Exhibit 10.4

CONSULTATION REPORT OF

UDF X
The Fairness of the Financing Terms
Between United Development Funding III, L.P.
and United Development Funding X, L.P.,
Dated October 1, 2007

Prepared For:

Mr. Hollis Greenlaw
President
UMTH Land Development, LP
1702 N. Collins Boulevard, Suite 100
Richardson, TX  75080

Prepared By:

JACKSON CLABORN, INC.
Real Estate Consulting and Appraisal Services
5800 W. Plano Parkway, Suite 220
Plano, TX 75093

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Jackson Claborn, Inc.

· Real Estate Consulting and Appraisal Services ·
· Plano, Texas · Southlake, Texas ·
www.jacksonclaborn.com
Jimmy H. Jackson, MAI David Claborn, MAI
Allen W. Gardiner, SRA Dod W. Clapp, SRA

October 1, 2007

Mr. Hollis Greenlaw
President
UMTH Land Development, LP
1702 N. Collins Boulevard, Suite 100
Richardson, TX  75080

RE:
A consultation report of, UDF X, the fairness of the financing terms between
United Development Funding III, L.P., and United Development Funding X, L.P.,
dated October 1, 2007; our file number 710008

Ladies and Gentlemen:

At your request, we have performed a consulting assignment regarding the
above-referenced agreement as of October 1, 2007, subject to certain assumptions
and limiting conditions that are attached. Our employment was not based upon an
appraisal producing a specific value or a value range and it should also be
noted that this assignment should not be considered to be an appraisal report as
we are not providing our opinion as to the sales price of the subject property,
but only providing our opinion as to the fairness of the financing terms.
Furthermore, we have not inspected the subject property of the above-referenced
agreement.

You have requested our opinion as an independent advisor (as that term is
defined in the Prospectus of United Development Funding III, L.P. dated May 15,
2006) as to the fairness of the terms of that certain note to be dated effective
as of October 1, 2007 amongst and between United Development Funding III, L.P.,
a Delaware limited partnership (“UDF III”) as Lender and United Development
Funding X, L.P., a Delaware limited partnership (“UDF X”) as Borrower. Pursuant
to the terms of this note (the “UDF X Note”), UDF III will advance to UDF X the
amount of up to $70,000,000 at an annual interest rate of 15.0%, which amount
shall be due and payable along with accrued and unpaid interest on September 30,
2012. The Borrower will be charged a fee equal to 3% of the note amount that
will be payable concurrently with each initial advance, but not for any
re-advance.  The credit facility shall revolve allowing for interest to accrue
on a monthly basis which shall be compounded on an annual basis if not paid in
full on each anniversary date.  The security for the loan shall be all the
assets and receivables held in UDF X, including without limitation, the
assignment of any liens and entity equity interests pledged to UDF X in the
course of its business.
 

Headquarters: 5800 W. Plano Parkway · Suite 220 · Plano, Texas 75093 · (972)
732-0051 · FAX (972) 733-1403
Branch Office: 1560 E. Southlake Blvd. · Suite 220 · Southlake, Texas 76092 ·
(817) 421-3833 · FAX (817) 421-3844

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UMTH Land Development, LP
Page Two
October 1, 2007

The transaction will be further secured by a UCC-1 filing evidencing the
security interest retained by for UDF III and an unconditional and unlimited
guarantee from UMTH Holdings, L.P., a Delaware limited partnership (“Guarantor”)
and parent company of UDF X.  With respect to the Guarantor, UMTH is a
financially sound, well diversified entity of substance that is capitalizing on
a business model of underwriting real estate finance transactions in markets
with strong underlying demographics, appropriate supply/demand ratios and
growing economics. In just a short period of operations, UMTH has demonstrated
an impressive record of success. As of YE 2006, UMTH had net earning of $2.4M
with $2.3M in net earning through YTD July 31, 2007 which is on target for
achieving their projected YE 2007 net earnings of $9M.

Based upon the information provided to us with respect to the Borrower, UDF X is
a newly formed, wholly owned subsidiary of UMTH Land Development, L.P., a
Delaware limited partnership (“UMTH-LD”) whose parent company is UMT Holdings,
L.P., a Delaware limited partnership (“UMTH”).  UMTH-LD is the general partner
of UDF III.  UMTH-LD and UDF X are each an affiliate of UDF III.  UMTH-LD has a
.1% general partner, UMT Services, Inc., and a 99.9% limited partner owned by
UMTH.  UMTH-LD formed UDF X as a strategic business platform for the
continuation of the UMTH Business Model which, in short, is the generation of
income by originating, purchasing and holding for investment, for its own
account, loans to and/or equity positions in entities that acquire, entitle,
develop and sell land and/or lots for the construction of single-family
residential homes. We understand the purpose of this note is to provide a credit
facility to UDF X for the implementation of their business model as a real
estate finance company.

