to enter into and perform  this
  Certification  and Agreement;  the execution and delivery of this  Certification
  
  
                                        C-1
  <PAGE>
  
  and Agreement by the  Partnership,  the General Partner and the Original Limited
  Partner  have been duly and validly  authorized  by all  necessary  action;  the
  execution and delivery of this  Certification and Agreement,  the fulfillment of
  its terms and consummation of the transactions contemplated hereunder do not and
  will not conflict  with or result in a violation,  breach or  termination  of or
  constitute a default  under (or would not result in such a conflict,  violation,
  breach,  termination  or default with the giving of notice or passage of time or
  both) any other  agreement,  indenture or instrument by which the Partnership or
  any General Partner or Original Limited Partner is bound or any law, regulation,
  judgment,  decree or order  applicable to the Partnership or any General Partner
  or  Original  Limited  Partner  or  any of  their  respective  properties;  this
  Certification  and Agreement  constitutes the valid and binding agreement of the
  Partnership,  the General Partner and the Original Limited Partner,  enforceable
  against each of them in accordance with its terms.
  
                    1.2  The  General  Partner  has  delivered  to the  Investment
  Partnership,  WNC or their affiliates all documents and information  which would
  be  material  to a  prudent  investor  in  deciding  whether  to  invest  in the
  Partnership. All factual information provided to the Investment Partnership, WNC
  or their affiliates either in writing or orally, did not, at the time given, and
  does not, on the date hereof, contain any untrue statement of a material fact or
  omit to state a material fact required to be stated therein or necessary to make
  the statements therein not misleading in light of the circumstances  under which
  they are made.
  
                    1.3 Each of the representations and warranties contained in  
  the  Partnership Agreement is true and correct as of the date hereof.
  
                    1.4 Each of the  covenants and  agreements of the  Partnership
  and the General  Partner  contained in the  Partnership  Agreement has been duly
  performed  to the extent  that  performance  of any  covenant  or  agreement  is
  required on or prior to the date hereof.
  
                    1.5 All conditions to admission of the Investment  Partnership
  as  the  investment  limited  partner  of  the  Partnership   contained  in  the
  Partnership Agreement have been satisfied.
  
                    1.6 No  default  has  occurred  and is  continuing  under  the
  Partnership  Agreement or any of the Project  Documents (as such term is defined
  in the Partnership Agreement) for the Partnership.
  
                    1.7 The Partnership will allocate to the Limited Partner the 
  Projected  Annual Tax Credits.
  
  
  
                                        C-2
  <PAGE>
  
                    1.8 The General  Partner agrees to take all actions  necessary
  to claim the Projected Tax Credit, including,  without limitation, the filing of
  Form(s) 8609 with the Internal Revenue Service.
  
                    1.9 No person or entity  other than the  Partnership  holds 
  any equity  interest in the Apartment Complex.
  
                    1.10 The  Partnership has the sole  responsibility  to pay all
  maintenance  and operating  costs,  including all taxes levied and all insurance
  costs, attributable to the Apartment Complex.
  
                    1.11 The Partnership,  except to the extent it is protected by
  insurance and  excluding any risk borne by lenders,  bears the sole risk of loss
  if the  Apartment  Complex is destroyed or condemned or there is a diminution in
  the value of the Apartment Complex.
  
                    1.12 No person or entity except the  Partnership has the right
  to any proceeds, after payment of all indebtedness,  from the sale, refinancing,
  or leasing of the Apartment Complex.
  
                    1.13 No  General  Partner  is  related  in any  manner  to the
  Investment  Partnership,  nor is any General  Partner  acting as an agent of the
  Investment Partnership.
  
           2.       Miscellaneous
  
                    2.1 This  Certification  and  Agreement is made solely for the
  benefit of the Partnership,  the General  Partner,  the Original Limited Partner
  and WNC, and the  Investment  Partnership  and their  respective  successors and
  assignees,  and no other  person  shall  acquire  or have any right  under or by
  virtue of this Agreement.
  
                    2.2  This  Certification  and  Agreement  may be  executed  in
  several  counterparts,  each of which shall be deemed to be an original,  all of
  which together shall constitute one and the same instrument.
  
  
  
                                        C-3
  <PAGE>
  
  
  
                    2.3   Capitalized   terms   used  but  not   defined  in  this
  Certification Agreement shall have the meanings given to them in the Partnership
  Agreement.
  
           IN WITNESS  WHEREOF,  this  Certificate  and  Agreement  is made and 
  entered  into as of the ______ day of April, 1997.
  
  
  PARTNERSHIP
  
  
  D. HILLTOP APARTMENTS, LTD.
  
  
  
  By:      _______________________
           DONALD W. SOWELL,
           General Partner
  
  
  
  GENERAL PARTNER
  
  
  
  By:      _______________________
           DONALD W. SOWELL
  
  
  
  ORIGINAL LIMITED PARTNER
  
  
  
  By:      _______________________
           BEATRICE W. SOWELL
  
  
  
  
                                        C-4
  <PAGE>
  
  
  
                       EXHIBIT D TO THE PARTNERSHIP AGREEMENT
  
  
                            GENERAL PARTNER CERTIFICATION
  
           This General Partner  Certification  is being issued to WNC HOUSING TAX
  CREDIT FUND V, L.P., SERIES 4 ("WNC") by DONALD W. SOWELL, General Partner of D.
  HILLTOP  APARTMENTS,  LTD.,  a  Texas  limited  partnership ("Partnership") in
  accordance  with  Section 7.2 of the Amended and  Restated  Agreement of Limited
  Partnership of the Partnership.
  
           WHEREAS,  WNC is  scheduled  to  make  a  Capital  Contribution  to the
  Partnership,  however, the Partnership Agreement requires the General Partner of
  the Partnership issue this Certification prior to WNC's payment; and
  
           WHEREAS,  WNC shall rely on this  Certification  in evaluating  the 
  continued  merits of its investment in the Partnership;
  
           NOW,   THEREFORE,   to  induce  WNC  to  make  its  scheduled   Capital
  Contribution to the Partnership,  the General Partner represents and warrants to
  WNC that the following are true and correct as of the date written below:
  
           (a) The  Partnership is a duly organized  limited  partnership  validly
  existing  under  the  laws  of the  State  and  has  complied  with  all  filing
  requirements  necessary  for the  protection  of the  limited  liability  of its
  Limited Partners.
  
           (b) This  Partnership  Agreement and the Project  Documents are in full
  force and effect and  neither  the  Partnership  nor the  General  Partner is in
  material  breach  or  violation  of  any  provisions  thereof  or  of  any  FmHA
  regulation.
  
           (c) Existing  improvements,  if any, on the Project have been completed
  substantially in conformity with the Project Documents, and the Project is being
  operated in  accordance  with  standards  and  procedures  which are prudent and
  customary for the operation of properties similar to the Project.
  
           (d) Additional  construction on the Project, if any, shall be completed
  substantially   in  conformity   with  the  Project   Documents  and  any  other
  requirements necessary to obtain Completion of Construction.
  
           (e) The Project is being  operated in  accordance  with  standards  and
  procedures  which are prudent and  customary  for the  operation  of  properties
  similar to the Project.
  
  
  
                                        D-1
  <PAGE>
  
           (f) No Partner has any personal liability with respect to or has 
  personally  guaranteed the payment of the permanent Mortgage.
  
           (g) The Partnership is in material compliance with all construction and
  use codes  applicable  to the  Project  and is not in  violation  of any zoning,
  environmental or similar regulations applicable to the Project.
  
           (h) All  appropriate  public  utilities,  including  sanitary and storm
  sewers,  water,  gas  and  electricity,  are  currently  available  and  will be
  operating  properly for all units in the Project at the time of first  occupancy
  and throughout the term of the Partnership.
  
           (i) The Project has obtained,  or will obtain before Permanent Mortgage
  Commencement,  and  will  maintain  throughout  the  term  of  this  Partnership
  Insurance written by an Insurance Company.
  
           (j) The  Partnership  owns  the fee  simple  interest  in the  Project,
  subject only to liens  (except  those with respect to which an adequate  bond or
  other financial security has been issued) which, in the aggregate, do not exceed
  $10,000 and the Mortgage Loan.
  
           (k) The  Construction  Contract  has  been  entered  into  between  the
  Partnership and the Contractor;  no other  consideration or fee shall be paid to
  the Contractor other than amounts set forth in the Construction Contract.
  
           (l) Except as  otherwise  disclosed  to the Limited  Partner in writing
  prior to the execution of this Agreement,  to the best of the General  Partner's
  knowledge:  (1) no Hazardous  Substance  has been disposed of, or released to or
  from,  or otherwise  now exists in, on, under or around,  the Project and (2) no
  aboveground or underground storage tanks are now or have ever been located on or
  under the Project. The General Partner will not install or allow to be installed
  any aboveground or underground storage tanks on the Project. The General Partner
  covenants  that the Project shall be kept free of Hazardous  Materials and shall
  not be used to generate,  manufacture,  refine, transport, treat, store, handle,
  dispose  of,  transfer,  produce  or  process  Hazardous  Materials,  except  in
  connection  with the normal  maintenance  and  operation  of any  portion of the
  Project. The General Partner shall comply, or cause there to be compliance, with
  all applicable Federal, state and local laws, ordinances,  rules and regulations
  with respect to Hazardous  Materials  and shall keep,  or cause to be kept,  the
  Project free and clear of any liens imposed  pursuant to such laws,  ordinances,
  rules and  regulations.  The General  Partner must  promptly  notify the Limited
  Partner in writing (3) if it knows,  or  suspects  or believes  there may be any
  Hazardous  Substance  in or around  any part of the  Project,  any  Improvements
  
  
                                        D-2
  <PAGE>
  
  constructed on the Project,  or the soil,  groundwater or soil vapor, (4) if the
  General  Partner or the  Partnership may be subject to any threatened or pending
  investigation by any governmental  agency under any law, regulation or ordinance
  pertaining to any Hazardous  Substance,  and (5) of any claim made or threatened
  by any Person,  other than a  governmental  agency,  against the  Partnership or
  General Partner  arising out of or resulting from any Hazardous  Substance being
  present or released in, on or around any part of the Project.
  
           (m) As of the date hereof, at funding of the Construction Loan and upon
  Permanent  Mortgage  Commencement,  fire and extended coverage insurance for the
  full  replacement  value of the Project  (excluding the value of the land,  site
  utilities,  landscaping and  foundations)  and worker's  compensation and public
  liability  insurance,  all in favor of the  Partnership,  is and will be in full
  force and effect  and will be kept in full  force and effect  during the term of
  the  Partnership;   all  such  policies  shall  be  amounts  and  with  insurers
  satisfactory  to the  permanent  lender  and  shall be paid  out of  Partnership
  assets.
  
           (n) The Partnership will allocate to the Limited Partner the Projected 
  Annual Tax Credits.
  
           (o) No charges or encumbrances  exist with respect to the Project other
  than those which are created or permitted by the Project  Documents or are noted
  or excepted in the title policy for the Project.
  
           (p) The  buildings  on the Project  site shall  constitute a "qualified
  low-income  housing  project"  as defined in Section  42(g) of the Code,  and as
  amplified by the Treasury Regulations thereunder. In this connection,  not later
  than  December  31 of the  first  year in which the  Partners  elect the LIHC to
  commence in accordance the Code.
  
           (q) No event or  proceeding,  including,  but not  limited  to, any (A)
  legal actions or proceedings before any court,  commission,  administrative body
  or other  governmental  authority,  and (B) acts of any  governmental  authority
  having  jurisdiction over the zoning or land use laws applicable to the Project,
  has occurred the  continuing  effect of which has: (i)  materially  or adversely
  affected the operation of the  Partnership or the Project  (except to the extent
  that funds are  available  to the  Partnership  to correct or cure such event or
  proceeding);  (ii)  materially or adversely  affected the ability of the General
  Partner to perform its  obligations  hereunder or under any other agreement with
  respect to the Project; or (iii) prevented the completion of construction of the
  improvements in substantial  conformity with the Project  Documents,  other than
  
  
                                        D-3
  <PAGE>
  
  legal  proceedings which have been bonded against (or as to which other adequate
  financial  security has been issued) in a manner as to indemnify the Partnership
  against loss;  provided that the foregoing  does not apply to matters of general
  applicability which would adversely affect the Partnership, the General Partner,
  Affiliates of the General  Partner or the Project only insofar as they or any of
  them are part of the general public.
  
           (r)  Neither  the   Partnership   nor  the  General   Partner  has  any
  liabilities,  contingent or otherwise,  which have not been disclosed in writing
  to the Limited  Partner and which in the  aggregate do not affect the ability of
  the Limited Partner to obtain the anticipated  benefits of its investment in the
  Partnership.
  
           (s) The General Partner has and shall maintain a net worth equal to at
  least $500,000.
  
           Capitalized  terms  used  but  not  defined  in  this  General  Partner
  Certification  shall  have  the  meanings  given  to  them  in  the  Partnership
  Agreement.
  
           IN  WITNESS  WHEREOF,  the  undersigned  have set  their  hands to this
  General Partner Certification this day of April, 1997.
  
  
  
  DONALD W. SOWELL
  General Partner
  
  
  
  
  
                                        D-4
  <PAGE>
  
  
  
                            EXHIBIT E TO THE PARTNERSHIP
  
                                REPORT OF OPERATIONS
  
                                              QUARTER ENDED:
  
  LOCAL PARTNERSHIP:   D. HILLTOP APARTMENTS, LTD.
  
  
   GENERAL PARTNER:    DONALD W. SOWELL
  
  
              ADDRESS:  509 Powell Drive
  CITY, STATE, ZIP:     Prairie View, Texas  77446
             PHONE:
  
  
      PROPERTY NAME:
            ADDRESS:
   CITY, STATE, ZIP:
      RESIDENT MNGR:
              PHONE:
  
  
         ACCOUNTANT:
               FIRM:
            ADDRESS:
   CITY, STATE, ZIP:
              PHONE:
  
  
  MANAGEMENT COMPANY:
            ADDRESS:
   CITY, STATE, ZIP:
              PHONE:
            CONTACT:
  
                                                  OCCUPANCY INFORMATION
  
  A.       No. of Units:     twenty-four (24)                   No. of Vacancies:
  
  B.       Occupancy for the quarter has: Increased/Decreased/Remained the Same
           (Circle One)
  
  C.       Number of:  Move-Ins       Move-Outs
  
  D.       Average length of tenant residency:1-6 mos.    6-12 mos.     1-3 yrs.
  Over 4 yrs.
  
  E.       Number of basic rent qualified applicants on waiting list:
  
  F.       If the  apartment  complex is less than 90%  occupied,  please explain 
           why,  and  describe  what efforts are being made to
           lease-up the remaining units.
  
  
  
  
  
  
  G.       On site manager:  Full Time _______       Part-Time ________.
  
           If part-time, the number of hours per week _________________.
  
                                        E-1
  <PAGE>
  
  
                               OPERATIONAL INFORMATION
  
                  Rent Schedule and Increases From Previous Quarter
  
                                     Monthly  Rent     Increases       Effective
                 No. of Units        Rent    Amount     Percent          Date
  
  
  1 Bdrm.
  
  
  2 Bdrm.
  
  
  3 Bdrm.
  
  Provide copy of rent roll through the last day of the  calendar  quarter.  On an
  annual  basis  provide  the annual  income  recertification  received  from each
  tenant.
  
                                PROPOSED MAINTENANCE
  
  
                                                       FUNDED BY
                                     COMPLETED OR      OPERATIONS
  TYPE            DESCRIPTION        PLANNED           OR RESERVES         AMOUNT
  
  
  INTERIOR PAINTING
  
  
  EXTERIOR PAINTING
  
  
  SIDING
  
  
  ROOFING
  
  
  DRAINAGE
  
  
  PAVING
  
  
  LANDSCAPING
  
  
  PLAYGROUND
  
  
  COMMUNITY ROOM
  
  
  LAUNDRY ROOM
  
  
  COMMON AREAS
  
  
  CARPET
  
  
  APPLIANCES
  
  
  LIGHTING
  
  
  OTHER
  
  
  Please describe in detail any major repairs or replacements of property.
  
  
                                        E-2
  <PAGE>
  
  
  
                                CONDITION OF PROPERTY
                              (Check One Box For Each)
  
  
                               Excellent      Good        Fair          Problem
  
  
  
  LANDSCAPE CONDITION
  
  
  COMMON AREA - CLEAN
  
  
  PARKING LOT CONDITION
  
  
  SIDEWALKS
  
  
  PROPERTY ENTRANCE
  
  
  SIGN CONDITION
  
  
  EXTERIOR PAINTING AND CAULKING
  
  
  ROOF
  
  
  WINDOWS
  
  
  DOORS
  
  
  SCREENS
  
  
  GUTTERS & DOWNSPOUTS
  
  
  MAILBOXES
  
  
  DUMPSTER, ODOR
  
  
  LAUNDRY ROOM
  
  
  OUTSIDE NIGHT LIGHTING
  
  
  SMOKE ALARM
  
  
  HEATING & AIR CONDITIONING   UNITS
  
  
  WATER HEATERS
  
  
  APPLIANCES
  
  
  PEST CONTROL
  
  
  CURB APPEAL
  
  
  OTHER
  
  
  
  
  
  
  Comments:
  -------------------------------------------------------------------------------
  
  -------------------------------------------------------------------------------
  
  -------------------------------------------------------------------------------
  
  
                                        E-3
  <PAGE>
  
  
                                                    FINANCIAL STATUS
  
  A.       Replacement Reserves are: Fully-funded ___ Under-funded ___ Balance ___
           If Underfunded, by how much:
  
  
           Tax/Insurance Escrows are: Fully-funded___ Under-funded___Balance ____
           If Under-funded, by how much:
  
  
           Property is operating at a: Surplus ___     Deficit ___  Amt. $ ___
                                                            
  
  
           Property Taxes paid?
           (please provide copy of paid tax bill)          yes              no
  
  
           Property Insurance paid?
           (please provide copy of yearly renewal)         yes              no
  
  
           Mortgage Payments are:     On Schedule     Delinquent      Amt. $
  
  B.       Please note and explain any significant changes in the following:
  
           Admin. Expenses     Increase          Decrease           Amount$
  
  
  
  
           Repairs/Maint.      Increase          Decrease           Amount$
  
  
  
  
  
           Utilities           Increase          Decrease           Amount$
  
  
  
  
           Taxes/Insurance     Increase          Decrease           Amount$
  
  
  
  
  C.       Do you anticipate making a return to owner distribution?   Yes     No
  
           Explanation:
  
  
  D.       Please explain in detail any change in the financial condition:
  
  
  
  
  
  E.       Any insurance claims filed?        Yes _____         No _____
  
           If yes, please explain:
  
           Prepared By:                                         Date:
  
         Firm:                                                  Telephone:
  
                                        E-4
  <PAGE>
  
  
  
                             D. HILLTOP APARTMENTS, LTD.
  
                          STATEMENT OF INCOME AND EXPENSES
  
                           QUARTER ENDED: _______________
  
                            Previous    Current             Budget
                            Quarter     Quarter      YTD    Amount   Various
  
  
  INCOME
  
  
    Net Rental Income
  
    Other Income
  
  
  TOTAL INCOME
  
  
    Renting Expense
  
    Admin. Expense
  
    Operating Expense
  
    Maintenance Expense
  
    Depreciation
  
    Taxes & Insurance
  
    Interest Expense
  
    Other
  
    Transfer to Replacement
     Reserve account
  
  
  
  TOTAL EXPENSES
  
  NET INCOME (LOSS)
  
  
  NOTE:    Please be sure to include Depreciation and Interest.
  
  
  Prepared by:                        Date:
  
         Firm:                        Telephone:
  
                                        E-5
  <PAGE>
  
  
                             D. HILLTOP APARTMENTS, LTD.
  
                               UNAUDITED BALANCE SHEET
  
                            QUARTER ENDED: ______________
  
  ASSETS
  
           Unrestricted Cash
           Restricted Reserves
           Buildings, personal property
            net of accumulated depreciation
           Land
           Capital Contributions Receivable
           Other
           TOTAL
  
  LIABILITIES
  
           Mortgage Payable
           Accounts Payable
           Operating Deficit Loan
           Working Capital Loan
           Other
  
  PARTNERS' EQUITY
  
           Limited Partner Equity Paid
           Limited Partner Equity Receivable
           General Partner Equity
           Other Equity
           Cumulative Losses
  
           TOTAL LIABILITIES AND NET WORTH
  
  DISTRIBUTIONS TO GENERAL PARTNER OR ANY AFFILIATE
  
           Fees or Compensation
           Reimbursed Expenses
           Partnership Cash Distributions
  
  *Depreciation  should be computed over the term approved by the Limited  Partner
  for the building  improvements,  and the applicable  Federal tax lives and rates
  for personal property.
  
  Prepared by:                                Date:
  
         Firm:                                Telephone:
  
  
  
  
  
                                        E-6
  <PAGE>
  
  <TABLE>
  
  
                            TAX CREDIT COMPLIANCE REPORT
  
  
  <S>         <C>     <C>       <C>        <C>        <C>       <C>       <C>           <C>          <C>         <C>
  DATE        1       2         3          4          5         6         7             8            9           10
              Person  Person(s) Person(s)  Person(s)  Person(s) Person(s) Person(s)    Person(s)    Person(s)
                                                                                                      Person(s )
  
  
  HUD/FmHA VERY LOW:
  
  
  QUALIFYING INCOME:
  
  
  MONTHLY INCOME:
  
  
  MAX GROSS RENT:
  
  
  
  
  
    UNIT      LEASED TO      #      ANNUAL     HUD/FmHA     LESS     #     TENANT       +    UTIL-      =         TENANT      SUBSIDY
                            IN      INCOME     GROSS        THAN     BR    RENTAL            ITIES                GROSS
                                               INCOME       40%            PAYMENT           AND                  RENT
                                                                                             RA
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== =================================== ========== ============= =============== =========== =========== ===================
  </TABLE>
  
                                        E-7
  <PAGE>
  
  
                          TAX CREDIT COMPLIANCE MONITORING:
                                ANNUAL CERTIFICATION
  
  
       As General Partner of D. HILLTOP  APARTMENTS,  LTD., I hereby certify as to
  the following:
  
       1. D.  HILLTOP  APARTMENTS,  LTD.  owns a  twenty-four  (24)  unit  project
  ("Project") in Palestine, Anderson County, Texas.
  
           2. An annual income certification (including supporting  documentation)
  has been received from each tenant. The income  certification  reflects that the
  tenant's income meets the income  limitation  applicable to the Project pursuant
  to Section 42(g)(1) of the Internal Revenue Code ("Code").
  
       3. The Project  satisfies the  requirements  of the applicable  minimum set
  aside test as defined in Section 42(g)(1) of the Code.
  
       4. Each unit  within the Project is rent  restricted  as defined in Section
  42(g)(2)of the Code.
  
       5. Each unit in the Project is available for use by the general  public and
  not for use on a transient basis.
  
       6. Each  building in the Project is suitable for  occupancy  in  accordance
  with local health, safety, and building codes.
  
       7.  During the  preceding  calendar  year,  there had been no change in the
  eligible  basis, as defined in Section 42(d) of the Code, of any building within
  the Project.
  
       8.  All  common  area  facilities  included  in the  eligible  basis of the
  Apartment  Complex are provided to the tenants on a comparable  basis  without a
  separate fee to any tenant in the Project.
  
       9. During the  preceding  calendar  year when a unit in the Project  became
  vacant reasonable  attempts were made to rent that unit to tenants whose incomes
  met the income limitation applicable to the Project pursuant to Section 42(g)(1)
  of the Code and while  that unit was  vacant no units of  comparable  or smaller
  size were  rented to tenants  whose  income  did not meet the income  limitation
  applicable to the Project pursuant to Section 42(g)(1) of the Code.
  
       10. If the income of a tenant in a unit  increased  above the limit allowed
  in  Section  42(g)(2)(D)(ii),  then the next  available  unit of  comparable  or
  smaller  size was  rented to tenants  whose  incomes  met the income  limitation
  applicable to the Project pursuant to Section 42(g)(1) of the Code.
  
  IN  VERIFICATION  OF THE  FOREGOING  ENCLOSED  HEREWITH  IS A COPY OF THE ANNUAL
  INCOME  CERTIFICATION  RECEIVED FROM EACH TENANT IN THE PROJECT.  UPON REQUEST I
  WILL PROVIDE  COPIES OF ALL  DOCUMENTATION  RECEIVED  FROM THE TENANT TO SUPPORT
  THAT CERTIFICATION.
  
           I declare  under penalty of perjury under the law of the State of Texas
  that the foregoing is true and correct.
  
                                        E-8
metadata_documents: [{"type": "8-K", "sequence": "1", "description": "NONE", "secsgml_size_bytes": 228478}]
metadata_filer: {"company-data": {"conformed-name": "WNC HOUSING TAX CREDIT FUND V LP SERIES 4", "cik": "0000943906", "assigned-sic": "6513", "irs-number": "330707612", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-21897", "film-number": "97586858"}, "business-address": {"street1": "3158 REDHILL AVE", "street2": "STE 120", "city": "COSTA MESTA", "state": "CA", "zip": "92626", "phone": "7146625565"}, "mail-address": {"street2": "3158 REDHILL AVE STE 120", "city": "COSTA MESA", "state": "CA", "zip": "92626"}}
text: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
  Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
  Date of Report (Date of earliest event reported):     April 14, 1997
  
                    WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
               (Exact name of registrant as specified in its charter)
  
        California                       0-21897                  33-0707612
  (State or other jurisdiction          (Commission             (IRS Employer
   of incorporation)                     File Number)         Identification No.)
  
            3158 Redhill Avenue, Suite 120, Costa Mesa, California 92626
                 (Address of principal executive offices) (Zip Code)
  
  Registrant's telephone number, including area code:  (714) 662-5565
  
                                        N/A
            Former name or former address, if changed since last report)
  
  144.edg
  Item 2.  Acquisition or Disposition of Assets
  
           WNC Housing Tax Credit Fund V, L.P., Series 4 ("SERIES 4") has acquired
  a Local Limited  Partnership  Interest in D. Hilltop  Apartments,  Ltd., a Texas
  limited partnership ("HILLTOP" or the "Local Limited Partnership"). HILLTOP owns
  The Hilltop Apartments (the "Apartment Complex") in Palestine, Texas.
  
           The  following  tables  contain  information  concerning  the Apartment
  Complex and the Local Limited Partnership identified herein:
  
                                                                                                            LOCAL
                                                                                                            LIMITED        YEAR
                                       ESTIMATED                                                PERMANENT   PARTNERSHIP'S  CREDITS
              PROJECT                  CONSTRUC-    ESTIMATED                                   MORTGAGE    ANTICIPATED    TO BE
  LOCAL       NAME AND                 TION         DEVELOPMENT COST   NUMBER OF     BASIC      LOAN        AGGREGATE      FIRST
  LIMITED     NUMBER OF   LOCATION OF  COMPLETION   (INCLUDING         APARTMENT     MONTHLY    PRINCIPAL   TAX CREDITS    AVAIL-
  PARTNERSHIP BUILDINGS   PROPERTY     DATE         LAND COST)         UNITS         RENTS      AMOUNT      (1)            ABLE
  HILLTOP      The         Palestine    December     $596,919           8  1BR units  $262       $473,450     $221,880      1997
               Hilltop     (Anderson    1996                            16 2BR units  $320       RD(3)
               Apartments  County),
                           Texas
               4
               buildings
               (2)
  (1)      Low Income Housing Credits are available over a 10-year period. For the
           year in which the credit first becomes available, SERIES 3 will receive
           only that  percentage  of the annual  credit which  corresponds  to the
           number of months  during  which  SERIES 3 was a limited  partner of the
           Local Limited  Partnership,  and during which the Apartment Complex was
           completed and in service.
  
