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 26, 1996
  
  
                    WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
               (Exact name of registrant as specified in its charter)
  
  
        California                     33-91136               33-6163848
  (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)
  
  
  
  <PAGE>
  
  
  
  Item 2.  Acquisition or Disposition of Assets
  
  
           WNC Housing Tax Credit Fund V, L.P., Series 3 ("Series 3") has become a
  limited  partner  in  Cascade  Pines,  L.P.  II, a Georgia  limited  partnership
  ("CASCADE");  and Rosedale Limited Partnership, a New Mexico limited partnership
  ("ROSEDALE").  CASCADE and ROSEDALE are sometimes hereinafter referred to as the
  "Local  Limited  Partnerships."  CASCADE owns the Cascade  Pines  Apartments  in
  Atlanta,  Georgia;  and Rosedale owns the Valley View Apartments in Silver City,
  New Mexico.
  
           The following tables contain  information  concerning the Local Limited
  Partnerships.
  
  
  <PAGE>
  <TABLE>
  
  
  
  
  
  
                                          ACTUAL OR                                                      LOCAL LIMITED   YEAR
                                          ESTIMATED    ESTIMATED                              PERMANENT  PARTNERSHIP'S   CREDITS
                                          CONSTRUC-    DEVELOP-                               MORTGAGE   ANTICIPATED     TO BE
  LOCAL        PROJECT                    TION         MENT COST    NUMBER OF      BASIC      LOAN       AGGREGATE       FIRST
  LIMITED      NAME/NUMBER   LOCATION OF  COMPLETION   (INCLUDING   APARTMENT      MONTHLY    PRINCIPAL  TAX CREDITS     AVAIL-
  PARTNERSHIP  OF BUILDINGS  PROPERTY     DATE         LAND COST)   UNITS          RENTS      AMOUNT     (1)             ABLE
  
  <S>          <C>            <C>         <C>          <C>          <C>             <C>
   CASCADE      Cascade Pines  Atlanta     October     $8,614,000    94 1BR units    $329-$365  $2,465,000  $2,681,950    1996
               Apartments     (Fulton     1996                     187 2BR units    $399-$470   URFA (3)
                               Co.),                                94 3BR units    $499-$530
               38 buildings   Georgia                                                          $4,990,000
               (2)                                                                             URFA (3)
  
                                                                                               $1,100,000
                                                                                               URFA(3)
  <S>          <C>            <C>          <C>         <C>           <C>             <C>
  ROSEDALE     Valley View    Silver City  January     $1,408,660    6 1BR units     $295       $ 1,330.000  $547,280     1996
               Apartment      (Grant       1996                      19 2BR units    $358       RECDS (4)
                              Co.),                                  6 3BR units     $418
               4 buildings    New Mexico
  
  
  <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.
  
  
  
  
  <PAGE>
  
  
  (3) Urban  Residential  Finance Authority (URFA) will provide the first mortgage
  loan for a term of 15 years at an annual  interest rate of 6.25%.  Principal and
  interest will be payable annually based on a 15-year amortization schedule. URFA
  will  provide  the  second  mortgage  loan for a term of 30  years at an  annual
  interest rate of 6.6%.  Principal and interest will be payable annually based on
  a 30-year amortization schedule. URFA will provide the third mortgage loan for a
  term of 30 years at an annual  interest rate of 7%.  Principal and interest will
  be payable annually based on a 30-year amortization schedule.
  
  (4) RECDS  provides  mortgage  loans under the RECDS  Section 515 Mortgage  Loan
  Program.  Each of these  mortgage  loans  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 1%, with principal and interest
  payable monthly based on a 50-year amortization schedule.
  
  </FN>
  </TABLE>
  
  
  Atlanta (CASCADE): Atlanta (population 394,000) is the state capital of Georgia,
  and is located in Fulton County at the  intersection of Interstate  Highways 85,
  75 and 20. Atlanta is considered the  commercial,  transportation  and financial
  capital of the Southeast.  It is the national  headquarters for Coca-Cola,  CNN,
  Delta Air Lines, United Parcel Service, Home Depot, and Holiday Inn-Worldwide.
  
  Silver City (ROSEDALE):  Silver City  (population  10,600) is the county seat of
  Grant County in southwest New Mexico near the  intersection of U.S.  Highway 180
  and State  Highway 90. Major  employers  for Rosedale  residents are Silver City
  Daily Press and Southwest Transit Mix.
  
  
  
  <PAGE>
  <TABLE>
  
  
                                                                                                                        ESTIMATED
                                                                                                                        ACQUISI-
                                          LOCAL                                     SHARING RATIOS:                     TION FEES
                                          GENERAL                                   ALLOCATIONS (4)    SERIES 3'S       PAYABLE
  LOCAL        LOCAL                      PARTNERS'      SHARING RATIOS:            AND SALE OR        CAPITAL          TO
  LIMITED      GENERAL       PROPERTY     DEVELOPMENT    CASH FLOW                  REFINANCING        CONTRIBUTION     FUND
  PARTNERSHIP  PARTNERS      MANAGER      FEE(3)         (3)                        PROCEEDS(5)        (6)              MANAGER
  
  
  
  <S>          <C>           <C>           <C>           <C>                        <C>                <C>
  CASCADE      Urban         Brencor Asset $1,333,381    WNC:greater of             98/2               $1,471,854      $147,000
               Residential   Management,                 10% or $5,000              50/50
               Management,   Inc. (8)                    LGP: 45%
               Inc. (7)                                  Balance:
                                                         WNC:10.9%;
                                                         LGP:89.1%
  
  
  <S>         <C>            <C>           <C>           <C>                        <C>                <C>
  ROSEDALE    Deke Noftsker  M-DC Group,   $230,000      WNC:greater of             99/1               $308,762        $31,000
              (13)           Inc.dba                     33% or $1,400              50/50
                             Alpha                       LGP: 67%
                             Management
                             Co, Inc. (14)
  
  
  
  <FN>
  
  
  (1) The maximum annual  management fee payable to the property manager generally
  is determined  pursuant to lender  regulations.  Each 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) Each Local  Limited  Partnership  will pay its Local  General  Partner(s)  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 3.
  
  (3)  Reflects  the amount of the net cash flow from  operations,  if any,  to be
  distributed to Series 3 ("WNC") and the Local General  Partner(s) ("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 Series 3 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 of Series 3 and the Local General  Partner(s)  in profits,  losses and
  Low  Income  Housing  Credits  commencing  with  entry of  Series 3 as a limited
  partner.
  
  (5)  Reflects  the  percentage  interests  of  Series  3 and the  Local  General
  Partner(s) 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  contribution  of Series 3; and the  capital  contribution  of the Local
  General Partner(s).
  
  (6)  Series  3 will  make  its  capital  contributions  to  each  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>
  
  <PAGE>
  
  
  Item 7.  Financial Statements and Exhibits
  
           a.   Financial Statements of Businesses Acquired.
  
                Financial Statements for ROSEDALE will be filed upon availability.
  
  
           b.   Proforma Financial Information
  
                Proforma Financial Information will be filed upon availability.
  
           c.       Exhibits
  
                    10.1    Amended and Restated Agreement of Limited Partnership
                            of Cascade Pines, L.P. II
  
                    10.2    Amended and Restated Agreement of Limited Partnership
                            of Rosedale Limited Partnership
  
  
  <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 3
  
  Date:  May 7, 1996                By:      WNC &  Associates, Inc.,
                                             General Partner
  
                                             By:      /s/ JOHN B. LESTER, JR.
                                                      John B. Lester, Jr.,
                                                      President
  
  
  <PAGE>
  
  
  
  
  
  
                                     INDEX TO EXHIBITS
  
  Exhibit
  Number Exhibit
  
  10.1     Amended and Restated Agreement of Limited Partnership of Cascade Pines,
           L.P. II
  
  10.2     Amended and Restated Agreement of Limited Partnership of Rosedale
           Limited Partnership
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                AMENDED AND RESTATED
  
                         AGREEMENT OF LIMITED PARTNERSHIP OF
  
                               CASCADE PINES, L.P. II
  
  
  
  
  
  
  
  
                                  TABLE OF CONTENTS
  
                                                                             Page
  
  I.       DEFINITIONS .........................................              1
           1.1      "Accountant" ...................................          1
           1.2      "Acquisition Account" ..........................          1
           1.3      "Act" ..........................................          2
           1.4      "Actual Tax Credit".............................          2
           1.5      "Adjusted Capital Account Deficit" .............          2
           1.6      "Administrative Expenses Fund" .................          2
           1.7      "Affiliate" ....................................          2
           1.8      "Agreement" or "Partnership Agreement"..........          2
           1.9      "Annual Budget" ................................          2
           1.10     "Assignee" .....................................          3
           1.11     "Bankruptcy" or "Bankrupt"......................          3
           1.12     "Bond Fund" ....................................          3
           1.13     "Bond Reserve Requirements" ....................          3
           1.14     "Bonds" ........................................          3
           1.15     "Bond Year" ....................................          3
           1.16     "Capital Account" ..............................          3
           1.17     "Capital Contribution" .........................          3
           1.18     "Cash Flow From Operations" ....................          4
           1.19     "Code" .........................................          4
           1.20     "Completion of Construction"....................          4
           1.21     "Compliance Period".............................          5
           1.22     "Consent of the Limited Partner"................          5
           1.23     "Construction Contract".........................          5
           1.24     "Construction Loan" ............................          5
           1.25     "Contractor" ...................................          5
           1.26     "Costs of Issuance Fund" .......................          5
           1.27     "Debt Service Coverage".........................          5
           1.28     "Debt Service Reserve Fund" ....................          6
           1.29     "Deferred Management Fee".......................          6
           1.30     "Developer".....................................          6
           1.31     "Development Fee" ..............................          6
           1.32     "Distributions" ................................          6
           1.33     "Fair Market Value" ............................          7
           1.34     "First Year Certificate" .......................          7
           1.35     "General Partner" ..............................          7
           1.36     "Gross Asset Value" ............................          7
           1.37     "HAP Contract" .................................          8
           1.38     "HAP Payments" .................................          8
           1.39     "Hazardous Substance"...........................          8
           1.40     "Improvements"..................................          8
           1.41     "Incentive Management Fee"......................          8
           1.42     "Income and Losses".............................          8
           1.43     "Insurance and Tax Escrow Fund" ................          10
           1.44     "Interest" .....................................          10
  
           1.45     "Interest Payment Date" ........................          10
           1.46     "Involuntary Withdrawal"........................          10
           1.47     "Issuer" .......................................          10
           1.48     "LIHTC".........................................          10
           1.49     "Limited Partner"...............................          10
           1.50     "Liquidation" ..................................          10
           1.51     "Loan Agreement" ...............................          10
           1.52     "Maintenance Reserve Fund" .....................          11
           1.53     "Management Agent"..............................          11
           1.54     "Management Agreement"..........................          11
           1.55     "Minimum Set-Aside Test"........................          11
           1.56     "Mortgage" or "Mortgage Loan"...................          11
           1.57     "Mortgage Note".................................          11
           1.58     "Nonrecourse Deductions"........................          11
           1.59     "Nonrecourse Liability".........................          11
           1.60     "Operating Deficit" ............................          12
           1.61     "Operating Deficit Guarantee Period"............          12
           1.62     "Operating Loans"...............................          12
           1.63     "Original Limited Partner" .....................          12
           1.64     "Partner" ......................................          12
           1.65     "Partner Nonrecourse Debt" .....................          12
           1.66     "Partner Nonrecourse Debt Minimum Gain" ........          12
           1.67     "Partner Nonrecourse Deductions" ...............          12
           1.68     "Partnership" ..................................          12
           1.69     "Partnership Minimum Gain" .....................          12
           1.70     "Permanent Mortgage Commencement" ..............          12
           1.71     "Person" .......................................          13
           1.72     "Principal Payment Date" .......................          13
           1.73     "Project" ......................................          13
           1.74     "Project Documents" ............................          13
           1.75     "Projected Annual Tax Credits" .................          13
           1.76     "Projected Tax Credits" ........................          13
           1.77     "Qualified Income Offset Item" .................          13
           1.78     "Qualified Tenants" ............................          13
           1.79     "Rating Agency" ................................          13
           1.80     "Rebate Fund" ..................................          13
           1.81     "Refinancing" ..................................          13
           1.82     "Rehabilitation Account" .......................          14
           1.83     "Rent Restriction Test" ........................          14
           1.84     "Reporting Fee".................................          14
           1.85     "Revenue Fund" .................................          14
           1.86     "Revised Projected Tax Credits".................          14
           1.87     "Sale or Refinancing"...........................          14
           1.88     "Sale or Refinancing Proceeds" .................          14
           1.89     "Special Limited Partner" ......................          14
           1.90     "State" ........................................          14
           1.91     "State Tax Credit Agency" ......................          14
           1.92     "Substitute Limited Partner" ...................          14
           1.93     "Surplus Fund" .................................          15
           1.94     "Tax Credit" ...................................          15
           1.95     "Tax Credit Conditions".........................          15
           1.96     "TRA 1986" .....................................          15
           1.97     "Transition Fund" ..............................          15
  
  
           1.98      "Treasury Regulations" ........................          15
           1.99      "Trust Indenture" .............................          15
           1.100 "Trustee" .....................................              15
           1.101 "Withdrawing" or "Withdrawal"..................              15
  
  II.      NAME ................................................              16
  
  III.     PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE ........              16
  
           3.1      Principal Executive Office .....................          16
           3.2      Agent for Service of Process ...................          16
  
  IV.      PURPOSE .............................................              16
  
  V.       TERM ................................................              16
  
  VI.      GENERAL PARTNER'S CONTRIBUTIONS AND LOANS............              16
  
           6.1      Capital Contribution of General Partner.........          16
           6.2      Construction and Operating Obligations;
                      General Partner Loans.........................          17
           6.3      Partner Loans...................................          18
  
  VII.     CAPITAL CONTRIBUTIONS OF LIMITED PARTNER.............              18
  
  
           7.1      Original Limited Partner........................          18
           7.2      Capital Contribution of Limited Partner.........          19
           7.3      Repurchase of Limited Partner's Interest........          20
           7.4      Reduction of Limited Partner's
                      Capital Contribution..........................          21
           7.5      Return of Capital Contribution..................          22
           7.6      Liability of Limited Partner....................          22
  
  VIII. WORKING CAPITAL AND RESERVES .......................                  23
  
           8.1      Reserve ........................................          23
  
  IX.      MANAGEMENT AND CONTROL ..............................              23
  
           9.1      Power and Authority of General Partner .........          23
           9.2      Payments to the General Partners and Others ....          24
           9.3      Specific Powers of the General Partner .........          26
           9.4      Authority Requirements..........................          27
           9.5      Limitations on General Partner's
                      Power and Authority ..........................          28
           9.6      Restrictions on Authority of General Partner....          29
           9.7      Duties of General Partner ......................          30
           9.8      Partnership Expenses ...........................          31
           9.9      General Partner Expenses .......................          32
           9.10     Other Business of Partners .....................          32
           9.11     Covenants, Representations and Warranties.......          33
  
  <PAGE>
  
  X.       ALLOCATIONS OF INCOME, LOSSES AND CREDITS ...........              36
  
           10.1     General ........................................          36
           10.2     Allocations From Sale or Refinancing............          36
           10.3     Special Allocations.............................          37
           10.4     Curative Allocations............................          40
           10.5     Other Allocation Rules..........................          41
           10.6     Tax Allocations:  Code Section 704(c)...........          42
           10.7     Allocation Among Limited Partners...............          42
           10.8     Allocation Among General Partners ..............          42
           10.9     Modification of Allocations ....................          42
  
  XI.      DISTRIBUTION ........................................              43
  
           11.1     Distribution of Cash Flow From Operations ......          43
           11.2     Distribution of Sale or Refinancing Proceeds....          43
           11.3     Additional Refinancing .........................          43
  
  XII.     TRANSFERS OF LIMITED PARTNER'S AND SPECIAL LIMITED
           PARTNER'S INTEREST IN THE PARTNERSHIP................              44
  
           12.1     Assignment of Limited Partner's
                    and Special Limited Partner's Interest .........          44
           12.2     Effective Date of Transfer .....................          45
           12.3     Invalid Assignment .............................          45
           12.4     Assignee's Rights to Allocations
                      and Distributions ............................          45
           12.5     Substitution of Assignee as Limited Partner
                    or Special Limited Partner .....................          45
           12.6     Death, Bankruptcy, Incompetency, etc.
                      of a Limited Partner .........................          45
  XIII. WITHDRAWAL, REMOVAL AND REPLACEMENT OF GENERAL
        PARTNER ............................................
  
           13.1     Withdrawal of General Partner ..................          46
           13.2     Removal of General Partner .....................          46
           13.3     Admission of Substitute General Partner ........          48
           13.4     Continuing Liability ...........................          49
           13.5     Transfer of Interest ...........................          50
           13.6     Payment to General Partner Upon Resignation,
                    Death or Insanity ..............................          50
  
  XIV.     BOOKS AND ACCOUNTS, REPORTS, TAX RETURNS,
           FISCAL YEAR AND BANKING .............................              51
  
           14.1     Books and Accounts .............................          51
           14.2     Accounting Reports .............................          51
           14.3     Other Reports ..................................          52
           14.4     Late Reports ...................................          54
           14.5     Annual Site Visits..............................          54
           14.6     Tax Returns.....................................          54
  <PAGE>
  
           14.7     Fiscal Year ....................................          54
           14.8     Banking ........................................          54
           14.9     Certificates and Elections .....................          55
  
  XV.      DISSOLUTION, WINDING UP, TERMINATION AND
           LIQUIDATION OF THE PARTNERSHIP ......................              55
  
           15.1     Dissolution of Partnership .....................          55
           15.2     Return of Capital Contribution upon
                      Dissolution ..................................          55
           15.3     Distributions of Assets ........................          56
           15.4     Deferral of Liquidation.........................          57
           15.5     Liquidation Statement ..........................          57
           15.6     Certificates of Dissolution; Certificate of
                      Cancellation of Certificate of Limited
                      Partnership ..................................          57
  
  XVI.     AMENDMENTS ..........................................              58
  
  XVII. MISCELLANEOUS ......................................
  
           17.1     Voting Rights ..................................          58
           17.2     Meeting of Partnership .........................          59
           17.3     Notices ........................................          59
           17.4     Successors and Assigns .........................          60
           17.5     Recording of Certificate of Limited
                    Partnership. ...................................          60
           17.6     Amendment of Certificate of Limited
                    Partnership ....................................          60
           17.7     Counterparts ...................................          60
           17.8     Captions .......................................          61
           17.9 Certain Provisions .............................              61
           17.10 Saving Clause..................................              61
           17.11 Number and Gender .............................              62
           17.12 Entire Agreement ..............................              62
           17.13 Governing Law .................................              62
           17.14 Attorney's Fees ...............................              62
           17.15 Receipt of Correspondence .....................              62
  
  
  EXHIBIT A - Legal Description...................... A-1  -  A-2
  EXHIBIT B - Form of Legal Opinion.................. B-1  -  B-4
  EXHIBIT C - Certification and Agreement............ C-1  -  C-4
  EXHIBIT D - General Partner Certification.......... D-1  -  D-5
  EXHIBIT E - Form of Completion Certificate......... E-1
  EXHIBIT F - Accountant's Certificate............... F-1
  EXHIBIT F - Report of Operations................... G-1  -  G-10
  
  DEVELOPMENT FEE AGREEMENT
  GUARANTY AGREEMENT
  
  
  
  
  <PAGE>
                           AMENDED AND RESTATED AGREEMENT
                              OF LIMITED PARTNERSHIP OF
                               CASCADE PINES, L.P. II
  
  
       THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is being entered
  into  effective as of the date written  below by and between  URBAN  RESIDENTIAL
  MANAGEMENT,  INC., a Georgia  corporation,  as the general partner (the "General
  Partner"),  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 as the limited partner
  (the  "Limited  Partner),   BRENCOR,  INC.,  a  Delaware  corporation,   as  the
  withdrawing limited partner (the "Original Limited Partner") and BRENCOR,  INC.,
  a Delaware  corporation,  as the Special Limited  Partner (the "Special  Limited
  Partner").
  
                                      RECITALS
  
       WHEREAS,  CASCADE  PINES,  L.P.  II, a  Georgia  limited  partnership  (the
  "Partnership")  recorded a certificate of limited  partnership  with the Georgia
  Secretary  of State on July 14, 1995. A  partnership  agreement  dated August 1,
  1995 was  entered  into by and between  the  General  Partner  and the  Original
  Limited Partner.
  
       WHEREAS,  the Partners  desire to enter into this Agreement to provide for,
  among other things, (i) the continuation of the Partnership,  (ii) the admission
  of the Limited Partner as a partner of the  Partnership,  (iii) the admission of
  the  Special  Limited  Partner  as  a  partner  of  the  Partnership,  (iv)  the
  liquidation of the Original Limited Partner's  Interest in the Partnership,  (v)
  the payment of Capital  Contributions by the Limited Partner to the Partnership,
  (vi) the allocation of Income,  Losses,  Tax Credits and  distributions  of Cash
  Flow From Operations and other cash funds of the Partnership  among the Partners
  (vii) the respective  rights,  obligations and interests of the Partners to each
  other and to the Partnership, and (viii) certain other matters.
  
       WHEREAS,  the Limited Partner,  the Special Limited Partner and the General
  Partner desire hereby to amend and restate the Limited Partnership  Agreement of
  the Partnership dated August 1, 1995.
  
       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 CASCADE PINES, L.P. II in its entirety to provide as follows:
  
                                      ARTICLE I
  
                                     DEFINITIONS
  
       Section 1.1 "Accountant" shall mean Reznick,  Fedder and Silverman, or such
  other firm of independent certified public accountants as may be engaged for the
  Partnership by the General Partner with the Consent of the Limited Partner.
  <PAGE>
  
       Section 1.2 "Acquisition  Account" shall mean that account  established and
  maintained in  accordance  with the Trust  Indenture and Section  9.2(c) of this
  Agreement.
  
       Section  1.3  "Act"  shall  mean the laws of the  State  governing  limited
  partnerships, as now in effect and as the same may be amended from time to time.
  
       Section 1.4 "Actual  Tax  Credit"  shall mean as of any point in time,  the
  total amount of the LIHTC actually  allocated by the  Partnership to the Limited
  Partner,  representing 98% of the LIHTC actually received by the Partnership, as
  shown on the applicable tax returns of the Partnership.
  
       Section 1.5 "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 period,  after giving effect to the following
  adjustments:
  
       (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
  1.704-1(b)(2)(ii)(d)(4),  1.704-1(b)(2)(ii)(d)(5) and 1.704-1(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 1.6 "Administrative  Expenses Fund" shall mean the fund established
  by the Trustee in accordance with the Trust Indenture. Amounts on deposit in the
  Administrative Expenses Fund shall be used to pay the Issuer's Fee.
  
       Section 1.7  "Affiliate"  shall mean (a) any Person  directly or indirectly
  controlling, controlled by, or under common control with another Person; (b) any
  Person owning or controlling 10% or more of the outstanding voting securities of
  such other Person; (c) any officer, director,  trustee, or partner of such other
  Person;  and (d) if such  Person is an  officer,  director,  trustee  or general
  partner, any other Person for which such Person acts in any such capacity.
  
       Section 1.8 "Agreement" or "Partnership  Agreement" shall mean this Amended
  and Restated Agreement of Limited Partnership, as it may be amended from time to
  time. Words such as "herein,"  "hereinafter,"  "hereof,"  "hereto," "hereby" and
  "hereunder,"  when  used  with  reference  to  this  Agreement,  refers  to this
  Agreement as a whole, unless the context otherwise requires.
  <PAGE>
  
       Section 1.9 "Annual Budget" shall mean the budget filed with the Issuer for
  its approval and,  promptly  following such approval,  to the Trustee,  no later
  than the first day of each fiscal  year which  shall show for each fiscal  year:
  (a) anticipated revenues and receipts dervied from the opertationof the Project,
  including HAP Payments paid to or on behalf of the  Partnership  pursuant to the
  HAP Contract,  together  with tenant  rentals and all other income and moneys as
  may be paid to or on behalf of the Partnership,  excluding security deposit; and
  (b) all current  expenses of the Partnerhip in connection  with the operation of
  the Project which are not otherwise  specifically  described in the Debt Service
  Reserve Fund or the Maintenance and Replacement Fund,  including  administrative
  expenses and property  management  fees with respect ot the Project  incurred in
  its ordinary operations.
  
       Section  1.10  "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  1.11  "Bankruptcy"  or  "Bankrupt"  shall  mean the  making  of an
  assignment for the benefit of creditors,  becoming a party to any liquidation or
  dissolution   action  or  proceeding,   the   commencement  of  any  bankruptcy,
  reorganization,  insolvency or other  proceeding  for the relief of  financially
  distressed debtors, or the appointment of a receiver,  liquidator,  custodian or
  trustee  and,  if any of the  same  occur  involuntarily,  the  same  not  being
  dismissed,  stayed or  discharged  within 90 days;  or the entry of an order for
  relief  under  Title 11 of the United  States  Code.  A Partner  shall be deemed
  Bankrupt  if  the  Bankruptcy  of  such  Partner  shall  have  occurred  and  be
  continuing.
  
       Section 1.12 "Bond Fund" shall mean the fund  established by the Trustee in
  accordance with the Trust Indenture  whereby amounts on deposit in the Bond Fund
  will be used solely to pay  principal of,  premium,  if any, and interest on the
  Bonds when due.
  
       Section 1.13 "Bond Reserve Requirements" shall mean an amount not to exceed
  $593,090 in Bond Years one through  fifteen and  $531,189 in Bond Years  sixteen
  through thirty.
  
       Section 1.14 "Bonds" shall mean the Urban Residential  Finance Authority of
  the City of Atlanta,  Georgia's  $7,455,000  Multi-Family Housing Revenue Bonds,
  (Cascade Pines Apartments) Series 1995.
  
       Section 1.15 "Bond Year" shall mean the 12-month period (or portion thereof
  as to the first Bond Year) ending on December 31 of each year.
  
       Section 1.16 "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 to such Partner of Partnership  Income
  (or  items  thereof)  and any items in the  nature  of income or gain  which are
  <PAGE>
  
  specially  allocated  pursuant to Section 10.3 or 10.4 hereof,  and decreased by
  the amount of any  Distributions  made to such Partner,  and allocations to such
  Partner of Partnership  Losses (or items thereof) and any items in the nature of
  expenses or losses  which are  specially  allocated  pursuant to Section 10.3 or
  10.4 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.
  
       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 1.704-1(b), as amended or any successor thereto, and
  shall be  interpreted  and  applied in a manner  consistent  with such  Treasury
  Regulation.
  
       Section 1.17 "Capital  Contribution"  shall mean the total amount of money,
  or the Gross Asset Value of property 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 a Capital Contribution.
  
       Section 1.18 "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 all funds  retained by the Trustee  for  purpose of the Revenue  Fund,  the
  Insurance and Tax Escrow Fund, the Bond Fund, the Debt Service Reserve Fund, the
  Maintenance  and Replacement  Fund, the Rebate Fund (if necessary),  the Surplus
  Fund, the Transition Fund, the Administrative Expenses Fund and Trustee fees and
  expenses. Cash Flow From Operations excludes calculation for deductions for cost
  recovery of buildings,  improvements and personal  property  amortization of any
  financing  fees.  Any amounts in the Surplus  Fund,  after giving  effect to the
  above transfers and payment of the Issuer's fee and any Trustee's  extraordinary
  fees shall be transferred  by the Trustee to the  Partnership  for  distribution
  pursuant to Section 11.1 of this Agreement but only if the Trustee  receives and
  the Issuer  approves (a) the Project audit required by the Loan  Agreement;  and
  (b) a verification of cash flows by an independent  certified public  accountant
  or financial analyst  acceptable to the Rating Agency using the same assumptions
  as the cash flows  submitted  to the Rating  Agency at the time of the  original
  rating of the Bonds  demonstrating  that:  (i) the Debt Service  Coverage was at
  least 1.32% at the end of the first Bond Year,  1.37% for Bond Years two through
  fifteen  and 1.45% for Bond Years  sixteen  through  thirty for the  immediately
  preceding fiscal year and is projected to do so for each fiscal year thereafter;
  <PAGE>
  
  (ii)  Project  revenues  and  investment  earnings  will  be  sufficient  to pay
  principal and interest on the bonds until  maturity;  and (iii) asset  liability
  parity does not fall below 100%.
  
       Section  1.19  "Code"  shall mean the  Internal  Revenue  Code of 1986,  as
  amended from time to time, or any successor statute.
  
       Section 1.20  "Completion  of  Construction"  shall mean the  completion of
  rehabilitation  of the  Project  substantially  in  accordance  with the Project
  Documents,  as  amended  from  time to time,  in order to  obtain  the  required
  certificates  of  occupancy  (or the local  equivalent)  for all  three  hundred
  seventy-six   (376)  apartment  units  as  evidenced  by  the  issuance  of  the
  certificate of occupancy by the governmental agency having jurisdiction over the
  Project or by the issuance of the  inspecting  architect's  certification,  in a
  form  substantially  similar  to  that  attached  hereto  as  Exhibit  "E".  The
  rehabilitation  shall be completed in good workmanlike manner, free and clear of
  all  mechanic's,  materialmen's  or similar  liens,  and all other  expenses and
  costs,  including  but not  limited  to costs of  financing,  must be paid  with
  respect to the Project through completion.
  
       Section 1.21 "Compliance Period" shall mean the period set forth in Section
  42(i)(1) of the Code, as amended, or any successor statute.
  
       Section 1.22 "Consent of the Limited  Partner" shall mean the prior written
  consent or approval of the Limited Partner.
  
       Section  1.23  "Construction   Contract"  shall  mean  the  stipulated  sum
  construction  contract in the amount of  $3,381,000,  entered  into  between the
  Partnership  and  the  Contractor   pursuant  to  which  the  Project  is  being
  constructed.
  
       Section 1.24  "Construction  Loan" shall mean the Bonds and the Subordinate
  Loan to provide funds for the  acquisition,  renovation  and  development of the
  Project.
  
       Section 1.25 "Contractor" shall mean Gardner Service Corporation,  which is
  the general construction contractor for the Project.
  
       Section 1.26 "Costs of Issuance  Fund" shall mean the fund  established  by
  the Trustee in the amount of  $254,494  for the payment of the costs of issuance
  of the Bonds, including, without limitation, all printing expenses in connection
  with the  Bonds,  the  Trust  Indenture,  the Loan  Agreement  and any  official
  statement  or  offering  document  for the Bonds,  the fees and  expenses of the
  Issuer and its  counsel,  acceptance  and  initial  annual  fee of the  Trustee,
  Trustee counsel fees and expenses, fees of the Rating Agency,  underwriter's fee
  and legal fees and expenses of Bond counsel, counsel to the underwriter, counsel
  to the  Partnership  and such other initial  development  costs  relative to the
  <PAGE>
  
  Project.  Any amounts  remaining in the Cost of Issuance Fund after  transfer of
  the above, on the date six months after the initial issuance and delivery of the
  Bonds, shall be transferred by the Trustee to the Revenue Fund.
  
       Section 1.27 "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.
  
       Section 1.28 "Debt Service Reserve Fund" shall mean the fund established by
  the Trustee in the initial  amount of $593,090 to be disbursed by the Trustee to
  the Bond Fund (a) on any  Interest  Payment Date  whenever a  deficiency  in the
  amount  necessary  to pay  principal  of and  interest on the Bonds on such date
  would otherwise exist after transfer therein of any balance in the Surplus Fund,
  (b) on any Interest  Payment Date when the amount on deposit therein exceeds the
  Bond Reserve  Requirement,  but only such excess amount, (c) at such time as the
  amount  therein and in the Bond Fund,  together with interest to accrue from the
  investment  thereof,  would equal the amount  necessary to pay  principal of and
  interest on the Bonds to maturity, and (d) at the end of the 16th Bond Year, and
  only at the end of the 16th Bond Year, the amount of $61,901 to redeem Bonds.
  
       Section 1.29 "Deferred  Management Fee" shall have the meaning set forth in
  Section 9.2(c) hereof.
  
       Section 1.30  "Developer"  shall mean Brencor,  Inc. and Urban  Residential
  Development Corporation, a Georgia corporation.
  
       Section 1.31  "Development Fee" shall mean the fee payable to the Developer
  pursuant  to Section  9.2(a) of this  Agreement  for  services  incident  to the
  development and rehabilitation of the Project in accordance with the Development
  Fee Agreement  between the  Partnership  and the  Developer  dated the even date
  herewith and incorporated herein by this reference.
  
       Section 1.32  "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 1.33 "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.
  <PAGE>
  
       Section  1.34 "First Year  Certificate"  shall mean the  certificate  to be
  filed by the General  Partner with the  Secretary of the Treasury as required by
  Code Section 42(1)(1), as amended, or any successor thereto.
  
       Section 1.35 "General  Partner"  shall mean URBAN  RESIDENTIAL  MANAGEMENT,
  INC. and such other Persons as are admitted to the  Partnership as additional or
  substitute General Partners pursuant to this Agreement.
  
       Section 1.36 "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 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 Fair Market Values, as determined by the General Partner,
  as of the following times: (1) 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;  (2) 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 (3) 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  (1) and (2) above  shall be made only with the  Consent of the  Limited
  Partner  and  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 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
  <PAGE>
  
  pursuant to this Section  1.36(d) to the extent the General  Partner  determines
  that  an  adjustment   pursuant  to  Section  1.36(b)  hereof  is  necessary  or
  appropriate in connection with a transaction  that would otherwise  result in an
  adjustment pursuant to this Section 1.36(d).
  
       If the  Gross  Asset  Value of an asset  has been  determined  or  adjusted
  pursuant to Section 1.36(a),  Section 1.36(b),  or Section 1.36(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  1.37 "HAP  Contract"  shall mean that certain  Housing  Assistance
  Payment  Contract  dated  September 27, 1995,  between the  Partnership  and the
  United  States of America  acting  through the  Department  of Housing and Urban
  Development ("HUD"), as amended and supplemented, for 70 designated units of the
  Project.
  
       Section 1.38 "HAP  Payments"  shall mean those moneys payable under the HAP
  Contract with respect to the Project.
  
       Section 1.39 "Hazardous  Substance"  shall mean,  without  limitation,  any
  petroleum,  petroleum  products or fractions or  components  thereof,  flammable
  explosives,   radioactive  materials,  hazardous  materials,  hazardous  wastes,
  hazardous or toxic substances,  or related materials,  asbestos or any materials
  containing  asbestos,  or any other similar  substance or material as defined by
  any Federal,  state or local  environmental law,  ordinance,  rule or regulation
  including,   without  limitation,  the  Comprehensive   Environmental  Response,
  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 1.40 "Improvements"  shall mean the construction of a three hundred
  seventy-six  (376) unit apartment complex for families in a good and workmanlike
  manner substantially in accordance with the plans and specifications and Project
  Documents.
  
       Section 1.41 "Incentive Management Fee" shall have the meaning set forth in
  Section 9.2(e) hereof.
  
       Section 1.42 "Income and Losses" shall mean,  for each fiscal 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:
  
       (a) 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 Section 1.41 shall be added to such taxable income or loss;
  <PAGE>
  
       (b)  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 Section 1.41 shall be  subtracted
  from such taxable income or loss;
  
       (c) In the event the Gross Asset Value of any Partnership asset is adjusted
  pursuant to Section 1.36(a) or (b) hereof,  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;
  
       (d) 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;
  
       (e) 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
  
       (f) Notwithstanding any other provision of this definition, any items which
  are  specially  allocated  pursuant  to Sections  10.3 or 10.4 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  1.43   "Insurance  and  Tax  Escrow  Fund"  shall  mean  the  fund
  established by the Trustee in accordance  with the Trust  Indenture.  Amounts on
  deposit in this fund will be disbursed by the Trustee to pay the premiums of all
  insurance on the Project and all taxes.
  <PAGE>
  
       Section  1.44  "Interest"  shall mean the entire  ownership  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 1.45 "Interest  Payment Date" shall mean March 1 and September 1 of
  each year commencing March 1, 1996.
  
       Section 1.46  "Involuntary  Withdrawal"  means any Withdrawal caused by the
  death,  adjudication  of insanity or  incompetence,  or  Bankruptcy of a General
  Partner, or the removal of a General Partner pursuant to Section 13.2 hereof.
  
       Section 1.47 "Issuer" shall mean the Urban Residential Finance Authority of
  the City of Atlanta, Georgia, and its successors and assigns.
  
       Section  1.48  "LIHTC"  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 1.49  "Limited  Partner"  shall mean WNC HOUSING TAX CREDIT FUND V,
  L.P., SERIES 3, 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 1.50  "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  1.51 "Loan  Agreement"  shall mean that  agreement  between  Urban
  Residential  Finance  Authority  of  the  City  of  Atlanta,   Georgia  and  the
  Partnership  dated as of September 1, 1995,  including any  amendments  thereto.
  Said Loan Agreement is incorporated herein by this reference.
  
       Section  1.52  "Maintenance  and  Replacement  Fund"  shall  mean that fund
  established  by  the  Trustee.   Amounts  on  deposit  in  the  Maintenance  and
  Replacement  Fund will be disbursed by the Trustee,  upon written request of the
  General  Partner with the approval of the Issuer,  for  maintenance,  repair and
  <PAGE>
  
  replacement which may be required at the Project, including, but not limited to,
  replacement  of  equipment  (including  ranges  and  refrigerators),  repair  or
  replacement of any roof or other structural  component of the Project,  exterior
  painting,  major floor covering  replacement and major repairs to or replacement
  of heating, air conditioning,  plumbing and electrical systems, but in any case,
  only if  there  are no  funds  available  in the  Rehabilitation  Fund  for such
  purpose.  The Maintenance  and Replacement  Fund will also be used to remedy any
  deficiency  in the Bond Fund after  exhaustion  of the Surplus Fund and the Debt
  Service Reserve Fund without any prior consents.
  
       Section 1.53 "Management Agent" shall mean the property  management company
  which  oversees the property  management  functions for the Project and which is
  on-site at the  Project.  The initial  Management  Agent shall  collectively  be
  Brencor Asset Management, Inc. and Pointe Properties, Inc. d/b/a Metric Property
  Services.
  
       Section 1.54 "Management  Agreement"  shall mean the agreement  between the
  Partnership and the Management Agent for property management services.
  
       Section 1.55 "Minimum  Set-Aside  Test" shall mean the 40-60 set-aside test
  pursuant to Section  42(g),  as amended and any successor  thereto,  of the Code
  with respect to the percentage of apartment  units in the Project to be occupied
  by tenants  whose  incomes are equal to or less than the required  percentage of
  the area median gross income.
  
       Section  1.56  "Mortgage"  or  "Mortgage  Loan"  shall  mean any  source of
  permanent financing of the Project by a qualified  commercial lender (as defined
  in Section 42 of the Code)  evidencing the  indebtedness  of the Partnership and
  encumbering  the  Project.  Where the context  admits,  the term  "Mortgage"  or
  "Mortgage  Loan"  shall  include  any  mortgage,  deed,  deed  of  trust,  note,
  regulatory  agreement,   security  agreement,   assumption  agreement  or  other
  instrument executed in connection with the Mortgage Note which is binding on the
  Partnership;  and in case  any  Mortgage  is  replaced  or  supplemented  by any
  subsequent  mortgage  or  mortgages,  the  Mortgage  shall  refer  to  any  such
  subsequent mortgage or mortgages.
  
       Section 1.57 "Mortgage  Note" shall mean the  nonrecourse  promissory  note
  whereby the Partnership promises to pay Urban Residential Finance Authority,  or
  its successor or assignee, the principal sum of $2,465,000, plus interest on the
  principal  at  6.25%  per  annum  over a  term  of  fifteen  years;  the  sum of
  $4,990,000, plus interest on the principal at 6.60% over a term of thirty years;
  and  $1,100,000,  plus  interest on the  principal at 7% over a term of thirty
  years.
  
       Section 1.58  "Nonrecourse  Deductions"  shall have the meaning given it in
  Treasury Regulations Section 1.704-2(b)(1).
  <PAGE>
  
       Section 1.59  "Nonrecourse  Liability"  shall have the meaning  given it in
  Treasury Regulations Section 1.704-2(b)(3).
  
       Section 1.60  "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 1.61  "Operating  Deficit  Guarantee  Period" shall mean the period
  commencing  with the date of this Agreement and ending four years  following the
  date of the Limited Partner's last Capital Contribution.
  
       Section 1.62 "Operating Loans" shall mean loans made by the General Partner
  to the Partnership pursuant to Article VI of this Agreement,  which loans do not
  bear  interest  and  are  repayable  only  as  provided  in  Article  XI of this
  Agreement.
  
           Section 1.63 "Original Limited Partner" shall mean BRENCOR, INC.
  
       Section 1.64  "Partner"  shall mean the General  Partner and/or the Limited
  Partner and/or the Special Limited Partner.
  
       Section 1.65 "Partner Nonrecourse Debt" shall have the meaning set forth in
  Section 1.704-2(b)(4) of the Treasury Regulations.
  
       Section 1.66 "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 1.67 "Partner  Nonrecourse  Deductions"  shall have the meaning set
  forth in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Treasury Regulations.
  
       Section 1.68  "Partnership"  shall mean the limited  partnership  continued
  under this Agreement.
  
       Section 1.69 "Partnership Minimum Gain" shall mean the amount determined in
  accordance with the principles of Treasury Regulation Sections 1.704-2(b)(2) and
  1.704-2(d).
  
       Section 1.70 "Permanent Mortgage  Commencement" shall mean the first day on
  which all of the following have occurred: (a) the principal amount, interest and
  maturity  date of the  Mortgage  and the  Mortgage  Note shall have been finally
  determined; and (b) amortization of the Mortgage shall have commenced.
  <PAGE>
  
       Section 1.71  "Person"  shall mean an  individual,  proprietorship,  trust,
  estate, partnership,  joint venture, association,  company, corporation or other
  entity.
  
       Section  1.72  "Principal  Payment  Date"  shall  mean  any  date on  which
  principal of the Bonds is payable pursuant to the Trust Indenture.
  
       Section 1.73 "Project" shall mean the approximately 26.785 acres of land in
  Atlanta, Fulton County, Georgia, as more fully described in Exhibit "A" attached
  hereto and incorporated herein by this reference, and the Improvements.
  
       Section  1.74  "Project  Documents"  shall mean and include  all  documents
  delivered to or required by the  Construction  Loan and Mortgage Loan and/or any
  governmental  agency having jurisdiction over the Project in connection with the
  development,  construction  and  financing  of the  Project,  including  but not
  limited to, the Trust Indenture,  the Loan Agreement,  Construction Contract and
  approved plans and  specifications for the development and rehabilitation of the
  Project.
  
       Section 1.75 "Projected  Annual Tax Credits" shall mean LIHTC in the amount
  of $109,513 for 1996,  $262,831 per year for each of the years 1997 through 2005
  and $153,318 for 2006,  which the General  Partner has projected to be the total
  amount  of  LIHTC  which  will  be  allocated  to  the  Limited  Partner  by the
  Partnership;  provided,  however, that if the Actual Tax Credit allocated to the
  Limited  Partner is greater (or less than)  $109,513  the  Projected  Annual Tax
  Credit  allocated to the Limited  Partner for the year 2006 shall be reduced (or
  increased)  by an amount  equal to the amount by which the Actual Tax Credit for
  1996 exceeds (or is less than) $109,513. The Partners recognize that some of the
  1996 LIHTCs had been allocated to the General  Partner and the Original  Limited
  Partner prior to the admission of the Limited Partners,  therefore,  the Limited
  Partner will not receive the full 98% of Projected Tax Credits.
  
       Section  1.76  "Projected  Tax Credits"  shall mean LIHTC in the  aggregate
  amount of $2,681,950.
  
       Section  1.77  "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 1.78 "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 LIHTC.
  <PAGE>
  
       Section 1.79 "Rating  Agency" shall mean Standard & Poor's Ratings Group, a
  division of McGraw-Hill Financial Services Company.
  
       Section 1.80 "Rebate Fund" shall mean the fund  established  by the Trustee
  in accordance with the Trust Indenture.
  
       Section 1.81 "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 1.82  "Rehabilitation  Account" shall mean that account established
  by the Trustee in the amount of $3,056,000 and maintained in accordance with the
  Trust Indenture and Section 9.2(e) of this Agreement.
  
       Section  1.83  "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  1.84  "Reporting  Fee" shall have the meaning set forth in Section
  9.2(d) hereof.
  
       Section 1.85 "Revenue Fund" shall mean the fund  established by the Trustee
  in accordance with the Trust Indenture.  All rental income, other Project income
  and HAP Payments will be deposited into the Revenue Fund. If no Event of Default
  has occurred and is  continuing,  amounts on deposit in the Revenue Fund will be
  disbursed by the Trustee not later than the tenth day of each month as follows:
  
       (a) To the Management  Agent in an amount equal to the amount  necessary to
  pay the  current  expenses  for the Project due or expected to become due in the
  month in which such transfer is made;
  
       (b) To the  Insurance  and Tax  Escrow  Fund in  accordance  with the Trust
  Indenture;
  
       (c) To the Bond Fund in the  amounts  required by the Trust  Indenture  for
  payment of principal and interest on the Principal Payment Date and the Interest
  Payment Date;
  
       (d) To the Trustee in an amount to pay the Trustee Fee, if any;
  
       (e) To the Debt  Service  Reserve  Fund in an amount  required  so that the
  balance therein equals the Bond Reserve requirement;
  
       (f) To the Maintenance  and  Replacement  Fund in accordance with the Trust
  Indenture;
  <PAGE>
  
       (g) To the Rebate Fund in accordance with the Trust Indenture; and
  
       (h) To the Surplus Fund in accordance with the Trust Indenture.
  
       Section 1.86  "Revised  Projected  Tax Credits"  shall have the meaning set
  forth in Section 7.4(a) hereof.
  
       Section 1.87 "Sale or Refinancing" shall mean any of the following items or
  transactions:  a  sale,  transfer,  exchange  or  other  disposition  of  all or
  substantially  all of  the  assets  of the  Partnership,  a  condemnation  of or
  casualty at the Project or any part thereof,  a claim against a title  insurance
  company,  the  refinancing  or any Mortgage  Note or other  indebtedness  of the
  Partnership and any similar item or  transaction;  provided,  however,  that the
  payment of Capital  Contributions  by the Partners shall not be included  within
  the meaning of the term "Sale or Refinancing."
  
       Section 1.88 "Sale or Refinancing Proceeds" shall mean all cash receipts of
  the  Partnership  arising from a Sale or  Refinancing  (including  principal and
  interest received on a debt obligation  received as consideration in whole or in
  part, on a Sale or Refinancing) less the amount paid or to be paid in connection
  with or as an expense  of such Sale or  Refinancing,  and with  regard to damage
  recoveries or insurance or condemnation  proceeds, the amount paid or to be paid
  for  repairs,  replacements  or  renewals  resulting  from  damage to or partial
  condemnation of the Project.
  
       Section 1.89 "Special Limited Partner" shall mean BRENCOR, INC., a Delaware
  corporation.
  
       Section 1.90 "State" shall mean the State of Georgia.
  
       Section  1.91  "State Tax  Credit  Agency"  shall mean the state  agency of
  Georgia which has the  responsibility  and authorization to administer the LIHTC
  program in Georgia.
  
       Section  1.92  "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 1.93 "Surplus Fund" shall mean the fund  established by the Trustee
  in accordance with the Trust Indenture.  In addition, on October 1 of each year,
  any balance will be distributed as follows:
  
       (a) To the  Administrative  Expenses Fund, the Issuer's Fee for the current
  Fiscal  Year to the extent  amounts  are not on  deposit  in the  Administrative
  Expenses Fund for such purpose,  together with any Issuer's Fee remaining unpaid
  from  previous  Fiscal  Years;  
  <PAGE>
  
       (b) To the Trustee,  the amount of any  Trustee's  extraordinary  fees then
  due; 
  
       (c) To the Maintenance and Replacement Fund the amount required to fund any
  scheduled replacements  recommended by the Independent Architect; and 
  
       (d) To the  Developer;  
  
       provided that the amounts  described  above will be distributed if and only
  if the Trustee receives and the Issuer approves:  (i) the Project audit required
  by the Loan  Agreement and (ii) a  verification  of cash flows by an independent
  certified public  accountant or financial  analyst using the same assumptions as
  the cash flows submitted to the Rating Agency at the time of the original rating
  of the Bonds demonstrating that the (A) Debt Service Coverage was at least 1.32%
  at the end of the first Bond Year,  1.37% for Bond Years two through fifteen and
  1.45% for Bond Years sixteen through thirty for the immediately preceding Fiscal
  Year and is projected to be so for the current  Fiscal Year and each Fiscal Year
  thereafter,  (B) Project revenues and investment  earnings will be sufficient to
  pay  principal  and  interest on the Bonds,  fees and  current  expenses on each
  Interest  Payment Date until maturity,  and (C) asset liability  parity does not
  fall below 100%. 
  
       Section 1.94 "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,  LIHTC. 
  
       Section 1.95 "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 1.96 "TRA 1986" shall mean the Tax Reform Act of 1986. 
  
       Section  1.97  "Transition  Fund"  shall mean the fund  established  by the
  Trustee in accordance with the Trust Indenture.  Amounts on deposit in this fund
  shall be used by the  Trustee to  purchase  United  States  Treasury  Strip that
  matures on August 15, 2010 and that, upon maturity, will pay to the Trustee, for
  the benefit of the  bondholders,  the  principal  sum of $265,000.  
  
       Section 1.98 "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).  
  <PAGE>
  
       Section 1.99 "Trust  Indenture"  shall mean that  agreement  between  Urban
  Residential Finance Authority of the City of Atlanta, Georgia and Reliance Trust
  Company dated as of September 1, 1995 and incorporated herein by this reference.
  If the terms of this  Agreement  conflict,  or are not in accordance  with,  the
  terms of the Trust  Indenture then the provisions of the Trust  Indenture  shall
  govern.  
  
       Section l.100  "Trustee"  shall mean Reliance Trust  Company,  or successor
  thereto.  
  
       Section  1.101  "Withdrawing"  or  "Withdrawal"  (including  the verb  form
  "Withdraw" and the adjectival forms  "Withdrawing" and "Withdrawn")  shall mean,
  as to a General Partner,  the occurrence of the death,  adjudication of insanity
  or incompetence,  or Bankruptcy of such Partner,  or the withdrawal,  removal or
  retirement  from the  Partnership of such Partner for any reason,  including any
  sale,  pledge,  encumbering,  assignment or other transfer of all or any part of
  its General Partner  Interest and those situations when a General Partner may no
  longer  continue  as a General  Partner by reason of any law or  pursuant to any
  terms of this Agreement.
  
                                    ARTICLE III
  
                                        NAME
  
           The name of the Partnership shall be "CASCADE PINES, L.P. II."
  
                                     ARTICLE III
  
                    PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE
  
       Section 3.1 Principal  Executive Office. The principal  executive office of
  the Partnership is located at 100 Peachtree  Street,  N.W., Suite 400,  Atlanta,
  Georgia 30303,  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 Herbert Kohn,  whose address is 100 Peachtree
  Street, N.W., Suite 400, Atlanta, Georgia 30303.
  
                                     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 LIHTC and to sell the Project  after the  Compliance  Period.  The
  Partnership  shall not engage in any business or activity  which is not incident
  to the attainment of such purpose.
  <PAGE>
  
                                     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, 2030
  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 as required pursuant to the Loan Agreement or
  required by the Trustee.  
  
       Section 6.2 Construction and Operating Obligations; General Partner Loans.
  
       (a) The Special Limited  Partner shall cause  Completion of Construction in
  accordance with the Project  Documents,  as amended from time to time, 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 Special  Limited  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
  Urban  Residential  Finance  Authority  of the  City  of  Atlanta,  Georgia,  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  Commencement shall not be reimbursable or otherwise
  change the Interest of any Partner in the  Partnership but shall be borne by the
  Special  Limited  Partner as a Capital  Contribution.  In the event the  Special
  Limited  Partner  shall fail to fund any such  deficiency  as  required  by this
  Section 6.2(a),  any amounts otherwise payable to the Special Limited 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 Special  Limited  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 a payment of the obligation
  of the fee which such funds have been  earmarked to pay, and the  obligation  of
  the Special  Limited  Partner to advance such amount  under this Section  6.2(a)
  shall be satisfied to the extent of such application.
  <PAGE>
  
       (b) During the Operating  Deficit  Guarantee  Period,  the Special  Limited
  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 Special  Limited  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 Special Limited
  Partner or its  Affiliates  pursuant to Section 9.2  ("Special  Limited  Partner
  Funds") and utilize the withheld  funds to meet the  obligations  of the Special
  Limited Partner pursuant to this Section 6.2(b); any such use of Special Limited
  Partner Funds will be deemed an Operating  Loan of the Special  Limited  Partner
  repayable  to the  Special  Limited  Partner as  aforesaid.  Such use of Special
  Limited Partner Funds shall also constitute  payment and satisfaction of amounts
  payable to the Special Limited Partner or Affiliates thereof pursuant to Section
  9.2, and the obligation of the  Partnership to make such payments to the Special
  Limited  Partner or its  Affiliates  pursuant to Section 9.2 shall  therefore be
  deemed satisfied.
  
       Section 6.3 Partner Loans.  With the prior consent of the Limited  Partner,
  and if approved by Urban  Residential  Finance Authority of the City of Atlanta,
  Georgia,  the  General  Partner,  or  Special  Limited  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.
  This Section 6.3 shall not apply to the  Operating  Loans  referenced in Article
  VI.  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.
  
                                     ARTICLE VII
  
                      CAPITAL CONTRIBUTIONS OF LIMITED PARTNER
  
       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.  The
  Original  Limited Partner  acknowledges  that it has no further  interest in the
  Partnership  as a  limited  partner  as of the date of this  Agreement,  and has
  released  all  claims,  if  any,  against  the  Partnership  arising  out of its
  participation as a limited partner.
  
       Section 7.2 Capital  Contribution of Limited  Partner.  The Limited Partner
  shall make a total Capital  Contribution  in the amount of $1,471,854 in cash on
  <PAGE>
  
  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
  Certification  and  Agreement  in the form  attached  hereto as Exhibit  "C" and
  incorporated herein by this reference;
  
       (3) prior to the due date of each installment of such Capital  Contribution
  except the first  payment,  the  General  Partner  shall  deliver to the Limited
  Partner a fully  executed  General  Partner  Certification  in the form attached
  hereto as Exhibit "D" and incorporated  herein by this reference,  to the effect
  that all of the  representations  and  warranties  set forth in  Article  IX are
  accurate;
  
       (4)  prior  to the  Capital  Contribution  payment  referenced  in  Section
  7.2(b)(3),  the  General  Partner  shall  deliver  to the  Limited  Partner  the
  following:  (A) a  certificate  of occupancy on all the  apartment  units in the
  Project; (B) a copy of the recorded grant deed (warranty deed); (C) a copy of an
  ALTA Owner's Title Insurance Policy and any endorsements required by the Limited
  Partner issued in an amount equal to the sum of the original principal amount of
  the  Mortgage and the  aggregate  amount of Capital  Contributions  set forth in
  Sections 6.1 and 7.2; (D) an audited  construction  cost  certification  with an
  itemized  cost  breakdown;  (E) copies of all Mortgage Loan  documents;  and (F)
  copies of all Mortgage Notes; and
  
       (5)  prior  to the  Capital  Contribution  payment  referenced  in  Section
  7.2(b)(3),  the General  Partner shall deliver to the Limited  Partner  Internal
  Revenue Code Form 8609, or any successor  form and a copy of the  Declaration of
  Restrictive   Covenants/Extended   Use   Agreement   entered  into  between  the
  Partnership and the State Tax Credit Agency.
  
       (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  $1,177,485  and will be payable  upon
  admittance of the Limited Partner into the Partnership,  provided the conditions
  of Section 7.2(a) have been met;
  <PAGE>
  
       (2) The second payment shall equal $147,185 and will be payable as follows:
  (a) upon Completion of  Construction as evidenced by the inspecting  Architect's
  certification,  in a form  substantially  similar to the form attached hereto as
  Exhibit "E" and incorporated  herein by this reference;  (b) receipt of a letter
  from the Contractor stating that all amounts payable to the Contractor have been
  paid in  full  and  the  Partnership  is not in  violation  of the  construction
  contract;  (c) the date the Project  maintains a debt coverage  ratio of 1.15 on
  the Bonds for 90  consecutive  days; (d) the Limited  Partner's  receipt of, and
  review  of,  tenant  income  verification  data  to  determine  that  98% of the
  apartments  units in the  Apartment  Complex  qualify  under  Section  42 of the
  Internal  Revenue  Code (the  Limited  Partner  will  review the  tenant  income
  verification in a reasonable  time); (e) delivery of the Accountant's  final Tax
  Credit cost  certification  setting forth the Project's  eligible  basis and the
  amount  of the Tax  Credits  to which the  Partnership  is  entitled,  in a form
  substantially   similar  to  the  form  attached   hereto  as  Exhibit  "F"  and
  incorporated  herein by this reference;  and (f) delivery to the Limited Partner
  of a fully  executed set of the Mortgage  documents;  provided the conditions of
  Section 7.2(a) have been met; and
  
       (3) The final  payment  shall equal  $147,184 and will be payable after all
  the conditions  above have been met and delivery of the IRS Form 8609,  provided
  the conditions of Section 7.2(a) have been met.
  
       Section 7.3 Repurchase of Limited Partner's Interest.  Within 60 days after
  the General  Partner  receives  written  demand 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 LIHTC no later than the close of the calendar
  year during which the Project is placed in service;
  
       (b) cause the Project to be placed in service by September 1, 1996;
  
       (c) achieve 90%  occupancy of the Project by Qualified  Tenants by December
  1, 1996;
  
       (d) obtain Permanent Mortgage Commencement by September 1, 1996; and
  
       (e) meet both the Minimum  Set-Aside Test and the Rent Restriction Test not
  later than  December  31 of the first year the  Partnership  elects the LIHTC to
  
  <PAGE>
  
  commence in accordance with the Code.
  
       Section 7.4 Reduction of Limited Partner's Capital Contribution.
  
       (a) If the anticipated amount of Tax Credits to be allocated to the Limited
  Partner as evidenced by IRS Form 8609,  and Schedule A thereto,  and the audited
  construction  cost  certification  provided to the Limited  Partner is less than
  $2,628,311  (the "Revised  Projected Tax  Credits")  then the Limited  Partner's
  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  56% of the  Revised  Projected  Tax  Credits  so
  anticipated to be allocated to the Limited Partner.
  
       (b) The General Partner is required to use its best efforts to rent 100% of
  the Project's  apartment  units to Qualified  Tenants  throughout the Compliance
  Period.  If at any time during the first five calendar years  following the year
  in which the Project is placed in service,  the Actual Tax Credit for any fiscal
  year or portion thereof is or will be less than the Projected Annual Tax Credit,
  or the Revised  Projected  Tax Credit  calculated  on an annual basis  ("Revised
  Projected Annual Tax Credit"),  if applicable,  then, unless the shortfall shall
  have previously been addressed under Section 7.4(a), the amount of the reduction
  shall be applied to the next Capital  Contribution  owed by the Limited Partner,
  if any, 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  any.  If,  at the  time  of  determination  thereof,  the  Capital
  Contribution  reduction  referenced in Section 7.4(a) and/or this Section 7.4(b)
  is  greater  than the  balance of the  Limited  Partner's  Capital  Contribution
  payments which is then due, if any ("Reduction  Shortfall"),  then the amount of
  the  Reduction  Shortfall  shall be paid by the Special  Limited  Partner to the
  Limited  Partner  within ninety days of the Special  Limited  Partner  receiving
  notice of the Reduction Shortfall from the Limited Partner.
  
       (c) In the event  that,  for any  reason,  at any time after the first five
  calendar years following the year in which the Project is placed in service, the
  amount of the Actual Tax Credit is less than the Projected Annual Tax Credit, or
  the Revised  Projected  Annual Tax Credit,  if  applicable,  (the "Annual Credit
  Shortfall"), then, unless the Annual Credit Shortfall shall have previously been
  addressed under Section 7.4(a) or Section 7.4(b),  there shall be a reduction in
  the Special  Limited  Partner's  share of Cash Flow From Operations in an amount
  equal to the Annual Credit  Shortfall  and said amount  instead shall be paid to
  the Limited Partner. In the event there are not sufficient funds to pay the full
  Annual  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 made a  constructive  advance to the  Partnership in an amount
  equal to the Annual Credit Shortfall (a "Credit Shortfall Loan"), which shall be
  deemed  to have been made on  January 1 of the year in which the  Annual  Credit
  
  <PAGE>
  
  Shortfall  arises.  Each Credit  Shortfall Loan shall bear simple  interest (not
  compounded)  from the date on which  such loan is deemed to have been made under
  this Section 7.4(c) at the rate equal to the 10-year  Treasury money rate at the
  time of the Credit Shortfall Loan, or, if lesser, the maximum legal rate. Credit
  Shortfall Loans or any portion thereof shall be repaid in the next year in which
  sufficient  monies are available  from the Special  Limited  Partner's Cash Flow
  From Operations,  with interest payable prior to principal.  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(b).
  
