UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)
[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934

                     For the quarterly period ended September 30, 2002

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934

            For the transition period from ________________ to ________________

                         Commission file number 0-13261


                              SHELTER PROPERTIES VI
             (Exact name of small business issuer as specified in its charter)



         South Carolina                                        57-0755618
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                            Identification No.)

                         55 Beattie Place, P.O. Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                                 (864) 239-1000
                           (Issuer's telephone number)





<PAGE>



                         PART I - FINANCIAL INFORMATION



ITEM 1.     FINANCIAL STATEMENTS



                              SHELTER PROPERTIES VI
                                  BALANCE SHEET
                                   (Unaudited)
                        (in thousands, except unit data)

                               September 30, 2002

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 805
   Receivables and deposits                                                      819
   Restricted escrows                                                            788
   Other assets                                                                  734
   Investment properties:
      Land                                                    $ 3,745
      Buildings and related personal property                   42,856
                                                                46,601
      Less accumulated depreciation                            (27,729)       18,872
                                                                            $ 22,018

Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                           $ 89
   Tenant security deposit liabilities                                           167
   Accrued property taxes                                                        615
   Other liabilities                                                             456
   Due to affiliates                                                             142
   Mortgage notes payable                                                     25,714

Partners' Deficit
   General partners                                            $ (255)
   Limited partners (42,324 units issued and
      outstanding)                                              (4,910)       (5,165)
                                                                            $ 22,018

                       See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>



                              SHELTER PROPERTIES VI
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>


                                            Three Months Ended       Nine Months Ended
                                               September 30,           September 30,
                                            2002         2001         2002        2001
                                                                               (restated)
Revenues:
<S>                                        <C>        <C>           <C>         <C>
   Rental income                           $ 2,040    $ 2,136       $ 6,247     $ 6,224
   Other income                                259        213           698         680
       Total revenues                        2,299      2,349         6,945       6,904

Expenses:
   Operating                                   874        936         2,556       2,729
   General and administrative                  108        109           335         343
   Depreciation                                459        438         1,397       1,329
   Interest                                    509        458         1,492       1,386
   Property taxes                              204        202           613         621
       Total expenses                        2,154      2,143         6,393       6,408

Income from continuing operations              145        206           552         496
Income from discontinued operations             --         --            --         132

Net income                                 $   145    $   206       $   552     $   628

Net income allocated
   to general partners (1%)                $     1    $     2       $     6     $     6
Net income allocated
   to limited partners (99%)                   144        204           546         622

                                           $   145    $   206       $   552     $   628
Per Limited Partnership Unit
 Income from continuing operations         $  3.40    $  4.82       $ 12.90     $ 11.60
 Income from discontinued operations            --         --            --        3.10


  Net income                               $  3.40    $  4.82       $ 12.90     $ 14.70

Distributions per limited
   partnership unit                        $ 13.37    $  4.09       $103.08     $ 75.99

                       See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>


                              SHELTER PROPERTIES VI
                    STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                        (in thousands, except unit data)

<TABLE>
<CAPTION>


                                       Limited
                                     Partnership     General      Limited
                                        Units        Partners    Partners     Total

<S>                                     <C>            <C>        <C>        <C>
Original capital contributions          42,324         $ 2        $42,324    $42,326

Partners' deficit at
   December 31, 2001                    42,324        $ (257)     $(1,093)   $(1,350)

Distributions to partners                   --            (4)      (4,363)    (4,367)

Net income for the nine months
   ended September 30, 2002                 --             6          546        552

Partners' deficit at
   September 30, 2002                   42,324        $ (255)     $(4,910)   $(5,165)

                       See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>



                              SHELTER PROPERTIES VI
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)


<TABLE>
<CAPTION>

                                                                 Nine Months Ended
                                                                   September 30,
                                                                   2002       2001
Cash flows from operating activities:
<S>                                                           <C>          <C>
   Net income                                                 $   552      $   628
   Adjustments to reconcile net income to net
     cash provided by operating activities:
        Depreciation                                            1,397        1,329
        Amortization of discounts and loan costs                  177          163
        Loss on early extinguishment of debt                       58           --
        Change in accounts:
            Receivables and deposits                             (467)         551
            Other assets                                          (72)         (64)
            Accounts payable                                      (58)         (91)
            Tenant security deposit liabilities                    11           (3)
            Accrued property taxes                                 43           67
            Other liabilities                                      64           15