  (2)      Rehabilitation property.
  
  (3)      RD provides mortgage loans under the RD Section 515 Mortgage Loan 
           Program. This  mortgage  loan will be a 50-year  loan and will bear 
           annual interest at a market  rate prior to  reduction  of the interest
           rate by a mortgage  interest subsidy to an annual rate of 10%, with  
           principal and interest  payable  monthly based on a 50-year 
           amortization schedule.
  Palestine  (population  18,100) is in eastern Texas at the intersection
  of U. S. Highways 287, 79 and 84,  approximately  100 miles southeast of Dallas.
  The major employers for Palestine residents are Texas Department of Corrections,
  Memorial Hospital and Murray Corp (air conditioning compressors).
  
                                                                                 SHARING                      ESTIMATED
                                                                                 RATIOS:         SERIES   3'  ACQUISITION
                                                                                 ALLOCATIONS     s            FEES PAYABLE
  LOCAL           LOCAL                                             SHARING      (4) AND         CAPITAL      TO FUND
  LIMITED         GENERAL            PROPERTY        DEVELOPMENT    RATIOS:      SALE OR         CONTRI-BUTIONMANAGER
  PARTNERSHIP     PARTNER            MANAGER (1)     FEE (2)        CASH   FLOW  REFINANCING     (6)
                                                                    (3)          PROCEEDS (5)
  HILLTOP         Donald W. Sowell   Wilmic          $72,330        WNC:1st      99/1            $120,814     $12,100
                                     Ventures, Inc.                 $400         50/50
                                                                    LGP:    2nd
                                                                    $800
                                         The
                                      balance:
                                        99/1
  (1) The maximum annual  management fee payable to the property manager generally
  is  determined  pursuant to lender  regulations.  The Local  General  Partner is
  authorized to employ either itself or one of its  affiliates,  or a third party,
  as property manager for leasing and management of the Apartment  Complex so long
  as the fee therefor  does not exceed the amount  authorized  and approved by the
  lender for the Apartment Complex.
  
  (2)  The  Local  Limited  Partnership  will  pay its  Local  General  Partner  a
  development  fee  in  the  amount  set  forth,  for  services  incident  to  the
  development and construction of the Apartment  Complex,  which services include:
  negotiating  the  financing  commitments  for the  Apartment  Complex;  securing
  necessary  approvals and permits for the  development  and  construction  of the
  Apartment Complex; and obtaining allocations of Low Income Housing Credits. This
  payment will be made in  installments  after receipt of each  installment of the
  capital contributions made by SERIES 4.
  
                                         2
  (3)  Reflects  the amount of the net cash flow from  operations,  if any,  to be
  distributed  to SERIES 4 ("WNC") and the Local  General  Partner  ("LGP") of the
  Local Limited Partnership for each year of operations.  Generally, to the extent
  that  the  specific  dollar  amounts  which  are to be paid to WNC are not  paid
  annually,  they will accrue and be paid from sale or refinancing  proceeds as an
  obligation of the Local Limited Partnership.
  
  (4) Subject to certain special allocations,  reflects the respective  percentage
  interests in profits,  losses and Low Income Housing Credits of SERIES 4 and the
  Local General Partner.
  
  (5) Reflects the percentage  interests of SERIES 4 and the Local General Partner
  in any net cash proceeds  from sale or  refinancing  of the  Apartment  Complex,
  after  payment  of  the  mortgage  loan  and  other  Local  Limited  Partnership
  obligations (see, e.g., note 3), and the following,  in the order set forth: the
  capital  contributions  of SERIES 4; and the capital  contribution  of the Local
  General Partner.
  
  (6)  SERIES  4  will  make  its  capital  contributions  to  the  Local  Limited
  Partnership  in  stages,  with each  contribution  due when  certain  conditions
  regarding  construction  or  operations  of  the  Apartment  Complex  have  been
  fulfilled.
  3
  Item 7.  Financial Statements and Exhibits
  
           a.       Financial Statements of Businesses Acquired.
  
                    Inapplicable.
  
           b.       Proforma Financial Information
  
                    Proforma   Financial    Information   will   be   filed   upon
                    availability.
  
           c.       Exhibits
  
                    10.1     Amended and Restated Agreement of Limited Partnership
                             of D. Hilltop Apartments, Ltd.
  
                                         4
  SIGNATURES
  
           Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
  the  registrant  has duly  caused  this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
                    WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
  
  Date:  April 23, 1997                       By:      WNC &  Associates, Inc.,
                                                       General Partner
  
                                                       By: /s/ JOHN B. LESTER, JR.
                                                             John B. Lester, Jr.,
                                                             President
  
                                         5
  INDEX TO EXHIBITS
  
  Exhibit
  Number            Exhibit
  
  10.1              Amended and Restated Agreement of Limited Partnership of 
                    D. Hilltop Apartments, Ltd.
  AMENDED AND RESTATED
  
                         AGREEMENT OF LIMITED PARTNERSHIP OF
  
                             D. HILLTOP APARTMENTS, LTD.
  TABLE OF CONTENTS
  
                                                                           Page
  
  I.       DEFINITIONS .........................................           1
  
           1.1      "Accountant" ...................................       1
           1.2      "Act" ..........................................       1
           1.3      "Actual Tax Credit".............................       1
           1.4      "Adjusted Capital Account Deficit" .............       1
           1.5      "Affiliate" ....................................       2
           1.6      "Agreement" or "Partnership Agreement"..........       2
           1.7      "Assignee" .....................................       2
           1.8      "Capital Account" ..............................       2
           1.9      "Capital Contribution" .........................       3
           1.10     "Cash Flow From Operations" ....................       3
           1.11     "Code" .........................................       3
           1.12     "Completion of Construction"....................       3
           1.13     "Compliance Period".............................       4
           1.14     "Construction Contract".........................       4
           1.15     "Construction Loan" ............................       4
           1.16     "Contractor" ...................................       4
           1.17     "Debt Service Coverage".........................       4
           1.18     "Development Fee" ..............................       5
           1.19     "Distributions" ................................       5
           1.20     "Equity Loan" ..................................       5
           1.21     "Event of Bankruptcy" ..........................       6
           1.22     "Fair Market Value" ............................       6
           1.23     "Financial Interest" ...........................       6
           1.24     "First Year Certificate" .......................       6
           1.25     "FmHA" .........................................       6
           1.26     "FmHA Interest Credit Agreement" ...............       6
           1.27     "FmHA Loan Agreement" ..........................       6
           1.28     "General Partner" ..............................       7
           1.29     "Gross Asset Value" ............................       7
           1.30     "Hazardous Substance"...........................       8
           1.31     "Income and Losses".............................       8
           1.32     "Insurance".....................................       9
           1.33     "Insurance Company".............................       10
           1.34     "Interest" .....................................       10
           1.35     "LIHC" .........................................       10
           1.36     "Limited Partner" ..............................       10
           1.37     "Liquidation" ..................................       10
           1.38     "Minimum Set-Aside Test" .......................       10
           1.39     "Mortgage" or "Mortgage Loan" ..................       10
           1.40     "Mortgage Note" ................................       11
           1.41     "Nonrecourse Deductions"........................       11
           1.42     "Nonrecourse Liability".........................       11
           1.43     "Operating Deficit" ............................       11
           1.44     "Operating Deficit Guarantee Period"............       11
  
                                         i
  1.45     "Original Limited Partner" .....................       11
           1.46     "Partner" ......................................       11
           1.47     "Partner Nonrecourse Debt" .....................       11
           1.48     "Partner Nonrecourse Debt Minimum Gain" ........       11
           1.49     "Partner Nonrecourse Deductions" ...............       11
           1.50     "Partnership" ..................................       12
           1.51     "Partnership Administration Fee" ...............       12
           1.52     "Partnership Minimum Gain" .....................       12
           1.53     "Permanent Mortgage Commencement" ..............       12
           1.54     "Person" .......................................       12
           1.55     "Project" ......................................       12
           1.56     "Project Documents" ............................       12
           1.57     "Projected Tax Credits" ........................       13
           1.58     "Qualified Income Offset Item" .................       13
           1.59     "Qualified Tenants" ............................       13
           1.60     "Refinancing" ..................................       13
           1.61     "Rent Restriction Test" ........................       13
           1.62     "Sale" .........................................       13
           1.63     "Sale or Refinancing Proceeds" .................       13
           1.64     "State" ........................................       14
           1.65     "State Tax Credit Agency" ......................       14
           1.66     "Substitute Limited Partner" ...................       14
           1.67     "Tax Credit" ...................................       14
           1.68     "Tax Credit Conditions".........................       14
           1.69     "TRA 1986" .....................................       14
           1.70     "Treasury Regulations" .........................       14
  
  II.      NAME ................................................           14
  
  III.     PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE ........           14
  
           3.1      Principal Executive Office .....................       14
           3.2      Agent for Service of Process ...................       15
  
  IV.      PURPOSE .............................................           15
  
  V.       TERM ................................................           15
  
  VI.      GENERAL PARTNER'S CONTRIBUTIONS AND LOANS ...........           15
  
           6.1      Capital Contribution of General Partner ........       15
           6.2      Construction and Operating Obligations .........       15
           6.3      General Partner Loans ..........................       16
  
  VII.     LIMITED PARTNER'S CAPITAL CONTRIBUTIONS .............           17
  
           7.1      Original Limited Partner .......................       17
           7.2      Capital Contribution of Limited Partner ........       17
           7.3      Repurchase of Limited Partner's Interest .......       19
           7.4      Reduction of Capital Contribution...............       20
           7.5      Return of Capital Contribution .................       21
           7.6      Liability of Limited Partner ...................       21
  
                                         ii
  VIII. WORKING CAPITAL AND RESERVES .......................               22
  
           8.1      Operation and Maintenance Reserve...............       22
           8.2      Reserve for Replacements........................       22
           8.3      Other Reserves..................................       22
  
  IX.      MANAGEMENT AND CONTROL ..............................           22
  
           9.1      Power and Authority of General Partner .........       22
           9.2      Payments to the General Partners and Others ....       23
           9.3      Specific Powers of the General Partner .........       25
           9.4      Authority Requirements..........................       25
           9.5      Limitations on General Partner's
                    Power and Authority ............................       26
           9.6      Restrictions on Authority of General Partner....       27
           9.7      Duties of General Partner ......................       28
           9.8      Partnership Expenses ...........................       28
           9.9      General Partner Expenses .......................       30
           9.10     Other Business of Partners .....................       30
           9.11     Covenants, Representations and Warranties.......       30
  
  X.       ALLOCATIONS OF INCOME, LOSSES AND CREDITS ...........           33
  
           10.1     General ........................................       33
           10.2     Allocations From Sale or Refinancing............       33
           10.3     Special Allocations.............................       35
           10.4     Curative Allocations............................       38
           10.5     Other Allocation Rules..........................       38
           10.6     Tax Allocations:  Code Section 704(c)...........       39
           10.7     Allocation Among Limited Partners
                    and Assignees ..................................       39
           10.8     Allocation Among General Partners ..............       40
           10.9     Modification of Allocations ....................       40
  
  XI.      DISTRIBUTION ........................................           40
  
           11.1     Distribution of Cash Flow From Operations ......       40
           11.2     Distribution Upon Sale or Refinancing ..........       41
  
  XII.     VOLUNTARY TRANSFERS OF LIMITED PARTNER'S INTEREST
           IN THE PARTNERSHIP...................................           41
  
           12.1     Assignment of Limited Partner's Interest .......       41
           12.2     Effective Date of Transfer .....................       42
           12.3     Invalid Assignment .............................       42
           12.4     Assignee's Rights to Allocations and
                    Distributions ..................................       42
           12.5     Substitution of Assignee as Limited Partner ....       43
           12.6     Death, Bankruptcy, Incompetency, etc.
                    of a Limited Partner ...........................       43
           12.7     Assignment .....................................       43
  
                                        iii
  XIII.    RESIGNATION, REMOVAL AND REPLACEMENT OF GENERAL
           PARTNER ............................................            44
  
           13.1     Resignation of General Partner .................       44
           13.2     Removal of General Partner .....................       44
           13.3     Admission of Substitute General Partner ........       45
           13.4     Continuing Liability ...........................       46
           13.5     Transfer of Interest ...........................       46
           13.6     Payment to General Partner Upon Resignation,
                    Death or Insanity ..............................       46
  
  XIV.     BOOKS AND ACCOUNTS, REPORTS, TAX RETURNS,
           FISCAL YEAR AND BANKING .............................           48
  
           14.1     Books and Accounts .............................       48
           14.2     Accounting Reports .............................       49
           14.3     Other Reports ..................................       50
           14.4     Late Reports ...................................       51
           14.5     Annual Site Visits .............................       52
           14.6     Tax Returns ....................................       52
           14.7     Fiscal Year ....................................       52
           14.8     Banking ........................................       52
           14.9     Certificates and Elections .....................       52
  
  XV.      DISSOLUTION, WINDING UP, TERMINATION AND
           LIQUIDATION OF THE PARTNERSHIP ......................           53
  
           15.1     Dissolution of Partnership .....................       53
           15.2     Return of Capital Contribution upon
                    Dissolution ....................................       53
           15.3     Distributions of Assets ........................       54
           15.4     Deferral of Liquidation.........................       55
           15.5     Liquidation Statement ..........................       55
           15.6     Certificates of Dissolution; Certificate of
                    Cancellation of Certificate of Limited
                    Partnership ...................................        56
  
  XVI.     AMENDMENTS ..........................................           56
  
  XVII. MISCELLANEOUS ......................................               57
  
           17.1      Voting Rights .................................       57
           17.2      Meeting of Partnership ........................       57
           17.3      Notices .......................................       58
           17.4      Successors and Assigns ........................       58
           17.5      FmHA Regulations ..............................       58
           17.6      Recording of Certificate of Limited
                     Partnership. ..................................       59
  
                                         iv
  17.7      Amendment of Certificate of Limited
                     Partnership ...................................       59
           17.8      Counterparts ..................................       60
           17.9      Captions ......................................       60
           17.10     Certain Provisions ............................       60
           17.11     Saving Clause .................................       60
           17.12     Number and Gender .............................       61
           17.13     Entire Agreement ..............................       61
           17.14     Governing Law .................................       61
           17.15     Attorney's Fees ...............................       61
           17.16     Receipt of FmHA Correspondence ................       61
           17.17     Security Interest and Right of Set-Off ........       61
  
  EXHIBIT A - Legal Description...................... A-1
  EXHIBIT B - Form of Opinion of Counsel............. B-1  -  B-4
  EXHIBIT C - Certification and Agreement............ C-1  -  C-4
  EXHIBIT D - General Partner Certification.......... D-1  -  D-3
  EXHIBIT E - Report of Operations................... E-1  -  E-9
  
                                         v
  AMENDED AND RESTATED AGREEMENT
                              OF LIMITED PARTNERSHIP OF
                             D. HILLTOP APARTMENTS, LTD.
  
           D.  HILLTOP   APARTMENTS,   LTD.,  a  Texas  limited  partnership  (the
  "Partnership")  recorded a  certificate  of limited  partnership  with the Texas
  Secretary of State on July 25, 1994. A partnership  agreement dated July 1, 1994
  was entered  into by and between  DONALD W. SOWELL as the general  partner  (the
  "General  Partner") and BEATRICE W. SOWELL as the limited partner (the "Original
  Limited Partner").
  
           Effective as of the date written below,  WNC HOUSING TAX CREDIT FUND V,
  L.P.,  SERIES 4, a California  limited  partnership (the "Limited  Partner") has
  been admitted to the  Partnership as successor  limited partner and the Original
  Limited  Partner has  liquidated  its interest in the  Partnership.  The Limited
  Partner and the General  Partner  desire hereby to amend and restate the Limited
  Partnership Agreement of the Partnership dated July 1, 1994.
  
       NOW,  THEREFORE,  in  consideration of their mutual  agreements  herein set
  forth,  the Partners  hereby agree to amend and restate the Agreement of Limited
  Partnership  of D.  HILLTOP  APARTMENTS,  LTD.  in its  entirety  to  provide as
  follows:
  
                                      ARTICLE I
  
                                     DEFINITIONS
  
           Section 1.1  "Accountant"  shall mean H.D.  Morris Co.,  Inc.,  or such
  other firm of independent  certified public accountants as may be engaged by the
  General  Partner  with  the  consent  of the  Limited  Partner  to  prepare  the
  Partnership income tax returns.
  
           Section 1.2 "Act" shall mean the Revised Limited Partnership Act of the
  State.
  
           Section 1.3 "Actual Tax Credit" shall mean as of any point in time, the
  total amount of the LIHC actually  allocated by the  Partnership  to the Limited
  Partner,  representing  ninety-nine percent (99%) of the LIHCs actually received
  by the Partnership, as shown on the applicable tax return of the Partnership.
  
           Section 1.4 "Adjusted  Capital Account Deficit" shall mean with respect
  to any Partner,  the deficit balance,  if any, in such Partner's Capital Account
  as of the end of the relevant fiscal year,  after giving effect to the following
  adjustments:
  
                                         1
  (a) Credit to such  Capital  Account any amounts  which such Partner is
  obligated  to restore or is deemed to be  obligated  to restore  pursuant to the
  penultimate  sentences  of  Treasury  Regulations  Sections   1.704-2(g)(1)  and
  1.704-2(i)(5); and
  
           (b) Debit to such  Capital  Account  the items  described  in  Sections
  1.704-2(b)(2)(ii)(d)(4),  1.704-2(b)(2)(ii)(d)(5) and 1.704-2(b)(2)(ii)(d)(6) of
  the Treasury Regulations.
  
  The foregoing  definition  of Adjusted  Capital  Account  Deficit is intended to
  comply  with the  provisions  of Section  1.704-1(b)(2)(ii)(d)  of the  Treasury
  Regulations and shall be interpreted consistently therewith.
  
           Section  1.5  "Affiliate"   shall  mean  (i)  any  Person  directly  or
  indirectly  controlling,  controlled  by, or under  common  control with another
  Person;  (ii) any Person owning or  controlling  10% or more of the  outstanding
  voting securities of such other Person; (iii) any officer, director, trustee, or
  partner of such other Person;  and (iv) if such Person is an officer,  director,
  trustee or general  partner,  any company for which such Person acts in any such
  capacity.
  
           Section 1.6  "Agreement"  or  "Partnership  Agreement"  shall mean this
  Amended and Restated Agreement of Limited Partnership, as it may be amended from
  time to time.
  
           Section 1.7  "Assignee"  shall mean a Person who has  acquired all or a
  portion of the Limited Partner's  beneficial interest in the Partnership and has
  not become a substitute Limited Partner.
  
           Section 1.8 "Capital Account" shall mean, with respect to each Partner,
  the account  maintained  for such Partner  comprised of such  Partner's  Capital
  Contribution  as  increased  by  allocations  of  Partnership  Income  (or items
  thereof)  and any items in the  nature of  income  or gain  which are  specially
  allocated  pursuant  to  Article X hereof,  and  decreased  by the amount of any
  Distributions  made to such Partner,  and allocations of Partnership  Losses (or
  items  thereof)  and any items in the  nature of  expenses  or losses  which are
  specially allocated pursuant to Article X hereof.
  
           In the event of any  transfer  of an  interest  in the  Partnership  in
  accordance with the terms of this Agreement, the transferee shall succeed to the
  Capital  Account of the  transferor to the extent it relates to the  transferred
  interest,  provided that if the transfer of any interest causes a termination of
  the Partnership pursuant to Code Section  708(b)(1)(B),  the Capital Accounts of
  all Partners,  including the transferee, shall be redetermined as of the date of
  such  termination.  In such event,  the Capital Account of each Partner shall be
  
                                         2
  equal to the net fair market value of its  interest as of such date.  Subsequent
  to such  redetermination,  allocations of Income and Loss with respect to assets
  held by the Partnership on the date of such redetermination shall be governed by
  the principles set forth in Code Section 704(c) and the Treasury Regulations.
  
           The foregoing  definition  and the other  provisions of this  Agreement
  relating to the  maintenance  of Capital  Accounts  are  intended to comply with
  Treasury  Regulation  Section 1.704,  and shall be interpreted  and applied in a
  manner consistent with such Treasury Regulation.
  
           Section  1.9  "Capital  Contribution"  shall  mean the total  amount of
  money, or the initial Gross Asset Value of property (net of liabilities securing
  such  contributed  property that the Partnership is considered to assume or take
  subject to under Section 752 of the Code),  contributed to the  Partnership,  if
  any, by all the Partners or any class of Partners or any one Partner as the case
  may be (or by a predecessor-in-interest of such Partner or Partners), reduced by
  any of such capital which shall have been returned  pursuant to Section 7.3, 7.4
  or 7.5 of this  Agreement.  A loan to the  Partnership by a Partner shall not be
  considered as a Capital Contribution.
  
           Section 1.10 "Cash Flow From Operations" shall mean gross receipts (not
  including  Capital  Contributions,  Sale or Refinancing  Proceeds or proceeds of
  Partnership borrowings) from Partnership operations, determined on a cash basis,
  less debt payments,  capital expenditures to the extent not paid from borrowings
  or  reserves,  other  reserves  pursuant to Section 8.3 and  operating  expenses
  associated with rental and maintenance of the Project;  but excluding deductions
  for cost recovery of buildings,  improvements and personal property amortization
  of any financing fees.
  
           Section 1.11 "Code" shall mean the  Internal  Revenue Code of 1986,  as
  amended, or any successor statute.
  
           Section 1.12 "Completion of Construction"  shall mean the completion of
  construction  of the  Project  substantially  in  accordance  with  the  Project
  Documents in order to obtain the  required  certificates  of  occupancy  (or the
  local equivalent) for all (24) twenty-four units as evidenced by the issuance of
  the  certificate  of  occupancy  by the  inspecting  architect,  the FmHA of the
  governmental  agency having  jurisdiction over the Project of by the issuance of
  the inspecting architect's certification. The construction shall be completed in
  good  workmanlike  manner,  free and clear of all  mechanics,  materialmen's  or
  similar  liens  and the  Project  shall  be  equipped  with  all  necessary  and
  appropriate  fixtures,  equipment  and articles of personal  property  including
  refrigerators and ranges.
  
                                         3
  Section  1.13  "Compliance  Period"  shall mean the period set forth in
  Section 42 (i)(1) of the Code, as amended, or any successor statute.
  
           Section  1.14  "Construction  Contract"  shall  mean  the  construction
  contract in the amount of $354,700  entered into between the  Partnership and
  the Contractor pursuant to which the Project is being Constructed.
  
           Section 1.15  "Construction  Loan" shall mean the loan  obtained by the
  Partnership from Midland Mortgage Investment Corporation in the principal amount
  $371,450  at 8.75%  per annum for term of six  months to  provide  funds for the
  acquisitions, renovation, and/or construction and development of the Project.
  
           Section 1.16 "Contractor"  shall mean D.W. & S.  Construction,  Inc.,
  which is the  general  construction contractor of the Project.
  
           Section 1.17 "Debt Service  Coverage"  shall mean the ratio between the
  net  operating  income  and  the  debt  service  required  to  be  paid  on  the
  Mortgage(s); as example, a 1.15 Debt Service Coverage means that for every $1.00
  of debt service  required to be paid there must be $1.15 of net operating income
  available.  For purposes of this  definition net operating  income is the actual
  receipt on a cash basis by the  Partnership  of revenues from  operations of the
  Partnership,  including, without limitation,  rental income (but not any subsidy
  thereof  from the  General  Partner  or an  Affiliate  thereof),  but  excluding
  prepayments,  security  deposits and interest  thereon,  less all cash operating
  obligations  of the  Partnership  (other  than those  covered by  insurance)  in
  accordance  with the applicable  budget adopted by the Partnership in accordance
  with  Section  14.3(j) of this  Agreement  (the  "Budget"),  including,  without
  limitation,  the  payment of  Management  Agent fees  (which  shall be deemed to
  include that portion of such fees which is deferred and not currently  paid) and
  the funding of reserves in accordance with Article VIII of this Agreement, and a
  reserve for all taxes or payments in lieu of taxes and any other  expenses which
  may  reasonably  be expected to be paid in a  subsequent  period but which on an
  accrual  basis are  allocable  to the  period  in  question,  such as  insurance
  premiums, audit, tax or accounting expenses.  Without limiting the generality of
  the  foregoing,  the  Partnership's  gross revenues for purposes of this Section
  shall not include Capital Contributions, borrowings, any lump-sum payment or any
  other  extraordinary  receipt of funds thereby,  or interest or any other income
  earned on investment of its funds,  and unless  otherwise  provided in a Budget,
  the cash  operating  obligations of the  Partnership  shall be deemed to include
  real estate taxes for the period at the fully assessed rate. A worksheet for the
  
                                         4
  calculation  of Debt  Service  Coverage  is found in the  Report  of  Operations
  exhibit attached to this Agreement and incorporated herein by this reference.
  
           Section  1.18  "Development  Fee"  shall  mean the fee  payable  to the
  General  Partner or an  Affiliate  of the  General  Partner  pursuant to Section
  9.2(a) for services incident to the development and construction of the Project,
  which services shall include,  but not be limited to, the  negotiations  for the
  payment of any fees and for the permanent financing commitments for the Project;
  the securing of all  necessary  approvals  and permits for the  development  and
  construction of the Project; the selection and negotiation of contracts with the
  marketing  consultant,   engineer,   architect,  general  contractor  and  other
  professionals,  and the  supervision of such parties;  the payment of the market
  study or market  evaluation report or payment of other depreciable items for tax
  purposes;   the   advancing   of  risk   capital  to  pay  for  the  payment  of
  pre-development  activities;  and the  preparation  and  submission  of the LIHC
  application.
  
           Section 1.19  "Distributions"  shall mean the total amount of money, or
  the Gross Asset Value of property (net of liabilities  securing such distributed
  property  that such  Partner is  considered  to assume or take  subject to under
  Section  752 of the  Code),  distributed  to  Partners  with  respect  to  their
  interests in the Partnership,  but shall not include any payments to the General
  Partner or its  Affiliates  for fees or other  compensation  as provided in this
  Agreement or any guaranteed  payment within the meaning of Section 707(c) of the
  Code, as amended, or any successor thereto.
  
           Section 1.20 "Equity  Loan" shall mean any loan secured by  Partnership
  property  (excluding a Mortgage Loan,  Refinancing  or a Supplemental  Loan) for
  purpose  of  providing  a return  of,  or a return  on,  the  Partner's  Capital
  Contribution as provided for in FmHA  Regulations  Section  1965.201 et seq., 42
  U.S.C.  Section 1485 (Equity  Takeout  Incentive  Loan), as amended from time to
  time, or other loans approved by the FmHA and Limited  Partner.  The Equity Loan
  will not supersede the Mortgage Loan but will be an additional  indebtedness  on
  Partnership property.  All Equity Loans must be approved by the FmHA and Limited
  Partner  prior to funding of the Equity  Loan.  The Equity  Loan funds  shall be
  distributed as follows: (a) first, payment of pre-approved  expenses (which must
  be  commercially  reasonable and  substantiated)  paid to  non-Affiliated  third
  parties  (unless  the  Partners  consent  to the use an  Affiliated  party)  for
  packaging the Equity Takeout Loan  application  and for locating and closing the
  Equity  Takeout Loan; (b) second,  to the Limited  Partner in an amount equal to
  its Capital  Contribution;  (c) third, to the General Partner in an amount equal
  to its Capital Contribution;  (d) thereafter, 50% to the Limited Partner and 50%
  to the General Partner.
  