       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, with the Consent of
  the Limited  Partner,  determine that such cash should,  in whole or in part, be
  returned to the Limited  Partner in  reduction of its Capital  Contribution.  No
  such return  shall be made 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  Capital
  Contributions  in the amounts and on the dates  specified in this Agreement and,
  except as otherwise expressly required hereunder,  shall not be required to lend
  any funds to the Partnership or, after their  respective  Capital  Contributions
  have been paid, to make any further Capital Contribution to the Partnership.
  
                                    ARTICLE VIII
  
                            WORKING CAPITAL AND RESERVES
  
       Section  8.1  Reserve.   In  accordance  with  the  Trust  Indenture,   the
  Partnership  shall  provide all revenue  generated  from the  operations  of the
  Project to the Trustee who will deposit the funds into the Revenue Fund.
  
                                     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
  
  <PAGE>
  
  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 or
  Special Limited Partner (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 Developer a  Development  Fee in the
  amount of $1,333,381 in accordance with the  Development  Fee Agreement  between
  the  Partnership  and the  Developer  dated as of the  even  date  herewith  and
  incorporated herein by this reference.
  
       (b) The  Partnership  shall collect the sum of $138,473 from the proceeds
  established  in Section 7.2(b) of this Agreement and transfer said amount to the
  Trustee to be used for the  acquisition,  rehabilitation  and development of the
  Project. The Trustee shall receive the funds and place the same into the Project
  Fund  which  consists  of an  Acquisition  Account,  Development  Account  and a
  Rehabilitation  Account.  The Trustee shall determine to which account the funds
  will  be  transferred.   The  General  Partner  shall  confirm  that  the  funds
  established  in this  Section  9.2(b) are  allocated  to either the  Acquisition
  Account,  Development  Account  and the  Rehabilitation  Account  and are  being
  properly administered by the Trustee.
  
       (c) Upon sale of the Bonds, there will be deposited in the Acquisition Fund
  the amount of $2,697,265.25.  The Trustee will disburse  $1,641,265.25  from the
  Acquisition  Fund to HUD.  In  addition,  the  Trustee  will  disburse  from the
  Acquisition  Fund the amount of  $1,056,000.00  to the Issuer for the assignment
  rights in connection with the purchase of the property.
  
       (d) The Trustee shall use the  Rehabilitation  Fund solely to pay costs for
  the Project.  Before any payment shall be made from the Rehabilitation Fund, the
  General  Partner  shall file with the  Trustee a  requisition  and  certificate,
  approved  by  the   inspecting   architect.   If  prior  to  the  Completion  of
  Construction, the Trustee has insufficient moneys on deposit in the Bond Fund to
  
  <PAGE>
  
  make all payments on the Bonds  required to be made,  the Trustee will  transfer
  from the Rehabilitation  Fund to the Bond Fund an amount sufficient,  when added
  to amounts  already on deposit in the Bond Fund,  to enable the  Trustee to make
  payments  due on the Bonds.  Upon the  occurrence  of an Event of Default of the
  Bonds,  amounts on deposit in the Rehabilitation Fund will be transferred to the
  Bond Fund.  Following the Completion of  Construction,  and after payment of all
  costs of the  Project,  the  Trustee  will call  Bonds for  redemption  and will
  transfer to the Bond Fund all amounts remaining on deposit in the Rehabilitation
  Fund  and not  required  to pay  unpaid  costs of the  Project.  Notwithstanding
  anything to the contrary,  the Trustee shall maintain a balance of not less than
  $94,000  in the  Rehabilitation  Fund,  which  balance  shall not be  disbursed,
  reduced or  depleted  without the prior  written  approval of HUD which shall be
  attached to the required requisition.
  
       (e) The Partnership shall pay to the Management Agent a property management
  fee for the leasing  and  management  of the Project in an amount in  accordance
  with the Management  Agreement.  The term of the Management  Agreement shall not
  exceed one year. If the Management  Agent is an Affiliate of the General Partner
  then commencing with the termination of the Operating  Deficit  Guarantee period
  referenced in Section 6.2(b),  in any year in which the Project has an Operating
  Deficit, 40% of the management fee will be deferred ("Deferred Management Fee").
  Deferred  Management  Fees, if any, shall be paid to the Management Agent solely
  in  accordance  with  and to the  extent  permitted  by  Section  11.1  of  this
  Agreement.
  
       (1) The General  Partner shall,  upon receiving any request of the Mortgage
  lender  requesting  such  action,  dismiss  the  Management  Agent as the entity
  responsible  for  management  of the Project  under the terms of the  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,  or in the event of any  misconduct by the  Management  Agent or its
  failure  to  exercise  reasonable  care  in  the  discharge  of its  duties  and
  obligations as Management Agent.
  
       (2) The  appointment  of any successor  Management  Agent is subject to the
  Consent  of the  Limited  Partner  which  may only be sought  after the  General
  Partner has  provided  the Limited  Partner  accurate  and  complete  disclosure
  respecting the proposed Management Agent.
  
       (f) The Partnership  shall pay to the Limited Partner a fee (the "Reporting
  Fee") commencing in 1997 equal to 10% of the Cash Flow From Operations but in no
  event less than $5,000 per year for the Limited Partner's services in monitoring
  the  operations  of the  Partnership  and for  services in  connection  with the
  Partnership's  accounting  matters and  assisting  with the  preparation  of tax
  returns and the reports  required in Sections  14.2 and 14.3 of this  Agreement.
  The  Reporting  Fee shall be  payable  each  calendar  year upon  release by the
  Trustee in  accordance  with the Trust  Indenture and shall be payable from Cash
  
  <PAGE>
  
  Flow From  Operations  in the manner and  priority  set forth in Section 11.1 of
  this Agreement; provided, however, that if in any year Cash Flow From Operations
  is insufficient to pay the full $5,000,  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, as provided in Section 11.1, or sufficient
  Sale or Refinancing Proceeds, as provided in Section 11.2.
  
       (g) The Partnership shall pay to Urban Residential  Development Corporation
  an  Incentive  Management  Fee  equal to 45% of the  available  Cash  Flow  From
  Operations  in  accordance  with Section 11.1 of this  Agreement 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  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 Incentive Management Fee shall be payable each calendar year
  upon release by the Trustee in accordance  with the Trust Indenture and shall be
  payable from Cash Flow From  Operations  in the manner and priority set forth in
  Section 11.1. If the Incentive  Management  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 the other provisions of this Agreement, and with the approval of
  the Special  Limited  Partner,  the  General  Partner  shall have the  following
  powers:
  
       (a) In the  Partnership's  name and on its 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 on its 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,
  contractors,  agents,  brokers,  accountants and attorneys, on such terms as the
  General Partner shall determine;
  
       (c) In the  Partnership's  name and on its 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;
  <PAGE>
  
       (d) In the  Partnership's  name and on its 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 LIHTC compliance;
  
       (e) In the  Partnership's  name and on its 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; and
  
       (g) In the  Partnership's  name and on its 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 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:
  <PAGE>
  
       (a) 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) Except as provided in the  Indenture of Trust,  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 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 Consent
  of the Limited  Partner the General  Partner and/or the Special  Limited 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;
  <PAGE>
  
       (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 Patner, 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 LIHTC.
  
       Section 9.7 Duties of General  Partner.  The General Partner agrees that it
  shall at all times:
  
       (a) 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;
  
       (b) 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;
  
       (c) 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;
  
       (d) 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;
  
       (e) Comply with all Code and state rules and regulations for rental housing
  and LIHTC;
  
       (f) Use its best efforts to keep the Project and Project dwelling units, in
  decent,  safe, sanitary and good condition,  repair and working order,  ordinary
  use and  obsolescence  excepted,  and make or cause to be made from time to time
  all necessary repairs thereto  (including  external and structural  repairs) and
  renewals and replacements thereof;
  <PAGE>
  
       (g) Permit,  and cause the Management Agent to permit,  the Limited Partner
  and its  representatives to have access to the Project and personnel employed by
  the Partnership and by the Management Agent who are concerned with management of
  the Project at all reasonable  times during normal business hours and to examine
  all Tax Credit compliance data; and
  
       (h) 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 Special Limited Partner,  General  Partner,  an Affiliate of the
  Special  Limited  Partner or 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 which are not Affiliates of
  the  General  Partner  or the  Special  Limited  Partner,  and  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) Except for the Incentive  Management Fee,  reimbursement to the General
  Partner, or the Special Limited Partner, or any of their Affiliates of operating
  cash  expenses  pursuant  to  Subsection  (a)  hereof  shall be  subject  to the
  following:
  
       (1) No such  reimbursement  shall be  permitted  for services for which the
  Special  Limited  Partner or the General  Partner or any of their  Affiliates is
  
  <PAGE>
  
  entitled to compensation by way of a separate fee; and
  
       (2) 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 Special Limited Partner
  or the  General  Partner or any of their  Affiliates.  For the  purposes of this
  Section  9.8(b)(2),  "controlling  person" includes,  but is not limited to, any
  Person,  however titled,  who performs functions for the Special Limited Partner
  or the  General  Partner  or any of their  Affiliates  similar  to those of: (i)
  chairman or member of the board of directors; (ii) executive management, such as
  president,  vice  president  or senior vice  president,  corporate  secretary or
  treasurer;  (iii) senior management,  such as the vice president of an operating
  division who reports directly to executive management;  or (iv) those holding 5%
  or more equity  interest in such Special  Limited  Partner or General Partner or
  any of their  Affiliates  or a person  having  the  power to direct or cause the
  direction of such  Special  Limited  Partner or General  Partner or any of their
  Affiliates,  whether through the ownership of voting securities,  by contract or
  otherwise.
  
       Section 9.9 General  Partner  Expenses.  The Special Limited Partner or the
  General Partner or any of their  Affiliates  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
  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 the
  Limited Partner.
  <PAGE>
  
       (b) The Partnership  Agreement and the Project  Documents are in full force
  and effect and neither the  Partnership  nor the General Partner is in breach or
  violation of any provisions thereof.
  
       (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  Improvements  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) No Partner has or will have any personal  liability  with respect to or
  has or will have personally guaranteed the payment of the Mortgage.
  
       (f) The  Partnership is in 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.
  
       (g) 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.
  
       (h) 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.
  
       (i) A builder's risk insurance  policy in favor of the Partnership  will be
  and is in full force and effect until Completion of Rehabilitation.
  
       (j) 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 in  amounts  and with  insurers
  satisfactory to Urban Residential Finance Authority. All such 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.
  <PAGE>
  
       (k) The Management Agent shall obtain a fidelity bond or a blanket position
  bond to minimally include (1) comprehensive  employee dishonesty,  disappearance
  and destruction, covering all principals of the Management Agent and all persons
  or positions which manage the Project's  assets,  including,  but not limited to
  rent, bank accounts and accounting records; (2) naming the Limited Partner as an
  additional  loss payee;  and (3)  insuring the Project for an amount equal to at
  least two (2) months of the Project's gross potential  income plus the Project's
  total tenant security deposit liability.
  
       (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 based on the Phase I  Environmental  Report prepared for this Project:
  (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)  The  General  Partner  has not  executed  and  will  not  execute  any
  agreements with provisions contradictory to, or in opposition to, the provisions
  of this Agreement.
  
       (n) Delivery of 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.
  <PAGE>
  
       (p) The  buildings on the Project  site  constitute  or 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 LIHTC
  to  commence  in  accordance  the Code,  the  Project  will  satisfy the Minimum
  Set-Aside Test.
  
       (q) As of the  date of  this  Agreement  all  accounts  of the  Partnership
  required to be maintained under the terms of the Project  Documents,  including,
  without limitation,  any account for replacement reserves,  are currently funded
  to required levels, including levels required by any authority.
  
       (r) The General Partner has not lent or otherwise advanced any funds to the
  Partnership  other than its  Capital  Contribution  and the  Partnership  has no
  unsatisfied  obligation to make any payments of any kind to the General  Partner
  or any Affiliate thereof outstanding as of the date of this Agreement.
  
       (s) No event has occurred  which with the giving of notice,  the passage of
  time or both  would  constitute  a  material  default  under any of the  Project
  Documents.
  
       (t) No event or  proceeding,  including,  but not  limited  to,  any  legal
  actions or  proceedings  before any court,  commission,  administrative  body or
  other  governmental  authority,  and 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:  (1)  materially  or  adversely
  affected the operation of the  Partnership or the Project  (except to the extent
  the funds are  available  to the  Partnership  to  correct or cure such event or
  proceeding); (2) 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 (3) 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.
  
       (u) 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 affect the ability of the Limited  Partner
  to obtain the anticipated benefits of its investment in the Partnership.
  
       (v) The Special  Limited  Partner and/or the General  Partner has and shall
  maintain a net worth  equal to at least  $500,000  computed in  accordance  with
  
  <PAGE>
  
  generally accepted accounting principles.
  
       The  Special  Limited  Partner  or 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 9.11.
  
                                      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 98% to the Limited  Partner,  1% to the Special 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
  the  related  Sale  or  Refinancing   Proceeds,   but  after  giving  effect  to
  Distributions  of Cash Flow From  Operations and allocations of other Income and
  Losses  pursuant  to this  Article X up to the date of the Sale or  Refinancing)
  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  Limited
  Partner's and Special  Limited  Partner's  positive  Capital  Account balance to
  their  Capital  Contribution  and to increase the Limited  Partner's and Special
  Limited  Partner's  positive Capital Account balance to an amount equal to their
  Capital  Contribution,  shall be  allocated  to the Limited  Partner and Special
  Limited Partner, as applicable;
  
       (3) Third, an amount of Income sufficient to increase the General Partner's
  positive Capital Account balance to an amount equal to its Capital Contribution;
  and
  
       (4) The  balance,  if any, of such  Income  shall be  allocated  50% to the
  Limited  Partner,  25% to the General  Partner  and 25% to the  Special  Limited
  Partner.
  <PAGE>
  
       (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 the
  related 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 up to the date of the Sale or  Refinancing)  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  98% to the Limited
  Partner, 1% to the Special 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 the  Limited  Partner if and to the
  extent that such allocation would create or increase an Adjusted Capital Account
  Deficit for the Limited Partner.  In the event an allocation of 98% 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 98% 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 shall be allocated 98% of the items
  of  Income  not  arising  from a Sale  or  Refinancing  and  98% 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  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
  
  <PAGE>
  
  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 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 an 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.
  <PAGE>
  
       (e) Nonrecourse Deductions for any fiscal year shall be specially allocated
  98% to the  Limited  Partner,  1% to the Special  Limited  Partner and 1% to the
  General Partner.
  
       (f) Any  Partner  Nonrecourse  Deductions  for any  fiscal  year  shall  be
  specially  allocated  to the  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  734(b) or Code  Section  743(b) is
  required,  pursuant to Treasury Regulations Section  1.704-1(b)(2)(iv)(m)(2)  or
  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  Partners 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:
  
       (1) Such  interest  income  shall be  specially  allocated  to the  Limited
  Partner to whom such promissory note relates; and
  
       (2) 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  investment  tax  credit
  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
  investment tax credit 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).
  <PAGE>
  
       (k) Any income,  gain,  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 among 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
  10.2(c),  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 this Article X (other than the
  Regulatory  Allocations),  with the Consent of the Limited Partner,  the General
  Partner shall make such offsetting  special  allocations of Partnership  income,
  gain,  loss,  or  deduction  in whatever  manner the General  Partner,  with the
  Consent of the  Limited  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 10.1,  10.2(a),  10.2(b),
  10.3(h),  10.3(i),  10.3(j),  10.3(k),  10.3(l),  10.3(m),  10.3(n) and 10.5. In
  exercising its authority under this 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).
  <PAGE>
  
       Section 10.5 Other Allocation Rules.
  
       (a) The basis (or cost) of any  Partnership  investment tax credit 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
  98% to the  Limited  Partner,  1% to the Special  Limited  Partner and 1% to the
  General Partner.
  
       (b) In the event Partnership  investment tax credit 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 (1) the reduction in the adjusted tax basis (or
  cost) of such property  pursuant to Code Section 50(c), over (2) 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 and  Section  10.2(a)  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
  Partner with the Consent of the Limited  Partner,  using any permissible  method
  under Code Section 706 and the Treasury Regulations thereunder.
  
       (d) Solely for purposes of determining a Partner's  proportionate  share of
  the "excess  nonrecourse  liabilities" of the Partnership  within the meaning of
  Treasury   Regulations   Section 1.752-3(a)(3),   the  Partners'   interests  in
  Partnership  profits are as  follows:  Limited  Partner:  98%;  Special  Limited
  Partner: 1%; General Partner: 1%.
  
       (e) To the  extent  permitted  by  Section  1.704-2(h)(3)  of the  Treasury
  Regulations, the General Partner shall endeavor to treat Distributions as having
  been made from the proceeds of a Nonrecourse  Liability or a Partner Nonrecourse
  Debt only to the extent  that such  Distributions  would  cause or  increase  an
  Adjusted Capital Account Deficit for any Partner who is not a General Partner.
  
       Section 10.6 Tax Allocations:  Code Section 704(c). In accordance with Code
  Section 704(c) and the Treasury Regulations thereunder,  income, gain, loss, and
  
  <PAGE>
  
  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 Section 1.25(a) hereof).
  
       In the event the Gross  Asset  Value of any  Partnership  asset is adjusted
  pursuant to Section  1.25(b)  hereof,  subsequent  allocations of income,  gain,
  loss,  and  deduction  with  respect  to such asset  shall  take  account of any
  variation  between  the  adjusted  basis of 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  and the  Special  Limited  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.  In the event that the
  Interest of the Limited  Partner  hereunder is at any time held by more than one
  Limited  Partner  all 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 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.
  
       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
  Regulations  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, 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
  
  <PAGE>
  
  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.
  
                                     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 pay the Deferred  Management Fee, if any, but in no event shall this
  payment exceed 50% of the Cash Flow From Operations;
  
       (b) To pay the current  Reporting Fee and then to pay any accrued Reporting
  Fees which have not been paid in full from previous years;
  
       (c) To pay the  Development  Fee in  accordance  with the  Development  Fee
  Agreement;
  
       (d) To pay the Operating Loans advanced by the Special Limited Partner,  if
  any, as referenced in Section  6.2(b) of this  Agreement,  limited to 50% of the
  Cash Flow From  Operations  remaining  after  reduction  for the  payments  made
  pursuant to subsections (a) through (c) of this Section 11.1;
  
       (e) To pay the Incentive  Management Fee equal to 45% of the Cash Flow From
  Operations   remaining  after  reduction  for  the  payments  made  pursuant  to
  subsections (a) through (d) of this Section 11.1; and
  
       (f) The balance of the remaining  Cash Flow From  Operations to the Limited
  Partner in an amount equal to 10.9%,  to the General  Partner in an amount equal
  to 3.6% and to the Special Limited Partner in an amount equal to 85.5%.
  
       Section  11.2  Distribution  of  Sale  or  Refinancing  Proceeds.  Sale  or
  Refinancing  Proceeds shall be distributed  in the following  order,  subject to
  HUD's land use restriction:
  
       (a) To the  payment  of the  Mortgage  Note and  other  matured  debts  and
  liabilities  of the  Partnership,  other than accrued  payments,  debts or other
  liabilities owing to Partners or former Partners;
  
       (b) To any  accrued  payments,  debts  or  other  liabilities  owing to the
  Partners or former Partners,  including,  but not limited to, accrued  Reporting
  Fees and Operating Loans, to be paid prorata if necessary;
  <PAGE>
  
       (c) To the  establishment of any reserves which the General  Partner,  with
  the  Consent  of the  Limited  Partner,  shall  deem  reasonably  necessary  for
  contingent,   unmatured  or  unforeseen   liabilities   or  obligations  of  the
  Partnership;
  
       (d) To the Limited Partner in an amount equal to its Capital Contribution;
  
       (e) To the General  Partner and the  Special  Limited  Partner in an amount
  equal to their Capital Contribution; and
  
       (f) Thereafter,  50% to the Limited Partner, 25% to the General Partner and
  25% to the Special Limited Partner.
  
       Section  11.3  Additional  Refinancing.  Notwithstanding  the  Distribution
  provisions of Section 11.2 of this  Agreement,  the Partners  recognize that the
  Partnership  is seeking to  refinance or add  additional  debt of up to $900,000
  with the first $900,000 of available refinance proceeds, or additional financing
  funds if applicable,  distributed as follows: to the Special Limited Partner and
  General  Partner  for  payment  of any  unpaid  Development  Fee;  and  then for
  reimbursement of expenses.
  
                                     ARTICLE XII
  
                           TRANSFERS OF LIMITED PARTNER'S
                            AND SPECIAL LIMITED PARTNER'S
                             INTEREST IN THE PARTNERSHIP
  
       Section 12.1 Assignment of Limited  Partner's and Special Limited Partner's
  Interest.  The Limited  Partner and Special  Limited  Partner shall not have the
  right to assign all or any part of their respective Interests 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
  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
  <PAGE>
  
       (d)  Upon  receipt  by  the  General  Partner  of  the  Assignee's  written
  representation  that the Partnership  Interest is to be acquired by the Assignee
  for the  Assignee's  own account for  long-term  investment  and not with a view
  toward resale, fractionalization, division or distribution thereof.
  
       THE LIMITED PARTNERSHIP  INTEREST DESCRIBED HEREIN HAVE 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 or Special 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 to such assignment are satisfied.
  
       Section 12.3 Invalid Assignment. Any purported assignment of an Interest of
  a Limited Partner or Special  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 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 or Special Limited
  Partner.
  
       (a) An  Assignee  shall not have the right to become a  Substitute  Limited
  Partner or Substitute  Special  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.
  <PAGE>
  
       (b) A  nonadmitted  transferee  of a Limited  Partner's or Special  Limited
  Partner's  Interest in the  Partnership  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 a transferee and transferor  jointly
  advise the  General  Partner in writing  of a  transfer  of an  Interest  in the
  Partnership, furnish the transferee with pertinent tax information at the end of
  each fiscal year of the Partnership.
  
       (c) The General  Partner may elect to treat a transferee  of a  Partnership
  Interest who has not become a Substitute Limited Partner as a Substitute Limited
  Partner,  or Substitute  Special Limited Partner as a Substitute Special Limited
  Partner,  as the case may be, in the place of its transferor  should the General
  Partner determine 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 or
  Special  Limited  Partner.   Upon  the  death,   dissolution,   adjudication  of
  bankruptcy,  insanity or  adjudication  of  incompetency of a Limited Partner or
  Special  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  constitute a successor as a transferee of its Interest in
  the  Partnership  and to join with such  transferee in making the application to
  substitute such transferee 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  respective  predecessors-in-interest  unless the
  General Partner shall so consent.
  
                                    ARTICLE XIII
  
                       WITHDRAWAL, REMOVAL AND REPLACEMENT OF
                                   GENERAL PARTNER
  
       Section 13.1  Withdrawal of General  Partner.  The General  Partner may not
  Withdraw  (other  than as a result of an  Involuntary  Withdrawal)  without  the
  Consent  of  the  Limited  Partner,  and,  to  the  extent  required,  of  Urban
  Residential Finance Authority and the State Tax Credit Agency.  Withdrawal shall
  be  conditioned  upon the  agreement  of one or more  Persons  who  satisfy  the
  requirements  of Section  13.5 of this  Agreement  to be admitted  as  successor
  General Partner(s).
  <PAGE>
  
       Section 13.2 Removal of General Partner.
  
       (a) 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;
  
       (C) Been convicted of, or entered into a plea of guilty to, a felony;
  
       (D) Made personal use of Partnership funds or properties;
  
       (E) Violated the terms of the Mortgage  Note,  and such  violation  prompts
  Urban  Residential  Finance  Authority 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) Failed to provide any loan, advance,  Capital Contribution or any other
  payment to the Partnership required under this Agreement;
  
       (G) Materially breached any representation,  warranty or covenant contained
  in this  Agreement,  or failed to perform any other action which may be required
  by this  Agreement  and  such  conduct  caused  the  Partnership  to  suffer  an
  uninsurable loss;
  
       (H)  Violated  any  federal or state tax law which  causes a  recapture  of
  LIHTC; or
  
       (I) Failed during any  six-month  period  during the  Compliance  Period to
  cause at least 85% of the total  apartment  units in the  Project to qualify for
  LIHTC, 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 by the Limited Partner 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 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
  
  <PAGE>
  
  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.  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.
  
       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  shall have  consented  in writing to the  admission of such Person as a
  substitute General Partner;  (iii) 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 (iv) 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 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 by the General  Partner and the
  Partnership  prior to the effective  date of such event and shall be free of any
  obligation or liability incurred on account of the activities of the Partnership
  after such time.
  
       Section 13.5 Transfer of Interest. Except as otherwise provided herein, the
  General  Partner may not assign,  transfer,  mortgage or sell any portion of its
  interest in the Partnership,  or enter into any agreement as the result of which
  any Person shall obtain an Interest 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.
  
       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
  
  <PAGE>
  
  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 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).
  
      (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.
  <PAGE>
  
                                     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
  
       (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
  their  federal and state income tax returns and other tax returns with regard to
  
  <PAGE>
  
  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:  (1) a
  balance  sheet as of the end of such  fiscal  year  and  statements  of  income,
  Partners' equity and changes in financial position for 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;  (2)
  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;  (3) 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
  appropriate in the circumstances;  (4) a copy of the Project's rent roll for the
  most recent  calendar  quarter;  (5) a statement  signed by the General  Partner
  indicating  the  number of  apartment  units  which are  occupied  by  Qualified
  Tenants;  and (6) 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.
  
       Section 14.3 Other Reports.  The General  Partner shall also provide to the
  Limited Partner:
  
       (a)  During the  period of  construction,  by the tenth day of each month a
  copy of the previous month's  Construction  Loan draw request and the inspecting
  architect's certification;
  
       (b) During the rent-up  phase,  and  continuing  until the end of the first
  six-month  period  during which the Project has a sustained  occupancy of 95% or
  better, by the tenth day of each month within such period a copy of the previous
  
  <PAGE>
  
  month's rent roll (through the last day of the month), a tenant LIHTC compliance
  worksheet similar to the monthly initial tenant certification worksheet included
  in Exhibit "G" attached hereto and  incorporated  herein by this reference,  and
  copies of all initial tenant files including completed  applications,  completed
  questionnaires or checklists of income and assets,  documentation of third party
  verification of income and assets,  income  certification forms (LIHTC specific)
  and executed  lease  agreements  collected by the Management  Agent,  or General
  Partner, verifying each tenant's eligibility as a Qualified Tenant;
  
       (c) A  quarterly  tax credit  compliance  report  similar to the  worksheet
  included in Exhibit "G". 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  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 LIHTC for that year;
  
       (e) If the Project receives a reservation of LIHTC in one year but will not
  complete the  construction  and rent-up until a later year, the General  Partner
  will provide to the Limited  Partner by December 31 of the year during which the
  reservation  is  received  an  audited  cost  certification  together  with  the
  accountant's  work  papers  verifying  that the  Partnership  has  expended  the
  requisite 10% of the  reasonably  expected cost basis to meet the carryover test
  provisions of Section 42 of the Code;
  
       (f)  During  the  Compliance  Period,  no  later  than  the  day  any  such
  certification is filed, copies of any certifications  which the Partnership must
  furnish to  federal  or state  governmental  authorities  administering  any Tax
  Credit  program  including,  but not  limited  to,  copies of all annual  tenant
  recertifications required under Section 42 of the Code;
  
       (g) On or before 30 days  after  each  calendar  quarter  of every year the
  Partnership  shall send to the Limited  Partner a report on  operations,  in the
  form attached hereto as Exhibit "G", an unaudited income  statement  showing all
  activity in the reserve accounts  required to be maintained  pursuant to Section
  VIII of this  Agreement and a Tax Credit  compliance  report  similar in form to
  that attached hereto as Exhibit "G";
  
       (h) By the annual renewal date of each and every year, an executed original
  or certified copy of each and every  insurance  policy  required by the terms of
  this Agreement;
  <PAGE>
  
       (i) On or before March 15th of each calendar  year,  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
  
       (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 9.11 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 or  Special  Limited
  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 or
  Special  Limited  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 or
  Special  Limited  Partner,  and  failure to so pay shall  constitute  a material
  default of the General Partner hereunder. In addition, if the General Partner or
  Special  Limited  Partner  shall so fail to pay, the General  Partner or Special
  Limited Partner and their Affiliates shall forthwith cease to be entitled to the
  annual  Incentive  Management  Fee and to the  payment  of any  Cash  Flow  From
  Operations to which the General Partner or Special Limited Partner may otherwise
  be entitled  hereunder.  Such payments of the Incentive  Management Fee and Cash
  Flow From Operations shall be restored only upon payment of such damages in full
  and any amount of such damages not so paid shall be deducted against payments of
  the Incentive  Management Fee and Cash Flow From Operations otherwise due to the
  General Partner or its Affiliates.
  
       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  inspection  of the property,  a review of the
  office and tenant files and an interview with the property manager.  The Limited
  Partner may, in its sole  discretion,  cancel all or any part of the annual site
  visit.
  
       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.
  <PAGE>
  
       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.
  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 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, Bankruptcy,  dissolution, death or insanity of
  the General Partner,  unless (1) at the time there is at least one other General
  Partner who will  continue as General  Partner,  or (2) within 90 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; or
  
       (c) The Partnership becomes subject to 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  Mortgage  Note or any other  agreement  with or rule or
  regulation of Urban  Residential  Finance  Authority to which the Partnership is
  subject.
  <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(c),  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(d),  Section  11.2(e)  and
  Section 11.2(f) 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's  taxable  year in which  such  liquidation  occurs,  such  General
  Partner shall pay to the Partnership the lesser of:
  
       (1) the  amount  necessary  to  restore  such  deficit  balance  to zero in
  compliance with Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(3); or
  
       (2) 1.01% of the Capital Contributions.
  <PAGE>
  
       (3) 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
  Partnership's  adjusted basis in such assets for book purposes.  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 manner  described in Section 10.2,  and such assets
  shall then be  distributed to the Partners as provided  herein.  In applying the
  preceding  sentence,  the  Project  shall not be  assigned a value less than the
  unamortized principal balance of any loan secured thereby.
  <PAGE>
  
       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
  
       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 provisions herein. Notwithstanding the foregoing, no
  amendment shall change the Partnership to a 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.
  <PAGE>
  
                                    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 and elect a  substitute  General
  Partner as provided in this Agreement;
  
       (3) Elect a successor  General  Partner upon the  Withdrawal of the General
  Partner;
  
       (4) Approve, but not initiate, the dissolution of the Partnership; or
  
       (5) 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:  (a) at any time by the General Partner;  or (b) upon the General
  Partner's  receipt of a written or facsimile  request  from the Limited  Partner
  setting forth the purpose of such meeting.  Within ten days after receipt of the
  Limited  Partner's  written or  facsimile  request  for a meeting,  the  General
  Partner  shall provide all Partners  with written  notice of the meeting  (which
  shall be by telephone  conference,  or 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 or  facsimile
  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
  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 it shall be amended from time to time.
  <PAGE>
  
       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:  URBAN RESIDENTIAL  MANAGEMENT,  INC. 100 Peachtree
  Street, N.W., Ste. 400 Atlanta, Georgia 30303
  
  
       To the Limited Partner:  WNC HOUSING TAX CREDIT FUND V, L.P.,  SERIES 3 c/o
  WNC & Associates, Inc. 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 and inure to the benefit of the  successors and
  assigns of the Partners.
  
       Section  17.5  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 17.6 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.
  
       (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 of Limited  Partnership or any amendment
  thereto.
  <PAGE>
  
       (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 17.7  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 17.8 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 17.9 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 17.10 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
  to Persons  or  circumstances  other than those as to which it is held  invalid,
  shall not be affected thereby.
  
       Section 17.11 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  17.12 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 17.13  Governing Law. This Agreement and its  application  shall be
  governed by the laws of the State.
  
       Section  17.14  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.
  <PAGE>
  
       Section  17.15  Receipt  of  Correspondence.  The  Partners  agree that the
  General Partner shall send to the Limited  Partner a copy of any  correspondence
  relative to the Project's  noncompliance with the Mortgage Note, relative to the
  acceleration  of the Mortgage  Note and/or  relative to the  disposition  of the
  Project.
  
       IN  WITNESS  WHEREOF,  this  Amended  and  Restated  Agreement  of  Limited
  Partnership of CASCADE PINES,  L.P. II, a Georgia limited  partnership,  is made
  and entered into as of the day of , 1996.
  
                                      GENERAL PARTNER
  
                                      URBAN RESIDENTIAL MANAGEMENT, INC.
  
  
                                      By:     __________________________________
                                              Herbert Kohn, President
  
  
                                      WITHDRAWING ORIGINAL LIMITED PARTNER
  
                                      BRENCOR, INC.
  
  
                                      By:     ___________________________________
                            Robert A. Crowder, President
  
  
                                      SPECIAL LIMITED PARTNER
  
                                      BRENCOR, INC.
  
  
                                      By:     _______________________________
                            Robert A. Crowder, President
  
  
                                      LIMITED PARTNER
  
                                      WNC HOUSING TAX CREDIT FUND V, L.P.,
                                        SERIES 3
  
                                      By:     WNC & ASSOCIATES, INC.
                                              General Partner
  
  
                                              By:      _________________________
                                                       John B. Lester, Jr.,
                                                       President
  
  
  
  
  <PAGE>
  
  
  
  
  
  
  
  
  
                         EXHIBIT A TO PARTNERSHIP AGREEMENT
  
                                  LEGAL DESCRIPTION
  
  
       All that  tract or parcel of land  lying and being in Land Lots 218 and 231
  of the 14th  District of Fulton  County,  Georgia,  and being more  particularly
  described as follows:
  
       BEGINNING at an iron pin on the  southwest  side of Harbin Road,  said iron
  pin being 200 feet  northwesterly,  as measured along the southwesterly  side of
  Harbin Road from the intersection of the southwesterly  side of Harbin Road with
  the  northwesterly  side of  Campbellton  Road; and from said point of beginning
  running  thence south 73 degrees 47 minutes 45 seconds  west,  399.85 feet to an
  iron pin; thence south 48 degrees 44 minutes 30 seconds west,  199.30 feet to an
  iron pin; thence north 27 degrees 18 minutes 15 seconds west,  149.33 feet to an
  iron pin; thence south 48 degrees 22 minutes 15 seconds west, 1204.96 feet to an
  iron pin;  thence  south 39 degrees 39 minutes 15 seconds  east;  300 feet to an
  iron pin; thence south 50 degrees 14 minutes 30 seconds west,  199.98 feet to an
  iron pin;  thence south 39 degrees 39 minutes 15 seconds east,  53.65 feet to an
  iron pin located on the south line of said Land Lot 218; thence north 88 degrees
  42  minutes  30  seconds  west,  along  the south  line of said Land Lot 218,  a
  distance of 228.37 feet to an iron pin;  thence  north 2 degrees 20 minutes east
  600.32 feet to an iron pin; thence south 87 degrees 18 minutes west,  62.43 feet
  to an iron pin;  thence north 3 degrees 07 minutes west,  390.09 feet to an iron
  pin; thence north 15 degrees 40 minutes west, 210.11 feet to an iron pin; thence
  north 89 degrees 29 minutes 30 seconds west,  219.86 feet to an iron pin; thence
  north 15 degrees 47 minutes 43 seconds west,  220.85 feet to an iron pin; thence
  south 88 degrees 30 minutes 30 seconds east 1364.46 feet to an iron pin;  thence
  north 80 degrees 04 minutes 45 seconds east,  615.47 feet to an iron pin located
  on the southwest  side of Harbin Road;  thence south 26 degrees 50 minutes east,
  along the  southwest  side of Harbin  Road,  188.10  feet to an iron pin and the
  point of BEGINNING.
  
       TOGETHER  WITH  a  non-exclusive  easement  for  ingress  and  egress  more
  particularly described as follows:
  
       ALL THAT  TRACT or  parcel  of land  lying and being in Land Lot 218 of the
  14th District of Fulton County,  Georgia, and being more particularly  described
  as follows:
  
       BEGINNING  at an  iron  pin  located  on  the  northwest  right  of  way of
  Campbellton Road 32.85 feet northeasterly from the intersection of the northwest
  right of way of Campbellton Road with the south line of Land Lot 218, which line
  is also the north  line of Land Lot 219;  running  thence  north 39  degrees  39
  minutes 15 seconds  west,  500 feet to an iron pin;  thence  north 48 degrees 22
  minutes  15 seconds  east,  60.02  feet to a point;  thence  south 39 degrees 39
  
  <PAGE>
  
  minutes 15 seconds east, 503.50 feet to a point located on the northwest side of
  the right of way of Campbellton Road; thence  southwesterly  along the northwest
  right  of way of  Campbellton  Road,  60 feet to an iron  pin and the  point  of
  BEGINNING.
  
       LESS AND EXCEPT therefrom the following tract or parcel of land:
  
       Beginning at a point on the northern right of way of Campbellton Road, S.W.
  1,140  feet  northeasterly  as  measured  along  said  right  of  way  from  the
  northeastern  intersection  of the rights of way of Campbellton  Road,  S.W. and
  Childress  Drive,  S.W.  said point being 32.85 feet  northeasterly  as measured
  along the northern right of way of  Campbellton  Road from the  intersection  of
  said right of way and the line  forming the boundary of Land Lots 218 and 219 of
  the 14th District of Fulton County, Georgia; thence running 5 feet northwesterly
  along the property line of 2909 Campbellton Road along a bearing of N 39 degrees
  39 minutes 15 seconds W to a point on said property line; thence running 60 feet
  along a  bearing  of N 50  degrees  14  minutes  30  seconds E to a point on the
  northeast  property  line  of  2909  Campbellton  Road;  thence  running  5 feet
  southeasterly  along  said  property  line  along a bearing  of S 39  degrees 39
  minutes  15  seconds E to a point on the  northern  right of way of  Campbellton
  Road, S.W.; thence running 60 feet southwesterly along the northern right of way
  of Campbellton  Road, S.W. to the Point of Beginning,  and containing 300 square
  feet (0.0069 acres).
  
       Being the same property  conveyed by Warranty Deed from John Hancock Mutual
  Life Insurance Company to Deerfield  Associates,  a Georgia Limited  Partnership
  dated April 17, 1979,  filed for record April 18, 1979 and recorded in Deed Book
  7221,  page 470,  in the  Office of the  Clerk of the  Superior  Court of Fulton
  County, Georgia.
  
  
  
  <PAGE>
                                                               
  
                         EXHIBIT B TO PARTNERSHIP AGREEMENT
  
                               FORM OF LEGAL OPINION
  
  
  
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 
  c/o WNC & Associates, Inc.
  3158 Redhill Avenue, Suite 120
  Costa Mesa, California  92626
  
  RE:      CASCADE PINES, L.P. II
  
  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 3,
  a California limited  partnership (the "Limited Partner") in CASCADE PINES, L.P.
  II (the  "Partnership"),  a Georgia limited  partnership formed to own, develop,
  (construct/-rehabilitate)   finance  and  operate  an   apartment   complex  for
  low-income persons (the "Apartment Complex") in Atlanta, Fulton County, Georgia.
  The general partner(s) of the Partnership (is/are) URBAN RESIDENTIAL MANAGEMENT,
  INC. (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.
  
       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.
  <PAGE>
  
       Based on the foregoing we are of the opinion that:
  
       (a)   ________________________,   one  of  the  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.
  _____________________,    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 a limited  partnership  duly  formed  and  validly
  existing under the laws of the State of Georgia.
  
       (c) The  Partnership  is validly  existing under and subject to the laws of
  Georgia 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 Partnership  Agreement by the General
  Partner(s)  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 Partner(s) 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 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 Apartment  Complex,  the  Partnership or any General Partner which
  would  materially  adversely  affect the  condition  (financial or otherwise) or
  business of the Apartment Complex, the Partnership or any of the Partners of the
  Partnership.
  
       (g) The Limited  Partner has been admitted to the  Partnership as a limited
  partner of the Partnership  under  __________ law and are entitled to all of the
  rights of limited partners under the Partnership Agreement.  Except as described
  
  <PAGE>
  
  in the  Partnership  Agreement,  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  Partnership  Agreement,
  and the  lender of the  Mortgage  Loan will  look  only to its  security  in the
  Apartment Complex for repayment of the Mortgage Loan.
  
       (j) The Partnership owns a fee simple interest in the Apartment Complex.
  
       (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  Apartment
  Complex, and the Apartment Complex conforms to all applicable Federal, state and
  local land use, zoning, health, building and safety laws, ordinances,  rules and
  regulations.
  
       (l) The  Apartment  Complex 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 Apartment Complex 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 Apartment Complex 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
  
  <PAGE>
  
  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 which
  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,
  
  
  
  
  - --------------------
  
  
  
  
  <PAGE>
  
  
  
                         EXHIBIT C TO PARTNERSHIP AGREEMENT
  
                             CERTIFICATION AND AGREEMENT
  
       CERTIFICATION  AND  AGREEMENT  made as of the date written below by CASCADE
  PINES,  L.P.  II, a  Georgia  limited  partnership  (the  "Partnership");  URBAN
  RESIDENTIAL   MANAGEMENT,   INC.  (collectively  referred  to  as  the  "General
  Partner");  and BRENCOR, INC. (collectively referred to as the "Original Limited
  Partner")  for the benefit of WNC  HOUSING TAX CREDIT FUND V, L.P.,  SERIES 3, 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 Partner and the Original Limited Partner
  
       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
  and Agreement by the  Partnership,  the General Partner and the Original Limited
  Partner  have been duly and validly  authorized  by all  necessary  action;  the
  
  <PAGE>
  
  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  Projected  Annual  Tax  Credits  (as such term is  defined  in the
  Partnership  Agreement Section 1.50) are $44,699 for 1997, $268,195 per year for
  each of the years 1998 through  2006,  and $223,496 for 2007,  which the General
  Partner has projected to be the total amount of LIHTC which will be allocated to
  the Investment Partnership by the Partnership, constituting 99% of the aggregate
  
  <PAGE>
  
  amount of LIHTC of  $2,681,950  to be  available to the  Partnership;  provided,
  however,  that if the Actual Tax Credit (as such term is defined in Section  1.3
  of the  Partnership  Agreement) for 1997 is greater (or less than) $44,699,  the
  Projected Tax Credit for the year 2007 shall be reduced (increased) by an amount
  equal to the amount by which the Actual  Tax  Credit for 1997  exceeds  (is less
  than) $44,699.
  
       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
  Investment  Partnership and WNC, 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.
  
       2.3 Capitalized terms used but not defined in this Certification  Agreement
  shall have the meanings given to them in the Partnership Agreement.
  
  
  
  <PAGE>
  
  
       IN WITNESS WHEREOF, this Certificate and Agreement is made and entered into
  as of the day of , 1996.
  
  PARTNERSHIP
  
  CASCADE PINES, L.P. II
  
  
  
  By:      URBAN RESIDENTIAL MANAGEMENT, INC.,
           General Partner
  
  
           By:
                    Herbert Kohn, President
  
  
  GENERAL PARTNER
  
  
  By:      URBAN RESIDENTIAL MANAGEMENT, INC.
  
  
           By:
                    Herbert Kohn, President
  
  
  ORIGINAL LIMITED PARTNER
  
  
  By:      BRENCOR, INC.
  
  
           By:
                    Robert A. Crowder, President
  
  
  <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  3  ("Limited  Partner")  by  URBAN  RESIDENTIAL
  MANAGEMENT,  INC.,  General Partner of CASCADE PINES, L.P. II, a Georgia limited
  partnership  ("Partnership")  in accordance  with Section 7.2 of the Amended and
  Restated  Agreement  of Limited  Partnership  of the  Partnership  ("Partnership
  Agreement").
  
       Capitalized   terms  used  but  not   defined  in  this   General   Partner
  Certification  shall  have  the  meanings  given  to  them  in  the  Partnership
  Agreement.
  
       WHEREAS, the Limited Partner is scheduled to make a Capital Contribution to
  the Partnership;
  
       WHEREAS,  the Partnership  Agreement  requires the General Partner to issue
  this Certification prior to the Limited Partner's payment; and
  
       WHEREAS, the Limited Partner shall rely on this Certification in evaluating
  the continued merits of its investment in the Partnership;
  
       NOW, THEREFORE, to induce the Limited Partner to make its scheduled Capital
  Contribution to the Partnership,  the General Partner represents and warrants to
  the  Limited  Partner  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 the
  Limited Partner.
  
       (b) The Partnership  Agreement and the Project  Documents are in full force
  and effect and neither the  Partnership  nor the General Partner is in breach or
  violation of any provisions thereof.
  
       (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  Improvements  on the Project,  if any,  shall be completed
  substantially   in  conformity   with  the  Project   Documents  and  any  other
  
  <PAGE>
  
  requirements necessary to obtain Completion of Construction.
  
       (e) No Partner has or will have any personal  liability with respect to, or
  has or will have personally guaranteed the payment of, the Mortgage.
  
       (f) The  Partnership is in 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.
  
       (g) The Partnership owns the fee simple interest in the Project.
  
       (h) 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.
  
       (i) A builder's risk insurance  policy in favor of the Partnership  will be
  and is in full force and effect until Completion of Rehabilitation.
  
       (j) 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 in  amounts  and with  insurers
  satisfactory to Urban Residential Finance Authority. All such 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.
  
       (k) The Management Agent shall obtain a fidelity bond or a blanket position
  bond to minimally include (1) comprehensive  employee dishonesty,  disappearance
  and destruction, covering all principals of the Management Agent and all persons
  or positions which manage the Project's assets,  including,  but not limited to,
  rent, bank accounts and accounting records; (2) naming the Limited Partner as an
  additional  loss payee;  and (3)  insuring the Project for an amount equal to at
  least two (2) months of the Project's gross potential  income plus the Project's
  total tenant security deposit liability.
  
       (l) Except as otherwise  disclosed to the Limited  Partner in writing prior
  to the  execution  of the  Partnership  Agreement,  to the  best of the  General
  Partner's knowledge based on the Phase I Environmental  Report prepared for this
  
  <PAGE>
  
  Project:  (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)  The  General  Partner  has not  executed  and  will  not  execute  any
  agreements with provisions contradictory to, or in opposition to, the provisions
  of the Partnership Agreement.
  
       (n) Delivery of 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  constitute  or 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 LIHTC
  to  commence  in  accordance  the Code,  the  Project  will  satisfy the Minimum
  Set-Aside Test.
  
       (q) As of the  date of  this  Agreement  all  accounts  of the  Partnership
  required to be maintained under the terms of the Project  Documents,  including,
  
  <PAGE>
  
  without limitation,  any account for replacement reserves,  are currently funded
  to required levels, including levels required by any authority.
  
       (r) The General Partner has not lent or otherwise advanced any funds to the
  Partnership  other than its  Capital  Contribution  and the  Partnership  has no
  unsatisfied  obligation to make any payments of any kind to the General  Partner
  or any Affiliate thereof outstanding as of the date of this Agreement.
  
       (s) No event has occurred  which with the giving of notice,  the passage of
  time or both  would  constitute  a  material  default  under any of the  Project
  Documents.
  
       (t) No event or  proceeding,  including,  but not  limited  to,  any  legal
  actions or  proceedings  before any court,  commission,  administrative  body or
  other  governmental  authority,  and 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:  (1)  materially  or  adversely
  affected the operation of the  Partnership or the Project  (except to the extent
  the funds are  available  to the  Partnership  to  correct or cure such event or
  proceeding);  (2)  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 (3) 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.
  
       (u) 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.
  
       (v) The Special  Limited  Partner and/or the General  Partner has and shall
  maintain a net worth  equal to at least  $500,000  computed in  accordance  with
  generally accepted accounting principles.
  
  
  
  <PAGE>
  
  
       IN WITNESS  WHEREOF,  the undersigned  have set their hands to this General
  Partner Certification this day of 1996.
  
  
  
  URBAN RESIDENTIAL MANAGEMENT, INC.
  General Partner
  
  
  
  By:
           Herbert Kohn, President
  
  
  
  
  <PAGE>
  
                         EXHIBIT E TO PARTNERSHIP AGREEMENT
  
                           FORM OF COMPLETION CERTIFICATE
  
              (to be used when construction [rehabilitation] completed)
  
  
                               COMPLETION CERTIFICATE
  
  
       The undersigned,  an architect duly licensed and registered in the State of
  Atlanta,  Fulton County,  Georgia, has prepared final working plans and detailed
  specifications  for CASCADE PINES,  L.P. II, a Georgia limited  partnership (the
  Partnership"),  between  WNC  HOUSING  TAX  CREDIT  FUND V,  L.P.,  SERIES 3, a
  California  limited  partnership  ("Limited  Partner")  and the  Partnership  in
  connection  with the  construction  [rehabilitation]  of improvements on certain
  real property located in Atlanta, Fulton County, Georgia (the "Improvements").
  
       The  undersigned  hereby  certifies  (i) that the  Improvements  have  been
  completed in accordance with the aforesaid plans and specifications, (ii) that a
  permanent  certificate  of  occupancy  and all other  permits  required  for the
  continued  use and occupancy of the  Improvements  have been issued with respect
  thereto by the governmental agencies having jurisdiction thereof, (iii) that the
  Improvements  are in compliance with all  requirements  and  restrictions of all
  governmental  authorities having jurisdiction over the Improvements,  including,
  without limitation,  all applicable zoning, building,  environmental,  fire, and
  health  ordinances,  rules  and  regulations  and  (iv)  that  all  contractors,
  subcontractors and workmen who worked on the Improvements have been paid in full
  except for normal retainages and amounts in dispute.
  
  
  
  - -----------------------------------
  Project Architect
  
  Date:  ____________________________
  
  
  
  Confirmed by:
  
  
  - -----------------------------------
  General Partner
  
  Date:  ____________________________
  
  
  
  <PAGE>
  
  
                         EXHIBIT F TO PARTNERSHIP AGREEMENT
  
                             [ACCOUNTANT'S CERTIFICATE]
                              [Accountant's Letterhead]
  
  
  
  _______________, 199____
  
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 c/o WNC & Associates, Inc.
  3158 Redhill Ave., Suite 120
  Costa Mesa, California 92626
  
  RE:  Partnership
       Certification as to Amount
       of Eligible Tax Credit Base
  
  Gentlemen:
  
       In connection  with the acquisition by WNC HOUSING TAX CREDIT FUND V, L.P.,
  SERIES 3 (the "Limited  Partner") of a limited  partnership  interest in CASCADE
  PINES, L.P. II, a Georgia limited partnership (the  "Partnership")  which owns a
  certain  parcel  of  land  located  in  Atlanta,   Fulton  County,  Georgia  and
  improvements  thereon (the  "Project"),  the Limited  Partner has  requested our
  certification as to the amount of low-income housing tax credits ("Tax Credits")
  available  with respect to the Project under Section 42 of the Internal  Revenue
  Code of 1986, as amended (the "Code").  Based upon our review of [the  financial
  information provided by the Partnership] of the Partnership,  we are prepared to
  file the Federal  information tax return of the Partnership  claiming annual Tax
  Credits in the amount of $_______________,  which amount is based on an eligible
  basis  (as   defined  in  Section   42(d)  of  the  Code)  of  the   Project  of
  $________________,  a qualified  basis (as defined in Section 42(c) of the Code)
  of the Project of $_________________ and an applicable percentage (as defined in
  Section 42(b) of the Code) of _____%.
  
  Sincerely,
  
  
  - -------------------------
  
  
  
  <PAGE>
  
  
  
                                REPORT OF OPERATIONS
  
                   QUARTER ENDED:____________________________,199X
  
  
  LOCAL PARTNERSHIP:
  
  
  
  GENERAL PARTNER:
  
  
  FIRM NAME:
  
  ADDRESS:
  
  CITY, STATE, ZIP:
  
  PHONE:
  
  
  PROPERTY NAME:
  
  ADDRESS:
  
  
  CITY, STATE, ZIP:
  
  RESIDENT MANAGER:
  
  PHONE:
  
  
  
  ACCOUNTANT:
  
  FIRM:
  
  ADDRESS:
  
  
  CITY, STATE, ZIP:
  
  
  PHONE:
  
  
  
  MANAGEMENT COMPANY
  
  ADDRESS:
  
  
  CITY, STATE, ZIP:
  
  PHONE:
  
  CONTACT:
  
  
                                OCCUPANCY INFORMATION
  
  
  A.     Number of Units ______ Number of RA Units _____
  
         Number of Section 8 Tenants  ________
  
  B.     Occupancy for the Quarter has: Increased____Decreased____
  
                                        Remained the Same ______
  
  C.     Number of:  Move-Ins______  Move-Outs________  % of Occupancy _______
  
  D.     Average length of tenant residency: 1-6 months_______6-12 months _______
  
                        1-3 years________Over 4 years_______
                    
  E.     Number of Basic rent qualified applicants on waiting list:
  
  
  F.     If the  apartments  are less than 90% occupied,  please  explain why and
         describe what efforts are being made to lease-up remaining units.
  
  
  
  G.     On site manager:   Full Time__________  Part Time____________.
  
         If part-time, the number of hours per week_____________.
  
  
  <PAGE>
  
  
  
                               OPERATIONAL INFORMATION
  
                  Rent Schedule and Increases from Previous Quarter
  
              ---------   ------------  -------------------------  -----------
               Number     Monthly Rent          Rent Increases      Effective
                                        -------------------------
               of Units   Basic / Market   Amount         Percent       Date
              ---------   ------------- -------------------------  -----------
  
  - ----------  ---------   -------------  --------------   -------  -----------
  1 Bedroom
  - ----------  ---------   -------------  --------------   ------- ------------
  
  - ----------  ---------   -------------  --------------   ------- ------------
  2 Bedroom
  - ----------  ---------   -------------  --------------   ------- ------------
  
  - ----------  ---------   -------------  --------------   ------- ------------
  3 Bedroom
  - ----------  ---------   -------------  --------------   ------- ------------
  
  
                                PROPOSED MAINTENANCE
  
  - ------------------------------------------------------------------------------
                                         Completed      Funded by
           Type            Description      or        Operations or    Amount
                                          Planned       Reserves
  - -------------------------------------------------------------------------------
  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:
  
  - ------------------------------------------------------------------------------
  
  - ------------------------------------------------------------------------------
  
  - ------------------------------------------------------------------------------
  
  
  
  <PAGE>
  
  
  
                                CONDITION OF PROPERTY
  
  THE OVERALL APPEARANCE OF THE BUILDING(S) IS:
  
  
      Excellent ______    Good ______       Fair ______       Bad  _______
  
  
  THE OVERALL APPEARANCE OF THE GROUNDS IS:
  
  
       Excellent ______   Good ______       Fair ______       Bad ________
  
  
  
  EXTERIOR CONDITION (Please Check Appropriate Box)
  - -------------------------------------------------------------------------------
  Type of Condition       Excellent       Good      Fair      Problems/Comments
  - ---------------------------------------------------------- -------------------
  - ------------------------------------------------------------------------------
  Signage
  - ------------------------------------------------------------------------------
  - ------------------------------------------------------------------------------
  Parking Lots
  - ------------------------------------------------------------------------------
  Office/Storage
  - ------------------------------------------------------------------------------
  Equipment
  - ------------------------------------------------------------------------------
  Community Building
  - ------------------------------------------------------------------------------
  Laundry Room
  - ------------------------------------------------------------------------------
  Benches/Playground
  - ------------------------------------------------------------------------------
  Lawns, Plantings
  - ------------------------------------------------------------------------------
  Drainage, Erosion
  - ------------------------------------------------------------------------------
  Carports
  - ------------------------------------------------------------------------------
  Fences
  - ------------------------------------------------------------------------------
  Walks/Steps/Guardrails
  - ------------------------------------------------------------------------------
  Lighting
  - ------------------------------------------------------------------------------
  Painting
  - ------------------------------------------------------------------------------
  Walls/Foundation
  - ------------------------------------------------------------------------------
  Roof/Flashing/Vents
  - ------------------------------------------------------------------------------
  Gutters/Splashblocks
  - ------------------------------------------------------------------------------
  Balconies/Patios
  - ------------------------------------------------------------------------------
  Doors Windows/Screens
  - ------------------------------------------------------------------------------
  Elevators
  - ------------------------------------------------------------------------------
  
  
  INTERIOR CONDITION
  - ------------------------------------------------------------------------------
  Stairs
  - ------------------------------------------------------------------------------
  Flooring
  - ------------------------------------------------------------------------------
  Doors/Cabinets/Hardware
  - ------------------------------------------------------------------------------
  Drapes/Blinds
  - ------------------------------------------------------------------------------
  Interior Painting
  - ------------------------------------------------------------------------------
  Refrig/Stoves/Sinks
  - ------------------------------------------------------------------------------
  Bathroom/Tubs/Showers
      Toilets
  - ------------------------------------------------------------------------------
  
  
  
  <PAGE>
  
  
  
                                  FINANCIAL STATUS
  
  
  A.     Replacement Reserve is: Fully-funded_____ Under-funded____  Amount____
         (complete attached schedule)
  
         Tax/Insurance Escrow is:Fully-funded_____ Under-funded_____ Amount____
         (complete attached schedule)
  
         Property is operating at a: Surplus____   Deficit____  Amount _____
  
  
         If deficit, General Partner funding?   Yes____  No____  Amount____       
  
         Mortgage Payments are: On Schedule______ Delinquent____ Amount____
  
         Are the taxes current?   Yes____     No____
           (please provide copy of paid tax bill)
  
         Is the insurance current? Yes____    No____     Renewal Date
         (please provide copy of yearly renewal)
  
  B.     Please note and explain any significant changes in the following:
  
  
         Administrative Expense  Increase____  Decrease____    Amount____
  
         ---------------------------------------------------------------------
  
         ---------------------------------------------------------------------
  
  
         Repairs/Maintenance Expense     Increase____   Decrease____   Amount____
  
         ---------------------------------------------------------------------
        ----------------------------------------------------------------------
  
         Utility Expense     Increase____   Decrease____       Amount____
  
         ---------------------------------------------------------------------
  
         ---------------------------------------------------------------------
         Taxes/Insurance Expense    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 files?  Yes______   No______
         If yes, please explain:
         ----------------------------------------------------------------------
  
          ---------------------------------------------------------------------
  
  
  
  <PAGE>
  
  
  
                                SCHEDULE OF RESERVES
  
                       Replacement    Tax & Insurance     Other      Total
  
  Beginning Balance:
  
  Deposits:
  
             -------   -----------    -----------          --------  ---------
  
             -------   -----------    -----------          --------  ---------
  
             -------   -----------    -----------          --------  ---------
  
  Total Deposits
                       -----------    -----------          --------  ---------
  
  Authorized Disbursements:
         Description:
  
         ----------    -----------    ------------         --------  ---------
  
         ----------    -----------    ------------         --------  ---------
  
         ----------    -----------    ------------         --------  ---------
  
         ----------    -----------    ------------         --------  ---------
  
  Total Disbursements:
                       -----------    ------------        --------- ---------
  
  Ending Balance: (1)
                       -----------    ------------        --------- ---------
  
  Required Balance:
                       -----------    -----------         --------- ---------
  
  Over/under funding:
                       -----------    -----------         --------- ---------
  
  (1) Must agree with amount shown on the balance sheet.
  
  
  
  Prepared By:                            Date:
  
  
  Firm:                                   Telephone:
  
  Reminder: Please include the following documents:
  
                1. Completed Report of Operations
                2. Balance Sheet
                3. Statement of Income & Expenses
                4. Rent roll for quarter ending
                5. Tax Credit Compliance Report
  
  
  
  
  <PAGE>
  
  
                            INITIAL TENANT CERTIFICATIONS
                                   PARTNERSHIP NAME
  
  Fund:          Tax Credit Set-Asides Information:  Loan/Regulatory Set-Asides:
  Property Name: [ ] 20/50 or [  ] 40/60 Election
  Address:       Does the 51% average apply? [  ] Y [  ] N
                 Deeper Set-Aside __% @ 50% AMI
  
  County:
                                 Management Company
  [ ] Multi-Family                                    Contact Person:
  [ ] Elderly
  
    24 Number of Units                                Phone #
  
       Number of Exempt
       Units
  LIHTC Project#
  
  - -----------------------------------------------------------------------------
  
  
  
                                                                  Gross   Move-In
  Unit  First Time   Move-In  No. of                      No. in Income   Income
  No.   Tenant Name  Date     Bdrms  Sq. Ft.   Set-Aside  Unit   Move-In  Limits
  - -------------------------------------------------------------------------------
        BIN #        Certificate of Occupancy Date:
  - -----------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
       BIN #          Certificate of Occupancy Date:
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
       BIN #           Certificate of Occupancy Date:
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  
  <PAGE>
  
  
                            INITIAL TENANT CERTIFICATIONS
                                  PARTNERSHIP NAME
  (CONTINUED)
  
  Tenant                                                            Tenant
  Income       Income         Asset      Unit   Rent      Tenant    Utility
  Qualified Verification  Verification   Rent   Subsidy   Payment   Allowance
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  
  
  
  <PAGE>
  
  
                            INITIAL TENANT CERTIFICATIONS
                                  PARTNERSHIP NAME
  (CONTINUED)
  
       Tenant                   Tenant            Overall
  Gross     Maximum             Rent              Tenant
  Rent      Rent                Qualified         Eligible
  
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
  
  
  
  
  <PAGE>
  
  
                       QUARTERLY TAX CREDIT COMPLIANCE REPORT
                                    PROPERTY NAME
  
  
  Quarter Ending: Tax Credit Set-Asides Information:  Loan/Regulatory Set-Asides:
                  [  ] 20/50 or [  ] 40/60 Election
                  Does the 51% average apply? [  ] Y [  ] N
                  Deeper Set-Aside : ( List Details)
  
  
  
  County:    Allocation:                                 Management Company:
  
             Pre-1990 (Rent based on number of persons)  Contact Person:
             Elected to change No. Bedrm
             Post-1989 (Based on number of Bedroom)
  
  [  ] Multi-Family  [  ] Elderly                         Phone No.
  