Since UDF X is an “Affiliated Party”, UDF III is required to obtain this
fairness opinion with respect to the terms of the transaction.

We are a full service real estate appraisal and consulting firm. As part of our
real estate appraisal and consulting services, we are regularly engaged in the
consultation with regard to real estate value and finance.

We are acting as an independent advisor to UDF III in connection with the UDF X
Note and will receive a fee for our services. The opinion fee is not contingent
upon the conclusions of our opinion. In addition, UMTH Land Development, L.P.
has agreed to indemnify us for certain liabilities arising out of our
engagement.

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UMTH Land Development, LP
Page Three
October 1, 2007

In the course of performing our review and analysis for rendering this opinion,
we have: (i) reviewed the details of the transaction with UDF X, (ii) reviewed
the terms of the UDF X Note, (iii) reviewed materials provided to us by members
of the senior management of UDF III with respect to the described transaction;
(iv) conducted discussions with members of the senior management of UDF III with
respect to the described transaction; and (v) conducted such other financial
studies, analyses and investigations and considered such other information as we
deemed appropriate.

With respect to the data and discussions relating to the transaction, we have
assumed, at the direction of management of UDF III and without independent
verification, that such data has been reasonably prepared on a basis reflecting
the best currently available estimates and judgments of UDF III. We have further
relied on the assurances of senior management of UDF III that they are unaware
of any facts that would make such information incomplete or misleading.

In rendering our opinion, we have assumed and relied upon the accuracy and
completeness of the financial, legal, tax, operating and other information
provided to us by UDF III, and have not assumed responsibility for independently
verifying and have not independently verified such information. We have not
assumed any responsibility to perform, and have not performed, an independent
evaluation or appraisal of any of the respective assets or liabilities
(contingent or otherwise) involved in the contemplated transaction. In addition,
we have not assumed any obligation to conduct, and have not conducted, any
physical inspection of the property involved in the contemplated transaction.
Additionally, we have not been asked and did not consider the possible effects
of any litigation or other legal claims.

Our opinion is subject to the assumptions and conditions set forth herein,
speaks only as of the date hereof, is based on market, economic, financial,
legal and other conditions as they exist and information which we have been
supplied as of the date hereof, and is without regard to any market, economic,
financial, legal or other circumstances or events of any kind or nature which
may exist or occur after such date. We have not undertaken to reaffirm or revise
this opinion or otherwise comment upon any events occurring after the date
hereof and do not have any obligation to update, revise or reaffirm our opinion.
Our opinion expressed herein is provided for the information and assistance of
the senior management of UDF III in connection with the UDF X Note.

Our opinion does not address the merits of the underlying decision by UDF III to
undertake the UDF X Note, but solely addresses the fairness of the terms
associated therewith.

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UMTH Land Development, LP
Page Four
October 1, 2007

Based on and subject to the foregoing, including the various assumptions and
limitations set forth herein, it is our opinion that, as of the date hereof,
that the terms of the UDF X Note are fair and at least as favorable to UDF III
as such transaction with an unaffiliated party in similar circumstances.

This consulting assignment conforms to the requirements of the Code of
Professional Ethics and the Uniform Standards of Professional Appraisal Practice
(USPAP) established by the Appraisal Institute and instituted by the State of
Texas. If you have any questions regarding the contents of this report, please
contact either of the undersigned.

Respectfully submitted,

 
/s/Jackson Claborn, Inc.

JACKSON CLABORN, INC.

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CERTIFICATION - CONSULTATION

We certify to the best of our knowledge and belief, that:

 
The statements of fact contained herein and upon which the opinions herein are
based, are true and correct, subject to the assumption and limiting conditions
explained in the report.

 
Employment in and compensation for providing this consultation are in no way
contingent upon any value reported and we certify that we have no interest,
either present or contemplated, in the subject property. We have no personal
interest or bias with respect to the subject matter of this consultation report
or the parties involved.

 
This consultation report identifies all of the limiting conditions (imposed by
the terms of my assignment or by the undersigned) affecting the analysis,
opinions and conclusions contained in this report.

 
The analysis, opinions and/or conclusions, if any, contained in this report have
been developed in accordance with the Code of Professional Ethics and Standards
of Professional Practice of the Appraisal Institute.

 
The use of this consultation report is subject to the requirements of the
Appraisal Institute relating to review by its duly authorized representatives.

 
No one other than the undersigned prepared the analysis, opinions or conclusions
concerning real estate that are set forth in this consultation report.

