THIRD AMENDMENT TO
                    REVOLVING CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT (this
"Amendment") made as of this 1st day of October, 1997, by and among
WDN PROPERTIES, LTD., a Texas limited partnership ("Borrower"),
WALDEN RESIDENTIAL PROPERTIES, INC., a Maryland corporation
("Walden"), WALDEN RESIDENTIAL OPERATING PARTNERSHIP, L.P., a
Georgia limited partnership ("WROP"), WDN PROPERTIES, INC., a New
York corporation ("WDN Properties"; Walden, WROP and WDN Properties
are sometimes hereinafter referred to collectively as the "Initial
Guarantors"), WALDEN/DREVER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership ("Additional Guarantor"; the Initial Guarantors
and the Additional Guarantor are sometimes hereinafter referred to
collectively as the "Guarantors"), BANKBOSTON, N.A. (formerly known
as The First National Bank of Boston), individually ("BKB"), BANK
OF MONTREAL, CHICAGO BRANCH ("BOM"), CORESTATES BANK, N.A.
("CoreStates"), DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES
("Dresdner"), KEYBANK NATIONAL ASSOCIATION ("Key Bank"), SIGNET
BANK ("Signet"; BKB, BOM, CoreStates, Dresdner, Key Bank and Signet
are hereinafter referred to collectively as the "Banks"), and
BANKBOSTON, N.A. (formerly known as The First National Bank of
Boston), as Agent (the "Agent").


                        W I T N E S E T H:

     WHEREAS, Borrower, Agent and the other banks a party thereto
entered into that certain Revolving Credit Agreement dated December
4, 1996, as amended by that certain First Amendment to Revolving
Credit Agreement dated as of April 23, 1997 among the Borrower, the
Initial Guarantors, the Banks and the Agent and that certain Second
Amendment to Revolving Credit Agreement dated as of June 27, 1997
among the Borrower, the Initial Guarantors, the Banks and the Agent
(collectively the "Credit Agreement"); and

     WHEREAS, Initial Guarantors have executed and delivered to the
Agent and the Banks that certain Unconditional Guaranty of Payment
and Performance dated December 4, 1996 (the "Guaranty"); and

     WHEREAS, Borrower has requested that Agent and the Banks
modify and amend certain terms and provisions of the Credit
Agreement to permit Walden to consummate the proposed acquisition
of interests in a portfolio of properties; and

     WHEREAS, as a condition to such modification, Agent and the
Banks have required that Borrower and Guarantors execute this
Amendment;

     NOW, THEREFORE, for and in consideration of the sum of TEN and
NO/100 DOLLARS ($10.00), and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the
parties hereto do hereby covenant and agree as follows:

     1.   Definitions.  All terms used herein which are not
otherwise defined herein shall have the meanings set forth in the
Credit Agreement.

     2.   Modification of the Credit Agreement.  Borrower, the
Banks and Agent do hereby modify and amend the Credit Agreement as
follows:

          (a)  By inserting the following definition in Section 1.1
Credit Agreement:

          "WDOP.  Walden/Drever Operating Partnership, L.P., a
          Delaware limited partnership.";

          (b)  By deleting the words and numbers "twenty-eight
percent (28%)" appearing in the second (2nd) line of the second
(2nd) paragraph on page 13 of the Credit Agreement, and inserting
in lieu thereof the words and numbers "fifty percent (50%)";

          (c)  By inserting the following sentence at the end of
the second (2nd) paragraph on page 13 of the Credit Agreement:

               "Notwithstanding anything herein to the contrary,
          the Real Estate owned by Subsidiaries of Additional
          Guarantor in the projects to be acquired on or about the
          date hereof in the transaction with Drever Partners, Inc.
          shall not be precluded from consideration as Unencumbered
          Operating Properties because such assets are not owned by
          WDOP in fee simple, and shall be considered as
          Unencumbered Operating Properties in the event that all
          other requirements relating to an asset being considered
          as an Unencumbered Operating Property are satisfied
          (which requirements, for the purposes hereof, shall be
          applied at the level of WDOP, the underlying Real Estate
          and the Persons that own the underlying Real Estate,
          provided that WDOP directly or indirectly owns 100% of
          the interests in the general partners of such
          Subsidiaries of WDOP and not less than 100% of the
          limited partner interests in each Subsidiary, and
          provided further that the terms of Section 7.19 are and continue
          to be satisfied at all times.";