        Number of Units
        Number of Exempt Units                            Fax No.
                                                          Prepared by:
  
  LIHTC Project#
  - -----------------------------------------------------------------------------
                                                            Gross    Annual
  Unit   Tenant    Move-In   No. Of   Inc.   Set-  No. In   Annual   Income
  No.    Name      Date      Bdrms    Pct.  Aside  Unit     Income   Limits
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  <PAGE>
  
  
                       QUARTERLY TAX CREDIT COMPLIANCE REPORT
                                    PROPERTY NAME
  (CONTINUED)
  
  
  Annual  Tenant                                   Less
  Recert.  Income      Income     Assets   Unit    Rent     Tenant
  Date   Qualified   Verified   Verified   Rent  Subsidy   Payment
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
          Tenant              Tenant     Overall
  Utility   Gross   Maximum    Rent       Tenat
  Allow.    Rent    Rent    Qualified    Eligible
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  
  <PAGE>
  
  
  
                         Tenant Tax Credit Compliance Audit
                           Document Transmittal Checklist
  
  Unit Number          Property Name                                   Date
  
  
  Tenant Name                                               Completed By:
  
  
  Initial  _________        Annual________
    Check Box for Type of Certification         Management Company
                                                   This Section For WNC Use Only
  Check Documents Being Sent
                                                            Received.  Reviewed
  ___Internal Checklist or worksheet
  ___Initial - Rental Application/ Rental
            Agreement
  ___Initial - Questionnaire of
            Income/Assets
  ___Recertification   -  Questionnaire  of  Income/Assets   
  ___Recertification  - Addendum  to  Lease   
  ___Employment   Verification   
  ___Employment   Termination  Verification  
  ___Military  Verification   
  ___Verification  of  Welfare  Benefits
  ___Verification of Social Security
          Benefits
  ___Verification   of   Disability    Benefits    
  ___Unemployment    Verification
  ___Verification   of   Unemployment   Compensation    
  ___Verification   Worksmen Compensation  
  ___Retirement/Annuities  Verification  
  ___Verification of Veterans Pension  
  ___Verification  of Child Support  
  ___Verification  of Alimony  Support
  ___Disposed  of  Assets  Last  2 yrs.  
  ___Real  Estate  
  ___Investment  
  ___Assets Verifications  (savings,  stocks etc.) 
  ___Trusts/with Current Tax Return 
  ___Lump Sum Settlements  
  ___Notarized Affidavit of Support  
  ___Certification of Handicap
  ___Notarized  Self-Employed-Tax  Return  
  ___Notarized  statement  of  no  income
  ___Tenant Certification
  - ------------------------------------------------------------------------------
                                     This Section For WNC Use Only
  
           YES  NO
                       Are all required forms completed?
                       Are all required forms dated?
                       Did the Manager and Tenant sign all documents?
                       Third party verification of income completed?
                       Third party verification of assets completed?
                       Are verifications completed for all members 18 yrs. and
                       over?
                       Did all the members of the household 18 yrs. and
                       over sign all documents?
                       Is  lease  completed  with a  minimum  of six  months/  SRO
                       monthly?
                       Addendum completed?
                       Tenant Certification completed?
                       Are all members of the household full-time students?
                       Is utility allowance
                       correct?
                       Is correct income limit being used?
                       Is correct rent limit being used?
  
                         For tenants with no income
                       Was  notarized  statement  of no income  obtained  with tax
                       return?
                       or Were all sources verified (AFDC, Unemployment,
                          Soc. Sec., Disability)?
  
  
  
  
  <PAGE>
  
  
  
                          TAX CREDIT COMPLIANCE MONITORING:
                                ANNUAL CERTIFICATION
  
       As General  Partner of CASCADE  PINES,  L.P. II, I hereby certify as to the
  following:
  
       1.  CASCADE  PINES,  L.P. II owns a three  hundred  seventy-six  (376) unit
  project ("Project") in Atlanta, Fulton County, Georgia.
  
       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 Georgia
  that the foregoing is true and correct.
  
  
       Executed this day of at , .
  
  
  
  - ------------------------------------
  
  
  
  <PAGE>
  
  
  
                        Calculation of Debt Service Coverage
  
                                        Month 1       Month 2        Month 3
                                        ------------  ------------   ------------
  
            INCOME
  
    Gross Potential Rent
    Other Income
    Vacancy  Loss                       ------------  ------------   ------------
    Adjusted Gross Income               ------------  ------------   ------------
  
                                     OPERATING EXPENSES
  
    Utilities
    Maintenance
    Management Fee
    Administration
    Insurance
    Real Estate Taxes
    Other Expenses                      ------------  ------------   ------------
    Total Operating Expenses            ------------  ------------   ------------
  
    Net Operating Income (1)
    Accrual adjustments for:
            R/E Taxes
            Insurance
            Tax/ Accounting
            Other
    Replacement Reserves
                                         ============  ============   ============
    Income for DSC Calculation
                                         ============  ============   ============
  
  
    Stabilized Debt Service              ------------  ------------   ------------
  
    Debt Service Coverage  (2)           ------------  ------------   ------------
  
       (1)  This  number  should  reconcile  easily  with  the  monthly  financial
  statements
  
       (2) The ratio between the Income for DSC  Calculation  and Stabilized  Debt
  Service.  As example,  a 1.15 DSC means that for every $1.00 of Stabilized  Debt
  Service  required  to be paid  there  must be a $1.15  of Net  Operating  Income
  available.
  
  
  
  
  
  
  
  <PAGE>
  
  
                              DEVELOPMENT FEE AGREEMENT
  
  
       This  DEVELOPMENT  FEE  AGREEMENT,  is entered  into as of the date written
  below by and between Brencor, Inc., a Delaware corporation and Urban Residential
  Development Corporation,  a Georgia corporation (collectively referred to as the
  "Developer")  and  CASCADE  PINES,  L.P.  II,  a  Georgia  limited   partnership
  ("Owner").  Developer and Owner collectively may be referred to as the "Parties"
  or individually may be referred to as a "Party".
  
                                      RECITALS
  
       A. Owner has acquired the real property located in Atlanta,  Fulton County,
  Georgia,  as more  particularly  described  in  Exhibit A  attached  hereto  and
  incorporated herein (the "Real Property").
  
       B.  Owner  intends  to  develop  on  the  Real  Property  a  three  hundred
  seventy-six  (376) unit  low-income  rental  housing  complex and other  related
  improvements,  which is intended to qualify for federal  low-income  housing tax
  credits (the "Project").
  
       C. Pursuant to continuous  verbal  discussions  and agreements  between the
  Developer and the Owner,  the Developer has  previously  undertaken  substantial
  development activities with respect to the Project and has agreed to oversee the
  development  of the Project  until all  construction  work is  completed  and to
  provide certain services relating thereto. The Parties recognize and acknowledge
  that the Developer is, and has been, an  independent  contractor in all services
  rendered to, and to be rendered to, the Owner pursuant to this  Development  Fee
  Agreement.
  
       D. Owner  desires to retain the services of Developer to manager,  oversee,
  and  complete  development  of the  Project.  Developer is willing to assign all
  development  rights to the Project to Owner,  to undertake  performance  of such
  development services,  and to fulfill all obligations of the Developer set forth
  in this Agreement,  in  consideration of Owner's promise to pay to Developer the
  fee specified in this Agreement.
  
       NOW THEREFORE,  in consideration  of the foregoing  recitals and the mutual
  promises and  undertakings  in this  Agreement,  and for other good and valuable
  consideration,  the receipt and  sufficiency  of which are hereby  acknowledged,
  Owner and Developer agree as follows.
  
                                      SECTION I
                                 CERTAIN DEFINITIONS
  
       As used in this  Agreement,  the following terms shall,  when  capitalized,
  have the following meanings:
  <PAGE>
  
       "Closing Date" means the date on which the Construction  Loan is closed and
  funded and the Limited Partner's initial Capital Contribution is made.
  
       "Code" means the Internal Revenue Code of 1986, as amended.
  
       "Construction Documents" means the contract documents between the Owner and
  the Construction Lender pertaining to construction of the Project.
  
       "Construction  Lender" means the Urban Residential Finance Authority of the
  City of  Atlanta,  Georgia,  which  has  committed  to  make a loan  to  finance
  construction of the Project.
  
       "Construction Loan" means the loan to finance  construction of the Project,
  made to Owner by the Construction Lender.
  
       "Contractor" means Gardner Service Corporation.
  
       "Department"  means the Georgia agency  responsible for the reservation and
  allocation of Tax Credits.
  
       "Development  Fee"  means the fee for  development  services  described  in
  Section 2 of this Agreement.
  
       "Permanent Loan" means the permanent mortgage to finance the Project and to
  retire the Construction Loan.
  
       "Permanent Loan Funding Date" means the date on which the Permanent Loan is
  closed and funded;  all construction costs are paid in full and the Construction
  Loan repaid in full;  and the  issuance of a  certificate  of  occupancy  by the
  governmental agency having jurisdiction over the Project.
  
       "Tax  Credit  Program"  means  Section  42 of  the  Code,  and  all  rules,
  regulations,  rulings,  notices and other Internal Revenue Service promulgations
  thereunder, relating to low-income housing tax credits.
  
       "Tax  Credits"  means  low-income  housing tax credits under the Tax Credit
  Program.
  
                                      SECTION 2
                       ENGAGEMENT OF DEVELOPER; FEE; SERVICES
  
       2.1 Engagement;  Term. Owner hereby confirms the engagement of Developer to
  act as  developer  of the  Project,  and to perform  the various  covenants  and
  obligations of the Developer under this Agreement. Developer hereby confirms and
  accepts such  engagement,  and agrees to perform fully and timely each and every
  one of its obligations  under this Agreement.  The term of such engagement shall
  commence on the date hereof and subject to the pre-payment provisions of Section
  3 shall expire on December 31, 2005.
  <PAGE>
  
       2.2 Development Fee. In  consideration of Developer's  agreement to provide
  development services during the term of this Agreement and the assignment of all
  development  rights  for  the  Project,  Owner  agrees  to pay the  Developer  a
  Development Fee in the amount of $________. The Development Fee shall be payable
  in accordance with Section 3 of this Agreement.
  
       2.3 Development Services.
  
       (a)  Owner  acknowledges  that  Developer  has,  prior to the date  hereof,
  performed  substantial  development  services  relating  to the  Project.  Owner
  further  acknowledges that as of the date of this Agreement  construction of the
  property is substantially  complete.  Such services (the "Prior  Services") have
  included the following:
  
       (1)  Developer  has  analyzed  the market and  demographic  environment  to
  determine the feasibility of the Project.
  
       (2) Developer has created,  refined and analyzed the financial  projections
  for the Project.
  
       (3)  Developer  has  negotiated,  conferred,  and worked  with the  Project
  architects, engineers and Contractor with regard to preparation, refinement, and
  finalization  of the plans and  specifications  for the Project,  and  projected
  construction schedules and costs.
  
       (4) Developer has applied for land use  approvals and  development  permits
  necessary for the Project, and has conferred and worked with the City of Atlanta
  planning and building agencies with regard to such approvals and permits.
  
       (5) Developer has negotiated and conferred with the Construction  Lender to
  obtain the Construction Loan.
  
       (6) Developer shall oversee  construction of the Project on Owner's behalf.
  Owner shall allow  Developer full access to the Project during the  construction
  period.  Developer and  Developer's  agents shall perform their work in a manner
  that minimizes interference with the management and operation of the Project.
  
       (A)  Developer  shall exert its best efforts to ensure that the  Contractor
  performs  its  obligations  under the  Construction  Documents in a diligent and
  timely manner.
  
       (B) Developer  shall  participate in and provide  assistance with regard to
  pre-construction conferences and pre-construction documents, including drawings,
  specifications, contracts, and schedules.
  <PAGE>
  
       (C) Developer  shall review all Project  construction  documents,  identify
  construction issues and participate in the resolution of such issues.
  
       (D) Developer shall attend  construction  progress  meetings at the Project
  site to monitor  construction  progress and advise Owner and the Contractor with
  respect to the resolution of construction issues.
  
       (E) Developer shall review the Contractor's monthly pay applications.
  
       (F) Developer shall monitor the  Contractor's  progress with respect to the
  approved Project  schedule and keep the Owner informed of all pertinent  Project
  issues and construction progress.
  
       (G) Developer  shall advise Owner with respect to relations with engineers,
  architects, and other construction professionals.
  
       (H)  Developer  shall be  available  for  immediate  response  in  critical
  situations arising during the construction of the Project.
  
       (I) Developer shall coordinate relations with the City of Atlanta and other
  governmental authorities having jurisdiction over development of the Project.
  
       (7) From the date hereof  through the  completion  of  construction  of the
  Project, the Developer shall provide the following services to owner with regard
  to the Tax Credits and the Tax Credit  Program which  services do not constitute
  the rendering of legal or tax advice:
  
       (A) Developer shall consult with and advise Owner  concerning  construction
  issues  that could  affect the amount of Tax  Credits  for which the  Project is
  eligible.
  
       (B)  Developer  shall  consult  with and advise  Owner with  respect to the
  requirements  of  the  Department  as  they  relate  to  the   construction  and
  development of the Project.
  
       (C)  Developer  shall  monitor  construction  progress  with respect to the
  Project schedule agreed to with the Department, if any.
  
       (D) Developer shall  coordinate and participate in any conferences with the
  Department relating to the Project and construction matters.
  
  
  <PAGE>
  
       (c) Assignment of Development Rights. Developer hereby assigns to Owner all
  rights to the  development  of the  Project,  including  but not limited to, all
  tangible and  intangible  rights arising with respect to the name CASCADE PINES,
  L.P. II, the design of the Project, the plans and specifications for the Project
  and all rights arising under the agreements with Project  architects,  engineers
  and other Project design and construction professionals.
  
                                      SECTION 3
                              DEVELOPMENT FEE PAYMENTS
  
       For  Development  services to be performed  under this Contract,  the Owner
  shall pay the Developer a Development Fee on the Permanent Loan Funding Date. If
  the  Development  Fee is not paid in full upon the  Permanent  Loan Funding Date
  then the  Development Fee shall be paid from available Cash Flow From Operations
  in  accordance  with the  terms of  Section  11.1 of the  Amended  and  Restated
  Agreement of Limited  Partnership for CASCADE PINES,  L.P. II, a Georgia limited
  partnership (said agreement is incorporated  herein by this reference) but in no
  event later than December 31, 2005.
  
                                      SECTION 4
                                     TERMINATION
  
       Neither  Party to this  Agreement  shall have the right to  terminate  this
  Agreement prior to the expiration of the term without cause. Owner may terminate
  this Agreement without further liability, for cause, which shall mean any one of
  the following:
  
       (a) A material breach by Developer of its obligations  under this Agreement
  that is not cured within  thirty (30) days after  notice  thereof (or, as to any
  non-monetary  obligations that is not reasonably capable of cure within 30 days,
  and  provided  that cure is  commenced  within 10 days of notice and  diligently
  pursued  thereafter  to  completion,  within  such  time  as may  reasonably  be
  necessary to complete such cure);
  
       (b) A fraudulent or  intentionally  incorrect  report by Developer to Owner
  with respect to the Project; or
  
       (c) Any  intentional  misconduct  or gross  negligence  by  Developer  with
  respect to its duties under this Contract.
  
       Upon proper termination of this Agreement by Owner pursuant to this Section
  4, all rights of Developer to receive unearned Development Fees pursuant to this
  Agreement with respect to services not yet performed shall terminate.  Developer
  shall receive the full  Development  Fee for Prior  Services and shall receive a
  portion of the  Development  Fee for Future  Services based on the percentage of
  completion of construction of the Project at the time of termination. Nothing in
  
  <PAGE>
  
  this Section 4 shall be deemed to prevent Owner from bringing an action  against
  Developer  to recover  fully all  damages  resulting  from any of the causes set
  forth in paragraphs  (a), (b) or (c) above,  or to prevent Owner from contending
  in any  action  or  proceeding  that the  Future  Services  were not  earned  by
  Developer.
  
                                      SECTION 5
                                 GENERAL PROVISIONS
  
       5.1 Notices. Notices required or permitted to be given under this Agreement
  shall be in writing sent by  registered  or  certified  mail,  postage  prepaid,
  return receipt  requested,  to the Parties at the following  addresses,  or such
  other  address as is  designated  in writing by the Party,  the date of registry
  thereof, or the date of certification  receipt therefor being deemed the date of
  such notice;  provided,  however, that any written communication containing such
  information sent to a Party actually received by a Party shall constitute notice
  for all purposes of this Agreement.
  
  If to Developer:           Brencor, Inc.
                             5214 Maryland Way, Suite 310
                             Brentwood, Tennessee 37027
  
                             Urban Residential Development Corporation
                             100 Peachtree Street, N.W., Suite 400
                             Atlanta, Georgia 30303
  
  If to Owner:               CASCADE PINES, L.P. II
                             100 Peachtree Street, N.W., Suite 400
                             Atlanta, Georgia 30303
  
  
       5.2 Interpretation.
  
       (a)  Headings.  The section  headings in this  Agreement  are  included for
  convenience  only;  they do not give full  notice of the terms of any portion of
  this  Agreement and are not relevant to the  interpretation  of any provision of
  this Agreement.
  
       (b)  Relationship  of the Parties.  Neither Party hereto shall be deemed an
  agent, partner, joint venturer, or related entity of the other by reason of this
  Agreement and as such neither Party may enter into contracts or agreements which
  bind the other Party.
  
       (c) Governing Law. The Parties intend that this Agreement shall be governed
  by and construed in accordance with the laws of the state of Georgia  applicable
  to contracts made and wholly  performed  within Georgia by persons  domiciled in
  Georgia.
  
       (d) Severability. Any provision of this Agreement that is deemed invalid or
  unenforceable  shall  be  ineffective  to  the  extent  of  such  invalidity  or
  unenforceability,  without  rendering  invalid or  unenforceable  the  remaining
  
  <PAGE>
  
  provisions of this Agreement.
  
       5.3 Integration; Amendment. This Agreement constitutes the entire agreement
  of the Parties  relating to the subject  matter  hereof.  There are no promises,
  terms, conditions, obligations, or warranties other than those contained herein.
  This  Agreement  supersedes  all  prior  communications,   representations,   or
  agreements,  verbal or written, among the Parties relating to the subject matter
  hereof. This Agreement may not be amended except in writing.
  
       5.4 Attorney' Fees. If any suit or action arising out of or related to this
  Agreement is brought by any Party to any such  document,  the  prevailing  Party
  shall be entitled to recover the costs and fees  (including  without  limitation
  reasonable  attorneys'  fees and  costs of  experts  and  consultants,  copying,
  courier and telecommunication costs, and deposition costs and all other costs of
  discovery)  incurred  by such  Party in such suit or action,  including  without
  limitation to any post-trial or appellate proceeding.
  
       5.5 Binding Effect.  This Agreement shall bind and inure to the benefit of,
  and be  enforceable  by, the  Parties  hereto and their  respective  successors,
  heirs, and permitted assigns.
  
       5.6 Assignment. Neither Party may assign this Agreement without the consent
  of the other Party.  No assignment  shall  relieve any Party of liability  under
  this Agreement unless agreed in writing to the contrary.
  
       5.7 Third-Party Beneficiary Rights. No person not a Party to this Agreement
  is an intended beneficiary of this Agreement,  and no person not a Party to this
  Agreement shall have any right to enforce any term of this Agreement.
  
       5.8  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
  counterparts, all of which taken together shall constitute one agreement binding
  on all the Parties,  notwithstanding that all Parties are not signatories to the
  same counterpart.
  
       5.9  Further  Assurances.  Each Party  agrees,  at the request of the other
  Party,  at any time and from time to time after the date hereof,  to execute and
  deliver  all  such  further  documents,  and to take and  forbear  from all such
  action, as may be reasonably  necessary or appropriate in order more effectively
  to perfect the transfers or rights  contemplated  herein or otherwise to confirm
  or carry out the provisions of this Agreement.
  
       5.10 Mandatory Arbitration. Any person enforcing this Agreement may require
  that all disputes,  claims,  counterclaims,  and defenses ("Claims") relating in
  
  <PAGE>
  
  any way to this  Agreement or any  transaction of which this Agreement is a part
  (the  "Transaction"),  be settled by binding  arbitration in accordance with the
  Commercial Arbitration Rules of the American Arbitration Association and Title 9
  of the U.S.  Code.  All claims  will be subject to the  statutes  of  limitation
  applicable if they were litigated.
  
       If arbitration occurs, one neutral arbitrator will decide all issues unless
  either  Party's  Claim is  $100,000.00  or more,  in which  case  three  neutral
  arbitrators will decide all issues. All arbitrators will be active Georgia State
  Bar members in good standing. In addition to all other powers, the arbitrator(s)
  shall  have the  exclusive  right to  determine  all  issues  of  arbitrability.
  Judgment on any arbitration award may be entered in any court with jurisdiction.
  
       If  either  Party  institutes  any  judicial  proceeding  relating  to  the
  Transaction,  such action shall not be a waiver of the right to submit any Claim
  to arbitration.  In addition,  both Parties have the right before,  during,  and
  after any arbitration to exercise any of the following remedies, in any order or
  concurrently:  (i)  setoff,  (ii)  self-help  repossession,  (iii)  judicial  or
  non-judicial  foreclosure  against real or personal  property  collateral,  (iv)
  provisional remedies, including injunction, appointment of receiver, attachment,
  claim and delivery, and replevin.
  
       This arbitration clause cannot be modified or waived by either Party except
  in a  writing  that  refers  to this  arbitration  clause  and is signed by both
  Parties.
  
       IN WITNESS WHEREOF,  the Parties have caused this Development Fee Agreement
  to be executed as of ________________________, 1996.
  
  DEVELOPER:            BRENCOR, INC.
  
  
                        By:      ______________________________
                                 Robert A. Crowder, President
  
  
                        URBAN RESIDENTIAL DEVELOPMENT CORPORATION
  
  
                        By:      _________________________
                                 Herbert Kohn, President
  
  OWNER:                CASCADE PINES, L.P. II
  
                         By:      URBAN RESIDENTIAL MANAGEMENT, INC.
  
  
                                  By:      _________________________
                                           Herbert Kohn, President
  
  
  <PAGE>
  
  
                                      EXHIBIT A
  
  
       All that  tract or parcel of land  lying and being in Land Lots 218 and 231
  of the 14th  District of Fulton  County,  Georgia,  and being more  particularly
  described as follows:
  
       BEGINNING at an iron pin on the  southwest  side of Harbin Road,  said iron
  pin being 200 feet  northwesterly,  as measured along the southwesterly  side of
  Harbin Road from the intersection of the southwesterly  side of Harbin Road with
  the  northwesterly  side of  Campbellton  Road; and from said point of beginning
  running  thence south 73 degrees 47 minutes 45 seconds  west,  399.85 feet to an
  iron pin; thence south 48 degrees 44 minutes 30 seconds west,  199.30 feet to an
  iron pin; thence north 27 degrees 18 minutes 15 seconds west,  149.33 feet to an
  iron pin; thence south 48 degrees 22 minutes 15 seconds west, 1204.96 feet to an
  iron pin;  thence  south 39 degrees 39 minutes 15 seconds  east;  300 feet to an
  iron pin; thence south 50 degrees 14 minutes 30 seconds west,  199.98 feet to an
  iron pin;  thence south 39 degrees 39 minutes 15 seconds east,  53.65 feet to an
  iron pin located on the south line of said Land Lot 218; thence north 88 degrees
  42  minutes  30  seconds  west,  along  the south  line of said Land Lot 218,  a
  distance of 228.37 feet to an iron pin;  thence  north 2 degrees 20 minutes east
  600.32 feet to an iron pin; thence south 87 degrees 18 minutes west,  62.43 feet
  to an iron pin;  thence north 3 degrees 07 minutes west,  390.09 feet to an iron
  pin; thence north 15 degrees 40 minutes west, 210.11 feet to an iron pin; thence
  north 89 degrees 29 minutes 30 seconds west,  219.86 feet to an iron pin; thence
  north 15 degrees 47 minutes 43 seconds west,  220.85 feet to an iron pin; thence
  south 88 degrees 30 minutes 30 seconds east 1364.46 feet to an iron pin;  thence
  north 80 degrees 04 minutes 45 seconds east,  615.47 feet to an iron pin located
  on the southwest  side of Harbin Road;  thence south 26 degrees 50 minutes east,
  along the  southwest  side of Harbin  Road,  188.10  feet to an iron pin and the
  point of BEGINNING.
  
       TOGETHER  WITH  a  non-exclusive  easement  for  ingress  and  egress  more
  particularly described as follows:
  
       ALL THAT  TRACT or  parcel  of land  lying and being in Land Lot 218 of the
  14th District of Fulton County,  Georgia, and being more particularly  described
  as follows:
  
       BEGINNING  at an  iron  pin  located  on  the  northwest  right  of  way of
  Campbellton Road 32.85 feet northeasterly from the intersection of the northwest
  right of way of Campbellton Road with the south line of Land Lot 218, which line
  is also the north  line of Land Lot 219;  running  thence  north 39  degrees  39
  minutes 15 seconds  west,  500 feet to an iron pin;  thence  north 48 degrees 22
  minutes  15 seconds  east,  60.02  feet to a point;  thence  south 39 degrees 39
  minutes 15 seconds east, 503.50 feet to a point located on the northwest side of
  the right of way of Campbellton Road; thence  southwesterly  along the northwest
  right  of way of  Campbellton  Road,  60 feet to an iron  pin and the  point  of
  BEGINNING.
  
       LESS AND EXCEPT therefrom the following tract or parcel of land:
  
       Beginning at a point on the northern right of way of Campbellton Road, S.W.
  1,140  feet  northeasterly  as  measured  along  said  right  of  way  from  the
  northeastern  intersection  of the rights of way of Campbellton  Road,  S.W. and
  
  <PAGE>
  
  Childress  Drive,  S.W.  said point being 32.85 feet  northeasterly  as measured
  along the northern right of way of  Campbellton  Road from the  intersection  of
  said right of way and the line  forming the boundary of Land Lots 218 and 219 of
  the 14th District of Fulton County, Georgia; thence running 5 feet northwesterly
  along the property line of 2909 Campbellton Road along a bearing of N 39 degrees
  39 minutes 15 seconds W to a point on said property line; thence running 60 feet
  along a  bearing  of N 50  degrees  14  minutes  30  seconds E to a point on the
  northeast  property  line  of  2909  Campbellton  Road;  thence  running  5 feet
  southeasterly  along  said  property  line  along a bearing  of S 39  degrees 39
  minutes  15  seconds E to a point on the  northern  right of way of  Campbellton
  Road, S.W.; thence running 60 feet southwesterly along the northern right of way
  of Campbellton  Road, S.W. to the Point of Beginning,  and containing 300 square
  feet (0.0069 acres).
  
       Being the same property  conveyed by Warranty Deed from John Hancock Mutual
  Life Insurance Company to Deerfield  Associates,  a Georgia Limited  Partnership
  dated April 17, 1979,  filed for record April 18, 1979 and recorded in Deed Book
  7221,  page 470,  in the  Office of the  Clerk of the  Superior  Court of Fulton
  County, Georgia.
  
  
  
  
  
  
  <PAGE>
  
  
  
                                 GUARANTY AGREEMENT
  
  
       FOR  VALUE  RECEIVED,  the  receipt  and  sufficiency  of which  is  hereby
  acknowledged, and in consideration of the agreement of Brencor, Inc., a Delaware
  corporation and Urban Residential Development Corporation, a Georgia corporation
  (collectively referred to as the "Developer") to permit deferral of the $_______
  due from CASCADE PINES, L.P. II a Georgia limited partnership  ("Debtor") to the
  Developer,  the undersigned  Guarantor(s),  hereby unconditionally  guaranty the
  full and prompt payment when due,  whether by  acceleration or otherwise of that
  certain Developer Fee from Debtor to the Developer, evidenced by the Development
  Fee Agreement  dated the even date  herewith,  and  incorporated  herein by this
  reference.  The  foregoing  described  debt is  referred to  hereinafter  as the
  "Liabilities" or "Liability."
  
       The  undersigned  further agree to pay all expenses paid or incurred by the
  Developer in endeavoring to collect the Liabilities, or any part thereof, and in
  enforcing the  Liabilities  or this  Guaranty  Agreement  (including  reasonable
  attorneys' fees if collected or enforced by law or through an  attorney-at-law).
  The  undersigned  hereby  represent  and warrant that the extension of credit or
  other  financial  accommodations  by the  Developer  to  Debtor  will  be to the
  interest and advantage of the  undersigned,  and acknowledge  that this Guaranty
  Agreement is a  substantial  inducement  to the  Developer  to extend  credit to
  Debtor and that the Developer would not otherwise extend credit to Debtor.
  
       The Developer  may, from time to time,  without notice to or consent of the
  undersigned,  (a) retain or obtain a security interest in any property to secure
  any of the  Liabilities  or any obligation  hereunder,  (b) retain or obtain the
  primary or  secondary  liability  of any party or  parties,  in  addition to the
  undersigned, with respect to any of the Liabilities, (c) extend or renew for any
  period  (whether  or not longer  than the  original  period) or alter any of the
  Liabilities,  (d)  release  or  compromise  any  Liability  of  the  undersigned
  hereunder  or  any  Liability  of  any  other  party  or  parties  primarily  or
  secondarily  liable  on any of  the  Liabilities,  (e)  release,  compromise  or
  subordinate its title or security interest,  or any part thereof, if any, in all
  or any  property  now or  hereafter  securing  any  of  the  Liabilities  or any
  obligation  hereunder,  and permit any  substitution  or  exchange  for any such
  property,  and  (f)  resort  to  the  undersigned  for  payment  of  any  of the
  Liabilities,  whether or not the  Developer  shall have resorted to any property
  securing  any of the  Liabilities  or any  obligation  hereunder  or shall  have
  preceded  against any other party primarily or secondarily  liable on any of the
  Liabilities.
  
       The  undersigned  hereby  expressly  waive:  (a) notice of the existence or
  creation  of all or any of the  Liabilities,  (b)  notice  of any  amendment  or
  modification of any of the  instruments or documents  evidencing or securing the
  
  <PAGE>
  
  Liabilities,  (c) presentment,  demand,  notice of dishonor and protest, (d) all
  diligence in collection or protection of or realization  upon the Liabilities or
  any thereof, any obligation hereunder, or any security for any of the foregoing,
  and (e) the right to require the Developer to proceed  against  Debtor on any of
  the Liabilities.
  
       In the event any payment of Debtor to the Developer is held to constitute a
  preference  under the bankruptcy  laws, or if for any other reason the Developer
  is required to refund such payment or pay the amount thereof to any other party,
  such  payment  by Debtor to the  Developer  shall not  constitute  a release  of
  Guarantor from any Liability hereunder,  but Guarantor agrees to pay such amount
  to the Developer upon demand and this Guaranty shall continue to be effective or
  shall be  reinstated,  as the case may be, to the extent of any such  payment or
  payments.
  
       No delay or failure on the part of the  Developer  in the  exercise  of any
  right or remedy  shall  operate  as a waiver  thereof,  and no single or partial
  exercise by the Developer of any right or remedy shall  preclude other or future
  exercise thereof or the exercise of any other right or remedy.  No action of the
  Developer  permitted  hereunder  shall in any way impair or affect this Guaranty
  Agreement. For the purpose of this Guaranty Agreement, the Liabilities of Debtor
  to the Developer are guaranteed  notwithstanding any right or power of Debtor or
  anyone  else  to  assert  any  claim  or  defense  as  to  the   invalidity   or
  unenforceability  of any such  obligation,  and no such claim or  defense  shall
  impair or affect the obligations of the undersigned hereunder.
  
       This Guaranty Agreement shall be binding upon the undersigned, and upon the
  legal representatives, heirs, successors and assigns of the undersigned.
  
       This Guaranty Agreement has been made and delivered in the state of Georgia
  and shall be construed and governed under Georgia law.
  
       Whenever  possible,  each  provision  of the  Guaranty  Agreement  shall be
  interpreted  in such manner as to be effective and valid under  applicable  law,
  but if any  provision  of this  Guaranty  Agreement  shall be  prohibited  by or
  invalid under such law, such  provision  shall be  ineffective  to the extent of
  such  prohibition  of  invalidity,  without  invalidating  the remainder of such
  provision or the remaining provisions of this Guaranty Agreement.
  
       Whenever the singular or plural number,  masculine or feminine or neuter is
  used herein, it shall equally include the other where  applicable.  In the event
  this Guaranty  Agreement is executed by more than one  guarantor,  this Guaranty
  Agreement and the obligations  hereunder are the joint and several obligation of
  the undersigned.
  <PAGE>
  
       Guarantor  consents  to the  jurisdiction  of the  courts  in the  State of
  Georgia and/or to the jurisdiction and venue of any United States District Court
  in the  State of  Georgia  having  jurisdiction  over  any  action  or  judicial
  proceeding  brought to enforce,  construe or interpret this Guaranty.  Guarantor
  agrees  to  stipulate  in  any  such  proceeding  that  this  Guaranty  is to be
  considered  for all  purposes to have been  executed  and  delivered  within the
  geographical  boundaries  of the  State  of  Georgia,  even if it was,  in fact,
  executed and delivered elsewhere.
  
       IN WITNESS  WHEREOF,  the  undersigned  have hereunto  caused this Guaranty
  Agreement to be executed as of _____________________, 1996.
  
  Signed, sealed and delivered                GUARANTOR:
  in the presence of:
  
  ____________________________                BRENCOR, INC.
  Witness
                                              By:      __________________________
  ____________________________                         Robert A. Crowder,
  Notary Public                                        President
  My Commission Expires:
                                              Address for Guarantor:
  - ----------------------------
                                              5214 Maryland Way, Suite 310
           (NOTARY SEAL)                      Brentwood, Tennessee  37027
  
  
  
  <PAGE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                AMENDED AND RESTATED
  
                         AGREEMENT OF LIMITED PARTNERSHIP OF
  
                            ROSEDALE LIMITED PARTNERSHIP
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  <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     "Construction Contract".........................       3
           1.14     "Construction Loan" ............................       4
           1.15     "Contractor" ...................................       4
           1.16     "Development Fee" ..............................       4
           1.17     "Distributions" ................................       4
           1.18     "Equity Loan" ..................................       4
           1.19     "Event of Bankruptcy" ..........................       5
           1.20     "Fair Market Value" ............................       5
           1.21     "Financial Interest" ...........................       5
           1.22     "First Year Certificate" .......................       5
           1.23     "FmHA" .........................................       5
           1.24     "FmHA Interest Credit Agreement" ...............       5
           1.25     "FmHA Loan Agreement" ..........................       5
           1.26     "General Partner" ..............................       6
           1.27     "Gross Asset Value" ............................       6
           1.28     "Income and Losses".............................       7
           1.29     "Interest" .....................................       8
           1.30     "LIHC" .........................................       8
           1.31     "Limited Partner" ..............................       8
           1.32     "Liquidation" ..................................       8
           1.33     "Minimum Set-Aside Test" .......................       8
           1.34     "Mortgage" or "Mortgage Loan" ..................       8
           1.35     "Mortgage Note" ................................       9
           1.36     "Operating Deficit" ............................       9
           1.37     "Original Limited Partner" .....................       9
           1.38     "Partner" ......................................       9
           1.39     "Partner Nonrecourse Debt" .....................       9
           1.40     "Partner Nonrecourse Debt Minimum Gain" ........       9
           1.41     "Partner Nonrecourse Deductions" ...............       9
           1.42     "Partnership" ..................................       9
           1.43     "Partnership Administration Fee" ...............       9
           1.44     "Partnership Minimum Gain" .....................       10
           1.45     "Permanent Mortgage Commencement" ..............       10
           1.46     "Person" .......................................       10
           1.47     "Project" ......................................       10
           1.48     "Project Documents" ............................       10
           1.49     "Projected Tax Credits" ........................       10
           1.50     "Qualified Income Offset Item" .................       11
  
  <PAGE>
  
           1.51     "Qualified Tenants" ............................       11
           1.52     "Refinancing" ..................................       11
           1.53     "Rent Restriction Test" ........................       11
           1.54     "Sale" .........................................       11
           1.55     "Sale or Refinancing Proceeds" .................       11
           1.56     "State" ........................................       11
           1.57     "State Tax Credit Agency" ......................       11
           1.58     "Substitute Limited Partner" ...................       11
           1.59     "Tax Credit" ...................................       12
           1.60     "TRA 1986" .....................................       12
           1.61     "Treasury Regulations" .........................       12
  
  II.      NAME ................................................           12
  
  III.     PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE ........           12
  
           3.1      Principal Executive Office .....................       12
           3.2      Agent for Service of Process ...................       12
  
  IV.      PURPOSE .............................................           12
  
  V.       TERM ................................................           13
  
  VI.      GENERAL PARTNER'S CONTRIBUTIONS AND LOANS ...........           13
  
           6.1      Capital Contribution of General Partner ........       13
           6.2      Construction and Operating Obligations .........       13
           6.3      General Partner Loans ..........................       14
  
  VII.     LIMITED PARTNER'S CAPITAL CONTRIBUTIONS .............           14
  
           7.1      Original Limited Partner .......................       14
           7.2      Capital Contribution of Limited Partner ........       14
           7.3      Repurchase of Limited Partner's Interest .......       16
           7.4      Reduction of Capital Contribution...............       17
           7.5      Return of Capital Contribution .................       18
           7.6      Liability of Limited Partner ...................       19
  
  VIII. WORKING CAPITAL AND RESERVES .......................               19
  
           8.1      Operation and Maintenance Reserve...............       19
           8.2      Reserve for Replacements........................       19
           8.3      Other Reserves..................................       19
  
  IX.      MANAGEMENT AND CONTROL ..............................           20
  
           9.1      Power and Authority of General Partner .........       20
           9.2      Payments to the General Partners and Others ....       20
           9.3      Specific Powers of the General Partner .........       22
  <PAGE>
  
  
           9.4      Limitations on General Partner's
                    Power and Authority ............................       22
           9.5      Restrictions on Authority of General Partner....       23
           9.6      Duties of General Partner ......................       24
           9.7      Partnership Expenses ...........................       25
           9.8      General Partner Expenses .......................       26
           9.9      Other Business of Partners .....................       26
           9.10     Covenants, Representations and Warranties.......       26
  
  X.       ALLOCATIONS OF INCOME, LOSSES AND CREDITS ...........           29
  
           10.1     General ........................................       29
           10.2     Allocations From Sale or Refinancing............       29
           10.3     Special Allocations.............................       30
           10.4     Curative Allocations............................       33
           10.5     Other Allocation Rules..........................       33
           10.6     Tax Allocations:  Code Section 704(c)...........       34
           10.7     Allocation Among Limited Partners
                    and Assignees ..................................       34
           10.8     Allocation Among General Partners ..............       35
           10.9     Modification of Allocations ....................       35
  
  XI.      DISTRIBUTION ........................................           35
  
           11.1     Distribution of Cash Flow From Operations ......       35
           11.2     Distribution Upon Sale or Refinancing ..........       35
  
  XII.     VOLUNTARY TRANSFERS OF LIMITED PARTNER'S INTEREST
           IN THE PARTNERSHIP...................................           36
  
           12.1     Assignment of Limited Partner's Interest .......       36
           12.2     Effective Date of Transfer .....................       37
           12.3     Invalid Assignment .............................       37
           12.4     Assignee's Rights to Allocations and
                    Distributions ..................................       37
           12.5     Substitution of Assignee as Limited Partner ....       37
           12.6     Death, Bankruptcy, Incompetency, etc.
                    of a Limited Partner ...........................       38
           12.7     Assignment .....................................       38
  
  XIII. RESIGNATION, REMOVAL AND REPLACEMENT OF GENERAL
        PARTNER ............................................               38
  
           13.1     Resignation of General Partner .................       38
           13.2     Removal of General Partner .....................       38
           13.3     Admission of Substitute General Partner ........       40
           13.4     Continuing Liability ...........................       40
           13.5     Transfer of Interest ...........................       40
           13.6     Payment to General Partner Upon Resignation,
                    Death or Insanity ..............................       41
  
  XIV.     BOOKS AND ACCOUNTS, REPORTS, TAX RETURNS,
           FISCAL YEAR AND BANKING .............................           42
  <PAGE>
  
           14.1     Books and Accounts .............................       42
           14.2     Accounting Reports .............................       43
           14.3     Other Reports ..................................       44
           14.4     Late Reports ...................................       45
           14.5     Annual Site Visits .............................       46
           14.6     Tax Returns ....................................       46
           14.7     Fiscal Year ....................................       46
           14.8     Banking ........................................       46
           14.9     Certificates and Elections .....................       46
  
  XV.      DISSOLUTION, WINDING UP, TERMINATION AND
           LIQUIDATION OF THE PARTNERSHIP ......................           46
  
           15.1     Dissolution of Partnership .....................       46
           15.2     Return of Capital Contribution upon
                    Dissolution ....................................       47
           15.3     Distributions of Assets ........................       47
           15.4     Deferral of Liquidation.........................       49
           15.5     Liquidation of Statement .......................       49
           15.6     Certificates of Dissolution; Certificate of
                    Cancellation of Certificate of Limited
                    Partnership ...................................        49
  
  XVI.     AMENDMENTS ..........................................           50
  
  XVII. MISCELLANEOUS ......................................               50
  
           17.1      Voting Rights .................................       50
           17.2      Meeting of Partnership ........................       51
           17.3      Notices .......................................       51
           17.4      Successors and Assigns ........................       51
           17.5      FmHA Regulations ..............................       51
           17.6      Recording of Certificate of Limited
                     Partnership. ..................................       52
           17.7      Amendment of Certificate of Limited
                     Partnership ...................................       53
           17.8      Counterparts ..................................       53
           17.9      Captions ......................................       53
           17.10     Certain Provisions ............................       53
           17.11     Saving Clause .................................       54
           17.12     Number and Gender .............................       54
           17.13     Entire Agreement ..............................       54
           17.14     Governing Law .................................       54
           17.15     Attorney's Fees ...............................       54
           17.16     Receipt of FmHA Correspondence ................       54
           17.17     Security Interest and Right of Set-Off ........       54
  
  
  <PAGE>
  
  
  
  EXHIBIT A - Legal Description...................... A-1
  EXHIBIT B - Form of Legal Opinion.................. B-1  -  B-4
  EXHIBIT C - Certification and Agreement............ C-1  -  C-4
  EXHIBIT D - General Partner Certification.......... D-1  -  D-5
  EXHIBIT E - Form of Completion Certificate......... E-1
  EXHIBIT F - Accountant's Certificate............... F-1
  EXHIBIT G - Report of Operations................... G-1  -  G-8
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  <PAGE>
  
  
  
  
                           AMENDED AND RESTATED AGREEMENT
                              OF LIMITED PARTNERSHIP OF
                            ROSEDALE LIMITED PARTNERSHIP
  
  
           ROSEDALE  LIMITED  PARTNERSHIP , a New Mexico limited  partnership (the
  "Partnership") recorded a certificate of limited partnership with the New Mexico
  Secretary of State on January 24, 1994. A partnership  agreement  dated March 4,
  1993 was entered  into by and  between  DEKE  NOFTSKER  and ABO  CORPORATION  as
  General Partners and DEKE NOFTSKER as the Limited Partner.
  
           A  First   Amendment  to  the  Certificate  and  Agreement  of  Limited
  Partnership  of Rosedale  Limited  Partnership  dated January 19, 1994,  ("First
  Amendment")  was filed with the Secretary of State of the State of New Mexico on
  June 8, 1995. The First  Amendment  documented the withdrawal of ABO CORPORATION
  as the  general  partner  and the  withdrawal  of DEKE  NOFTSKER  as the limited
  partner.  As a result of the First  Amendment,  DEKE  NOFTSKER  remained  as the
  general  partner (the "General  Partner") and ABO  CORPORATION was readmitted as
  the limited partner (the "Original Limited Partner").
  
           Effective as of the date written below,  WNC HOUSING TAX CREDIT FUND V,
  L.P.,  SERIES 3, 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 March 4, 1993.
  
           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  ROSEDALE  LIMITED  PARTNERSHIP  in its  entirety  to provide as
  follows:
  
                                      ARTICLE I
  
                                     DEFINITIONS
  
           Section 1.1  "Accountant"  shall mean Pulakos & Alongi,  Ltd.,  or such
  other firm of independent certified public accountants as may be engaged for the
  Partnership by the General Partner with the consent of the Limited Partner.
  
  
  <PAGE>
  
           Section  1.2 "Act" shall mean the laws if the State  governing  limited
  partnerships, as now in effect and as the same may be amended from time to time.
  
           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 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  period,  after  giving  effect  to the
  following adjustments:
  
           (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
  1.704-1(b)(2)(ii)(d)(4),  1.704-1(b)(2)(ii)(d)(5) and 1.704-1(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. Words such as "herein", "hereinafter", "hereof", "hereto", hereby"
  and  "hereunder",  when used with referenced to this  Agreement,  refers to this
  Agreement as a whole, unless the context otherwise requires.
  <PAGE>
  
           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  "Bankruptcy"  or  "Bankrupt"  shall mean the making of an
  assignment for the benefit of creditors,  becoming a party to any liquidation or
  dissolution   action  or  proceeding,   the   commencement  of  any  bankruptcy,
  reorganization,  insolvency or other  proceeding  for the relief of  financially
  distressed debtors, or the appointment of a receiver,  liquidator,  custodian or
  trustee  and,  if any of the  same  occur  involuntarily,  the  same  not  being
  dismissed,  stayed or  discharged  within 90 days, or the entry of any order for
  relief  under  Title 11 of the United  States  Code.  A Partner  shall be deemed
  Bankrupt  if  the  Bankruptcy  of  such  Partner  shall  have  occurred  and  be
  continuing.
  
           Section 1.9 "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 to such Partner of Partnership  Income
  (or  items  thereof)  and any items in the  nature  of income or gain  which are
  specially  allocated  pursuant to Section 10.3 or 10.4 hereof,  and decreased by
  the amount of any  Distributions  made to such Partner,  and allocations to such
  Partner 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.
  
           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 1.704-1(b), as amended or any successor thereto, and
  shall be  interpreted  and  applied in a manner  consistent  with such  Treasury
  Regulation.
  
           Section  1.10  "Capital  Contribution"  shall mean the total  amount of
  money,  or  the  initial  Gross  Asset  Value  of  property  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 a Capital Contribution.
  <PAGE>
  
           Section 1.11 "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,  amounts  set  aside as  reserves  pursuant  to  Article  VIII 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 1.12 "Code" shall mean the  Internal  Revenue Code of 1986,  as
  amended from time to time, or any successor statute.
  
           Section 1.13 "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 thirty-two  (32) apartment units as evidenced by the
  issuance of the certificate of occupancy by the inspecting  architect,  the FmHA
  or the  governmental  agency  having  jurisdiction  over the  Project  or by the
  issuance of the inspecting  architect's  certification,  in a form substantially
  similar to that attached hereto Exhibit "E". The construction shall be completed
  in good workmanlike  manner,  free and clear of all mechanics,  materialmen's or
  similar  liens and all other  expenses and costs,  including  but not limited to
  costs of financing, must be paid with respect to the Project through completion.
  
           Section  1.14  "Compliance  Period"  shall mean the period set forth in
  Section 42(I)(1) of the Code, as amended, or any successor statute.
  
           Section  1.15  "Consent  of the Limited  Partner"  shall mean the prior
  written consent or approval of the Limited Partner.
  
           Section 1.16 "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
  
  <PAGE>
  
  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  concurrently  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
  calculation  of Debt  Service  Coverage  is found in the  Report  of  Operations
  exhibit attached to this Agreement and incorporated herein by this reference.
  
           Section 1.17 "Deferred  Management Fee" shall have the meaning set 
  forth in Section 9.2(c) hereof.
  
           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
  in accordance with the Development Fee Agreement between the Partnership and the
  Developer,  dated  the  been  date  herewith  and  incorporated  herein  by this
  reference.
  
           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
  
  <PAGE>
  
  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 "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 1.21 "First Year Certificate"  shall mean the certificate to be
  filed by the General  Partner with the  Secretary of the Treasury as required by
  Code Section 42(1)(1), as amended, or any successor thereto.
  
           Section 1.22 "FmHA" shall mean the Farmers Home  Administration  of the
  United States Department of Agriculture.
  
           Section 1.23 "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 1.24 "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 1.25 "General  Partner" shall mean DEKE NOFTSKER and such other
  Persons as are admitted to the  Partnership as additional or substitute  General
  Partners pursuant to this Agreement.
  
           Section  1.26 "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 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;
  <PAGE>
  
           (b) The Gross Asset Values of all Partnership  assets shall be adjusted
  to equal their  respective  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 with the  Consent of the Limited
  Partner  and  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 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 1.26(d) to the extent the General  Partners  determines
  that  an  adjustment   pursuant  to  Section  1.26(b)  hereof  is  necessary  or
  appropriate in connection with a transaction  that would otherwise  result in an
  adjustment pursuant to this Section 1.26(d).
  
  If the Gross Asset Value of an asset has been determined or adjusted pursuant to
  Section 1.26(a),  Section 1.26(b),  or Section 1.26(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.
  <PAGE>
  
           Section  1.27  "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  1.28  "Improvements"  shall  mean  the  construction  of  a 32
  (thiry-two) unit apartment complex for families in a good and workmanlike manner
  substantially  in  accordance  with the plans  and  specifications  and  Project
  Documents.
  
           Section 1.29  "Incentive Management Fee" shall have the meaning set 
  forth in Section 9.2(e) hereof.
                
           Section  1.30 "Income and Losses"  shall mean,  for each fiscal 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 Section 1.26(a) or (b) thereof shall be taken into account
  as gain or loss from the  disposition  of such asset for  purposes of  computing
  Income and Losses;
  <PAGE>
  
           (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;
  
           (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 or 10.4 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 1.31 "Interest" shall mean the entire  ownership  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 1.32  "Involuntary  Withdrawal"  means any Withdrawal caused by
  the death, adjudication of insanity or incompetence,  or Bankruptcy of a General
  Partner, or the removal of a General Partner pursuant to Section 13.2 hereof.
  <PAGE>
  
           Section  1.33  "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 1.34 "Limited  Partner"  shall mean WNC HOUSING TAX CREDIT FUND
  V, L.P., SERIES 3, 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 1.35  "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 1.36  "Management  Agent"  shall mean the  property  management
  company  which  oversees the property  management  functions for the Project and
  which is on-site at the  Project.  The  initial  Management  Agent shall be M-DC
  Group, Inc., dba Alpha Management.
  
           Section 1.37 "Management  Agreement"  shall mean the agreement  between
  the Partnership and the Management Agent for property management services.
  
           Section 1.38 "Minimum  Set-Aside  Test" shall mean the 40-60  set-aside
  test pursuant to Section  42(g),  as amended and any successor  thereto,  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 any source of
  permanent financing of the Project by a qualified  commercial lender (as defined
  in Section 42 of the Code)  evidencing the  indebtedness  of the Partnership and
  encumbering  the  Project.  Where the context  admits,  the term  "Mortgage"  or
  "Mortgage  Loan"  shall  include  any  mortgage,  deed,  deed  of  trust,  note,
  regulatory  agreement,   security  agreement,   assumption  agreement  or  other
  instrument executed in connection with the Mortgage Note which is binding on the
  Partnership;  and in case  any  Mortgage  is  replaced  or  supplemented  by any
  subsequent  mortgage  or  mortgages,  the  Mortgage  shall  refer  to  any  such
  subsequent mortgage or mortgages.
  <PAGE>
  
           Section 1.40 "Mortgage Note" shall mean the nonrecourse promissory note
  whereby the  Partnership  promises to pay Farmers  Home  Administration,  or its
  successor or assignee,  the  principal sum of  $1,330,000,  plus interest on the
  principal at 7.5% per annum over a term of 50 years.
  
           Section 1.41 "Nonrecourse Liability" shall have the meaning given it in
  Treasury Regulations Section 1.704-2(b)(3).
  
           Section  1.42  "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 (not  including
  Capital  Contributions,  Sale or Refinancing Proceeds or proceeds of Partnership
  borrowings).
  
           Section 1.43 "Operating Deficit Guarantee Period" shall mean the period
  commencing  with the date of this  Agreement  and ending  four  years  after the
  project attains 100% occupancy.
  
           Section  1.44  "Operating  Loans"  shall mean loans made by the General
  Partner to the Partnership pursuant to Article VI of this Agreement, which loans
  do not bear  interest and are  repayable  only as provided in Article XI of this
  Agreement.
  
           Section 1.45 "Original Limited Partner" shall mean ABO CORPORATION.
  
           Section  1.46  "Partner"  shall mean either the General  Partner or the
  Limited Partner.
  
           Section  1.47  "Partner  Nonrecourse  Debt"  shall have the meaning set
  forth in Section 1.704-2(b)(4) of the Treasury Regulations.
  <PAGE>
  
           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,
  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;  and (b) the  closing  of the  Mortgage  shall  have
  occurred and 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.
  <PAGE>
  
           Section 1.55 "Project" shall mean the approximately  3.81 acres of land
  in Silver City, Grant County, New Mexico, as more fully described in Exhibit "A"
  attached hereto and incorporated herein by this reference, and the Improvements.
  
           Section 1.56 "Project  Documents"  shall mean and include all documents
  delivered to or required by Mortgage Loan and/or any governmental  agency having
  jurisdiction  over the Project in connection with the development,  construction
  and financing of the Project,  including but not limited to, 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 $36,120 for 1996,  $54,180 per year for each of the years 1997 through
  2005,  and $4,515 for 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 $547,280 to be available to the Partnership;  provided, however, that if
  the Actual Tax Credit for 1996 is greater (or less than) $36,120,  the Projected
  Tax Credit for the year 2006 shall be reduced  (increased) by an amount equal to
  the amount by which the Actual Credit for 1996 exceeds (is less than) $36,120.
  
           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 "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 1.61  "Reporting Fee" shall have the meaning set forth in 
  Section 9.2(d) hereof.
  
           Section 1.62  "Revised Projected Tax Credits" shall have the meaning 
  set forth in Section 7.4(a) hereof.
   
  
  <PAGE>
  
           Section  1.63 "Sale or  Refinancing"  shall  mean any of the  following
  items or transactions: a sale, transfer, exchange or other disposition of all or
  substantially  all of  the  assets  of the  Partnership,  a  condemnation  of or
  casualty at the Project or any part thereof,  a claim against a title  insurance
  company,  the  refinancing  or any Mortgage  Note or other  indebtedness  of the
  Partnership and any similar item or  transaction;  provided,  however,  that the
  payment of Capital  Contributions  by the Partners shall not be included  within
  the meaning of the term "Sale or Refinancing."
  
           Section  1.64  "Sale  or  Refinancing  Proceeds"  shall  mean  all cash
  receipts  of the  Partnership  arising  from a Sale  or  Refinancing  (including
  principal and interest  received on a debt obligation  received as consideration
  in whole or in part,  on a Sale or  Refinancing)  less the amount  paid or to be
  paid in connection with or as an expense of such Sale or  Refinancing,  and with
  regard to damage  recoveries or insurance or condemnation  proceeds,  the amount
  paid or to be paid for repairs,  replacements or renewals  resulting from damage
  to or partial condemnation of the Project.
  
           Section 1.65 "State" shall mean the State of New Mexico.
  
           Section 1.66 "State Tax Credit  Agency"  shall mean the state agency of
  New Mexico has the  responsibility  and  authorization  to  administer  the LIHC
  program in New Mexico.
  
           Section 1.67 "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 1.68 "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 1.69 "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 1.70 "TRA 1986" shall mean the Tax Reform Act of 1986.
  <PAGE>
  
           Section  1.71  "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).
  
           Section 1.72  "Withdrawing"  or  "Withdrawal"  (including the verb form
  "Withdraw" and the adjectival forms  "Withdrawing" and "Withdrawn")  shall mean,
  as to a General Partner,  the occurrence of the death,  adjudication of insanity
  or incompetence,  or Bankruptcy of such Partner,  or the withdrawal,  removal or
  retirement  from the  Partnership of such Partner for any reason,  including any
  sale,  pledge,  encumbering,  assignment or other transfer of all or any part of
  its General Partner  Interest and those situations when a General Partner may no
  longer  continue  as a General  Partner by reason of any law or  pursuant to any
  terms of this Agreement.
  
  
                                     ARTICLE II
  
                                        NAME
  
           The name of the Partnership shall be "ROSEDALE LIMITED PARTNERSHIP."
  
                                     ARTICLE III
  
                    PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE
  
           Section 3.1 Principal  Executive Office. The principal executive office
  of the Partnership is located at 3825 Hawkins NE, Albuquerque, New Mexico 87109,
  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 Deke  Noftsker,  whose address is 3825
  Hawkins NE, Albuquerque, New Mexico 87109.
  
                                     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
  
  <PAGE>
  
  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, 2047
  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 $70,000.
  
           Section 6.2  Construction and Operating Obligations; General Partner 
  Loans.
  
           (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
  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 cost overrun and not be
  repayable.  In addition,  if (1) the Improvements are not completed on or before
  
  <PAGE>
  
  May 1, 1996  ("Completion  Date")  (which  date may be extended in the events of
  force  majeure,  but in no event  longer than three  months from the  Completion
  Date.  For purposes of this  Agreement  force majeure shall mean any act of God,
  strike, lockout, or other industrial disturbance,  act of the public enemy, war,
  blockage, public riot, fire, flood, explosion, governmental action, governmental
  delay,  restraint or inaction and any other cause or event,  whether of the kind
  enumerated specifically herein, or otherwise, which is not reasonably within the
  control of a Partner to this Agreement  claiming such suspension);  (2) prior to
  completing the Improvements, there is an uncured default under or termination of
  the Construction Loan, Mortgage Loan commitment, or other material documents; or
  (3) a  foreclosure  action is  commenced  against the  Partnership,  then at the
  Limited Partner's election,  either the General Partner will be removed from the
  Partnership  and the  Limited  Partner,  or an  assignee,  will be  admitted  as
  successor  General Partner,  all in accordance with Article XIII hereof,  or the
  General  Partner  will  repurchase  the  Interest of the Limited  Partner for an
  amount equal to the amounts  theretofore  paid by the Limited  Partner,  and the
  Limited  Partner  shall  have no further  Interest  in the  Partnership.  If the
  Limited  Partner elects to have the General  Partner  repurchase the Interest of
  the Limited  Partner  then the  repurchase  shall occur within 60 days after the
  General Partner receives written demand from the Limited Partner.
  
           (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.
  <PAGE>
  
           (b) The General Partner shall promptly provide funds necessary to cover
  any Operating  Deficits for u31. In the event the General  Partner shall fail to
  make any such advances as provided in this Section 6.2(b) the Partnership  shall
  utilize those funds  otherwise  payable to the General Partner or its Affiliates
  pursuant to Section 9.2 ("General Partner Funds") to meet the obligations of the
  General Partner pursuant to this Section.  Such 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  installment  payments to the  General  Partner or its
  Affiliates  pursuant  to  Section  9.2 shall be reduced  proportionally.  If the
  Operating  Deficit  guarantee period  referenced above has not expired,  but all
  General Partner Funds have been distributed,  then the General Partner shall pay
  additional  Capital  Contributions to the Partnership to meet the  Partnership's
  financial  obligations.  Notwithstanding,  after  expiration  of  the  Operating
  Deficit guarantee period referenced above, the General Partner may advance funds
  to the  Partnership  to pay operating  expenses of the  Partnership  in order to
  facilitate the  Partnership's  compliance with the Rent  Restriction  Test or to
  cure Operating Deficits. All General Partner advances not satisfied from General
  Partner Funds shall constitute an additional Capital Contribution of the General
  Partner.
  
           Section  6.3 Other  General  Partner  Loans.  After  expiration  of the
  Operating Deficit Guarantee Period, with the Consent of the Limited Partner, the
  General Partner may loan to the Partnership any sums required by the Partnership
  and not  otherwise  reasonably  available to it. Any such loan shall bear simple
  interest (not  compounded) at the rate 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, if lesser, the maximum legal rate. The maturity date
  and  repayment  schedule  of any such loan shall be as agreed to by the  General
  Partner and the Limited  Partner.  The terms of any such loan shall be evidenced
  by a written  instrument.  The  General  Partner  shall not charge a  prepayment
  penalty on any such loan.  Any loan in  contravention  of this Section  shall be
  deemed an invalid  action taken by the General  Partner and such advance will be
  classified as a General Partner Capital Contribution.
  