                                         5
  Section  1.21  "Event of  Bankruptcy"  shall mean the  adjudication  of
  bankruptcy or insolvency by a court of competent jurisdiction;  the making of an
  assignment  for the  benefit  of  creditors;  or the  filing  of a  petition  to
  accomplish  any of the  foregoing,  unless such petition is dismissed  within 60
  days thereafter; or a like event.
  
           Section  1.22 "Fair  Market  Value"  shall  mean,  with  respect to any
  property,  real or personal, the price a ready, willing and able buyer would pay
  to a ready, willing and able seller of the property, provided that such value is
  reasonably  agreed to between the parties in arm's-length  negotiations  and the
  parties have sufficiently adverse interests.
  
           Section  1.23  "Financial  Interest"  shall mean the General  Partner's
  capital interest in the Partnership to be contributed and maintained pursuant to
  the requirements of FmHA Instruction 1944-E, Section  1944.211(a)(13)(ii) or any
  amendments  thereto.  Such  Financial  Interest  shall not affect the  Partners'
  allocable share of the Profits, Losses, Tax Credits or Cash Flow From Operations
  as set forth in this Agreement.
  
           Section 1.24 "First Year Certificate"  shall mean the certificate to be
  filed by the General  Partner with the Secretary of the Treasury  within 90 days
  following the close of the first taxable year of the Project as required by Code
  Section 42(1)(1), as amended, or any successor thereto.
  
           Section  1.25  "FmHA"  shall  mean the  Rural  Economic  and  Community
  Development Services and any successor thereto.
  
           Section 1.26 "FmHA Interest Credit  Agreement"  shall mean the Multiple
  Family Housing Interest Credit and Rental Assistance Agreement (Form FmHA 1944-7
  or any successor thereof) between the FmHA and the Partnership  whereby the FmHA
  will provide a monthly credit subsidy to the Partnership's Mortgage account when
  the Partnership makes each monthly payment on the Mortgage.
  
           Section 1.27 "FmHA Loan Agreement" shall mean the Loan Agreement for an
  RRH Loan to a Limited Partnership Operating on a Limited Profit Basis (Form FmHA
  1944-34 or any successor  thereof)  between the FmHA and the Partnership made in
  consideration  of the Mortgage Loan to the  Partnership  by the FmHA pursuant to
  Section  515(b) of the  Housing  Act of 1949 to build a low to  moderate  income
  apartment complex.
  
           Section  1.28  "General  Partner"  shall mean DONALD W. SOWELL and such
  other  Persons as are admitted to the  Partnership  as  additional or substitute
  General Partners pursuant to this Agreement.
  
                                         6
  Section  1.29 "Gross Asset Value" shall mean with respect to any asset,
  the asset's adjusted basis for federal income tax purposes, except as follows:
  
           (a) The initial Gross Asset Value of any asset contributed by a Partner
  to the  Partnership  shall be the gross  fair  market  value of such  asset,  as
  determined by the contributing  Partner and the General Partner,  provided that,
  if the contributing  Partner is a General Partner, the determination of the fair
  market value of a contributed asset shall be determined by appraisal;
  
           (b) The Gross Asset Values of all Partnership  assets shall be adjusted
  to equal their respective gross fair market values, as determined by the General
  Partner,  as of the  following  times:  (i)  the  acquisition  of an  additional
  interest in the Partnership by any new or existing  Partner in exchange for more
  than a de minimis Capital Contribution; (ii) the distribution by the Partnership
  to a  Partner  of more  than a de  minimis  amount of  Partnership  property  as
  consideration  for an interest in the Partnership;  and (iii) the liquidation of
  the   Partnership   within  the   meaning  of   Treasury   Regulations   Section
  1.704-1(b)(2)(ii)(g):  provided,  however,  that  the  adjustments  pursuant  to
  clauses (i) and (ii) above shall be made only if the General Partner  reasonably
  determines  that such  adjustments  are necessary or  appropriate to reflect the
  relative economic interests of the Partners in the Partnership;
  
           (c) The Gross Asset Value of any Partnership  asset  distributed to any
  Partner  shall be adjusted to equal the gross fair market value of such asset on
  the date of  distribution  as  determined  by the  distributee  and the  General
  Partner,   provided  that,  if  the  distributee  is  a  General  Partner,   the
  determination  of the  fair  market  value  of the  distributed  asset  shall be
  determined by appraisal; and
  
           (d) The Gross Asset Values of Partnership assets shall be increased (or
  decreased)  to reflect  any  adjustments  to the  adjusted  basis of such assets
  pursuant to Code Section 734(b) or Code Section  743(b),  but only to the extent
  that such  adjustments  are taken into account in determining  Capital  Accounts
  pursuant  to  Treasury  Regulations  Section  1.704-1(b)(2)(iv)(m)  and  Section
  10.3(g) hereof;  provided however, that Gross Asset Values shall not be adjusted
  pursuant to this Section 1.29(d) to the extent the General  Partners  determines
  that  an  adjustment   pursuant  to  Section  1.29(b)  hereof  is  necessary  or
  appropriate in connection with a transaction  that would otherwise  result in an
  adjustment pursuant to this Section 1.29(d).
  
                                         7
  If the Gross Asset Value of an asset has been determined or adjusted pursuant to
  Section 1.29(a),  Section 1.29(b),  or Section 1.29(d) hereof,  such Gross Asset
  Value shall thereafter be adjusted by the  depreciation  taken into account with
  respect to such asset for purposes of computing Income and Losses.
  
           Section  1.30  "Hazardous   Substance"   shall  mean  and  include  any
  substance,  material  or waste,  including  asbestos,  petroleum  and  petroleum
  products  (including  crude oil), that is or becomes  designated,  classified or
  regulated  as  "toxic" or  "hazardous"  or a  "pollutant"  or that is or becomes
  similarly designated, classified or regulated, under any federal, state or local
  law, regulation or ordinance  including,  without  limitation,  Compensation and
  Liability Act of 1980, as amended,  the Hazardous Materials  Transportation Act,
  as amended,  the Resource  Conservation  and Recovery  Act, as amended,  and the
  regulations adopted and publications promulgated pursuant thereto.
  
           Section 1.31 "Income and Losses"  shall mean,  for each taxable year or
  other period,  an amount equal to the  Partnership's  taxable income or loss for
  such year or period, determined in accordance with Code Section 703(a) (for this
  purpose,  all items of income,  gain,  loss or  deduction  required to be stated
  separately  pursuant  to Code  Section  703(a)(1)  shall be  included in taxable
  income or loss), with the following adjustments:
  
           (i) Any income of the  Partnership  that is exempt from federal  income
  tax and not otherwise taken into account in computing  Income or Losses pursuant
  to this definition shall be added to such taxable income or loss;
  
           (ii) Any  expenditures  of the  Partnership  described  in Code Section
  705(a)(2)(B) or treated as Code Section  705(a)(2)(B)  expenditures  pursuant to
  Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in
  computing  Income and Losses  pursuant to this  definition,  shall be subtracted
  from such taxable income or loss;
  
           (iii) In the event the Gross  Asset Value of any  Partnership  asset is
  adjusted pursuant to subparagraphs (ii) or (iii) of the definition thereof,  the
  amount of such  adjustment  shall be taken into account as gain or loss from the
  disposition of such asset for purposes of computing Income and Losses;
  
           (iv) Gain or loss resulting from any disposition of Partnership  assets
  with respect to which gain or loss is  recognized  for federal  income  purposes
  shall be computed by reference to the Gross Asset Value of the property disposed
  of,  notwithstanding  that the adjusted tax basis of such property  differs from
  its Gross Asset Value;
  
                                         8
  (v) In lieu of the depreciation,  amortization, and other cost recovery
  deductions  taken into account in computing such taxable  income or loss,  there
  shall be taken into account  depreciation  for such fiscal year or other period,
  computed as provided below; and
  
           (vi) Notwithstanding any other provision of this definition,  any items
  which are specially  allocated  pursuant to Sections 10.3,  10.4, or 10.5 hereof
  shall not otherwise be taken into account in computing Income or Losses.
  
  Depreciation  for each  fiscal  year or other  period  shall  be  calculated  as
  follows:  an  amount  equal to the  depreciation,  amortization,  or other  cost
  recovery  deduction  allowable  with  respect to an asset for such year or other
  period for federal income tax purposes,  except that if the Gross Asset Value of
  an asset differs from its adjusted  basis for federal income tax purposes at the
  beginning of such year or other  period,  depreciation  shall be an amount which
  bears the same ratio to such  beginning  Gross Asset Value as the federal income
  tax depreciation,  amortization,  or other cost recovery deduction for such year
  or other period bears to such beginning adjusted tax basis.  Provided,  however,
  that if the  federal  income  tax  depreciation,  amortization,  or  other  cost
  recovery deduction for such year is zero,  depreciation shall be determined with
  reference  to such  beginning  Gross  Asset Value  using any  reasonable  method
  selected by the General Partner.
  
           Section 1.32 "Insurance"  shall mean casualty  coverage,  including but
  not limited to, fire or other  casualty loss to any structure or building on the
  Project in an amount equal to the full replacement value of the damaged property
  without  deduction  for  depreciation;   shall  include   comprehensive  general
  liability coverage against liability claims for bodily injury or property damage
  arising out of Project  operations in an amount equal to  $1,000,000;  and shall
  include an umbrella  liability  coverage  in an amount  equal to  $1,000,000  to
  protect  against  claims in excess of the limits of the other  primary  policies
  required herein.  All Insurance policies shall provide that they are not subject
  to cancellation  without 30 days prior written notice to the Limited Partner and
  shall not contain any co-insurance provisions.
  
           Section  1.33  "Insurance  Company"  shall mean any  insurance  company
  engaged by the  General  Partner  for the  Partnership  with the  Consent of the
  Limited  Partner  which  Insurance  Company shall have an A rating or better for
  financial safety by A.M. Best or Standard & Poor's.
  
                                         9
  Section 1.34 "Interest"  shall mean the entire interest of a Partner in
  the Partnership at any particular  time,  including the right of such Partner to
  any and all  benefits  to which a  Partner  may be  entitled  hereunder  and the
  obligation of such Partner to comply with the terms of this Agreement.
  
           Section  1.35  "LIHC"  shall  mean the  low-income  housing  tax credit
  established  by TRA 1986 and which is provided for in Section 42 of the Code, as
  amended, or any successor thereto.
  
           Section 1.36 "Limited  Partner"  shall mean WNC HOUSING TAX CREDIT FUND
  V, L.P., SERIES 4, a California limited  partnership,  and such other Persons as
  are admitted to the  Partnership  as additional or substitute  Limited  Partners
  pursuant to this Agreement.
  
           Section 1.37  "Liquidation"  shall mean with respect to the Partnership
  the orderly sale and liquidation of the Project and other  Partnership  property
  following  the first to occur of (a) the date  upon  which  the  Partnership  is
  terminated under Section 708(b)(1) of the Code unless continued by a vote of the
  Partners,  (b) the date upon which the Partnership  ceases to be a going concern
  (even  though it may  continue  in  existence  for the purpose of winding up its
  affairs,  paying  its  debts  and  distributing  any  remaining  balance  to its
  Partners),  or (c) the date this Agreement terminates pursuant to its terms; and
  means,  with  respect  to a  Partner  at a time when the  Partnership  is not in
  Liquidation, the liquidation of such Partner's interest in the Partnership under
  Treasury Regulation 1.761-1(d), as amended, or any successor thereto.
  
           Section 1.38 "Minimum  Set-Aside  Test" shall mean the 40-60  set-aside
  test  pursuant to Section  42(g),  as amended,  of the Code with  respect to the
  percentage  of  apartment  units in the Project to be occupied by tenants  whose
  incomes are less than the required percentage of the area median gross income.
  
           Section 1.39  "Mortgage"  or "Mortgage  Loan" shall mean the  permanent
  financing  of the  Project  to  replace  the  Construction  Loan to be  provided
  pursuant to the FmHA Loan Agreement and the FmHA Interest Credit Agreement,  and
  evidenced by the Mortgage Note.
  
           Section 1.40  "Mortgage  Note" shall mean the Multiple  Family  Housing
  Promissory  Note  (Form FmHA  1944-52  or any  successor  thereof)  whereby  the
  Partnership promises to pay to the FmHA the principal sum of $473,450,  plus
  interest on the principal at the effective  rate of one percent per annum over a
  term of fifty years on the first day of each month.
  
                                         10
  Section 1.41  "Nonrecourse  Deductions" shall have the meaning given it
  in Treasury Regulations Section 1.704-2(b)(1).
  
           Section 1.42 "Nonrecourse Liability" shall have the meaning given it in
  Treasury Regulations Section 1.704-2(b)(3).
  
           Section  1.43  "Operating  Deficit"  for any fiscal year shall mean the
  total amount by which the sum of the Partnership's  operating  expenses (defined
  solely as the expenses incurred in connection with the operation and maintenance
  of the Project),  debt service on the Mortgage Loan and other  Partnership  debt
  and net additions to Partnership reserves required or permitted to be maintained
  under this Agreement for such fiscal year, exceeds the cash revenues received in
  respect of the  operation  of the Project  for such  fiscal  year and  available
  reserves.
  
           Section 1.44 "Operating Deficit Guarantee Period" shall mean the period
  commencing  with the date of this  Agreement  and ending  four  years  following
  Completion of Construction.
  
           Section 1.45 "Original Limited Partner" shall mean BEATRICE W. SOWELL.
  
           Section  1.46  "Partner"  shall mean either the General  Partner or the
  Limited Partner.
  
           Section 1.47 "Partner  Nonrecourse  Debt" shall mean the definition set
  forth in Section 1.704-2(b)(4) of the Treasury Regulations.
  
           Section 1.48  "Partner  Nonrecourse  Debt  Minimum  Gain" shall mean an
  amount,  with respect to each Partner Nonrecourse Debt, equal to the Partnership
  Minimum Gain that would result if such Partner  Nonrecourse Debt were treated as
  a Nonrecourse  Liability (as defined in Section  1.704-2  (b)(3) of the Treasury
  Regulations),  determined  in  accordance  with  Section  1.704-2(i)(3)  of  the
  Treasury Regulations.
  
           Section 1.49 "Partner Nonrecourse Deductions" shall mean the definition
  set  forth  in  Sections   1.704-2(i)(1)   and  1.704-2(i)(2)  of  the  Treasury
  Regulations.
  
           Section 1.50 "Partnership" shall mean the limited partnership continued
  under this Agreement.
  
           Section  1.51  "Partnership  Administration  Fee"  shall  mean  the fee
  payable to the General Partner pursuant to Section 9.2 for services  incident to
  the  administration  of the  business  and  affairs  of the  Partnership,  which
  services shall include, but not be limited to, maintaining the books and records
  of the  Partnership,  selecting and supervising the  Partnership's  accountants,
  
                                         11
  bookkeepers  and other Persons  required to prepare and audit the  Partnership's
  financial statements and tax returns, and preparing and disseminating reports on
  the status of the Project and the Partnership, all as required by Article XIV of
  this Agreement.
  
           Section  1.52   "Partnership   Minimum  Gain"  shall  mean  the  amount
  determined  by  computing,  with  respect to each  nonrecourse  liability of the
  Partnership,  the  amount  of  gain,  if any,  that  would  be  realized  by the
  Partnership  if a  reduction  occurs  in the  amount  by which  the  nonrecourse
  liability  exceeds  the  adjusted  basis  in  the  Project   encumbered  by  the
  nonrecourse  liability.  Such computation  shall be made in a manner  consistent
  with Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).
  
           Section 1.53 "Permanent Mortgage Commencement" shall mean the first day
  on which all of the following have  occurred:  (a) the  Construction  Loan shall
  have been repaid in full; (b) the principal  amount,  interest and maturity date
  of the Mortgage and the Mortgage  Note shall have been finally  determined;  and
  (c) amortization of the Mortgage shall have commenced.
  
           Section 1.54 "Person" shall mean an individual,  proprietorship, trust,
  estate, partnership,  joint venture, association,  company, corporation or other
  entity.
  
           Section 1.55 "Project" shall mean the approximately 2.554 acres of land
  in Palestine,  Anderson  County,  Texas,  as more fully described in Exhibit "A"
  attached  hereto  and  incorporated  herein by this  reference,  and any and all
  improvements now or hereafter to be constructed thereon,  specifically including
  a twenty-four (24) unit low to moderate income housing complex for family.
  
           Section 1.56 "Project  Documents"  shall mean and include all documents
  delivered to or required by the  construction  lender  and/or FmHA in connection
  with the development,  construction and financing of the Project,  including but
  not limited to, the construction  loan agreement,  construction  contract,  FmHA
  Loan  Agreement and FmHA Interest  Credit  Agreement and the approved  plans and
  specifications for the development and construction of the Project.
  
           Section  1.57  "Projected  Annual Tax  Credits"  shall mean LIHC in the
  amount of  $21,966  per year for each of the years 1997  through  2006 which the
  General  Partner  has  projected  to be the total  amount of LIHC  which will be
  allocated to the Limited Partner by the  Partnership,  constituting  ninety-nine
  percent (99%) of the aggregate amount of LIHC of $221,880 to be available to the
  Partnership;  provided,  however,  that if the  Actual  Tax  Credit  for 1997 is
  greater (or less than) $21,966 the Projected Annual Tax Credit for the year 2006
  
                                         12
  shall be  reduced  (increased)  by an  amount  equal to the  amount by which the
  Actual Credit for 1997 exceeds (is less than) $21,966.
  
           Section 1.58 "Qualified  Income Offset Item" shall have the meaning set
  forth in Treasury  Regulation  Section  1.704-1(b)(2)(ii)(d),  or any  successor
  provision.
  
           Section  1.59  "Qualified  Tenants"  shall  mean any  tenants  who have
  incomes of 60% or less of the area median gross  income,  as adjusted for family
  size, so as to make the Project eligible for LIHC.
  
           Section 1.60 "Refinancing" shall mean the refinancing of the Project so
  as to retire the Mortgage Note and create a new permanent  lender who shall hold
  a first deed of trust on the Project.  No Refinancing shall be permitted without
  approval from the Limited Partner.
  
           Section 1.61 "Rent  Restriction  Test" shall mean the test  pursuant to
  Section  42 of the Code  whereby  the  gross  rent  charged  to  tenants  of the
  low-income  apartment units in the Project must not exceed 30% of the applicable
  income standards.
  
           Section  1.62  "Sale"  shall  mean  and  include  the  sale,  exchange,
  condemnation or similar eminent domain taking,  casualty or other disposition of
  all or any  portion  of the  Project  which  is not in the  ordinary  course  of
  business,  and the sale of easements,  rights of way or similar interests in the
  Project or any other  similar  items  which in  accordance  with the  accounting
  methods used by the Partnership are attributable to capital; provided,  however,
  that "Sale" shall not refer to any transaction to the extent gain or loss is not
  recognized, or is elected not to be recognized,  under any applicable section of
  the Code.
  
           Section  1.63 "Sale or  Refinancing  Proceeds"  shall mean the net cash
  (including both principal and interest)  realized by the Partnership from a Sale
  or Refinancing,  after  retirement of applicable  Mortgage debt,  payment of all
  expenses related to the transaction,  other than the sales preparation fee which
  may be payable to the General Partner or its Affiliates pursuant to Section 9.2,
  and payment of or provision for other Partnership debts and obligations.
  
           Section 1.64 "State" shall mean the State of Texas.
  
           Section 1.65 "State Tax Credit Agency" shall mean the allocation by the
  appropriate state agency of LIHC with respect to the Project.
  
                                         13
  Section 1.66 "Substitute  Limited Partner" shall mean any Person who is
  admitted to the  Partnership  as a Limited  Partner  pursuant to Section 12.5 or
  acquires  the  Interest of the Limited  Partner  pursuant to Section 7.3 of this
  Agreement.
  
           Section 1.67 "Tax  Credit"  shall mean any credit  permitted  under the
  Code or the law of any state against the federal or a state income tax liability
  of any Partner as a result of  activities  or  expenditures  of the  Partnership
  including, without limitation, LIHC.
  
           Section 1.68 "Tax Credit  Conditions"  shall mean,  for the duration of
  the Compliance Period, any and all restrictions  including,  but not limited to,
  applicable federal,  state and local laws, rules and regulations,  which must be
  complied  with in order to qualify  for the Tax  Credits or to avoid an event of
  recapture in respect of the Tax Credits.
  
           Section 1.69 "TRA 1986" shall mean the Tax Reform Act of 1986.
  
           Section  1.70  "Treasury   Regulations"   shall  mean  the  Income  Tax
  Regulations  promulgated under the Code, as such regulations may be amended from
  time to time (including corresponding provisions of succeeding regulations).
  
                                     ARTICLE II
  
                                        NAME
  
           The name of the Partnership shall be "D. HILLTOP APARTMENTS, LTD."
  
                                     ARTICLE III
  
                    PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE
  
           Section 3.1 Principal  Executive Office. The principal executive office
  of the  Partnership  is located at 509 Ellen Powell Drive,  Prairie View,  Texas
  77446,  or at such other place or places within the State as the General Partner
  may hereafter designate.
  
           Section  3.2 Agent for  Service of  Process.  The name of the agent for
  service of process on the Partnership is Donald W. Sowell,  whose address is 509
  Ellen Powell Drive, Prairie View, Texas 77446.
  
                                         14
  ARTICLE IV
  
                                       PURPOSE
  
           The  purpose  of the  Partnership  is to  acquire,  construct,  own and
  operate the Project in order to provide, in part, Tax Credits to the Partners in
  accordance  with  the  provisions  of the  Code  and  the  Treasury  Regulations
  applicable to LIHC,  the rules and  regulations of FmHA relating to rural rental
  housing  projects  financed or  subsidized by FmHA and to sell the Project after
  the 15-year Tax Credit  compliance  period.  The Partnership shall not engage in
  any  business  or  activity  which is not  incident  to the  attainment  of such
  purpose.
  
                                      ARTICLE V
  
                                        TERM
  
           The  Partnership  term commenced upon the filing of the  Certificate of
  Limited  Partnership  in the  office  of,  and on the form  prescribed  by,  the
  Secretary  of State of the State,  and shall  continue  until  December 31, 2050
  unless terminated earlier in accordance with the provisions of this Agreement or
  as otherwise provided by law.
  
                                     ARTICLE VI
  
                      GENERAL PARTNER'S CONTRIBUTIONS AND LOANS
  
           Section  6.1  Capital  Contribution  of General  Partner.  The  General
  Partner shall make a Capital Contribution in the amount of $14,645.
  
           Section 6.2 Construction and Operating Obligations.
  
           (a) The General  Partner  shall cause  Completion  of  Construction  in
  accordance with the Project Documents,  and shall equip the Project or cause the
  same to be equipped with all necessary and appropriate  fixtures,  equipment and
  articles of personal property,  including refrigerators and ranges. If costs and
  expenses  necessary to effect  Completion of Construction  exceed the sum of the
  Capital Contributions and the proceeds of the Mortgage Note, the General Partner
  shall be  responsible  for and shall be obligated to pay such  deficiencies  and
  shall, to the extent  permitted  under the Project  Documents and any applicable
  regulations or  requirements of the FmHA, be reimbursed at or prior to Permanent
  Mortgage  Commencement  only out of the  proceeds  designated  in this  sentence
  available  from  time to time  after  payment  of all  costs  described  in this
  sentence.   Any  such  advances  not  reimbursed   through  Permanent   Mortgage
  
                                         15
  Commencement  shall not be reimbursable or otherwise  change the Interest of any
  Partner  in the  Partnership  but  shall be borne by the  General  Partner  as a
  Capital  Contribution.  In the event the General  Partner shall fail to fund any
  such  deficiency  as  required by this  Section  6.2(a),  any amounts  otherwise
  payable to the General  Partner or any of its  Affiliates as a  Development  Fee
  pursuant to Section 9.2 or any other fee  pursuant to this  Agreement,  shall be
  applied by the Partnership to meet such obligation of the General  Partner.  Any
  such  application of funds as described in the  immediately  preceding  sentence
  shall  constitute a payment of the  obligation  of the fee which such funds have
  been earmarked to pay, and the obligation of the General Partner to advance such
  amount  under  this  Section  6.2(a)  shall be  satisfied  to the extent of such
  application.
  
           (b) During the Operating Deficit Guarantee Period, the General Partner,
  as  required  from  time to time,  shall  provide  Operating  Loans  in  amounts
  necessary  to  cover  any  Operating  Deficits.  Each  Operating  Loan  shall be
  nonrecourse  to the Partners and shall be repayable  out of 50% of the available
  Cash Flow From  Operations or Sale or  Refinancing  Proceeds in accordance  with
  Article XI of this  Agreement.  In the event the General  Partner  shall fail to
  make any Operating Loans required by this Section 6.2(b),  the Partnership shall
  withhold those funds otherwise  payable to the General Partner or its Affiliates
  pursuant to Section 9.2 ("General Partner Funds") and utilize the withheld funds
  to meet the obligations of the General Partner  pursuant to this Section 6.2(b);
  any such use of General  Partner  Funds will be deemed an Operating  Loan of the
  General  Partner  repayable  to the General  Partner as  aforesaid.  Such use of
  General Partner Funds shall also constitute  payment and satisfaction of amounts
  payable to the General  Partner or Affiliates  thereof  pursuant to Section 9.2,
  and the  obligation  of the  Partnership  to make such  payments  to the General
  Partner or its  Affiliates  pursuant  to Section 9.2 shall  therefore  be deemed
  satisfied.
  
           Section  6.3  General  Partner  Loans.  With the prior  consent  of the
  Limited  Partner,  and if approved by the FmHA in accordance with FmHA rules and
  regulations,  the General  Partner may loan to the Partnership any sums required
  by the  Partnership and not otherwise  reasonably  available to it, at a rate of
  interest  not to exceed  the  lesser of 2% per annum  above the then  prevailing
  prime or reference rate charged by Bank of America N.T. & S.A., Main Office, San
  Francisco,  California,  or the maximum legal rate. The amount and maturity date
  of any such  loan and the  rate of  interest  thereon  shall be  evidenced  by a
  written instrument. The General Partner shall not charge a prepayment penalty on
  any such loan.
  
                                         16
  ARTICLE VII
  
                       LIMITED PARTNER'S CAPITAL CONTRIBUTIONS
  
           Section 7.1 Original Limited Partner. The Original Limited Partner made
  a Capital Contribution of $100. Effective as of the date of this Agreement,  the
  Original Limited Partner's  Interest has been liquidated and the Partnership has
  reacquired the Original Limited Partner's Interest in the Partnership.
  