 
No one at Jackson Claborn, Inc has personally inspected the property that is the
subject of this report.

 
We certify that this consultation assignment was not based on a requested
minimum valuation, a specific valuation, or the approval of a loan.

/s/Jackson Claborn, Inc.
 
JACKSON CLABORN, INC.

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ASSUMPTIONS AND LIMITING CONDITIONS

This consultation is expressly subject to the following assumptions and limiting
conditions:

 
1)
 
No responsibility is assumed for matters of legal nature. It is assumed that
title to the property is marketable and the legal description furnished us is
correct.

 
2)
 
The property is treated as though under responsible ownership and competent
management and free and clear of all liens and encumbrances.

 
3)
 
The described physical condition of any improvements is based on visual
inspection only. It is assumed that there are no hidden or unapparent physical
conditions affecting value such as the existence of hazardous materials such as
asbestos or any other potentially hazardous materials. No liability is assumed
for the soundness of structural members, equipment or soil conditions, since no
engineering tests were made.

 
4)
 
Improvements are considered to be within lot lines and in accordance with local
zoning and building ordinances, as well as all applicable Federal, state and
local environmental laws and regulations, except as noted herein. Any plats,
diagrams or drawings provided are intended solely to facilitate understanding
and aid to the reader in picturing the property and are not meant to be used as
references in matters of survey, as no survey was made and no liability is
assumed regarding questions of survey.

 
5)
 
It is assumed that all required private, Federal, state or local licenses,
certificates of occupancy, consents or other legislative or administrative
permissions required have been or can be readily obtained or renewed for any use
on which the value estimate in this report is based.

 
6)
 
Any information received from public or private sources is believed to be
reliable; however, no warranty is given for its accuracy.

 
7)
 
The authors shall not be required to give further consultation or testimony or
appear in court, by reason of this consultation report with reference to the
property described unless previous arrangements have been made to that effect.

 
8)
 
Disclosure of the contents of this consultation report is governed by the Bylaws
and Regulations of the Appraisal Institute. Possession of this consultation
report or a copy thereof or any part thereof, does not carry with it the right
of publication, nor may it be used by anyone but the party for whom it has been
prepared without the previous written consent of the appraisers and, in any
event, only with proper written qualifications and only in its entirety.

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9)
 
Neither all nor any part of the contents of this consultation report (especially
conclusions as to value, the identity of the appraisers or the firm with which
the appraiser is connected) shall be disseminated to the public through
advertising, public relations, news, sales or other media without the prior
written consent and approval of Jackson Claborn, Inc.

 
10)
 
Any opinions of value stated herein are based on the purchasing power of the
dollar as of the date of this report, except as otherwise specified. Therefore,
the opinion of value is considered reliable only as of the stated date of
valuation.

 
11)
 
This consultation report is intended to be read and used as a whole and not in
parts. Separation of any section or page from the main body of the consultation
report is expressly forbidden and will be considered as invalidating the
consultation.

 
12)
 
Any allocation of value of this consultation report between land and
improvements applies only to this consultation and must not be used as part of
any other appraisal and is invalid if so used. The value reported for any
portion appraised, plus the value of all other portions may or may not equal the
value of the entire parcel or tract considered as an entity.

 
13)
 
No responsibility is assumed for the accuracy of any descriptions of physical
materials and conditions pertaining to the property or for any damages sustained
in connection with actual or potential deficiencies or hazards such as, but not
limited to, inadequacies or defects in the structure, design, mechanical
equipment or utility services associated with the improvements; air or water
pollution; noise; flooding; storms or wind; traffic and other neighborhood
hazards; radon gas, asbestos, natural or artificial radiation or toxic
substances of any description, whether on or off the premises.

 
14)
 
The opinions of value and/or lease rates contained within this consultation
report are estimates. There is no guarantee, written or implied, that the
subject will actually sell or lease for the estimated value/lease rate.

 
 
15)
 
The Americans with Disabilities Act ("ADA") became effective January 26, 1992.
We have not made a specific compliance survey and analysis of this property to
determine whether or not it is in conformity with the various detailed
requirements of the ADA. Indeed, we have not been supplied with nor have we
rendered a qualified opinion as to whether or not there are any "readily
achievable" barrier removal items present. It is possible that a survey of the
property together with a detailed analysis of the requirements of the ADA could
reveal that the property is not in compliance with one or more of the
requirements of the Act.  If so, this fact could have a negative affect upon the
value of the property.  Since we have no direct evidence relating to this issue,
we did not consider possible non-compliance with the requirements of ADA in
estimating the value of the property.  Consequently, the subject property has
been valued assuming compliance to ADA.  Should a professional survey prove
non-compliance, we reserve the right to re-evaluate the property.