  
  
  <PAGE>
  
  
                                     ARTICLE VII
  
                       LIMITED PARTNER'S CAPITAL CONTRIBUTIONS
  
           Section 7.1 Original Limited Partner. The Original Limited Partner made
  a Capital Contribution of $1.00. 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.  The
  Original  Limited Partner  acknowledges  that it has no further  interest in the
  Partnership  as a  limited  partner  as of the date of this  Agreement,  and has
  released  all  claims,  if  any,  against  the  Partnership  arising  out of its
  participation as a limited partner.
  
           Section  7.2  Capital  Contribution  of Limited  Partner.  The  Limited
  Partner shall make a total Capital  Contribution  in the amount of $308,762,  as
  may be adjusted in accordance with Section 7.4 of this Agreement, 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
  Certification  and  Agreement  in the form  attached  hereto as Exhibit  "C" and
  incorporated herein by this reference;
  
                    (3) prior to the due date of each  installment of such Capital
  Contribution except the first payment,  the General Partner shall deliver to the
  Limited  Partner a fully  executed  General  Partner  Certification  in the form
  attached hereto as Exhibit "D" and incorporated herein by this reference, to the
  effect that all of the  representations  and  warranties set forth in Article IX
  are accurate;
  
                    (4) prior to the Capital  Contribution  payment  referenced in
  Section 7.2(b)(1),  the General Partner shall deliver to the Limited Partner the
  following:  (A) a  certificate  of occupancy on all the  apartment  units in the
  
  <PAGE>
  
  Project; (B) a copy of the recorded grant deed (warranty deed); (C) a copy of an
  ALTA Owner's Title Insurance Policy and any endorsements required by the Limited
  Partner issued in an amount equal to the sum of the original principal amount of
  the  Mortgage and the  aggregate  amount of Capital  Contributions  set forth in
  Sections 6.1 and 7.2; (D) an audited  construction  cost  certification  with an
  itemized  cost  breakdown;  (E) copies of all Mortgage Loan  documents;  and (F)
  copies of all Mortgage Notes; and
  
                    (5) prior to the Capital  Contribution  payment  referenced in
  Section  7.2(b)(2),  the General  Partner shall  deliver to the Limited  Partner
  Internal  Revenue  Code  Form  8609,  or any  successor  form  and a copy of the
  Declaration of Restrictive Covenants/Extended Use Agreement entered into between
  the Partnership and the State Tax Credit Agency.
  
                    (6) not later than the Capital Contribution payment referenced
  in Section  7.2(b)(2),  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)  $154,381  will be payable upon admittance of the Limited 
  Partner into the  Partnership provided the conditions of Section 7.2(a) have 
  been met; and
  
                    (2)  $154,381  will be payable  after the Project  maintains a
  debt  service  coverage  of 1.10 for 90  consecutive  days and receipt of tenant
  income  verification  data to  determine  that 100% of the units in the  Project
  qualify under Section 42 of the Internal  Revenue Code provided,  the conditions
  of Section 7.2(a) have been met.
  
           Section 7.3 Repurchase of Limited  Partner's  Interest.  Within 60 days
  after the General Partner receives written demand 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:
  <PAGE>
  
           (a)      receive an  allocation of LIHTC no later than the close of the
  calendar  year during which the Project is placed in service;
  
           (b)      cause the Project to be placed in service by May 1, 1996;
  
           (c)      achieve 90% occupancy of the Project by Qualified Tenants by 
  June 1, 1996;
  
           (d)      obtain Permanent Mortgage Commencement by May 1, 1996;
  
           (e) meet both the Minimum  Set-Aside Test and the Rent Restriction Test
  not later than December 31 of the first year the Partnership elects the LIHTC to
  commence in accordance with the Code; and
  
           (f)      obtain a carryover  allocation, within the meaning of Section 
  42 of the Code, from the State Tax Credit Agency on or before December 31, 1994.
  
           Section 7.4 Reduction of Limited Partner's Capital Contribution.
  
           (a) If the  anticipated  amount of Tax Credits to be  allocated  to the
  Limited  Partner as evidenced by IRS Form 8609, and Schedule A thereto,  and the
  audited construction cost certification  provided to the Limited Partner is less
  than $528,353 (the "Revised  Projected Tax Credits") then the Limited  Partner's
  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  59% of the  Revised  Projected  Tax  Credits  so
  anticipated to be allocated to the Limited Partner.
  
           (b) The General  Partner is  required  to use its best  efforts to rent
  100% of the  Project's  apartment  units to  Qualified  Tenants  throughout  the
  Compliance Period. If at any time during the first five calendar years following
  the year in which the  Project is placed in  service,  the Actual Tax Credit for
  any fiscal year or portion thereof is or will be less than the Projected  Annual
  Tax Credit,  or the Revised  Projected Tax Credit  calculated on an annual basis
  ("Revised  Projected  Annual  Tax  Credit"),  if  applicable,  then,  unless the
  shortfall shall have previously been addressed under Section 7.4(a),  the amount
  
  <PAGE>
  
  of the reduction shall be applied to the next Capital  Contribution  owed by the
  Limited  Partner,  if any,  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 any. If, at the time of determination  thereof,  the
  Capital Contribution  reduction referenced in Section 7.4(a) and/or this Section
  7.4(b) is greater than the balance of the Limited Partner's Capital Contribution
  payments which is then due, if any ("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) In the event that, for any reason, at any time after the first five
  calendar years following the year in which the Project is placed in service, the
  amount of the Actual Tax Credit is less than the Projected Annual Tax Credit, or
  the Revised  Projected  Annual Tax Credit,  if  applicable,  (the "Annual Credit
  Shortfall"), then, unless the Annual Credit Shortfall shall have previously been
  addressed under Section 7.4(a) or Section 7.4(b),  there shall be a reduction in
  the General  Partner's  share of Cash Flow From Operations in an amount equal to
  the Annual Credit Shortfall and said amount instead shall be paid to the Limited
  Partner.  In the event  there are not  sufficient  funds to pay the full  Annual
  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
  made a constructive  advance to the Partnership in an amount equal to the Annual
  Credit Shortfall (a "Credit Shortfall Loan"), which shall be deemed to have been
  made on January 1 of the year in which the Annual Credit Shortfall arises.  Each
  Credit  Shortfall Loan shall bear simple interest (not compounded) from the date
  on which such loan is deemed to have been made under this Section  7.4(c) at the
  rate  equal  to the  10-year  Treasury  money  rate at the  time  of the  Credit
  Shortfall Loan, or, if lesser, the maximum legal rate. Credit Shortfall Loans or
  any portion thereof shall be repaid in the next year in which sufficient  monies
  are  available  from the  General  Partner's  Cash  Flow From  Operations,  with
  interest  payable prior to principal.  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(b).
  
           (d) In the event there is a  reduction  in the  qualified  basis of the
  Project  for income tax  purposes  following  an audit by the  Internal  Revenue
  Service (IRS) resulting in a recapture of Tax Credits previously claimed,  then,
  in addition to any other payments to which the Limited Partner is entitled under
  
  <PAGE>
  
  the terms of this  Section  7.4 the  General  Partner  shall pay to the  Limited
  Partner the sum of (1) the deficiency  assessed against the Limited Partner as a
  result of the Tax Credit  recapture,  (2) any interest and penalties  imposed on
  the  Limited  Partner  with  respect  to  such  deficiency,  and  (3) an  amount
  sufficient to pay any tax liability owed by the Limited  Partner  resulting from
  the receipt of the amounts specified in (1) and (2).
  
           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, with the consent of
  the Limited  Partner,  determine that such cash should,  in whole or in part, be
  returned to the Limited  Partner in  reduction of its Capital  Contribution.  No
  such return  shall be made 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  Capital
  Contribution  in the amounts and on the dates  specified in this  Agreement and,
  except as otherwise expressly required hereunder,  shall not be required to lend
  any funds to the Partnership or, after their  respective  Capital  Contributions
  have been paid, to make any further Capital Contribution to the Partnership.
  
                                    ARTICLE VIII
  
                            WORKING CAPITAL AND RESERVES
  
           Section 8.1 Operation and Replacement Reserve Account.  The Partnership
  shall establish an operating and  maintenance  reserve account and a replacement
  reserve  account and shall deposit  thereinto an annual amount equal to $200 per
  residential  unit per year for the purpose of repairs,  maintenance  and capital
  repairs.  Said deposit shall be made monthly in equal installments.  Any balance
  remaining  in  these  accounts  at the  time of a sale of the  Project  shall be
  allocated and  distributed  equally  between the General Partner and the Limited
  Partner.
  
           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
  
  <PAGE>
  
  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.  Subject to the
  receipt of Consent to the Limited Partner where required by this Agreement,  and
  subject to the other  limitations and  restrictions  included in this Agreement,
  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.  No  Limited  Partner  (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.
  <PAGE>
  
           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 $230,000,  in accordance
  with the  Development  Fee Agreement  between the Partnership and the Developer.
  Such fee shall be deemed  paid by the  Partnership  and deemed  received  by the
  General  Partner (and  includable in the taxable income of the General  Partner)
  when the Project is placed-in-service.
  
           (b) Notwithstanding the preceding, the Partnership shall retain the sum
  of $78,762 from the Capital  Contributions  paid  pursuant to 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  costs,  loan  fees,  building  materials  and  labor,  but the amount
  retained  shall  in  no  event  be  greater  than  the  difference  between  the
  Construction  Loan and the Mortgage Loan. If any such funds are remaining  after
  the 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  in an  amount  equal  to 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 and/or an incentive rent-up fee.
  
           (c) The  Partnership  shall  pay to the  Management  Agent  a  property
  management  fee for the  leasing and  management  of the Project in an amount in
  accordance with the Management  Agreement.  The term of the Management Agreement
  shall not  exceed  one year.  If the  Management  Agent is an  Affiliate  of the
  General Partner then  commencing  with the termination of the Operating  Deficit
  Guarantee period  referenced in Section 6.2(b), in any year in which the Project
  has an Operating  Deficit,  40% of the management Fees, if any, shall be paid to
  the Management  Agent solely in accordance  with and to the extent  permitted by
  Section 11.1 of this Agreement.
  
                    (1) The General  Partner shall,  upon receiving any request of
  the Mortgage lender requesting such action,  dismiss the Management Agent as the
  entity  responsible  for  management  of the  Project  under  the  terms  of the
  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,  or in the event of any misconduct by the Management Agent or its
  failure  to  exercise  reasonable  care  in  the  discharge  of its  duties  and
  obligations as Management Agent.
  <PAGE>
  
                    (2) The  appointment  of any  successor  Management  Agent  is
  subject to the Consent of the Limited Partner which may only be sought after the
  General  Partner  has  provided  the  Limited  Partner   accurate  and  complete
  disclosure respecting the proposed Management Agent.
  
           (d)  The  Partnership  shall  pay to the  Limited  Partner  a fee  (the
  "Reporting  Fee")  commencing  in  1996  equal  to  33% of the  Cash  Flow  From
  Operations but in no event less than $1,400 for the Limited  Partner's  services
  in monitoring the operations of the  Partnership  and for services in connection
  with the Partnership's  accounting matters and assisting with the preparation of
  tax  returns  and  the  reports  required  in  Sections  14.2  and  14.3 of this
  Agreement.  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 of this  Agreement;
  provided, however, that if in any year Cash Flow From Operations is insufficient
  to pay the full $1,400,  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,  as provided in Section 11.1, or sufficient Sale or Refinancing
  Proceeds, as provided in Section 11.2.
  
           (e) The  Partnership  shall pay to the  General  Partner  an  Incentive
  Management  Fee  equal to 67% of the  available  Cash Flow  From  Operations  in
  accordance  with  Section  11.1 of this  Agreement  for each  fiscal year of the
  Partnership  commencing in 1996 for services  incident to the  administration of
  the business and affairs of the Partnership,  which services shall include,  but
  not 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
  Incentive  Management  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  Incentive
  Management  Fee is not paid in any year it  shall  not  accrue  for  payment  in
  subsequent years.
  <PAGE>
  
           Section 9.3 Specific Powers of the General Partner.
  
           (a) In the Partnership's name and behalf, the General Partner may hold,
  sell,  transfer,  lease or  otherwise  deal  with any  real,  personal  or mixed
  property,  interest  therein  or  appurtenance  thereto in  accordance  with the
  purpose of this Agreement as indicated in Article IV hereto;
  
           (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,
  contractors,  agents, brokers,  Accountants and Management Agents (provided that
  the  selection of any  Management  Agent has received the Consent of the Limited
  Partner) and attorneys, on such terms as the General Partner shall determine;
  
           (c) In the  Partnership's  name and on its 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 on its 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) In the  Partnership's  name and on its behalf, the General Partner 
  is authorized to execute the Construction Loan and the Mortgage;
  
           (g) 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.
  <PAGE>
  
           (h) 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.
  
           (i) The General  Partner  shall operate the Project and shall cause the
  Management Agent to manage the Project in such a manner that the Project will be
  eligible to receive a Tax Credit with respect to 100% of the apartment  units in
  the Project.  To that end, the General Partner agrees,  without  limitation,  to
  make all elections requested by the Limited Partner under Section 42 of the Code
  to allow the  Partnership or its Partners to claim the Tax Credit,  to file Form
  8609 with respect to the Project as  required,  for at least the duration of the
  Compliance  Period to operate  the  Project  and cause the  Management  Agent to
  manage the  Project so as to comply with the  requirements  of Section 42 of the
  Code,  as amended,  or any  successor  thereto,  including,  but not limited to,
  Section 42(g) and Section  42(i)(3) of the Code, as amended,  or any  successors
  thereto,  to make all  certifications  required by Section 42(l) of the Code, as
  amended,  or any  successor  thereto,  and to operate  the Project and cause the
  Management Agent to manage the Project so as to comply with all other Tax Credit
  Conditions.
  
       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
  counsel to the Partnership,  would not avoid a recapture  thereof on the part of
  the former owners; and
  <PAGE>
  
           (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  9.4  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 any provision of 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 or the Rent Restriction 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;
  <PAGE>
  
       (l) Commingle funds of the Partnership with the funds of another Person;
  
       (m) Take any action  which  requires  the  Consent of the  Limited  Partner
  unless the General Partner has received the Consent of the Limited Partner.
  
       Section 9.5 Restrictions on Authority of General  Partner.  Without consent
  of the Limited Partner the General Partner shall not:
  
       (a) Sell, exchange, lease or otherwise dispose of the Project;
  
       (b) Incur  indebtedness  other than the Construction Loan and 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) Contract away the fiduciary duty owed to the Limited  Partner at common
  law;
  
       (e) 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.
  
       (f) Make any expenditure of funds, or commit to make any such  expenditure,
  other than in response  to an  emergency,  except as provided  for in the annual
  budget as provided in Section 14.3(i) hereof;
  
       (g) Cause the merger or other reorganization of the Partnership; or
  
       (h) Dissolve the Partnership.
  
  
  <PAGE>
  
  
       Section 9.6 Duties of General  Partner.  The General Partner agrees that it
  shall at all times:
  
       (a) 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;
  
       (b) 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;
  
       (c) 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 required  under  Section  9.11(j)
  hereof;
  
       (d) 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;
  
       (e) Comply with all FmHA,  Code and state rules and  regulations  for rural
  rental housing, LIHC; and
  
       (f) Use its best efforts to keep the Project and Project dwelling units, in
  decent,  safe, sanitary and good condition,  repair and working order,  ordinary
  use and  obsolescence  excepted,  and make or cause to be made from time to time
  all necessary repairs thereto  (including  external and structural  repairs) and
  renewals and replacements thereof;
  
       (g) Pay,  before  the same shall  become  delinquent  and before  penalties
  accrue thereon all Partnership taxes, assessments and other governmental charges
  against the  Partnership or its  properties,  and all of its other  liabilities,
  except to the extent and so long as the same are being  contested  in good faith
  by appropriate  proceedings in such manners as not to cause any material adverse
  effect  on  the  Partnership's   property,   financial   condition  or  business
  operations, with adequate reserves provided for such payments;
  
       (h) Permit,  and cause the Management Agent to permit,  the Limited Partner
  and its  representatives to have access to the Project and personnel employed by
  the Partnership and by the Management Agent who are concerned with management of
  
  <PAGE>
  
  the Project at all reasonable  times during normal business hours and to examine
  all  agreements,  Tax Credit  compliance data and plans and  specifications  and
  deliver  copies  thereof and such reports as may  reasonably  be required by the
  Limited  Partner.  The General  Partner shall  provide the Limited  Partner with
  copies of all  correspondence,  notices and reports sent pursuant to or received
  under the Project  Documents or any authority with respect to the Project at the
  time such correspondence, notices or reports are sent or received, copies of all
  other  correspondence  of substantial  importance which a prudent investor would
  wish  to  examine  in  connection   with  the   transaction  at  the  time  such
  correspondence  is sent or  received,  and all  reports  required by Article XIV
  within the required time periods set forth therein.
  
       (i) Make any Capital  Contributions,  advances or loans required to be made
  by the General Partner under the terms of this Agreement;
  
       (j)  Establish  and maintain all reserves  required to be  established  and
  maintained under the terms of this Agreement;
  
       (k) Comply with each and every  covenant,  representation  and warranty set
  forth in Section 9.11; and
  
       (l) Perform  such other acts as may be  expressly  required of it under the
  terms of this Agreement.
  
       Section 9.7 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 9.7
  the term  "operating  cash  expenses"  shall  mean,  with  respect to any fiscal
  period, the amount of cash disbursed by the Partnership for Partnership business
  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
  
  <PAGE>
  
  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  which are not  Affiliates  of the General  Partner,  and
  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
  9.8(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.
  <PAGE>
  
           Section 9.8 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  9.9  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
  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. Conversely, no person
  shall have any rights to  Partnership  assets,  income or  proceeds by virtue of
  such other ventures or activities of any Partner.
  
           Section 9.10 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 the
  Limited Partner.
  
           (b) The  Partnership  Agreement  and the Project  Documents are in full
  force and effect and  neither  the  Partnership  nor the  General  Partner is in
  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.
  <PAGE>
  
           (d) Additional  Improvements 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) No Partner has or will have any personal  liability with respect to
  or has or will have personally guaranteed the payment of the Mortgage.
  
           (f) The  Partnership  is in 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.
  
           (g)      The Partnership owns the fee simple interest in the Project.
  
           (h) 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.
  
           (i) A builder's risk insurance policy in favor of the Partnership is in
  full force and effect and will remain in full force and effect until  Completion
  of Construction.
  
           (j) As of the date hereof and throughout  the term of the  Partnership,
  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,  are in full force and effect and will be kept in full
  force and effect throughout the term of the Partnership; all such policies shall
  be amounts and with insurers  satisfactory to Farmers Home  Administration.  All
  such 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.
  
           (k)  The  Management  Agent  has  obtained  or,  upon  commencement  of
  management functions, will obtain a fidelity bond or a blanket position bond (1)
  to include, at a minimum,  comprehensive employee dishonesty,  disappearance and
  destruction,  covering all principals of the Management Agent and all persons or
  positions which manage the Project's assets, including, but not limited to rent,
  bank  accounts  and  accounting  records;  (2) naming the Limited  Partner as an
  additional  loss payee;  and (3)  insuring the Project for an amount equal to at
  least two (2) months of the Project's gross potential  income plus the Project's
  total tenant security deposit liability.
  <PAGE>
  
           (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) The  General  Partner  has not  executed  and will not  execute any
  agreements with provisions contradictory to, or in opposition to, the provisions
  of this Agreement.
  
           (n) The Projected Tax Credits applicable to the Project are $36,120 for
  1996,  $54,180 per year for each of the years 1997 through 2005,  and $4,515 for
  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
  
  <PAGE>
  
  ninety-nine  percent  (99%) of the  aggregate  amount of LIHC of  $547,280 to be
  available to the Partnership;  provided,  however, that if the Actual Tax Credit
  for 1996 is greater (or less than)  $36,120,  the  Projected  Tax Credit for the
  year 2006 shall be reduced (increased) by an amount equal to the amount by which
  the Actual Credit for 1996 exceeds (is less than) $36,120.
  
           (o) No charges,  lien 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 constitute or 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  with the Code,  the Project  will  satisfy the Minimum
  Set-Aside Test.
  
           (q) All accounts of the Partnership required to be maintained under the
  terms of the Project Documents,  including,  without limitation, any account for
  replacement reserves, are currently funded to required levels,  including levels
  required by any authority.
  
           (r) The General Partner has not lent or otherwise advanced any funds to
  the Partnership  other than its Capital  Contribution and the Partnership has no
  unsatisfied  obligation to make any payments of any kind to the General  Partner
  or any Affiliate thereof.
  
           (s) No event has  occurred  which  constitutes  a default  under any of
  the Project Documents.
  
           (t) 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;  (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
  
  <PAGE>
  
  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.
  
           (u)  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 affect the ability of the
  Limited  Partner to obtain the  anticipated  benefits of its  investment  in the
  Partnership.
  
           (v) The General  Partner has and shall maintain a net worth equal to at
  least  $500,000  computed  in  accordance  with  generally  accepted  accounting
  principles.
  
  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
  9.11.
  
                                      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 the related  Sale or  Refinancing  Proceeds,  but after  giving
  
  <PAGE>
  
  effect to  Distributions  of Cash Flow From Operations and allocations of Income
  and Losses  pursuant to this Article X up to the date of the Sale or Refinancing
  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
  Limited Partner's  positive Capital Account balance to its Capital  Contribution
  and to increase the Limited  Partner's  positive  Capital  Account balance to an
  amount  equal to its Capital  Contribution,  shall be  allocated  to the Limited
  Partner;
  
                    (3) Third,  an amount of Income  sufficient  to  increase  the
  General  Partner's  positive Capital Account balance to an amount equal to its 
  Capital Contribution; and
  
                    (4) 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 the related  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 up to the date of the Sale or  Refinancing
  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 the Limited  Partner if and to
  the extent that such  allocation  would  create or increase an Adjusted  Capital
  Account  Deficit for the 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
  
  <PAGE>
  
  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 shall 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
  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.
  <PAGE>
  
           (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 an 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.
  
           (f) Any  Partner  Nonrecourse  Deductions  for any fiscal year shall be
  specially  allocated  to the  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  734(b) or Code  Section  743(b) is
  required,  pursuant to Treasury Regulations Section  1.704-1(b)(2)(iv)(m)(2)  or
  Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
  
  <PAGE>
  
  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  Partners 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  investment  tax credit
  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
  investment tax credit 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).
  
           (k) Any  income,  gain,  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  among the
  Partners so that, to the extent possible, the net amount of such Issuance Items,
  
  <PAGE>
  
  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 10.2(c),  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),  with the Consent of the Limited Partner,  the General
  Partner shall make such offsetting  special  allocations of Partnership  income,
  gain,  loss,  or  deduction  in whatever  manner the General  Partner,  with the
  Consent of the  Limited  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 10.1,  10.2(a),  10.2(b),
  10.3(h), 10.3(i), 10.3(j), 10.3(k), 10.3(l), 10.3(n) and 10.5. In exercising its
  authority  under this 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).
  <PAGE>
  
           Section 10.5 Other Allocation Rules.
  
       (a) The basis (or cost) of any  Partnership  investment tax credit 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 LIHC will be allocated
  99% to the Limited Partner and 1% to the General Partner.
  
       (b) In the event Partnership  investment tax credit 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 and  Section  10.2(a)  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.
  
       (d) Solely for purposes of determining a Partner's  proportionate  share of
  the "excess  nonrecourse  liabilities" of the Partnership  within the meaning of
  Treasury   Regulations  Section   1.752-3(a)(3),   the  Partners'  interests  in
  Partnership profits are as follows: Limited Partner: 99%; General Partner: 1%.
  
       (e) To the  extent  permitted  by  Section  1.704-2(h)(3)  of the  Treasury
  Regulations, the General Partner shall endeavor to treat Distributions as having
  been made from the proceeds of a Nonrecourse  Liability or a Partner Nonrecourse
  
  <PAGE>
  
  Debt only to the extent  that such  Distributions  would  cause or  increase  an
  Adjusted Capital Account Deficit for any Partner who is not a General Partner.
  
           Section 10.6 Tax Allocations:  Code Section 704(c).  In accordance with
  Code Section 704(c) and the Treasury Regulations thereunder, income, gain, 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 Section 1.25(a) hereof).
  
  In the event the Gross Asset Value of any Partnership asset is adjusted pursuant
  to Section 1.25(b) hereof,  subsequent  allocations of income,  gain,  loss, and
  deduction with respect to such asset shall take account of any variation between
  the adjusted  basis of 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  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 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
  
  <PAGE>
  
  among them without amendment to this Agreement.
  
           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, 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.
  
                                     ARTICLE XI
  
                                    DISTRIBUTION
  
           Section 11.1 Distribution of Cash Flow From Operations.
  
           Cash Flow Form  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 pay the Deferred  Management Fee, if any, but in no event shall 
  this  payment exceed 50% of the Cash Flow From Operations;
  
           (b) To pay  the  current  Reporting  Fee and  then  to pay any  accrued
  Reporting Fees which have not been paid in full from previous years;
  
           (c)  To pay the Development Fee in accordance with the Development Fee 
  Agreement;
  
           (d) To pay the Operating Loans, if any, as referenced in Section 6.2(b)
  of this  Agreement,  limited to 50% of the Cash Flow From  Operations  remaining
  after reduction for the payments made pursuant to subsections (a) through (c) of
  this Section 11.1;
  <PAGE>
  
           (e) To pay the Incentive  Management  Fee equal to 67% of the Cash Flow
  From  Operations  remaining  after  reduction  for the payments made pursuant to
  subsections (a) through (d) of this Section 11.1; and
  
           (f) To the Limited  Partner in an amount equal to 50% of the  remaining
  Cash Flow From  Operations and to the General  Partner in an amount equal to 50%
  of the remaining Cash Flow From Operations.
  
       Section  11.2  Distribution  of  Sale  or  Refinancing  Proceeds.  Sale  or
  Refinancing Proceeds shall be distributed in the following order:
  
       (a) To the  payment  of the  Mortgage  Note and  other  matured  debts  and
  liabilities  of the  Partnership,  other than accrued  payments,  debts or other
  liabilities owing to Partners or former Partners if applicable;
  
       (b) To any  accrued  payments,  debts  or  other  liabilities  owing to the
  Partners or former Partners,  including,  but not limited to, accrued  Reporting
  Fees and Operating Loan;
  
       (c) To the  establishment of any reserves which the General  Partner,  with
  the  Consent  of the  Limited  Partner,  shall  deem  reasonably  necessary  for
  contingent,   unmatured  or  unforeseen   liabilities   or  obligations  of  the
  Partnership;
  
       (d) To the Limited Partner in an amount equal to its Capital Contribution;
  
       (e) To the General Partner in an amount equal to its Capital  Contribution;
  and
  
       (f) Thereafter, 99% to the Limited Partner and 1% to the General Partner.
  
                                     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 their  respective
  Interests  in the  Partnership  to any other  Person,  whether or not a Partner,
  except upon satisfaction of each of the following:
  <PAGE>
  
       (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  the  Assignee's  written
  representation  that the Partnership  Interest is to be acquired by the Assignee
  for the  Assignee's  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  to such
  assignment are satisfied.
  
           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  and  Distributions  from the
  Partnership  attributable  to the Interest  acquired by reason of any  permitted
  
  <PAGE>
  
  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 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.
  
           (b) A  nonadmitted  transferee of a Limited  Partner's  Interest in the
  Partnership  shall  only be  entitled  to  receive  that  share of  allocations,
  Distributions  and the return of Capital  Contribution  to which its  transferor
  would otherwise have been 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 a transferee and  transferor  jointly advise the General
  Partner in writing of a transfer of an Interest in the Partnership,  furnish the
  transferee  with pertinent tax information at the end of each fiscal year of the
  Partnership.
  
           (c)  The  General  Partner  may  elect  to  treat  a  transferee  of  a
  Partnership Interest who has not become a Substitute Limited Partner as the case
  may be, in the place of its transferor  should the General Partner  determine 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 or adjudication
  of  incompetency  or insanity 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  constitute a successor as a transferee
  
  <PAGE>
  
  of its Interest in the  Partnership  and to join with such  transferee in making
  the  application  to  substitute  such  transferee 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 respective predecessors
  unless the General Partner shall so consent.
  
                                    ARTICLE XIII
  
                       WITHDRAWAL, REMOVAL AND REPLACEMENT OF
                                   GENERAL PARTNER
  
           Section 13.1 Withdrawal of General Partner.
  
           (a) The General  Partner may not Withdraw (other than as a result of an
  Involuntary  Withdrawal) without the Consent of the Limited Partner, and, to the
  extent required, of Farmers Home Administration and the State Tax Credit Agency.
  Withdrawal  shall be  conditioned  upon the agreement of one or more Persons who
  satisfy the  requirements  of Section  13.5 of this  Agreement to be admitted as
  successor General Partner(s).
  
           (b)  Each  General  Partner  shall  indemnify  and  hold  harmless  the
  Partnership and all Partners from its Withdrawal in violation of Section 13.1(a)
  hereof.  Each  General  Partner  shall be liable for damages to the  Partnership
  resulting from its Withdrawal in violation of Section 13.1(a).
  
           Section 13.2 Removal of General Partner.
  
           (a)      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 negligent conduct in the performance of its 
  duties under this Agreement;
  
                             (C)      Been convicted of, or entered 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
  
  <PAGE>
  
  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)      Failed to provide any loan, advance, Capital
  Contribution or any payment the Partnership required under this Agreement;
  
                             (G)      Failed to obtain the Consent of the Limited 
  Partner prior to any decision,  act or omission under circumstances where this 
  Agreement requires that such consent be obtained;
  
                             (H)      Breached any  representation,  warranty or 
  covenant contained in this Agreement or failed to perform any action which may 
  be required by this Agreement;
  
                             (G)      Violated any federal or state tax law which 
  causes a recapture of LIHC; or
  
                             (H)      Failed during any six-month  period  during 
  the  Compliance  Period 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.
  
                    (2)      As provided in Section 6.2(a) hereof.
  
           (b) Written  notice of the  removal  for cause of the  General  Partner
  shall be  served by the  Limited  Partner  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  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 under any circumstances. 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.  If the General Partner fails to cause
  
  <PAGE>
  
  the accounting to be prepared within 30 days of receipt of the notice of removal
  for cause then the Limited Partner may cause the accounting to be prepared.  The
  expenses of the accounting shall be borne by the General Partner.
  
           Section 13.3 Effects of a Withdrawal. In the event of a Withdrawal, the
  entire  Interest  of the  Withdrawing  General  Partner  shall  immediately  and
  automatically  terminate  on the  effective  date of such  Withdrawal,  and such
  General Partner shall immediately  cease to be a General Partner,  shall have no
  further right to participate  in the management or operation of the  Partnership
  or  the  Project  or to  receive  any  allocations  or  Distributions  from  the
  Partnership  or any  other  funds  or  assets  of  the  Partnership,  except  as
  specifically set forth below. In the event of a Withdrawal, any or all executory
  contracts,  including but not limited to the Management  Agreement,  between the
  Partnership  and  the  Withdrawing  General  Partner  or its  Affiliates  may be
  terminated by the Partnership.
  
      Furthermore,   notwithstanding  such  Withdrawal,  the  Withdrawing  General
  Partner  shall  be and  shall  remain,  liable  as a  General  Partner  for  all
  liabilities  and  obligations  incurred  by the  Partnership  or by the  General
  Partner prior to the effective date of the  Withdrawal,  or which may arise upon
  such Withdrawal.  Any remaining Partner shall have all other rights and remedies
  against  the  Withdrawing  General  Partner  as  provided  by law or under  this
  Agreement.
  
           The General  Partner agrees that in the event of its Withdrawal it will
  indemnify  and hold the Limited  Partner  harmless  from and against all losses,
  costs and  expenses  incurred  in  connection  with the  Withdrawal,  including,
  without limitation,  all legal fees and other expenses of the Limited Partner in
  connection with the transaction.
  
           The  following  additional  provisions  shall  apply in the  event of a
  Withdrawal:
  
           (a)  In  the  event  of  a  Withdrawal  which  is  not  an  Involuntary
  Withdrawal,  the  Withdrawing  General  Partner  shall have no further  right to
  receive any future  allocations  or  Distributions  from the  Partnership or any
  other funds or assets of the Partnership, nor shall it be entitled to receive or
  to be paid by the Partnership any further payments of fees (including fees which
  have been  earned but are  unpaid) or to be repaid any  outstanding  advances or
  loans  made by it to the  Partnership  or to be paid any  amount  for its former
  
  <PAGE>
  
  Interest.  From and after the  effective  date of such  Withdrawal,  the  former
  rights  of the  Withdrawing  General  Partner  to  receive  or to be  paid  such
  allocations,  Distributions, funds, assets, fees or repayments shall be assigned
  to the other General Partner or General  Partners (which may include the Limited
  Partner),  or if there is no other general  partner of the  Partnership  at that
  time, to the Limited Partner.
  
           (b) In the event of an  Involuntary  Withdrawal,  except as provided in
  Section 13.3(b)(3) below, the Withdrawing  General Partner shall have no further
  right to receive any future allocations or Distributions from the Partnership or
  any other funds or assets of the Partnership,  provided that accrued and payable
  fees  (i.e.,  fees earned but unpaid as of the date of  Withdrawal)  owed to the
  Withdrawing  General  Partner,  and any  outstanding  loans  of the  Withdrawing
  General Partner to the  Partnership,  shall be paid to the  Withdrawing  General
  Partner in the manner and at the times such fees and loans  would have been paid
  had the Withdrawing  General Partner not Withdrawn.  The Interest of the General
  Partner shall be purchased as follows:
  
                    (1) If the  Involuntary  Withdrawal  arises  from  removal for
  cause as set forth in Section  13.2(a)  hereof,  the Withdrawn  General  Partner
  shall be entitled to receive as its sole  compensation  for its  Interest in the
  Partnership an amount equal to its positive  Capital Account balance  determined
  as of the effective date of the removal,  if any,  payable upon the  dissolution
  and  termination  of  the  Partnership  after  all  of the  Partners  have  been
  distributed the positive balances in their Capital Accounts.
  
                    (2) If the Involuntary  Withdrawal does not arise from removal
  for  cause  under  Section  13.2(a)  hereof,  and  if the  Partnership  is to be
  continued  with one or more  remaining  or  successor  General  Partner(s),  the
  Partnership,  with the Consent of the Limited Partner, may, but is not obligated
  to,  purchase the Interest of the  Withdrawing  General  Partner in  Partnership
  allocations,  Distributions  and capital.  The purchase  price of such  Interest
  shall  be  its  Fair  Market  Value  as  determined  by  agreement  between  the
  Withdrawing  General Partner and the Limited Partner,  or, if they cannot agree,
  by  arbitration  in  accordance  with the  then  current  rules of the  American
  Arbitration Association.  The cost of such arbitration shall be borne equally by
  the Withdrawing General Partner and the Partnership. The purchase price shall be
  paid  by  the   Partnership  by  delivering  to  the  General   Partner  or  its
  
  <PAGE>
  
  representative the Partnership's  non-interest bearing unsecured promissory note
  payable,  if at all, upon  liquidation  of the  Partnership  in accordance  with
  Section 11.2(b). The note shall also provide that the Partnership may prepay all
  or any part thereof without penalty.
  
                    (3) If the Involuntary  Withdrawal does not arise from removal
  for  cause  under  Section  13.2(a)  hereof,  and  if the  Partnership  is to be
  continued with one or more remaining or successor General Partner(s), and if the
  Partnership does not purchase the Interest of the Withdrawing General Partner in
  Partnership allocations, Distributions and capital, then the Withdrawing General
  Partner shall retain its Interest in such items, but such Interest shall be held
  as a special limited partner.
  
           Section 13.4 Successor General Partner. Upon the occurrence of an event
  giving rise to a Withdrawal of a General Partner, any remaining General Partner,
  or, if there be no remaining General Partner, the Withdrawing General Partner or
  its legal  representative,  shall  promptly  notify the Limited  Partner of such
  Withdrawal (the "Withdrawal Notice"). Whether or not the Withdrawal Notice shall
  have been sent as provided  herein,  the Limited Partner shall have the right to
  become a successor General Partner (and to become the successor managing General
  Partner if the Withdrawing  General Partner was previously the managing  General
  Partner).  In order to  effectuate  the  provisions of this Section 13.4 and the
  continuance of the Partnership, the Withdrawal of a General Partner shall not be
  effective  until the  expiration of 120 days from the date on which occurred the
  event  giving  rise to the  Withdrawal,  unless the Limited  Partner  shall have
  elected to become a  successor  General  Partner  as  provided  herein  prior to
  expiration  of such 120-day  period,  whereupon  the  Withdrawal  of the General
  Partner  shall be  deemed  effective  upon  the  notification  of all the  other
  Partners by the Limited Partner of such election.
  
           Section 13.5 Admission of Additional or Successor  General Partner.  No
  Person shall be admitted as an additional or successor  General  Partner  unless
  (a) such  Person  shall  have  agreed to become a General  Partner  by a written
  instrument  which shall include the acceptance  and adoption of this  Agreement;
  (b) the  Consent of the  Limited  Partner to the  admission  of such Person as a
  substitute  General Partner,  which consent may be withheld in the discretion of
  the  Limited  Partner,  shall have been given;  and (c) such  Person  shall have
  executed and acknowledged any other  instruments which the Limited 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
  
  <PAGE>
  
  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
  successor  General  Partner.  Nothing  contained herein shall reduce the Limited
  Partner's Interest in the Partnership.
  
           Section 13.6 Transfer of Interest. Except as otherwise provided herein,
  the General  Partner may not Withdraw  from 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.
  
           Section 13.7 No Goodwill Value.  At no time during  continuation of the
  Partnership shall any value ever be placed on the Partnership name, or the right
  to its use, or to the goodwill  appertaining to the Partnership or its business,
  either as among the Partners or for the purpose of determining  the value of any
  Interest,  nor shall the legal  representatives of any Partner have any right to
  claim any such  value.  In the event of a  termination  and  dissolution  of the
  Partnership as provided in this Agreement, neither the Partnership name, nor the
  right to its use, nor the same goodwill, if any, shall be considered as an asset
  of the  Partnership,  and no  valuation  shall be put thereon for the purpose of
  liquidation or distribution, or for any other purpose whatsoever.
  
                                     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 Income 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;
  <PAGE>
  
                    (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
  
                    (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) 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.
  
           Section 14.2 Accounting Reports.
  
           (a) By March 1 of each calendar year the General  Partner shall provide
  to the Limited Partner 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
  the Limited  Partner:  (i) a balance sheet as of the end of such fiscal year and
  statements of income, Partners,  equity and changes in cash flow for 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 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
  
  <PAGE>
  
  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   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 year.
  
           (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 the
  Limited  Partner a report as to the nature of the Sale or Refinancing  and as to
  the Income and Losses for tax  purposes  and  proceeds  arising from the Sale or
  Refinancing.
  
       Section 14.3 Other Reports.  The General  Partner shall also provide to the
  Limited Partner:
  
       (a)  During the  period of  construction,  by the tenth day of each month a
  copy of the previous month's  Construction  Loan draw request and the inspecting
  architect's certification;
  
           (b) During the rent-up phase, and continuing until the end of the first
  six-month  period  during which the Project has a sustained  occupancy of 95% or
  better, by the tenth day of each month within such period a copy of the previous
  month's rent roll (through the last day of the month),  a tenant LIHC compliance
  worksheet similar to the monthly initial tenant certification worksheet included
  in Exhibit "C" attached hereto and  incorporated  herein by this reference,  and
  copies of all initial tenant files including completed  applications,  completed
  questionnaires or checklists of income and assets,  documentation of third party
  verification of income and assets, income certification forms and executed lease
  agreements collected by the Management Agent, or General Partner, verifying each
  tenant's eligibility as a Qualified Tenant;  compliance worksheet similar to the
  form in Exhibit D attached
  
           (c) A quarterly tax credit  compliance  report similar to the worksheet
  included in Exhibit "G". 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
  
  <PAGE>
  
  limited  to,  copies  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 non-compliance  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;
  
       (d) If the Project receives a reservation of LIHCs in one year but will not
  complete the  construction  and rent-up until a later year, the General  Partner
  will provide to the Limited  Partner by December 31 of the year during which the
  reservation  is  received  an  audited  cost  certification  together  with  the
  accountant's  work  papers  verifying  that the  Partnership  has  expended  the
  requisite 10% of the  reasonably  expected cost basis to meet the carryover test
  provisions of Section 42 of the Code;
  
           (e)  During  the  Compliance  Period,  no  later  than the day any such
  certification is filed, copies of any certifications  which the Partnership must
  furnish to  federal  or state  governmental  authorities  administering  any Tax
  Credit  programs  under  Section 42 of the Code  including,  but not limited to,
  copies of all annual  tenant  recertification  required  under Section 42 of the
  Code;
  
           (f) On or before 30 days after each calendar  quarter of every year the
  Partnership  shall send to the Limited  Partner a report on  operations,  in the
  form  attached  hereto as Exhibit "G" an audited  income  statement  showing all
  activity in the reserve accounts  required to be maintained  pursuant to Section
  VIII of this  Agreement and a Tax Credit  compliance  report  similar in form to
  that attached hereto as Exhibit "G";
  
           (g) By the annual  renewal  date of each and every  year,  an  executed
  original or certified copy of each and every  insurance  policy  required by the
  terms of this Agreement;
  
       (h) On or before March 15th of each calendar  year,  the General  Partner's
  updated financial statement as of December 31 of the previous year;
  
           (h) On or before November 30 of each calendar year, the General Partner
  shall send 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
  
  <PAGE>
  
  payments;
  
           (i) If the  Limited  Partner is  required  by the  Securities  Exchange
  Commission  to file a  post-effective  amendment  to its offering  document,  an
  audited  operating  statement  for the  Project  within  30 days of the  request
  therefor by the Limited Partner,  covering the Project's  operating history from
  the  Completion of  Construction  to the date  requested by the Limited and in a
  form required by the Securities and Exchange Commission; and
  
           (j) 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,  using his own funds, shall
  pay as  damages  the  sum  of  $100.00  per  week  (plus  interest  at the  rate
  established by Section 6.3 hereof) 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 and cause for removal under Section 13.2 hereof.  In
  addition,  if the General  Partner shall so fail to pay, the General Partner and
  its Affiliates shall forthwith cease to be entitled to any fees hereunder (other
  than the Development Fee) and/or to the payment of any Cash Flow From Operations
  or Sale or  Refinancing  Proceeds to which the General  Partner may otherwise be
  entitled  hereunder.  Payments of fees and Distributions  shall be restored only
  upon payment of such damages in full.
  
           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  inspection  of the property,  a review of the
  office and tenant files and an interview with the property manager.  The Limited
  Partner may, in its sole discretion, cancel all or any part of the annual visit.
  <PAGE>
  
           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.
  
           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.  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 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  effective  date of the  Withdrawal  or removal of the  General
  Partner,  unless  (i) at the time  there is at least one other  General  Partner
  (which may be the  Limited  Partner if it elects to serve as  successor  General
  Partner under Section 13.4 hereof) who will continue as General Partner, or (ii)
  
  <PAGE>
  
  within  120 days after the  occurrence  of any such  event the  Limited  Partner
  elects 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; or
  
           (c)      The written election to do so of the Limited Partner;
  
           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.
  
           Section 15.2 Return of Capital Contribution upon Dissolution. Except as
  provided in Sections  7.3, 7.4 and 7.6 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 Partner 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 any General
  Partner.  No Partner  shall have any right to demand  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(c),  the remaining assets of the Partnership
  shall be distributed to the Partners in accordance with the positive balances in
  their Capital Accounts,  after taking into account all allocations under Article
  X hereof.
  
           (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
  
  <PAGE>
  
  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 lesser of:
  
       (1) the  amount  necessary  to  restore  such  deficit  balance  to zero in
  compliance with Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(3); or
  
       (2) 1.01% of the Capital Contributions.
  
           The deficit  make-up shall be paid by the General Partner by the end of
  such taxable year 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. Notwithstanding, if the Limited Partner
  has  become  successor  General  Partner,  it shall not be  responsible  for any
  deficit  balance in its Capital  Account  which arose during the time the former
  General Partner served as General Partner.
  
       (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
  Partnership's  adjusted basis in such assets for book purposes.  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
  
  <PAGE>
  
  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 with the Consent of the Limited 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,  but only with the Consent of the
  Limited  Partner,  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 manner  described in Section  10.2,  and such assets shall
  then be  distributed  to the  Partners  as  provided  herein.  In  applying  the
  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
  
  <PAGE>
  
  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
  
           This Agreement may be amended at any time by the Limited Partner.  This
  Agreement  may be  amended by the  General  Partner  absent  the  Consent of the
  Limited Partner.  Notwithstanding  the foregoing,  no amendment shall change the
  Partnership to a 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 allocations,  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 or  disapprove,  but,  except as otherwise  expressly  provided
  herein, not initiate, the Sale or Refinancing of the Project;
  
       (2) Remove the General  Partner and elect a substitute  General  Partner as
  provided in this Agreement;
  
       (3) Elect a successor  General  Partner upon the  withdrawal of the General
  Partner;
  
       (4)  Approve  or  disapprove,  but not  initiate,  the  dissolution  of the
  Partnership; or
  <PAGE>
  
       (5) 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.
  
       (c) The Limited Partner shall have the right to consent to those actions or
  inactions of the  Partnership  and/or General  Partner as otherwise set forth in
  this  Agreement,  and the  General  Partner  is  prohibited  from any  action or
  inaction requiring such consent unless such consent has been obtained.
  
           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 or facsimile request from the Limited Partner setting forth
  the  purpose  of such  meeting.  Within ten days  after  receipt of the  Limited
  Partner's written or facsimile request for a meeting,  the General Partner shall
  provide all  Partners  with  written  notice of the meeting  (which  shall be by
  telephone  conference,  or 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 or  facsimile  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
  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 it 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:
  
  <PAGE>
  
  
       To the General Partner:    DEKE NOFTSKER
                                  3825 Hawkins NE, Albuquerque, New Mexico 87109
  
       To the Limited Partner:    WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                                  c/o WNC California Tax Credit
                                  Partners IV
                                  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.
  
           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.
  
           (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
  
  <PAGE>
  
  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.
  
       (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,  or  appointment of a
  new agent for service of process.
  
       (4) The admission of a General Partner and that Partner's address.
  <PAGE>
  
       (5) The discovery by the General Partner of any false or erroneous material
  statement  contained in the Certificate of Limited  Partnership 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
  to Persons  or  circumstances  other than those as to which it is held  invalid,
  shall not be affected thereby.
  
           Section 17.12 Tax Matters  Partner.  All the Partners hereby agree that
  the Limited Partner shall be the "Tax Matters Partner"  pursuant to the Code and
  in  connection  with  any  audit  of  the  Federal  income  tax  returns  of the
  Partnership;  provided,  however that if the Limited Partner shall withdraw from
  
  <PAGE>
  
  the Partnership or become Bankrupt,  the General Partner shall thereafter be the
  "Tax Matters  Partner".  If the Tax Matters  Partner shall determine to litigate
  any  administrative  determination  relating to federal  income tax matters,  it
  shall litigate such matter in such court as the Tax Matters Partner shall decide
  in its sole discretion. In discharging its duties and responsibilities,  the Tax
  Matters  Partner  shall act as a fiduciary  (i) to the  Limited  Partner (to the
  exclusion  of the other  Partners)  insofar  as tax  matters  related to the Tax
  Credits are concerned, and (ii) to all of the Partners in other respects.
  
           Section 17.13  Expiration of Compliance Period.
  
           (a)  Notwithstanding  any provision  hereof to the contrary (other than
  this Section 17.11),  the Limited Partner shall have the right at any time after
  the beginning of the last year of the Compliance  Period to require,  by written
  notice to the  General  Partner,  that the  General  Partner  promptly  submit a
  written  request to the applicable  State Tax Credit Agency  pursuant to Section
  42(h) of the Code (or any  successor  provision)  that such  agency  endeavor to
  locate within one year from the date of such written request a purchaser for the
  Project who will  continue  to operate  the  Project as a  qualified  low income
  property, at a purchase price that is not less than the minimum amount set forth
  in Section 42(h)(6) of the Code (or any successor provision).  In the event that
  the State Tax Credit Agency  obtains an offer  satisfying  the conditions of the
  preceding  sentence,  the  General  Partner  shall  promptly  notify the Limited
  Partner in writing with respect to the terms and conditions of such offer,  and,
  if the Limited  Partner  notifies the General  Partner that such offer should be
  accepted,  the General  Partner shall cause the  Partnership  promptly to accept
  such offer and to proceed to sell the Project pursuant to such offer.
  
           (b)  Notwithstanding  any  other  provision  of this  Agreement  to the
  contrary,  the Limited Partner shall have the right at any time after the end of
  the Compliance Period to require,  by written notice to the General Partner (the
  "Required Sale Notice"),  that the General Partner promptly use its best efforts
  to obtain a buyer for the Project on the most  favorable  terms then  available.
  The General  Partner  shall submit the terms of any proposed sale to the Limited
  Partner for its approval in the manner set forth in Section 17.11(a) hereof.  If
  
  <PAGE>
  
  the General  Partner shall fail to so obtain a buyer for the Project  within six
  months of receipt of the  Required  Sale Notice or if the Consent of the Limited
  Partner in its sole discretion  shall be withheld to any proposed sale, then the
  Limited  Partner  shall have the right at any time  thereafter to obtain a buyer
  for the  Project  on  terms  acceptable  to the  Limited  Partner  (but not less
  favorable to the Partnership  than any proposed sale previously  rejected by the
  Limited  Partner).  In the event that the Limited Partner so obtains a buyer, it
  shall  notify  the  General  Partner in  writing  with  respect to the terms and
  conditions  of the  proposed  sale  and the  General  Partner  shall  cause  the
  Partnership promptly to sell the Project to such buyer.
  
           (c) A sale of the Project prior to the end of the Compliance Period may
  only  take  place if the  conditions  of  Section  42(j)(6)  of the Code (or any
  successor provision) will be satisfied upon such sale by having the purchaser of
  the Project post the required bond on behalf of the Partnership.
  
           Section  17.14  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 17.15 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 17.16  Governing Law. This Agreement and its  application  shall be
  governed by the laws of the State.
  
           Section  17.17  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 17.18 Receipt of FmHA  Correspondence.  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/or relative to the disposition of the Project.
  
           Section 17.19 Security  Interest and Right of Set-Off.  As security for
  the  performance  of the  respective  obligations  to which any  Partner  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
  
  <PAGE>
  
  to said Partner to the extent of the amount of such obligation.
  
           IN WITNESS  WHEREOF,  this  Amended and  Restated  Agreement of Limited
  Partnership of ROSEDALE LIMITED  PARTNERSHIP,  a New Mexico limited partnership,
  is made and entered into as of the day of 1996.
  
                                      GENERAL PARTNER
  
  
                                      ----------------------------------------
                                      DEKE NOFTSKER
  
  
                                      WITHDRAWING ORIGINAL LIMITED PARTNER
  
                                      ABO CORPORATION
  
  
                                      By:     ___________________________________
  
  
                                      LIMITED PARTNER
  
                                      WNC HOUSING TAX CREDITS V, L.P.,
                                      SERIES 3,
                                      a California limited partnership
  
  
                                      By:     WNC & ASSOCIATES, INC.
                                              General Partner
  
  
                                              By:      _________________________
                                                          John B. Lester, Jr.
                                                              President
  
  
  <PAGE>
  
  
                               EXHIBIT A TO PARTNERSHIP AGREEMENT
  
                                       LEGAL DESCRIPTION
  
  
  ALL THOSE  PARTS OF THE  NORTHEAST  1/4  SOUTHEAST  1/4 OF SECTION  35,  T.17S.,
  R.14W.,  N.M.P.M.,  TOWN OF SILVER CITY, GRANT COUNTY, NEW MEXICO,  DESCRIBED AS
  FOLLOWS:
  
       Beginning at the Southeast  Corner of this Tract,  a point which bears,  in
  two courses: N23 degrees 25' 44" W, 1821.95 feet and N00degrees 10' 12" W, 50.00
  feet from the  Southeast  Corner of Section  35;  thence S89  degrees 12' 00" W,
  521.96 feet to the Southwest  corner of this Tract,  a point on the East Line of
  Memory  Lane;  thence N00 degrees 28' 43" W along said Line,  146.17 feet to the
  Northwest  Corner of this Tract;  thence N89  degrees  12' 00" E,  357.90  feet;
  thence N00 degrees 10' 12" W, 121.28 feet;  thence N79 degrees 13' 33" E, 166.96
  feet to the Northeast Corner of this Tract; thence S00 degrees 10' 12" E, 296.37
  feet to the point of beginning; containing 2.265 acres more or less; and also:
  
       Beginning at the Southwest  Corner of this Tract,  a point on the East Line
  of Memory Lane which bears in four courses:  N23 degrees 25' 44W", 1821.95 feet;
  N00 degrees  10' 12" W, 50.00  feet;  S89 degrees 12' 00" W, 521.96 feet and N00
  degrees 28' 43" W, 146.17 feet from the  Southeast  Corner of Section 35; thence
  N00  degrees  28' 43" W along the East Line of Memory  Lane,  58.02  feet to the
  Northwest  Corner of this Tract;  thence N79  degrees  13' 33" E,  365.15  feet;
  thence S00 degrees 10' 12" E, 121.28 feet to the Southeast Corner of this Tract;
  thence S89 degrees 12' 00" W, 357.90 feet to the point of beginning;  containing
  0.737 acre more or less.
  
  
  
  
  
  <PAGE>
  
  
  
                         EXHIBIT B TO PARTNERSHIP AGREEMENT
  
  
                                FORM OF LEGAL OPINION
  
  
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 WNC & Associates, Inc.
  3158 Redhill Avenue, Suite 120
  Costa Mesa, California  92626
  
  RE:      ROSEDALE LIMITED PARTNERSHIP
  
  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  3, a
  California  limited  partnership  (the  "Limited  Partner") in ROSEDALE  LIMITED
  PARTNERSHIP (the "Partnership"), a New Mexico limited partnership formed to own,
  develop,  (construct/rehabilitate)  finance and operate an apartment complex for
  low-income  persons (the "Apartment  Complex") in Silver City, Grant County, New
  Mexico.  The general  partner(s) of the Partnership  (is/are) DEKE NOFTSKER (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.
  
  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
  
  <PAGE>
  
  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 New
  Mexico.
  
           (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 New  Mexico  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
  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.
  <PAGE>
  
           (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,
  health, building and safety laws, ordinances, rules and regulations.
  <PAGE>
  
           (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 3'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,
  
  
  
  
  - --------------------
  
  
  
  <PAGE>
  
  
  
                         EXHIBIT C TO PARTNERSHIP AGREEMENT
  
  
                             CERTIFICATION AND AGREEMENT
  
  
           CERTIFICATION  AND  AGREEMENT  made as of the  date  written  below  by
  ROSEDALE   LIMITED   PARTNERSHIP,   a  New  Mexico  limited   partnership   (the
  "Partnership");   DEKE  NOFTSKER  (collectively  referred  to  as  the  "General
  Partner");  and  ABO  CORPORATION  (collectively  referred  to as the  "Original
  Limited Partner") for the benefit of WNC HOUSING TAX CREDIT FUND V, L.P., SERIES
  3, 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
  
  <PAGE>
  
  Certification  and Agreement;  the execution and delivery of this  Certification
  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.
  <PAGE>
  
       1.7 The Projected  Tax Credits (as such term is defined in the  Partnership
  Agreement  Section 1.43) are $36,120 for 1996,  $54,180 per year for each of the
  years 1997  through  2005,  and $4,515 for 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  $547,280  to be  available  to the  Partnership;
  provided, however, that the Actual Tax Credit for 1996 is greater (or less than)
  $36,120, the Projected Tax Credit for the year 2006 shall be deduced (increased)
  by an amount equal to the amount by which the Actual Credit for 1996 exceeds (is
  less than) $36,120.
  
       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
  
  <PAGE>
  
  several  counterparts,  each of which shall be deemed to be an original,  all of
  which together shall constitute one and the same instrument.
  
                    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 , 1996.
  
  PARTNERSHIP
  
  ROSEDALE LIMITED PARTNERSHIP
  
  
  
  By:
           DEKE NOFTSKER,
           General Partner
  
  
  GENERAL PARTNER
  
  
  
  - -----------------------------
  DEKE NOFTSKER
  
  
  ORIGINAL LIMITED PARTNER
  
  ABO CORPORATION
  
  
  By:
  
  
  
  <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 3 ("WNC")  by DEKE  NOFTSKER,  General  Partner of
  ROSEDALE LIMITED PARTNERSHIP,  a New Mexico 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 breach or
  violation of any provisions thereof.
  
       (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) No Partner has any personal liability with respect to or has personally
  guaranteed the payment of the permanent Mortgage.
  <PAGE>
  
       (f) The  Partnership is in 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.
  
       (g) 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.
  
       (h) 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.
  
       (i) A builder's risk insurance  policy in favor of the Partnership  will be
  and is in full force and effect until Completion of Construction.
  
       (j) 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.
  
       (k) The  Projected  Tax Credits  applicable  to the Project are $36,120 for
  1996,  $54,180 per year for each of the years 1997 through 2005,  and $4,515 for
  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  $547,280 to be
  available to the Partnership;  provided,  however, that if the Actual Tax Credit
  for 1996 is greater (or less than)  $36,120,  the  Projected  Tax Credit for the
  year 2006 shall be reduced (increased) by an amount equal to the amount by which
  the Actual Credit for 1996 exceeds (is less than) $36,120.
  
       (l) 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.
  
       (m) 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
  
  <PAGE>
  
  amplified by the Treasury Regulations thereunder. In this connection,  not later
  than  December 31 of the first year the  Partners  elect the LIHC to commence in
  accordance with the Code and the Minimum Set-Aside Test and the Rent Restriction
  Test shall be met.
  
       (n) 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.
  
       (o) 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.
  
       (p) 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 1996.
  
  
  
  DEKE NOFTSKER,
  General Partner
  
  
  
  
  
  <PAGE>
  
  
                             EXHIBIT E TO PARTNERSHIP AGREEMENT
  
                               FORM OF COMPLETION CERTIFICATE
  
                    (to be used when construction [rehabilitation] completed)
  
  
                                   COMPLETION CERTIFICATE
  
  The  undersigned,  an architect duly licensed and registered in the State of New
  Mexico,  has  prepared  final  working  plans and  detailed  specifications  for
  ROSEDALE   LIMITED   PARTNERSHIP,   a  New  Mexico  limited   partnership   (the
  "Partnership"),  between  WNC  HOUSING  TAX  CREDIT  FUND V,  L.P.,  SERIES 3, a
  California  limited  partnership  ("Limited  Partner")  and the  Partnership  in
  connection  with the  construction  [rehabilitation]  of improvements on certain
  real  property   located  in  Silver  City,   Grant  County,   New  Mexico  (the
  "Improvements").
  
  The undersigned  hereby certifies (i) that the Improvements  have been completed
  in accordance with the aforesaid plans and specifications, (ii) that a permanent
  certificate  of occupancy and all other  permits  required for the continued use
  and occupancy of the  Improvements  have been issued with respect thereto by the
  governmental agencies having jurisdiction  thereof,  (iii) that the Improvements
  are in compliance with all  requirements  and  restrictions of all  governmental
  authorities having jurisdiction,  including,  without limitation, all applicable
  zoning,  building,  environmental,   fire,  and  health  ordinances,  rules  and
  regulations and (iv) that all contractors, subcontractors and workmen who worked
  on the  Improvements  have been paid in full  except for normal  retainages  and
  amounts in dispute.
  
  
  - -----------------------------------
  Project Architect
  
  Date:  ____________________________
  
  
  Confirmed by:
  
  
  - -----------------------------------
  General Partner
  
  Date:  ____________________________
  
  
  <PAGE>
  
  
                               EXHIBIT F TO PARTNERSHIP AGREEMENT
  
                                    [ACCOUNTANT'S CERTIFICATE]
                                    [Accountant's Letterhead]
  
  
  
  _______________, 199____
  
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 
  c/o WNC & Associates, Inc.
  3158 Redhill Ave., Suite 120
  Costa Mesa, California 92626
  
  RE:  Partnership
       Certification as to Amount
       of Eligible Tax Credit Base
  
  Gentlemen:
  
  In  connection  with the  acquisition  by WNC  HOUSING  TAX CREDIT FUND V, L.P.,
  SERIES 3 (the "Limited Partner") of a limited  partnership  interest in ROSEDALE
  LIMITED PARTNERSHIP,  a New Mexico limited partnership (the "Partnership") which
  owns a certain parcel of land located in Silver City,  Grant County,  New Mexico
  and improvements thereon (the "Project"),  the Limited Partner has requested our
  certification as to the amount of low-income housing tax credits ("Tax Credits")
  available  with respect to the Project under Section 42 of the Internal  Revenue
  Code of 1986, as amended (the "Code").  Based upon our review of [the  financial
  information provided by the Partnership] of the Partnership,  we are prepared to
  file the Federal  information tax return of the Partnership  claiming annual Tax
  Credits in the amount of $_______________,  which amount is based on an eligible
  basis  (as   defined  in  Section   42(d)  of  the  Code)  of  the   Project  of
  $________________,  a qualified  basis (as defined in Section 42(c) of the Code)
  of the Project of $_________________ and an applicable percentage (as defined in
  Section 42(b) of the Code) of _____%.
  