           Section  7.2  Capital  Contribution  of Limited  Partner.  The  Limited
  Partner  shall make a total  Capital  Contribution  in the amount of $120,814 in
  cash on the dates and subject to the conditions hereinafter set forth:
  
           (a)      The  obligation  of the  Limited  Partner  to pay the  
  aforesaid  Capital  Contribution  shall be subject to the satisfaction of the 
  following conditions:
  
                    (1) prior to the initial  payment of the Capital  Contribution
  only,  the  issuance to the Limited  Partner of an opinion of the  Partnership's
  legal counsel,  in a form substantially  similar to the form of opinion attached
  hereto as Exhibit "B" and incorporated herein by this reference;
  
                    (2) prior to the initial  payment of the Capital  Contribution
  only, the General  Partner shall deliver to the Limited Partner a fully executed
  Certificate  and  Agreement  in the form  attached  hereto  as  Exhibit  "C" and
  incorporated herein by this reference;
  
                    (3) prior to the initial  payment of the Capital  Contribution
  only, the Limited Partner shall obtain from the General Partner, with respect to
  the Project,  Form FmHA 1924-13  (Estimate and  Certificate  of Actual Cost) and
  Form FmHA 1930-7  (Statement of Budget,  Income and Expenses) a construction pro
  forma reflecting payment of the construction expenses and an operation pro forma
  reflecting income and expenses;
  
                    (4) prior to the due date of each  installment of such Capital
  Contribution except the first payment,  the issuance to the Limited Partner of a
  certificate  signed by or on behalf of the General  Partner in the form attached
  hereto as Exhibit "D" and incorporated herein by this reference,  dated not more
  than  five  days  prior  to  such  due  date,  to  the  effect  that  all of the
  representations and warranties set forth in Section 9.11 are accurate;
  
                                         17
  (5) not later than the Capital Contribution payment referenced
  in Section  7.2(b)(5),  the General Partner shall deliver to the Limited Partner
  the following:  (A)  Certificate of Occupancy on all the apartment  units in the
  Project;  (B) copy of the recorded grant deed (warranty  deed);  (C) copy of the
  policy of title  insurance  issued at Permanent  Mortgage  Commencement;  (D) an
  audited  construction cost  certification  with an itemized cost breakdown;  (E)
  copies of all Mortgage Loan  agreements;  (F) copies of all Mortgage Notes;  and
  (G) copy of the  Declaration  of  Restrictive  Covenants/Extended  Use Agreement
  entered into between the Partnership and the State Tax Credit Agency responsible
  for allocating the LIHC; and
  
                    (6) not later than the Capital Contribution payment referenced
  in Section  7.2(b)(5),  the General Partner shall deliver to the Limited Partner
  Internal Revenue Code Form 8609, or any successor form.
  
           (b)  Provided  the  conditions  of Section  7.2(a) of this  Partnership
  Agreement  have been met, the Limited  Partner shall make the following  Capital
  Contributions:
  
                    (1) The first  payment shall equal $24,163 and will be payable
  upon  verification  of Tax  Credit  reservation,  receipt  of a  commitment  for
  permanent financing,  commencement of construction and admittance of the Limited
  Partner into the Partnership,  provided the conditions of Section 7.2(a) of this
  Agreement have been met;
  
                    (2) The second payment shall equal $24,163 and will be payable
  upon 50% Completion of Construction  as evidenced by the inspecting  architect's
  certification  and the  construction  draw requests,  provided the conditions of
  Section 7.2(a) of this Agreement have been met;
  
                    (3) The third  payment shall equal $24,163 and will be payable
  upon  Completion  of  Construction  as evidenced by the  inspecting  architect's
  certification  or the issuance of a  certificate  of occupancy  and receipt of a
  letter from the  Contractor  stating that all amounts  payable to the Contractor
  have  been  paid in full and that the  Partnership  is not in  violation  of the
  Construction  Contract,  provided  the  conditions  of  Section  7.2(a)  of this
  Agreement have been met;
  
                    (4) The fourth payment shall equal $24,163 and will be payable
  the date the Project  maintains a debt coverage ratio of 1.15 for 60 consecutive
  days,  delivery to the Limited Partner of all income  verification data insuring
  that 100% of the units in the Project  qualify  under Section 42 of the Code and
  delivery  to the  Limited  Partner  of the  final  Mortgage  closing  documents,
  
                                         18
  provided the conditions of Section 7.2(a) of this Agreement have been met; and
  
                    (5) The final  payment shall equal $24,162 and will be payable
  after the above conditions have been met and delivery of the Accountant's  final
  tax  return in which Tax  Credits  are taken and  Internal  Revenue  Form  8609,
  provided the conditions of Section 7.2(a) of this Agreement have been met.
  
           Section 7.3 Repurchase of Limited  Partner's  Interest.  Within 60 days
  after  receipt  of  written  demand  therefor  from  the  Limited  Partner,  the
  Partnership shall repurchase the Limited  Partner's  interest in the Partnership
  by refunding to it in cash the full amount of the Capital Contribution which the
  Limited  Partner has  theretofore  made in the event that,  for any reason,  the
  Partnership shall fail to:
  
           (a)      receive an allocation of LIHC;
  
           (b)      cause the Project to be placed in service by December 31, 
  1996;
  
           (c)      achieve 90% occupancy of the Project by Qualified Tenants by 
  January 1997;
  
           (d)      obtain the closing of the permanent Mortgage Loan by December 
  31, 1996;
  
           (e) meet both the Minimum  Set-Aside Test and the Rent Restriction Test
  not later  than  December  31 of the first year the  Partners  elect the LIHC to
  commence in accordance with the Code;
  
           (f)  continue  to meet  both the  Minimum  Set-Aside  Test and the Rent
  Restriction  Test during the period when the Limited Partner is required to make
  its Capital Contribution to the Partnership;
  
           (g)      obtain the 1994 Tax Credit carry over allocation; and
  
           (h)      obtain the approval of FmHA, if required, to the amendment of
  the Limited Partnership  Agreement reflected in this Agreement.
  
           Section 7.4 Reduction of Capital Contribution.
  
           (a) As  evidenced  by IRS Form 8609 and the audited  construction  cost
  certification,  if the Limited  Partner's 99% interest in the Tax Credit is less
  than $219,661 then the Capital Contribution provided for in Section 7.2 shall be
  reduced by the amount which will make the total Capital  Contribution to be paid
  by the Limited Partner to the Partnership  equal to 55% of the total Tax Credits
  
                                         19
  allocated  to the Limited  Partner.  In the event  there is a  reduction  in the
  Capital  Contribution  pursuant to this Section 7.4, Projected Tax Credits shall
  thereafter be referred to as the "Revised Projected Tax Credits."
  
           (b) If the Capital Contribution of the Limited Partner is to be reduced
  pursuant  to this  Section  7.4 during the period  when the  Limited  Partner is
  required  to make its  Capital  Contribution,  then the amount of the  reduction
  shall be applied to the next Capital  Contribution  owed by the Limited Partner.
  If the Capital Contribution  reduction referenced in this Section 7.4 is greater
  than  the  balance  of  the  Limited  Partner's  Capital  Contribution  payments
  ("Reduction Shortfall") then the amount of the Reduction Shortfall shall be paid
  by the General  Partner to the Limited Partner within ninety days of the General
  Partner receiving notice of the Reduction Shortfall from the Limited Partner.
  
           (c) The General  Partner  will use its best efforts to rent 100% of the
  Project's  apartment units to Qualified  Tenants over the fifteen (15) year LIHC
  life. If at any time the  Accountants  determine  that the Actual Tax Credit for
  any fiscal year or portion thereof is less than the Projected Tax Credit, or the
  Revised Projected Tax Credit,  if applicable,  pertaining to such fiscal year or
  portion thereof,  then the Capital  Contribution of the Limited Partner shall be
  reduced by an amount equal to the difference  between (A) Projected Tax Credits,
  or the Revised  Projected  Tax Credits,  if  applicable,  and (B) the Actual Tax
  Credit.  Any reduction in Capital  Contribution shall first be applied to reduce
  the  Limited  Partner's  next  Capital  Contribution,  and any  portion  of such
  reduction  in excess of such  Capital  Contribution  shall be  applied to reduce
  succeeding Capital  Contributions of the Limited Partner.  If no further Capital
  Contribution  payments  are due and owing  from the  Limited  Partner,  then the
  entire  amount  of such  reduction  shall be repaid  by the  Partnership  to the
  Limited Partner  promptly after demand is made therefore.  During the first five
  calendar years of Partnership  operations,  the General  Partner is obligated to
  provide  such  funds  to the  Partnership  as shall be  necessary  to cause  the
  aforesaid payment to be made by the Partnership to the Limited Partner.
  
           (d) In the event that, for any reason, at any time after the first five
  calendar years of Partnership operations, if the amount of the Actual Tax Credit
  shall be less than the  Projected  Tax  Credit  (or the  Revised  Projected  Tax
  Credit,  if  applicable)  (the  "Credit   Shortfall")  then  there  shall  be  a
  corresponding reduction in the General Partner's Cash Flow From Operations in an
  amount  equal  to the  Credit  Shortfall  and said  amount  shall be paid to the
  Limited  Partner.  In the event  there is not  sufficient  funds to pay the full
  Credit Shortfall to the Limited Partner at the time of the next  Distribution of
  Cash Flow From  Operations  then the Limited  Partner shall be treated as having
  
                                         20
  made a  constructive  advance to the  Partnership  with  respect to such year (a
  "Credit Shortfall  Loan"),  which shall be deemed to have been made on January 1
  of such year.  Credit  Shortfall  Loans shall be deemed to bear simple  interest
  (not compounded) from the respective dates on which such principal  advances are
  deemed to have been made  under  this  Section  7.4(d) at 7% per  annum.  Credit
  Shortfall Loans shall be repaid in the next year in which sufficient  moneys are
  available from the General  Partner's Cash Flow From Operations.  In the event a
  Sale or  Refinancing  of the Project  occurs  prior to  repayment in full of the
  Credit  Shortfall  Loan then the excess will be paid in accordance  with Section
  11.2(c).
  
           Section  7.5  Return  of  Capital  Contribution.  From time to time the
  Partnership  may have cash in excess of the amount  required  for the conduct of
  the  affairs  of the  Partnership,  and the  General  Partner  may,  in its sole
  discretion, determine that such cash should, in whole or in part, be returned to
  the Limited Partner in reduction of its Capital  Contribution.  Any Distribution
  to the Limited Partner pursuant to this Section 7.5, or pursuant to Section 7.4,
  shall be deemed to have been consented to by the Limited Partner. No such return
  shall be made:
  
           (a) Until this Agreement has been amended to reflect such reduction of
   capital; and
  
           (b) Unless all liabilities of the Partnership (except those to Partners
  on account of amounts  credited to them  pursuant to this  Agreement)  have been
  paid  or  there  remain  assets  of the  Partnership  sufficient,  in  the  sole
  discretion of the General Partner, to pay such liabilities.
  
           Section 7.6 Liability of Limited Partner. The Limited Partner shall not
  be liable for any of the debts,  liabilities,  contracts or other obligations of
  the  Partnership.  The Limited  Partner shall be liable only to make its Capital
  Contribution  in the amounts and on the dates  specified in this  Agreement  and
  shall not be required to lend any funds to the Partnership or, after its Capital
  Contribution  has been paid,  to make any further  Capital  Contribution  to the
  Partnership.
  
                                    ARTICLE VIII
  
                            WORKING CAPITAL AND RESERVES
  
           Section 8.1  Operation and  Maintenance  Reserve.  The General  Partner
  shall deposit in the Partnership's  general fund account, or provide a letter of
  credit,  in an amount  required by the FmHA,  to be used for  initial  operating
  capital as permitted or required by  applicable  FmHA  regulations.  Said amount
  
                                         21
  shall  be  reimbursed,  without  interest,  out of  Project  funds  as  shall be
  authorized  in  accordance  with  applicable  FmHA  regulations,  and  if not so
  reimbursed within five years of the deposit,  any amount remaining  unreimbursed
  shall be forgiven  and shall  constitute  an  ordinary  and  necessary  business
  expense of the  General  Partner as part  consideration  for the  payment of the
  Development Fee.
  
           Section 8.2 Reserve for  Replacements.  The General Partner shall fund,
  establish and maintain a reserve  account in an amount required by the FmHA Loan
  Agreement  which funds shall be used in  accordance  with FmHA  Regulation 7 CFR
  Part 1930-C, or any successor thereof, as evidenced by the FmHA Loan Agreement.
  
           Section 8.3 Other Reserves.  The General Partner shall establish out of
  funds  available to the  Partnership  a reserve  account  sufficient in its sole
  discretion to pay any unforeseen  contingencies  which might arise in connection
  with the furtherance of the Partnership business including,  but not limited to,
  (a) any rent subsidy  required to maintain  rent levels in  compliance  with the
  Code and applicable FmHA regulations;  and (b) any real estate taxes, insurance,
  debt  service or other  payments  for which  other  funds are not  provided  for
  hereunder or otherwise expected to be available to the Partnership.  The General
  Partner shall not be liable for any  good-faith  estimate which it shall make in
  connection  with  establishing  or  maintaining  any such reserves nor shall the
  General  Partner be required to establish  or maintain any such  reserves if, in
  its sole discretion, such reserves do not appear to be necessary.
  
                                     ARTICLE IX
  
                               MANAGEMENT AND CONTROL
  
           Section 9.1 Power and Authority of General Partner. The General Partner
  shall have complete and exclusive control over the management of the Partnership
  business and affairs,  and shall have the right, power and authority,  on behalf
  of the Partnership,  and in its name, to exercise all of the rights,  powers and
  authority of a partner of a partnership  without limited  partners.  If there is
  more than one General  Partner,  all acts,  decisions or consents of the General
  Partners  shall  require  the  concurrence  of all of the General  Partners.  No
  actions taken without the  authorization  of all the General  Partners  shall be
  deemed valid actions taken by the General  Partners  pursuant to this Agreement.
  If any General  Partner should violate this  Agreement,  he shall  indemnify and
  hold the other General Partners harmless against all obligations and liabilities
  arising or resulting from or incidental to said  violation.  No Limited  Partner
  
                                         22
  (except one who may also be a General Partner,  and then only in its capacity as
  General  Partner  within the scope of its  authority  hereunder)  shall have any
  right  to  be  active  in  the  management  of  the  Partnership's  business  or
  investments or to exercise any control thereover, nor have the right to bind the
  Partnership in any contract, agreement, promise or undertaking, or to act in any
  way  whatsoever  with  respect to the control or conduct of the  business of the
  Partnership, except as otherwise specifically provided in this Agreement.
  
           Section 9.2 Payments to the General Partners and Others.
  
           (a) The Partnership shall pay to the General Partner or an Affiliate of
  the General Partner, a Development Fee in the amount of $72,330,  which includes
  interest on the unpaid portion thereof.
  
           (b) The  Partnership  shall retain the sum of $48,484 from the proceeds
  established  in Section  7.2(b) of this  Agreement  to be used for  supplemental
  development costs including, but not limited to, land costs, architectural fees,
  survey and engineering costs,  financing cost, loan fees, building materials and
  labor, but only to the extent of the difference  between the  Construction  Loan
  and the  Mortgage.  If any funds in this  Section  9.2(b)  are  remaining  after
  Completion of Construction and all  construction  costs are paid in full and the
  Construction Loan retired, then the remainder shall first be paid to the General
  Partner as payment toward any unpaid  Development  Fee and the balance,  if any,
  shall be paid to the  General  Partner as a reduction  of the General  Partner's
  Capital Contribution.
  
           (c) The  Partnership  shall  pay to an  independent  third  party,  the
  General Partner or an Affiliate of the General Partner a property management fee
  for the leasing and  management of the Project  ("Management  Agent") so long as
  such fee does not exceed  the amount  authorized  and  approved  by FmHA for the
  Project.
  
                    (i) The General  Partner  may,  upon  receiving  any  required
  approval of the  Mortgage  lender,  dismiss the  Management  Agent as the entity
  responsible  for  the  Project  under  the  terms  of  the  property  management
  agreement;  and,  at the  request  of the  Limited  Partner,  shall  remove  the
  Management Agent in the event that the Management Agent  experiences an Event of
  Bankruptcy,  is  dissolved,  or  makes  an  assignment  for the  benefit  of its
  creditors,  or for any intentional misconduct by the Management Agent or failure
  to exercise  reasonable  care in the discharge of its duties and  obligations as
  Management  Agent,  including without  limitation,  for any action or failure to
  take any action which:
  
                             (A)  violates in any material respect any provision 
  of the  property  management agreement or
  
                                         23
  (B)  violates in any material respect any provision 
  of this  Agreement or provision of applicable law.
  
           (d)  The  Partnership  shall  pay to the  Limited  Partner  a fee  (the
  "Reporting  Fee")  commencing  in 1997 for its services in  connection  with the
  Partnership's  accounting  matters relating to the Limited Partner and assisting
  with the  preparation  of tax returns and the reports  required in Sections 14.2
  and 14.3 in the annual amount of $400. The Reporting Fee shall be payable within
  seventy-five  (75) days  following  each calendar year and shall be payable from
  Cash Flow From  Operations in the manner and priority set forth in Section 11.1;
  provided, however, that if in any fiscal year commencing in 1997, Cash Flow From
  Operations  is  insufficient  to pay the full amount of the  Reporting  Fee, the
  unpaid portion thereof shall accrue and be payable on a cumulative  basis in the
  first year in which there is  sufficient  Cash Flow From  Operations or from the
  proceeds of a Sale or Refinancing, as provided in Section 11.2(c).
  
           (e) The  Partnership  shall pay to the  General  Partner a  Partnership
  Administration  Fee  equal  to $800  for  each  fiscal  year of the  Partnership
  commencing in 1997 for services  incident to the  administration of the business
  and affairs of the Partnership, which services shall include, but not be limited
  to,  maintaining  the  books  and  records  of the  Partnership,  selecting  and
  supervising  the  Partnership's  accountants,   bookkeepers  and  other  Persons
  required to prepare and audit the  Partnership's  financial  statements  and tax
  returns,  and preparing and  disseminating  reports on the status of the Project
  and the  Partnership,  all as  required by Article  XIV of this  Agreement.  The
  Partnership  Administration  Fee shall be payable within  seventy-five (75) days
  following each calendar year and shall be payable from Cash Flow From Operations
  in the  manner  and  priority  set forth in  Section  11.1.  If the  Partnership
  Administration  Fee is not paid in any year it shall not accrue  for  payment in
  subsequent years.
  
           Section 9.3 Specific  Powers of the General  Partner.  Subject to other
  provisions  of this  Agreement,  the General  Partner  shall have the  following
  powers:
  
           (a) In the  Partnership's  name and  behalf,  the  General  Partner may
  acquire  (including  by fee or real  estate  contract),  hold,  sell,  transfer,
  assign,  lease or  otherwise  deal with any real,  personal  or mixed  property,
  interest therein or appurtenance thereto.
  
           (b) In the  Partnership's  name and  behalf,  the  General  Partner may
  employ,  contract and  otherwise  deal with,  from time to time,  Persons  whose
  services  are  necessary  or  appropriate  in  connection  with  management  and
  operation  of  the  Partnership   business,   including,   without   limitation,
  
                                         24
  contractors,  agents,  brokers,  accountants and attorneys, on such terms as the
  General Partner shall determine.
  
           (c) In the Partnership's name and behalf, the General Partner may bring
  or  defend,  pay,  collect,  compromise,  arbitrate,  resort to legal  action or
  otherwise adjust claims or demands of or against the Partnership.
  
           (d) In the Partnership's  name and behalf,  the General Partner may pay
  as a  Partnership  expense any and all costs and  expenses  associated  with the
  formation, development, organization and operation of the Partnership, including
  the expense of annual audits, tax returns and FmHA, LIHC compliance.
  
           (e) In the  Partnership's  name and  behalf,  the  General  Partner may
  deposit, withdraw, invest, pay, retain and distribute the Partnership's funds in
  a manner consistent with the provisions of this Agreement.
  
           (f) The General Partner may require in any or all Partnership contracts
  that the General  Partner shall not have any personal  liability  thereunder but
  that the  Person  contracting  with the  Partnership  shall  look  solely to the
  Partnership and its assets for satisfaction.
  
           (g) In the Partnership's name and behalf, the General Partner may 
  execute,  acknowledge and deliver any and all instruments to effectuate any of 
  the foregoing.
  
           Section 9.4 Authority Requirements.  During the Compliance Period, the
  following provisions shall apply:
  
           (a) Each of the provisions of this  Agreement  shall be subject to, and
  the  General  Partner  covenants  to act in  accordance  with,  the  Tax  Credit
  Conditions and all applicable federal, state and local laws and regulations;
  
           (b) The Tax Credit  Conditions  and all such laws and  regulations,  as
  amended  or  supplemented,  shall  govern  the  rights  and  obligations  of the
  Partners,  their heirs,  executors,  administrators,  successor and assigns, and
  they shall  control  as to any terms in this  Agreement  which are  inconsistent
  therewith,   and  any  such  inconsistent  terms  of  this  Agreement  shall  be
  unenforceable by or against any of the Partners;
  
           (c) Upon any  dissolution  of the  Partnership  or any  transfer of the
  Project,  no title or right to the  possession and control of the Project and no
  right to collect rent therefrom shall pass to any Person who is not, or does not
  become,  bound by the Tax Credit  Conditions in a manner that, in the opinion of
  
                                         25
  counsel to the Partnership,  would not avoid a recapture  thereof on the part of
  the former owners; and
  
           (d) Any  conveyance  or  transfer of title to all or any portion of the
  Project  required or  permitted  under this  Agreement  shall in all respects be
  subject to the Tax Credit  Conditions  and all  conditions,  approvals  or other
  requirements of the rules and regulations of any authority applicable thereto.
  
           Section  9.5  Limitations  on General  Partner's  Power and  Authority.
  Notwithstanding the foregoing provisions of this Article IX, the General Partner
  shall not:
  
           (a)      Except as required by Section 9.4, act in contravention of 
  this Agreement;
  
           (b)      Act in any manner  which  would  make it  impossible to carry
  on the  ordinary  business  of the Partnership;
  
           (c)      Confess a judgment against the Partnership;
  
           (d)      Possess Partnership  property,  or assign the Partner's right 
  in specific  Partnership  property, for other than the exclusive benefit of the 
  Partnership;
  
           (e)      Admit a Person as a General Partner except as provided in 
  this Agreement;
  
           (f)      Admit a Person as a Limited Partner except as provided in this
  Agreement;
  
           (g)      Violate the Mortgage Loan or Mortgage Note;
  
           (h)      Cause the Project apartment units to be rented to anyone 
  other than Qualified Tenants;
  
           (i)      Violate the Minimum Set-Aside Test for the Project;
  
           (j)      Cause any recapture of the Tax Credits;
  
           (k) Permit any creditor who makes a nonrecourse loan to the Partnership
  to have,  or to acquire at any time as a result of making such loan,  any direct
  or indirect  interest in the profits,  income,  capital or other property of the
  Partnership, other than as a secured creditor; or
  
           (l)  Commingle  funds  of the  Partnership  with the  funds of  another
  Person;  provided,  however,  that the General  Partner  may  establish a master
  fiduciary  account pursuant to which separate  subtrust accounts are established
  
                                         26
  for the benefit of affiliated  limited  partnerships,  provided that Partnership
  funds  are  protected  from  claims  of such  other  partnerships  and/or  their
  creditors.
  
           Section 9.6 Restrictions on Authority of General  Partner.  Without the
  prior approval of the Limited Partner the General Partner shall not:
  
           (a)      Sell,  exchange,  lease or otherwise  dispose of all or a  
  substantial  part of the assets of the Partnership;
  
           (b)      Incur  indebtedness  other than the Mortgage Loan in the name
  of the Partnership,  other than in the ordinary course of the Partnership's 
  business;
  
           (c)      Engage in any  transaction  not  expressly  contemplated  by 
  this Agreement in which the General Partner has an actual or potential conflict
  of interest with the Limited Partner;
  
           (d) Admit a General  Partner,  or elect to continue  the  Partnership's
  business after a General  Partner ceases to be a General  Partner (other than by
  removal) where there is no remaining or surviving General Partner;
  
           (e)      Contract away the fiduciary duty owed to the Limited Partner 
  at common law; or
  
           (f) Take any action  which  would cause the Project to fail to qualify,
  or which would cause a termination or discontinuance of the qualification of the
  Project,  as a "qualified low income housing  project" under Section 42(g)(1) of
  the Code, as amended, or any successor thereto, or which would cause the Limited
  Partner to fail to obtain the  Projected  Tax  Credits or which  would cause the
  recapture of any LIHC.
  
           Section 9.7 Duties of General Partner. The General Partner agrees that
  it shall at all times:
  
           (a) Use its best  efforts to rent 100% of the  apartments  to Qualified
  Tenants  during the Project's  "compliance  period" for purposes of Code Section
  42.
  
           (b) Diligently  and faithfully  devote such of its time to the 
  business of the Partnership as may be necessary to properly conduct the affairs 
  of the Partnership;
  
           (c) File and publish all certificates, statements or other instruments
  required by law for the formation and operation of the Partnership as a limited
  partnership in all appropriate jurisdictions;
  
                                         27
  (d) Cause the Partnership to carry adequate public liability insurance,
  comprehensive  casualty  insurance for not less than the full insurable value of
  the Project and such other  insurance as is generally  maintained for properties
  similar to the Project;
  
           (e) Have a fiduciary  responsibility for the safekeeping and use of all
  funds and assets of the Partnership,  whether or not in its immediate possession
  or control  and not employ or permit  another to employ  such funds or assets in
  any manner except for the benefit of the Partnership;
  
           (f) Comply with all FmHA, Code and state rules and regulations for 
  rural rental housing, LIHC; and
  
           (g) Perform such other acts as may be expressly required of it under 
  the terms of this Agreement.
  
           Section 9.8 Partnership Expenses.
  
           (a) All of the  Partnership's  expenses shall be billed directly to and
  paid by the Partnership to the extent practicable. Reimbursements to the General
  Partner or any of its  Affiliates by the  Partnership  shall be allowed only for
  the Partnership's operating cash expenses and only subject to the limitations on
  the reimbursement of such expenses set forth herein. As used in this Section 9.8
  the term  "operating  cash  expenses"  shall  mean,  with  respect to any fiscal
  period,  the amount of cash  disbursed by the  Partnership in that period in the
  ordinary course of business for the payment of its operating  expenses,  such as
  expenses  for  advertising  and  promotion,  management,  utilities,  repair and
  maintenance,  insurance, Partner communications,  legal, accounting, statistical
  and bookkeeping services,  use of computing or accounting equipment,  travel and
  telephone expenses,  salaries and direct expenses of Partnership employees while
  engaged in Partnership  business,  and any other operational and  administrative
  expenses  necessary  for  the  prudent  operation  of the  Partnership.  Without
  limiting the  generality  of the  foregoing,  "operating  cash  expenses"  shall
  include fees paid by the  Partnership to the General Partner or any Affiliate of
  the General  Partner  permitted by this  Agreement and the actual cost of goods,
  materials and  administrative  services used for or by the Partnership,  whether
  incurred by the  General  Partner,  an  Affiliate  of the  General  Partner or a
  nonaffiliated  Person in  performing  the  foregoing  functions.  As used in the
  preceding  sentence,  "actual cost of goods and materials" means the actual cost
  of goods and materials used for or by the Partnership and obtained from entities
  not affiliated with the General  Partner,  or goods and materials  obtained from
  
                                         28
  the General Partner or an Affiliate at competitive rates, provided the same does
  not violate FmHA rules and regulations,  Actual cost of administrative  services
  means the pro rata cost of personnel  (as if such persons were  employees of the
  Partnership)  associated  therewith,  but in no event to exceed the amount which
  would be charged by nonaffiliated Persons for comparable goods and services.
  
           (b)  Reimbursement  to the General  Partner or any of its Affiliates of
  operating  cash expenses  pursuant to Subsection  (a) hereof shall be subject to
  the following:
  
                    (i)  No such reimbursement shall be permitted for services for
  which the General Partner or any of its Affiliates is entitled to compensation 
  by way of a separate fee; and
  
                    (ii) No such  reimbursement  shall  be  made  for (a)  rent or
  depreciation,  utilities,  capital equipment or other such administrative items,
  and (b) salaries,  fringe  benefits,  travel  expenses and other  administrative
  items incurred or allocated to any  "controlling  person" of the General Partner
  or any  Affiliate  of the General  Partner.  For the  purposes  of this  Section
  9.7(b)(ii),  "controlling  person" includes,  but is not limited to, any Person,
  however titled,  who performs functions for the General Partner or any Affiliate
  of the General  Partner  similar to those of: 1) chairman or member of the board
  of directors;  (2) executive  management,  such as president,  vice president or
  senior vice president,  corporate secretary or treasurer; (3) senior management,
  such as the vice  president  of an operating  division  who reports  directly to
  executive  management;  or (4) those holding 5% or more equity  interest in such
  General  Partner or any such Affiliate of the General Partner or a person having
  the power to direct or cause the  direction of such General  Partner or any such
  Affiliate  of the  General  Partner,  whether  through the  ownership  of voting
  securities, by contract or otherwise.
  