          (d)  By inserting the words "; provided that no more than
forty percent (40%) of the Asset Value of the Unencumbered
Operating Properties may be located in Houston, Texas until October
1, 1998, and thereafter such Asset Value shall not exceed thirty
percent (30%) as provided above" following the words "the purposes
hereof)" appearing in the last line of Section 7.14(a)(ii) of the Credit
Agreement;

          (e)  By deleting the words and numbers "twenty percent
(20%)" appearing in the fourth (4th) line of Section 7.19(g) of the Credit
Agreement, and inserting in lieu thereof the words and numbers
"fifty percent (50%)";

          (f)  By inserting the words "(provided, however, that
with respect to senior unsecured recourse Indebtedness of Walden
only, the aggregate outstanding amount of such Indebtedness
(excluding the Obligations, but including any of such Indebtedness
permitted within the five percent (5%) threshold described above)
shall not exceed fifty percent (50%) of Walden's Consolidated Total
Assets)" following the words "Walden's Consolidated Total Assets"
appearing in the fourth (4th) line of Section 8.1(h) of the Credit
Agreement; and

          (g)  By deleting the number "1.60" appearing in the third
(3 rd) line of Section 9.2(c) of the Credit Agreement, and inserting in
lieu thereof the number " 1.25".

     3.   Additional Guaranty.  Contemporaneously with the
execution of this Amendment, Additional Guarantor has executed and
delivered to Agent for the benefit of Agent and the Banks that
certain Unconditional Guaranty of Payment and Performance (the
"Additional Guaranty").  The parties hereto acknowledge and agree
that from and after the date hereof, Additional Guarantor shall be
an "Additional Guarantor" pursuant to the terms of the Credit
Agreement, the Additional Guaranty shall be a "Guaranty" for the
purposes of the Credit Agreement, and Walden, as the general
partner of Additional Guarantor, shall be a "General Partner for
the purposes of the Credit Agreement.  The Borrower and Additional
Guarantor hereby restate and reaffirm with respect to Additional
Guarantor each and every representation and warranty in the Loan
Documents made by or with respect to Guarantors and their general
partners as if the same were more fully set forth herein, and
represent and warrant that each such representation and warranty is
true and correct with respect to Additional Guarantor and its
general partner, and that all covenants and agreements in the Loan
Documents of the Guarantors and their general partners are true and
correct with respect to Additional Guarantor.

     4.   References to Credit Agreement.  All references in the
Loan Documents to the Credit Agreement shall be deemed a reference
to the Credit Agreement as modified and amended herein.

     5.   Consent.  By execution of this Amendment, Guarantors
hereby expressly consent to the modifications and amendments
relating to the Credit Agreement as set forth herein, and Borrower
and Guarantors hereby acknowledge, represent and agree that the
Loan Documents (including without limitation the Guaranty and the
Additional Guaranty) remain in full force and effect and constitute
the valid and legally binding obligation of Borrower and Guarantors
enforceable against such Persons in accordance with their
respective terms, that the Guaranty extends to and applies to the
Credit Agreement as modified and amended, and that the execution
and delivery of this Amendment does not constitute, and shall not
be deemed to constitute, a release, waiver or satisfaction of
Borrower's or Guarantors' obligations under the Loan Documents
(including without limitation the Guaranty and the Additional
Guaranty).

     6.   Representations.  Borrower and Guarantors represent and
warrant to Agent and the Banks as follows:

          (a)  Existence.  Additional Guarantor is a Delaware
limited partnership duly organized pursuant to a limited
partnership agreement dated August 12, 1997 and is validly existing
and in good standing under the laws of Delaware.  Additional
Guarantor has all requisite power to own its property and conduct
its business as now conducted and presently contemplated, and is in
good standing as a foreign entity and is duly authorized to do
business in each jurisdiction where a failure to be so qualified in
such jurisdiction could have a materially adverse effect on the
business, assets or financial condition of Additional Guarantor.