  Sincerely,
  
  
  
  - -------------------
  
  <PAGE>
  
  
                            EXHIBIT G TO THE PARTNERSHIP
  
                                REPORT OF OPERATIONS
  
                                   QUARTER ENDED:
  
  LOCAL PARTNERSHIP:   ROSEDALE LIMITED PARTNERSHIP
  
   GENERAL PARTNER:    DEKE NOFTSKER
  
            DDRESS:    Silver City, Grant County, New Mexico
  CITY, STATE, ZIP:
             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: thirty-two (32)                    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 _________________.
  
  <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.
  
  
  
  
  <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:         ____________________________________________________________
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - ----------------------------------------------------------------------------
                                                    
  <PAGE>
  
                                  FINANCIAL STATUS
  
  A.       Replacement Reserves are:  Fully-funded    Under-funded    Balance
           If  Under-funded,   by  how much:
  
  
           Tax/Insurance Escrows are: Fully-funded    Under-funded    Balance
           If Under-funded, by how much:
  
  
           Property is operating at a:Surplu          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:
  
  
  <PAGE>
  
  
  
  
                          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:
  
  
  <PAGE>
  
  
                                      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:
  
  <PAGE>
  
  
  
                            INITIAL TENANT CERTIFICATIONS
                                   PARTNERSHIP NAME
  
  Fund:          Tax Credit Set-Asides Information:  Loan/Regulatory Set-Asides:
  Property Name: [ ] 20/50 or [  ] 40/60 Election
  Address:       Does the 51% average apply? [  ] Y [  ] N
                 Deeper Set-Aside __% @ 50% AMI
  
  County:
                                 Management Company
  [ ] Multi-Family                                    Contact Person:
  [ ] Elderly
  
    24 Number of Units                                Phone #
  
       Number of Exempt
       Units
  LIHTC Project#
  
  - -----------------------------------------------------------------------------
  
  
  
                                                                  Gross   Move-In
  Unit  First Time   Move-In  No. of                      No. in Income   Income
  No.   Tenant Name  Date     Bdrms  Sq. Ft.   Set-Aside  Unit   Move-In  Limits
  - -------------------------------------------------------------------------------
        BIN #        Certificate of Occupancy Date:
  - -----------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
       BIN #          Certificate of Occupancy Date:
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
       BIN #           Certificate of Occupancy Date:
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  
  <PAGE>
  
  
                            INITIAL TENANT CERTIFICATIONS
                                  PARTNERSHIP NAME
  (CONTINUED)
  
  Tenant                                                            Tenant
  Income       Income         Asset      Unit   Rent      Tenant    Utility
  Qualified Verification  Verification   Rent   Subsidy   Payment   Allowance
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  
  
  
  <PAGE>
  
  
                            INITIAL TENANT CERTIFICATIONS
                                  PARTNERSHIP NAME
  (CONTINUED)
  
       Tenant                   Tenant            Overall
  Gross     Maximum             Rent              Tenant
  Rent      Rent                Qualified         Eligible
  
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
  
  
  
  
  <PAGE>
  
  
                       QUARTERLY TAX CREDIT COMPLIANCE REPORT
                                    PROPERTY NAME
  
  
  Quarter Ending: Tax Credit Set-Asides Information:  Loan/Regulatory Set-Asides:
                  [  ] 20/50 or [  ] 40/60 Election
                  Does the 51% average apply? [  ] Y [  ] N
                  Deeper Set-Aside : ( List Details)
  
  
  
  County:    Allocation:                                 Management Company:
  
             Pre-1990 (Rent based on number of persons)  Contact Person:
             Elected to change No. Bedrm
             Post-1989 (Based on number of Bedroom)
  
  [  ] Multi-Family  [  ] Elderly                         Phone No.
  
        Number of Units
        Number of Exempt Units                            Fax No.
                                                          Prepared by:
  
  LIHTC Project#
  - -----------------------------------------------------------------------------
                                                            Gross    Annual
  Unit   Tenant    Move-In   No. Of   Inc.   Set-  No. In   Annual   Income
  No.    Name      Date      Bdrms    Pct.  Aside  Unit     Income   Limits
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  <PAGE>
  
  
                       QUARTERLY TAX CREDIT COMPLIANCE REPORT
                                    PROPERTY NAME
  (CONTINUED)
  
  
  Annual  Tenant                                   Less
  Recert.  Income      Income     Assets   Unit    Rent     Tenant
  Date   Qualified   Verified   Verified   Rent  Subsidy   Payment
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
          Tenant              Tenant     Overall
  Utility   Gross   Maximum    Rent       Tenat
  Allow.    Rent    Rent    Qualified    Eligible
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  
  <PAGE>
  
  
  
                          TAX CREDIT COMPLIANCE MONITORING:
                                ANNUAL CERTIFICATION
  
           As General Partner of ROSEDALE LIMITED PARTNERSHIP, I hereby certify as
  to the following:
  
       1.  ROSEDALE  LIMITED  PARTNERSHIP  owns a  thirty-two  (32)  unit  project
  ("Project") in Silver City, Grant County, New Mexico.
  
       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 New
  Mexico that the foregoing is true and correct.
  
       Executed this day of at , .
  
  
  
  <PAGE>
metadata_documents: [{"type": "8-K", "sequence": "1", "description": "INITIAL FILING", "secsgml_size_bytes": 539692}]
metadata_filer: {"company-data": {"conformed-name": "WNC HOUSING TAX CREDIT FUND V LP SERIES 3", "cik": "0000943904", "assigned-sic": "6513", "irs-number": "336163848", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "033-91136", "film-number": "96558926"}, "business-address": {"street1": "3158 REDHILL AVE", "street2": "STE 120", "city": "COSTA MESA", "state": "CA", "zip": "92636", "phone": "7146625565"}, "mail-address": {"street1": "3158 REDHILL AVE", "street2": "STE 120", "city": "COSTA MESA", "state": "CA", "zip": "92636"}}
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 26, 1996
  
                    WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
               (Exact name of registrant as specified in its charter)
  
        California                     33-91136               33-6163848
  (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)
  Item 2.  Acquisition or Disposition of Assets
  
           WNC Housing Tax Credit Fund V, L.P., Series 3 ("Series 3") has become a
  limited  partner  in  Cascade  Pines,  L.P.  II, a Georgia  limited  partnership
  ("CASCADE");  and Rosedale Limited Partnership, a New Mexico limited partnership
  ("ROSEDALE").  CASCADE and ROSEDALE are sometimes hereinafter referred to as the
  "Local  Limited  Partnerships."  CASCADE owns the Cascade  Pines  Apartments  in
  Atlanta,  Georgia;  and Rosedale owns the Valley View Apartments in Silver City,
  New Mexico.
  
           The following tables contain  information  concerning the Local Limited
  Partnerships.
  ACTUAL OR                                                      LOCAL LIMITED   YEAR
                                          ESTIMATED    ESTIMATED                              PERMANENT  PARTNERSHIP'S   CREDITS
                                          CONSTRUC-    DEVELOP-                               MORTGAGE   ANTICIPATED     TO BE
  LOCAL        PROJECT                    TION         MENT COST    NUMBER OF      BASIC      LOAN       AGGREGATE       FIRST
  LIMITED      NAME/NUMBER   LOCATION OF  COMPLETION   (INCLUDING   APARTMENT      MONTHLY    PRINCIPAL  TAX CREDITS     AVAIL-
  PARTNERSHIP  OF BUILDINGS  PROPERTY     DATE         LAND COST)   UNITS          RENTS      AMOUNT     (1)             ABLE
  CASCADE      Cascade Pines  Atlanta     October     $8,614,000    94 1BR units    $329-$365  $2,465,000  $2,681,950    1996
               Apartments     (Fulton     1996                     187 2BR units    $399-$470   URFA (3)
                               Co.),                                94 3BR units    $499-$530
               38 buildings   Georgia                                                          $4,990,000
               (2)                                                                             URFA (3)
  
                                                                                               $1,100,000
                                                                                               URFA(3)
  ROSEDALE     Valley View    Silver City  January     $1,408,660    6 1BR units     $295       $ 1,330.000  $547,280     1996
               Apartment      (Grant       1996                      19 2BR units    $358       RECDS (4)
                              Co.),                                  6 3BR units     $418
               4 buildings    New Mexico
  (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) Urban  Residential  Finance Authority (URFA) will provide the first mortgage
  loan for a term of 15 years at an annual  interest rate of 6.25%.  Principal and
  interest will be payable annually based on a 15-year amortization schedule. URFA
  will  provide  the  second  mortgage  loan for a term of 30  years at an  annual
  interest rate of 6.6%.  Principal and interest will be payable annually based on
  a 30-year amortization schedule. URFA will provide the third mortgage loan for a
  term of 30 years at an annual  interest rate of 7%.  Principal and interest will
  be payable annually based on a 30-year amortization schedule.
  
  (4) RECDS  provides  mortgage  loans under the RECDS  Section 515 Mortgage  Loan
  Program.  Each of these  mortgage  loans  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 1%, with principal and interest
  payable monthly based on a 50-year amortization schedule.
  Atlanta (CASCADE): Atlanta (population 394,000) is the state capital of Georgia,
  and is located in Fulton County at the  intersection of Interstate  Highways 85,
  75 and 20. Atlanta is considered the  commercial,  transportation  and financial
  capital of the Southeast.  It is the national  headquarters for Coca-Cola,  CNN,
  Delta Air Lines, United Parcel Service, Home Depot, and Holiday Inn-Worldwide.
  
  Silver City (ROSEDALE):  Silver City  (population  10,600) is the county seat of
  Grant County in southwest New Mexico near the  intersection of U.S.  Highway 180
  and State  Highway 90. Major  employers  for Rosedale  residents are Silver City
  Daily Press and Southwest Transit Mix.
  ESTIMATED
                                                                                                                        ACQUISI-
                                          LOCAL                                     SHARING RATIOS:                     TION FEES
                                          GENERAL                                   ALLOCATIONS (4)    SERIES 3'S       PAYABLE
  LOCAL        LOCAL                      PARTNERS'      SHARING RATIOS:            AND SALE OR        CAPITAL          TO
  LIMITED      GENERAL       PROPERTY     DEVELOPMENT    CASH FLOW                  REFINANCING        CONTRIBUTION     FUND
  PARTNERSHIP  PARTNERS      MANAGER      FEE(3)         (3)                        PROCEEDS(5)        (6)              MANAGER
  CASCADE      Urban         Brencor Asset $1,333,381    WNC:greater of             98/2               $1,471,854      $147,000
               Residential   Management,                 10% or $5,000              50/50
               Management,   Inc. (8)                    LGP: 45%
               Inc. (7)                                  Balance:
                                                         WNC:10.9%;
                                                         LGP:89.1%
  ROSEDALE    Deke Noftsker  M-DC Group,   $230,000      WNC:greater of             99/1               $308,762        $31,000
              (13)           Inc.dba                     33% or $1,400              50/50
                             Alpha                       LGP: 67%
                             Management
                             Co, Inc. (14)
  (1) The maximum annual  management fee payable to the property manager generally
  is determined  pursuant to lender  regulations.  Each 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) Each Local  Limited  Partnership  will pay its Local  General  Partner(s)  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 3.
  
  (3)  Reflects  the amount of the net cash flow from  operations,  if any,  to be
  distributed to Series 3 ("WNC") and the Local General  Partner(s) ("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 Series 3 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 of Series 3 and the Local General  Partner(s)  in profits,  losses and
  Low  Income  Housing  Credits  commencing  with  entry of  Series 3 as a limited
  partner.
  
  (5)  Reflects  the  percentage  interests  of  Series  3 and the  Local  General
  Partner(s) 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  contribution  of Series 3; and the  capital  contribution  of the Local
  General Partner(s).
  
  (6)  Series  3 will  make  its  capital  contributions  to  each  Local  Limited
  Partnership  in  stages,  with each  contribution  due when  certain  conditions
  regarding  construction  or  operations  of  the  apartment  complex  have  been
  fulfilled.
  Item 7.  Financial Statements and Exhibits
  
           a.   Financial Statements of Businesses Acquired.
  
                Financial Statements for ROSEDALE will be filed upon availability.
  
           b.   Proforma Financial Information
  
                Proforma Financial Information will be filed upon availability.
  
           c.       Exhibits
  
                    10.1    Amended and Restated Agreement of Limited Partnership
                            of Cascade Pines, L.P. II
  
                    10.2    Amended and Restated Agreement of Limited Partnership
                            of Rosedale Limited Partnership
  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 3
  
  Date:  May 7, 1996                By:      WNC &  Associates, Inc.,
                                             General Partner
  
                                             By:      /s/ JOHN B. LESTER, JR.
                                                      John B. Lester, Jr.,
                                                      President
  INDEX TO EXHIBITS
  
  Exhibit
  Number Exhibit
  
  10.1     Amended and Restated Agreement of Limited Partnership of Cascade Pines,
           L.P. II
  
  10.2     Amended and Restated Agreement of Limited Partnership of Rosedale
           Limited Partnership
  
                                AMENDED AND RESTATED
  
                         AGREEMENT OF LIMITED PARTNERSHIP OF
  
                               CASCADE PINES, L.P. II
  
                                  TABLE OF CONTENTS
  
                                                                             Page
  
  I.       DEFINITIONS .........................................              1
           1.1      "Accountant" ...................................          1
           1.2      "Acquisition Account" ..........................          1
           1.3      "Act" ..........................................          2
           1.4      "Actual Tax Credit".............................          2
           1.5      "Adjusted Capital Account Deficit" .............          2
           1.6      "Administrative Expenses Fund" .................          2
           1.7      "Affiliate" ....................................          2
           1.8      "Agreement" or "Partnership Agreement"..........          2
           1.9      "Annual Budget" ................................          2
           1.10     "Assignee" .....................................          3
           1.11     "Bankruptcy" or "Bankrupt"......................          3
           1.12     "Bond Fund" ....................................          3
           1.13     "Bond Reserve Requirements" ....................          3
           1.14     "Bonds" ........................................          3
           1.15     "Bond Year" ....................................          3
           1.16     "Capital Account" ..............................          3
           1.17     "Capital Contribution" .........................          3
           1.18     "Cash Flow From Operations" ....................          4
           1.19     "Code" .........................................          4
           1.20     "Completion of Construction"....................          4
           1.21     "Compliance Period".............................          5
           1.22     "Consent of the Limited Partner"................          5
           1.23     "Construction Contract".........................          5
           1.24     "Construction Loan" ............................          5
           1.25     "Contractor" ...................................          5
           1.26     "Costs of Issuance Fund" .......................          5
           1.27     "Debt Service Coverage".........................          5
           1.28     "Debt Service Reserve Fund" ....................          6
           1.29     "Deferred Management Fee".......................          6
           1.30     "Developer".....................................          6
           1.31     "Development Fee" ..............................          6
           1.32     "Distributions" ................................          6
           1.33     "Fair Market Value" ............................          7
           1.34     "First Year Certificate" .......................          7
           1.35     "General Partner" ..............................          7
           1.36     "Gross Asset Value" ............................          7
           1.37     "HAP Contract" .................................          8
           1.38     "HAP Payments" .................................          8
           1.39     "Hazardous Substance"...........................          8
           1.40     "Improvements"..................................          8
           1.41     "Incentive Management Fee"......................          8
           1.42     "Income and Losses".............................          8
           1.43     "Insurance and Tax Escrow Fund" ................          10
           1.44     "Interest" .....................................          10
  
           1.45     "Interest Payment Date" ........................          10
           1.46     "Involuntary Withdrawal"........................          10
           1.47     "Issuer" .......................................          10
           1.48     "LIHTC".........................................          10
           1.49     "Limited Partner"...............................          10
           1.50     "Liquidation" ..................................          10
           1.51     "Loan Agreement" ...............................          10
           1.52     "Maintenance Reserve Fund" .....................          11
           1.53     "Management Agent"..............................          11
           1.54     "Management Agreement"..........................          11
           1.55     "Minimum Set-Aside Test"........................          11
           1.56     "Mortgage" or "Mortgage Loan"...................          11
           1.57     "Mortgage Note".................................          11
           1.58     "Nonrecourse Deductions"........................          11
           1.59     "Nonrecourse Liability".........................          11
           1.60     "Operating Deficit" ............................          12
           1.61     "Operating Deficit Guarantee Period"............          12
           1.62     "Operating Loans"...............................          12
           1.63     "Original Limited Partner" .....................          12
           1.64     "Partner" ......................................          12
           1.65     "Partner Nonrecourse Debt" .....................          12
           1.66     "Partner Nonrecourse Debt Minimum Gain" ........          12
           1.67     "Partner Nonrecourse Deductions" ...............          12
           1.68     "Partnership" ..................................          12
           1.69     "Partnership Minimum Gain" .....................          12
           1.70     "Permanent Mortgage Commencement" ..............          12
           1.71     "Person" .......................................          13
           1.72     "Principal Payment Date" .......................          13
           1.73     "Project" ......................................          13
           1.74     "Project Documents" ............................          13
           1.75     "Projected Annual Tax Credits" .................          13
           1.76     "Projected Tax Credits" ........................          13
           1.77     "Qualified Income Offset Item" .................          13
           1.78     "Qualified Tenants" ............................          13
           1.79     "Rating Agency" ................................          13
           1.80     "Rebate Fund" ..................................          13
           1.81     "Refinancing" ..................................          13
           1.82     "Rehabilitation Account" .......................          14
           1.83     "Rent Restriction Test" ........................          14
           1.84     "Reporting Fee".................................          14
           1.85     "Revenue Fund" .................................          14
           1.86     "Revised Projected Tax Credits".................          14
           1.87     "Sale or Refinancing"...........................          14
           1.88     "Sale or Refinancing Proceeds" .................          14
           1.89     "Special Limited Partner" ......................          14
           1.90     "State" ........................................          14
           1.91     "State Tax Credit Agency" ......................          14
           1.92     "Substitute Limited Partner" ...................          14
           1.93     "Surplus Fund" .................................          15
           1.94     "Tax Credit" ...................................          15
           1.95     "Tax Credit Conditions".........................          15
           1.96     "TRA 1986" .....................................          15
           1.97     "Transition Fund" ..............................          15
  
           1.98      "Treasury Regulations" ........................          15
           1.99      "Trust Indenture" .............................          15
           1.100 "Trustee" .....................................              15
           1.101 "Withdrawing" or "Withdrawal"..................              15
  
  II.      NAME ................................................              16
  
  III.     PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE ........              16
  
           3.1      Principal Executive Office .....................          16
           3.2      Agent for Service of Process ...................          16
  
  IV.      PURPOSE .............................................              16
  
  V.       TERM ................................................              16
  
  VI.      GENERAL PARTNER'S CONTRIBUTIONS AND LOANS............              16
  
           6.1      Capital Contribution of General Partner.........          16
           6.2      Construction and Operating Obligations;
                      General Partner Loans.........................          17
           6.3      Partner Loans...................................          18
  
  VII.     CAPITAL CONTRIBUTIONS OF LIMITED PARTNER.............              18
  
           7.1      Original Limited Partner........................          18
           7.2      Capital Contribution of Limited Partner.........          19
           7.3      Repurchase of Limited Partner's Interest........          20
           7.4      Reduction of Limited Partner's
                      Capital Contribution..........................          21
           7.5      Return of Capital Contribution..................          22
           7.6      Liability of Limited Partner....................          22
  
  VIII. WORKING CAPITAL AND RESERVES .......................                  23
  
           8.1      Reserve ........................................          23
  
  IX.      MANAGEMENT AND CONTROL ..............................              23
  
           9.1      Power and Authority of General Partner .........          23
           9.2      Payments to the General Partners and Others ....          24
           9.3      Specific Powers of the General Partner .........          26
           9.4      Authority Requirements..........................          27
           9.5      Limitations on General Partner's
                      Power and Authority ..........................          28
           9.6      Restrictions on Authority of General Partner....          29
           9.7      Duties of General Partner ......................          30
           9.8      Partnership Expenses ...........................          31
           9.9      General Partner Expenses .......................          32
           9.10     Other Business of Partners .....................          32
           9.11     Covenants, Representations and Warranties.......          33
  X.       ALLOCATIONS OF INCOME, LOSSES AND CREDITS ...........              36
  
           10.1     General ........................................          36
           10.2     Allocations From Sale or Refinancing............          36
           10.3     Special Allocations.............................          37
           10.4     Curative Allocations............................          40
           10.5     Other Allocation Rules..........................          41
           10.6     Tax Allocations:  Code Section 704(c)...........          42
           10.7     Allocation Among Limited Partners...............          42
           10.8     Allocation Among General Partners ..............          42
           10.9     Modification of Allocations ....................          42
  
  XI.      DISTRIBUTION ........................................              43
  
           11.1     Distribution of Cash Flow From Operations ......          43
           11.2     Distribution of Sale or Refinancing Proceeds....          43
           11.3     Additional Refinancing .........................          43
  
  XII.     TRANSFERS OF LIMITED PARTNER'S AND SPECIAL LIMITED
           PARTNER'S INTEREST IN THE PARTNERSHIP................              44
  
           12.1     Assignment of Limited Partner's
                    and Special Limited Partner's Interest .........          44
           12.2     Effective Date of Transfer .....................          45
           12.3     Invalid Assignment .............................          45
           12.4     Assignee's Rights to Allocations
                      and Distributions ............................          45
           12.5     Substitution of Assignee as Limited Partner
                    or Special Limited Partner .....................          45
           12.6     Death, Bankruptcy, Incompetency, etc.
                      of a Limited Partner .........................          45
  XIII. WITHDRAWAL, REMOVAL AND REPLACEMENT OF GENERAL
        PARTNER ............................................
  
           13.1     Withdrawal of General Partner ..................          46
           13.2     Removal of General Partner .....................          46
           13.3     Admission of Substitute General Partner ........          48
           13.4     Continuing Liability ...........................          49
           13.5     Transfer of Interest ...........................          50
           13.6     Payment to General Partner Upon Resignation,
                    Death or Insanity ..............................          50
  
  XIV.     BOOKS AND ACCOUNTS, REPORTS, TAX RETURNS,
           FISCAL YEAR AND BANKING .............................              51
  
           14.1     Books and Accounts .............................          51
           14.2     Accounting Reports .............................          51
           14.3     Other Reports ..................................          52
           14.4     Late Reports ...................................          54
           14.5     Annual Site Visits..............................          54
           14.6     Tax Returns.....................................          54
  14.7     Fiscal Year ....................................          54
           14.8     Banking ........................................          54
           14.9     Certificates and Elections .....................          55
  
  XV.      DISSOLUTION, WINDING UP, TERMINATION AND
           LIQUIDATION OF THE PARTNERSHIP ......................              55
  
           15.1     Dissolution of Partnership .....................          55
           15.2     Return of Capital Contribution upon
                      Dissolution ..................................          55
           15.3     Distributions of Assets ........................          56
           15.4     Deferral of Liquidation.........................          57
           15.5     Liquidation Statement ..........................          57
           15.6     Certificates of Dissolution; Certificate of
                      Cancellation of Certificate of Limited
                      Partnership ..................................          57
  
  XVI.     AMENDMENTS ..........................................              58
  
  XVII. MISCELLANEOUS ......................................
  
           17.1     Voting Rights ..................................          58
           17.2     Meeting of Partnership .........................          59
           17.3     Notices ........................................          59
           17.4     Successors and Assigns .........................          60
           17.5     Recording of Certificate of Limited
                    Partnership. ...................................          60
           17.6     Amendment of Certificate of Limited
                    Partnership ....................................          60
           17.7     Counterparts ...................................          60
           17.8     Captions .......................................          61
           17.9 Certain Provisions .............................              61
           17.10 Saving Clause..................................              61
           17.11 Number and Gender .............................              62
           17.12 Entire Agreement ..............................              62
           17.13 Governing Law .................................              62
           17.14 Attorney's Fees ...............................              62
           17.15 Receipt of Correspondence .....................              62
  
  EXHIBIT A - Legal Description...................... A-1  -  A-2
  EXHIBIT B - Form of Legal Opinion.................. B-1  -  B-4
  EXHIBIT C - Certification and Agreement............ C-1  -  C-4
  EXHIBIT D - General Partner Certification.......... D-1  -  D-5
  EXHIBIT E - Form of Completion Certificate......... E-1
  EXHIBIT F - Accountant's Certificate............... F-1
  EXHIBIT F - Report of Operations................... G-1  -  G-10
  
  DEVELOPMENT FEE AGREEMENT
  GUARANTY AGREEMENT
  AMENDED AND RESTATED AGREEMENT
                              OF LIMITED PARTNERSHIP OF
                               CASCADE PINES, L.P. II
  
       THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is being entered
  into  effective as of the date written  below by and between  URBAN  RESIDENTIAL
  MANAGEMENT,  INC., a Georgia  corporation,  as the general partner (the "General
  Partner"),  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 as the limited partner
  (the  "Limited  Partner),   BRENCOR,  INC.,  a  Delaware  corporation,   as  the
  withdrawing limited partner (the "Original Limited Partner") and BRENCOR,  INC.,
  a Delaware  corporation,  as the Special Limited  Partner (the "Special  Limited
  Partner").
  
                                      RECITALS
  
       WHEREAS,  CASCADE  PINES,  L.P.  II, a  Georgia  limited  partnership  (the
  "Partnership")  recorded a certificate of limited  partnership  with the Georgia
  Secretary  of State on July 14, 1995. A  partnership  agreement  dated August 1,
  1995 was  entered  into by and between  the  General  Partner  and the  Original
  Limited Partner.
  
       WHEREAS,  the Partners  desire to enter into this Agreement to provide for,
  among other things, (i) the continuation of the Partnership,  (ii) the admission
  of the Limited Partner as a partner of the  Partnership,  (iii) the admission of
  the  Special  Limited  Partner  as  a  partner  of  the  Partnership,  (iv)  the
  liquidation of the Original Limited Partner's  Interest in the Partnership,  (v)
  the payment of Capital  Contributions by the Limited Partner to the Partnership,
  (vi) the allocation of Income,  Losses,  Tax Credits and  distributions  of Cash
  Flow From Operations and other cash funds of the Partnership  among the Partners
  (vii) the respective  rights,  obligations and interests of the Partners to each
  other and to the Partnership, and (viii) certain other matters.
  
       WHEREAS,  the Limited Partner,  the Special Limited Partner and the General
  Partner desire hereby to amend and restate the Limited Partnership  Agreement of
  the Partnership dated August 1, 1995.
  
       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 CASCADE PINES, L.P. II in its entirety to provide as follows:
  
                                      ARTICLE I
  
                                     DEFINITIONS
  
       Section 1.1 "Accountant" shall mean Reznick,  Fedder and Silverman, or such
  other firm of independent certified public accountants as may be engaged for the
  Partnership by the General Partner with the Consent of the Limited Partner.
  Section 1.2 "Acquisition  Account" shall mean that account  established and
  maintained in  accordance  with the Trust  Indenture and Section  9.2(c) of this
  Agreement.
  
       Section  1.3  "Act"  shall  mean the laws of the  State  governing  limited
  partnerships, as now in effect and as the same may be amended from time to time.
  
       Section 1.4 "Actual  Tax  Credit"  shall mean as of any point in time,  the
  total amount of the LIHTC actually  allocated by the  Partnership to the Limited
  Partner,  representing 98% of the LIHTC actually received by the Partnership, as
  shown on the applicable tax returns of the Partnership.
  
       Section 1.5 "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 period,  after giving effect to the following
  adjustments:
  
       (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
  1.704-1(b)(2)(ii)(d)(4),  1.704-1(b)(2)(ii)(d)(5) and 1.704-1(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 1.6 "Administrative  Expenses Fund" shall mean the fund established
  by the Trustee in accordance with the Trust Indenture. Amounts on deposit in the
  Administrative Expenses Fund shall be used to pay the Issuer's Fee.
  
       Section 1.7  "Affiliate"  shall mean (a) any Person  directly or indirectly
  controlling, controlled by, or under common control with another Person; (b) any
  Person owning or controlling 10% or more of the outstanding voting securities of
  such other Person; (c) any officer, director,  trustee, or partner of such other
  Person;  and (d) if such  Person is an  officer,  director,  trustee  or general
  partner, any other Person for which such Person acts in any such capacity.
  
       Section 1.8 "Agreement" or "Partnership  Agreement" shall mean this Amended
  and Restated Agreement of Limited Partnership, as it may be amended from time to
  time. Words such as "herein,"  "hereinafter,"  "hereof,"  "hereto," "hereby" and
  "hereunder,"  when  used  with  reference  to  this  Agreement,  refers  to this
  Agreement as a whole, unless the context otherwise requires.
  Section 1.9 "Annual Budget" shall mean the budget filed with the Issuer for
  its approval and,  promptly  following such approval,  to the Trustee,  no later
  than the first day of each fiscal  year which  shall show for each fiscal  year:
  (a) anticipated revenues and receipts dervied from the opertationof the Project,
  including HAP Payments paid to or on behalf of the  Partnership  pursuant to the
  HAP Contract,  together  with tenant  rentals and all other income and moneys as
  may be paid to or on behalf of the Partnership,  excluding security deposit; and
  (b) all current  expenses of the Partnerhip in connection  with the operation of
  the Project which are not otherwise  specifically  described in the Debt Service
  Reserve Fund or the Maintenance and Replacement Fund,  including  administrative
  expenses and property  management  fees with respect ot the Project  incurred in
  its ordinary operations.
  
       Section  1.10  "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  1.11  "Bankruptcy"  or  "Bankrupt"  shall  mean the  making  of an
  assignment for the benefit of creditors,  becoming a party to any liquidation or
  dissolution   action  or  proceeding,   the   commencement  of  any  bankruptcy,
  reorganization,  insolvency or other  proceeding  for the relief of  financially
  distressed debtors, or the appointment of a receiver,  liquidator,  custodian or
  trustee  and,  if any of the  same  occur  involuntarily,  the  same  not  being
  dismissed,  stayed or  discharged  within 90 days;  or the entry of an order for
  relief  under  Title 11 of the United  States  Code.  A Partner  shall be deemed
  Bankrupt  if  the  Bankruptcy  of  such  Partner  shall  have  occurred  and  be
  continuing.
  
       Section 1.12 "Bond Fund" shall mean the fund  established by the Trustee in
  accordance with the Trust Indenture  whereby amounts on deposit in the Bond Fund
  will be used solely to pay  principal of,  premium,  if any, and interest on the
  Bonds when due.
  
       Section 1.13 "Bond Reserve Requirements" shall mean an amount not to exceed
  $593,090 in Bond Years one through  fifteen and  $531,189 in Bond Years  sixteen
  through thirty.
  
       Section 1.14 "Bonds" shall mean the Urban Residential  Finance Authority of
  the City of Atlanta,  Georgia's  $7,455,000  Multi-Family Housing Revenue Bonds,
  (Cascade Pines Apartments) Series 1995.
  
       Section 1.15 "Bond Year" shall mean the 12-month period (or portion thereof
  as to the first Bond Year) ending on December 31 of each year.
  
       Section 1.16 "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 to such Partner of Partnership  Income
  (or  items  thereof)  and any items in the  nature  of income or gain  which are
  specially  allocated  pursuant to Section 10.3 or 10.4 hereof,  and decreased by
  the amount of any  Distributions  made to such Partner,  and allocations to such
  Partner of Partnership  Losses (or items thereof) and any items in the nature of
  expenses or losses  which are  specially  allocated  pursuant to Section 10.3 or
  10.4 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.
  
       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 1.704-1(b), as amended or any successor thereto, and
  shall be  interpreted  and  applied in a manner  consistent  with such  Treasury
  Regulation.
  
       Section 1.17 "Capital  Contribution"  shall mean the total amount of money,
  or the Gross Asset Value of property 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 a Capital Contribution.
  
       Section 1.18 "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 all funds  retained by the Trustee  for  purpose of the Revenue  Fund,  the
  Insurance and Tax Escrow Fund, the Bond Fund, the Debt Service Reserve Fund, the
  Maintenance  and Replacement  Fund, the Rebate Fund (if necessary),  the Surplus
  Fund, the Transition Fund, the Administrative Expenses Fund and Trustee fees and
  expenses. Cash Flow From Operations excludes calculation for deductions for cost
  recovery of buildings,  improvements and personal  property  amortization of any
  financing  fees.  Any amounts in the Surplus  Fund,  after giving  effect to the
  above transfers and payment of the Issuer's fee and any Trustee's  extraordinary
  fees shall be transferred  by the Trustee to the  Partnership  for  distribution
  pursuant to Section 11.1 of this Agreement but only if the Trustee  receives and
  the Issuer  approves (a) the Project audit required by the Loan  Agreement;  and
  (b) a verification of cash flows by an independent  certified public  accountant
  or financial analyst  acceptable to the Rating Agency using the same assumptions
  as the cash flows  submitted  to the Rating  Agency at the time of the  original
  rating of the Bonds  demonstrating  that:  (i) the Debt Service  Coverage was at
  least 1.32% at the end of the first Bond Year,  1.37% for Bond Years two through
  fifteen  and 1.45% for Bond Years  sixteen  through  thirty for the  immediately
  preceding fiscal year and is projected to do so for each fiscal year thereafter;
  (ii)  Project  revenues  and  investment  earnings  will  be  sufficient  to pay
  principal and interest on the bonds until  maturity;  and (iii) asset  liability
  parity does not fall below 100%.
  
       Section  1.19  "Code"  shall mean the  Internal  Revenue  Code of 1986,  as
  amended from time to time, or any successor statute.
  
       Section 1.20  "Completion  of  Construction"  shall mean the  completion of
  rehabilitation  of the  Project  substantially  in  accordance  with the Project
  Documents,  as  amended  from  time to time,  in order to  obtain  the  required
  certificates  of  occupancy  (or the local  equivalent)  for all  three  hundred
  seventy-six   (376)  apartment  units  as  evidenced  by  the  issuance  of  the
  certificate of occupancy by the governmental agency having jurisdiction over the
  Project or by the issuance of the  inspecting  architect's  certification,  in a
  form  substantially  similar  to  that  attached  hereto  as  Exhibit  "E".  The
  rehabilitation  shall be completed in good workmanlike manner, free and clear of
  all  mechanic's,  materialmen's  or similar  liens,  and all other  expenses and
  costs,  including  but not  limited  to costs of  financing,  must be paid  with
  respect to the Project through completion.
  
       Section 1.21 "Compliance Period" shall mean the period set forth in Section
  42(i)(1) of the Code, as amended, or any successor statute.
  
       Section 1.22 "Consent of the Limited  Partner" shall mean the prior written
  consent or approval of the Limited Partner.
  
       Section  1.23  "Construction   Contract"  shall  mean  the  stipulated  sum
  construction  contract in the amount of  $3,381,000,  entered  into  between the
  Partnership  and  the  Contractor   pursuant  to  which  the  Project  is  being
  constructed.
  
       Section 1.24  "Construction  Loan" shall mean the Bonds and the Subordinate
  Loan to provide funds for the  acquisition,  renovation  and  development of the
  Project.
  
       Section 1.25 "Contractor" shall mean Gardner Service Corporation,  which is
  the general construction contractor for the Project.
  
       Section 1.26 "Costs of Issuance  Fund" shall mean the fund  established  by
  the Trustee in the amount of  $254,494  for the payment of the costs of issuance
  of the Bonds, including, without limitation, all printing expenses in connection
  with the  Bonds,  the  Trust  Indenture,  the Loan  Agreement  and any  official
  statement  or  offering  document  for the Bonds,  the fees and  expenses of the
  Issuer and its  counsel,  acceptance  and  initial  annual  fee of the  Trustee,
  Trustee counsel fees and expenses, fees of the Rating Agency,  underwriter's fee
  and legal fees and expenses of Bond counsel, counsel to the underwriter, counsel
  to the  Partnership  and such other initial  development  costs  relative to the
  Project.  Any amounts  remaining in the Cost of Issuance Fund after  transfer of
  the above, on the date six months after the initial issuance and delivery of the
  Bonds, shall be transferred by the Trustee to the Revenue Fund.
  
       Section 1.27 "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.
  
       Section 1.28 "Debt Service Reserve Fund" shall mean the fund established by
  the Trustee in the initial  amount of $593,090 to be disbursed by the Trustee to
  the Bond Fund (a) on any  Interest  Payment Date  whenever a  deficiency  in the
  amount  necessary  to pay  principal  of and  interest on the Bonds on such date
  would otherwise exist after transfer therein of any balance in the Surplus Fund,
  (b) on any Interest  Payment Date when the amount on deposit therein exceeds the
  Bond Reserve  Requirement,  but only such excess amount, (c) at such time as the
  amount  therein and in the Bond Fund,  together with interest to accrue from the
  investment  thereof,  would equal the amount  necessary to pay  principal of and
  interest on the Bonds to maturity, and (d) at the end of the 16th Bond Year, and
  only at the end of the 16th Bond Year, the amount of $61,901 to redeem Bonds.
  
       Section 1.29 "Deferred  Management Fee" shall have the meaning set forth in
  Section 9.2(c) hereof.
  
       Section 1.30  "Developer"  shall mean Brencor,  Inc. and Urban  Residential
  Development Corporation, a Georgia corporation.
  
       Section 1.31  "Development Fee" shall mean the fee payable to the Developer
  pursuant  to Section  9.2(a) of this  Agreement  for  services  incident  to the
  development and rehabilitation of the Project in accordance with the Development
  Fee Agreement  between the  Partnership  and the  Developer  dated the even date
  herewith and incorporated herein by this reference.
  
       Section 1.32  "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 1.33 "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  1.34 "First Year  Certificate"  shall mean the  certificate  to be
  filed by the General  Partner with the  Secretary of the Treasury as required by
  Code Section 42(1)(1), as amended, or any successor thereto.
  
       Section 1.35 "General  Partner"  shall mean URBAN  RESIDENTIAL  MANAGEMENT,
  INC. and such other Persons as are admitted to the  Partnership as additional or
  substitute General Partners pursuant to this Agreement.
  
       Section 1.36 "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 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 Fair Market Values, as determined by the General Partner,
  as of the following times: (1) 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;  (2) 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 (3) 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  (1) and (2) above  shall be made only with the  Consent of the  Limited
  Partner  and  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 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  1.36(d) to the extent the General  Partner  determines
  that  an  adjustment   pursuant  to  Section  1.36(b)  hereof  is  necessary  or
  appropriate in connection with a transaction  that would otherwise  result in an
  adjustment pursuant to this Section 1.36(d).
  
       If the  Gross  Asset  Value of an asset  has been  determined  or  adjusted
  pursuant to Section 1.36(a),  Section 1.36(b),  or Section 1.36(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  1.37 "HAP  Contract"  shall mean that certain  Housing  Assistance
  Payment  Contract  dated  September 27, 1995,  between the  Partnership  and the
  United  States of America  acting  through the  Department  of Housing and Urban
  Development ("HUD"), as amended and supplemented, for 70 designated units of the
  Project.
  
       Section 1.38 "HAP  Payments"  shall mean those moneys payable under the HAP
  Contract with respect to the Project.
  
       Section 1.39 "Hazardous  Substance"  shall mean,  without  limitation,  any
  petroleum,  petroleum  products or fractions or  components  thereof,  flammable
  explosives,   radioactive  materials,  hazardous  materials,  hazardous  wastes,
  hazardous or toxic substances,  or related materials,  asbestos or any materials
  containing  asbestos,  or any other similar  substance or material as defined by
  any Federal,  state or local  environmental law,  ordinance,  rule or regulation
  including,   without  limitation,  the  Comprehensive   Environmental  Response,
  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 1.40 "Improvements"  shall mean the construction of a three hundred
  seventy-six  (376) unit apartment complex for families in a good and workmanlike
  manner substantially in accordance with the plans and specifications and Project
  Documents.
  
       Section 1.41 "Incentive Management Fee" shall have the meaning set forth in
  Section 9.2(e) hereof.
  
       Section 1.42 "Income and Losses" shall mean,  for each fiscal 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:
  
       (a) 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 Section 1.41 shall be added to such taxable income or loss;
  (b)  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 Section 1.41 shall be  subtracted
  from such taxable income or loss;
  
       (c) In the event the Gross Asset Value of any Partnership asset is adjusted
  pursuant to Section 1.36(a) or (b) hereof,  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;
  
       (d) 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;
  
       (e) 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
  
       (f) Notwithstanding any other provision of this definition, any items which
  are  specially  allocated  pursuant  to Sections  10.3 or 10.4 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  1.43   "Insurance  and  Tax  Escrow  Fund"  shall  mean  the  fund
  established by the Trustee in accordance  with the Trust  Indenture.  Amounts on
  deposit in this fund will be disbursed by the Trustee to pay the premiums of all
  insurance on the Project and all taxes.
  Section  1.44  "Interest"  shall mean the entire  ownership  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 1.45 "Interest  Payment Date" shall mean March 1 and September 1 of
  each year commencing March 1, 1996.
  
       Section 1.46  "Involuntary  Withdrawal"  means any Withdrawal caused by the
  death,  adjudication  of insanity or  incompetence,  or  Bankruptcy of a General
  Partner, or the removal of a General Partner pursuant to Section 13.2 hereof.
  
       Section 1.47 "Issuer" shall mean the Urban Residential Finance Authority of
  the City of Atlanta, Georgia, and its successors and assigns.
  
       Section  1.48  "LIHTC"  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 1.49  "Limited  Partner"  shall mean WNC HOUSING TAX CREDIT FUND V,
  L.P., SERIES 3, 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 1.50  "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  1.51 "Loan  Agreement"  shall mean that  agreement  between  Urban
  Residential  Finance  Authority  of  the  City  of  Atlanta,   Georgia  and  the
  Partnership  dated as of September 1, 1995,  including any  amendments  thereto.
  Said Loan Agreement is incorporated herein by this reference.
  
       Section  1.52  "Maintenance  and  Replacement  Fund"  shall  mean that fund
  established  by  the  Trustee.   Amounts  on  deposit  in  the  Maintenance  and
  Replacement  Fund will be disbursed by the Trustee,  upon written request of the
  General  Partner with the approval of the Issuer,  for  maintenance,  repair and
  replacement which may be required at the Project, including, but not limited to,
  replacement  of  equipment  (including  ranges  and  refrigerators),  repair  or
  replacement of any roof or other structural  component of the Project,  exterior
  painting,  major floor covering  replacement and major repairs to or replacement
  of heating, air conditioning,  plumbing and electrical systems, but in any case,
  only if  there  are no  funds  available  in the  Rehabilitation  Fund  for such
  purpose.  The Maintenance  and Replacement  Fund will also be used to remedy any
  deficiency  in the Bond Fund after  exhaustion  of the Surplus Fund and the Debt
  Service Reserve Fund without any prior consents.
  
       Section 1.53 "Management Agent" shall mean the property  management company
  which  oversees the property  management  functions for the Project and which is
  on-site at the  Project.  The initial  Management  Agent shall  collectively  be
  Brencor Asset Management, Inc. and Pointe Properties, Inc. d/b/a Metric Property
  Services.
  
       Section 1.54 "Management  Agreement"  shall mean the agreement  between the
  Partnership and the Management Agent for property management services.
  
       Section 1.55 "Minimum  Set-Aside  Test" shall mean the 40-60 set-aside test
  pursuant to Section  42(g),  as amended and any successor  thereto,  of the Code
  with respect to the percentage of apartment  units in the Project to be occupied
  by tenants  whose  incomes are equal to or less than the required  percentage of
  the area median gross income.
  
       Section  1.56  "Mortgage"  or  "Mortgage  Loan"  shall  mean any  source of
  permanent financing of the Project by a qualified  commercial lender (as defined
  in Section 42 of the Code)  evidencing the  indebtedness  of the Partnership and
  encumbering  the  Project.  Where the context  admits,  the term  "Mortgage"  or
  "Mortgage  Loan"  shall  include  any  mortgage,  deed,  deed  of  trust,  note,
  regulatory  agreement,   security  agreement,   assumption  agreement  or  other
  instrument executed in connection with the Mortgage Note which is binding on the
  Partnership;  and in case  any  Mortgage  is  replaced  or  supplemented  by any
  subsequent  mortgage  or  mortgages,  the  Mortgage  shall  refer  to  any  such
  subsequent mortgage or mortgages.
  
       Section 1.57 "Mortgage  Note" shall mean the  nonrecourse  promissory  note
  whereby the Partnership promises to pay Urban Residential Finance Authority,  or
  its successor or assignee, the principal sum of $2,465,000, plus interest on the
  principal  at  6.25%  per  annum  over a  term  of  fifteen  years;  the  sum of
  $4,990,000, plus interest on the principal at 6.60% over a term of thirty years;
  and  $1,100,000,  plus  interest on the  principal at 7% over a term of thirty
  years.
  
       Section 1.58  "Nonrecourse  Deductions"  shall have the meaning given it in
  Treasury Regulations Section 1.704-2(b)(1).
  Section 1.59  "Nonrecourse  Liability"  shall have the meaning  given it in
  Treasury Regulations Section 1.704-2(b)(3).
  
       Section 1.60  "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 1.61  "Operating  Deficit  Guarantee  Period" shall mean the period
  commencing  with the date of this Agreement and ending four years  following the
  date of the Limited Partner's last Capital Contribution.
  
       Section 1.62 "Operating Loans" shall mean loans made by the General Partner
  to the Partnership pursuant to Article VI of this Agreement,  which loans do not
  bear  interest  and  are  repayable  only  as  provided  in  Article  XI of this
  Agreement.
  
           Section 1.63 "Original Limited Partner" shall mean BRENCOR, INC.
  
       Section 1.64  "Partner"  shall mean the General  Partner and/or the Limited
  Partner and/or the Special Limited Partner.
  
       Section 1.65 "Partner Nonrecourse Debt" shall have the meaning set forth in
  Section 1.704-2(b)(4) of the Treasury Regulations.
  
       Section 1.66 "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 1.67 "Partner  Nonrecourse  Deductions"  shall have the meaning set
  forth in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Treasury Regulations.
  
       Section 1.68  "Partnership"  shall mean the limited  partnership  continued
  under this Agreement.
  
       Section 1.69 "Partnership Minimum Gain" shall mean the amount determined in
  accordance with the principles of Treasury Regulation Sections 1.704-2(b)(2) and
  1.704-2(d).
  
       Section 1.70 "Permanent Mortgage  Commencement" shall mean the first day on
  which all of the following have occurred: (a) the principal amount, interest and
  maturity  date of the  Mortgage  and the  Mortgage  Note shall have been finally
  determined; and (b) amortization of the Mortgage shall have commenced.
  Section 1.71  "Person"  shall mean an  individual,  proprietorship,  trust,
  estate, partnership,  joint venture, association,  company, corporation or other
  entity.
  
       Section  1.72  "Principal  Payment  Date"  shall  mean  any  date on  which
  principal of the Bonds is payable pursuant to the Trust Indenture.
  
       Section 1.73 "Project" shall mean the approximately 26.785 acres of land in
  Atlanta, Fulton County, Georgia, as more fully described in Exhibit "A" attached
  hereto and incorporated herein by this reference, and the Improvements.
  
       Section  1.74  "Project  Documents"  shall mean and include  all  documents
  delivered to or required by the  Construction  Loan and Mortgage Loan and/or any
  governmental  agency having jurisdiction over the Project in connection with the
  development,  construction  and  financing  of the  Project,  including  but not
  limited to, the Trust Indenture,  the Loan Agreement,  Construction Contract and
  approved plans and  specifications for the development and rehabilitation of the
  Project.
  
       Section 1.75 "Projected  Annual Tax Credits" shall mean LIHTC in the amount
  of $109,513 for 1996,  $262,831 per year for each of the years 1997 through 2005
  and $153,318 for 2006,  which the General  Partner has projected to be the total
  amount  of  LIHTC  which  will  be  allocated  to  the  Limited  Partner  by the
  Partnership;  provided,  however, that if the Actual Tax Credit allocated to the
  Limited  Partner is greater (or less than)  $109,513  the  Projected  Annual Tax
  Credit  allocated to the Limited  Partner for the year 2006 shall be reduced (or
  increased)  by an amount  equal to the amount by which the Actual Tax Credit for
  1996 exceeds (or is less than) $109,513. The Partners recognize that some of the
  1996 LIHTCs had been allocated to the General  Partner and the Original  Limited
  Partner prior to the admission of the Limited Partners,  therefore,  the Limited
  Partner will not receive the full 98% of Projected Tax Credits.
  
       Section  1.76  "Projected  Tax Credits"  shall mean LIHTC in the  aggregate
  amount of $2,681,950.
  
       Section  1.77  "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 1.78 "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 LIHTC.
  Section 1.79 "Rating  Agency" shall mean Standard & Poor's Ratings Group, a
  division of McGraw-Hill Financial Services Company.
  
       Section 1.80 "Rebate Fund" shall mean the fund  established  by the Trustee
  in accordance with the Trust Indenture.
  
       Section 1.81 "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 1.82  "Rehabilitation  Account" shall mean that account established
  by the Trustee in the amount of $3,056,000 and maintained in accordance with the
  Trust Indenture and Section 9.2(e) of this Agreement.
  
       Section  1.83  "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  1.84  "Reporting  Fee" shall have the meaning set forth in Section
  9.2(d) hereof.
  
       Section 1.85 "Revenue Fund" shall mean the fund  established by the Trustee
  in accordance with the Trust Indenture.  All rental income, other Project income
  and HAP Payments will be deposited into the Revenue Fund. If no Event of Default
  has occurred and is  continuing,  amounts on deposit in the Revenue Fund will be
  disbursed by the Trustee not later than the tenth day of each month as follows:
  
       (a) To the Management  Agent in an amount equal to the amount  necessary to
  pay the  current  expenses  for the Project due or expected to become due in the
  month in which such transfer is made;
  
       (b) To the  Insurance  and Tax  Escrow  Fund in  accordance  with the Trust
  Indenture;
  
       (c) To the Bond Fund in the  amounts  required by the Trust  Indenture  for
  payment of principal and interest on the Principal Payment Date and the Interest
  Payment Date;
  
       (d) To the Trustee in an amount to pay the Trustee Fee, if any;
  
       (e) To the Debt  Service  Reserve  Fund in an amount  required  so that the
  balance therein equals the Bond Reserve requirement;
  
       (f) To the Maintenance  and  Replacement  Fund in accordance with the Trust
  Indenture;
  (g) To the Rebate Fund in accordance with the Trust Indenture; and
  
       (h) To the Surplus Fund in accordance with the Trust Indenture.
  
       Section 1.86  "Revised  Projected  Tax Credits"  shall have the meaning set
  forth in Section 7.4(a) hereof.
  
       Section 1.87 "Sale or Refinancing" shall mean any of the following items or
  transactions:  a  sale,  transfer,  exchange  or  other  disposition  of  all or
  substantially  all of  the  assets  of the  Partnership,  a  condemnation  of or
  casualty at the Project or any part thereof,  a claim against a title  insurance
  company,  the  refinancing  or any Mortgage  Note or other  indebtedness  of the
  Partnership and any similar item or  transaction;  provided,  however,  that the
  payment of Capital  Contributions  by the Partners shall not be included  within
  the meaning of the term "Sale or Refinancing."
  
       Section 1.88 "Sale or Refinancing Proceeds" shall mean all cash receipts of
  the  Partnership  arising from a Sale or  Refinancing  (including  principal and
  interest received on a debt obligation  received as consideration in whole or in
  part, on a Sale or Refinancing) less the amount paid or to be paid in connection
  with or as an expense  of such Sale or  Refinancing,  and with  regard to damage
  recoveries or insurance or condemnation  proceeds, the amount paid or to be paid
  for  repairs,  replacements  or  renewals  resulting  from  damage to or partial
  condemnation of the Project.
  
       Section 1.89 "Special Limited Partner" shall mean BRENCOR, INC., a Delaware
  corporation.
  
       Section 1.90 "State" shall mean the State of Georgia.
  
       Section  1.91  "State Tax  Credit  Agency"  shall mean the state  agency of
  Georgia which has the  responsibility  and authorization to administer the LIHTC
  program in Georgia.
  
       Section  1.92  "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 1.93 "Surplus Fund" shall mean the fund  established by the Trustee
  in accordance with the Trust Indenture.  In addition, on October 1 of each year,
  any balance will be distributed as follows:
  
       (a) To the  Administrative  Expenses Fund, the Issuer's Fee for the current
  Fiscal  Year to the extent  amounts  are not on  deposit  in the  Administrative
  Expenses Fund for such purpose,  together with any Issuer's Fee remaining unpaid
  from  previous  Fiscal  Years;
  (b) To the Trustee,  the amount of any  Trustee's  extraordinary  fees then
  due; 
  
       (c) To the Maintenance and Replacement Fund the amount required to fund any
  scheduled replacements  recommended by the Independent Architect; and 
  
       (d) To the  Developer;  
  
       provided that the amounts  described  above will be distributed if and only
  if the Trustee receives and the Issuer approves:  (i) the Project audit required
  by the Loan  Agreement and (ii) a  verification  of cash flows by an independent
  certified public  accountant or financial  analyst using the same assumptions as
  the cash flows submitted to the Rating Agency at the time of the original rating
  of the Bonds demonstrating that the (A) Debt Service Coverage was at least 1.32%
  at the end of the first Bond Year,  1.37% for Bond Years two through fifteen and
  1.45% for Bond Years sixteen through thirty for the immediately preceding Fiscal
  Year and is projected to be so for the current  Fiscal Year and each Fiscal Year
  thereafter,  (B) Project revenues and investment  earnings will be sufficient to
  pay  principal  and  interest on the Bonds,  fees and  current  expenses on each
  Interest  Payment Date until maturity,  and (C) asset liability  parity does not
  fall below 100%. 
  
       Section 1.94 "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,  LIHTC. 
  
       Section 1.95 "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 1.96 "TRA 1986" shall mean the Tax Reform Act of 1986. 
  
       Section  1.97  "Transition  Fund"  shall mean the fund  established  by the
  Trustee in accordance with the Trust Indenture.  Amounts on deposit in this fund
  shall be used by the  Trustee to  purchase  United  States  Treasury  Strip that
  matures on August 15, 2010 and that, upon maturity, will pay to the Trustee, for
  the benefit of the  bondholders,  the  principal  sum of $265,000.  
  
       Section 1.98 "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).
  Section 1.99 "Trust  Indenture"  shall mean that  agreement  between  Urban
  Residential Finance Authority of the City of Atlanta, Georgia and Reliance Trust
  Company dated as of September 1, 1995 and incorporated herein by this reference.
  If the terms of this  Agreement  conflict,  or are not in accordance  with,  the
  terms of the Trust  Indenture then the provisions of the Trust  Indenture  shall
  govern.  
  
       Section l.100  "Trustee"  shall mean Reliance Trust  Company,  or successor
  thereto.  
  
       Section  1.101  "Withdrawing"  or  "Withdrawal"  (including  the verb  form
  "Withdraw" and the adjectival forms  "Withdrawing" and "Withdrawn")  shall mean,
  as to a General Partner,  the occurrence of the death,  adjudication of insanity
  or incompetence,  or Bankruptcy of such Partner,  or the withdrawal,  removal or
  retirement  from the  Partnership of such Partner for any reason,  including any
  sale,  pledge,  encumbering,  assignment or other transfer of all or any part of
  its General Partner  Interest and those situations when a General Partner may no
  longer  continue  as a General  Partner by reason of any law or  pursuant to any
  terms of this Agreement.
  
                                    ARTICLE III
  
                                        NAME
  
           The name of the Partnership shall be "CASCADE PINES, L.P. II."
  
                                     ARTICLE III
  
                    PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE
  
       Section 3.1 Principal  Executive Office. The principal  executive office of
  the Partnership is located at 100 Peachtree  Street,  N.W., Suite 400,  Atlanta,
  Georgia 30303,  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 Herbert Kohn,  whose address is 100 Peachtree
  Street, N.W., Suite 400, Atlanta, Georgia 30303.
  
                                     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 LIHTC and to sell the Project  after the  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, 2030
  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 as required pursuant to the Loan Agreement or
  required by the Trustee.  
  
       Section 6.2 Construction and Operating Obligations; General Partner Loans.
  
       (a) The Special Limited  Partner shall cause  Completion of Construction in
  accordance with the Project  Documents,  as amended from time to time, 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 Special  Limited  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
  Urban  Residential  Finance  Authority  of the  City  of  Atlanta,  Georgia,  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  Commencement shall not be reimbursable or otherwise
  change the Interest of any Partner in the  Partnership but shall be borne by the
  Special  Limited  Partner as a Capital  Contribution.  In the event the  Special
  Limited  Partner  shall fail to fund any such  deficiency  as  required  by this
  Section 6.2(a),  any amounts otherwise payable to the Special Limited 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 Special  Limited  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 a payment of the obligation
  of the fee which such funds have been  earmarked to pay, and the  obligation  of
  the Special  Limited  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 Special  Limited
  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 Special  Limited  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 Special Limited
  Partner or its  Affiliates  pursuant to Section 9.2  ("Special  Limited  Partner
  Funds") and utilize the withheld  funds to meet the  obligations  of the Special
  Limited Partner pursuant to this Section 6.2(b); any such use of Special Limited
  Partner Funds will be deemed an Operating  Loan of the Special  Limited  Partner
  repayable  to the  Special  Limited  Partner as  aforesaid.  Such use of Special
  Limited Partner Funds shall also constitute  payment and satisfaction of amounts
  payable to the Special Limited Partner or Affiliates thereof pursuant to Section
  9.2, and the obligation of the  Partnership to make such payments to the Special
  Limited  Partner or its  Affiliates  pursuant to Section 9.2 shall  therefore be
  deemed satisfied.
  
       Section 6.3 Partner Loans.  With the prior consent of the Limited  Partner,
  and if approved by Urban  Residential  Finance Authority of the City of Atlanta,
  Georgia,  the  General  Partner,  or  Special  Limited  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.
  This Section 6.3 shall not apply to the  Operating  Loans  referenced in Article
  VI.  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.
  
                                     ARTICLE VII
  
                      CAPITAL CONTRIBUTIONS OF LIMITED PARTNER
  
       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.  The
  Original  Limited Partner  acknowledges  that it has no further  interest in the
  Partnership  as a  limited  partner  as of the date of this  Agreement,  and has
  released  all  claims,  if  any,  against  the  Partnership  arising  out of its
  participation as a limited partner.
  
       Section 7.2 Capital  Contribution of Limited  Partner.  The Limited Partner
  shall make a total Capital  Contribution  in the amount of $1,471,854 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
  Certification  and  Agreement  in the form  attached  hereto as Exhibit  "C" and
  incorporated herein by this reference;
  
       (3) prior to the due date of each installment of such Capital  Contribution
  except the first  payment,  the  General  Partner  shall  deliver to the Limited
  Partner a fully  executed  General  Partner  Certification  in the form attached
  hereto as Exhibit "D" and incorporated  herein by this reference,  to the effect
  that all of the  representations  and  warranties  set forth in  Article  IX are
  accurate;
  
       (4)  prior  to the  Capital  Contribution  payment  referenced  in  Section
  7.2(b)(3),  the  General  Partner  shall  deliver  to the  Limited  Partner  the
  following:  (A) a  certificate  of occupancy on all the  apartment  units in the
  Project; (B) a copy of the recorded grant deed (warranty deed); (C) a copy of an
  ALTA Owner's Title Insurance Policy and any endorsements required by the Limited
  Partner issued in an amount equal to the sum of the original principal amount of
  the  Mortgage and the  aggregate  amount of Capital  Contributions  set forth in
  Sections 6.1 and 7.2; (D) an audited  construction  cost  certification  with an
  itemized  cost  breakdown;  (E) copies of all Mortgage Loan  documents;  and (F)
  copies of all Mortgage Notes; and
  
       (5)  prior  to the  Capital  Contribution  payment  referenced  in  Section
  7.2(b)(3),  the General  Partner shall deliver to the Limited  Partner  Internal
  Revenue Code Form 8609, or any successor  form and a copy of the  Declaration of
  Restrictive   Covenants/Extended   Use   Agreement   entered  into  between  the
  Partnership and the State Tax Credit Agency.
  
       (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  $1,177,485  and will be payable  upon
  admittance of the Limited Partner into the Partnership,  provided the conditions
  of Section 7.2(a) have been met;
  (2) The second payment shall equal $147,185 and will be payable as follows:
  (a) upon Completion of  Construction as evidenced by the inspecting  Architect's
  certification,  in a form  substantially  similar to the form attached hereto as
  Exhibit "E" and incorporated  herein by this reference;  (b) receipt of a letter
  from the Contractor stating that all amounts payable to the Contractor have been
  paid in  full  and  the  Partnership  is not in  violation  of the  construction
  contract;  (c) the date the Project  maintains a debt coverage  ratio of 1.15 on
  the Bonds for 90  consecutive  days; (d) the Limited  Partner's  receipt of, and
  review  of,  tenant  income  verification  data  to  determine  that  98% of the
  apartments  units in the  Apartment  Complex  qualify  under  Section  42 of the
  Internal  Revenue  Code (the  Limited  Partner  will  review the  tenant  income
  verification in a reasonable  time); (e) delivery of the Accountant's  final Tax
  Credit cost  certification  setting forth the Project's  eligible  basis and the
  amount  of the Tax  Credits  to which the  Partnership  is  entitled,  in a form
  substantially   similar  to  the  form  attached   hereto  as  Exhibit  "F"  and
  incorporated  herein by this reference;  and (f) delivery to the Limited Partner
  of a fully  executed set of the Mortgage  documents;  provided the conditions of
  Section 7.2(a) have been met; and
  
       (3) The final  payment  shall equal  $147,184 and will be payable after all
  the conditions  above have been met and delivery of the IRS Form 8609,  provided
  the conditions of Section 7.2(a) have been met.
  