           Section 9.9 General Partner Expenses. The General Partner or Affiliates
  of the  General  Partner  shall  pay  all  Partnership  expenses  which  are not
  permitted to be reimbursed  pursuant to Section 9.8 and all other expenses which
  are unrelated to the business of the Partnership.
  
           Section  9.10  Other  Business  of  Partners.  Any  Partner  may engage
  independently  or with others in other  business  ventures  of every  nature and
  description,  including,  without  limitation,  the  acquisition,   development,
  construction,  operation and management of real estate projects and developments
  of every  type on their own  behalf or on  behalf of other  partnerships,  joint
  ventures,  corporations  or other business  ventures  formed by them or in which
  they may have an interest,  including,  without  limitation,  business  ventures
  similar  to,  related to or in direct or indirect  competition  with the Project
  except if prohibited under a non-competition agreement.  Neither the Partnership
  
                                         29
  nor any  Partner  shall  have  any  right by  virtue  of this  Agreement  or the
  partnership  relationship  created  hereby  in  or to  such  other  ventures  or
  activities or to the income or proceeds derived therefrom.
  
           Section 9.11 Covenants,  Representations  and  Warranties.  The General
  Partner covenants, represents and warrants that the following are presently true
  and  will  be  true  during  the  term of this  Agreement,  to the  extent  then
  applicable:
  
           (a) The  Partnership is a duly organized  limited  partnership  validly
  existing  under  the  laws  of the  State  and  has  complied  with  all  filing
  requirements  necessary  for the  protection  of the  limited  liability  of its
  Limited Partners.
  
           (b) This  Partnership  Agreement and the Project  Documents are in full
  force and effect and  neither  the  Partnership  nor the  General  Partner is in
  material  breach  or  violation  of  any  provisions  thereof  or  of  any  FmHA
  regulation.
  
           (c) Existing  improvements,  if any, on the Project have been completed
  substantially in conformity with the Project Documents, and the Project is being
  operated in  accordance  with  standards  and  procedures  which are prudent and
  customary for the operation of properties similar to the Project.
  
           (d) Additional  construction on the Project, if any, shall be completed
  substantially   in  conformity   with  the  Project   Documents  and  any  other
  requirements necessary to obtain Completion of Construction.
  
           (e) The Project is being  operated in  accordance  with  standards  and
  procedures  which are prudent and  customary  for the  operation  of  properties
  similar to the Project.
  
           (f)      No Partner has any personal  liability with respect to or has
  personally  guaranteed the payment of the permanent Mortgage.
  
           (g) The Partnership is in material compliance with all construction and
  use codes  applicable  to the  Project  and is not in  violation  of any zoning,
  environmental or similar regulations applicable to the Project.
  
           (h) All  appropriate  public  utilities,  including  sanitary and storm
  sewers,  water,  gas  and  electricity,  are  currently  available  and  will be
  operating  properly for all units in the Project at the time of first  occupancy
  and throughout the term of the Partnership.
  
           (i) The Project has obtained,  or will obtain before Permanent Mortgage
  Commencement,  and  will  maintain  throughout  the  term  of  this  Partnership
  Insurance written by an Insurance Company.
  
                                         30
  (j) The  Partnership  owns  the fee  simple  interest  in the  Project,
  subject only to liens  (except  those with respect to which an adequate  bond or
  other financial security has been issued) which, in the aggregate, do not exceed
  $10,000 and the Mortgage Loan.
  
           (k) The  Construction  Contract  has  been  entered  into  between  the
  Partnership and the Contractor;  no other  consideration or fee shall be paid to
  the Contractor other than amounts set forth in the Construction Contract.
  
           (l) Except as  otherwise  disclosed  to the Limited  Partner in writing
  prior to the execution of this Agreement,  to the best of the General  Partner's
  knowledge:  (1) no Hazardous  Substance  has been disposed of, or released to or
  from,  or otherwise  now exists in, on, under or around,  the Project and (2) no
  aboveground or underground storage tanks are now or have ever been located on or
  under the Project. The General Partner will not install or allow to be installed
  any aboveground or underground storage tanks on the Project. The General Partner
  covenants  that the Project shall be kept free of Hazardous  Materials and shall
  not be used to generate,  manufacture,  refine, transport, treat, store, handle,
  dispose  of,  transfer,  produce  or  process  Hazardous  Materials,  except  in
  connection  with the normal  maintenance  and  operation  of any  portion of the
  Project. The General Partner shall comply, or cause there to be compliance, with
  all applicable Federal, state and local laws, ordinances,  rules and regulations
  with respect to Hazardous  Materials  and shall keep,  or cause to be kept,  the
  Project free and clear of any liens imposed  pursuant to such laws,  ordinances,
  rules and  regulations.  The General  Partner must  promptly  notify the Limited
  Partner in writing (3) if it knows,  or  suspects  or believes  there may be any
  Hazardous  Substance  in or around  any part of the  Project,  any  Improvements
  constructed on the Project,  or the soil,  groundwater or soil vapor, (4) if the
  General  Partner or the  Partnership may be subject to any threatened or pending
  investigation by any governmental  agency under any law, regulation or ordinance
  pertaining to any Hazardous  Substance,  and (5) of any claim made or threatened
  by any Person,  other than a  governmental  agency,  against the  Partnership or
  General Partner  arising out of or resulting from any Hazardous  Substance being
  present or released in, on or around any part of the Project.
  
           (m) As of the date hereof, at funding of the Construction Loan and upon
  Permanent  Mortgage  Commencement,  fire and extended coverage insurance for the
  full  replacement  value of the Project  (excluding the value of the land,  site
  utilities,  landscaping and  foundations)  and worker's  compensation and public
  liability  insurance,  all in favor of the  Partnership,  is and will be in full
  force and effect  and will be kept in full  force and effect  during the term of
  
                                         31
  the  Partnership;   all  such  policies  shall  be  amounts  and  with  insurers
  satisfactory  to the  permanent  lender  and  shall be paid  out of  Partnership
  assets.
  
           (n) The Partnership will allocate to the Limited Partner the Projected 
  Annual Tax Credits.
  
           (o) No charges or encumbrances  exist with respect to the Project other
  than those which are created or permitted by the Project  Documents or are noted
  or excepted in the title policy for the Project.
  
           (p) The  buildings  on the Project  site shall  constitute a "qualified
  low-income  housing  project"  as defined in Section  42(g) of the Code,  and as
  amplified by the Treasury Regulations thereunder. In this connection,  not later
  than  December  31 of the  first  year in which the  Partners  elect the LIHC to
  commence in accordance the Code.
  
           (q) No event or  proceeding,  including,  but not  limited  to, any (A)
  legal actions or proceedings before any court,  commission,  administrative body
  or other  governmental  authority,  and (B) acts of any  governmental  authority
  having  jurisdiction over the zoning or land use laws applicable to the Project,
  has occurred the  continuing  effect of which has: (i)  materially  or adversely
  affected the operation of the  Partnership or the Project  (except to the extent
  that funds are  available  to the  Partnership  to correct or cure such event or
  proceeding);  (ii)  materially or adversely  affected the ability of the General
  Partner to perform its  obligations  hereunder or under any other agreement with
  respect to the Project; or (iii) prevented the completion of construction of the
  improvements in substantial  conformity with the Project  Documents,  other than
  legal  proceedings which have been bonded against (or as to which other adequate
  financial  security has been issued) in a manner as to indemnify the Partnership
  against loss;  provided that the foregoing  does not apply to matters of general
  applicability which would adversely affect the Partnership, the General Partner,
  Affiliates of the General  Partner or the Project only insofar as they or any of
  them are part of the general public.
  
           (r)  Neither  the   Partnership   nor  the  General   Partner  has  any
  liabilities,  contingent or otherwise,  which have not been disclosed in writing
  to the Limited  Partner and which in the  aggregate do not affect the ability of
  the Limited Partner to obtain the anticipated  benefits of its investment in the
  Partnership.
  
           (s)  The General Partner has and shall maintain a net worth equal to at
  least $500,000.
  
                                         32
  The  General  Partner  shall be liable to the  Limited  Partner for any
  costs,  damages,  loss of profits,  diminution in the value of its investment in
  the Partnership, or other losses, of every nature and kind whatsoever, direct or
  indirect,  realized  or  incurred  by the  Limited  Partner  as a result  of any
  material breach of the  representations and warranties set forth in this Section
  9.10.
  
                                      ARTICLE X
  
                      ALLOCATIONS OF INCOME, LOSSES AND CREDITS
  
           Section 10.1 General. All items includable in the calculation of Income
  or Loss not arising from a Sale or  Refinancing,  and all Tax Credits,  shall be
  allocated 99% to the Limited Partner and 1% to the General Partner.
  
           Section  10.2  Allocations  From Sale or  Refinancing.  All  Income and
  Losses  arising  from a Sale or  Refinancing  shall  be  allocated  between  the
  Partners as follows:
  
           (a)      As to Income:
  
                    (1) First, an amount of Income equal to the aggregate negative
  balances  (if any) in the  Capital  Accounts  of all  Partners  having  negative
  Capital  Accounts  (prior to taking into account the Sale or Refinancing and the
  Distribution  of Sale or  Refinancing  Proceeds,  but  after  giving  effect  to
  Distributions  of Cash Flow From Operations and allocations of Income and Losses
  pursuant to Section 10.1 for the year) shall be  allocated  to such  Partners in
  proportion to their  negative  Capital  Account  balances until all such Capital
  Accounts shall have zero balances; and
  
                    (2) Second,  an amount of Income  sufficient  to increase  the
  Partner's  positive  Capital  Account  balance to an amount equal to its Capital
  Contribution,  determined  prior to taking into account the Distribution of Sale
  or Refinancing  Proceeds from the Sale or Refinancing but after giving effect to
  allocations  pursuant to Section 10.2(a) resulting from the Sale or Refinancing;
  and
  
                    (3) the balance, if any, of such Income shall be allocated 99%
  to the Limited  Partner and 1% to the General Partner.
  
           (b)      As to Losses:
  
                    (1) an  amount  of  Losses  equal  to the  aggregate  positive
  balances  (if any) in the  Capital  Accounts  of all  Partners  having  positive
  Capital  Accounts  (prior to taking into account the Sale or Refinancing and the
  Distribution  of Sale or  Refinancing  Proceeds,  but  after  giving  effect  to
  
                                         33
  Distributions  of Cash Flow From Operations and allocations of Income and Losses
  pursuant to Section 10.1 for the year) shall be  allocated  to such  Partners in
  proportion to their  positive  Capital  Account  balances until all such Capital
  Accounts shall have zero balances; and
  
                    (2) the balance of any such Losses shall be allocated 99% to 
  the Limited  Partner and 1% to the General Partner.
  
           (c)  Notwithstanding  the foregoing  provisions of Section  10.2(a) and
  (b), in no event shall any Losses be  allocated  to a Limited  Partner if and to
  the extent that such  allocation  would  create or increase an Adjusted  Capital
  Account Deficit for such Limited  Partner.  In the event an allocation of 99% of
  each item  includable  in the  calculation  of Income or Loss not arising from a
  Sale or  Refinancing,  would  create or  increase an  Adjusted  Capital  Account
  Deficit for the Limited  Partner,  then so much of the items of deduction  other
  than projected depreciation shall be allocated to the General Partner instead of
  the Limited Partner as is necessary to allow the Limited Partner to be allocated
  99% of the  items  of  income  and  Project  depreciation  without  creating  or
  increasing an Adjusted Capital Account Deficit for the Limited Partner, it being
  the intent of the parties that the Limited  Partner  always be allocated  99% of
  the  items of  Income  not  arising  from a Sale or  Refinancing  and 99% of the
  Project depreciation.
  
           Section 10.3  Special  Allocations.  The following special allocations
  shall be made in the  following order:
  
           (a) Except as otherwise  provided in Section 1.704-2(f) of the Treasury
  Regulations, notwithstanding any other provisions of this Article X, if there is
  a net decrease in Partnership  Minimum Gain during any Partnership  fiscal year,
  each Partner shall be specially  allocated items of Partnership  Income and gain
  for such fiscal year (and, if necessary,  subsequent  fiscal years) in an amount
  equal to such Person's  share of the net decrease in  Partnership  Minimum Gain,
  determined  in  accordance  with  Treasury   Regulations   Section   1.704-2(g).
  Allocations pursuant to the previous sentence shall be made in proportion to the
  respective  amounts  required  to be  allocated  to each  Partner  and  pursuant
  thereto.  The items to be so allocated  shall be determined  in accordance  with
  Section  1.704-2(f)(6)  and  1.704-2(j)(2)  of the  Treasury  Regulations.  This
  Section  10.3(a)  is  intended  to  comply  with  the  minimum  gain  chargeback
  requirement  in Section  1.704-2(f)  of the  Treasury  Regulations  and shall be
  interpreted consistently therewith.
  
           (b)  Except as  otherwise  provided  in  Section  1.704-2(i)(4)  of the
  Treasury Regulations,  notwithstanding any other provision of this Article X, if
  there is a net decrease in Partner Nonrecourse Debt Minimum Gain attributable to
  
                                         34
  a Partner  Nonrecourse Debt during any Partnership  fiscal year, each Person who
  has a share of the Partner  Nonrecourse  Debt Minimum Gain  attributable to such
  Partner Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of
  the Treasury  Regulations,  shall be specially  allocated  items of  Partnership
  Income and gain for such  fiscal  year (and,  if  necessary,  subsequent  fiscal
  years) in an amount equal to such Person's  share of the net decrease in Partner
  Nonrecourse  Debt Minimum Gain  attributable to such Partner  Nonrecourse  Debt,
  determined  in  accordance  with  Treasury  Regulations  Section  1.704-2(i)(4).
  Allocations pursuant to the previous sentence shall be made in proportion to the
  respective  amounts required to be allocated to each Partner  pursuant  thereto.
  The items to be so allocated  shall be determined  in  accordance  with Sections
  1.704-2(i)(4)  and  1.704-2(j)(2)  of the  Treasury  Regulations.  This  Section
  10.3(b) is intended to comply with the minimum gain  chargeback  requirement  in
  Section  1.704-2(i)(4)  of the  Treasury  Regulations  and shall be  interpreted
  consistently therewith.
  
           (c) In the event any Partner  unexpectedly  receives  any  adjustments,
  allocations,   or  distributions   described  in  Treasury  Regulations  Section
  1.704-1(b)(2)(ii)(d)(4),    Section    1.704-1(b)(2)(ii)(d)(5),    or    Section
  1.704-1(b)(2)(ii)(d)(6), items of Partnership Income and gain shall be specially
  allocated to each such Partner in an amount and manner  sufficient to eliminate,
  to the extent required by the Treasury Regulations, the Adjusted Capital Account
  Deficit of such  Partner as quickly as  possible,  provided  that an  allocation
  pursuant to this  Section  10.3(c)  shall be made if and only to the extent that
  such  Partner  would  have  Adjusted  Capital  Account  Deficit  after all other
  allocations  provided for in this Section 10.3 have been  tentatively made as if
  this Section 10.3(c) were not in the Agreement.
  
           (d) In the event any Partner has a deficit  Capital  Account at the end
  of any  Partnership  fiscal year which is in excess of the sum of (i) the amount
  such Partner is obligated to restore, and (ii) the amount such Partner is deemed
  to be obligated  to restore  pursuant to the  penultimate  sentences of Treasury
  Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be
  specially  allocated items of Partnership  Income and gain in the amount of such
  excess as quickly as  possible,  provided  that an  allocation  pursuant to this
  Section  10.3(d) shall be made if and only to the extent that such Partner would
  have a deficit Capital Account in excess of such sum after all other allocations
  provided for in this Section 10.3 have been  tentatively made as if this Section
  10.3(d) and Section 10.3(c) hereof were not in the Agreement.
  
           (e)  Nonrecourse  Deductions  for any fiscal  year  shall be  specially
  allocated 99% to the Limited Partner and 1% to the General Partner.
  
                                         35
  (f) Any  Partner  Nonrecourse  Deductions  for any fiscal year shall be
  specially  allocated  to the  General  Partner or Limited  Partner who bears the
  economic risk of loss with respect to the Partner Nonrecourse Debt to which such
  Partner  Nonrecourse  Deductions are  attributable  in accordance  with Treasury
  Regulations Section 1.704-2(i)(1).
  
           (g) To the  extent  an  adjustment  to the  adjusted  tax  basis of any
  Partnership  asset  pursuant to Code  Section  743(b) is  required,  pursuant to
  Treasury  Regulations  Section  1.704-1(b)(2)(iv)(m)(2)  or Regulations  Section
  1.704-1(b)(2)(iv)(m)(4),  to  be  taken  into  account  in  determining  Capital
  Accounts as the result of a distribution to a Partner in complete liquidation of
  his interest in the  Partnership,  the amount of such  adjustment to the Capital
  Accounts  shall be treated as an item of gain (if the  adjustment  increases the
  basis of the asset) or Loss (if the  adjustment  decreases  such basis) and such
  gain or Loss shall be specially allocated to the General Partner and the Limited
  Partner in accordance  with their interests in the Partnership in the event that
  Treasury Regulations Section 1.704-1 (b)(2)(iv)(m)(2) applies, or to the Partner
  to whom  such  distribution  was made in the  event  that  Treasury  Regulations
  Section 1.704-1(b)(2)(iv)(m)(4) applies.
  
           (h) To the extent the  Partnership  has  taxable  interest  income with
  respect to any  promissory  note pursuant to Section 483 or Section 1271 through
  1288 of the Code:
  
                    (a) Such interest income shall be specially allocated to the  
  Limited  Partner to whom such promissory note relates; and
  
                    (b) The amount of such interest  income shall be excluded from
  the  Capital  Contributions  credited  to  such  Partner's  Capital  Account  in
  connection with payments of principal with respect to such promissory note.
  
           (i) In the event the adjusted tax basis of any Code Section 38 property
  that has been placed in service by the Partnership is increased pursuant to Code
  Section 50(c), such increase shall be specially allocated among the Partners (as
  an item in the  nature  of  income  or  gain)  in the  same  proportions  as the
  investment tax credit that is recaptured with respect to such property is shared
  among the Partners.
  
           (j) Any  reduction in the  adjusted tax basis (or cost) of  Partnership
  Code  Section 38 property  pursuant  to Code  Section  50(c) shall be  specially
  allocated among the Partners (as an item in the nature of expenses or losses) in
  the same  proportions  as the  basis  (or cost) of such  property  is  allocated
  pursuant to Treasury Regulations Section 1.46-3(f)(2)(i).
  
                                         36
  (k) Any Income,  Loss,  or  deduction  realized as a direct or indirect
  result of the issuance of an Interest in the Partnership by the Partnership to a
  Partner (the "Issuance  Items") shall be allocated  amount the Partners so that,
  to the extent possible, the net amount of such Issuance Items, together with all
  other  allocations  under this Agreement to each Partner,  shall be equal to the
  net amount that would have been  allocated  to each such Partner if the issuance
  items had not been realized.
  
           (l)  If any  Partnership  expenditure  treated  as a  deduction  on its
  federal  income  tax  return is  disallowed  as a  deduction  and  treated  as a
  distribution  pursuant to Section  731(a) of the Code,  there shall be a special
  allocation  of  gross  income  to the  Partner  deemed  to  have  received  such
  distribution equal to the amount of such distribution.
  
           (m) The  allocation  to the General  Partner of each  material  item of
  Partnership income,  loss,  deduction or credit will not be less than 1% of each
  such item at all times during the existence of the Partnership.
  
           (n) Interest deduction on the Partnership indebtedness referred to in 
  Section  6.3  shall  be allocated 100% to the General Partner.
  
           Section  10.4  Curative  Allocations.  The  allocations  set  forth  in
  Sections 10.3(a),  10.3(b),  10.3(c),  10.3(d),  10.3(e),  10.3(f),  and 10.3(g)
  hereof (the  "Regulatory  Allocations")  are  intended  to comply  with  certain
  requirements of the Treasury Regulations. It is the intent of the Partners that,
  to the extent possible,  all Regulatory  Allocations shall be offset either with
  other  Regulatory  Allocations  or with  special  allocations  of other items of
  Partnership  Income,  gain,  Loss,  or deduction  pursuant to this Section 10.4.
  Therefore,  notwithstanding any other provision of the Article X (other than the
  Regulatory Allocations),  the General Partner shall make such offsetting special
  allocations of Partnership  Income,  gain, Loss, or deduction in whatever manner
  the  General  Partner  determines  appropriate  so that,  after such  offsetting
  allocations are made,  each Partner's  Capital Account balance is, to the extent
  possible,  equal to the Capital  Account  balance such Partner would have had if
  the Regulatory  Allocations  were not part of the Agreement and all  Partnership
  items were allocated pursuant to Sections 10.3(h), 10.3(i), 10.3(j), 10.3(k) and
  10.5. In exercising its discretion under Section 10.4, the General Partner shall
  take into  account  future  Regulatory  Allocations  under  Section  10.3(a) and
  10.3(b)  that,  although  not yet made,  are likely to offset  other  Regulatory
  Allocations previously made under Sections 10.3(e) and 10.3(f).
  
                                         37
  Section 10.5 Other Allocation Rules.
  
           (a) The basis (or cost) of any  Partnership  Code  Section 38  property
  shall be allocated  among the Partners in accordance  with Treasury  Regulations
  Section 1.46-3 (f)(2)(i). All Tax Credits (other than the investment tax credit)
  shall be  allocated  among the  Partners  in  accordance  with  applicable  law.
  Consistent with the foregoing,  the Partners intend that LIHTC will be allocated
  99% to the Limited Partner and 1% to the General Partner.
  
           (b) In the event  Partnership  Code  Section 38 property is disposed of
  during any taxable year,  profits for such taxable year (and, to the extent such
  profits are  insufficient,  profits for  subsequent  taxable years) in an amount
  equal to the excess,  if any, of (i) the reduction in the adjusted tax basis (or
  cost) of such property pursuant to Code Section 50(c), over (ii) any increase in
  the adjusted tax basis of such property pursuant to Code Section 50(c) caused by
  the disposition of such property,  shall be excluded from the profits  allocated
  pursuant  to Section  10.1  hereof  and shall  instead  be  allocated  among the
  Partners in proportion  to their  respective  shares of such excess,  determined
  pursuant to Section 10.3(i) and 10.3(j) hereof.  In the event more than one item
  of such property is disposed of by the Partnership, the foregoing sentence shall
  apply  to  such  items  in the  order  in  which  they  are  disposed  of by the
  Partnership,  so the  profits  equal to the entire  amount of such  excess  with
  respect to the first such property  disposed of shall be allocated  prior to any
  allocations with respect to the second such property disposed of, and so forth.
           (c) For purposes of determining the Income,  Losses, or any other items
  allocable  to any  period,  Income,  Losses,  and any such other  items shall be
  determined  on a daily,  monthly,  or other basis,  as determined by the General
  Partners  using any  permissible  method under Code Section 706 and the Treasury
  Regulations thereunder.
  
           Section 10.6 Tax Allocations:  Code Section 704(c).  In accordance with
  Code Section 704(c) and the Treasury Regulations  thereunder,  Income, Loss, and
  deduction  with  respect  to any  property  contributed  to the  capital  of the
  Partnership shall,  solely for tax purposes,  be allocated among the Partners so
  as to take account of any variation  between the adjusted basis of such property
  to the  Partnership  for federal income tax purposes and its initial Gross Asset
  Value (computed in accordance with this Agreement).
  
  In the event the Gross Asset Value of any Partnership asset is adjusted pursuant
  hereto, subsequent allocations of Income, gain, Loss, and deduction with respect
  to such asset shall take account of any variation  between the adjusted basis of
  
                                         38
  such asset for federal income tax purposes and its Gross Asset Value in the same
  manner as under Code Section 704(c) and the Treasury Regulations thereunder.
  
  Any elections or other decisions  relating to such allocations  shall be made by
  the  General  Partner in any manner  that  reasonably  reflects  the purpose and
  intention  of this  Agreement.  Allocations  pursuant to this  Section  10.6 are
  solely for purposes of federal,  state, and local taxes and shall not affect, or
  in any way be taken into account in computing,  any Person's  Capital Account or
  share of Income, Losses, other items, or distributions pursuant to any provision
  of this Agreement.
  
           Section 10.7 Allocation  Among Limited  Partners and Assignees.  In the
  event that the Interest of the Limited Partner  hereunder is at any time held by
  more than one Limited  Partner or Assignee all tax items which are  specifically
  allocated to the Limited  Partner for any month pursuant to this Article X shall
  be  apportioned  among such Persons  according to the ratio of their  respective
  profit-sharing interests in the Partnership at the last day of such month.
  
           Section 10.8 Allocation Among General  Partners.  In the event that the
  Interest of the General  Partner  hereunder is at any time held by more than one
  General  Partner all tax items which are  specifically  allocated to the General
  Partner for any month pursuant to this Article X shall be apportioned among such
  Persons in such  percentages as may from time to time be determined by agreement
  among them  without  amendment  to this  Agreement  or  consent  of the  Limited
  Partner.
  
           Section 10.9 Modification of Allocations.  The provisions of Articles X
  and XI and other  provisions  of this  Agreement  are  intended  to comply  with
  Treasury  Regulation  Section  1.704 and shall be  interpreted  and applied in a
  manner  consistent with such section of the Treasury  Regulations.  In the event
  that the General Partner determines, in its sole discretion,  that it is prudent
  to  modify  the  manner  in which  the  Capital  Accounts  of the  Partners  and
  Assignees,  or any debit or credit thereto, are computed in order to comply with
  such  section of the  Treasury  Regulations,  the General  Partner may make such
  modification, to the minimum extent necessary, to effect the plan of allocations
  and Distributions provided for elsewhere in this Agreement. Further, the General
  Partner shall make any  appropriate  modifications  in the event it appears that
  unanticipated  events (e.g., the existence of a Partnership election pursuant to
  Code  Section  754) might  otherwise  cause this  Agreement  not to comply  with
  Treasury Regulation Section 1.704.
  
                                         39
  ARTICLE XI
  
                                    DISTRIBUTION
  
           Section 11.1 Distribution of Cash Flow From Operations.
  
           Cash Flow From  Operations  for each fiscal  year shall be  distributed
  within  seventy-five (75) days following each calendar year and shall be applied
  in the following order of priority:
  
                    (a) To the  payment of the current  Reporting  Fee and then to
  the payment of any accrued  Reporting Fees which have not been paid in full from
  previous years;
  
                    (b) To the payment of the Partnership Administration Fee; and
  
                    (c) The balance thereof, if any, shall be distributed annually
  99% to the Limited Partner and 1% to the General Partner.
  
           Section  11.2  Distribution  Upon  Sale or  Refinancing.  Provided  the
  Distribution  is not  determined  to be a liquidating  distribution  pursuant to
  Treasury Regulation 1.704-1(b)(2)(ii)(g),  funds available for distribution upon
  Sale or Refinancing shall be distributed in the following order:
  
           (a)      To the payment of the Mortgage Note and other matured debts 
  and  liabilities of the  Partnership, if applicable;
  
           (b)      To the payment of any other priority debt in accordance with 
  State law;
  
           (c)      To any accrued payments or loan repayments owing to the  
  Partners,  to be paid  prorata  if necessary;
  
           (d)      To the  establishment  of any reserves which the General 
  Partner shall deem reasonably  necessary for contingent, unmatured or unforeseen
  liabilities or obligations of the Partnership;
  
           (e)      To the Limited Partner in an amount equal to its Capital 
  Contribution;
  
           (f)      To the General Partner in an amount equal to its Capital 
  Contribution; and
  
           (g)      Thereafter, 50% to the Limited Partner and 50% to the General
  Partner.
  