          (b)  Subsidiaries.  Each of the Subsidiaries of
Additional Guarantor (i) is a corporation, limited partnership,
limited liability company or trust duly organized under the laws of
its State of organization and is validly existing and in good
standing under the laws thereof, (ii) has all requisite power to
own its property and conduct its business as now conducted and as
presently contemplated, and (iii) is in good standing and is duly
authorized to do business in each jurisdiction where the
Unencumbered Operating Properties of the Subsidiaries of Additional
Guarantor are located and in each other jurisdiction where a
failure to be so qualified could have a materially adverse effect
on the business, assets or financial condition of the Additional
Guarantor or such Subsidiary.  Schedule I attached hereto sets
forth all of the Subsidiaries of Additional Guarantor, the form and
jurisdiction of organization of each of the Subsidiaries, and
WDOP's, Walden's and the other Subsidiaries of Walden's ownership
interest therein.

          (c)  Partners.  Walden is the sole general partner of
Additional Guarantor and owns a one percent (1%) partnership
interest in Additional Guarantor.  WDN Properties, Inc. is a
limited partner of Additional Guarantor and owns a ninety-nine
percent (99%) partnership interest in Additional Guarantor;
provided, however, that after the consummation of a pending
transaction involving Drever Partners, Inc., such partnership
interests shall be reduced to not less than forty percent (40%).

          (d)  Authorization.  The execution, delivery and
performance of this Amendment and the Additional Guaranty and the
transactions contemplated hereby and thereby (i) are within the
authority of Borrower and Guarantors, (ii) have been duly
authorized by all necessary proceedings on the part of such
Persons, (iii) do not and will not conflict with or result in any
breach or contravention of any provision of law, statute, rule or
regulation to which any of such Persons is subject or any judgment,
order, writ, injunction, license or permit applicable to such
Persons, (iv) do not and will not conflict with or constitute a
default (whether with the passage of time or the giving of notice,
or both) under any provision of the partnership agreement or
certificate, certificate of formation, operating agreement,
articles of incorporation or other charter documents or bylaws of,
or any mortgage, indenture, agreement, contract or other instrument
binding upon, any of such Persons or any of its properties or to
which any of such Persons is subject, and (v) do not and will not
result in or require the imposition of any lien or other
encumbrance on any of the properties, assets or fights of such
Persons.

          (e)  Enforceability.  The execution and delivery of this
Amendment and the Additional Guaranty are valid and legally binding
obligations of Borrower and Guarantors enforceable in accordance
with the respective terms and provisions hereof and thereof, except
as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any proceeding therefor may be brought.

          (f)  Approvals.  The execution, delivery and performance
of this Amendment and the Additional Guaranty and the transactions
contemplated hereby and thereby do not require the approval or
consent of any Person or the authorization, consent, approval of or
any license or permit issued by, or any filing or registration
with, or the giving of any notice to, any court, department, board,
commission or other governmental agency or authority other than
those already obtained.

          (g)  No Fraudulent Intent.  Neither the execution and
delivery of this Amendment nor the Additional Guaranty nor the
performance of any actions required hereunder or any of the Loan
Documents (including without limitation the Additional Guaranty) is
being undertaken by the Borrower or any Guarantor with or as a
result of any actual intent by any of such Persons to hinder, delay
or defraud any entity to which any of such Persons is now or will
hereafter become indebted.

          (h)  Transaction in Best Interests of Borrower;
Consideration.  The transaction evidenced by this Amendment is in
the best interests of the Borrower and the Guarantors and the
creditors of such Persons, the direct and indirect benefits to
inure to the Borrower and the Guarantors pursuant to this Amendment
and the other Loan Documents (including without limitation the
Additional Guaranty) constitute substantially more than "reasonably
equivalent value" (as such term is used in Section 548 of the
Bankruptcy Code) and "valuable consideration," "fair value," and
"fair consideration," (as such terms are used in any applicable
state fraudulent conveyance law), in exchange for the benefits to
be provided by the Borrower and the Guarantors pursuant to this
Amendment and the other Loan Documents (including without
limitation the Additional Guaranty), and but for the willingness of
the Guarantors to guaranty the Loan, Borrower would be unable to
obtain the approval of the Banks of this Amendment and Additional
Guarantor would be unable to obtain separate financing which
separate financing will enable Walden and its Subsidiaries
(including the Guarantors) to have available financing to conduct
and expand their business.

     7.   No Default.  By execution hereof, the Borrower and
Guarantors certify that the Borrower and Guarantors are and will be
in compliance with all covenants under the Loan Documents after the
execution and delivery of this Amendment and the Additional
Guaranty, and that no Default or Event of Default has occurred and
is continuing.