       Section 7.3 Repurchase of Limited Partner's Interest.  Within 60 days after
  the General  Partner  receives  written  demand 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 LIHTC no later than the close of the calendar
  year during which the Project is placed in service;
  
       (b) cause the Project to be placed in service by September 1, 1996;
  
       (c) achieve 90%  occupancy of the Project by Qualified  Tenants by December
  1, 1996;
  
       (d) obtain Permanent Mortgage Commencement by September 1, 1996; and
  
       (e) meet both the Minimum  Set-Aside Test and the Rent Restriction Test not
  later than  December  31 of the first year the  Partnership  elects the LIHTC to
  commence in accordance with the Code.
  
       Section 7.4 Reduction of Limited Partner's Capital Contribution.
  
       (a) If the anticipated amount of Tax Credits to be allocated to the Limited
  Partner as evidenced by IRS Form 8609,  and Schedule A thereto,  and the audited
  construction  cost  certification  provided to the Limited  Partner is less than
  $2,628,311  (the "Revised  Projected Tax  Credits")  then the Limited  Partner's
  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  56% of the  Revised  Projected  Tax  Credits  so
  anticipated to be allocated to the Limited Partner.
  
       (b) The General Partner is required to use its best efforts to rent 100% of
  the Project's  apartment  units to Qualified  Tenants  throughout the Compliance
  Period.  If at any time during the first five calendar years  following the year
  in which the Project is placed in service,  the Actual Tax Credit for any fiscal
  year or portion thereof is or will be less than the Projected Annual Tax Credit,
  or the Revised  Projected  Tax Credit  calculated  on an annual basis  ("Revised
  Projected Annual Tax Credit"),  if applicable,  then, unless the shortfall shall
  have previously been addressed under Section 7.4(a), the amount of the reduction
  shall be applied to the next Capital  Contribution  owed by the Limited Partner,
  if any, 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  any.  If,  at the  time  of  determination  thereof,  the  Capital
  Contribution  reduction  referenced in Section 7.4(a) and/or this Section 7.4(b)
  is  greater  than the  balance of the  Limited  Partner's  Capital  Contribution
  payments which is then due, if any ("Reduction  Shortfall"),  then the amount of
  the  Reduction  Shortfall  shall be paid by the Special  Limited  Partner to the
  Limited  Partner  within ninety days of the Special  Limited  Partner  receiving
  notice of the Reduction Shortfall from the Limited Partner.
  
       (c) In the event  that,  for any  reason,  at any time after the first five
  calendar years following the year in which the Project is placed in service, the
  amount of the Actual Tax Credit is less than the Projected Annual Tax Credit, or
  the Revised  Projected  Annual Tax Credit,  if  applicable,  (the "Annual Credit
  Shortfall"), then, unless the Annual Credit Shortfall shall have previously been
  addressed under Section 7.4(a) or Section 7.4(b),  there shall be a reduction in
  the Special  Limited  Partner's  share of Cash Flow From Operations in an amount
  equal to the Annual Credit  Shortfall  and said amount  instead shall be paid to
  the Limited Partner. In the event there are not sufficient funds to pay the full
  Annual  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 made a  constructive  advance to the  Partnership in an amount
  equal to the Annual Credit Shortfall (a "Credit Shortfall Loan"), which shall be
  deemed  to have been made on  January 1 of the year in which the  Annual  Credit
  Shortfall  arises.  Each Credit  Shortfall Loan shall bear simple  interest (not
  compounded)  from the date on which  such loan is deemed to have been made under
  this Section 7.4(c) at the rate equal to the 10-year  Treasury money rate at the
  time of the Credit Shortfall Loan, or, if lesser, the maximum legal rate. Credit
  Shortfall Loans or any portion thereof shall be repaid in the next year in which
  sufficient  monies are available  from the Special  Limited  Partner's Cash Flow
  From Operations,  with interest payable prior to principal.  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(b).
  
       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, with the Consent of
  the Limited  Partner,  determine that such cash should,  in whole or in part, be
  returned to the Limited  Partner in  reduction of its Capital  Contribution.  No
  such return  shall be made 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  Capital
  Contributions  in the amounts and on the dates  specified in this Agreement and,
  except as otherwise expressly required hereunder,  shall not be required to lend
  any funds to the Partnership or, after their  respective  Capital  Contributions
  have been paid, to make any further Capital Contribution to the Partnership.
  
                                    ARTICLE VIII
  
                            WORKING CAPITAL AND RESERVES
  
       Section  8.1  Reserve.   In  accordance  with  the  Trust  Indenture,   the
  Partnership  shall  provide all revenue  generated  from the  operations  of the
  Project to the Trustee who will deposit the funds into the Revenue Fund.
  
                                     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 or
  Special Limited Partner (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 Developer a  Development  Fee in the
  amount of $1,333,381 in accordance with the  Development  Fee Agreement  between
  the  Partnership  and the  Developer  dated as of the  even  date  herewith  and
  incorporated herein by this reference.
  
       (b) The  Partnership  shall collect the sum of $138,473 from the proceeds
  established  in Section 7.2(b) of this Agreement and transfer said amount to the
  Trustee to be used for the  acquisition,  rehabilitation  and development of the
  Project. The Trustee shall receive the funds and place the same into the Project
  Fund  which  consists  of an  Acquisition  Account,  Development  Account  and a
  Rehabilitation  Account.  The Trustee shall determine to which account the funds
  will  be  transferred.   The  General  Partner  shall  confirm  that  the  funds
  established  in this  Section  9.2(b) are  allocated  to either the  Acquisition
  Account,  Development  Account  and the  Rehabilitation  Account  and are  being
  properly administered by the Trustee.
  
       (c) Upon sale of the Bonds, there will be deposited in the Acquisition Fund
  the amount of $2,697,265.25.  The Trustee will disburse  $1,641,265.25  from the
  Acquisition  Fund to HUD.  In  addition,  the  Trustee  will  disburse  from the
  Acquisition  Fund the amount of  $1,056,000.00  to the Issuer for the assignment
  rights in connection with the purchase of the property.
  
       (d) The Trustee shall use the  Rehabilitation  Fund solely to pay costs for
  the Project.  Before any payment shall be made from the Rehabilitation Fund, the
  General  Partner  shall file with the  Trustee a  requisition  and  certificate,
  approved  by  the   inspecting   architect.   If  prior  to  the  Completion  of
  Construction, the Trustee has insufficient moneys on deposit in the Bond Fund to
  make all payments on the Bonds  required to be made,  the Trustee will  transfer
  from the Rehabilitation  Fund to the Bond Fund an amount sufficient,  when added
  to amounts  already on deposit in the Bond Fund,  to enable the  Trustee to make
  payments  due on the Bonds.  Upon the  occurrence  of an Event of Default of the
  Bonds,  amounts on deposit in the Rehabilitation Fund will be transferred to the
  Bond Fund.  Following the Completion of  Construction,  and after payment of all
  costs of the  Project,  the  Trustee  will call  Bonds for  redemption  and will
  transfer to the Bond Fund all amounts remaining on deposit in the Rehabilitation
  Fund  and not  required  to pay  unpaid  costs of the  Project.  Notwithstanding
  anything to the contrary,  the Trustee shall maintain a balance of not less than
  $94,000  in the  Rehabilitation  Fund,  which  balance  shall not be  disbursed,
  reduced or  depleted  without the prior  written  approval of HUD which shall be
  attached to the required requisition.
  
       (e) The Partnership shall pay to the Management Agent a property management
  fee for the leasing  and  management  of the Project in an amount in  accordance
  with the Management  Agreement.  The term of the Management  Agreement shall not
  exceed one year. If the Management  Agent is an Affiliate of the General Partner
  then commencing with the termination of the Operating  Deficit  Guarantee period
  referenced in Section 6.2(b),  in any year in which the Project has an Operating
  Deficit, 40% of the management fee will be deferred ("Deferred Management Fee").
  Deferred  Management  Fees, if any, shall be paid to the Management Agent solely
  in  accordance  with  and to the  extent  permitted  by  Section  11.1  of  this
  Agreement.
  
       (1) The General  Partner shall,  upon receiving any request of the Mortgage
  lender  requesting  such  action,  dismiss  the  Management  Agent as the entity
  responsible  for  management  of the Project  under the terms of the  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,  or in the event of any  misconduct by the  Management  Agent or its
  failure  to  exercise  reasonable  care  in  the  discharge  of its  duties  and
  obligations as Management Agent.
  
       (2) The  appointment  of any successor  Management  Agent is subject to the
  Consent  of the  Limited  Partner  which  may only be sought  after the  General
  Partner has  provided  the Limited  Partner  accurate  and  complete  disclosure
  respecting the proposed Management Agent.
  
       (f) The Partnership  shall pay to the Limited Partner a fee (the "Reporting
  Fee") commencing in 1997 equal to 10% of the Cash Flow From Operations but in no
  event less than $5,000 per year for the Limited Partner's services in monitoring
  the  operations  of the  Partnership  and for  services in  connection  with the
  Partnership's  accounting  matters and  assisting  with the  preparation  of tax
  returns and the reports  required in Sections  14.2 and 14.3 of this  Agreement.
  The  Reporting  Fee shall be  payable  each  calendar  year upon  release by the
  Trustee in  accordance  with the Trust  Indenture and shall be payable from Cash
  Flow From  Operations  in the manner and  priority  set forth in Section 11.1 of
  this Agreement; provided, however, that if in any year Cash Flow From Operations
  is insufficient to pay the full $5,000,  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, as provided in Section 11.1, or sufficient
  Sale or Refinancing Proceeds, as provided in Section 11.2.
  
       (g) The Partnership shall pay to Urban Residential  Development Corporation
  an  Incentive  Management  Fee  equal to 45% of the  available  Cash  Flow  From
  Operations  in  accordance  with Section 11.1 of this  Agreement 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  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 Incentive Management Fee shall be payable each calendar year
  upon release by the Trustee in accordance  with the Trust Indenture and shall be
  payable from Cash Flow From  Operations  in the manner and priority set forth in
  Section 11.1. If the Incentive  Management  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 the other provisions of this Agreement, and with the approval of
  the Special  Limited  Partner,  the  General  Partner  shall have the  following
  powers:
  
       (a) In the  Partnership's  name and on its 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 on its 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,
  contractors,  agents,  brokers,  accountants and attorneys, on such terms as the
  General Partner shall determine;
  
       (c) In the  Partnership's  name and on its 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 on its 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 LIHTC compliance;
  
       (e) In the  Partnership's  name and on its 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; and
  
       (g) In the  Partnership's  name and on its 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 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) 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) Except as provided in the  Indenture of Trust,  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 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 Consent
  of the Limited  Partner the General  Partner and/or the Special  Limited 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 Patner, 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 LIHTC.
  
       Section 9.7 Duties of General  Partner.  The General Partner agrees that it
  shall at all times:
  
       (a) 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;
  
       (b) 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;
  
       (c) 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;
  
       (d) 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;
  
       (e) Comply with all Code and state rules and regulations for rental housing
  and LIHTC;
  
       (f) Use its best efforts to keep the Project and Project dwelling units, in
  decent,  safe, sanitary and good condition,  repair and working order,  ordinary
  use and  obsolescence  excepted,  and make or cause to be made from time to time
  all necessary repairs thereto  (including  external and structural  repairs) and
  renewals and replacements thereof;
  (g) Permit,  and cause the Management Agent to permit,  the Limited Partner
  and its  representatives to have access to the Project and personnel employed by
  the Partnership and by the Management Agent who are concerned with management of
  the Project at all reasonable  times during normal business hours and to examine
  all Tax Credit compliance data; and
  
       (h) 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 Special Limited Partner,  General  Partner,  an Affiliate of the
  Special  Limited  Partner or 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 which are not Affiliates of
  the  General  Partner  or the  Special  Limited  Partner,  and  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) Except for the Incentive  Management Fee,  reimbursement to the General
  Partner, or the Special Limited Partner, or any of their Affiliates of operating
  cash  expenses  pursuant  to  Subsection  (a)  hereof  shall be  subject  to the
  following:
  
       (1) No such  reimbursement  shall be  permitted  for services for which the
  Special  Limited  Partner or the General  Partner or any of their  Affiliates is
  entitled to compensation by way of a separate fee; and
  
       (2) 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 Special Limited Partner
  or the  General  Partner or any of their  Affiliates.  For the  purposes of this
  Section  9.8(b)(2),  "controlling  person" includes,  but is not limited to, any
  Person,  however titled,  who performs functions for the Special Limited Partner
  or the  General  Partner  or any of their  Affiliates  similar  to those of: (i)
  chairman or member of the board of directors; (ii) executive management, such as
  president,  vice  president  or senior vice  president,  corporate  secretary or
  treasurer;  (iii) senior management,  such as the vice president of an operating
  division who reports directly to executive management;  or (iv) those holding 5%
  or more equity  interest in such Special  Limited  Partner or General Partner or
  any of their  Affiliates  or a person  having  the  power to direct or cause the
  direction of such  Special  Limited  Partner or General  Partner or any of their
  Affiliates,  whether through the ownership of voting securities,  by contract or
  otherwise.
  
       Section 9.9 General  Partner  Expenses.  The Special Limited Partner or the
  General Partner or any of their  Affiliates  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
  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 the
  Limited Partner.
  (b) The Partnership  Agreement and the Project  Documents are in full force
  and effect and neither the  Partnership  nor the General Partner is in breach or
  violation of any provisions thereof.
  
       (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  Improvements  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) No Partner has or will have any personal  liability  with respect to or
  has or will have personally guaranteed the payment of the Mortgage.
  
       (f) The  Partnership is in 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.
  
       (g) 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.
  
       (h) 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.
  
       (i) A builder's risk insurance  policy in favor of the Partnership  will be
  and is in full force and effect until Completion of Rehabilitation.
  
       (j) 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 in  amounts  and with  insurers
  satisfactory to Urban Residential Finance Authority. All such 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.
  (k) The Management Agent shall obtain a fidelity bond or a blanket position
  bond to minimally include (1) comprehensive  employee dishonesty,  disappearance
  and destruction, covering all principals of the Management Agent and all persons
  or positions which manage the Project's  assets,  including,  but not limited to
  rent, bank accounts and accounting records; (2) naming the Limited Partner as an
  additional  loss payee;  and (3)  insuring the Project for an amount equal to at
  least two (2) months of the Project's gross potential  income plus the Project's
  total tenant security deposit liability.
  
       (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 based on the Phase I  Environmental  Report prepared for this Project:
  (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)  The  General  Partner  has not  executed  and  will  not  execute  any
  agreements with provisions contradictory to, or in opposition to, the provisions
  of this Agreement.
  
       (n) Delivery of 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  constitute  or 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 LIHTC
  to  commence  in  accordance  the Code,  the  Project  will  satisfy the Minimum
  Set-Aside Test.
  
       (q) As of the  date of  this  Agreement  all  accounts  of the  Partnership
  required to be maintained under the terms of the Project  Documents,  including,
  without limitation,  any account for replacement reserves,  are currently funded
  to required levels, including levels required by any authority.
  
       (r) The General Partner has not lent or otherwise advanced any funds to the
  Partnership  other than its  Capital  Contribution  and the  Partnership  has no
  unsatisfied  obligation to make any payments of any kind to the General  Partner
  or any Affiliate thereof outstanding as of the date of this Agreement.
  
       (s) No event has occurred  which with the giving of notice,  the passage of
  time or both  would  constitute  a  material  default  under any of the  Project
  Documents.
  
       (t) No event or  proceeding,  including,  but not  limited  to,  any  legal
  actions or  proceedings  before any court,  commission,  administrative  body or
  other  governmental  authority,  and 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:  (1)  materially  or  adversely
  affected the operation of the  Partnership or the Project  (except to the extent
  the funds are  available  to the  Partnership  to  correct or cure such event or
  proceeding); (2) 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 (3) 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.
  
       (u) 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 affect the ability of the Limited  Partner
  to obtain the anticipated benefits of its investment in the Partnership.
  
       (v) The Special  Limited  Partner and/or the General  Partner has and shall
  maintain a net worth  equal to at least  $500,000  computed in  accordance  with
  generally accepted accounting principles.
  
       The  Special  Limited  Partner  or 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 9.11.
  
                                      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 98% to the Limited  Partner,  1% to the Special 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
  the  related  Sale  or  Refinancing   Proceeds,   but  after  giving  effect  to
  Distributions  of Cash Flow From  Operations and allocations of other Income and
  Losses  pursuant  to this  Article X up to the date of the Sale or  Refinancing)
  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  Limited
  Partner's and Special  Limited  Partner's  positive  Capital  Account balance to
  their  Capital  Contribution  and to increase the Limited  Partner's and Special
  Limited  Partner's  positive Capital Account balance to an amount equal to their
  Capital  Contribution,  shall be  allocated  to the Limited  Partner and Special
  Limited Partner, as applicable;
  
       (3) Third, an amount of Income sufficient to increase the General Partner's
  positive Capital Account balance to an amount equal to its Capital Contribution;
  and
  
       (4) The  balance,  if any, of such  Income  shall be  allocated  50% to the
  Limited  Partner,  25% to the General  Partner  and 25% to the  Special  Limited
  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 the
  related 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 up to the date of the Sale or  Refinancing)  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  98% to the Limited
  Partner, 1% to the Special 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 the  Limited  Partner if and to the
  extent that such allocation would create or increase an Adjusted Capital Account
  Deficit for the Limited Partner.  In the event an allocation of 98% 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 98% 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 shall be allocated 98% of the items
  of  Income  not  arising  from a Sale  or  Refinancing  and  98% 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  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 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 an 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
  98% to the  Limited  Partner,  1% to the Special  Limited  Partner and 1% to the
  General Partner.
  
       (f) Any  Partner  Nonrecourse  Deductions  for any  fiscal  year  shall  be
  specially  allocated  to the  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  734(b) or Code  Section  743(b) is
  required,  pursuant to Treasury Regulations Section  1.704-1(b)(2)(iv)(m)(2)  or
  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  Partners 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:
  
       (1) Such  interest  income  shall be  specially  allocated  to the  Limited
  Partner to whom such promissory note relates; and
  
       (2) 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  investment  tax  credit
  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
  investment tax credit 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).
  (k) Any income,  gain,  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 among 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
  10.2(c),  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 this Article X (other than the
  Regulatory  Allocations),  with the Consent of the Limited Partner,  the General
  Partner shall make such offsetting  special  allocations of Partnership  income,
  gain,  loss,  or  deduction  in whatever  manner the General  Partner,  with the
  Consent of the  Limited  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 10.1,  10.2(a),  10.2(b),
  10.3(h),  10.3(i),  10.3(j),  10.3(k),  10.3(l),  10.3(m),  10.3(n) and 10.5. In
  exercising its authority under this 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).
  Section 10.5 Other Allocation Rules.
  
       (a) The basis (or cost) of any  Partnership  investment tax credit 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
  98% to the  Limited  Partner,  1% to the Special  Limited  Partner and 1% to the
  General Partner.
  
       (b) In the event Partnership  investment tax credit 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 (1) the reduction in the adjusted tax basis (or
  cost) of such property  pursuant to Code Section 50(c), over (2) 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 and  Section  10.2(a)  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
  Partner with the Consent of the Limited  Partner,  using any permissible  method
  under Code Section 706 and the Treasury Regulations thereunder.
  
       (d) Solely for purposes of determining a Partner's  proportionate  share of
  the "excess  nonrecourse  liabilities" of the Partnership  within the meaning of
  Treasury   Regulations   Section 1.752-3(a)(3),   the  Partners'   interests  in
  Partnership  profits are as  follows:  Limited  Partner:  98%;  Special  Limited
  Partner: 1%; General Partner: 1%.
  
       (e) To the  extent  permitted  by  Section  1.704-2(h)(3)  of the  Treasury
  Regulations, the General Partner shall endeavor to treat Distributions as having
  been made from the proceeds of a Nonrecourse  Liability or a Partner Nonrecourse
  Debt only to the extent  that such  Distributions  would  cause or  increase  an
  Adjusted Capital Account Deficit for any Partner who is not a General Partner.
  
       Section 10.6 Tax Allocations:  Code Section 704(c). In accordance with Code
  Section 704(c) and the Treasury Regulations thereunder,  income, gain, 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 Section 1.25(a) hereof).
  
       In the event the Gross  Asset  Value of any  Partnership  asset is adjusted
  pursuant to Section  1.25(b)  hereof,  subsequent  allocations of income,  gain,
  loss,  and  deduction  with  respect  to such asset  shall  take  account of any
  variation  between  the  adjusted  basis of 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  and the  Special  Limited  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.  In the event that the
  Interest of the Limited  Partner  hereunder is at any time held by more than one
  Limited  Partner  all 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 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.
  
       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
  Regulations  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, 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.
  
                                     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 pay the Deferred  Management Fee, if any, but in no event shall this
  payment exceed 50% of the Cash Flow From Operations;
  
       (b) To pay the current  Reporting Fee and then to pay any accrued Reporting
  Fees which have not been paid in full from previous years;
  
       (c) To pay the  Development  Fee in  accordance  with the  Development  Fee
  Agreement;
  
       (d) To pay the Operating Loans advanced by the Special Limited Partner,  if
  any, as referenced in Section  6.2(b) of this  Agreement,  limited to 50% of the
  Cash Flow From  Operations  remaining  after  reduction  for the  payments  made
  pursuant to subsections (a) through (c) of this Section 11.1;
  
       (e) To pay the Incentive  Management Fee equal to 45% of the Cash Flow From
  Operations   remaining  after  reduction  for  the  payments  made  pursuant  to
  subsections (a) through (d) of this Section 11.1; and
  
       (f) The balance of the remaining  Cash Flow From  Operations to the Limited
  Partner in an amount equal to 10.9%,  to the General  Partner in an amount equal
  to 3.6% and to the Special Limited Partner in an amount equal to 85.5%.
  
       Section  11.2  Distribution  of  Sale  or  Refinancing  Proceeds.  Sale  or
  Refinancing  Proceeds shall be distributed  in the following  order,  subject to
  HUD's land use restriction:
  
       (a) To the  payment  of the  Mortgage  Note and  other  matured  debts  and
  liabilities  of the  Partnership,  other than accrued  payments,  debts or other
  liabilities owing to Partners or former Partners;
  
       (b) To any  accrued  payments,  debts  or  other  liabilities  owing to the
  Partners or former Partners,  including,  but not limited to, accrued  Reporting
  Fees and Operating Loans, to be paid prorata if necessary;
  (c) To the  establishment of any reserves which the General  Partner,  with
  the  Consent  of the  Limited  Partner,  shall  deem  reasonably  necessary  for
  contingent,   unmatured  or  unforeseen   liabilities   or  obligations  of  the
  Partnership;
  
       (d) To the Limited Partner in an amount equal to its Capital Contribution;
  
       (e) To the General  Partner and the  Special  Limited  Partner in an amount
  equal to their Capital Contribution; and
  
       (f) Thereafter,  50% to the Limited Partner, 25% to the General Partner and
  25% to the Special Limited Partner.
  
       Section  11.3  Additional  Refinancing.  Notwithstanding  the  Distribution
  provisions of Section 11.2 of this  Agreement,  the Partners  recognize that the
  Partnership  is seeking to  refinance or add  additional  debt of up to $900,000
  with the first $900,000 of available refinance proceeds, or additional financing
  funds if applicable,  distributed as follows: to the Special Limited Partner and
  General  Partner  for  payment  of any  unpaid  Development  Fee;  and  then for
  reimbursement of expenses.
  
                                     ARTICLE XII
  
                           TRANSFERS OF LIMITED PARTNER'S
                            AND SPECIAL LIMITED PARTNER'S
                             INTEREST IN THE PARTNERSHIP
  
       Section 12.1 Assignment of Limited  Partner's and Special Limited Partner's
  Interest.  The Limited  Partner and Special  Limited  Partner shall not have the
  right to assign all or any part of their respective Interests 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
  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 the Assignee
  for the  Assignee's  own account for  long-term  investment  and not with a view
  toward resale, fractionalization, division or distribution thereof.
  
       THE LIMITED PARTNERSHIP  INTEREST DESCRIBED HEREIN HAVE 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 or Special 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 to such assignment are satisfied.
  
       Section 12.3 Invalid Assignment. Any purported assignment of an Interest of
  a Limited Partner or Special  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 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 or Special Limited
  Partner.
  
       (a) An  Assignee  shall not have the right to become a  Substitute  Limited
  Partner or Substitute  Special  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  transferee  of a Limited  Partner's or Special  Limited
  Partner's  Interest in the  Partnership  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 a transferee and transferor  jointly
  advise the  General  Partner in writing  of a  transfer  of an  Interest  in the
  Partnership, furnish the transferee with pertinent tax information at the end of
  each fiscal year of the Partnership.
  
       (c) The General  Partner may elect to treat a transferee  of a  Partnership
  Interest who has not become a Substitute Limited Partner as a Substitute Limited
  Partner,  or Substitute  Special Limited Partner as a Substitute Special Limited
  Partner,  as the case may be, in the place of its transferor  should the General
  Partner determine 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 or
  Special  Limited  Partner.   Upon  the  death,   dissolution,   adjudication  of
  bankruptcy,  insanity or  adjudication  of  incompetency of a Limited Partner or
  Special  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  constitute a successor as a transferee of its Interest in
  the  Partnership  and to join with such  transferee in making the application to
  substitute such transferee 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  respective  predecessors-in-interest  unless the
  General Partner shall so consent.
  
                                    ARTICLE XIII
  
                       WITHDRAWAL, REMOVAL AND REPLACEMENT OF
                                   GENERAL PARTNER
  
       Section 13.1  Withdrawal of General  Partner.  The General  Partner may not
  Withdraw  (other  than as a result of an  Involuntary  Withdrawal)  without  the
  Consent  of  the  Limited  Partner,  and,  to  the  extent  required,  of  Urban
  Residential Finance Authority and the State Tax Credit Agency.  Withdrawal shall
  be  conditioned  upon the  agreement  of one or more  Persons  who  satisfy  the
  requirements  of Section  13.5 of this  Agreement  to be admitted  as  successor
  General Partner(s).
  Section 13.2 Removal of General Partner.
  
       (a) 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;
  
       (C) Been convicted of, or entered into a plea of guilty to, a felony;
  
       (D) Made personal use of Partnership funds or properties;
  
       (E) Violated the terms of the Mortgage  Note,  and such  violation  prompts
  Urban  Residential  Finance  Authority 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) Failed to provide any loan, advance,  Capital Contribution or any other
  payment to the Partnership required under this Agreement;
  
       (G) Materially breached any representation,  warranty or covenant contained
  in this  Agreement,  or failed to perform any other action which may be required
  by this  Agreement  and  such  conduct  caused  the  Partnership  to  suffer  an
  uninsurable loss;
  
       (H)  Violated  any  federal or state tax law which  causes a  recapture  of
  LIHTC; or
  
       (I) Failed during any  six-month  period  during the  Compliance  Period to
  cause at least 85% of the total  apartment  units in the  Project to qualify for
  LIHTC, 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 by the Limited Partner 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 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.  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.
  
       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  shall have  consented  in writing to the  admission of such Person as a
  substitute General Partner;  (iii) 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 (iv) 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 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 by the General  Partner and the
  Partnership  prior to the effective  date of such event and shall be free of any
  obligation or liability incurred on account of the activities of the Partnership
  after such time.
  
       Section 13.5 Transfer of Interest. Except as otherwise provided herein, the
  General  Partner may not assign,  transfer,  mortgage or sell any portion of its
  interest in the Partnership,  or enter into any agreement as the result of which
  any Person shall obtain an Interest 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.
  
       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 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).
  
      (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
  
       (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
  their  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:  (1) a
  balance  sheet as of the end of such  fiscal  year  and  statements  of  income,
  Partners' equity and changes in financial position for 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;  (2)
  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;  (3) 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
  appropriate in the circumstances;  (4) a copy of the Project's rent roll for the
  most recent  calendar  quarter;  (5) a statement  signed by the General  Partner
  indicating  the  number of  apartment  units  which are  occupied  by  Qualified
  Tenants;  and (6) 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.
  
       Section 14.3 Other Reports.  The General  Partner shall also provide to the
  Limited Partner:
  
       (a)  During the  period of  construction,  by the tenth day of each month a
  copy of the previous month's  Construction  Loan draw request and the inspecting
  architect's certification;
  
       (b) During the rent-up  phase,  and  continuing  until the end of the first
  six-month  period  during which the Project has a sustained  occupancy of 95% or
  better, by the tenth day of each month within such period a copy of the previous
  month's rent roll (through the last day of the month), a tenant LIHTC compliance
  worksheet similar to the monthly initial tenant certification worksheet included
  in Exhibit "G" attached hereto and  incorporated  herein by this reference,  and
  copies of all initial tenant files including completed  applications,  completed
  questionnaires or checklists of income and assets,  documentation of third party
  verification of income and assets,  income  certification forms (LIHTC specific)
  and executed  lease  agreements  collected by the Management  Agent,  or General
  Partner, verifying each tenant's eligibility as a Qualified Tenant;
  
       (c) A  quarterly  tax credit  compliance  report  similar to the  worksheet
  included in Exhibit "G". 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  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 LIHTC for that year;
  
       (e) If the Project receives a reservation of LIHTC in one year but will not
  complete the  construction  and rent-up until a later year, the General  Partner
  will provide to the Limited  Partner by December 31 of the year during which the
  reservation  is  received  an  audited  cost  certification  together  with  the
  accountant's  work  papers  verifying  that the  Partnership  has  expended  the
  requisite 10% of the  reasonably  expected cost basis to meet the carryover test
  provisions of Section 42 of the Code;
  
       (f)  During  the  Compliance  Period,  no  later  than  the  day  any  such
  certification is filed, copies of any certifications  which the Partnership must
  furnish to  federal  or state  governmental  authorities  administering  any Tax
  Credit  program  including,  but not  limited  to,  copies of all annual  tenant
  recertifications required under Section 42 of the Code;
  
       (g) On or before 30 days  after  each  calendar  quarter  of every year the
  Partnership  shall send to the Limited  Partner a report on  operations,  in the
  form attached hereto as Exhibit "G", an unaudited income  statement  showing all
  activity in the reserve accounts  required to be maintained  pursuant to Section
  VIII of this  Agreement and a Tax Credit  compliance  report  similar in form to
  that attached hereto as Exhibit "G";
  
       (h) By the annual renewal date of each and every year, an executed original
  or certified copy of each and every  insurance  policy  required by the terms of
  this Agreement;
  (i) On or before March 15th of each calendar  year,  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
  
       (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 9.11 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 or  Special  Limited
  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 or
  Special  Limited  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 or
  Special  Limited  Partner,  and  failure to so pay shall  constitute  a material
  default of the General Partner hereunder. In addition, if the General Partner or
  Special  Limited  Partner  shall so fail to pay, the General  Partner or Special
  Limited Partner and their Affiliates shall forthwith cease to be entitled to the
  annual  Incentive  Management  Fee and to the  payment  of any  Cash  Flow  From
  Operations to which the General Partner or Special Limited Partner may otherwise
  be entitled  hereunder.  Such payments of the Incentive  Management Fee and Cash
  Flow From Operations shall be restored only upon payment of such damages in full
  and any amount of such damages not so paid shall be deducted against payments of
  the Incentive  Management Fee and Cash Flow From Operations otherwise due to the
  General Partner or its Affiliates.
  
       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  inspection  of the property,  a review of the
  office and tenant files and an interview with the property manager.  The Limited
  Partner may, in its sole  discretion,  cancel all or any part of the annual site
  visit.
  
       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.
  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 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, Bankruptcy,  dissolution, death or insanity of
  the General Partner,  unless (1) at the time there is at least one other General
  Partner who will  continue as General  Partner,  or (2) within 90 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; or
  
       (c) The Partnership becomes subject to 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  Mortgage  Note or any other  agreement  with or rule or
  regulation of Urban  Residential  Finance  Authority to which the Partnership is
  subject.
  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(c),  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(d),  Section  11.2(e)  and
  Section 11.2(f) 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's  taxable  year in which  such  liquidation  occurs,  such  General
  Partner shall pay to the Partnership the lesser of:
  
       (1) the  amount  necessary  to  restore  such  deficit  balance  to zero in
  compliance with Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(3); or
  
       (2) 1.01% of the Capital Contributions.
  (3) 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
  Partnership's  adjusted basis in such assets for book purposes.  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 manner  described in Section 10.2,  and such assets
  shall then be  distributed to the Partners as provided  herein.  In applying the
  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
  
       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 provisions herein. Notwithstanding the foregoing, no
  amendment shall change the Partnership to a 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 and elect a  substitute  General
  Partner as provided in this Agreement;
  
       (3) Elect a successor  General  Partner upon the  Withdrawal of the General
  Partner;
  
       (4) Approve, but not initiate, the dissolution of the Partnership; or
  
       (5) 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:  (a) at any time by the General Partner;  or (b) upon the General
  Partner's  receipt of a written or facsimile  request  from the Limited  Partner
  setting forth the purpose of such meeting.  Within ten days after receipt of the
  Limited  Partner's  written or  facsimile  request  for a meeting,  the  General
  Partner  shall provide all Partners  with written  notice of the meeting  (which
  shall be by telephone  conference,  or 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 or  facsimile
  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
  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 it 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:  URBAN RESIDENTIAL  MANAGEMENT,  INC. 100 Peachtree
  Street, N.W., Ste. 400 Atlanta, Georgia 30303
  
       To the Limited Partner:  WNC HOUSING TAX CREDIT FUND V, L.P.,  SERIES 3 c/o
  WNC & Associates, Inc. 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 and inure to the benefit of the  successors and
  assigns of the Partners.
  
       Section  17.5  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 17.6 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.
  
       (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 of Limited  Partnership 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 17.7  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 17.8 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 17.9 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 17.10 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
  to Persons  or  circumstances  other than those as to which it is held  invalid,
  shall not be affected thereby.
  
       Section 17.11 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  17.12 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 17.13  Governing Law. This Agreement and its  application  shall be
  governed by the laws of the State.
  
       Section  17.14  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  17.15  Receipt  of  Correspondence.  The  Partners  agree that the
  General Partner shall send to the Limited  Partner a copy of any  correspondence
  relative to the Project's  noncompliance with the Mortgage Note, relative to the
  acceleration  of the Mortgage  Note and/or  relative to the  disposition  of the
  Project.
  
       IN  WITNESS  WHEREOF,  this  Amended  and  Restated  Agreement  of  Limited
  Partnership of CASCADE PINES,  L.P. II, a Georgia limited  partnership,  is made
  and entered into as of the day of , 1996.
  
                                      GENERAL PARTNER
  
                                      URBAN RESIDENTIAL MANAGEMENT, INC.
  
                                      By:     __________________________________
                                              Herbert Kohn, President
  
                                      WITHDRAWING ORIGINAL LIMITED PARTNER
  
                                      BRENCOR, INC.
  
                                      By:     ___________________________________
                            Robert A. Crowder, President
  
                                      SPECIAL LIMITED PARTNER
  
                                      BRENCOR, INC.
  
                                      By:     _______________________________
                            Robert A. Crowder, President
  
                                      LIMITED PARTNER
  
                                      WNC HOUSING TAX CREDIT FUND V, L.P.,
                                        SERIES 3
  
                                      By:     WNC & ASSOCIATES, INC.
                                              General Partner
  
                                              By:      _________________________
                                                       John B. Lester, Jr.,
                                                       President
  EXHIBIT A TO PARTNERSHIP AGREEMENT
  
                                  LEGAL DESCRIPTION
  
       All that  tract or parcel of land  lying and being in Land Lots 218 and 231
  of the 14th  District of Fulton  County,  Georgia,  and being more  particularly
  described as follows:
  
       BEGINNING at an iron pin on the  southwest  side of Harbin Road,  said iron
  pin being 200 feet  northwesterly,  as measured along the southwesterly  side of
  Harbin Road from the intersection of the southwesterly  side of Harbin Road with
  the  northwesterly  side of  Campbellton  Road; and from said point of beginning
  running  thence south 73 degrees 47 minutes 45 seconds  west,  399.85 feet to an
  iron pin; thence south 48 degrees 44 minutes 30 seconds west,  199.30 feet to an
  iron pin; thence north 27 degrees 18 minutes 15 seconds west,  149.33 feet to an
  iron pin; thence south 48 degrees 22 minutes 15 seconds west, 1204.96 feet to an
  iron pin;  thence  south 39 degrees 39 minutes 15 seconds  east;  300 feet to an
  iron pin; thence south 50 degrees 14 minutes 30 seconds west,  199.98 feet to an
  iron pin;  thence south 39 degrees 39 minutes 15 seconds east,  53.65 feet to an
  iron pin located on the south line of said Land Lot 218; thence north 88 degrees
  42  minutes  30  seconds  west,  along  the south  line of said Land Lot 218,  a
  distance of 228.37 feet to an iron pin;  thence  north 2 degrees 20 minutes east
  600.32 feet to an iron pin; thence south 87 degrees 18 minutes west,  62.43 feet
  to an iron pin;  thence north 3 degrees 07 minutes west,  390.09 feet to an iron
  pin; thence north 15 degrees 40 minutes west, 210.11 feet to an iron pin; thence
  north 89 degrees 29 minutes 30 seconds west,  219.86 feet to an iron pin; thence
  north 15 degrees 47 minutes 43 seconds west,  220.85 feet to an iron pin; thence
  south 88 degrees 30 minutes 30 seconds east 1364.46 feet to an iron pin;  thence
  north 80 degrees 04 minutes 45 seconds east,  615.47 feet to an iron pin located
  on the southwest  side of Harbin Road;  thence south 26 degrees 50 minutes east,
  along the  southwest  side of Harbin  Road,  188.10  feet to an iron pin and the
  point of BEGINNING.
  
       TOGETHER  WITH  a  non-exclusive  easement  for  ingress  and  egress  more
  particularly described as follows:
  
       ALL THAT  TRACT or  parcel  of land  lying and being in Land Lot 218 of the
  14th District of Fulton County,  Georgia, and being more particularly  described
  as follows:
  
       BEGINNING  at an  iron  pin  located  on  the  northwest  right  of  way of
  Campbellton Road 32.85 feet northeasterly from the intersection of the northwest
  right of way of Campbellton Road with the south line of Land Lot 218, which line
  is also the north  line of Land Lot 219;  running  thence  north 39  degrees  39
  minutes 15 seconds  west,  500 feet to an iron pin;  thence  north 48 degrees 22
  minutes  15 seconds  east,  60.02  feet to a point;  thence  south 39 degrees 39
  minutes 15 seconds east, 503.50 feet to a point located on the northwest side of
  the right of way of Campbellton Road; thence  southwesterly  along the northwest
  right  of way of  Campbellton  Road,  60 feet to an iron  pin and the  point  of
  BEGINNING.
  
       LESS AND EXCEPT therefrom the following tract or parcel of land:
  
       Beginning at a point on the northern right of way of Campbellton Road, S.W.
  1,140  feet  northeasterly  as  measured  along  said  right  of  way  from  the
  northeastern  intersection  of the rights of way of Campbellton  Road,  S.W. and
  Childress  Drive,  S.W.  said point being 32.85 feet  northeasterly  as measured
  along the northern right of way of  Campbellton  Road from the  intersection  of
  said right of way and the line  forming the boundary of Land Lots 218 and 219 of
  the 14th District of Fulton County, Georgia; thence running 5 feet northwesterly
  along the property line of 2909 Campbellton Road along a bearing of N 39 degrees
  39 minutes 15 seconds W to a point on said property line; thence running 60 feet
  along a  bearing  of N 50  degrees  14  minutes  30  seconds E to a point on the
  northeast  property  line  of  2909  Campbellton  Road;  thence  running  5 feet
  southeasterly  along  said  property  line  along a bearing  of S 39  degrees 39
  minutes  15  seconds E to a point on the  northern  right of way of  Campbellton
  Road, S.W.; thence running 60 feet southwesterly along the northern right of way
  of Campbellton  Road, S.W. to the Point of Beginning,  and containing 300 square
  feet (0.0069 acres).
  
       Being the same property  conveyed by Warranty Deed from John Hancock Mutual
  Life Insurance Company to Deerfield  Associates,  a Georgia Limited  Partnership
  dated April 17, 1979,  filed for record April 18, 1979 and recorded in Deed Book
  7221,  page 470,  in the  Office of the  Clerk of the  Superior  Court of Fulton
  County, Georgia.
  EXHIBIT B TO PARTNERSHIP AGREEMENT
  
                               FORM OF LEGAL OPINION
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 
  c/o WNC & Associates, Inc.
  3158 Redhill Avenue, Suite 120
  Costa Mesa, California  92626
  
  RE:      CASCADE PINES, L.P. II
  
  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 3,
  a California limited  partnership (the "Limited Partner") in CASCADE PINES, L.P.
  II (the  "Partnership"),  a Georgia limited  partnership formed to own, develop,
  (construct/-rehabilitate)   finance  and  operate  an   apartment   complex  for
  low-income persons (the "Apartment Complex") in Atlanta, Fulton County, Georgia.
  The general partner(s) of the Partnership (is/are) URBAN RESIDENTIAL MANAGEMENT,
  INC. (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.
  
       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
  [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.
  _____________________,    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 a limited  partnership  duly  formed  and  validly
  existing under the laws of the State of Georgia.
  
       (c) The  Partnership  is validly  existing under and subject to the laws of
  Georgia 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 Partnership  Agreement by the General
  Partner(s)  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 Partner(s) 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 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 Apartment  Complex,  the  Partnership or any General Partner which
  would  materially  adversely  affect the  condition  (financial or otherwise) or
  business of the Apartment Complex, the Partnership or any of the Partners of the
  Partnership.
  
       (g) The Limited  Partner has been admitted to the  Partnership as a limited
  partner of the Partnership  under  __________ law and are entitled to all of the
  rights of limited partners under the Partnership Agreement.  Except as described
  in the  Partnership  Agreement,  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  Partnership  Agreement,
  and the  lender of the  Mortgage  Loan will  look  only to its  security  in the
  Apartment Complex for repayment of the Mortgage Loan.
  
       (j) The Partnership owns a fee simple interest in the Apartment Complex.
  
       (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  Apartment
  Complex, and the Apartment Complex conforms to all applicable Federal, state and
  local land use, zoning, health, building and safety laws, ordinances,  rules and
  regulations.
  
       (l) The  Apartment  Complex 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 Apartment Complex 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 Apartment Complex 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 which
  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,
  
  - --------------------
  EXHIBIT C TO PARTNERSHIP AGREEMENT
  
                             CERTIFICATION AND AGREEMENT
  
       CERTIFICATION  AND  AGREEMENT  made as of the date written below by CASCADE
  PINES,  L.P.  II, a  Georgia  limited  partnership  (the  "Partnership");  URBAN
  RESIDENTIAL   MANAGEMENT,   INC.  (collectively  referred  to  as  the  "General
  Partner");  and BRENCOR, INC. (collectively referred to as the "Original Limited
  Partner")  for the benefit of WNC  HOUSING TAX CREDIT FUND V, L.P.,  SERIES 3, 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 Partner and the Original Limited Partner
  
       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
  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  Projected  Annual  Tax  Credits  (as such term is  defined  in the
  Partnership  Agreement Section 1.50) are $44,699 for 1997, $268,195 per year for
  each of the years 1998 through  2006,  and $223,496 for 2007,  which the General
  Partner has projected to be the total amount of LIHTC which will be allocated to
  the Investment Partnership by the Partnership, constituting 99% of the aggregate
  amount of LIHTC of  $2,681,950  to be  available to the  Partnership;  provided,
  however,  that if the Actual Tax Credit (as such term is defined in Section  1.3
  of the  Partnership  Agreement) for 1997 is greater (or less than) $44,699,  the
  Projected Tax Credit for the year 2007 shall be reduced (increased) by an amount
  equal to the amount by which the Actual  Tax  Credit for 1997  exceeds  (is less
  than) $44,699.
  
       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
  Investment  Partnership and WNC, 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.
  
       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 , 1996.
  
  PARTNERSHIP
  
  CASCADE PINES, L.P. II
  
  By:      URBAN RESIDENTIAL MANAGEMENT, INC.,
           General Partner
  
           By:
                    Herbert Kohn, President
  
  GENERAL PARTNER
  
  By:      URBAN RESIDENTIAL MANAGEMENT, INC.
  
           By:
                    Herbert Kohn, President
  
  ORIGINAL LIMITED PARTNER
  
  By:      BRENCOR, INC.
  
           By:
                    Robert A. Crowder, President
  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  3  ("Limited  Partner")  by  URBAN  RESIDENTIAL
  MANAGEMENT,  INC.,  General Partner of CASCADE PINES, L.P. II, a Georgia limited
  partnership  ("Partnership")  in accordance  with Section 7.2 of the Amended and
  Restated  Agreement  of Limited  Partnership  of the  Partnership  ("Partnership
  Agreement").
  
       Capitalized   terms  used  but  not   defined  in  this   General   Partner
  Certification  shall  have  the  meanings  given  to  them  in  the  Partnership
  Agreement.
  
       WHEREAS, the Limited Partner is scheduled to make a Capital Contribution to
  the Partnership;
  
       WHEREAS,  the Partnership  Agreement  requires the General Partner to issue
  this Certification prior to the Limited Partner's payment; and
  
       WHEREAS, the Limited Partner shall rely on this Certification in evaluating
  the continued merits of its investment in the Partnership;
  
       NOW, THEREFORE, to induce the Limited Partner to make its scheduled Capital
  Contribution to the Partnership,  the General Partner represents and warrants to
  the  Limited  Partner  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 the
  Limited Partner.
  
       (b) The Partnership  Agreement and the Project  Documents are in full force
  and effect and neither the  Partnership  nor the General Partner is in breach or
  violation of any provisions thereof.
  
       (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  Improvements  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) No Partner has or will have any personal  liability with respect to, or
  has or will have personally guaranteed the payment of, the Mortgage.
  
       (f) The  Partnership is in 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.
  
       (g) The Partnership owns the fee simple interest in the Project.
  
       (h) 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.
  
       (i) A builder's risk insurance  policy in favor of the Partnership  will be
  and is in full force and effect until Completion of Rehabilitation.
  
       (j) 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 in  amounts  and with  insurers
  satisfactory to Urban Residential Finance Authority. All such 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.
  
       (k) The Management Agent shall obtain a fidelity bond or a blanket position
  bond to minimally include (1) comprehensive  employee dishonesty,  disappearance
  and destruction, covering all principals of the Management Agent and all persons
  or positions which manage the Project's assets,  including,  but not limited to,
  rent, bank accounts and accounting records; (2) naming the Limited Partner as an
  additional  loss payee;  and (3)  insuring the Project for an amount equal to at
  least two (2) months of the Project's gross potential  income plus the Project's
  total tenant security deposit liability.
  
       (l) Except as otherwise  disclosed to the Limited  Partner in writing prior
  to the  execution  of the  Partnership  Agreement,  to the  best of the  General
  Partner's knowledge based on the Phase I Environmental  Report prepared for this
  Project:  (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)  The  General  Partner  has not  executed  and  will  not  execute  any
  agreements with provisions contradictory to, or in opposition to, the provisions
  of the Partnership Agreement.
  
       (n) Delivery of 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  constitute  or 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 LIHTC
  to  commence  in  accordance  the Code,  the  Project  will  satisfy the Minimum
  Set-Aside Test.
  
       (q) As of the  date of  this  Agreement  all  accounts  of the  Partnership
  required to be maintained under the terms of the Project  Documents,  including,
  without limitation,  any account for replacement reserves,  are currently funded
  to required levels, including levels required by any authority.
  
       (r) The General Partner has not lent or otherwise advanced any funds to the
  Partnership  other than its  Capital  Contribution  and the  Partnership  has no
  unsatisfied  obligation to make any payments of any kind to the General  Partner
  or any Affiliate thereof outstanding as of the date of this Agreement.
  
       (s) No event has occurred  which with the giving of notice,  the passage of
  time or both  would  constitute  a  material  default  under any of the  Project
  Documents.
  
       (t) No event or  proceeding,  including,  but not  limited  to,  any  legal
  actions or  proceedings  before any court,  commission,  administrative  body or
  other  governmental  authority,  and 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:  (1)  materially  or  adversely
  affected the operation of the  Partnership or the Project  (except to the extent
  the funds are  available  to the  Partnership  to  correct or cure such event or
  proceeding);  (2)  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 (3) 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.
  
       (u) 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.
  
       (v) The Special  Limited  Partner and/or the General  Partner has and shall
  maintain a net worth  equal to at least  $500,000  computed in  accordance  with
  generally accepted accounting principles.
  IN WITNESS  WHEREOF,  the undersigned  have set their hands to this General
  Partner Certification this day of 1996.
  
  URBAN RESIDENTIAL MANAGEMENT, INC.
  General Partner
  
  By:
           Herbert Kohn, President
  EXHIBIT E TO PARTNERSHIP AGREEMENT
  
                           FORM OF COMPLETION CERTIFICATE
  
              (to be used when construction [rehabilitation] completed)
  
                               COMPLETION CERTIFICATE
  
       The undersigned,  an architect duly licensed and registered in the State of
  Atlanta,  Fulton County,  Georgia, has prepared final working plans and detailed
  specifications  for CASCADE PINES,  L.P. II, a Georgia limited  partnership (the
  Partnership"),  between  WNC  HOUSING  TAX  CREDIT  FUND V,  L.P.,  SERIES 3, a
  California  limited  partnership  ("Limited  Partner")  and the  Partnership  in
  connection  with the  construction  [rehabilitation]  of improvements on certain
  real property located in Atlanta, Fulton County, Georgia (the "Improvements").
  
       The  undersigned  hereby  certifies  (i) that the  Improvements  have  been
  completed in accordance with the aforesaid plans and specifications, (ii) that a
  permanent  certificate  of  occupancy  and all other  permits  required  for the
  continued  use and occupancy of the  Improvements  have been issued with respect
  thereto by the governmental agencies having jurisdiction thereof, (iii) that the
  Improvements  are in compliance with all  requirements  and  restrictions of all
  governmental  authorities having jurisdiction over the Improvements,  including,
  without limitation,  all applicable zoning, building,  environmental,  fire, and
  health  ordinances,  rules  and  regulations  and  (iv)  that  all  contractors,
  subcontractors and workmen who worked on the Improvements have been paid in full
  except for normal retainages and amounts in dispute.
  
  - -----------------------------------
  Project Architect
  
  Date:  ____________________________
  
  Confirmed by:
  
  - -----------------------------------
  General Partner
  
  Date:  ____________________________
  EXHIBIT F TO PARTNERSHIP AGREEMENT
  
                             [ACCOUNTANT'S CERTIFICATE]
                              [Accountant's Letterhead]
  
  _______________, 199____
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 c/o WNC & Associates, Inc.
  3158 Redhill Ave., Suite 120
  Costa Mesa, California 92626
  
  RE:  Partnership
       Certification as to Amount
       of Eligible Tax Credit Base
  
  Gentlemen:
  
       In connection  with the acquisition by WNC HOUSING TAX CREDIT FUND V, L.P.,
  SERIES 3 (the "Limited  Partner") of a limited  partnership  interest in CASCADE
  PINES, L.P. II, a Georgia limited partnership (the  "Partnership")  which owns a
  certain  parcel  of  land  located  in  Atlanta,   Fulton  County,  Georgia  and
  improvements  thereon (the  "Project"),  the Limited  Partner has  requested our
  certification as to the amount of low-income housing tax credits ("Tax Credits")
  available  with respect to the Project under Section 42 of the Internal  Revenue
  Code of 1986, as amended (the "Code").  Based upon our review of [the  financial
  information provided by the Partnership] of the Partnership,  we are prepared to
  file the Federal  information tax return of the Partnership  claiming annual Tax
  Credits in the amount of $_______________,  which amount is based on an eligible
  basis  (as   defined  in  Section   42(d)  of  the  Code)  of  the   Project  of
  $________________,  a qualified  basis (as defined in Section 42(c) of the Code)
  of the Project of $_________________ and an applicable percentage (as defined in
  Section 42(b) of the Code) of _____%.
  
  Sincerely,
  
  - -------------------------
  REPORT OF OPERATIONS
  
                   QUARTER ENDED:____________________________,199X
  
  LOCAL PARTNERSHIP:
  
  GENERAL PARTNER:
  
  FIRM NAME:
  
  ADDRESS:
  
  CITY, STATE, ZIP:
  
  PHONE:
  
  PROPERTY NAME:
  
  ADDRESS:
  
  CITY, STATE, ZIP:
  
  RESIDENT MANAGER:
  
  PHONE:
  
  ACCOUNTANT:
  
  FIRM:
  
  ADDRESS:
  
  CITY, STATE, ZIP:
  
  PHONE:
  
  MANAGEMENT COMPANY
  
  ADDRESS:
  
  CITY, STATE, ZIP:
  
  PHONE:
  
  CONTACT:
  
                                OCCUPANCY INFORMATION
  
  A.     Number of Units ______ Number of RA Units _____
  
         Number of Section 8 Tenants  ________
  
  B.     Occupancy for the Quarter has: Increased____Decreased____
  
                                        Remained the Same ______
  
  C.     Number of:  Move-Ins______  Move-Outs________  % of Occupancy _______
  
  D.     Average length of tenant residency: 1-6 months_______6-12 months _______
  
                        1-3 years________Over 4 years_______
                    
  E.     Number of Basic rent qualified applicants on waiting list:
  
  F.     If the  apartments  are less than 90% occupied,  please  explain why and
         describe what efforts are being made to lease-up remaining units.
  
  G.     On site manager:   Full Time__________  Part Time____________.
  
         If part-time, the number of hours per week_____________.
  OPERATIONAL INFORMATION
  
                  Rent Schedule and Increases from Previous Quarter
  
              ---------   ------------  -------------------------  -----------
               Number     Monthly Rent          Rent Increases      Effective
                                        -------------------------
               of Units   Basic / Market   Amount         Percent       Date
              ---------   ------------- -------------------------  -----------
  
  - ----------  ---------   -------------  --------------   -------  -----------
  1 Bedroom
  - ----------  ---------   -------------  --------------   ------- ------------
  
  - ----------  ---------   -------------  --------------   ------- ------------
  2 Bedroom
  - ----------  ---------   -------------  --------------   ------- ------------
  
  - ----------  ---------   -------------  --------------   ------- ------------
  3 Bedroom
  - ----------  ---------   -------------  --------------   ------- ------------
  
                                PROPOSED MAINTENANCE
  
  - ------------------------------------------------------------------------------
                                         Completed      Funded by
           Type            Description      or        Operations or    Amount
                                          Planned       Reserves
  - -------------------------------------------------------------------------------
  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:
  
  - ------------------------------------------------------------------------------
  
  - ------------------------------------------------------------------------------
  
  - ------------------------------------------------------------------------------
  CONDITION OF PROPERTY
  
  THE OVERALL APPEARANCE OF THE BUILDING(S) IS:
  
      Excellent ______    Good ______       Fair ______       Bad  _______
  
  THE OVERALL APPEARANCE OF THE GROUNDS IS:
  
       Excellent ______   Good ______       Fair ______       Bad ________
  
  EXTERIOR CONDITION (Please Check Appropriate Box)
  - -------------------------------------------------------------------------------
  Type of Condition       Excellent       Good      Fair      Problems/Comments
  - ---------------------------------------------------------- -------------------
  - ------------------------------------------------------------------------------
  Signage
  - ------------------------------------------------------------------------------
  - ------------------------------------------------------------------------------
  Parking Lots
  - ------------------------------------------------------------------------------
  Office/Storage
  - ------------------------------------------------------------------------------
  Equipment
  - ------------------------------------------------------------------------------
  Community Building
  - ------------------------------------------------------------------------------
  Laundry Room
  - ------------------------------------------------------------------------------
  Benches/Playground
  - ------------------------------------------------------------------------------
  Lawns, Plantings
  - ------------------------------------------------------------------------------
  Drainage, Erosion
  - ------------------------------------------------------------------------------
  Carports
  - ------------------------------------------------------------------------------
  Fences
  - ------------------------------------------------------------------------------
  Walks/Steps/Guardrails
  - ------------------------------------------------------------------------------
  Lighting
  - ------------------------------------------------------------------------------
  Painting
  - ------------------------------------------------------------------------------
  Walls/Foundation
  - ------------------------------------------------------------------------------
  Roof/Flashing/Vents
  - ------------------------------------------------------------------------------
  Gutters/Splashblocks
  - ------------------------------------------------------------------------------
  Balconies/Patios
  - ------------------------------------------------------------------------------
  Doors Windows/Screens
  - ------------------------------------------------------------------------------
  Elevators
  - ------------------------------------------------------------------------------
  
  INTERIOR CONDITION
  - ------------------------------------------------------------------------------
  Stairs
  - ------------------------------------------------------------------------------
  Flooring
  - ------------------------------------------------------------------------------
  Doors/Cabinets/Hardware
  - ------------------------------------------------------------------------------
  Drapes/Blinds
  - ------------------------------------------------------------------------------
  Interior Painting
  - ------------------------------------------------------------------------------
  Refrig/Stoves/Sinks
  - ------------------------------------------------------------------------------
  Bathroom/Tubs/Showers
      Toilets
  - ------------------------------------------------------------------------------
  FINANCIAL STATUS
  
  A.     Replacement Reserve is: Fully-funded_____ Under-funded____  Amount____
         (complete attached schedule)
  
         Tax/Insurance Escrow is:Fully-funded_____ Under-funded_____ Amount____
         (complete attached schedule)
  
         Property is operating at a: Surplus____   Deficit____  Amount _____
  
         If deficit, General Partner funding?   Yes____  No____  Amount____       
  
         Mortgage Payments are: On Schedule______ Delinquent____ Amount____
  
         Are the taxes current?   Yes____     No____
           (please provide copy of paid tax bill)
  
         Is the insurance current? Yes____    No____     Renewal Date
         (please provide copy of yearly renewal)
  
  B.     Please note and explain any significant changes in the following:
  
         Administrative Expense  Increase____  Decrease____    Amount____
  
         ---------------------------------------------------------------------
  
         ---------------------------------------------------------------------
  
         Repairs/Maintenance Expense     Increase____   Decrease____   Amount____
  
         ---------------------------------------------------------------------
        ----------------------------------------------------------------------
  
         Utility Expense     Increase____   Decrease____       Amount____
  
         ---------------------------------------------------------------------
  
         ---------------------------------------------------------------------
         Taxes/Insurance Expense    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 files?  Yes______   No______
         If yes, please explain:
         ----------------------------------------------------------------------
  
          ---------------------------------------------------------------------
  SCHEDULE OF RESERVES
  
                       Replacement    Tax & Insurance     Other      Total
  
  Beginning Balance:
  
  Deposits:
  
             -------   -----------    -----------          --------  ---------
  
             -------   -----------    -----------          --------  ---------
  
             -------   -----------    -----------          --------  ---------
  
  Total Deposits
                       -----------    -----------          --------  ---------
  
  Authorized Disbursements:
         Description:
  
         ----------    -----------    ------------         --------  ---------
  
         ----------    -----------    ------------         --------  ---------
  
         ----------    -----------    ------------         --------  ---------
  
         ----------    -----------    ------------         --------  ---------
  
  Total Disbursements:
                       -----------    ------------        --------- ---------
  
  Ending Balance: (1)
                       -----------    ------------        --------- ---------
  
  Required Balance:
                       -----------    -----------         --------- ---------
  
  Over/under funding:
                       -----------    -----------         --------- ---------
  
  (1) Must agree with amount shown on the balance sheet.
  
  Prepared By:                            Date:
  
  Firm:                                   Telephone:
  
  Reminder: Please include the following documents:
  
                1. Completed Report of Operations
                2. Balance Sheet
                3. Statement of Income & Expenses
                4. Rent roll for quarter ending
                5. Tax Credit Compliance Report
  INITIAL TENANT CERTIFICATIONS
                                   PARTNERSHIP NAME
  
  Fund:          Tax Credit Set-Asides Information:  Loan/Regulatory Set-Asides:
  Property Name: [ ] 20/50 or [  ] 40/60 Election
  Address:       Does the 51% average apply? [  ] Y [  ] N
                 Deeper Set-Aside __% @ 50% AMI
  
  County:
                                 Management Company
  [ ] Multi-Family                                    Contact Person:
  [ ] Elderly
  
    24 Number of Units                                Phone #
  
       Number of Exempt
       Units
  LIHTC Project#
  
  - -----------------------------------------------------------------------------
  
                                                                  Gross   Move-In
  Unit  First Time   Move-In  No. of                      No. in Income   Income
  No.   Tenant Name  Date     Bdrms  Sq. Ft.   Set-Aside  Unit   Move-In  Limits
  - -------------------------------------------------------------------------------
        BIN #        Certificate of Occupancy Date:
  - -----------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
       BIN #          Certificate of Occupancy Date:
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
       BIN #           Certificate of Occupancy Date:
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  INITIAL TENANT CERTIFICATIONS
                                  PARTNERSHIP NAME
  (CONTINUED)
  
  Tenant                                                            Tenant
  Income       Income         Asset      Unit   Rent      Tenant    Utility
  Qualified Verification  Verification   Rent   Subsidy   Payment   Allowance
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  INITIAL TENANT CERTIFICATIONS
                                  PARTNERSHIP NAME
  (CONTINUED)
  
       Tenant                   Tenant            Overall
  Gross     Maximum             Rent              Tenant
  Rent      Rent                Qualified         Eligible
  
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
                                YES               YES
  - -------------------------------------------------------------------------------
  QUARTERLY TAX CREDIT COMPLIANCE REPORT
                                    PROPERTY NAME
  
  Quarter Ending: Tax Credit Set-Asides Information:  Loan/Regulatory Set-Asides:
                  [  ] 20/50 or [  ] 40/60 Election
                  Does the 51% average apply? [  ] Y [  ] N
                  Deeper Set-Aside : ( List Details)
  
  County:    Allocation:                                 Management Company:
  
             Pre-1990 (Rent based on number of persons)  Contact Person:
             Elected to change No. Bedrm
             Post-1989 (Based on number of Bedroom)
  
  [  ] Multi-Family  [  ] Elderly                         Phone No.
  