                                         40
  ARTICLE XII
  
                           VOLUNTARY TRANSFERS OF LIMITED
                        PARTNER'S INTEREST IN THE PARTNERSHIP
  
           Section 12.1  Assignment  of Limited  Partner's  Interest.  The Limited
  Partner  shall not have the right to assign all or any part of its  interest  in
  the Partnership to any other Person, whether or not a Partner, except:
  
           (a) By a written  instrument in form and substance  satisfactory to the
  General  Partner  and its  counsel,  setting  forth the name and  address of the
  proposed transferee,  the nature and extent of the interest which is proposed to
  be transferred  and the terms and conditions upon which the transfer is proposed
  to be made,  stating that the Assignee  accepts and agrees to be bound by all of
  the terms and provisions of this Agreement, and providing for the payment of all
  reasonable  expenses  incurred  by  the  Partnership  in  connection  with  such
  assignment,  including but not limited to the cost of preparing any necessary or
  appropriate amendment to this Agreement;
  
           (b) Upon consent of the General Partner to such assignment, which  
  shall  not be  unreasonably withheld;
  
           (c) Upon  receipt  by the  General  Partner  of an  opinion  of counsel
  acceptable  to the  General  Partner  that  such  assignment  complies  with all
  applicable federal and state securities laws; and
  
           (d) Upon  receipt  by the  General  Partner of the  Assignee's  written
  representation  that the  Partnership  interest is to be acquired by him for his
  own  account  for  long-term  investment  and  not  with a view  toward  resale,
  fractionalization, division or distribution thereof.
  
           THE  LIMITED  PARTNERSHIP   INTEREST  DESCRIBED  HEREIN  HAS  NOT  BEEN
  REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933 AS  AMENDED  OR UNDER  ANY STATE
  SECURITIES  LAW. THE INTEREST  MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED  UNLESS
  REGISTERED  UNDER  APPLICABLE  FEDERAL  AND STATE  SECURITIES  LAWS OR UNLESS AN
  EXEMPTION FROM REGISTRATION IS AVAILABLE.
  
           Section 12.2  Effective  Date of Transfer.  Any assignment of a Limited
  Partner's  interest  pursuant to Section 12.1 shall  become  effective as of the
  last day of the calendar  month in which the last of the  conditions  in Section
  12.1 to such assignment are satisfied.
  
                                         41
  Section  12.3  Invalid  Assignment.  Any  purported  assignment  of  an
  interest of a Limited Partner  otherwise than in accordance with Section 12.1 or
  Section 12.6 shall be of no effect as between the  Partnership and the purported
  assignee and shall be disregarded by the General  Partner in making  allocations
  and Distributions hereunder.
  
           Section 12.4  Assignee's  Rights to Allocations and  Distributions.  An
  Assignee shall be entitled to receive  allocations of Partnership  tax items and
  Distributions  from the Partnership  attributable  to the  Partnership  interest
  acquired by reason of any permitted  assignment  from and after the first day of
  the calendar month following the month which ends with the effective date of the
  transfer of such interest as provided in Section 12.2. The  Partnership  and the
  General  Partner  shall be  entitled to treat the  assignor of such  Partnership
  interest  as the  absolute  owner  thereof in all  respects,  and shall incur no
  liability for allocations of Partnership  items and  Distributions  made in good
  faith to such assignor,  until such time as the written instrument of assignment
  has been received by the Partnership.
  
           Section 12.5 Substitution of Assignee as Limited Partner.
  
           (a) An Assignee shall not have the right to become a substitute Limited
  Partner in place of his  assignor  unless  the  written  consent of the  General
  Partner to such  substitution  shall have been obtained,  which consent,  in the
  General  Partner's  absolute  discretion,  may be withheld.  No consent or other
  action of any non-assigning  Limited Partner shall be required for the admission
  to the Partnership of any substitute Limited Partner.
  
           (b) A  nonadmitted  Assignee  of a Limited  Partner's  interest  in the
  Partnership  under an  assignment  complying  with  Section  12.1  shall only be
  entitled to receive that share of allocations,  Distributions  and the return of
  Capital  Contribution  to which its transferor  would otherwise be entitled with
  respect  to the  interest  transferred,  and shall  have no right to obtain  any
  information  on  account  of the  Partnership's  transactions,  to  inspect  the
  Partnership's  books and records or have any other of the rights and  privileges
  of a Limited  Partner,  provided,  however,  that the  Partnership  shall, if an
  Assignee  and  assignor  jointly  advise  the  General  Partner  in writing of a
  transfer of an interest in the Partnership  complying with Section 12.1, furnish
  the Assignee with  pertinent tax  information  at the end of each fiscal year of
  the Partnership.
  
           (c) The General Partner may elect to treat an Assignee of a Partnership
  interest who has not become a substitute Limited Partner as a substitute Limited
  
                                         42
  Partner in the place of its Assignor  should it deem in its absolute  discretion
  that such treatment is in the best interest of the Partnership.
  
           Section  12.6  Death,  Bankruptcy,  Incompetency,  etc.  of  a  Limited
  Partner. Upon the death,  dissolution,  adjudication of bankruptcy,  insanity or
  adjudication  of incompetency of a Limited  Partner,  such Partner's  executors,
  administrators or legal  representatives  shall have all the rights of a Limited
  Partner for the purpose of settling or managing such Partner's estate, including
  such  power as such  Partner  possessed  to assign  his  Interest  as a Partner.
  However,  such executors,  administrators or legal representatives will not have
  the  right  to  become  substitute  Limited  Partners  in  the  place  of  their
  predecessor-in-interest  unless the General Partner  consents in accordance with
  Section 12.5(a).
  
           Section 12.7 Assignment. For purposes of this Article XII, "assign" and
  "assignment" shall mean any grant, vesting,  conveyance,  or transfer whatsoever
  of any interest whatsoever  (including without limitations  security interests),
  whether by operation of law or consensually, gratuitously or for considerations.
  
                                    ARTICLE XIII
  
                       RESIGNATION, REMOVAL AND REPLACEMENT OF
                                   GENERAL PARTNER
  
           Section 13.1  Resignation of General  Partner.  The General Partner may
  resign  only with the prior  written  approval of the  Limited  Partner  and, if
  required by applicable  FmHA  regulations,  the FmHA. The Consent of the Limited
  Partner shall be conditioned upon the agreement of one or more successor General
  Partners who satisfy the  requirements  of Section 13.3 of this  Agreement to be
  admitted as substitute General Partner(s).
  
           Section 13.2 Removal of General Partner.
  
           (a)  Subject  to  the  limitations  imposed  on  the  Project  and  the
  Partnership by applicable FmHA  regulations,  the Limited Partner may remove the
  General Partner:
  
                    (1)      For cause if such General Partner has:
  
                             (A)      Been subject to an Event of Bankruptcy;
  
                             (B)      Committed  any fraud,  willful  misconduct,
  breach of fiduciary  duty or other grossly negligent conduct in the performance 
  of its duties under this Agreement;
  
                                         43
  (C)      Convicted of, or entering into a plea of 
  guilty to a felony;
  
                             (D)      Made personal use of Partnership funds or 
  properties;
  
                             (E)      Violated  the  terms of the FmHA  loan  
  Agreement,  the  FmHA  Interest  Credit Agreement or any FmHA rule or regulation
  applicable to the Partnership Mortgage Note,  and  such  violation  prompts the 
  FmHA to  issue a  default  letter  or acceleration  notice to the  Partnership 
  or General  Partner  and such  conduct caused the Partnership to suffer an 
  uninsurable loss;
  
                             (F)      Breached any  representation,  warranty or 
  covenant contained in this Agreement or failed to perform any action which may 
  be required by this Agreement and such conduct caused the Partnership to suffer 
  an uninsurable loss;
  
                             (G)      Violated any federal or state tax law which
  causes a recapture of LIHC; or
  
                             (H)      Failed  during  any  six-month  period  
  during  the  first 15 years of  Project operations to cause at least 85% of the 
  total  apartment units in the Project to qualify for LIHC, unless such failure 
  is the result of fire,  flood,  earthquake or other act of God or unless  such 
  failure is cured  within 120 days after the end of the six-month period.
  
           (b) Written  notice of the  removal  for cause of the  General  Partner
  shall be served upon the General  Partner  either by certified or by  registered
  mail, return receipt  requested,  or by personal service.  Such notice shall set
  forth the reasons for the  removal,  if any, and the date upon which the removal
  is to become effective.
  
           (c) Upon  receipt of such the notice of removal for cause,  the General
  Partner shall cause an accounting to be prepared  covering the  transactions  of
  the  Partnership  from the end of the  previous  fiscal year through the date of
  receipt  of such  notice,  and  thereafter  it  shall  not  sell or  dispose  of
  Partnership  assets in the  ordinary  course of business of the  Partnership  or
  otherwise  unless such sale or disposition is subject to a contract entered into
  by and binding upon the Partnership prior to the date upon which such notice was
  received by the General Partner. If possible,  the accounting shall be completed
  by the  effective  date of the  removal  and  shall be in  sufficient  detail to
  accurately  and fully  reflect  the  earnings  or losses  for the period and the
  financial condition of the Partnership.  The expenses of the accounting shall be
  borne by the General Partner.
  
                                         44
  (d) The removal of the General Partner for cause shall become effective
  upon the date set forth in the notice.  Such General  Partner shall (i) cease to
  be a Partner  of, or have any further  interest  in, the  Partnership  as of the
  effective  date  of the  removal;  (ii)  be  entitled  to  receive  as its  sole
  compensation  for its interest in the Partnership an amount equal to its Capital
  Account  balance  as of the  effective  date of the  removal,  payable  upon the
  dissolution and  termination of the  Partnership  after all of the Partners have
  been  distributed  the positive  balances in their Capital  Accounts;  and (iii)
  remain  liable to restore any deficit  balance in its Capital  Account as of the
  date of its removal as provided in Section 15.3(b) of this Agreement.
  
           Section 13.3 Admission of Substitute  General Partner.  No Person shall
  be admitted as a substitute  General  Partner  unless (i) such Person shall have
  agreed to become a  substitute  General  Partner by a written  instrument  which
  shall include the  acceptance and adoption of this  Agreement;  (ii) the Limited
  Partner and, if required by FmHA regulations applicable to the Partnership, FmHA
  shall have  consented in writing to the admission of such Person as a substitute
  General  Partner;  (iii) such Person  shall  acquire  and agree to maintain  the
  Financial  Interest in the  Partnership,  if any,  required by  applicable  FmHA
  regulations; (iv) such Person, if a corporation, shall satisfy the "safe harbor"
  guidelines  established  by  Revenue  Procedure  89-12,  1989-7  I.R.B.  or  any
  successor  Revenue  Procedure;  and (v) such  Person  shall  have  executed  and
  acknowledged any other instruments  which the withdrawing  General Partner shall
  reasonably  deem necessary or appropriate to affect the admission of such Person
  as a substitute General Partner. If the foregoing conditions are satisfied, this
  Agreement shall be amended in accordance with the provisions of the Act, and all
  other  steps  shall be taken  which  are  reasonably  necessary  to  effect  the
  withdrawal  of the  withdrawing  General  Partner  and the  substitution  of the
  substitute  General Partner.  Nothing  contained herein shall reduce the Limited
  Partner's interest in the Partnership.
  
           Section 13.4  Continuing  Liability.  In the event a General Partner is
  removed or  otherwise  withdraws  from the  Partnership  or sells,  transfers or
  assigns its entire interest  pursuant to this Article XIII, such General Partner
  shall be, and shall remain,  liable for all obligations and liabilities incurred
  as General  Partner prior to the effective  date of such event to the extent the
  time for  performance  thereof has accrued by such date, but shall  otherwise be
  free of any obligation or liability incurred as General Partner.
  
           Section 13.5 Transfer of Interest. Except as otherwise provided herein,
  the General  Partner may not assign,  transfer,  mortgage or sell any portion of
  
                                         45
  its interest in the  Partnership,  or enter into any  agreement as the result of
  which any Person shall become interested in the Partnership, without the consent
  of the Limited Partner.  A transferee of the General  Partner's  interest in the
  Partnership  shall not become a General  Partner  unless  admitted in accordance
  with Section 13.3.
  
           Section 13.6 Payment to General Partner Upon Resignation, Death or 
  Insanity.
  
           (a) Upon the  resignation  of the General  Partner  pursuant to Section
  13.1,  or the death or  insanity  of the General  Partner if an  individual,  or
  dissolution of the General Partner if a corporation, partnership, trust or other
  form of legal entity,  and if the business of the Partnership is to be continued
  with one or more successor or additional  General  Partner(s),  the  Partnership
  shall have the right,  with the  approval  of the Limited  Partner and FmHA,  if
  required,   but  not  the  obligation,   to  liquidate  such  General  Partner's
  Partnership  Interest  upon payment to such  General  Partner of the Fair Market
  Value of such  Interest as  determined  by two  independent  appraisers.  If the
  Partnership  does not  liquidate  the  General  Partner's  Partnership  Interest
  pursuant to the previous  sentence,  then the General  Partner  shall retain the
  same Interest in the Income,  Losses, Tax Credits,  Distributions and Capital of
  the Partnership as it previously  held under this  Agreement,  but such Interest
  shall be held as a special limited partner; and the General Partner shall not be
  personally  liable for Partnership  debts incurred after such General  Partner's
  general  partner  Interest is liquidated.  The resigning  General Partner or its
  representative  as the case may be shall choose one  appraiser and the successor
  or continuing General Partner(s) shall choose one appraiser.  If such appraisers
  cannot  agree upon the Fair Market  Value of the General  Partner's  Partnership
  Interest within 30 days after liquidation of the General Partner's Interest, the
  two appraisers so chosen shall jointly choose a third appraiser. The Fair Market
  Value of the  General  Partner's  Partnership  Interest  shall be the  appraisal
  submitted by the third appraiser whose determination shall be final and binding.
  Each of the parties shall  compensate its own appraiser and the  compensation of
  the third appraiser shall be borne equally by such parties. If the continuing or
  successor General Partner(s) fail to choose an appraiser,  the Fair Market Value
  of the  General  Partner's  Partnership  Interest  shall  be  determined  by the
  appraiser chosen by the resigning  General Partner or its  representative as the
  case may be. If the  General  Partner  fails to choose  an  appraiser,  the Fair
  Market Value of the General Partner's  Partnership  Interest shall be determined
  by the appraiser chosen by the continuing or successor General Partner(s).
  
                                         46
  (b) The purchase price of the General  Partner's  Partnership  Interest
  upon  resignation,  dissolution,  death or insanity,  as determined  pursuant to
  Section  13.6(a),  shall be paid by the Partnership by delivering to the General
  Partner or its  representative  as the case may be the  Partnership's  unsecured
  promissory  note  bearing  interest at a rate which is equal to the lesser of 2%
  per annum in excess of the then  prevailing  prime or reference  rate charged by
  Bank of America N.T. & S.A.,  Main Office,  San  Francisco,  California,  or the
  maximum legal rate.  Said note shall be payable upon  Liquidation  in accordance
  with state law priority.  The note shall also provide that the  Partnership  may
  prepay all or any part thereof without penalty.  Notwithstanding  the foregoing:
  if such note is delivered  following the resignation of the General Partner then
  (i) such note  shall not bear  interest  and (ii) the  principal  payable to the
  resigned  General  Partner  shall be  limited  in amount  and date of payment to
  Distributions which such resigned General Partner would have received under this
  Agreement had the General Partner not resigned.
  
                                     ARTICLE XIV
  
                            BOOKS AND ACCOUNTS, REPORTS,
                        TAX RETURNS, FISCAL YEAR AND BANKING
  
           Section 14.1 Books and Accounts.
  
           (a) The  General  Partner  shall  cause  the  Partnership  to keep  and
  maintain at its principal  executive  office full and complete books and records
  which shall include each of the following:
  
                    (1) a current list of the full name and last known business or
  residence address of each Partner set forth in alphabetical  order together with
  the Capital Contribution and the share in profits and losses of each Partner;
  
                    (2) a copy of the  Certificate of Limited  Partnership and all
  certificates of amendment  thereto,  together with executed copies of any powers
  of attorney pursuant to which any certificate has been executed;
  
                    (3) copies of the  Partnership's  federal,  state and local 
  income tax  information  returns and reports, if any, for the six most recent 
  taxable years;
  
                    (4) copies of the original of this Agreement and all 
  amendments thereto;
  
                    (5) financial statements of the Partnership for the six most 
  recent fiscal years; and
  
                                         47
  (6) the  Partnership's  books and records  for at least the  
  current  and past three  fiscal years.
  
           (b) Upon the request of the Limited Partner,  the General Partner shall
  promptly  deliver to the Limited Partner,  at the expense of the Partnership,  a
  copy of the information set forth in Section  14.1(a)(1),  (2) or (4) above. The
  Limited Partner shall have the right upon  reasonable  request and during normal
  business  hours to  inspect  and copy any of the  foregoing  or any of the other
  books and records of the  Partnership  or the Project at its own  expense,  and,
  upon  reasonable  request,  to obtain  from the  General  Partner  copies of the
  Partnership's  federal,  state  and local  income  tax or  information  returns,
  promptly after such returns become available.
  
           Section 14.2 Accounting Reports.
  
           (a) By March 1 of each calendar year the General  Partner shall provide
  to each  Person  who was a Limited  Partner at any time  during the fiscal  year
  ending  during  that  calendar  year  all  tax  information  necessary  for  the
  preparation  of his federal  and state  income tax returns and other tax returns
  with regard to the  jurisdiction(s)  in which the  Partnership  is formed and in
  which the Project is located.
  
           (b) By March 1 of each calendar year the General  Partner shall send to
  each Person who was a Limited Partner at any time during such fiscal year: (i) a
  balance  sheet as of the end of such  fiscal  year  and  statements  of  income,
  Partners,  equity and changes in financial position of such fiscal year prepared
  in accordance with generally accepted  accounting  principles and accompanied by
  an auditor's report containing an opinion of the Partnership's accountants; (ii)
  a report  (which need not be audited) of any  Distributions  made to Persons who
  were Limited Partners at any time during the fiscal year, separately identifying
  Distributions from Cash Flow From Operations for the fiscal year, Cash Flow From
  Operations for prior years, Sale or Refinancing  Proceeds and reserves;  (iii) a
  report  setting  forth  the  amount  of all  fees  and  other  compensation  and
  Distributions  and reimbursed  expenses paid by the  Partnership  for the fiscal
  year to the  General  Partner  or  Affiliates  of the  General  Partner  and the
  services performed in consideration therefor,  which report shall be verified by
  the Partnership's accountants,  with the method of verification to include, at a
  minimum,  a review of the time  records of  individual  employees,  the costs of
  whose services were reimbursed,  and a review of the specific nature of the work
  performed by each such  employee,  all in  accordance  with  generally  accepted
  auditing  standards  and,  accordingly,  including  such tests of the accounting
  records  and  such  other  auditing  procedures  as  the  accountants   consider
  
                                         48
  appropriate in the circumstances; (iv) a copy of the Project's rent roll for the
  most recent  calendar  quarter;  (v) a statement  signed by the General  Partner
  indicating  the  number of  apartment  units  which are  occupied  by  Qualified
  Tenants;  and (vi) a report of the  significant  activities  of the  Partnership
  during the quarter.
  
           (c) Within 60 days after the end of each fiscal quarter in which a Sale
  or Refinancing  of the Project  occurs,  the General  Partner shall send to each
  Person who was a Limited Partner at the time of the Sale or Refinancing a report
  as to the nature of the Sale or Refinancing and as to the profits and losses for
  tax  purposes  and  Sale  or  Refinancing  Proceeds  arising  from  the  Sale or
  Refinancing.
  
           (d) By March 1 of each  calendar year of the  Partnership,  the General
  Partner  shall  provide  to each  person  who was a Limited  Partner at any time
  during such fiscal year an audited  report of the  Project's  financial  affairs
  provided the FmHA requires an audit of the Project pursuant to FmHA regulations.
  
           Section 14.3 Other Reports. The General Partner shall also provide to 
  the Limited Partner:
  
           (a)  During  the  period  of  construction,   a  copy  of  the  initial
  construction schedule and any updates to the construction  schedule,  and by the
  tenth day of each month a copy of the previous  month's  Construction  Loan draw
  request and the inspecting architect's  application and certification of payment
  (AIA Document G702, or similar form acceptable to the Limited Partner);
  
           (b) During  the  rent-up  phase,  and for a term equal to six months of
  sustained  occupancy of 95% or better,  a copy of the previous month's rent roll
  (through  the  last  day of the  month)  and a copy  of the  tenant  tax  credit
  compliance  worksheet  similar to the form in Exhibit "E" attached hereto.  Upon
  request the General  Partner will provide to the Limited Partner the information
  collected by the property management company, or General Partner,  verifying the
  tenant's  eligibility  for  LIHC  purposes.  The  Limited  Partner  will ask for
  information on approximately 10% of the tenants unless the circumstances warrant
  a more thorough review;
  
           (c) A quarterly tax credit  compliance  report similar to the worksheet
  included  in  Exhibit  "E" due on or before  April 30 of each year for the first
  quarter,  July 31 of each year for the second  quarter,  October 31 of each year
  for the third  quarter  and January 31 of each year for the fourth  quarter.  In
  order to  verify  the  reliability  of the  information  being  provided  on the
  compliance  report the Limited  Partner  may request a small  sampling of tenant
  files to be provided.  The sampling will include,  but not be limited to, copies
  
                                         49
  of tenant  applications,  certifications  and third party  verifications used to
  qualify  tenants.  If any  inaccuracies  are  found to  exist on the tax  credit
  compliance report or any items of noncompliance are discovered then the sampling
  will be expanded as determined by the Limited Partner.
  
           (d) By September 15 of each year, an estimate of LIHC for that year;
  
           (e) If the  Project  receives  a  reservation  of LIHCs in one year but
  cannot  complete the  construction  and rent-up until the next year, the General
  Partner will provide to the Limited Partner an audited cost  certification  (and
  backup  documents)  verifying the  Partnership has expended the requisite 10% of
  the reasonably  expected cost basis to meet the carryover test provisions of the
  Code;
  
           (f) During the Compliance Period,  copies of any  certifications  which
  the  Partnership  must  furnish  to federal  or state  governmental  authorities
  administering  the Tax Credit  programs under Section 42 of the Code  including,
  but not limited to, copies of all annual tenant recertification;
  
           (g) A quarterly  report on operations,  in the form attached  hereto as
  Exhibit  "E",  due on or before  April 30 of each year for the first  quarter of
  operations,  July 31 of each year for the second quarter of operations,  October
  31 of each year for the third quarter of operations  and January 31 of each year
  for the fourth quarter of operations which shall include, but is not limited to,
  an  unaudited  income  statement  showing all  activity in the reserve  accounts
  required to be maintained pursuant to Section VIII of this Agreement,  statement
  of income and expenses,  balance sheet, rent roll as of the end of each calendar
  quarter of each year, and third party verification of current utility allowance;
  
           (h) By the annual  renewal  date of each and every  year,  an  executed
  original or certified  copy of each and every  Insurance  policy or  certificate
  required by the terms of this Agreement;
  
           (i) On or before March 15th of each calendar year, the General  Partner
  shall send to the  Limited  Partner  the  General  Partner's  updated  financial
  statement as of December 31 of the previous year;
  
           (j) On or  before  November  1 of  each  calendar  year,  a copy of the
  following year's proposed  operating  budget.  Each such budget shall contain an
  amount required for reserves in accordance with Article VIII and for the payment
  of real estate taxes, insurance, debt service and other payments; and
  
                                         50
  (k) Notice of the  occurrence,  or of the likelihood of occurrence,  of
  any event which has had or is likely to have a material  adverse effect upon the
  Project or the Partnership,  including, but not limited to, any breach of any of
  the  representations and warranties set forth in Section 9.10 of this Agreement,
  and any inability of the Partnership to meet its cash obligations as they become
  payable, within ten days after the occurrence of such event.
  
           Section 14.4 Late  Reports.  If the General  Partner does not cause the
  Partnership to fulfill its  obligations  under Sections 14.2 and 14.3 within the
  time periods set forth therein, the General Partner shall pay as damages the sum
  of  $100.00  per  week  (plus  interest)  to  the  Limited  Partner  until  such
  obligations  shall have been fulfilled.  Such damages shall be paid forthwith by
  the General  Partner,  and failure to so pay shall constitute a material default
  of the General Partner hereunder.  In addition,  if the General Partner shall so
  fail to pay, the General partner and its Affiliates  shall forthwith cease to be
  entitled to the annual Partnership Management Fee and to the payment of any Cash
  Flow From  Operations  to which the General  Partner may  otherwise  be entitled
  hereunder.  Such payments of the annual Partnership  Administration Fee and Cash
  Flow From Operations shall be suspended, and shall be restored only upon payment
  of such  damages in full,  and any amount of such  damages  not so paid shall be
  deducted against suspended payments of the annual Partnership Administration Fee
  and Cash Flow From Operations otherwise due to the General Partner under Section
  11.1.
  
           Section 14.5 Annual Site Visits. On an annual basis a representative of
  the Limited Partner, at the Limited Partner's expense, will conduct a site visit
  which will include,  in part,  an  examination  of the grounds,  a review of the
  office and tenant files and an interview with the property manager.
  
           Section 14.6 Tax Returns.  The General  Partner shall cause income tax
  returns for the Partnership to be prepared and timely filed with the appropriate
  federal,  state and local taxing  authorities.  The General Partner shall be the
  tax matters partner for purposes of Section 6231(a)(7) of the Code.
  
           Section 14.7 Fiscal Year. The fiscal year of the  Partnership  shall be
  the  calendar  year or such  other  period as may be  approved  by the  Internal
  Revenue Service for federal income tax purposes.
  
           Section 14.8 Banking.  All funds of the Partnership  shall be deposited
  in a separate  bank  account or accounts as shall be  determined  by the General
  Partner in accordance with FmHA rules and regulations. All withdrawals therefrom
  shall be made  upon  checks  signed  by the  General  Partner  or by any  person
  authorized to do so by the General Partner. The General Partner shall provide to
  
                                         51
  any Partner who requests same the name and address of the financial institution,
  the account number and other relevant information regarding any Partnership bank
  account.
  
           Section 14.9 Certificates and Elections.
  
           (a) The General Partner shall file the First Year Certificate within 90
  days  following  the  close of the  taxable  year  during  which  Completion  of
  Construction  occurs and thereafter shall timely file any certificates which the
  Partnership   must  furnish  to  federal  or  state   governmental   authorities
  administering the Tax Credit programs under Section 42 of the Code.
  
           (b)  The  General  Partner  may,  but is not  required  to,  cause  the
  Partnership  to make or revoke the  election  referred  to in Section 754 of the
  Code, as amended, or any similar provisions enacted in lieu thereof.
  
                                     ARTICLE XV
  
                        DISSOLUTION, WINDING UP, TERMINATION
                         AND LIQUIDATION OF THE PARTNERSHIP
  
           Section 15.1  Dissolution  of  Partnership.  The  Partnership  shall be
  dissolved  upon the  expiration of its term or the earlier  occurrence of any of
  the following events:
  
           (a) The retirement, removal, Event of Bankruptcy, dissolution, death or
  insanity  of the General  Partner,  unless (i) at the time there is at least one
  other General Partner who will continue as General  Partner,  or (ii) within 120
  days  after  the  occurrence  of any such  event  all of the  Partners  elect to
  continue the business of the Partnership;
  
           (b)      The Sale of the Project and the receipt in cash of the full 
  amount of the proceeds of such Sale;
  
           (c)      The written election to do so of the Limited Partner; or
  
           (d)      The Partnership becomes subject to an Event of Bankruptcy.
  