     8.   Waiver of Claims.  Borrower and Guarantors acknowledge,
represent and agree that Borrower and Guarantors have no defenses,
setoffs, claims, counterclaims or causes of action of any kind or
nature whatsoever with respect to the Loan Documents, the
administration or funding of the Loans or with respect to any acts
or omissions of Agent or any of the Banks, or any past or present
officers, agents or employees of Agent or any of the Banks, and
each of Borrower and Guarantors does hereby expressly waive,
release and relinquish any and all such defenses, setoffs, claims,
counterclaims and causes of action, if any.

     9.   Conditions to Effectiveness of Amendment.  The
effectiveness of this Amendment shall be conditioned upon the
receipt by the Agent of the Additional Guaranty duly executed by
Additional Guarantor, a contribution agreement among Borrower and
the Guarantors in form and substance satisfactory to the Agent and
each and every other document, certification, opinion or other item
set forth in Section 10 of the Credit Agreement applicable to Guarantors,
general partners of Guarantors, or Loan Documents executed by
Guarantors.

     10.  Ratification.  Except as hereinabove set forth, all
terms, covenants and provisions of the Credit Agreement remain
unaltered and in full force and effect, and the parties hereto do
hereby expressly ratify and confirm the Credit Agreement as
modified and amended herein.  Nothing in this Amendment shall be
deemed or construed to constitute, and there has not otherwise
occurred, a novation, cancellation, satisfaction, release,
extinguishment or substitution of the indebtedness evidenced by the
Notes or the other obligations of Borrower and Guarantors under the
Loan Documents.

     11.  Amendment as Loan Document. This Amendment shall
constitute a Loan Document.

     12.  Counterparts.  This Amendment may be executed in any
number of counterparts which shall together constitute but one and
the same agreement.

     13.  Miscellaneous.  This Amendment shall be construed and
enforced in accordance with the laws of the Commonwealth of
Massachusetts.  This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
permitted successors, successors-in-title and assigns as provided
in the Credit Agreement.

     IN WITNESS WHEREOF, the parties hereto have hereto set their
hands and affixed their seals as of the day and year first above
written.

                              BORROWER:

                              WDN PROPERTIES, LTD., a Texas
                              limited
                              partnership, by it sole general
                              partner

                              By:  Walden Residential Properties, Inc.,
                                   a Maryland corporation


                                   By:
                                        Name:
                                        Title:


                              [CORPORATE SEAL]


                              INITIAL GUARANTORS:

                              WALDEN RESIDENTIAL PROPERTIES, INC.,
                              a Maryland corporation


                              By:
                                   Name:
                                   Title:



                              [CORPORATE SEAL]

                              WALDEN RESIDENTIAL OPERATING
                              PARTNERSHIP, L.P. a Georgia limited
                              partnership, by its sole general
                              partner

                              By:  Walden Operating, Inc., a
                                   Delaware corporation


                                   By:
                                        Name:
                                        Title:


                              [CORPORATE SEAL]

                              WDN PROPERTIES, INC., a New York
                              corporation


                              By:
                                   Name:
                                   Title:



                              [CORPORATE SEAL]


                              ADDITIONAL GUARANTOR:

                              WALDEN/DREVER OPERATING PARTNERSHIP,
                              L.P., a Delaware limited partnership

                              By:  Walden Residential Properties, Inc.,
                                   a Maryland corporation,
                                   its sole general partner


                                   By:
                                        Name:
                                        Title:


                              [CORPORATE SEAL]

                              BANKBOSTON, N.A. (formerly known as
                              The First National Bank of Boston),
                              individually and as Agent


                              By:
                                   Name:
                                   Title:



                              [BANK SEAL]

                              BANK OF MONTREAL, CHICAGO BRANCH


                              By:
                                   Name:
                                   Title:


                              CORESTATES BANK, N.A.