        Number of Units
        Number of Exempt Units                            Fax No.
                                                          Prepared by:
  
  LIHTC Project#
  - -----------------------------------------------------------------------------
                                                            Gross    Annual
  Unit   Tenant    Move-In   No. Of   Inc.   Set-  No. In   Annual   Income
  No.    Name      Date      Bdrms    Pct.  Aside  Unit     Income   Limits
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  QUARTERLY TAX CREDIT COMPLIANCE REPORT
                                    PROPERTY NAME
  (CONTINUED)
  
  Annual  Tenant                                   Less
  Recert.  Income      Income     Assets   Unit    Rent     Tenant
  Date   Qualified   Verified   Verified   Rent  Subsidy   Payment
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  
          Tenant              Tenant     Overall
  Utility   Gross   Maximum    Rent       Tenat
  Allow.    Rent    Rent    Qualified    Eligible
  
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  - -------------------------------------------------------------------------------
  Tenant Tax Credit Compliance Audit
                           Document Transmittal Checklist
  
  Unit Number          Property Name                                   Date
  
  Tenant Name                                               Completed By:
  
  Initial  _________        Annual________
    Check Box for Type of Certification         Management Company
                                                   This Section For WNC Use Only
  Check Documents Being Sent
                                                            Received.  Reviewed
  ___Internal Checklist or worksheet
  ___Initial - Rental Application/ Rental
            Agreement
  ___Initial - Questionnaire of
            Income/Assets
  ___Recertification   -  Questionnaire  of  Income/Assets   
  ___Recertification  - Addendum  to  Lease   
  ___Employment   Verification   
  ___Employment   Termination  Verification  
  ___Military  Verification   
  ___Verification  of  Welfare  Benefits
  ___Verification of Social Security
          Benefits
  ___Verification   of   Disability    Benefits    
  ___Unemployment    Verification
  ___Verification   of   Unemployment   Compensation    
  ___Verification   Worksmen Compensation  
  ___Retirement/Annuities  Verification  
  ___Verification of Veterans Pension  
  ___Verification  of Child Support  
  ___Verification  of Alimony  Support
  ___Disposed  of  Assets  Last  2 yrs.  
  ___Real  Estate  
  ___Investment  
  ___Assets Verifications  (savings,  stocks etc.) 
  ___Trusts/with Current Tax Return 
  ___Lump Sum Settlements  
  ___Notarized Affidavit of Support  
  ___Certification of Handicap
  ___Notarized  Self-Employed-Tax  Return  
  ___Notarized  statement  of  no  income
  ___Tenant Certification
  - ------------------------------------------------------------------------------
                                     This Section For WNC Use Only
  
           YES  NO
                       Are all required forms completed?
                       Are all required forms dated?
                       Did the Manager and Tenant sign all documents?
                       Third party verification of income completed?
                       Third party verification of assets completed?
                       Are verifications completed for all members 18 yrs. and
                       over?
                       Did all the members of the household 18 yrs. and
                       over sign all documents?
                       Is  lease  completed  with a  minimum  of six  months/  SRO
                       monthly?
                       Addendum completed?
                       Tenant Certification completed?
                       Are all members of the household full-time students?
                       Is utility allowance
                       correct?
                       Is correct income limit being used?
                       Is correct rent limit being used?
  
                         For tenants with no income
                       Was  notarized  statement  of no income  obtained  with tax
                       return?
                       or Were all sources verified (AFDC, Unemployment,
                          Soc. Sec., Disability)?
  TAX CREDIT COMPLIANCE MONITORING:
                                ANNUAL CERTIFICATION
  
       As General  Partner of CASCADE  PINES,  L.P. II, I hereby certify as to the
  following:
  
       1.  CASCADE  PINES,  L.P. II owns a three  hundred  seventy-six  (376) unit
  project ("Project") in Atlanta, Fulton County, Georgia.
  
       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 Georgia
  that the foregoing is true and correct.
  
       Executed this day of at , .
  
  - ------------------------------------
  Calculation of Debt Service Coverage
  
                                        Month 1       Month 2        Month 3
                                        ------------  ------------   ------------
  
            INCOME
  
    Gross Potential Rent
    Other Income
    Vacancy  Loss                       ------------  ------------   ------------
    Adjusted Gross Income               ------------  ------------   ------------
  
                                     OPERATING EXPENSES
  
    Utilities
    Maintenance
    Management Fee
    Administration
    Insurance
    Real Estate Taxes
    Other Expenses                      ------------  ------------   ------------
    Total Operating Expenses            ------------  ------------   ------------
  
    Net Operating Income (1)
    Accrual adjustments for:
            R/E Taxes
            Insurance
            Tax/ Accounting
            Other
    Replacement Reserves
                                         ============  ============   ============
    Income for DSC Calculation
                                         ============  ============   ============
  
    Stabilized Debt Service              ------------  ------------   ------------
  
    Debt Service Coverage  (2)           ------------  ------------   ------------
  
       (1)  This  number  should  reconcile  easily  with  the  monthly  financial
  statements
  
       (2) The ratio between the Income for DSC  Calculation  and Stabilized  Debt
  Service.  As example,  a 1.15 DSC means that for every $1.00 of Stabilized  Debt
  Service  required  to be paid  there  must be a $1.15  of Net  Operating  Income
  available.
  DEVELOPMENT FEE AGREEMENT
  
       This  DEVELOPMENT  FEE  AGREEMENT,  is entered  into as of the date written
  below by and between Brencor, Inc., a Delaware corporation and Urban Residential
  Development Corporation,  a Georgia corporation (collectively referred to as the
  "Developer")  and  CASCADE  PINES,  L.P.  II,  a  Georgia  limited   partnership
  ("Owner").  Developer and Owner collectively may be referred to as the "Parties"
  or individually may be referred to as a "Party".
  
                                      RECITALS
  
       A. Owner has acquired the real property located in Atlanta,  Fulton County,
  Georgia,  as more  particularly  described  in  Exhibit A  attached  hereto  and
  incorporated herein (the "Real Property").
  
       B.  Owner  intends  to  develop  on  the  Real  Property  a  three  hundred
  seventy-six  (376) unit  low-income  rental  housing  complex and other  related
  improvements,  which is intended to qualify for federal  low-income  housing tax
  credits (the "Project").
  
       C. Pursuant to continuous  verbal  discussions  and agreements  between the
  Developer and the Owner,  the Developer has  previously  undertaken  substantial
  development activities with respect to the Project and has agreed to oversee the
  development  of the Project  until all  construction  work is  completed  and to
  provide certain services relating thereto. The Parties recognize and acknowledge
  that the Developer is, and has been, an  independent  contractor in all services
  rendered to, and to be rendered to, the Owner pursuant to this  Development  Fee
  Agreement.
  
       D. Owner  desires to retain the services of Developer to manager,  oversee,
  and  complete  development  of the  Project.  Developer is willing to assign all
  development  rights to the Project to Owner,  to undertake  performance  of such
  development services,  and to fulfill all obligations of the Developer set forth
  in this Agreement,  in  consideration of Owner's promise to pay to Developer the
  fee specified in this Agreement.
  
       NOW THEREFORE,  in consideration  of the foregoing  recitals and the mutual
  promises and  undertakings  in this  Agreement,  and for other good and valuable
  consideration,  the receipt and  sufficiency  of which are hereby  acknowledged,
  Owner and Developer agree as follows.
  
                                      SECTION I
                                 CERTAIN DEFINITIONS
  
       As used in this  Agreement,  the following terms shall,  when  capitalized,
  have the following meanings:
  "Closing Date" means the date on which the Construction  Loan is closed and
  funded and the Limited Partner's initial Capital Contribution is made.
  
       "Code" means the Internal Revenue Code of 1986, as amended.
  
       "Construction Documents" means the contract documents between the Owner and
  the Construction Lender pertaining to construction of the Project.
  
       "Construction  Lender" means the Urban Residential Finance Authority of the
  City of  Atlanta,  Georgia,  which  has  committed  to  make a loan  to  finance
  construction of the Project.
  
       "Construction Loan" means the loan to finance  construction of the Project,
  made to Owner by the Construction Lender.
  
       "Contractor" means Gardner Service Corporation.
  
       "Department"  means the Georgia agency  responsible for the reservation and
  allocation of Tax Credits.
  
       "Development  Fee"  means the fee for  development  services  described  in
  Section 2 of this Agreement.
  
       "Permanent Loan" means the permanent mortgage to finance the Project and to
  retire the Construction Loan.
  
       "Permanent Loan Funding Date" means the date on which the Permanent Loan is
  closed and funded;  all construction costs are paid in full and the Construction
  Loan repaid in full;  and the  issuance of a  certificate  of  occupancy  by the
  governmental agency having jurisdiction over the Project.
  
       "Tax  Credit  Program"  means  Section  42 of  the  Code,  and  all  rules,
  regulations,  rulings,  notices and other Internal Revenue Service promulgations
  thereunder, relating to low-income housing tax credits.
  
       "Tax  Credits"  means  low-income  housing tax credits under the Tax Credit
  Program.
  
                                      SECTION 2
                       ENGAGEMENT OF DEVELOPER; FEE; SERVICES
  
       2.1 Engagement;  Term. Owner hereby confirms the engagement of Developer to
  act as  developer  of the  Project,  and to perform  the various  covenants  and
  obligations of the Developer under this Agreement. Developer hereby confirms and
  accepts such  engagement,  and agrees to perform fully and timely each and every
  one of its obligations  under this Agreement.  The term of such engagement shall
  commence on the date hereof and subject to the pre-payment provisions of Section
  3 shall expire on December 31, 2005.
  2.2 Development Fee. In  consideration of Developer's  agreement to provide
  development services during the term of this Agreement and the assignment of all
  development  rights  for  the  Project,  Owner  agrees  to pay the  Developer  a
  Development Fee in the amount of $________. The Development Fee shall be payable
  in accordance with Section 3 of this Agreement.
  
       2.3 Development Services.
  
       (a)  Owner  acknowledges  that  Developer  has,  prior to the date  hereof,
  performed  substantial  development  services  relating  to the  Project.  Owner
  further  acknowledges that as of the date of this Agreement  construction of the
  property is substantially  complete.  Such services (the "Prior  Services") have
  included the following:
  
       (1)  Developer  has  analyzed  the market and  demographic  environment  to
  determine the feasibility of the Project.
  
       (2) Developer has created,  refined and analyzed the financial  projections
  for the Project.
  
       (3)  Developer  has  negotiated,  conferred,  and worked  with the  Project
  architects, engineers and Contractor with regard to preparation, refinement, and
  finalization  of the plans and  specifications  for the Project,  and  projected
  construction schedules and costs.
  
       (4) Developer has applied for land use  approvals and  development  permits
  necessary for the Project, and has conferred and worked with the City of Atlanta
  planning and building agencies with regard to such approvals and permits.
  
       (5) Developer has negotiated and conferred with the Construction  Lender to
  obtain the Construction Loan.
  
       (6) Developer shall oversee  construction of the Project on Owner's behalf.
  Owner shall allow  Developer full access to the Project during the  construction
  period.  Developer and  Developer's  agents shall perform their work in a manner
  that minimizes interference with the management and operation of the Project.
  
       (A)  Developer  shall exert its best efforts to ensure that the  Contractor
  performs  its  obligations  under the  Construction  Documents in a diligent and
  timely manner.
  
       (B) Developer  shall  participate in and provide  assistance with regard to
  pre-construction conferences and pre-construction documents, including drawings,
  specifications, contracts, and schedules.
  (C) Developer  shall review all Project  construction  documents,  identify
  construction issues and participate in the resolution of such issues.
  
       (D) Developer shall attend  construction  progress  meetings at the Project
  site to monitor  construction  progress and advise Owner and the Contractor with
  respect to the resolution of construction issues.
  
       (E) Developer shall review the Contractor's monthly pay applications.
  
       (F) Developer shall monitor the  Contractor's  progress with respect to the
  approved Project  schedule and keep the Owner informed of all pertinent  Project
  issues and construction progress.
  
       (G) Developer  shall advise Owner with respect to relations with engineers,
  architects, and other construction professionals.
  
       (H)  Developer  shall be  available  for  immediate  response  in  critical
  situations arising during the construction of the Project.
  
       (I) Developer shall coordinate relations with the City of Atlanta and other
  governmental authorities having jurisdiction over development of the Project.
  
       (7) From the date hereof  through the  completion  of  construction  of the
  Project, the Developer shall provide the following services to owner with regard
  to the Tax Credits and the Tax Credit  Program which  services do not constitute
  the rendering of legal or tax advice:
  
       (A) Developer shall consult with and advise Owner  concerning  construction
  issues  that could  affect the amount of Tax  Credits  for which the  Project is
  eligible.
  
       (B)  Developer  shall  consult  with and advise  Owner with  respect to the
  requirements  of  the  Department  as  they  relate  to  the   construction  and
  development of the Project.
  
       (C)  Developer  shall  monitor  construction  progress  with respect to the
  Project schedule agreed to with the Department, if any.
  
       (D) Developer shall  coordinate and participate in any conferences with the
  Department relating to the Project and construction matters.
  (c) Assignment of Development Rights. Developer hereby assigns to Owner all
  rights to the  development  of the  Project,  including  but not limited to, all
  tangible and  intangible  rights arising with respect to the name CASCADE PINES,
  L.P. II, the design of the Project, the plans and specifications for the Project
  and all rights arising under the agreements with Project  architects,  engineers
  and other Project design and construction professionals.
  
                                      SECTION 3
                              DEVELOPMENT FEE PAYMENTS
  
       For  Development  services to be performed  under this Contract,  the Owner
  shall pay the Developer a Development Fee on the Permanent Loan Funding Date. If
  the  Development  Fee is not paid in full upon the  Permanent  Loan Funding Date
  then the  Development Fee shall be paid from available Cash Flow From Operations
  in  accordance  with the  terms of  Section  11.1 of the  Amended  and  Restated
  Agreement of Limited  Partnership for CASCADE PINES,  L.P. II, a Georgia limited
  partnership (said agreement is incorporated  herein by this reference) but in no
  event later than December 31, 2005.
  
                                      SECTION 4
                                     TERMINATION
  
       Neither  Party to this  Agreement  shall have the right to  terminate  this
  Agreement prior to the expiration of the term without cause. Owner may terminate
  this Agreement without further liability, for cause, which shall mean any one of
  the following:
  
       (a) A material breach by Developer of its obligations  under this Agreement
  that is not cured within  thirty (30) days after  notice  thereof (or, as to any
  non-monetary  obligations that is not reasonably capable of cure within 30 days,
  and  provided  that cure is  commenced  within 10 days of notice and  diligently
  pursued  thereafter  to  completion,  within  such  time  as may  reasonably  be
  necessary to complete such cure);
  
       (b) A fraudulent or  intentionally  incorrect  report by Developer to Owner
  with respect to the Project; or
  
       (c) Any  intentional  misconduct  or gross  negligence  by  Developer  with
  respect to its duties under this Contract.
  
       Upon proper termination of this Agreement by Owner pursuant to this Section
  4, all rights of Developer to receive unearned Development Fees pursuant to this
  Agreement with respect to services not yet performed shall terminate.  Developer
  shall receive the full  Development  Fee for Prior  Services and shall receive a
  portion of the  Development  Fee for Future  Services based on the percentage of
  completion of construction of the Project at the time of termination. Nothing in
  this Section 4 shall be deemed to prevent Owner from bringing an action  against
  Developer  to recover  fully all  damages  resulting  from any of the causes set
  forth in paragraphs  (a), (b) or (c) above,  or to prevent Owner from contending
  in any  action  or  proceeding  that the  Future  Services  were not  earned  by
  Developer.
  
                                      SECTION 5
                                 GENERAL PROVISIONS
  
       5.1 Notices. Notices required or permitted to be given under this Agreement
  shall be in writing sent by  registered  or  certified  mail,  postage  prepaid,
  return receipt  requested,  to the Parties at the following  addresses,  or such
  other  address as is  designated  in writing by the Party,  the date of registry
  thereof, or the date of certification  receipt therefor being deemed the date of
  such notice;  provided,  however, that any written communication containing such
  information sent to a Party actually received by a Party shall constitute notice
  for all purposes of this Agreement.
  
  If to Developer:           Brencor, Inc.
                             5214 Maryland Way, Suite 310
                             Brentwood, Tennessee 37027
  
                             Urban Residential Development Corporation
                             100 Peachtree Street, N.W., Suite 400
                             Atlanta, Georgia 30303
  
  If to Owner:               CASCADE PINES, L.P. II
                             100 Peachtree Street, N.W., Suite 400
                             Atlanta, Georgia 30303
  
       5.2 Interpretation.
  
       (a)  Headings.  The section  headings in this  Agreement  are  included for
  convenience  only;  they do not give full  notice of the terms of any portion of
  this  Agreement and are not relevant to the  interpretation  of any provision of
  this Agreement.
  
       (b)  Relationship  of the Parties.  Neither Party hereto shall be deemed an
  agent, partner, joint venturer, or related entity of the other by reason of this
  Agreement and as such neither Party may enter into contracts or agreements which
  bind the other Party.
  
       (c) Governing Law. The Parties intend that this Agreement shall be governed
  by and construed in accordance with the laws of the state of Georgia  applicable
  to contracts made and wholly  performed  within Georgia by persons  domiciled in
  Georgia.
  
       (d) Severability. Any provision of this Agreement that is deemed invalid or
  unenforceable  shall  be  ineffective  to  the  extent  of  such  invalidity  or
  unenforceability,  without  rendering  invalid or  unenforceable  the  remaining
  provisions of this Agreement.
  
       5.3 Integration; Amendment. This Agreement constitutes the entire agreement
  of the Parties  relating to the subject  matter  hereof.  There are no promises,
  terms, conditions, obligations, or warranties other than those contained herein.
  This  Agreement  supersedes  all  prior  communications,   representations,   or
  agreements,  verbal or written, among the Parties relating to the subject matter
  hereof. This Agreement may not be amended except in writing.
  
       5.4 Attorney' Fees. If any suit or action arising out of or related to this
  Agreement is brought by any Party to any such  document,  the  prevailing  Party
  shall be entitled to recover the costs and fees  (including  without  limitation
  reasonable  attorneys'  fees and  costs of  experts  and  consultants,  copying,
  courier and telecommunication costs, and deposition costs and all other costs of
  discovery)  incurred  by such  Party in such suit or action,  including  without
  limitation to any post-trial or appellate proceeding.
  
       5.5 Binding Effect.  This Agreement shall bind and inure to the benefit of,
  and be  enforceable  by, the  Parties  hereto and their  respective  successors,
  heirs, and permitted assigns.
  
       5.6 Assignment. Neither Party may assign this Agreement without the consent
  of the other Party.  No assignment  shall  relieve any Party of liability  under
  this Agreement unless agreed in writing to the contrary.
  
       5.7 Third-Party Beneficiary Rights. No person not a Party to this Agreement
  is an intended beneficiary of this Agreement,  and no person not a Party to this
  Agreement shall have any right to enforce any term of this Agreement.
  
       5.8  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
  counterparts, all of which taken together shall constitute one agreement binding
  on all the Parties,  notwithstanding that all Parties are not signatories to the
  same counterpart.
  
       5.9  Further  Assurances.  Each Party  agrees,  at the request of the other
  Party,  at any time and from time to time after the date hereof,  to execute and
  deliver  all  such  further  documents,  and to take and  forbear  from all such
  action, as may be reasonably  necessary or appropriate in order more effectively
  to perfect the transfers or rights  contemplated  herein or otherwise to confirm
  or carry out the provisions of this Agreement.
  
       5.10 Mandatory Arbitration. Any person enforcing this Agreement may require
  that all disputes,  claims,  counterclaims,  and defenses ("Claims") relating in
  any way to this  Agreement or any  transaction of which this Agreement is a part
  (the  "Transaction"),  be settled by binding  arbitration in accordance with the
  Commercial Arbitration Rules of the American Arbitration Association and Title 9
  of the U.S.  Code.  All claims  will be subject to the  statutes  of  limitation
  applicable if they were litigated.
  
       If arbitration occurs, one neutral arbitrator will decide all issues unless
  either  Party's  Claim is  $100,000.00  or more,  in which  case  three  neutral
  arbitrators will decide all issues. All arbitrators will be active Georgia State
  Bar members in good standing. In addition to all other powers, the arbitrator(s)
  shall  have the  exclusive  right to  determine  all  issues  of  arbitrability.
  Judgment on any arbitration award may be entered in any court with jurisdiction.
  
       If  either  Party  institutes  any  judicial  proceeding  relating  to  the
  Transaction,  such action shall not be a waiver of the right to submit any Claim
  to arbitration.  In addition,  both Parties have the right before,  during,  and
  after any arbitration to exercise any of the following remedies, in any order or
  concurrently:  (i)  setoff,  (ii)  self-help  repossession,  (iii)  judicial  or
  non-judicial  foreclosure  against real or personal  property  collateral,  (iv)
  provisional remedies, including injunction, appointment of receiver, attachment,
  claim and delivery, and replevin.
  
       This arbitration clause cannot be modified or waived by either Party except
  in a  writing  that  refers  to this  arbitration  clause  and is signed by both
  Parties.
  
       IN WITNESS WHEREOF,  the Parties have caused this Development Fee Agreement
  to be executed as of ________________________, 1996.
  
  DEVELOPER:            BRENCOR, INC.
  
                        By:      ______________________________
                                 Robert A. Crowder, President
  
                        URBAN RESIDENTIAL DEVELOPMENT CORPORATION
  
                        By:      _________________________
                                 Herbert Kohn, President
  
  OWNER:                CASCADE PINES, L.P. II
  
                         By:      URBAN RESIDENTIAL MANAGEMENT, INC.
  
                                  By:      _________________________
                                           Herbert Kohn, President
  EXHIBIT A
  
       All that  tract or parcel of land  lying and being in Land Lots 218 and 231
  of the 14th  District of Fulton  County,  Georgia,  and being more  particularly
  described as follows:
  
       BEGINNING at an iron pin on the  southwest  side of Harbin Road,  said iron
  pin being 200 feet  northwesterly,  as measured along the southwesterly  side of
  Harbin Road from the intersection of the southwesterly  side of Harbin Road with
  the  northwesterly  side of  Campbellton  Road; and from said point of beginning
  running  thence south 73 degrees 47 minutes 45 seconds  west,  399.85 feet to an
  iron pin; thence south 48 degrees 44 minutes 30 seconds west,  199.30 feet to an
  iron pin; thence north 27 degrees 18 minutes 15 seconds west,  149.33 feet to an
  iron pin; thence south 48 degrees 22 minutes 15 seconds west, 1204.96 feet to an
  iron pin;  thence  south 39 degrees 39 minutes 15 seconds  east;  300 feet to an
  iron pin; thence south 50 degrees 14 minutes 30 seconds west,  199.98 feet to an
  iron pin;  thence south 39 degrees 39 minutes 15 seconds east,  53.65 feet to an
  iron pin located on the south line of said Land Lot 218; thence north 88 degrees
  42  minutes  30  seconds  west,  along  the south  line of said Land Lot 218,  a
  distance of 228.37 feet to an iron pin;  thence  north 2 degrees 20 minutes east
  600.32 feet to an iron pin; thence south 87 degrees 18 minutes west,  62.43 feet
  to an iron pin;  thence north 3 degrees 07 minutes west,  390.09 feet to an iron
  pin; thence north 15 degrees 40 minutes west, 210.11 feet to an iron pin; thence
  north 89 degrees 29 minutes 30 seconds west,  219.86 feet to an iron pin; thence
  north 15 degrees 47 minutes 43 seconds west,  220.85 feet to an iron pin; thence
  south 88 degrees 30 minutes 30 seconds east 1364.46 feet to an iron pin;  thence
  north 80 degrees 04 minutes 45 seconds east,  615.47 feet to an iron pin located
  on the southwest  side of Harbin Road;  thence south 26 degrees 50 minutes east,
  along the  southwest  side of Harbin  Road,  188.10  feet to an iron pin and the
  point of BEGINNING.
  
       TOGETHER  WITH  a  non-exclusive  easement  for  ingress  and  egress  more
  particularly described as follows:
  
       ALL THAT  TRACT or  parcel  of land  lying and being in Land Lot 218 of the
  14th District of Fulton County,  Georgia, and being more particularly  described
  as follows:
  
       BEGINNING  at an  iron  pin  located  on  the  northwest  right  of  way of
  Campbellton Road 32.85 feet northeasterly from the intersection of the northwest
  right of way of Campbellton Road with the south line of Land Lot 218, which line
  is also the north  line of Land Lot 219;  running  thence  north 39  degrees  39
  minutes 15 seconds  west,  500 feet to an iron pin;  thence  north 48 degrees 22
  minutes  15 seconds  east,  60.02  feet to a point;  thence  south 39 degrees 39
  minutes 15 seconds east, 503.50 feet to a point located on the northwest side of
  the right of way of Campbellton Road; thence  southwesterly  along the northwest
  right  of way of  Campbellton  Road,  60 feet to an iron  pin and the  point  of
  BEGINNING.
  
       LESS AND EXCEPT therefrom the following tract or parcel of land:
  
       Beginning at a point on the northern right of way of Campbellton Road, S.W.
  1,140  feet  northeasterly  as  measured  along  said  right  of  way  from  the
  northeastern  intersection  of the rights of way of Campbellton  Road,  S.W. and
  Childress  Drive,  S.W.  said point being 32.85 feet  northeasterly  as measured
  along the northern right of way of  Campbellton  Road from the  intersection  of
  said right of way and the line  forming the boundary of Land Lots 218 and 219 of
  the 14th District of Fulton County, Georgia; thence running 5 feet northwesterly
  along the property line of 2909 Campbellton Road along a bearing of N 39 degrees
  39 minutes 15 seconds W to a point on said property line; thence running 60 feet
  along a  bearing  of N 50  degrees  14  minutes  30  seconds E to a point on the
  northeast  property  line  of  2909  Campbellton  Road;  thence  running  5 feet
  southeasterly  along  said  property  line  along a bearing  of S 39  degrees 39
  minutes  15  seconds E to a point on the  northern  right of way of  Campbellton
  Road, S.W.; thence running 60 feet southwesterly along the northern right of way
  of Campbellton  Road, S.W. to the Point of Beginning,  and containing 300 square
  feet (0.0069 acres).
  
       Being the same property  conveyed by Warranty Deed from John Hancock Mutual
  Life Insurance Company to Deerfield  Associates,  a Georgia Limited  Partnership
  dated April 17, 1979,  filed for record April 18, 1979 and recorded in Deed Book
  7221,  page 470,  in the  Office of the  Clerk of the  Superior  Court of Fulton
  County, Georgia.
  GUARANTY AGREEMENT
  
       FOR  VALUE  RECEIVED,  the  receipt  and  sufficiency  of which  is  hereby
  acknowledged, and in consideration of the agreement of Brencor, Inc., a Delaware
  corporation and Urban Residential Development Corporation, a Georgia corporation
  (collectively referred to as the "Developer") to permit deferral of the $_______
  due from CASCADE PINES, L.P. II a Georgia limited partnership  ("Debtor") to the
  Developer,  the undersigned  Guarantor(s),  hereby unconditionally  guaranty the
  full and prompt payment when due,  whether by  acceleration or otherwise of that
  certain Developer Fee from Debtor to the Developer, evidenced by the Development
  Fee Agreement  dated the even date  herewith,  and  incorporated  herein by this
  reference.  The  foregoing  described  debt is  referred to  hereinafter  as the
  "Liabilities" or "Liability."
  
       The  undersigned  further agree to pay all expenses paid or incurred by the
  Developer in endeavoring to collect the Liabilities, or any part thereof, and in
  enforcing the  Liabilities  or this  Guaranty  Agreement  (including  reasonable
  attorneys' fees if collected or enforced by law or through an  attorney-at-law).
  The  undersigned  hereby  represent  and warrant that the extension of credit or
  other  financial  accommodations  by the  Developer  to  Debtor  will  be to the
  interest and advantage of the  undersigned,  and acknowledge  that this Guaranty
  Agreement is a  substantial  inducement  to the  Developer  to extend  credit to
  Debtor and that the Developer would not otherwise extend credit to Debtor.
  
       The Developer  may, from time to time,  without notice to or consent of the
  undersigned,  (a) retain or obtain a security interest in any property to secure
  any of the  Liabilities  or any obligation  hereunder,  (b) retain or obtain the
  primary or  secondary  liability  of any party or  parties,  in  addition to the
  undersigned, with respect to any of the Liabilities, (c) extend or renew for any
  period  (whether  or not longer  than the  original  period) or alter any of the
  Liabilities,  (d)  release  or  compromise  any  Liability  of  the  undersigned
  hereunder  or  any  Liability  of  any  other  party  or  parties  primarily  or
  secondarily  liable  on any of  the  Liabilities,  (e)  release,  compromise  or
  subordinate its title or security interest,  or any part thereof, if any, in all
  or any  property  now or  hereafter  securing  any  of  the  Liabilities  or any
  obligation  hereunder,  and permit any  substitution  or  exchange  for any such
  property,  and  (f)  resort  to  the  undersigned  for  payment  of  any  of the
  Liabilities,  whether or not the  Developer  shall have resorted to any property
  securing  any of the  Liabilities  or any  obligation  hereunder  or shall  have
  preceded  against any other party primarily or secondarily  liable on any of the
  Liabilities.
  
       The  undersigned  hereby  expressly  waive:  (a) notice of the existence or
  creation  of all or any of the  Liabilities,  (b)  notice  of any  amendment  or
  modification of any of the  instruments or documents  evidencing or securing the
  Liabilities,  (c) presentment,  demand,  notice of dishonor and protest, (d) all
  diligence in collection or protection of or realization  upon the Liabilities or
  any thereof, any obligation hereunder, or any security for any of the foregoing,
  and (e) the right to require the Developer to proceed  against  Debtor on any of
  the Liabilities.
  
       In the event any payment of Debtor to the Developer is held to constitute a
  preference  under the bankruptcy  laws, or if for any other reason the Developer
  is required to refund such payment or pay the amount thereof to any other party,
  such  payment  by Debtor to the  Developer  shall not  constitute  a release  of
  Guarantor from any Liability hereunder,  but Guarantor agrees to pay such amount
  to the Developer upon demand and this Guaranty shall continue to be effective or
  shall be  reinstated,  as the case may be, to the extent of any such  payment or
  payments.
  
       No delay or failure on the part of the  Developer  in the  exercise  of any
  right or remedy  shall  operate  as a waiver  thereof,  and no single or partial
  exercise by the Developer of any right or remedy shall  preclude other or future
  exercise thereof or the exercise of any other right or remedy.  No action of the
  Developer  permitted  hereunder  shall in any way impair or affect this Guaranty
  Agreement. For the purpose of this Guaranty Agreement, the Liabilities of Debtor
  to the Developer are guaranteed  notwithstanding any right or power of Debtor or
  anyone  else  to  assert  any  claim  or  defense  as  to  the   invalidity   or
  unenforceability  of any such  obligation,  and no such claim or  defense  shall
  impair or affect the obligations of the undersigned hereunder.
  
       This Guaranty Agreement shall be binding upon the undersigned, and upon the
  legal representatives, heirs, successors and assigns of the undersigned.
  
       This Guaranty Agreement has been made and delivered in the state of Georgia
  and shall be construed and governed under Georgia law.
  
       Whenever  possible,  each  provision  of the  Guaranty  Agreement  shall be
  interpreted  in such manner as to be effective and valid under  applicable  law,
  but if any  provision  of this  Guaranty  Agreement  shall be  prohibited  by or
  invalid under such law, such  provision  shall be  ineffective  to the extent of
  such  prohibition  of  invalidity,  without  invalidating  the remainder of such
  provision or the remaining provisions of this Guaranty Agreement.
  
       Whenever the singular or plural number,  masculine or feminine or neuter is
  used herein, it shall equally include the other where  applicable.  In the event
  this Guaranty  Agreement is executed by more than one  guarantor,  this Guaranty
  Agreement and the obligations  hereunder are the joint and several obligation of
  the undersigned.
  Guarantor  consents  to the  jurisdiction  of the  courts  in the  State of
  Georgia and/or to the jurisdiction and venue of any United States District Court
  in the  State of  Georgia  having  jurisdiction  over  any  action  or  judicial
  proceeding  brought to enforce,  construe or interpret this Guaranty.  Guarantor
  agrees  to  stipulate  in  any  such  proceeding  that  this  Guaranty  is to be
  considered  for all  purposes to have been  executed  and  delivered  within the
  geographical  boundaries  of the  State  of  Georgia,  even if it was,  in fact,
  executed and delivered elsewhere.
  
       IN WITNESS  WHEREOF,  the  undersigned  have hereunto  caused this Guaranty
  Agreement to be executed as of _____________________, 1996.
  
  Signed, sealed and delivered                GUARANTOR:
  in the presence of:
  
  ____________________________                BRENCOR, INC.
  Witness
                                              By:      __________________________
  ____________________________                         Robert A. Crowder,
  Notary Public                                        President
  My Commission Expires:
                                              Address for Guarantor:
  - ----------------------------
                                              5214 Maryland Way, Suite 310
           (NOTARY SEAL)                      Brentwood, Tennessee  37027
  AMENDED AND RESTATED
  
                         AGREEMENT OF LIMITED PARTNERSHIP OF
  
                            ROSEDALE LIMITED PARTNERSHIP
  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     "Construction Contract".........................       3
           1.14     "Construction Loan" ............................       4
           1.15     "Contractor" ...................................       4
           1.16     "Development Fee" ..............................       4
           1.17     "Distributions" ................................       4
           1.18     "Equity Loan" ..................................       4
           1.19     "Event of Bankruptcy" ..........................       5
           1.20     "Fair Market Value" ............................       5
           1.21     "Financial Interest" ...........................       5
           1.22     "First Year Certificate" .......................       5
           1.23     "FmHA" .........................................       5
           1.24     "FmHA Interest Credit Agreement" ...............       5
           1.25     "FmHA Loan Agreement" ..........................       5
           1.26     "General Partner" ..............................       6
           1.27     "Gross Asset Value" ............................       6
           1.28     "Income and Losses".............................       7
           1.29     "Interest" .....................................       8
           1.30     "LIHC" .........................................       8
           1.31     "Limited Partner" ..............................       8
           1.32     "Liquidation" ..................................       8
           1.33     "Minimum Set-Aside Test" .......................       8
           1.34     "Mortgage" or "Mortgage Loan" ..................       8
           1.35     "Mortgage Note" ................................       9
           1.36     "Operating Deficit" ............................       9
           1.37     "Original Limited Partner" .....................       9
           1.38     "Partner" ......................................       9
           1.39     "Partner Nonrecourse Debt" .....................       9
           1.40     "Partner Nonrecourse Debt Minimum Gain" ........       9
           1.41     "Partner Nonrecourse Deductions" ...............       9
           1.42     "Partnership" ..................................       9
           1.43     "Partnership Administration Fee" ...............       9
           1.44     "Partnership Minimum Gain" .....................       10
           1.45     "Permanent Mortgage Commencement" ..............       10
           1.46     "Person" .......................................       10
           1.47     "Project" ......................................       10
           1.48     "Project Documents" ............................       10
           1.49     "Projected Tax Credits" ........................       10
           1.50     "Qualified Income Offset Item" .................       11
  1.51     "Qualified Tenants" ............................       11
           1.52     "Refinancing" ..................................       11
           1.53     "Rent Restriction Test" ........................       11
           1.54     "Sale" .........................................       11
           1.55     "Sale or Refinancing Proceeds" .................       11
           1.56     "State" ........................................       11
           1.57     "State Tax Credit Agency" ......................       11
           1.58     "Substitute Limited Partner" ...................       11
           1.59     "Tax Credit" ...................................       12
           1.60     "TRA 1986" .....................................       12
           1.61     "Treasury Regulations" .........................       12
  
  II.      NAME ................................................           12
  
  III.     PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE ........           12
  
           3.1      Principal Executive Office .....................       12
           3.2      Agent for Service of Process ...................       12
  
  IV.      PURPOSE .............................................           12
  
  V.       TERM ................................................           13
  
  VI.      GENERAL PARTNER'S CONTRIBUTIONS AND LOANS ...........           13
  
           6.1      Capital Contribution of General Partner ........       13
           6.2      Construction and Operating Obligations .........       13
           6.3      General Partner Loans ..........................       14
  
  VII.     LIMITED PARTNER'S CAPITAL CONTRIBUTIONS .............           14
  
           7.1      Original Limited Partner .......................       14
           7.2      Capital Contribution of Limited Partner ........       14
           7.3      Repurchase of Limited Partner's Interest .......       16
           7.4      Reduction of Capital Contribution...............       17
           7.5      Return of Capital Contribution .................       18
           7.6      Liability of Limited Partner ...................       19
  
  VIII. WORKING CAPITAL AND RESERVES .......................               19
  
           8.1      Operation and Maintenance Reserve...............       19
           8.2      Reserve for Replacements........................       19
           8.3      Other Reserves..................................       19
  
  IX.      MANAGEMENT AND CONTROL ..............................           20
  
           9.1      Power and Authority of General Partner .........       20
           9.2      Payments to the General Partners and Others ....       20
           9.3      Specific Powers of the General Partner .........       22
  9.4      Limitations on General Partner's
                    Power and Authority ............................       22
           9.5      Restrictions on Authority of General Partner....       23
           9.6      Duties of General Partner ......................       24
           9.7      Partnership Expenses ...........................       25
           9.8      General Partner Expenses .......................       26
           9.9      Other Business of Partners .....................       26
           9.10     Covenants, Representations and Warranties.......       26
  
  X.       ALLOCATIONS OF INCOME, LOSSES AND CREDITS ...........           29
  
           10.1     General ........................................       29
           10.2     Allocations From Sale or Refinancing............       29
           10.3     Special Allocations.............................       30
           10.4     Curative Allocations............................       33
           10.5     Other Allocation Rules..........................       33
           10.6     Tax Allocations:  Code Section 704(c)...........       34
           10.7     Allocation Among Limited Partners
                    and Assignees ..................................       34
           10.8     Allocation Among General Partners ..............       35
           10.9     Modification of Allocations ....................       35
  
  XI.      DISTRIBUTION ........................................           35
  
           11.1     Distribution of Cash Flow From Operations ......       35
           11.2     Distribution Upon Sale or Refinancing ..........       35
  
  XII.     VOLUNTARY TRANSFERS OF LIMITED PARTNER'S INTEREST
           IN THE PARTNERSHIP...................................           36
  
           12.1     Assignment of Limited Partner's Interest .......       36
           12.2     Effective Date of Transfer .....................       37
           12.3     Invalid Assignment .............................       37
           12.4     Assignee's Rights to Allocations and
                    Distributions ..................................       37
           12.5     Substitution of Assignee as Limited Partner ....       37
           12.6     Death, Bankruptcy, Incompetency, etc.
                    of a Limited Partner ...........................       38
           12.7     Assignment .....................................       38
  
  XIII. RESIGNATION, REMOVAL AND REPLACEMENT OF GENERAL
        PARTNER ............................................               38
  
           13.1     Resignation of General Partner .................       38
           13.2     Removal of General Partner .....................       38
           13.3     Admission of Substitute General Partner ........       40
           13.4     Continuing Liability ...........................       40
           13.5     Transfer of Interest ...........................       40
           13.6     Payment to General Partner Upon Resignation,
                    Death or Insanity ..............................       41
  
  XIV.     BOOKS AND ACCOUNTS, REPORTS, TAX RETURNS,
           FISCAL YEAR AND BANKING .............................           42
  14.1     Books and Accounts .............................       42
           14.2     Accounting Reports .............................       43
           14.3     Other Reports ..................................       44
           14.4     Late Reports ...................................       45
           14.5     Annual Site Visits .............................       46
           14.6     Tax Returns ....................................       46
           14.7     Fiscal Year ....................................       46
           14.8     Banking ........................................       46
           14.9     Certificates and Elections .....................       46
  
  XV.      DISSOLUTION, WINDING UP, TERMINATION AND
           LIQUIDATION OF THE PARTNERSHIP ......................           46
  
           15.1     Dissolution of Partnership .....................       46
           15.2     Return of Capital Contribution upon
                    Dissolution ....................................       47
           15.3     Distributions of Assets ........................       47
           15.4     Deferral of Liquidation.........................       49
           15.5     Liquidation of Statement .......................       49
           15.6     Certificates of Dissolution; Certificate of
                    Cancellation of Certificate of Limited
                    Partnership ...................................        49
  
  XVI.     AMENDMENTS ..........................................           50
  
  XVII. MISCELLANEOUS ......................................               50
  
           17.1      Voting Rights .................................       50
           17.2      Meeting of Partnership ........................       51
           17.3      Notices .......................................       51
           17.4      Successors and Assigns ........................       51
           17.5      FmHA Regulations ..............................       51
           17.6      Recording of Certificate of Limited
                     Partnership. ..................................       52
           17.7      Amendment of Certificate of Limited
                     Partnership ...................................       53
           17.8      Counterparts ..................................       53
           17.9      Captions ......................................       53
           17.10     Certain Provisions ............................       53
           17.11     Saving Clause .................................       54
           17.12     Number and Gender .............................       54
           17.13     Entire Agreement ..............................       54
           17.14     Governing Law .................................       54
           17.15     Attorney's Fees ...............................       54
           17.16     Receipt of FmHA Correspondence ................       54
           17.17     Security Interest and Right of Set-Off ........       54
  EXHIBIT A - Legal Description...................... A-1
  EXHIBIT B - Form of Legal Opinion.................. B-1  -  B-4
  EXHIBIT C - Certification and Agreement............ C-1  -  C-4
  EXHIBIT D - General Partner Certification.......... D-1  -  D-5
  EXHIBIT E - Form of Completion Certificate......... E-1
  EXHIBIT F - Accountant's Certificate............... F-1
  EXHIBIT G - Report of Operations................... G-1  -  G-8
  AMENDED AND RESTATED AGREEMENT
                              OF LIMITED PARTNERSHIP OF
                            ROSEDALE LIMITED PARTNERSHIP
  
           ROSEDALE  LIMITED  PARTNERSHIP , a New Mexico limited  partnership (the
  "Partnership") recorded a certificate of limited partnership with the New Mexico
  Secretary of State on January 24, 1994. A partnership  agreement  dated March 4,
  1993 was entered  into by and  between  DEKE  NOFTSKER  and ABO  CORPORATION  as
  General Partners and DEKE NOFTSKER as the Limited Partner.
  
           A  First   Amendment  to  the  Certificate  and  Agreement  of  Limited
  Partnership  of Rosedale  Limited  Partnership  dated January 19, 1994,  ("First
  Amendment")  was filed with the Secretary of State of the State of New Mexico on
  June 8, 1995. The First  Amendment  documented the withdrawal of ABO CORPORATION
  as the  general  partner  and the  withdrawal  of DEKE  NOFTSKER  as the limited
  partner.  As a result of the First  Amendment,  DEKE  NOFTSKER  remained  as the
  general  partner (the "General  Partner") and ABO  CORPORATION was readmitted as
  the limited partner (the "Original Limited Partner").
  
           Effective as of the date written below,  WNC HOUSING TAX CREDIT FUND V,
  L.P.,  SERIES 3, 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 March 4, 1993.
  
           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  ROSEDALE  LIMITED  PARTNERSHIP  in its  entirety  to provide as
  follows:
  
                                      ARTICLE I
  
                                     DEFINITIONS
  
           Section 1.1  "Accountant"  shall mean Pulakos & Alongi,  Ltd.,  or such
  other firm of independent certified public accountants as may be engaged for the
  Partnership by the General Partner with the consent of the Limited Partner.
  Section  1.2 "Act" shall mean the laws if the State  governing  limited
  partnerships, as now in effect and as the same may be amended from time to time.
  
           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 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  period,  after  giving  effect  to the
  following adjustments:
  
           (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
  1.704-1(b)(2)(ii)(d)(4),  1.704-1(b)(2)(ii)(d)(5) and 1.704-1(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. Words such as "herein", "hereinafter", "hereof", "hereto", hereby"
  and  "hereunder",  when used with referenced to this  Agreement,  refers to this
  Agreement as a whole, unless the context otherwise requires.
  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  "Bankruptcy"  or  "Bankrupt"  shall mean the making of an
  assignment for the benefit of creditors,  becoming a party to any liquidation or
  dissolution   action  or  proceeding,   the   commencement  of  any  bankruptcy,
  reorganization,  insolvency or other  proceeding  for the relief of  financially
  distressed debtors, or the appointment of a receiver,  liquidator,  custodian or
  trustee  and,  if any of the  same  occur  involuntarily,  the  same  not  being
  dismissed,  stayed or  discharged  within 90 days, or the entry of any order for
  relief  under  Title 11 of the United  States  Code.  A Partner  shall be deemed
  Bankrupt  if  the  Bankruptcy  of  such  Partner  shall  have  occurred  and  be
  continuing.
  
           Section 1.9 "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 to such Partner of Partnership  Income
  (or  items  thereof)  and any items in the  nature  of income or gain  which are
  specially  allocated  pursuant to Section 10.3 or 10.4 hereof,  and decreased by
  the amount of any  Distributions  made to such Partner,  and allocations to such
  Partner 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.
  
           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 1.704-1(b), as amended or any successor thereto, and
  shall be  interpreted  and  applied in a manner  consistent  with such  Treasury
  Regulation.
  
           Section  1.10  "Capital  Contribution"  shall mean the total  amount of
  money,  or  the  initial  Gross  Asset  Value  of  property  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 a Capital Contribution.
  Section 1.11 "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,  amounts  set  aside as  reserves  pursuant  to  Article  VIII 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 1.12 "Code" shall mean the  Internal  Revenue Code of 1986,  as
  amended from time to time, or any successor statute.
  
           Section 1.13 "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 thirty-two  (32) apartment units as evidenced by the
  issuance of the certificate of occupancy by the inspecting  architect,  the FmHA
  or the  governmental  agency  having  jurisdiction  over the  Project  or by the
  issuance of the inspecting  architect's  certification,  in a form substantially
  similar to that attached hereto Exhibit "E". The construction shall be completed
  in good workmanlike  manner,  free and clear of all mechanics,  materialmen's or
  similar  liens and all other  expenses and costs,  including  but not limited to
  costs of financing, must be paid with respect to the Project through completion.
  
           Section  1.14  "Compliance  Period"  shall mean the period set forth in
  Section 42(I)(1) of the Code, as amended, or any successor statute.
  
           Section  1.15  "Consent  of the Limited  Partner"  shall mean the prior
  written consent or approval of the Limited Partner.
  
           Section 1.16 "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  concurrently  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
  calculation  of Debt  Service  Coverage  is found in the  Report  of  Operations
  exhibit attached to this Agreement and incorporated herein by this reference.
  
           Section 1.17 "Deferred  Management Fee" shall have the meaning set 
  forth in Section 9.2(c) hereof.
  
           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
  in accordance with the Development Fee Agreement between the Partnership and the
  Developer,  dated  the  been  date  herewith  and  incorporated  herein  by this
  reference.
  
           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 "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 1.21 "First Year Certificate"  shall mean the certificate to be
  filed by the General  Partner with the  Secretary of the Treasury as required by
  Code Section 42(1)(1), as amended, or any successor thereto.
  
           Section 1.22 "FmHA" shall mean the Farmers Home  Administration  of the
  United States Department of Agriculture.
  
           Section 1.23 "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 1.24 "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 1.25 "General  Partner" shall mean DEKE NOFTSKER and such other
  Persons as are admitted to the  Partnership as additional or substitute  General
  Partners pursuant to this Agreement.
  
           Section  1.26 "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 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  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 with the  Consent of the Limited
  Partner  and  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 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 1.26(d) to the extent the General  Partners  determines
  that  an  adjustment   pursuant  to  Section  1.26(b)  hereof  is  necessary  or
  appropriate in connection with a transaction  that would otherwise  result in an
  adjustment pursuant to this Section 1.26(d).
  
  If the Gross Asset Value of an asset has been determined or adjusted pursuant to
  Section 1.26(a),  Section 1.26(b),  or Section 1.26(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  1.27  "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  1.28  "Improvements"  shall  mean  the  construction  of  a 32
  (thiry-two) unit apartment complex for families in a good and workmanlike manner
  substantially  in  accordance  with the plans  and  specifications  and  Project
  Documents.
  
           Section 1.29  "Incentive Management Fee" shall have the meaning set 
  forth in Section 9.2(e) hereof.
                
           Section  1.30 "Income and Losses"  shall mean,  for each fiscal 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 Section 1.26(a) or (b) thereof 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;
  
           (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 or 10.4 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 1.31 "Interest" shall mean the entire  ownership  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 1.32  "Involuntary  Withdrawal"  means any Withdrawal caused by
  the death, adjudication of insanity or incompetence,  or Bankruptcy of a General
  Partner, or the removal of a General Partner pursuant to Section 13.2 hereof.
  Section  1.33  "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 1.34 "Limited  Partner"  shall mean WNC HOUSING TAX CREDIT FUND
  V, L.P., SERIES 3, 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 1.35  "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 1.36  "Management  Agent"  shall mean the  property  management
  company  which  oversees the property  management  functions for the Project and
  which is on-site at the  Project.  The  initial  Management  Agent shall be M-DC
  Group, Inc., dba Alpha Management.
  
           Section 1.37 "Management  Agreement"  shall mean the agreement  between
  the Partnership and the Management Agent for property management services.
  
           Section 1.38 "Minimum  Set-Aside  Test" shall mean the 40-60  set-aside
  test pursuant to Section  42(g),  as amended and any successor  thereto,  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 any source of
  permanent financing of the Project by a qualified  commercial lender (as defined
  in Section 42 of the Code)  evidencing the  indebtedness  of the Partnership and
  encumbering  the  Project.  Where the context  admits,  the term  "Mortgage"  or
  "Mortgage  Loan"  shall  include  any  mortgage,  deed,  deed  of  trust,  note,
  regulatory  agreement,   security  agreement,   assumption  agreement  or  other
  instrument executed in connection with the Mortgage Note which is binding on the
  Partnership;  and in case  any  Mortgage  is  replaced  or  supplemented  by any
  subsequent  mortgage  or  mortgages,  the  Mortgage  shall  refer  to  any  such
  subsequent mortgage or mortgages.
  Section 1.40 "Mortgage Note" shall mean the nonrecourse promissory note
  whereby the  Partnership  promises to pay Farmers  Home  Administration,  or its
  successor or assignee,  the  principal sum of  $1,330,000,  plus interest on the
  principal at 7.5% per annum over a term of 50 years.
  
           Section 1.41 "Nonrecourse Liability" shall have the meaning given it in
  Treasury Regulations Section 1.704-2(b)(3).
  
           Section  1.42  "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 (not  including
  Capital  Contributions,  Sale or Refinancing Proceeds or proceeds of Partnership
  borrowings).
  
           Section 1.43 "Operating Deficit Guarantee Period" shall mean the period
  commencing  with the date of this  Agreement  and ending  four  years  after the
  project attains 100% occupancy.
  
           Section  1.44  "Operating  Loans"  shall mean loans made by the General
  Partner to the Partnership pursuant to Article VI of this Agreement, which loans
  do not bear  interest and are  repayable  only as provided in Article XI of this
  Agreement.
  
           Section 1.45 "Original Limited Partner" shall mean ABO CORPORATION.
  
           Section  1.46  "Partner"  shall mean either the General  Partner or the
  Limited Partner.
  
           Section  1.47  "Partner  Nonrecourse  Debt"  shall have the meaning 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,
  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;  and (b) the  closing  of the  Mortgage  shall  have
  occurred and 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  3.81 acres of land
  in Silver City, Grant County, New Mexico, as more fully described in Exhibit "A"
  attached hereto and incorporated herein by this reference, and the Improvements.
  
           Section 1.56 "Project  Documents"  shall mean and include all documents
  delivered to or required by Mortgage Loan and/or any governmental  agency having
  jurisdiction  over the Project in connection with the development,  construction
  and financing of the Project,  including but not limited to, 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 $36,120 for 1996,  $54,180 per year for each of the years 1997 through
  2005,  and $4,515 for 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 $547,280 to be available to the Partnership;  provided, however, that if
  the Actual Tax Credit for 1996 is greater (or less than) $36,120,  the Projected
  Tax Credit for the year 2006 shall be reduced  (increased) by an amount equal to
  the amount by which the Actual Credit for 1996 exceeds (is less than) $36,120.
  
           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 "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 1.61  "Reporting Fee" shall have the meaning set forth in 
  Section 9.2(d) hereof.
  
           Section 1.62  "Revised Projected Tax Credits" shall have the meaning 
  set forth in Section 7.4(a) hereof.
  Section  1.63 "Sale or  Refinancing"  shall  mean any of the  following
  items or transactions: a sale, transfer, exchange or other disposition of all or
  substantially  all of  the  assets  of the  Partnership,  a  condemnation  of or
  casualty at the Project or any part thereof,  a claim against a title  insurance
  company,  the  refinancing  or any Mortgage  Note or other  indebtedness  of the
  Partnership and any similar item or  transaction;  provided,  however,  that the
  payment of Capital  Contributions  by the Partners shall not be included  within
  the meaning of the term "Sale or Refinancing."
  
           Section  1.64  "Sale  or  Refinancing  Proceeds"  shall  mean  all cash
  receipts  of the  Partnership  arising  from a Sale  or  Refinancing  (including
  principal and interest  received on a debt obligation  received as consideration
  in whole or in part,  on a Sale or  Refinancing)  less the amount  paid or to be
  paid in connection with or as an expense of such Sale or  Refinancing,  and with
  regard to damage  recoveries or insurance or condemnation  proceeds,  the amount
  paid or to be paid for repairs,  replacements or renewals  resulting from damage
  to or partial condemnation of the Project.
  
           Section 1.65 "State" shall mean the State of New Mexico.
  
           Section 1.66 "State Tax Credit  Agency"  shall mean the state agency of
  New Mexico has the  responsibility  and  authorization  to  administer  the LIHC
  program in New Mexico.
  
           Section 1.67 "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 1.68 "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 1.69 "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 1.70 "TRA 1986" shall mean the Tax Reform Act of 1986.
  Section  1.71  "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).
  
           Section 1.72  "Withdrawing"  or  "Withdrawal"  (including the verb form
  "Withdraw" and the adjectival forms  "Withdrawing" and "Withdrawn")  shall mean,
  as to a General Partner,  the occurrence of the death,  adjudication of insanity
  or incompetence,  or Bankruptcy of such Partner,  or the withdrawal,  removal or
  retirement  from the  Partnership of such Partner for any reason,  including any
  sale,  pledge,  encumbering,  assignment or other transfer of all or any part of
  its General Partner  Interest and those situations when a General Partner may no
  longer  continue  as a General  Partner by reason of any law or  pursuant to any
  terms of this Agreement.
  
                                     ARTICLE II
  
                                        NAME
  
           The name of the Partnership shall be "ROSEDALE LIMITED PARTNERSHIP."
  
                                     ARTICLE III
  
                    PRINCIPAL EXECUTIVE OFFICE/AGENT FOR SERVICE
  
           Section 3.1 Principal  Executive Office. The principal executive office
  of the Partnership is located at 3825 Hawkins NE, Albuquerque, New Mexico 87109,
  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 Deke  Noftsker,  whose address is 3825
  Hawkins NE, Albuquerque, New Mexico 87109.
  
                                     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, 2047
  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 $70,000.
  
           Section 6.2  Construction and Operating Obligations; General Partner 
  Loans.
  
           (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
  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 cost overrun and not be
  repayable.  In addition,  if (1) the Improvements are not completed on or before
  May 1, 1996  ("Completion  Date")  (which  date may be extended in the events of
  force  majeure,  but in no event  longer than three  months from the  Completion
  Date.  For purposes of this  Agreement  force majeure shall mean any act of God,
  strike, lockout, or other industrial disturbance,  act of the public enemy, war,
  blockage, public riot, fire, flood, explosion, governmental action, governmental
  delay,  restraint or inaction and any other cause or event,  whether of the kind
  enumerated specifically herein, or otherwise, which is not reasonably within the
  control of a Partner to this Agreement  claiming such suspension);  (2) prior to
  completing the Improvements, there is an uncured default under or termination of
  the Construction Loan, Mortgage Loan commitment, or other material documents; or
  (3) a  foreclosure  action is  commenced  against the  Partnership,  then at the
  Limited Partner's election,  either the General Partner will be removed from the
  Partnership  and the  Limited  Partner,  or an  assignee,  will be  admitted  as
  successor  General Partner,  all in accordance with Article XIII hereof,  or the
  General  Partner  will  repurchase  the  Interest of the Limited  Partner for an
  amount equal to the amounts  theretofore  paid by the Limited  Partner,  and the
  Limited  Partner  shall  have no further  Interest  in the  Partnership.  If the
  Limited  Partner elects to have the General  Partner  repurchase the Interest of
  the Limited  Partner  then the  repurchase  shall occur within 60 days after the
  General Partner receives written demand from the Limited Partner.
  
           (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.
  (b) The General Partner shall promptly provide funds necessary to cover
  any Operating  Deficits for u31. In the event the General  Partner shall fail to
  make any such advances as provided in this Section 6.2(b) the Partnership  shall
  utilize those funds  otherwise  payable to the General Partner or its Affiliates
  pursuant to Section 9.2 ("General Partner Funds") to meet the obligations of the
  General Partner pursuant to this Section.  Such 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  installment  payments to the  General  Partner or its
  Affiliates  pursuant  to  Section  9.2 shall be reduced  proportionally.  If the
  Operating  Deficit  guarantee period  referenced above has not expired,  but all
  General Partner Funds have been distributed,  then the General Partner shall pay
  additional  Capital  Contributions to the Partnership to meet the  Partnership's
  financial  obligations.  Notwithstanding,  after  expiration  of  the  Operating
  Deficit guarantee period referenced above, the General Partner may advance funds
  to the  Partnership  to pay operating  expenses of the  Partnership  in order to
  facilitate the  Partnership's  compliance with the Rent  Restriction  Test or to
  cure Operating Deficits. All General Partner advances not satisfied from General
  Partner Funds shall constitute an additional Capital Contribution of the General
  Partner.
  
           Section  6.3 Other  General  Partner  Loans.  After  expiration  of the
  Operating Deficit Guarantee Period, with the Consent of the Limited Partner, the
  General Partner may loan to the Partnership any sums required by the Partnership
  and not  otherwise  reasonably  available to it. Any such loan shall bear simple
  interest (not  compounded) at the rate 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, if lesser, the maximum legal rate. The maturity date
  and  repayment  schedule  of any such loan shall be as agreed to by the  General
  Partner and the Limited  Partner.  The terms of any such loan shall be evidenced
  by a written  instrument.  The  General  Partner  shall not charge a  prepayment
  penalty on any such loan.  Any loan in  contravention  of this Section  shall be
  deemed an invalid  action taken by the General  Partner and such advance will be
  classified as a General Partner Capital Contribution.
  ARTICLE VII
  
                       LIMITED PARTNER'S CAPITAL CONTRIBUTIONS
  
           Section 7.1 Original Limited Partner. The Original Limited Partner made
  a Capital Contribution of $1.00. 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.  The
  Original  Limited Partner  acknowledges  that it has no further  interest in the
  Partnership  as a  limited  partner  as of the date of this  Agreement,  and has
  released  all  claims,  if  any,  against  the  Partnership  arising  out of its
  participation as a limited partner.
  