           Notwithstanding   the  foregoing,   however,  in  no  event  shall  the
  Partnership  terminate  prior to the expiration of its term if such  termination
  would result in a violation of the FmHA Loan Agreement, the FmHA Interest Credit
  Agreement or any other agreement with or rule or regulation of FmHA to which the
  Partnership is subject.
  
                                         52
  Section 15.2 Return of Capital Contribution upon Dissolution. Except as
  provided  in  Sections  7.3 and  7.4 of  this  Agreement,  which  provide  for a
  reduction or refund of the Limited Partner's Capital  Contribution under certain
  circumstances,  and which shall represent the personal obligation of the General
  Partner,  as  well  as the  obligation  of the  Partnership,  each  holder  of a
  Partnership  interest shall look solely to the assets of the Partnership for all
  Distributions  with  respect  to the  Partnership  (including  the return of its
  Capital  Contribution)  and shall have no recourse therefor (upon dissolution or
  otherwise) against the General Partner or any Limited Partner.  No Partner shall
  have any right to demand or receive  property other than money upon  dissolution
  and termination of the Partnership.
  
           Section  15.3  Distributions  of  Assets.  Upon  a  dissolution  of the
  Partnership,  the  General  Partner  (or,  if there is no General  Partner  then
  remaining,  such other Person(s) designated as the liquidator of the Partnership
  by the  Limited  Partner or by the court in a judicial  dissolution)  shall take
  full account of the  Partnership  assets and liabilities and shall liquidate the
  assets as promptly as is consistent with obtaining the fair value thereof.
  
           (a) Upon  dissolution  and  termination,  after payment of, or adequate
  provision for, the debts and obligations of the Partnership  pursuant to Section
  11.2(a) through and including  11.2(d),  the remaining assets of the Partnership
  (or  the  proceeds  of  sales  or  other  dispositions  in  liquidation  of  the
  Partnership  assets,  as may be  determined  by the  General  Partner  or  other
  liquidator) shall be distributed to the Partners in accordance with the positive
  balances in their Capital  Accounts.  In order to make a final  determination of
  the Capital Account of each Partner:
  
                    (1)      the allocations  pursuant to Section 11.2(e),  
  Section 11.2(f) and Section 11.2(g) shall be made, but not distributed; and
  
                    (2)      the Income and Losses of the  Partnership  upon  
  Liquidation or dissolution and winding up shall then be allocated among the 
  Partners as set forth in Section 10.2.
  
           (b) In the event that a General  Partner  has a deficit  balance in its
  Capital Account following the Liquidation of the Partnership or its interest, as
  determined  after taking into account all Capital  Account  adjustments  for the
  Partnership  taxable year in which such Liquidation occurs, such General Partner
  shall pay to the  Partnership  the  amount  necessary  to restore  such  deficit
  balance   to   zero   in   compliance   with   Treasury    Regulation    Section
  1.704-1(b)(2)(ii)(b)(3).
  
                                         53
  (1) The deficit  reduction amount shall be paid by the General
  Partner by the end of such taxable year (or, if later,  within 90 days after the
  date of Liquidation) and shall, upon Liquidation of the Partnership,  be paid to
  creditors of the Partnership or distributed to other Partners in accordance with
  their positive Capital Account balances.
  
           (c)      With respect to assets distributed in kind to the Partners in 
  Liquidation or otherwise:
  
                    (1) unrealized  appreciation or unrealized depreciation in the
  values of such  assets  shall be deemed to be Income and Losses  realized by the
  Partnership  immediately prior to the Liquidation or other  Distribution  event;
  and
  
                    (2) such Income and Losses  shall be allocated to the Partners
  in accordance with Section 10.2 hereof, and any property so distributed shall be
  treated as a Distribution  of an amount in cash equal to the excess of such Fair
  Market Value over the outstanding  principal  balance of and accrued interest on
  any debt by which the property is encumbered.
  
           (d) For the purposes of Section 15.3(c),  "unrealized  appreciation" or
  "unrealized  depreciation"  shall mean the  difference  between  the Fair Market
  Value  of such  assets,  taking  into  account  the  Fair  Market  Value  of the
  associated financing but subject to Section 7701(g) of the Code, and the asset's
  Gross  Asset  Value.  Section  15.3(c) is merely  intended to provide a rule for
  allocating  unrealized Income and Losses upon Liquidation or other  Distribution
  event,  and nothing  contained in Section 15.3(c) or elsewhere in this Agreement
  is  intended  to treat or cause  such  Distributions  to be treated as sales for
  value.  The  Fair  Market  Value  of  such  assets  shall  be  determined  by an
  independent appraiser to be selected by the General Partner.
  
           Section 15.4 Deferral of Liquidation. If at the time of Liquidation the
  General  Partner or other  liquidator  shall determine that an immediate sale of
  part or all of the  Partnership  assets could cause undue loss to the  Partners,
  the liquidator may, in order to avoid loss,  either defer Liquidation and retain
  all or a portion of the assets or  distribute  all or a portion of the assets to
  the Partners in kind. In the event that the liquidator elects to distribute such
  assets in kind,  the assets shall first be assigned a value (by  appraisal by an
  independent appraiser) and the unrealized  appreciation or depreciation in value
  of the assets shall be allocated to the Partners,  Capital Accounts,  as if such
  assets had been sold, in the matter  described in Section 10.2,  and such assets
  shall then be  distributed to the Partners as provided  herein.  In applying the
  
                                         54
  preceding  sentence,  the  Project  shall not be  assigned a value less than the
  unamortized principal balance of any loan secured thereby.
  
           Section  15.5  Liquidation  Statement.  Each of the  Partners  shall be
  furnished  with a  statement  prepared  or caused to be  prepared by the General
  Partner or other liquidator, which shall set forth the assets and liabilities of
  the Partnership as of the date of complete Liquidation. Upon compliance with the
  distribution  plan as outlined in Sections  15.3 and 15.4,  the Limited  Partner
  shall cease to be such and the General  Partner shall execute,  acknowledge  and
  cause to be filed those certificates referenced in Section 15.6.
  
           Section  15.6  Certificates  of  Dissolution;  Certificate  of  
  Cancellation  of  Certificate  of Limited Partnership.
  
           (a) Upon the dissolution of the Partnership,  the General Partner shall
  cause to be filed in the office of, and on a form prescribed by the Secretary of
  State of the State, a certificate of dissolution. The certificate of dissolution
  shall set forth the Partnership's name, the Secretary of State's file number for
  the Partnership, the event causing the Partnership's dissolution and the date of
  the dissolution.
  
           (b) Upon the completion of the winding up of the Partnership's affairs,
  the  General  Partner  shall  cause to be filed in the  office of, and on a form
  prescribed   by,  the  Secretary  of  State  of  the  State,  a  certificate  of
  cancellation  of the  Certificate  of Limited  Partnership.  The  certificate of
  cancellation  of the  Certificate  of  Limited  Partnership  shall set forth the
  Partnership's  name,  the Secretary of State's file number for the  Partnership,
  and any other  information  which the  General  Partner  determines  to  include
  therein.
  
                                     ARTICLE XVI
  
                                     AMENDMENTS
  
           Subject to FmHA's consent and approval, if required under the FmHA Loan
  Agreement or applicable FmHA  regulations,  this Agreement may be amended at any
  time by the Limited  Partner;  provided,  however,  that this  Agreement  may be
  amended to add a substitute  Limited Partner only as set forth in Article XII of
  this Agreement; and provided,  further, that, this Agreement may be amended from
  time to time by the General Partner, without the consent of the Limited Partner,
  to add to the  representations,  duties or obligations of the General Partner or
  its Affiliates or surrender any right or power granted to the General Partner or
  Affiliates  herein which may be inconsistent  with any other  provision  herein.
  Notwithstanding  the foregoing,  no amendment  shall change the Partnership to a
  
                                         55
  general partnership; extend the term of the Partnership beyond the date provided
  for in this  Agreement;  modify the limited  liability  of the Limited  Partner;
  allow the Limited Partner to take control of the  Partnership's  business within
  the  meaning  of the Act;  reduce  or defer  the  realization  of any  Partner's
  interest  in  Income,  Losses,  Tax  Credits,   Distributions,  or  compensation
  hereunder, or increase any Partner's obligations hereunder,  without the consent
  of the Partner so affected; or change the provisions of this Article XVI.
  
                                    ARTICLE XVII
  
                                    MISCELLANEOUS
  
           Section 17.1 Voting Rights.
  
           (a) The  Limited  Partner  shall have no right to vote upon any matters
  affecting the Partnership, except as provided in this Agreement. Notwithstanding
  the foregoing,  the Limited Partner may,  without the concurrence of the General
  Partner:
  
                    (1)      Approve, but not initiate, the Sale or Refinancing of
  the Project;
  
                    (2)      Remove the General  Partner for cause  pursuant to 
  this Agreement and elect a substitute General Partner;
  
                    (3)      Approve, but not initiate, the dissolution of the 
  Partnership; or
  
                    (4)      Subject to the provisions of Article XVI hereof, 
  amend this Agreement.
  
           (b) On any  matter  where the  Limited  Partner  has the right to vote,
  votes may only be cast at a duly called  meeting of the  Partnership  or through
  written action without a meeting.
  
           Section 17.2 Meeting of Partnership. Meetings of the Partnership may be
  called either: at any time by the General Partner; or upon the General Partner's
  receipt of a written  request from the Limited Partner setting forth the purpose
  of such meeting.  Within ten days after receipt of the Limited Partner's written
  request for a meeting,  the General  Partner  shall  provide all  Partners  with
  written notice of the meeting (which shall be at the principal place of business
  of the  Partnership or such other location  referenced in the notice) to be held
  not less  than 15 days nor  more  than 30 days  after  receipt  of such  written
  request from the Limited Partner,  which notice shall specify the time and place
  of such  meeting  and the purpose or purposes  thereof.  If the General  Partner
  fails to provide the written notice of the meeting within ten days after receipt
  of the Limited Partner's request to hold a meeting, then the Limited Partner may
  
                                         56
  provide the  written  notice of the meeting to all the  Partners,  which  notice
  shall  specify  the time and place of such  meeting  and the purpose or purposes
  thereof.  All meetings and actions of the Limited  Partner  shall be governed in
  all  respects,  including  matters  relating  to  notice,  quorum,  adjournment,
  proxies,  record  dates  and  actions  without  a  meeting,  by  the  applicable
  provisions of the Act, as shall be amended from time to time.
  
           Section 17.3 Notices.  Any notice given  pursuant to this Agreement may
  be served  personally  on the Partner to be  notified,  or may be mailed,  first
  class postage prepaid,  to the following address,  or to such other address as a
  party may from time to time designate in writing:
  
           To the General Partner:    DONALD W. SOWELL
                                      509 Ellen Powell Drive
                                      Prairie View, TX  77446
  
           To the Limited Partner:    WNC HOUSING TAX CREDIT FUND
                                      V, L.P., SERIES 4
                                      3158 Redhill Ave., Suite 120
                                      Costa Mesa, CA   92626-3416
  
           Section 17.4  Successors  and Assigns.  All the terms and conditions of
  this Agreement shall be binding upon the successors and assigns of the Partners,
  but shall not inure to the benefit of the  successors or assigns of the Partners
  except as otherwise expressly provided in this Agreement.
  
           Section 17.5 FmHA Regulations.  Notwithstanding any other provisions of
  this Agreement, the following will take precedence:
  
           (a) The Partnership is authorized to execute any documents  required by
  FmHA in connection  with the FmHA Loan  Agreement.  The General  Partner  hereby
  covenants to act in accordance with the Project Documents.  Any incoming General
  Partner shall, as a condition of receiving a Partnership  interest,  agree to be
  bound by the Project  Documents,  and all other documents executed in connection
  with the FmHA Loan  Agreement  to the same  extent  and on the same terms as any
  other General Partner. Upon any dissolution, no title or right to possession and
  control of the Project, and no right to collect the rents therefrom,  shall pass
  to any Person who is not bound in a manner  consistent  with  Section 515 of the
  Housing Act and the rules and regulations thereunder.
  
                                         57
  (b) In the event that any provision of this  Agreement in any way tends
  to contradict, modify or in any way change the terms of the Project Documents or
  any other agreement  related to the Project entered into, or to be entered into,
  by or on behalf of the Partnership with FmHA, the terms of the Project Documents
  or such other agreements with FmHA shall prevail and govern.
  
           (c)  Any  amendment  or  revision  of  this  Agreement,  transfer  of a
  Partnership  interest or other action requiring approval shall be subject to the
  written  approval of FmHA,  if such  approval  is  required,  and any  amendment
  without the prior written  approval of FmHA shall be subject to later  amendment
  to  comply  with the  requirements  of  FmHA;  provided,  however,  that no such
  approval of FmHA shall be required for any amendment of this  Agreement the sole
  purpose of which is to provide for the admission of  additional  or  substituted
  limited  partners so long as any such additional or substituted  limited partner
  so admitted shall own in the aggregate less than a 10% limited partner  interest
  in the Partnership.
  
           (d) Any  conveyance  or  transfer of title to all or any portion of the
  Project  required or  permitted  under this  Agreement  shall in all respects be
  subject to all  conditions,  approvals and other  requirements of FmHA rules and
  regulations applicable thereto.
  
           (e) The General Partner will at all times maintain the FmHA required  
  Financial  Interest in the Partnership.
  
           The foregoing paragraphs (a), (b), (c), (d), and (e) will automatically
  become void and of no further force and effect with respect to FmHA at such time
  as the Mortgage is no longer being provided by FmHA.
  
           Section 17.6 Recording of Certificate  of Limited  Partnership.  If the
  General Partner should deem it advisable to do so, the Partnership  shall record
  in the office of the County  Recorder of the county in which the principal place
  of business of the Partnership is located a certified copy of the Certificate of
  Limited  Partnership,  or any  amendment  thereto,  after  such  Certificate  or
  amendment has been filed with the Secretary of State of the State.
  
           Section 17.7 Amendment of Certificate of Limited Partnership.
  
           (a) The General  Partner shall cause to be filed,  within 30 days after
  the happening of any of the following events, an amendment to the Certificate of
  Limited Partnership reflecting the occurrence thereof:
  
                    (1)      A change in the name of the Partnership.
  
                                         58
  (2)      A change in the street address of the Partnership's 
  principal executive office.
  
                    (3) A change in the address,  or the withdrawal,  of a General
  Partner, or a change in the address of the agent for service of process,  unless
  a corporate  agent is  designated,  or appointment of a new agent for service of
  process.
  
                    (4)      The admission of a General Partner and that Partner's
  address.
  
                    (5) The  discovery  by the  General  Partner  of any  false or
  erroneous  material  statement  contained in the  Certificate  or any  amendment
  thereto.
  
           (b) The  Certificate  of  Limited  Partnership  may also be  amended in
  conformity with this Agreement at any time in any other respect that the General
  Partner determines.
  
           (c)  The  General  Partner  shall  cause  the  Certificate  of  Limited
  Partnership to be amended, when required or permitted as aforesaid,  by filing a
  certificate of amendment  thereto in the office of, and on a form prescribed by,
  the  Secretary of State of the State.  The  certificate  of amendment  shall set
  forth the  Partnership's  name,  the  Secretary  of State's  file number for the
  Partnership and the text of the amendment.
  
           Section 17.8  Counterparts.  This  Agreement  may be executed in one or
  more  counterparts,  each of  which  shall  be  deemed  an  original,  and  said
  counterparts  shall  constitute  but one  and  the  same  instrument  which  may
  sufficiently be evidenced by one counterpart.
  
           Section  17.9  Captions.  Captions  to and  headings  of the  Articles,
  Sections and  subsections of this Agreement are solely for the  conveniences  of
  the  parties,  are not a part of this  Agreement,  and shall not be used for the
  interpretation  or  determination  of the  validity  of  this  Agreement  or any
  provision hereof.
  
           Section 17.10 Certain Provisions.  If the operation of any provision of
  this  Agreement  would  contravene  the  provisions of applicable  law, or would
  result in the  imposition  of general  liability  on any Limited  Partner,  such
  provisions shall be void and ineffectual.
  
           Section 17.11 Saving Clause. If any provision of this Agreement, or the
  application  of such  provision  to any  Person or  circumstance,  shall be held
  invalid,  the remainder of this Agreement,  or the application of such provision
  
                                         59
  to Persons  or  circumstances  other than those as to which it is held  invalid,
  shall not be affected thereby.
  
           Section  17.12  Number and  Gender.  All  pronouns  and any  variations
  thereof shall be deemed to refer to the masculine, feminine, neuter, singular or
  plural as the identity of the Person or Persons may require.
  
           Section 17.13 Entire Agreement.  This Agreement  constitutes the entire
  understanding  between the parties with respect to the subject matter hereof and
  all prior  understandings and agreements  between the parties,  written or oral,
  respecting this transaction are merged in this Agreement.
  
           Section 17.14  Governing  Law. This  Agreement  and its  application  
  shall be governed by the laws of the State.
  
           Section  17.15  Attorney's  Fees.  If a suit or action is instituted in
  connection  with an  alleged  breach of any  provision  of this  Agreement,  the
  prevailing party shall be entitled to recover,  in addition to costs,  such sums
  as the court may adjudge  reasonable as attorney's  fees,  including fees on any
  appeal.
  
           Section  17.16  Receipt  of FmHA  Correspondence.  By their  signatures
  below,  the Partners  agree that the FmHA and the General  Partner shall send to
  the  Limited  Partner a copy of any  correspondence  relative  to the  Project's
  noncompliance with the Mortgage Note and FmHA rules and regulations, relative to
  the  acceleration  of the Mortgage Note and relative to the  disposition  of the
  Project.
  
           Section 17.17 Security  Interest and Right of Set-Off.  As security for
  the  performance of the respective  obligations to which it may be subject under
  this Agreement,  the  Partnership  shall have (and each Partner hereby grants to
  the Partnership) a security interest in all funds  distributable to said Partner
  to the extent of the amount of such obligation.  Each Partner,  by the execution
  of this  Agreement,  irrevocably  constitutes  and  appoints  each of the  other
  Partners,  with full power of substitution in the premises,  his true and lawful
  attorney-in-fact  with full power and authority in his name,  place and stead to
  execute,  acknowledge,  deliver,  swear to,  file and record at the  appropriate
  public  offices  all  financing  statements,  continuation  statements  or other
  documents and amendments  thereto which such other Partner deems  appropriate to
  perfect or continue the  perfection  of the  aforesaid  security  interest.  The
  appointment of each such attorney-in-fact  shall be deemed to be a power coupled
  with an interest,  in  recognition  of the fact that each of the Partners  under
  this  Agreement  will be relying upon its power to act as  contemplated  by this
  
                                         60
  Agreement in any such filing, and shall survive and shall not be affected by the
  subsequent  bankruptcy,   death,   adjudication  of  incompetence  or  insanity,
  disability,  incapacity or dissolution of any Person hereby giving the power nor
  by  the  transfer  or  assignment  of all or any  part  of the  interest  in the
  Partnership of any such Person.
  
           IN WITNESS  WHEREOF,  this  Amended and  Restated  Agreement of Limited
  Partnership of D. HILLTOP APARTMENTS, LTD., a Texas limited partnership, is made
  and entered into as of the 14th day of April 1997.
  
                                      GENERAL PARTNER
  
                                      /s/ Donald W. Sowell
                                      DONALD W. SOWELL
  
                                      WITHDRAWING ORIGINAL LIMITED PARTNER
  
                                      /s/ Beatrice W. Sowell
                                      BEATRICE W. SOWELL
  
                                      LIMITED PARTNER
  
                                      WNC HOUSING TAX CREDIT FUND V,
                                      L.P., SERIES 4
                                      a California limited partnership
  
                                              By:      WNC & ASSOCIATES, INC.
                                                       General Partner
  
                                                       By: /s/ John B. Lester, Jr.
                                                           John B. Lester, Jr.
                                                           President
  
                                         61
  EXHIBIT A TO PARTNERSHIP AGREEMENT
  
                                  LEGAL DESCRIPTION
  
       All that certain tract or parcel of land, a part of the S.G.  Wells Survey,
  Abstract  No. 65,  Anderson  County,  Texas,  also being a part of that  certain
  called  80.54  acre  tract  conveyed  to  James  R.  Paxton  et al by  Palestine
  Industrial Foundation, Inc., August 2, 1977, recorded in Volume 866, Page 397 of
  the Deed Records of Anderson County,  Texas, and being more completely described
  as follows, to wit:
  
       BEGINNING at a 1/2" Iron Rod for corner at the Northeast corner of Lot 1 of
  Bill Richbourg's  Addition as Recorded in Envelope No. 159-A of the Plat Records
  of Anderson  County,  Texas, in the West  Right-of-Way of State Highway Loop No.
  256.
  
       THENCE S 86-9-41 W with the North  line of Lot 1 and 2 at Bill  Richbourg's
  Addition and the North line of Academy Apartments a distance of 752.67 feet to a
  1/2" Iron Rod for corner;
  
       THENCE N 3-50-19 W a distance of 260.00 feet to a 1/2" Iron Rod for corner;
  
       THENCE N 86-9-41 E a distance of 289.34 feet to a 1/2" Iron Rod for corner;
  
       THENCE S 28-13-35 E a distance of 345.46 feet to a 1/2" Iron Rod for corner
  in the West R.O.W. line of State Highway Loop No. 256;
  
       THENCE S 28-13-35 E with the West R.O.W. line of State Highway Loop No. 256
  a distance of 65.88 feet to the place of  beginning,  containing  2.554 acres of
  land.
  
                                        A-1
  EXHIBIT B TO PARTNERSHIP AGREEMENT
  
                                FORM OF LEGAL OPINION
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4 
  WNC & Associates, Inc.
  3158 Redhill Avenue, Suite 120
  Costa Mesa, California  92626
  
  RE:      D. HILLTOP APARTMENTS, LTD.
  
  Ladies and Gentlemen:
  
  You have  requested  our opinion with respect to certain  matters in  connection
  with the  investment  by WNC  HOUSING  TAX  CREDIT  FUND V,  L.P.,  SERIES  4, a
  California limited partnership (the "Limited Partner") in D. HILLTOP APARTMENTS,
  LTD. (the  "Partnership"),  a Texas limited  partnership formed to own, develop,
  (construct/rehabilitate) finance and operate an apartment complex for low-income
  persons (the "Apartment  Complex") in Palestine,  Anderson  County,  Texas.  The
  general partner(s) of the Partnership (is/are) DONALD W.
  SOWELL (the "General Partner(s)").
  
  In rendering  the opinions  stated  below,  we have examined and relied upon the
  following:
  
           (i)               [Certificate of Limited Partnership];
  
           (ii)              [Agreement of Limited Partnership] (the "Partnership 
                             Agreement");
  
           (iii)             A  preliminary  reservation  letter from [State
                             Allocating   Agency]  (the  "State   Agency")   dated
                             _________,      199___     conditionally     awarding
                             $_______________  in Federal tax credits annually for
                             each of ten years and  $_______________ in California
                             tax credits  annually  for each of four years for the
                             Apartment Complex; and
  
           (iv)              Such other documents, records and instruments as
                             we have  deemed  necessary  in order to  enable us to
                             render the opinions referred to in this letter.
  
                                        B-1
  For purposes of rendering  the opinions  stated below we have assumed  that,  in
  those  cases in which we have not been  involved  directly  in the  preparation,
  execution or the filing of a document,  that (a) the document  reviewed by us is
  an original document, or a true and accurate copy of the original document,  and
  has not been subsequently  amended, (b) the signatures on each original document
  are genuine,  and (c) each party who executed the document had proper  authority
  and capacity.
  
  Based on the foregoing we are of the opinion that:
  
           (a)  ________________________,  one  of  the  General  Partners,  is  a
  [corporate/partnership]  duly formed and validly  existing under the laws of the
  State of  _____________________  and has full power and  authority to enter into
  and    perform    its    obligations    under   the    Partnership    Agreement.
  _____________________,    one   of   the   other   General   Partners,    is   a
  [corporation/partnership] duly formed and validly existing under the laws of the
  State of  __________________  and has full power and authority to enter into and
  perform its obligations under the Partnership Agreement.
  
           (b) The  Partnership  is and after the  [filing  or  execution]  of the
  Amended  [Partnership  Agreement]  [Certificate]  will  continue to be a limited
  partnership  duly  formed and  validly  existing  under the laws of the State of
  Texas.
  
           (c) The Partnership is and after the filing of the Amended [Partnership
  Agreement]  [Certificate] will continue to be validly existing under and subject
  to  the  laws  of  Texas  with  full  power  and  authority  to  own,   develop,
  [construct/rehabilitate],  finance  and  operate  the  Apartment  Complex and to
  otherwise conduct business under the Partnership Agreement.
  
           (d) Execution of the  Partnership  Agreement by the General  Partner(s)
  has been duly and validly  authorized by or on behalf of the General  Partner(s)
  and,  having been  executed and  delivered  in  accordance  with its terms,  the
  Partnership Agreement constitutes the valid and binding agreement of the General
  Partner(s), enforceable in accordance with its terms.
  
           (e) The execution and delivery of the Amended and Restated Agreement of
  Limited  Partnership by the General Partners does not conflict with and will not
  result  in a  breach  of any of  the  terms,  provisions  or  conditions  of any
  agreement or instrument known to counsel to which any of the General Partners or
  the  Partnership is a party or by which any of them may be bound,  or any order,
  rule,  or  regulation  to be  applicable  to any of such parties of any court or
  
                                        B-2
  governmental body or administrative  agency having jurisdiction over any of such
  parties or over the property.
  
           (f) To the best of counsel's knowledge,  after due inquiry, there is no
  litigation  or  governmental   proceeding  pending  or  threatened  against,  or
  involving  the  Project,  the  Partnership  or any General  Partner  which would
  materially  adversely affect the condition  (financial or otherwise) or business
  of the Project,  the Partnership or any of the Partners of the Partnership prior
  to or following  execution  and filing of the Amended and Restated  Agreement of
  Limited Partnership, or the Limited Partner or the Special Limited Partner.
  
           (g) Upon  the  execution  and  delivery  of the  Amended  and  Restated
  Agreement  of Limited  Partnership  providing  for the  admission of the Limited
  Partner as substitute  limited partner [and the filing] the Limited Partner will
  be the  limited  partners  of the  Partnership  entitled to all of the rights of
  limited   partners   under  the  Amended  and  Restated   Agreement  of  Limited
  Partnership.  Except as  described  in the Amended  and  Restated  Agreement  of
  Limited  Partnership,  no person is a partner  of or has any legal or  equitable
  interest  in the  Partnership,  and all  former  partners  of record or known to
  counsel have validly withdrawn from the Partnership and have released any claims
  against the Partnership arising out of their participation as partners therein.
  
           (h) Liability of the Limited Partner for obligations of the Partnership
  is limited to the amount of the Limited Partner's capital contributions required
  by the Partnership Agreement.
  
           (i) Neither the General  Partner(s) of the  Partnership nor the Limited
  Partner  will have any  liability  for the Mortgage  Note or the  Mortgage  Loan
  represented  thereby (as those  terms are  defined in the  Amended and  Restated
  Agreement of Limited Partnership), and the lender of the Mortgage Loan will look
  only to its security in the Project for repayment of the Mortgage Loan.
  