                              By:
                                   Name:
                                   Title:


                              DRESDNER BANK AG NEW YORK AND GRAND
                              CAYMAN BRANCHES


                              By:
                                   Name:
                                   Title:




                              KEYBANK NATIONAL ASSOCIATION


                              By:
                                   Name:
                                   Title:



                              SIGNET BANK


                              By:
                                   Name:
                                   Title:



                              SCHEDULE 1

                         SUBSIDIARIES OF WDOP





















I:\FINANCE\SECFIL~1\10-K-97\EX-10-11.WPD
1      RKM:mvm:lg      11/11/97

                           Schedule 1A

                           PARTNERSHIPS


Name
General
Partners(s)
Project


Apartment Opportunity Fund, L.P.
AOF Newgen, L.P.
Villas at Indian Trails, Atlanta, GA
Audubon Square, Austin, TX
Lakes of Renaissance, Austin, TX
Oakridge, Austin, TX
Arbor Creek, Dallas, TX
Brittany Park, Dallas, TX
Casa Valley, Dallas, TX
Trinity Oakes, Dallas, TX
Ashton Woods, Houston, TX
Briarcrest, Houston, TX
Cimarron Parkway, Houston, TX
Harbor Pointe, Houston, TX
Hidden Lake, Houston, TX
Pathway, Houston, TX
Pine Creek, Houston, TX
Wimbledon, Houston, TX
Woodborough, Houston, TX
Woodchase, Houston, TX
Crestwood, Phoenix, AZ
Fairways, Phoenix, AZ
Garden Place, Phoenix, AZ


Apartment Opportunity Fund II, L.P.
AOF II, Inc.
Saratoga Springs, Atlanta, GA
Shannon Chase, Atlanta, GA
Shadow Creek, Austin, TX
The Rafters, Corpus Christi, TX
Willowick, Corpus Christi, TX
Bent Creek, Dallas, TX
Canyon Ridge, Dallas, TX
Creekwood Village, Dallas, TX
Montfort Oaks, Dallas, TX
Shadowridge Village, Dallas, TX
Trinity Mills, Dallas, TX
Bayou Oaks, Houston, TX
Cimarron Park, Houston, TX
Holiday on Hayes, Houston, TX
Northwoods, Houston, TX
Silverado, Houston, TX
Felicita Creek, San Diego, CA
Park Bonita, San Diego, CA
Sun Ridge, San Diego, CA



DMH 90 Properties
Drever Partners, Inc.
Polo Club, Austin, TX
Arbor Point, Houston, TX
Bar Harbor, Houston, TX
Central Park Condos, Houston, TX
The Charleston, Houston, TX
Harpers Mill, Houston, TX
Polo Club I, Houston, TX
Polo Club II, Houston, TX
Richmond Green, Houston, TX
Woodedge, Houston, TX


Houston Portfolio Joint Venture
Drever Partners, Inc.
The Huntley, Houston, TX
Woodlake, Houston, TX
One Cypress Landing, Houston, TX
Live Oak, Houston, TX


Village Portfolio Joint Venture
Drever Partners, Inc.
The Huntley, Houston, TX
Woodlake, Houston, TX
One Cypress Landing, Houston, TX


Fullerton Portfolio Joint Venture
Drever Partners, Inc.
The Huntley, Houston, TX
Woodlake, Houston, TX
Carriage Hill, Houston, TX
The Enclave, Houston, TX
Georgetown, Houston, TX


Houston Portfolio Joint Venture II
Drever Partners, Inc.
Carriage Hill, Houston, TX
The Enclave, Houston, TX
Georgetown, Houston, TX
Brandon Oaks, Houston, TX
Central Park Regency, Houston, TX
Colony Oaks, Houston, TX
Georgetown II, Houston, TX
Meadows on Memorial, Houston, TX
Mill Creek, Houston, TX
Stony Creek, Houston, TX


Tassajara Partners
Drever Partners, Inc.
One Cypress Landing, Houston, TX


Drever/Monticello Investors, L.P.
Drever Partners, Inc.
Monticello, Houston, TX


Cornerstone Associates, L.P.
Drever Partners, Inc.
Aston Brook, Houston, TX


Dallas/La Prada Investors, L.P.
Drever Partners, Inc.
La Prada, Dallas, TX


Lake Tranquility Investors, L.P.
Drever Partners, Inc.
Tranquility Lake, Houston, TX


Camden Oaks Joint Venture
Drever Partners, Inc.
Camden Court, Houston, TX
One Willow Park, Houston, TX


Texas Portfolio Joint Venture
Drever Partners, Inc.
Arbors of Wells Branch, Austin, TX


Westfield Partners, L.P.
Drever Partners, Inc.
One Westfield Lake, Houston, TX


Colorado Club Partners, L.P.
Drever Partners, Inc.
Colorado Club, Houston, TX


Houston Portfolio Joint Venture B
Drever Partners, Inc.
Willow Chase, Houston, TX