           Section  7.2  Capital  Contribution  of Limited  Partner.  The  Limited
  Partner shall make a total Capital  Contribution  in the amount of $308,762,  as
  may be adjusted in accordance with Section 7.4 of this Agreement, 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
  Certification  and  Agreement  in the form  attached  hereto as Exhibit  "C" and
  incorporated herein by this reference;
  
                    (3) prior to the due date of each  installment of such Capital
  Contribution except the first payment,  the General Partner shall deliver to the
  Limited  Partner a fully  executed  General  Partner  Certification  in the form
  attached hereto as Exhibit "D" and incorporated herein by this reference, to the
  effect that all of the  representations  and  warranties set forth in Article IX
  are accurate;
  
                    (4) prior to the Capital  Contribution  payment  referenced in
  Section 7.2(b)(1),  the General Partner shall deliver to the Limited Partner the
  following:  (A) a  certificate  of occupancy on all the  apartment  units in the
  Project; (B) a copy of the recorded grant deed (warranty deed); (C) a copy of an
  ALTA Owner's Title Insurance Policy and any endorsements required by the Limited
  Partner issued in an amount equal to the sum of the original principal amount of
  the  Mortgage and the  aggregate  amount of Capital  Contributions  set forth in
  Sections 6.1 and 7.2; (D) an audited  construction  cost  certification  with an
  itemized  cost  breakdown;  (E) copies of all Mortgage Loan  documents;  and (F)
  copies of all Mortgage Notes; and
  
                    (5) prior to the Capital  Contribution  payment  referenced in
  Section  7.2(b)(2),  the General  Partner shall  deliver to the Limited  Partner
  Internal  Revenue  Code  Form  8609,  or any  successor  form  and a copy of the
  Declaration of Restrictive Covenants/Extended Use Agreement entered into between
  the Partnership and the State Tax Credit Agency.
  
                    (6) not later than the Capital Contribution payment referenced
  in Section  7.2(b)(2),  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)  $154,381  will be payable upon admittance of the Limited 
  Partner into the  Partnership provided the conditions of Section 7.2(a) have 
  been met; and
  
                    (2)  $154,381  will be payable  after the Project  maintains a
  debt  service  coverage  of 1.10 for 90  consecutive  days and receipt of tenant
  income  verification  data to  determine  that 100% of the units in the  Project
  qualify under Section 42 of the Internal  Revenue Code provided,  the conditions
  of Section 7.2(a) have been met.
  
           Section 7.3 Repurchase of Limited  Partner's  Interest.  Within 60 days
  after the General Partner receives written demand 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 LIHTC no later than the close of the
  calendar  year during which the Project is placed in service;
  
           (b)      cause the Project to be placed in service by May 1, 1996;
  
           (c)      achieve 90% occupancy of the Project by Qualified Tenants by 
  June 1, 1996;
  
           (d)      obtain Permanent Mortgage Commencement by May 1, 1996;
  
           (e) meet both the Minimum  Set-Aside Test and the Rent Restriction Test
  not later than December 31 of the first year the Partnership elects the LIHTC to
  commence in accordance with the Code; and
  
           (f)      obtain a carryover  allocation, within the meaning of Section 
  42 of the Code, from the State Tax Credit Agency on or before December 31, 1994.
  
           Section 7.4 Reduction of Limited Partner's Capital Contribution.
  
           (a) If the  anticipated  amount of Tax Credits to be  allocated  to the
  Limited  Partner as evidenced by IRS Form 8609, and Schedule A thereto,  and the
  audited construction cost certification  provided to the Limited Partner is less
  than $528,353 (the "Revised  Projected Tax Credits") then the Limited  Partner's
  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  59% of the  Revised  Projected  Tax  Credits  so
  anticipated to be allocated to the Limited Partner.
  
           (b) The General  Partner is  required  to use its best  efforts to rent
  100% of the  Project's  apartment  units to  Qualified  Tenants  throughout  the
  Compliance Period. If at any time during the first five calendar years following
  the year in which the  Project is placed in  service,  the Actual Tax Credit for
  any fiscal year or portion thereof is or will be less than the Projected  Annual
  Tax Credit,  or the Revised  Projected Tax Credit  calculated on an annual basis
  ("Revised  Projected  Annual  Tax  Credit"),  if  applicable,  then,  unless the
  shortfall shall have previously been addressed under Section 7.4(a),  the amount
  of the reduction shall be applied to the next Capital  Contribution  owed by the
  Limited  Partner,  if any,  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 any. If, at the time of determination  thereof,  the
  Capital Contribution  reduction referenced in Section 7.4(a) and/or this Section
  7.4(b) is greater than the balance of the Limited Partner's Capital Contribution
  payments which is then due, if any ("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) In the event that, for any reason, at any time after the first five
  calendar years following the year in which the Project is placed in service, the
  amount of the Actual Tax Credit is less than the Projected Annual Tax Credit, or
  the Revised  Projected  Annual Tax Credit,  if  applicable,  (the "Annual Credit
  Shortfall"), then, unless the Annual Credit Shortfall shall have previously been
  addressed under Section 7.4(a) or Section 7.4(b),  there shall be a reduction in
  the General  Partner's  share of Cash Flow From Operations in an amount equal to
  the Annual Credit Shortfall and said amount instead shall be paid to the Limited
  Partner.  In the event  there are not  sufficient  funds to pay the full  Annual
  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
  made a constructive  advance to the Partnership in an amount equal to the Annual
  Credit Shortfall (a "Credit Shortfall Loan"), which shall be deemed to have been
  made on January 1 of the year in which the Annual Credit Shortfall arises.  Each
  Credit  Shortfall Loan shall bear simple interest (not compounded) from the date
  on which such loan is deemed to have been made under this Section  7.4(c) at the
  rate  equal  to the  10-year  Treasury  money  rate at the  time  of the  Credit
  Shortfall Loan, or, if lesser, the maximum legal rate. Credit Shortfall Loans or
  any portion thereof shall be repaid in the next year in which sufficient  monies
  are  available  from the  General  Partner's  Cash  Flow From  Operations,  with
  interest  payable prior to principal.  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(b).
  
           (d) In the event there is a  reduction  in the  qualified  basis of the
  Project  for income tax  purposes  following  an audit by the  Internal  Revenue
  Service (IRS) resulting in a recapture of Tax Credits previously claimed,  then,
  in addition to any other payments to which the Limited Partner is entitled under
  the terms of this  Section  7.4 the  General  Partner  shall pay to the  Limited
  Partner the sum of (1) the deficiency  assessed against the Limited Partner as a
  result of the Tax Credit  recapture,  (2) any interest and penalties  imposed on
  the  Limited  Partner  with  respect  to  such  deficiency,  and  (3) an  amount
  sufficient to pay any tax liability owed by the Limited  Partner  resulting from
  the receipt of the amounts specified in (1) and (2).
  
           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, with the consent of
  the Limited  Partner,  determine that such cash should,  in whole or in part, be
  returned to the Limited  Partner in  reduction of its Capital  Contribution.  No
  such return  shall be made 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  Capital
  Contribution  in the amounts and on the dates  specified in this  Agreement and,
  except as otherwise expressly required hereunder,  shall not be required to lend
  any funds to the Partnership or, after their  respective  Capital  Contributions
  have been paid, to make any further Capital Contribution to the Partnership.
  
                                    ARTICLE VIII
  
                            WORKING CAPITAL AND RESERVES
  
           Section 8.1 Operation and Replacement Reserve Account.  The Partnership
  shall establish an operating and  maintenance  reserve account and a replacement
  reserve  account and shall deposit  thereinto an annual amount equal to $200 per
  residential  unit per year for the purpose of repairs,  maintenance  and capital
  repairs.  Said deposit shall be made monthly in equal installments.  Any balance
  remaining  in  these  accounts  at the  time of a sale of the  Project  shall be
  allocated and  distributed  equally  between the General Partner and the Limited
  Partner.
  
           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.  Subject to the
  receipt of Consent to the Limited Partner where required by this Agreement,  and
  subject to the other  limitations and  restrictions  included in this Agreement,
  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.  No  Limited  Partner  (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 $230,000,  in accordance
  with the  Development  Fee Agreement  between the Partnership and the Developer.
  Such fee shall be deemed  paid by the  Partnership  and deemed  received  by the
  General  Partner (and  includable in the taxable income of the General  Partner)
  when the Project is placed-in-service.
  
           (b) Notwithstanding the preceding, the Partnership shall retain the sum
  of $78,762 from the Capital  Contributions  paid  pursuant to 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  costs,  loan  fees,  building  materials  and  labor,  but the amount
  retained  shall  in  no  event  be  greater  than  the  difference  between  the
  Construction  Loan and the Mortgage Loan. If any such funds are remaining  after
  the 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  in an  amount  equal  to 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 and/or an incentive rent-up fee.
  
           (c) The  Partnership  shall  pay to the  Management  Agent  a  property
  management  fee for the  leasing and  management  of the Project in an amount in
  accordance with the Management  Agreement.  The term of the Management Agreement
  shall not  exceed  one year.  If the  Management  Agent is an  Affiliate  of the
  General Partner then  commencing  with the termination of the Operating  Deficit
  Guarantee period  referenced in Section 6.2(b), in any year in which the Project
  has an Operating  Deficit,  40% of the management Fees, if any, shall be paid to
  the Management  Agent solely in accordance  with and to the extent  permitted by
  Section 11.1 of this Agreement.
  
                    (1) The General  Partner shall,  upon receiving any request of
  the Mortgage lender requesting such action,  dismiss the Management Agent as the
  entity  responsible  for  management  of the  Project  under  the  terms  of the
  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,  or in the event of any misconduct by the Management Agent or its
  failure  to  exercise  reasonable  care  in  the  discharge  of its  duties  and
  obligations as Management Agent.
  (2) The  appointment  of any  successor  Management  Agent  is
  subject to the Consent of the Limited Partner which may only be sought after the
  General  Partner  has  provided  the  Limited  Partner   accurate  and  complete
  disclosure respecting the proposed Management Agent.
  
           (d)  The  Partnership  shall  pay to the  Limited  Partner  a fee  (the
  "Reporting  Fee")  commencing  in  1996  equal  to  33% of the  Cash  Flow  From
  Operations but in no event less than $1,400 for the Limited  Partner's  services
  in monitoring the operations of the  Partnership  and for services in connection
  with the Partnership's  accounting matters and assisting with the preparation of
  tax  returns  and  the  reports  required  in  Sections  14.2  and  14.3 of this
  Agreement.  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 of this  Agreement;
  provided, however, that if in any year Cash Flow From Operations is insufficient
  to pay the full $1,400,  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,  as provided in Section 11.1, or sufficient Sale or Refinancing
  Proceeds, as provided in Section 11.2.
  
           (e) The  Partnership  shall pay to the  General  Partner  an  Incentive
  Management  Fee  equal to 67% of the  available  Cash Flow  From  Operations  in
  accordance  with  Section  11.1 of this  Agreement  for each  fiscal year of the
  Partnership  commencing in 1996 for services  incident to the  administration of
  the business and affairs of the Partnership,  which services shall include,  but
  not 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
  Incentive  Management  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  Incentive
  Management  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.
  
           (a) In the Partnership's name and behalf, the General Partner may hold,
  sell,  transfer,  lease or  otherwise  deal  with any  real,  personal  or mixed
  property,  interest  therein  or  appurtenance  thereto in  accordance  with the
  purpose of this Agreement as indicated in Article IV hereto;
  
           (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,
  contractors,  agents, brokers,  Accountants and Management Agents (provided that
  the  selection of any  Management  Agent has received the Consent of the Limited
  Partner) and attorneys, on such terms as the General Partner shall determine;
  
           (c) In the  Partnership's  name and on its 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 on its 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) In the  Partnership's  name and on its behalf, the General Partner 
  is authorized to execute the Construction Loan and the Mortgage;
  
           (g) 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.
  (h) 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.
  
           (i) The General  Partner  shall operate the Project and shall cause the
  Management Agent to manage the Project in such a manner that the Project will be
  eligible to receive a Tax Credit with respect to 100% of the apartment  units in
  the Project.  To that end, the General Partner agrees,  without  limitation,  to
  make all elections requested by the Limited Partner under Section 42 of the Code
  to allow the  Partnership or its Partners to claim the Tax Credit,  to file Form
  8609 with respect to the Project as  required,  for at least the duration of the
  Compliance  Period to operate  the  Project  and cause the  Management  Agent to
  manage the  Project so as to comply with the  requirements  of Section 42 of the
  Code,  as amended,  or any  successor  thereto,  including,  but not limited to,
  Section 42(g) and Section  42(i)(3) of the Code, as amended,  or any  successors
  thereto,  to make all  certifications  required by Section 42(l) of the Code, as
  amended,  or any  successor  thereto,  and to operate  the Project and cause the
  Management Agent to manage the Project so as to comply with all other Tax Credit
  Conditions.
  
       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
  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  9.4  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 any provision of 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 or the Rent Restriction 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;
  (l) Commingle funds of the Partnership with the funds of another Person;
  
       (m) Take any action  which  requires  the  Consent of the  Limited  Partner
  unless the General Partner has received the Consent of the Limited Partner.
  
       Section 9.5 Restrictions on Authority of General  Partner.  Without consent
  of the Limited Partner the General Partner shall not:
  
       (a) Sell, exchange, lease or otherwise dispose of the Project;
  
       (b) Incur  indebtedness  other than the Construction Loan and 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) Contract away the fiduciary duty owed to the Limited  Partner at common
  law;
  
       (e) 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.
  
       (f) Make any expenditure of funds, or commit to make any such  expenditure,
  other than in response  to an  emergency,  except as provided  for in the annual
  budget as provided in Section 14.3(i) hereof;
  
       (g) Cause the merger or other reorganization of the Partnership; or
  
       (h) Dissolve the Partnership.
  Section 9.6 Duties of General  Partner.  The General Partner agrees that it
  shall at all times:
  
       (a) 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;
  
       (b) 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;
  
       (c) 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 required  under  Section  9.11(j)
  hereof;
  
       (d) 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;
  
       (e) Comply with all FmHA,  Code and state rules and  regulations  for rural
  rental housing, LIHC; and
  
       (f) Use its best efforts to keep the Project and Project dwelling units, in
  decent,  safe, sanitary and good condition,  repair and working order,  ordinary
  use and  obsolescence  excepted,  and make or cause to be made from time to time
  all necessary repairs thereto  (including  external and structural  repairs) and
  renewals and replacements thereof;
  
       (g) Pay,  before  the same shall  become  delinquent  and before  penalties
  accrue thereon all Partnership taxes, assessments and other governmental charges
  against the  Partnership or its  properties,  and all of its other  liabilities,
  except to the extent and so long as the same are being  contested  in good faith
  by appropriate  proceedings in such manners as not to cause any material adverse
  effect  on  the  Partnership's   property,   financial   condition  or  business
  operations, with adequate reserves provided for such payments;
  
       (h) Permit,  and cause the Management Agent to permit,  the Limited Partner
  and its  representatives to have access to the Project and personnel employed by
  the Partnership and by the Management Agent who are concerned with management of
  the Project at all reasonable  times during normal business hours and to examine
  all  agreements,  Tax Credit  compliance data and plans and  specifications  and
  deliver  copies  thereof and such reports as may  reasonably  be required by the
  Limited  Partner.  The General  Partner shall  provide the Limited  Partner with
  copies of all  correspondence,  notices and reports sent pursuant to or received
  under the Project  Documents or any authority with respect to the Project at the
  time such correspondence, notices or reports are sent or received, copies of all
  other  correspondence  of substantial  importance which a prudent investor would
  wish  to  examine  in  connection   with  the   transaction  at  the  time  such
  correspondence  is sent or  received,  and all  reports  required by Article XIV
  within the required time periods set forth therein.
  
       (i) Make any Capital  Contributions,  advances or loans required to be made
  by the General Partner under the terms of this Agreement;
  
       (j)  Establish  and maintain all reserves  required to be  established  and
  maintained under the terms of this Agreement;
  
       (k) Comply with each and every  covenant,  representation  and warranty set
  forth in Section 9.11; and
  
       (l) Perform  such other acts as may be  expressly  required of it under the
  terms of this Agreement.
  
       Section 9.7 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 9.7
  the term  "operating  cash  expenses"  shall  mean,  with  respect to any fiscal
  period, the amount of cash disbursed by the Partnership for Partnership business
  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  which are not  Affiliates  of the General  Partner,  and
  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
  9.8(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 9.8 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  9.9  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
  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. Conversely, no person
  shall have any rights to  Partnership  assets,  income or  proceeds by virtue of
  such other ventures or activities of any Partner.
  
           Section 9.10 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 the
  Limited Partner.
  
           (b) The  Partnership  Agreement  and the Project  Documents are in full
  force and effect and  neither  the  Partnership  nor the  General  Partner is in
  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  Improvements 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) No Partner has or will have any personal  liability with respect to
  or has or will have personally guaranteed the payment of the Mortgage.
  
           (f) The  Partnership  is in 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.
  
           (g)      The Partnership owns the fee simple interest in the Project.
  
           (h) 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.
  
           (i) A builder's risk insurance policy in favor of the Partnership is in
  full force and effect and will remain in full force and effect until  Completion
  of Construction.
  
           (j) As of the date hereof and throughout  the term of the  Partnership,
  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,  are in full force and effect and will be kept in full
  force and effect throughout the term of the Partnership; all such policies shall
  be amounts and with insurers  satisfactory to Farmers Home  Administration.  All
  such 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.
  
           (k)  The  Management  Agent  has  obtained  or,  upon  commencement  of
  management functions, will obtain a fidelity bond or a blanket position bond (1)
  to include, at a minimum,  comprehensive employee dishonesty,  disappearance and
  destruction,  covering all principals of the Management Agent and all persons or
  positions which manage the Project's assets, including, but not limited to rent,
  bank  accounts  and  accounting  records;  (2) naming the Limited  Partner as an
  additional  loss payee;  and (3)  insuring the Project for an amount equal to at
  least two (2) months of the Project's gross potential  income plus the Project's
  total tenant security deposit liability.
  (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) The  General  Partner  has not  executed  and will not  execute any
  agreements with provisions contradictory to, or in opposition to, the provisions
  of this Agreement.
  
           (n) The Projected Tax Credits applicable to the Project are $36,120 for
  1996,  $54,180 per year for each of the years 1997 through 2005,  and $4,515 for
  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  $547,280 to be
  available to the Partnership;  provided,  however, that if the Actual Tax Credit
  for 1996 is greater (or less than)  $36,120,  the  Projected  Tax Credit for the
  year 2006 shall be reduced (increased) by an amount equal to the amount by which
  the Actual Credit for 1996 exceeds (is less than) $36,120.
  
           (o) No charges,  lien 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 constitute or 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  with the Code,  the Project  will  satisfy the Minimum
  Set-Aside Test.
  
           (q) All accounts of the Partnership required to be maintained under the
  terms of the Project Documents,  including,  without limitation, any account for
  replacement reserves, are currently funded to required levels,  including levels
  required by any authority.
  
           (r) The General Partner has not lent or otherwise advanced any funds to
  the Partnership  other than its Capital  Contribution and the Partnership has no
  unsatisfied  obligation to make any payments of any kind to the General  Partner
  or any Affiliate thereof.
  
           (s) No event has  occurred  which  constitutes  a default  under any of
  the Project Documents.
  
           (t) 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;  (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.
  
           (u)  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 affect the ability of the
  Limited  Partner to obtain the  anticipated  benefits of its  investment  in the
  Partnership.
  
           (v) The General  Partner has and shall maintain a net worth equal to at
  least  $500,000  computed  in  accordance  with  generally  accepted  accounting
  principles.
  
  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
  9.11.
  
                                      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 the related  Sale or  Refinancing  Proceeds,  but after  giving
  effect to  Distributions  of Cash Flow From Operations and allocations of Income
  and Losses  pursuant to this Article X up to the date of the Sale or Refinancing
  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
  Limited Partner's  positive Capital Account balance to its Capital  Contribution
  and to increase the Limited  Partner's  positive  Capital  Account balance to an
  amount  equal to its Capital  Contribution,  shall be  allocated  to the Limited
  Partner;
  
                    (3) Third,  an amount of Income  sufficient  to  increase  the
  General  Partner's  positive Capital Account balance to an amount equal to its 
  Capital Contribution; and
  
                    (4) 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 the related  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 up to the date of the Sale or  Refinancing
  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 the Limited  Partner if and to
  the extent that such  allocation  would  create or increase an Adjusted  Capital
  Account  Deficit for the 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 shall 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
  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 an 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.
  
           (f) Any  Partner  Nonrecourse  Deductions  for any fiscal year shall be
  specially  allocated  to the  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  734(b) or Code  Section  743(b) is
  required,  pursuant to Treasury Regulations Section  1.704-1(b)(2)(iv)(m)(2)  or
  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  Partners 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  investment  tax credit
  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
  investment tax credit 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).
  
           (k) Any  income,  gain,  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  among 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 10.2(c),  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),  with the Consent of the Limited Partner,  the General
  Partner shall make such offsetting  special  allocations of Partnership  income,
  gain,  loss,  or  deduction  in whatever  manner the General  Partner,  with the
  Consent of the  Limited  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 10.1,  10.2(a),  10.2(b),
  10.3(h), 10.3(i), 10.3(j), 10.3(k), 10.3(l), 10.3(n) and 10.5. In exercising its
  authority  under this 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).
  Section 10.5 Other Allocation Rules.
  
       (a) The basis (or cost) of any  Partnership  investment tax credit 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 LIHC will be allocated
  99% to the Limited Partner and 1% to the General Partner.
  
       (b) In the event Partnership  investment tax credit 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 and  Section  10.2(a)  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.
  
       (d) Solely for purposes of determining a Partner's  proportionate  share of
  the "excess  nonrecourse  liabilities" of the Partnership  within the meaning of
  Treasury   Regulations  Section   1.752-3(a)(3),   the  Partners'  interests  in
  Partnership profits are as follows: Limited Partner: 99%; General Partner: 1%.
  
       (e) To the  extent  permitted  by  Section  1.704-2(h)(3)  of the  Treasury
  Regulations, the General Partner shall endeavor to treat Distributions as having
  been made from the proceeds of a Nonrecourse  Liability or a Partner Nonrecourse
  Debt only to the extent  that such  Distributions  would  cause or  increase  an
  Adjusted Capital Account Deficit for any Partner who is not a General Partner.
  
           Section 10.6 Tax Allocations:  Code Section 704(c).  In accordance with
  Code Section 704(c) and the Treasury Regulations thereunder, income, gain, 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 Section 1.25(a) hereof).
  
  In the event the Gross Asset Value of any Partnership asset is adjusted pursuant
  to Section 1.25(b) hereof,  subsequent  allocations of income,  gain,  loss, and
  deduction with respect to such asset shall take account of any variation between
  the adjusted  basis of 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  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 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.
  
           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, 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.
  
                                     ARTICLE XI
  
                                    DISTRIBUTION
  
           Section 11.1 Distribution of Cash Flow From Operations.
  
           Cash Flow Form  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 pay the Deferred  Management Fee, if any, but in no event shall 
  this  payment exceed 50% of the Cash Flow From Operations;
  
           (b) To pay  the  current  Reporting  Fee and  then  to pay any  accrued
  Reporting Fees which have not been paid in full from previous years;
  
           (c)  To pay the Development Fee in accordance with the Development Fee 
  Agreement;
  
           (d) To pay the Operating Loans, if any, as referenced in Section 6.2(b)
  of this  Agreement,  limited to 50% of the Cash Flow From  Operations  remaining
  after reduction for the payments made pursuant to subsections (a) through (c) of
  this Section 11.1;
  (e) To pay the Incentive  Management  Fee equal to 67% of the Cash Flow
  From  Operations  remaining  after  reduction  for the payments made pursuant to
  subsections (a) through (d) of this Section 11.1; and
  
           (f) To the Limited  Partner in an amount equal to 50% of the  remaining
  Cash Flow From  Operations and to the General  Partner in an amount equal to 50%
  of the remaining Cash Flow From Operations.
  
       Section  11.2  Distribution  of  Sale  or  Refinancing  Proceeds.  Sale  or
  Refinancing Proceeds shall be distributed in the following order:
  
       (a) To the  payment  of the  Mortgage  Note and  other  matured  debts  and
  liabilities  of the  Partnership,  other than accrued  payments,  debts or other
  liabilities owing to Partners or former Partners if applicable;
  
       (b) To any  accrued  payments,  debts  or  other  liabilities  owing to the
  Partners or former Partners,  including,  but not limited to, accrued  Reporting
  Fees and Operating Loan;
  
       (c) To the  establishment of any reserves which the General  Partner,  with
  the  Consent  of the  Limited  Partner,  shall  deem  reasonably  necessary  for
  contingent,   unmatured  or  unforeseen   liabilities   or  obligations  of  the
  Partnership;
  
       (d) To the Limited Partner in an amount equal to its Capital Contribution;
  
       (e) To the General Partner in an amount equal to its Capital  Contribution;
  and
  
       (f) Thereafter, 99% to the Limited Partner and 1% to the General Partner.
  
                                     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 their  respective
  Interests  in the  Partnership  to any other  Person,  whether or not a Partner,
  except upon satisfaction of each of the following:
  (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  the  Assignee's  written
  representation  that the Partnership  Interest is to be acquired by the Assignee
  for the  Assignee's  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  to such
  assignment are satisfied.
  
           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  and  Distributions  from the
  Partnership  attributable  to the 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 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.
  
           (b) A  nonadmitted  transferee of a Limited  Partner's  Interest in the
  Partnership  shall  only be  entitled  to  receive  that  share of  allocations,
  Distributions  and the return of Capital  Contribution  to which its  transferor
  would otherwise have been 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 a transferee and  transferor  jointly advise the General
  Partner in writing of a transfer of an Interest in the Partnership,  furnish the
  transferee  with pertinent tax information at the end of each fiscal year of the
  Partnership.
  
           (c)  The  General  Partner  may  elect  to  treat  a  transferee  of  a
  Partnership Interest who has not become a Substitute Limited Partner as the case
  may be, in the place of its transferor  should the General Partner  determine 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 or adjudication
  of  incompetency  or insanity 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  constitute a successor as a transferee
  of its Interest in the  Partnership  and to join with such  transferee in making
  the  application  to  substitute  such  transferee 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 respective predecessors
  unless the General Partner shall so consent.
  
                                    ARTICLE XIII
  
                       WITHDRAWAL, REMOVAL AND REPLACEMENT OF
                                   GENERAL PARTNER
  
           Section 13.1 Withdrawal of General Partner.
  
           (a) The General  Partner may not Withdraw (other than as a result of an
  Involuntary  Withdrawal) without the Consent of the Limited Partner, and, to the
  extent required, of Farmers Home Administration and the State Tax Credit Agency.
  Withdrawal  shall be  conditioned  upon the agreement of one or more Persons who
  satisfy the  requirements  of Section  13.5 of this  Agreement to be admitted as
  successor General Partner(s).
  
           (b)  Each  General  Partner  shall  indemnify  and  hold  harmless  the
  Partnership and all Partners from its Withdrawal in violation of Section 13.1(a)
  hereof.  Each  General  Partner  shall be liable for damages to the  Partnership
  resulting from its Withdrawal in violation of Section 13.1(a).
  
           Section 13.2 Removal of General Partner.
  
           (a)      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 negligent conduct in the performance of its 
  duties under this Agreement;
  
                             (C)      Been convicted of, or entered 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)      Failed to provide any loan, advance, Capital
  Contribution or any payment the Partnership required under this Agreement;
  
                             (G)      Failed to obtain the Consent of the Limited 
  Partner prior to any decision,  act or omission under circumstances where this 
  Agreement requires that such consent be obtained;
  
                             (H)      Breached any  representation,  warranty or 
  covenant contained in this Agreement or failed to perform any action which may 
  be required by this Agreement;
  
                             (G)      Violated any federal or state tax law which 
  causes a recapture of LIHC; or
  
                             (H)      Failed during any six-month  period  during 
  the  Compliance  Period 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.
  
                    (2)      As provided in Section 6.2(a) hereof.
  
           (b) Written  notice of the  removal  for cause of the  General  Partner
  shall be  served by the  Limited  Partner  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  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 under any circumstances. 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.  If the General Partner fails to cause
  the accounting to be prepared within 30 days of receipt of the notice of removal
  for cause then the Limited Partner may cause the accounting to be prepared.  The
  expenses of the accounting shall be borne by the General Partner.
  
           Section 13.3 Effects of a Withdrawal. In the event of a Withdrawal, the
  entire  Interest  of the  Withdrawing  General  Partner  shall  immediately  and
  automatically  terminate  on the  effective  date of such  Withdrawal,  and such
  General Partner shall immediately  cease to be a General Partner,  shall have no
  further right to participate  in the management or operation of the  Partnership
  or  the  Project  or to  receive  any  allocations  or  Distributions  from  the
  Partnership  or any  other  funds  or  assets  of  the  Partnership,  except  as
  specifically set forth below. In the event of a Withdrawal, any or all executory
  contracts,  including but not limited to the Management  Agreement,  between the
  Partnership  and  the  Withdrawing  General  Partner  or its  Affiliates  may be
  terminated by the Partnership.
  
      Furthermore,   notwithstanding  such  Withdrawal,  the  Withdrawing  General
  Partner  shall  be and  shall  remain,  liable  as a  General  Partner  for  all
  liabilities  and  obligations  incurred  by the  Partnership  or by the  General
  Partner prior to the effective date of the  Withdrawal,  or which may arise upon
  such Withdrawal.  Any remaining Partner shall have all other rights and remedies
  against  the  Withdrawing  General  Partner  as  provided  by law or under  this
  Agreement.
  
           The General  Partner agrees that in the event of its Withdrawal it will
  indemnify  and hold the Limited  Partner  harmless  from and against all losses,
  costs and  expenses  incurred  in  connection  with the  Withdrawal,  including,
  without limitation,  all legal fees and other expenses of the Limited Partner in
  connection with the transaction.
  
           The  following  additional  provisions  shall  apply in the  event of a
  Withdrawal:
  
           (a)  In  the  event  of  a  Withdrawal  which  is  not  an  Involuntary
  Withdrawal,  the  Withdrawing  General  Partner  shall have no further  right to
  receive any future  allocations  or  Distributions  from the  Partnership or any
  other funds or assets of the Partnership, nor shall it be entitled to receive or
  to be paid by the Partnership any further payments of fees (including fees which
  have been  earned but are  unpaid) or to be repaid any  outstanding  advances or
  loans  made by it to the  Partnership  or to be paid any  amount  for its former
  Interest.  From and after the  effective  date of such  Withdrawal,  the  former
  rights  of the  Withdrawing  General  Partner  to  receive  or to be  paid  such
  allocations,  Distributions, funds, assets, fees or repayments shall be assigned
  to the other General Partner or General  Partners (which may include the Limited
  Partner),  or if there is no other general  partner of the  Partnership  at that
  time, to the Limited Partner.
  
           (b) In the event of an  Involuntary  Withdrawal,  except as provided in
  Section 13.3(b)(3) below, the Withdrawing  General Partner shall have no further
  right to receive any future allocations or Distributions from the Partnership or
  any other funds or assets of the Partnership,  provided that accrued and payable
  fees  (i.e.,  fees earned but unpaid as of the date of  Withdrawal)  owed to the
  Withdrawing  General  Partner,  and any  outstanding  loans  of the  Withdrawing
  General Partner to the  Partnership,  shall be paid to the  Withdrawing  General
  Partner in the manner and at the times such fees and loans  would have been paid
  had the Withdrawing  General Partner not Withdrawn.  The Interest of the General
  Partner shall be purchased as follows:
  
                    (1) If the  Involuntary  Withdrawal  arises  from  removal for
  cause as set forth in Section  13.2(a)  hereof,  the Withdrawn  General  Partner
  shall be entitled to receive as its sole  compensation  for its  Interest in the
  Partnership an amount equal to its positive  Capital Account balance  determined
  as of the effective date of the removal,  if any,  payable upon the  dissolution
  and  termination  of  the  Partnership  after  all  of the  Partners  have  been
  distributed the positive balances in their Capital Accounts.
  
                    (2) If the Involuntary  Withdrawal does not arise from removal
  for  cause  under  Section  13.2(a)  hereof,  and  if the  Partnership  is to be
  continued  with one or more  remaining  or  successor  General  Partner(s),  the
  Partnership,  with the Consent of the Limited Partner, may, but is not obligated
  to,  purchase the Interest of the  Withdrawing  General  Partner in  Partnership
  allocations,  Distributions  and capital.  The purchase  price of such  Interest
  shall  be  its  Fair  Market  Value  as  determined  by  agreement  between  the
  Withdrawing  General Partner and the Limited Partner,  or, if they cannot agree,
  by  arbitration  in  accordance  with the  then  current  rules of the  American
  Arbitration Association.  The cost of such arbitration shall be borne equally by
  the Withdrawing General Partner and the Partnership. The purchase price shall be
  paid  by  the   Partnership  by  delivering  to  the  General   Partner  or  its
  representative the Partnership's  non-interest bearing unsecured promissory note
  payable,  if at all, upon  liquidation  of the  Partnership  in accordance  with
  Section 11.2(b). The note shall also provide that the Partnership may prepay all
  or any part thereof without penalty.
  
                    (3) If the Involuntary  Withdrawal does not arise from removal
  for  cause  under  Section  13.2(a)  hereof,  and  if the  Partnership  is to be
  continued with one or more remaining or successor General Partner(s), and if the
  Partnership does not purchase the Interest of the Withdrawing General Partner in
  Partnership allocations, Distributions and capital, then the Withdrawing General
  Partner shall retain its Interest in such items, but such Interest shall be held
  as a special limited partner.
  
           Section 13.4 Successor General Partner. Upon the occurrence of an event
  giving rise to a Withdrawal of a General Partner, any remaining General Partner,
  or, if there be no remaining General Partner, the Withdrawing General Partner or
  its legal  representative,  shall  promptly  notify the Limited  Partner of such
  Withdrawal (the "Withdrawal Notice"). Whether or not the Withdrawal Notice shall
  have been sent as provided  herein,  the Limited Partner shall have the right to
  become a successor General Partner (and to become the successor managing General
  Partner if the Withdrawing  General Partner was previously the managing  General
  Partner).  In order to  effectuate  the  provisions of this Section 13.4 and the
  continuance of the Partnership, the Withdrawal of a General Partner shall not be
  effective  until the  expiration of 120 days from the date on which occurred the
  event  giving  rise to the  Withdrawal,  unless the Limited  Partner  shall have
  elected to become a  successor  General  Partner  as  provided  herein  prior to
  expiration  of such 120-day  period,  whereupon  the  Withdrawal  of the General
  Partner  shall be  deemed  effective  upon  the  notification  of all the  other
  Partners by the Limited Partner of such election.
  
           Section 13.5 Admission of Additional or Successor  General Partner.  No
  Person shall be admitted as an additional or successor  General  Partner  unless
  (a) such  Person  shall  have  agreed to become a General  Partner  by a written
  instrument  which shall include the acceptance  and adoption of this  Agreement;
  (b) the  Consent of the  Limited  Partner to the  admission  of such Person as a
  substitute  General Partner,  which consent may be withheld in the discretion of
  the  Limited  Partner,  shall have been given;  and (c) such  Person  shall have
  executed and acknowledged any other  instruments which the Limited 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
  successor  General  Partner.  Nothing  contained herein shall reduce the Limited
  Partner's Interest in the Partnership.
  
           Section 13.6 Transfer of Interest. Except as otherwise provided herein,
  the General  Partner may not Withdraw  from 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.
  
           Section 13.7 No Goodwill Value.  At no time during  continuation of the
  Partnership shall any value ever be placed on the Partnership name, or the right
  to its use, or to the goodwill  appertaining to the Partnership or its business,
  either as among the Partners or for the purpose of determining  the value of any
  Interest,  nor shall the legal  representatives of any Partner have any right to
  claim any such  value.  In the event of a  termination  and  dissolution  of the
  Partnership as provided in this Agreement, neither the Partnership name, nor the
  right to its use, nor the same goodwill, if any, shall be considered as an asset
  of the  Partnership,  and no  valuation  shall be put thereon for the purpose of
  liquidation or distribution, or for any other purpose whatsoever.
  
                                     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 Income 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
  
                    (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) 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.
  
           Section 14.2 Accounting Reports.
  
           (a) By March 1 of each calendar year the General  Partner shall provide
  to the Limited Partner 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
  the Limited  Partner:  (i) a balance sheet as of the end of such fiscal year and
  statements of income, Partners,  equity and changes in cash flow for 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 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   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 year.
  
           (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 the
  Limited  Partner a report as to the nature of the Sale or Refinancing  and as to
  the Income and Losses for tax  purposes  and  proceeds  arising from the Sale or
  Refinancing.
  
       Section 14.3 Other Reports.  The General  Partner shall also provide to the
  Limited Partner:
  
       (a)  During the  period of  construction,  by the tenth day of each month a
  copy of the previous month's  Construction  Loan draw request and the inspecting
  architect's certification;
  
           (b) During the rent-up phase, and continuing until the end of the first
  six-month  period  during which the Project has a sustained  occupancy of 95% or
  better, by the tenth day of each month within such period a copy of the previous
  month's rent roll (through the last day of the month),  a tenant LIHC compliance
  worksheet similar to the monthly initial tenant certification worksheet included
  in Exhibit "C" attached hereto and  incorporated  herein by this reference,  and
  copies of all initial tenant files including completed  applications,  completed
  questionnaires or checklists of income and assets,  documentation of third party
  verification of income and assets, income certification forms and executed lease
  agreements collected by the Management Agent, or General Partner, verifying each
  tenant's eligibility as a Qualified Tenant;  compliance worksheet similar to the
  form in Exhibit D attached
  
           (c) A quarterly tax credit  compliance  report similar to the worksheet
  included in Exhibit "G". 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  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 non-compliance  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;
  
       (d) If the Project receives a reservation of LIHCs in one year but will not
  complete the  construction  and rent-up until a later year, the General  Partner
  will provide to the Limited  Partner by December 31 of the year during which the
  reservation  is  received  an  audited  cost  certification  together  with  the
  accountant's  work  papers  verifying  that the  Partnership  has  expended  the
  requisite 10% of the  reasonably  expected cost basis to meet the carryover test
  provisions of Section 42 of the Code;
  
           (e)  During  the  Compliance  Period,  no  later  than the day any such
  certification is filed, copies of any certifications  which the Partnership must
  furnish to  federal  or state  governmental  authorities  administering  any Tax
  Credit  programs  under  Section 42 of the Code  including,  but not limited to,
  copies of all annual  tenant  recertification  required  under Section 42 of the
  Code;
  
           (f) On or before 30 days after each calendar  quarter of every year the
  Partnership  shall send to the Limited  Partner a report on  operations,  in the
  form  attached  hereto as Exhibit "G" an audited  income  statement  showing all
  activity in the reserve accounts  required to be maintained  pursuant to Section
  VIII of this  Agreement and a Tax Credit  compliance  report  similar in form to
  that attached hereto as Exhibit "G";
  
           (g) By the annual  renewal  date of each and every  year,  an  executed
  original or certified copy of each and every  insurance  policy  required by the
  terms of this Agreement;
  
       (h) On or before March 15th of each calendar  year,  the General  Partner's
  updated financial statement as of December 31 of the previous year;
  
           (h) On or before November 30 of each calendar year, the General Partner
  shall send 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;
  
           (i) If the  Limited  Partner is  required  by the  Securities  Exchange
  Commission  to file a  post-effective  amendment  to its offering  document,  an
  audited  operating  statement  for the  Project  within  30 days of the  request
  therefor by the Limited Partner,  covering the Project's  operating history from
  the  Completion of  Construction  to the date  requested by the Limited and in a
  form required by the Securities and Exchange Commission; and
  
           (j) 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,  using his own funds, shall
  pay as  damages  the  sum  of  $100.00  per  week  (plus  interest  at the  rate
  established by Section 6.3 hereof) 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 and cause for removal under Section 13.2 hereof.  In
  addition,  if the General  Partner shall so fail to pay, the General Partner and
  its Affiliates shall forthwith cease to be entitled to any fees hereunder (other
  than the Development Fee) and/or to the payment of any Cash Flow From Operations
  or Sale or  Refinancing  Proceeds to which the General  Partner may otherwise be
  entitled  hereunder.  Payments of fees and Distributions  shall be restored only
  upon payment of such damages in full.
  
           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  inspection  of the property,  a review of the
  office and tenant files and an interview with the property manager.  The Limited
  Partner may, in its sole discretion, cancel all or any part of the annual visit.
  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.
  
           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.  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 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  effective  date of the  Withdrawal  or removal of the  General
  Partner,  unless  (i) at the time  there is at least one other  General  Partner
  (which may be the  Limited  Partner if it elects to serve as  successor  General
  Partner under Section 13.4 hereof) who will continue as General Partner, or (ii)
  within  120 days after the  occurrence  of any such  event the  Limited  Partner
  elects 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; or
  
           (c)      The written election to do so of the Limited Partner;
  
           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.
  
           Section 15.2 Return of Capital Contribution upon Dissolution. Except as
  provided in Sections  7.3, 7.4 and 7.6 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 Partner 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 any General
  Partner.  No Partner  shall have any right to demand  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(c),  the remaining assets of the Partnership
  shall be distributed to the Partners in accordance with the positive balances in
  their Capital Accounts,  after taking into account all allocations under Article
  X hereof.
  
           (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 lesser of:
  
       (1) the  amount  necessary  to  restore  such  deficit  balance  to zero in
  compliance with Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(3); or
  
       (2) 1.01% of the Capital Contributions.
  
           The deficit  make-up shall be paid by the General Partner by the end of
  such taxable year 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. Notwithstanding, if the Limited Partner
  has  become  successor  General  Partner,  it shall not be  responsible  for any
  deficit  balance in its Capital  Account  which arose during the time the former
  General Partner served as General Partner.
  
       (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
  Partnership's  adjusted basis in such assets for book purposes.  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 with the Consent of the Limited 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,  but only with the Consent of the
  Limited  Partner,  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 manner  described in Section  10.2,  and such assets shall
  then be  distributed  to the  Partners  as  provided  herein.  In  applying  the
  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
  
           This Agreement may be amended at any time by the Limited Partner.  This
  Agreement  may be  amended by the  General  Partner  absent  the  Consent of the
  Limited Partner.  Notwithstanding  the foregoing,  no amendment shall change the
  Partnership to a 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 allocations,  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 or  disapprove,  but,  except as otherwise  expressly  provided
  herein, not initiate, the Sale or Refinancing of the Project;
  
       (2) Remove the General  Partner and elect a substitute  General  Partner as
  provided in this Agreement;
  
       (3) Elect a successor  General  Partner upon the  withdrawal of the General
  Partner;
  
       (4)  Approve  or  disapprove,  but not  initiate,  the  dissolution  of the
  Partnership; or
  (5) 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.
  
       (c) The Limited Partner shall have the right to consent to those actions or
  inactions of the  Partnership  and/or General  Partner as otherwise set forth in
  this  Agreement,  and the  General  Partner  is  prohibited  from any  action or
  inaction requiring such consent unless such consent has been obtained.
  
           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 or facsimile request from the Limited Partner setting forth
  the  purpose  of such  meeting.  Within ten days  after  receipt of the  Limited
  Partner's written or facsimile request for a meeting,  the General Partner shall
  provide all  Partners  with  written  notice of the meeting  (which  shall be by
  telephone  conference,  or 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 or  facsimile  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
  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 it 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:    DEKE NOFTSKER
                                  3825 Hawkins NE, Albuquerque, New Mexico 87109
  
       To the Limited Partner:    WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                                  c/o WNC California Tax Credit
                                  Partners IV
                                  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.
  
           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.
  
           (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.
  
       (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,  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 of Limited  Partnership 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
  to Persons  or  circumstances  other than those as to which it is held  invalid,
  shall not be affected thereby.
  
           Section 17.12 Tax Matters  Partner.  All the Partners hereby agree that
  the Limited Partner shall be the "Tax Matters Partner"  pursuant to the Code and
  in  connection  with  any  audit  of  the  Federal  income  tax  returns  of the
  Partnership;  provided,  however that if the Limited Partner shall withdraw from
  the Partnership or become Bankrupt,  the General Partner shall thereafter be the
  "Tax Matters  Partner".  If the Tax Matters  Partner shall determine to litigate
  any  administrative  determination  relating to federal  income tax matters,  it
  shall litigate such matter in such court as the Tax Matters Partner shall decide
  in its sole discretion. In discharging its duties and responsibilities,  the Tax
  Matters  Partner  shall act as a fiduciary  (i) to the  Limited  Partner (to the
  exclusion  of the other  Partners)  insofar  as tax  matters  related to the Tax
  Credits are concerned, and (ii) to all of the Partners in other respects.
  
           Section 17.13  Expiration of Compliance Period.
  
           (a)  Notwithstanding  any provision  hereof to the contrary (other than
  this Section 17.11),  the Limited Partner shall have the right at any time after
  the beginning of the last year of the Compliance  Period to require,  by written
  notice to the  General  Partner,  that the  General  Partner  promptly  submit a
  written  request to the applicable  State Tax Credit Agency  pursuant to Section
  42(h) of the Code (or any  successor  provision)  that such  agency  endeavor to
  locate within one year from the date of such written request a purchaser for the
  Project who will  continue  to operate  the  Project as a  qualified  low income
  property, at a purchase price that is not less than the minimum amount set forth
  in Section 42(h)(6) of the Code (or any successor provision).  In the event that
  the State Tax Credit Agency  obtains an offer  satisfying  the conditions of the
  preceding  sentence,  the  General  Partner  shall  promptly  notify the Limited
  Partner in writing with respect to the terms and conditions of such offer,  and,
  if the Limited  Partner  notifies the General  Partner that such offer should be
  accepted,  the General  Partner shall cause the  Partnership  promptly to accept
  such offer and to proceed to sell the Project pursuant to such offer.
  
           (b)  Notwithstanding  any  other  provision  of this  Agreement  to the
  contrary,  the Limited Partner shall have the right at any time after the end of
  the Compliance Period to require,  by written notice to the General Partner (the
  "Required Sale Notice"),  that the General Partner promptly use its best efforts
  to obtain a buyer for the Project on the most  favorable  terms then  available.
  The General  Partner  shall submit the terms of any proposed sale to the Limited
  Partner for its approval in the manner set forth in Section 17.11(a) hereof.  If
  the General  Partner shall fail to so obtain a buyer for the Project  within six
  months of receipt of the  Required  Sale Notice or if the Consent of the Limited
  Partner in its sole discretion  shall be withheld to any proposed sale, then the
  Limited  Partner  shall have the right at any time  thereafter to obtain a buyer
  for the  Project  on  terms  acceptable  to the  Limited  Partner  (but not less
  favorable to the Partnership  than any proposed sale previously  rejected by the
  Limited  Partner).  In the event that the Limited Partner so obtains a buyer, it
  shall  notify  the  General  Partner in  writing  with  respect to the terms and
  conditions  of the  proposed  sale  and the  General  Partner  shall  cause  the
  Partnership promptly to sell the Project to such buyer.
  
           (c) A sale of the Project prior to the end of the Compliance Period may
  only  take  place if the  conditions  of  Section  42(j)(6)  of the Code (or any
  successor provision) will be satisfied upon such sale by having the purchaser of
  the Project post the required bond on behalf of the Partnership.
  
           Section  17.14  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 17.15 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 17.16  Governing Law. This Agreement and its  application  shall be
  governed by the laws of the State.
  
           Section  17.17  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 17.18 Receipt of FmHA  Correspondence.  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/or relative to the disposition of the Project.
  
           Section 17.19 Security  Interest and Right of Set-Off.  As security for
  the  performance  of the  respective  obligations  to which any  Partner  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.
  
           IN WITNESS  WHEREOF,  this  Amended and  Restated  Agreement of Limited
  Partnership of ROSEDALE LIMITED  PARTNERSHIP,  a New Mexico limited partnership,
  is made and entered into as of the day of 1996.
  
                                      GENERAL PARTNER
  
                                      ----------------------------------------
                                      DEKE NOFTSKER
  
                                      WITHDRAWING ORIGINAL LIMITED PARTNER
  
                                      ABO CORPORATION
  
                                      By:     ___________________________________
  
                                      LIMITED PARTNER
  
                                      WNC HOUSING TAX CREDITS V, L.P.,
                                      SERIES 3,
                                      a California limited partnership
  
                                      By:     WNC & ASSOCIATES, INC.
                                              General Partner
  
                                              By:      _________________________
                                                          John B. Lester, Jr.
                                                              President
  EXHIBIT A TO PARTNERSHIP AGREEMENT
  
                                       LEGAL DESCRIPTION
  
  ALL THOSE  PARTS OF THE  NORTHEAST  1/4  SOUTHEAST  1/4 OF SECTION  35,  T.17S.,
  R.14W.,  N.M.P.M.,  TOWN OF SILVER CITY, GRANT COUNTY, NEW MEXICO,  DESCRIBED AS
  FOLLOWS:
  
       Beginning at the Southeast  Corner of this Tract,  a point which bears,  in
  two courses: N23 degrees 25' 44" W, 1821.95 feet and N00degrees 10' 12" W, 50.00
  feet from the  Southeast  Corner of Section  35;  thence S89  degrees 12' 00" W,
  521.96 feet to the Southwest  corner of this Tract,  a point on the East Line of
  Memory  Lane;  thence N00 degrees 28' 43" W along said Line,  146.17 feet to the
  Northwest  Corner of this Tract;  thence N89  degrees  12' 00" E,  357.90  feet;
  thence N00 degrees 10' 12" W, 121.28 feet;  thence N79 degrees 13' 33" E, 166.96
  feet to the Northeast Corner of this Tract; thence S00 degrees 10' 12" E, 296.37
  feet to the point of beginning; containing 2.265 acres more or less; and also:
  
       Beginning at the Southwest  Corner of this Tract,  a point on the East Line
  of Memory Lane which bears in four courses:  N23 degrees 25' 44W", 1821.95 feet;
  N00 degrees  10' 12" W, 50.00  feet;  S89 degrees 12' 00" W, 521.96 feet and N00
  degrees 28' 43" W, 146.17 feet from the  Southeast  Corner of Section 35; thence
  N00  degrees  28' 43" W along the East Line of Memory  Lane,  58.02  feet to the
  Northwest  Corner of this Tract;  thence N79  degrees  13' 33" E,  365.15  feet;
  thence S00 degrees 10' 12" E, 121.28 feet to the Southeast Corner of this Tract;
  thence S89 degrees 12' 00" W, 357.90 feet to the point of beginning;  containing
  0.737 acre more or less.
  EXHIBIT B TO PARTNERSHIP AGREEMENT
  
                                FORM OF LEGAL OPINION
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 WNC & Associates, Inc.
  3158 Redhill Avenue, Suite 120
  Costa Mesa, California  92626
  
  RE:      ROSEDALE LIMITED PARTNERSHIP
  
  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  3, a
  California  limited  partnership  (the  "Limited  Partner") in ROSEDALE  LIMITED
  PARTNERSHIP (the "Partnership"), a New Mexico limited partnership formed to own,
  develop,  (construct/rehabilitate)  finance and operate an apartment complex for
  low-income  persons (the "Apartment  Complex") in Silver City, Grant County, New
  Mexico.  The general  partner(s) of the Partnership  (is/are) DEKE NOFTSKER (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.
  
  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 New
  Mexico.
  
           (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 New  Mexico  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
  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,
  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 3'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,
  
  - --------------------
  EXHIBIT C TO PARTNERSHIP AGREEMENT
  
                             CERTIFICATION AND AGREEMENT
  
           CERTIFICATION  AND  AGREEMENT  made as of the  date  written  below  by
  ROSEDALE   LIMITED   PARTNERSHIP,   a  New  Mexico  limited   partnership   (the
  "Partnership");   DEKE  NOFTSKER  (collectively  referred  to  as  the  "General
  Partner");  and  ABO  CORPORATION  (collectively  referred  to as the  "Original
  Limited Partner") for the benefit of WNC HOUSING TAX CREDIT FUND V, L.P., SERIES
  3, 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
  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 Projected  Tax Credits (as such term is defined in the  Partnership
  Agreement  Section 1.43) are $36,120 for 1996,  $54,180 per year for each of the
  years 1997  through  2005,  and $4,515 for 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  $547,280  to be  available  to the  Partnership;
  provided, however, that the Actual Tax Credit for 1996 is greater (or less than)
  $36,120, the Projected Tax Credit for the year 2006 shall be deduced (increased)
  by an amount equal to the amount by which the Actual Credit for 1996 exceeds (is
  less than) $36,120.
  
       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.
  
                    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 , 1996.
  
  PARTNERSHIP
  
  ROSEDALE LIMITED PARTNERSHIP
  
  By:
           DEKE NOFTSKER,
           General Partner
  
  GENERAL PARTNER
  
  - -----------------------------
  DEKE NOFTSKER
  
  ORIGINAL LIMITED PARTNER
  
  ABO CORPORATION
  
  By:
  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 3 ("WNC")  by DEKE  NOFTSKER,  General  Partner of
  ROSEDALE LIMITED PARTNERSHIP,  a New Mexico 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 breach or
  violation of any provisions thereof.
  
       (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) No Partner has any personal liability with respect to or has personally
  guaranteed the payment of the permanent Mortgage.
  (f) The  Partnership is in 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.
  
       (g) 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.
  
       (h) 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.
  
       (i) A builder's risk insurance  policy in favor of the Partnership  will be
  and is in full force and effect until Completion of Construction.
  
       (j) 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.
  
       (k) The  Projected  Tax Credits  applicable  to the Project are $36,120 for
  1996,  $54,180 per year for each of the years 1997 through 2005,  and $4,515 for
  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  $547,280 to be
  available to the Partnership;  provided,  however, that if the Actual Tax Credit
  for 1996 is greater (or less than)  $36,120,  the  Projected  Tax Credit for the
  year 2006 shall be reduced (increased) by an amount equal to the amount by which
  the Actual Credit for 1996 exceeds (is less than) $36,120.
  
       (l) 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.
  
       (m) 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 the  Partners  elect the LIHC to commence in
  accordance with the Code and the Minimum Set-Aside Test and the Rent Restriction
  Test shall be met.
  
       (n) 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.
  
       (o) 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.
  
       (p) 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 1996.
  
  DEKE NOFTSKER,
  General Partner
  EXHIBIT E TO PARTNERSHIP AGREEMENT
  
                               FORM OF COMPLETION CERTIFICATE
  
                    (to be used when construction [rehabilitation] completed)
  
                                   COMPLETION CERTIFICATE
  
  The  undersigned,  an architect duly licensed and registered in the State of New
  Mexico,  has  prepared  final  working  plans and  detailed  specifications  for
  ROSEDALE   LIMITED   PARTNERSHIP,   a  New  Mexico  limited   partnership   (the
  "Partnership"),  between  WNC  HOUSING  TAX  CREDIT  FUND V,  L.P.,  SERIES 3, a
  California  limited  partnership  ("Limited  Partner")  and the  Partnership  in
  connection  with the  construction  [rehabilitation]  of improvements on certain
  real  property   located  in  Silver  City,   Grant  County,   New  Mexico  (the
  "Improvements").
  
  The undersigned  hereby certifies (i) that the Improvements  have been completed
  in accordance with the aforesaid plans and specifications, (ii) that a permanent
  certificate  of occupancy and all other  permits  required for the continued use
  and occupancy of the  Improvements  have been issued with respect thereto by the
  governmental agencies having jurisdiction  thereof,  (iii) that the Improvements
  are in compliance with all  requirements  and  restrictions of all  governmental
  authorities having jurisdiction,  including,  without limitation, all applicable
  zoning,  building,  environmental,   fire,  and  health  ordinances,  rules  and
  regulations and (iv) that all contractors, subcontractors and workmen who worked
  on the  Improvements  have been paid in full  except for normal  retainages  and
  amounts in dispute.
  
  - -----------------------------------
  Project Architect
  
  Date:  ____________________________
  
  Confirmed by:
  
  - -----------------------------------
  General Partner
  
  Date:  ____________________________
  EXHIBIT F TO PARTNERSHIP AGREEMENT
  
                                    [ACCOUNTANT'S CERTIFICATE]
                                    [Accountant's Letterhead]
  
  _______________, 199____
  
  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3 
  c/o WNC & Associates, Inc.
  3158 Redhill Ave., Suite 120
  Costa Mesa, California 92626
  
  RE:  Partnership
       Certification as to Amount
       of Eligible Tax Credit Base
  
  Gentlemen:
  
  In  connection  with the  acquisition  by WNC  HOUSING  TAX CREDIT FUND V, L.P.,
  SERIES 3 (the "Limited Partner") of a limited  partnership  interest in ROSEDALE
  LIMITED PARTNERSHIP,  a New Mexico limited partnership (the "Partnership") which
  owns a certain parcel of land located in Silver City,  Grant County,  New Mexico
  and improvements thereon (the "Project"),  the Limited Partner has requested our
  certification as to the amount of low-income housing tax credits ("Tax Credits")
  available  with respect to the Project under Section 42 of the Internal  Revenue
  Code of 1986, as amended (the "Code").  Based upon our review of [the  financial
  information provided by the Partnership] of the Partnership,  we are prepared to
  file the Federal  information tax return of the Partnership  claiming annual Tax
  Credits in the amount of $_______________,  which amount is based on an eligible
  basis  (as   defined  in  Section   42(d)  of  the  Code)  of  the   Project  of
  $________________,  a qualified  basis (as defined in Section 42(c) of the Code)
  of the Project of $_________________ and an applicable percentage (as defined in
  Section 42(b) of the Code) of _____%.
  
  Sincerely,
  
  - -------------------
  EXHIBIT G TO THE PARTNERSHIP
  
                                REPORT OF OPERATIONS
  
                                   QUARTER ENDED:
  
  LOCAL PARTNERSHIP:   ROSEDALE LIMITED PARTNERSHIP
  
   GENERAL PARTNER:    DEKE NOFTSKER
  
            DDRESS:    Silver City, Grant County, New Mexico
  CITY, STATE, ZIP:
             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: thirty-two (32)                    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 _________________.
  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.
  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:         ____________________________________________________________
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - -------------------------------------------------------------------------------
  
  - ----------------------------------------------------------------------------
  FINANCIAL STATUS
  
  A.       Replacement Reserves are:  Fully-funded    Under-funded    Balance
           If  Under-funded,   by  how much:
  
           Tax/Insurance Escrows are: Fully-funded    Under-funded    Balance
           If Under-funded, by how much:
  
           Property is operating at a:Surplu          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:
  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:
  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:
  INITIAL TENANT CERTIFICATIONS
                                   PARTNERSHIP NAME
  
  Fund:          Tax Credit Set-Asides Information:  Loan/Regulatory Set-Asides:
  Property Name: [ ] 20/50 or [  ] 40/60 Election
  Address:       Does the 51% average apply? [  ] Y [  ] N
                 Deeper Set-Aside __% @ 50% AMI
  
  County:
                                 Management Company
  [ ] Multi-Family                                    Contact Person:
  [ ] Elderly
  
    24 Number of Units                                Phone #
  
       Number of Exempt
       Units
  LIHTC Project#
  
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                                                                  Gross   Move-In
  Unit  First Time   Move-In  No. of                      No. in Income   Income
  No.   Tenant Name  Date     Bdrms  Sq. Ft.   Set-Aside  Unit   Move-In  Limits
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        BIN #        Certificate of Occupancy Date:
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       BIN #          Certificate of Occupancy Date:
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       BIN #           Certificate of Occupancy Date:
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  INITIAL TENANT CERTIFICATIONS
                                  PARTNERSHIP NAME
  (CONTINUED)
  
  Tenant                                                            Tenant
  Income       Income         Asset      Unit   Rent      Tenant    Utility
  Qualified Verification  Verification   Rent   Subsidy   Payment   Allowance
  
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  INITIAL TENANT CERTIFICATIONS
                                  PARTNERSHIP NAME
  (CONTINUED)
  
       Tenant                   Tenant            Overall
  Gross     Maximum             Rent              Tenant
  Rent      Rent                Qualified         Eligible
  
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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                                YES               YES
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  QUARTERLY TAX CREDIT COMPLIANCE REPORT
                                    PROPERTY NAME
  
  Quarter Ending: Tax Credit Set-Asides Information:  Loan/Regulatory Set-Asides:
                  [  ] 20/50 or [  ] 40/60 Election
                  Does the 51% average apply? [  ] Y [  ] N
                  Deeper Set-Aside : ( List Details)
  
  County:    Allocation:                                 Management Company:
  
             Pre-1990 (Rent based on number of persons)  Contact Person:
             Elected to change No. Bedrm
             Post-1989 (Based on number of Bedroom)
  
  [  ] Multi-Family  [  ] Elderly                         Phone No.
  
        Number of Units
        Number of Exempt Units                            Fax No.
                                                          Prepared by:
  
  LIHTC Project#
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                                                            Gross    Annual
  Unit   Tenant    Move-In   No. Of   Inc.   Set-  No. In   Annual   Income
  No.    Name      Date      Bdrms    Pct.  Aside  Unit     Income   Limits
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  QUARTERLY TAX CREDIT COMPLIANCE REPORT
                                    PROPERTY NAME
  (CONTINUED)
  
  Annual  Tenant                                   Less
  Recert.  Income      Income     Assets   Unit    Rent     Tenant
  Date   Qualified   Verified   Verified   Rent  Subsidy   Payment
  
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          Tenant              Tenant     Overall
  Utility   Gross   Maximum    Rent       Tenat
  Allow.    Rent    Rent    Qualified    Eligible
  
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  TAX CREDIT COMPLIANCE MONITORING:
                                ANNUAL CERTIFICATION
  
           As General Partner of ROSEDALE LIMITED PARTNERSHIP, I hereby certify as
  to the following:
  
       1.  ROSEDALE  LIMITED  PARTNERSHIP  owns a  thirty-two  (32)  unit  project
  ("Project") in Silver City, Grant County, New Mexico.
  
       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 New
  Mexico that the foregoing is true and correct.
  
       Executed this day of at , .