           (j)      The Partnership owns a fee simple interest in the Project.
  
           (k) To the best of our actual knowledge and belief,  after due inquiry,
  the Partnership has obtained all consents, permissions,  licenses, approvals, or
  orders required by all applicable  governmental  or regulatory  agencies for the
  development, [construction/rehabilitation] and operation of the Project, and the
  Project  conforms to all applicable  Federal,  state and local land use, zoning,
  
                                        B-3
  health, building and safety laws, ordinances, rules and regulations.
  
           (l) The Project has obtained a  preliminary  reservation  of low income
  housing tax credits ("LIHTC") from the State Agency. The final allocation of the
  LIHTC and ultimately  eligibility  of the Project for such final  allocation are
  subject to a series of requirements  which must be met, performed or achieved at
  various  times  prior to and after  such  final  allocation.  Assuming  all such
  requirements  are met,  performed  or achieved at the time or times  provided by
  applicable laws and regulations, the Project will qualify for LIHTC.
  
  All of the  opinions  set  forth  above are  qualified  to the  extent  that the
  validity  of any  provision  of any  agreement  may be subject to or affected by
  applicable bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
  affecting the rights of creditors generally. We do not express any opinion as to
  the  availability  of any equitable or specific remedy upon any breach of any of
  the covenants,  warranties or other  provisions  contained in any agreement.  We
  have not examined,  and we express no opinion with respect to the  applicability
  of, or liability under, any Federal, state or local law, ordinance or regulation
  governing or  pertaining  to  environmental  matters,  hazardous  wastes,  toxic
  substances or the like.
  
  We  express no opinion as to any  matter  except  those set forth  above.  These
  opinions are rendered for use by the Limited  Partner and its legal counsel.  We
  understand  that WNC HOUSING TAX CREDIT FUND V, L.P.,  SERIES 4's legal  counsel
  will rely on this opinion in connection  with federal  income tax opinions to be
  rendered by that firm.  This  opinion may not be  delivered to or relied upon by
  any other person or entity without our express written consent.
  
  Sincerely,
  
  --------------------
  
                                        B-4
  EXHIBIT C TO THE PARTNERSHIP AGREEMENT
  
                             CERTIFICATION AND AGREEMENT
  
           CERTIFICATION  AND  AGREEMENT  made as of the date written  below by D.
  HILLTOP  APARTMENTS,  LTD., a Texas  limited  partnership  (the  "Partnership");
  DONALD W. SOWELL (the "General Partner");  and BEATRICE W. SOWELL (the "Original
  Limited Partner") for the benefit of WNC HOUSING TAX CREDIT FUND V, L.P., SERIES
  4, a California limited  partnership (the "Investment  Partnership"),  and WNC &
  ASSOCIATES, INC. ("WNC").
  
           WHEREAS, the Partnership  proposes to admit the Investment  Partnership
  as a limited  partner thereof  pursuant to an Amended and Restated  Agreement of
  Limited  Partnership  of  the  Partnership  (the  "Partnership  Agreement"),  in
  accordance with which the Investment  Partnership will make substantial  capital
  contributions to the Partnership; and
  
           WHEREAS,  the Investment  Partnership  and WNC have relied upon certain
  information  and  representations  described  herein in evaluating the merits of
  investment by the Investment Partnership in the Partnership;
  
           NOW, THEREFORE,  to induce the Investment Partnership to enter into the
  Partnership  Agreement and become a limited partner of the Partnership,  and for
  $1.00 and other good and  valuable  consideration,  the receipt and  adequacy of
  which are hereby  acknowledged,  the  Partnership,  the General  Partner and the
  Original  Limited  Partner  hereby  agree  as  follows  for the  benefit  of the
  Investment Partnership and WNC.
  
           1.       Representations,  Warranties  and  Covenants of the  
                    Partnership,  the General Partners and the Original Limited 
                    Partners
  
           The  Partnership,  the General Partner and the Original Limited Partner
  jointly  and  severally  represent,   warrant  and  certify  to  the  Investment
  Partnership  and WNC  that,  with  respect  to the  Partnership,  as of the date
  hereof:
  
                    1.1 The  Partnership is duly organized and in good standing as
  a limited  partnership  pursuant to the laws of the state of its formation  with
  full power and authority to own its apartment complex (the "Apartment  Complex")
  and conduct its business; the Partnership,  the General Partner and the Original
  Limited  Partner  have the power and  authority  to enter into and perform  this
  Certification  and Agreement;  the execution and delivery of this  Certification
  
                                        C-1
  and Agreement by the  Partnership,  the General Partner and the Original Limited
  Partner  have been duly and validly  authorized  by all  necessary  action;  the
  execution and delivery of this  Certification and Agreement,  the fulfillment of
  its terms and consummation of the transactions contemplated hereunder do not and
  will not conflict  with or result in a violation,  breach or  termination  of or
  constitute a default  under (or would not result in such a conflict,  violation,
  breach,  termination  or default with the giving of notice or passage of time or
  both) any other  agreement,  indenture or instrument by which the Partnership or
  any General Partner or Original Limited Partner is bound or any law, regulation,
  judgment,  decree or order  applicable to the Partnership or any General Partner
  or  Original  Limited  Partner  or  any of  their  respective  properties;  this
  Certification  and Agreement  constitutes the valid and binding agreement of the
  Partnership,  the General Partner and the Original Limited Partner,  enforceable
  against each of them in accordance with its terms.
  
                    1.2  The  General  Partner  has  delivered  to the  Investment
  Partnership,  WNC or their affiliates all documents and information  which would
  be  material  to a  prudent  investor  in  deciding  whether  to  invest  in the
  Partnership. All factual information provided to the Investment Partnership, WNC
  or their affiliates either in writing or orally, did not, at the time given, and
  does not, on the date hereof, contain any untrue statement of a material fact or
  omit to state a material fact required to be stated therein or necessary to make
  the statements therein not misleading in light of the circumstances  under which
  they are made.
  
                    1.3 Each of the representations and warranties contained in  
  the  Partnership Agreement is true and correct as of the date hereof.
  
                    1.4 Each of the  covenants and  agreements of the  Partnership
  and the General  Partner  contained in the  Partnership  Agreement has been duly
  performed  to the extent  that  performance  of any  covenant  or  agreement  is
  required on or prior to the date hereof.
  
                    1.5 All conditions to admission of the Investment  Partnership
  as  the  investment  limited  partner  of  the  Partnership   contained  in  the
  Partnership Agreement have been satisfied.
  
                    1.6 No  default  has  occurred  and is  continuing  under  the
  Partnership  Agreement or any of the Project  Documents (as such term is defined
  in the Partnership Agreement) for the Partnership.
  
                    1.7 The Partnership will allocate to the Limited Partner the 
  Projected  Annual Tax Credits.
  
                                        C-2
  1.8 The General  Partner agrees to take all actions  necessary
  to claim the Projected Tax Credit, including,  without limitation, the filing of
  Form(s) 8609 with the Internal Revenue Service.
  
                    1.9 No person or entity  other than the  Partnership  holds 
  any equity  interest in the Apartment Complex.
  
                    1.10 The  Partnership has the sole  responsibility  to pay all
  maintenance  and operating  costs,  including all taxes levied and all insurance
  costs, attributable to the Apartment Complex.
  
                    1.11 The Partnership,  except to the extent it is protected by
  insurance and  excluding any risk borne by lenders,  bears the sole risk of loss
  if the  Apartment  Complex is destroyed or condemned or there is a diminution in
  the value of the Apartment Complex.
  
                    1.12 No person or entity except the  Partnership has the right
  to any proceeds, after payment of all indebtedness,  from the sale, refinancing,
  or leasing of the Apartment Complex.
  
                    1.13 No  General  Partner  is  related  in any  manner  to the
  Investment  Partnership,  nor is any General  Partner  acting as an agent of the
  Investment Partnership.
  
           2.       Miscellaneous
  
                    2.1 This  Certification  and  Agreement is made solely for the
  benefit of the Partnership,  the General  Partner,  the Original Limited Partner
  and WNC, and the  Investment  Partnership  and their  respective  successors and
  assignees,  and no other  person  shall  acquire  or have any right  under or by
  virtue of this Agreement.
  
                    2.2  This  Certification  and  Agreement  may be  executed  in
  several  counterparts,  each of which shall be deemed to be an original,  all of
  which together shall constitute one and the same instrument.
  
                                        C-3
  2.3   Capitalized   terms   used  but  not   defined  in  this
  Certification Agreement shall have the meanings given to them in the Partnership
  Agreement.
  
           IN WITNESS  WHEREOF,  this  Certificate  and  Agreement  is made and 
  entered  into as of the ______ day of April, 1997.
  
  PARTNERSHIP
  
  D. HILLTOP APARTMENTS, LTD.
  
  By:      _______________________
           DONALD W. SOWELL,
           General Partner
  
  GENERAL PARTNER
  
  By:      _______________________
           DONALD W. SOWELL
  
  ORIGINAL LIMITED PARTNER
  
  By:      _______________________
           BEATRICE W. SOWELL
  
                                        C-4
  EXHIBIT D TO THE PARTNERSHIP AGREEMENT
  
                            GENERAL PARTNER CERTIFICATION
  
           This General Partner  Certification  is being issued to WNC HOUSING TAX
  CREDIT FUND V, L.P., SERIES 4 ("WNC") by DONALD W. SOWELL, General Partner of D.
  HILLTOP  APARTMENTS,  LTD.,  a  Texas  limited  partnership ("Partnership") in
  accordance  with  Section 7.2 of the Amended and  Restated  Agreement of Limited
  Partnership of the Partnership.
  
           WHEREAS,  WNC is  scheduled  to  make  a  Capital  Contribution  to the
  Partnership,  however, the Partnership Agreement requires the General Partner of
  the Partnership issue this Certification prior to WNC's payment; and
  
           WHEREAS,  WNC shall rely on this  Certification  in evaluating  the 
  continued  merits of its investment in the Partnership;
  
           NOW,   THEREFORE,   to  induce  WNC  to  make  its  scheduled   Capital
  Contribution to the Partnership,  the General Partner represents and warrants to
  WNC that the following are true and correct as of the date written below:
  
           (a) The  Partnership is a duly organized  limited  partnership  validly
  existing  under  the  laws  of the  State  and  has  complied  with  all  filing
  requirements  necessary  for the  protection  of the  limited  liability  of its
  Limited Partners.
  
           (b) This  Partnership  Agreement and the Project  Documents are in full
  force and effect and  neither  the  Partnership  nor the  General  Partner is in
  material  breach  or  violation  of  any  provisions  thereof  or  of  any  FmHA
  regulation.
  
           (c) Existing  improvements,  if any, on the Project have been completed
  substantially in conformity with the Project Documents, and the Project is being
  operated in  accordance  with  standards  and  procedures  which are prudent and
  customary for the operation of properties similar to the Project.
  
           (d) Additional  construction on the Project, if any, shall be completed
  substantially   in  conformity   with  the  Project   Documents  and  any  other
  requirements necessary to obtain Completion of Construction.
  
           (e) The Project is being  operated in  accordance  with  standards  and
  procedures  which are prudent and  customary  for the  operation  of  properties
  similar to the Project.
  
                                        D-1
  (f) No Partner has any personal liability with respect to or has 
  personally  guaranteed the payment of the permanent Mortgage.
  
           (g) The Partnership is in material compliance with all construction and
  use codes  applicable  to the  Project  and is not in  violation  of any zoning,
  environmental or similar regulations applicable to the Project.
  
           (h) All  appropriate  public  utilities,  including  sanitary and storm
  sewers,  water,  gas  and  electricity,  are  currently  available  and  will be
  operating  properly for all units in the Project at the time of first  occupancy
  and throughout the term of the Partnership.
  
           (i) The Project has obtained,  or will obtain before Permanent Mortgage
  Commencement,  and  will  maintain  throughout  the  term  of  this  Partnership
  Insurance written by an Insurance Company.
  
           (j) The  Partnership  owns  the fee  simple  interest  in the  Project,
  subject only to liens  (except  those with respect to which an adequate  bond or
  other financial security has been issued) which, in the aggregate, do not exceed
  $10,000 and the Mortgage Loan.
  
           (k) The  Construction  Contract  has  been  entered  into  between  the
  Partnership and the Contractor;  no other  consideration or fee shall be paid to
  the Contractor other than amounts set forth in the Construction Contract.
  
           (l) Except as  otherwise  disclosed  to the Limited  Partner in writing
  prior to the execution of this Agreement,  to the best of the General  Partner's
  knowledge:  (1) no Hazardous  Substance  has been disposed of, or released to or
  from,  or otherwise  now exists in, on, under or around,  the Project and (2) no
  aboveground or underground storage tanks are now or have ever been located on or
  under the Project. The General Partner will not install or allow to be installed
  any aboveground or underground storage tanks on the Project. The General Partner
  covenants  that the Project shall be kept free of Hazardous  Materials and shall
  not be used to generate,  manufacture,  refine, transport, treat, store, handle,
  dispose  of,  transfer,  produce  or  process  Hazardous  Materials,  except  in
  connection  with the normal  maintenance  and  operation  of any  portion of the
  Project. The General Partner shall comply, or cause there to be compliance, with
  all applicable Federal, state and local laws, ordinances,  rules and regulations
  with respect to Hazardous  Materials  and shall keep,  or cause to be kept,  the
  Project free and clear of any liens imposed  pursuant to such laws,  ordinances,
  rules and  regulations.  The General  Partner must  promptly  notify the Limited
  Partner in writing (3) if it knows,  or  suspects  or believes  there may be any
  Hazardous  Substance  in or around  any part of the  Project,  any  Improvements
  
                                        D-2
  constructed on the Project,  or the soil,  groundwater or soil vapor, (4) if the
  General  Partner or the  Partnership may be subject to any threatened or pending
  investigation by any governmental  agency under any law, regulation or ordinance
  pertaining to any Hazardous  Substance,  and (5) of any claim made or threatened
  by any Person,  other than a  governmental  agency,  against the  Partnership or
  General Partner  arising out of or resulting from any Hazardous  Substance being
  present or released in, on or around any part of the Project.
  
           (m) As of the date hereof, at funding of the Construction Loan and upon
  Permanent  Mortgage  Commencement,  fire and extended coverage insurance for the
  full  replacement  value of the Project  (excluding the value of the land,  site
  utilities,  landscaping and  foundations)  and worker's  compensation and public
  liability  insurance,  all in favor of the  Partnership,  is and will be in full
  force and effect  and will be kept in full  force and effect  during the term of
  the  Partnership;   all  such  policies  shall  be  amounts  and  with  insurers
  satisfactory  to the  permanent  lender  and  shall be paid  out of  Partnership
  assets.
  
           (n) The Partnership will allocate to the Limited Partner the Projected 
  Annual Tax Credits.
  
           (o) No charges or encumbrances  exist with respect to the Project other
  than those which are created or permitted by the Project  Documents or are noted
  or excepted in the title policy for the Project.
  
           (p) The  buildings  on the Project  site shall  constitute a "qualified
  low-income  housing  project"  as defined in Section  42(g) of the Code,  and as
  amplified by the Treasury Regulations thereunder. In this connection,  not later
  than  December  31 of the  first  year in which the  Partners  elect the LIHC to
  commence in accordance the Code.
  
           (q) No event or  proceeding,  including,  but not  limited  to, any (A)
  legal actions or proceedings before any court,  commission,  administrative body
  or other  governmental  authority,  and (B) acts of any  governmental  authority
  having  jurisdiction over the zoning or land use laws applicable to the Project,
  has occurred the  continuing  effect of which has: (i)  materially  or adversely
  affected the operation of the  Partnership or the Project  (except to the extent
  that funds are  available  to the  Partnership  to correct or cure such event or
  proceeding);  (ii)  materially or adversely  affected the ability of the General
  Partner to perform its  obligations  hereunder or under any other agreement with
  respect to the Project; or (iii) prevented the completion of construction of the
  improvements in substantial  conformity with the Project  Documents,  other than
  
                                        D-3
  legal  proceedings which have been bonded against (or as to which other adequate
  financial  security has been issued) in a manner as to indemnify the Partnership
  against loss;  provided that the foregoing  does not apply to matters of general
  applicability which would adversely affect the Partnership, the General Partner,
  Affiliates of the General  Partner or the Project only insofar as they or any of
  them are part of the general public.
  
           (r)  Neither  the   Partnership   nor  the  General   Partner  has  any
  liabilities,  contingent or otherwise,  which have not been disclosed in writing
  to the Limited  Partner and which in the  aggregate do not affect the ability of
  the Limited Partner to obtain the anticipated  benefits of its investment in the
  Partnership.
  
           (s) The General Partner has and shall maintain a net worth equal to at
  least $500,000.
  
           Capitalized  terms  used  but  not  defined  in  this  General  Partner
  Certification  shall  have  the  meanings  given  to  them  in  the  Partnership
  Agreement.
  
           IN  WITNESS  WHEREOF,  the  undersigned  have set  their  hands to this
  General Partner Certification this day of April, 1997.
  
  DONALD W. SOWELL
  General Partner
  
                                        D-4
  EXHIBIT E TO THE PARTNERSHIP
  
                                REPORT OF OPERATIONS
  
                                              QUARTER ENDED:
  
  LOCAL PARTNERSHIP:   D. HILLTOP APARTMENTS, LTD.
  
   GENERAL PARTNER:    DONALD W. SOWELL
  
              ADDRESS:  509 Powell Drive
  CITY, STATE, ZIP:     Prairie View, Texas  77446
             PHONE:
  
      PROPERTY NAME:
            ADDRESS:
   CITY, STATE, ZIP:
      RESIDENT MNGR:
              PHONE:
  
         ACCOUNTANT:
               FIRM:
            ADDRESS:
   CITY, STATE, ZIP:
              PHONE:
  
  MANAGEMENT COMPANY:
            ADDRESS:
   CITY, STATE, ZIP:
              PHONE:
            CONTACT:
  
                                                  OCCUPANCY INFORMATION
  
  A.       No. of Units:     twenty-four (24)                   No. of Vacancies:
  
  B.       Occupancy for the quarter has: Increased/Decreased/Remained the Same
           (Circle One)
  
  C.       Number of:  Move-Ins       Move-Outs
  
  D.       Average length of tenant residency:1-6 mos.    6-12 mos.     1-3 yrs.
  Over 4 yrs.
  
  E.       Number of basic rent qualified applicants on waiting list:
  
  F.       If the  apartment  complex is less than 90%  occupied,  please explain 
           why,  and  describe  what efforts are being made to
           lease-up the remaining units.
  
  G.       On site manager:  Full Time _______       Part-Time ________.
  
           If part-time, the number of hours per week _________________.
  
                                        E-1
  OPERATIONAL INFORMATION
  
                  Rent Schedule and Increases From Previous Quarter
  
                                     Monthly  Rent     Increases       Effective
                 No. of Units        Rent    Amount     Percent          Date
  
  1 Bdrm.
  
  2 Bdrm.
  
  3 Bdrm.
  
  Provide copy of rent roll through the last day of the  calendar  quarter.  On an
  annual  basis  provide  the annual  income  recertification  received  from each
  tenant.
  
                                PROPOSED MAINTENANCE
  
                                                       FUNDED BY
                                     COMPLETED OR      OPERATIONS
  TYPE            DESCRIPTION        PLANNED           OR RESERVES         AMOUNT
  
  INTERIOR PAINTING
  
  EXTERIOR PAINTING
  
  SIDING
  
  ROOFING
  
  DRAINAGE
  
  PAVING
  
  LANDSCAPING
  
  PLAYGROUND
  
  COMMUNITY ROOM
  
  LAUNDRY ROOM
  
  COMMON AREAS
  
  CARPET
  
  APPLIANCES
  
  LIGHTING
  
  OTHER
  
  Please describe in detail any major repairs or replacements of property.
  
                                        E-2
  CONDITION OF PROPERTY
                              (Check One Box For Each)
  
                               Excellent      Good        Fair          Problem
  
  LANDSCAPE CONDITION
  
  COMMON AREA - CLEAN
  
  PARKING LOT CONDITION
  
  SIDEWALKS
  
  PROPERTY ENTRANCE
  
  SIGN CONDITION
  
  EXTERIOR PAINTING AND CAULKING
  
  ROOF
  
  WINDOWS
  
  DOORS
  
  SCREENS
  
  GUTTERS & DOWNSPOUTS
  
  MAILBOXES
  
  DUMPSTER, ODOR
  
  LAUNDRY ROOM
  
  OUTSIDE NIGHT LIGHTING
  
  SMOKE ALARM
  
  HEATING & AIR CONDITIONING   UNITS
  
  WATER HEATERS
  
  APPLIANCES
  
  PEST CONTROL
  
  CURB APPEAL
  
  OTHER
  
  Comments:
  -------------------------------------------------------------------------------
  
  -------------------------------------------------------------------------------
  
  -------------------------------------------------------------------------------
  
                                        E-3
  FINANCIAL STATUS
  
  A.       Replacement Reserves are: Fully-funded ___ Under-funded ___ Balance ___
           If Underfunded, by how much:
  
           Tax/Insurance Escrows are: Fully-funded___ Under-funded___Balance ____
           If Under-funded, by how much:
  
           Property is operating at a: Surplus ___     Deficit ___  Amt. $ ___
                                                            
  
           Property Taxes paid?
           (please provide copy of paid tax bill)          yes              no
  
           Property Insurance paid?
           (please provide copy of yearly renewal)         yes              no
  
           Mortgage Payments are:     On Schedule     Delinquent      Amt. $
  
  B.       Please note and explain any significant changes in the following:
  
           Admin. Expenses     Increase          Decrease           Amount$
  
           Repairs/Maint.      Increase          Decrease           Amount$
  
           Utilities           Increase          Decrease           Amount$
  
           Taxes/Insurance     Increase          Decrease           Amount$
  
  C.       Do you anticipate making a return to owner distribution?   Yes     No
  
           Explanation:
  
  D.       Please explain in detail any change in the financial condition:
  
  E.       Any insurance claims filed?        Yes _____         No _____
  
           If yes, please explain:
  
           Prepared By:                                         Date:
  
         Firm:                                                  Telephone:
  
                                        E-4
  D. HILLTOP APARTMENTS, LTD.
  
                          STATEMENT OF INCOME AND EXPENSES
  
                           QUARTER ENDED: _______________
  
                            Previous    Current             Budget
                            Quarter     Quarter      YTD    Amount   Various
  
  INCOME
  
    Net Rental Income
  
    Other Income
  
  TOTAL INCOME
  
    Renting Expense
  
    Admin. Expense
  
    Operating Expense
  
    Maintenance Expense
  
    Depreciation
  
    Taxes & Insurance
  
    Interest Expense
  
    Other
  
    Transfer to Replacement
     Reserve account
  
  TOTAL EXPENSES
  
  NET INCOME (LOSS)
  
  NOTE:    Please be sure to include Depreciation and Interest.
  
  Prepared by:                        Date:
  
         Firm:                        Telephone:
  
                                        E-5
  D. HILLTOP APARTMENTS, LTD.
  
                               UNAUDITED BALANCE SHEET
  
                            QUARTER ENDED: ______________
  
  ASSETS
  
           Unrestricted Cash
           Restricted Reserves
           Buildings, personal property
            net of accumulated depreciation
           Land
           Capital Contributions Receivable
           Other
           TOTAL
  
  LIABILITIES
  
           Mortgage Payable
           Accounts Payable
           Operating Deficit Loan
           Working Capital Loan
           Other
  
  PARTNERS' EQUITY
  
           Limited Partner Equity Paid
           Limited Partner Equity Receivable
           General Partner Equity
           Other Equity
           Cumulative Losses
  
           TOTAL LIABILITIES AND NET WORTH
  
  DISTRIBUTIONS TO GENERAL PARTNER OR ANY AFFILIATE
  
           Fees or Compensation
           Reimbursed Expenses
           Partnership Cash Distributions
  
  *Depreciation  should be computed over the term approved by the Limited  Partner
  for the building  improvements,  and the applicable  Federal tax lives and rates
  for personal property.
  
  Prepared by:                                Date:
  
         Firm:                                Telephone:
  
                                        E-6
  TAX CREDIT COMPLIANCE REPORT
  DATE        1       2         3          4          5         6         7             8            9           10
              Person  Person(s) Person(s)  Person(s)  Person(s) Person(s) Person(s)    Person(s)    Person(s)
                                                                                                      Person(s )
  
  HUD/FmHA VERY LOW:
  
  QUALIFYING INCOME:
  
  MONTHLY INCOME:
  
  MAX GROSS RENT:
  
    UNIT      LEASED TO      #      ANNUAL     HUD/FmHA     LESS     #     TENANT       +    UTIL-      =         TENANT      SUBSIDY
                            IN      INCOME     GROSS        THAN     BR    RENTAL            ITIES                GROSS
                                               INCOME       40%            PAYMENT           AND                  RENT
                                                                                             RA
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== ----------------------------------------------------------------------------------------------------------- ============
  
  ========== =================================== ========== ============= =============== =========== =========== ===================
  E-7
  TAX CREDIT COMPLIANCE MONITORING:
                                ANNUAL CERTIFICATION
  
       As General Partner of D. HILLTOP  APARTMENTS,  LTD., I hereby certify as to
  the following:
  
       1. D.  HILLTOP  APARTMENTS,  LTD.  owns a  twenty-four  (24)  unit  project
  ("Project") in Palestine, Anderson County, Texas.
  
           2. An annual income certification (including supporting  documentation)
  has been received from each tenant. The income  certification  reflects that the
  tenant's income meets the income  limitation  applicable to the Project pursuant
  to Section 42(g)(1) of the Internal Revenue Code ("Code").
  
       3. The Project  satisfies the  requirements  of the applicable  minimum set
  aside test as defined in Section 42(g)(1) of the Code.
  
       4. Each unit  within the Project is rent  restricted  as defined in Section
  42(g)(2)of the Code.
  
       5. Each unit in the Project is available for use by the general  public and
  not for use on a transient basis.
  
       6. Each  building in the Project is suitable for  occupancy  in  accordance
  with local health, safety, and building codes.
  
       7.  During the  preceding  calendar  year,  there had been no change in the
  eligible  basis, as defined in Section 42(d) of the Code, of any building within
  the Project.
  
       8.  All  common  area  facilities  included  in the  eligible  basis of the
  Apartment  Complex are provided to the tenants on a comparable  basis  without a
  separate fee to any tenant in the Project.
  
       9. During the  preceding  calendar  year when a unit in the Project  became
  vacant reasonable  attempts were made to rent that unit to tenants whose incomes
  met the income limitation applicable to the Project pursuant to Section 42(g)(1)
  of the Code and while  that unit was  vacant no units of  comparable  or smaller
  size were  rented to tenants  whose  income  did not meet the income  limitation
  applicable to the Project pursuant to Section 42(g)(1) of the Code.
  
       10. If the income of a tenant in a unit  increased  above the limit allowed
  in  Section  42(g)(2)(D)(ii),  then the next  available  unit of  comparable  or
  smaller  size was  rented to tenants  whose  incomes  met the income  limitation
  applicable to the Project pursuant to Section 42(g)(1) of the Code.
  
  IN  VERIFICATION  OF THE  FOREGOING  ENCLOSED  HEREWITH  IS A COPY OF THE ANNUAL
  INCOME  CERTIFICATION  RECEIVED FROM EACH TENANT IN THE PROJECT.  UPON REQUEST I
  WILL PROVIDE  COPIES OF ALL  DOCUMENTATION  RECEIVED  FROM THE TENANT TO SUPPORT
  THAT CERTIFICATION.
  
           I declare  under penalty of perjury under the law of the State of Texas
  that the foregoing is true and correct.
  
                                        E-8