               Net cash provided by operating activities        1,705        2,595

Cash flows from investing activities:
   Property improvements and replacements                      (1,030)      (1,179)
   Net (deposits to) withdrawals from restricted escrows          (56)         185

               Net cash used in investing activities           (1,086)        (994)

Cash flows from financing activities:
   Repayment of mortgage notes payable                         (9,811)          --
   Proceeds from mortgage notes payable                        14,892           --
   Loan costs paid                                               (483)         (12)
   Payments on mortgage note payable                             (610)        (640)
   Distributions to partners                                   (4,367)      (3,236)
   Advances from affiliates                                       320           --
   Repayment of advances from affiliates                         (320)          --

               Net cash used in financing activities             (379)      (3,888)

Net increase (decrease) in cash and cash equivalents              240       (2,287)
Cash and cash equivalents at beginning of period                  565        2,780
Cash and cash equivalents at end of period                    $   805      $   493

Supplemental disclosure of cash flow information:
   Cash paid for interest                                     $ 1,252      $ 1,203

At December  31,  2001,  approximately  $139,000 of  property  improvements  and
replacements  were  included  in accounts  payable and are  included in property
improvements and replacements for the nine months ended September 30, 2002.

                       See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>




                              SHELTER PROPERTIES VI
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The accompanying  unaudited  financial  statements of Shelter Properties VI (the
"Partnership" or  "Registrant")  have been prepared in accordance with generally
accepted  accounting  principles for interim financial  information and with the
instructions  to Form 10-QSB and Item 310 (b) of  Regulation  S-B.  Accordingly,
they do not include all of the information  and footnotes  required by generally
accepted accounting  principles for complete financial  statements.  The general
partner  responsible  for  management of the  Partnership's  business is Shelter
Realty VI Corporation (the "Corporate General  Partner").  The Corporate General
Partner  is  a  subsidiary  of  Apartment   Investment  and  Management  Company
("AIMCO"),  a publicly traded real estate  investment  trust. The  non-corporate
general partner,  AIMCO Properties,  L.P., is also an affiliate of AIMCO. In the
opinion of the Corporate General Partner, all adjustments  (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included. Operating results for the three and nine month periods ended September
30, 2002, are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 2002. For further information,  refer to the
financial  statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the year ended December 31, 2001.

Effective  January 1, 2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards  ("SFAS")  No.  144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets",  which  established  standards for the way that
public business  enterprises report information about long-lived assets that are
either  being held for sale or have  already  been  disposed of by sale or other
means.  The standard  requires that results of operations for a long-lived asset
that is being held for sale or has  already  been  disposed  of be reported as a
discontinued  operation  on  the  statement  of  operations.  As a  result,  the
accompanying  statements of operations  for the nine months ended  September 30,
2001 have been  restated  as of  January 1, 2001 to reflect  the  operations  of
Foxfire/Barcelona  Apartments as income from discontinued  operations due to its
sale in November  2000.  During the first quarter of 2001,  certain  accruals of
approximately  $132,000 related to the sale of  Foxfire/Barcelona  Apartments in
November  2000 were  reversed due to actual  costs being less than  anticipated.
This accrual reversal is included as income from discontinued  operations in the
nine month period ended September 30, 2001.

Effective  April 1, 2002, the Partnership  adopted SFAS No. 145,  "Rescission of
FASB  Statements No. 4, 44 and 64". SFAS No. 4 "Reporting  Gains and Losses from
Extinguishment of Debt," required that all gains and losses from  extinguishment
of debt be aggregated  and, if material,  classified as an  extraordinary  item.
SFAS No.  145  rescinds  SFAS No.  4, and  accordingly,  gains and  losses  from
extinguishment  of debt should only be classified as  extraordinary  if they are
unusual in nature and occur  infrequently.  Neither of these criteria applies to
the Partnership.  As a result, the accompanying statements of operations reflect
the loss on early extinguishment of debt at River Reach Apartments,  Rocky Creek
Apartments and Carriage House Apartments (see "Note C") as interest expense.

Note B - Reconciliation of Cash Flows

The following is a reconciliation of "Net cash provided by operating activities"
on the accompanying  statements of cash flows to "Net cash from operations",  as
defined  in the  partnership  agreement  of the  Partnership  (the  "Partnership
Agreement").  However,  "Net cash from  operations"  should not be considered an
alternative  to  net  income  as an  indicator  of the  Partnership's  operating
performance or to cash flows as a measure of liquidity.

<TABLE>
<CAPTION>

                                                              Nine Months Ended
                                                                September 30,
                                                             2002          2001
                                                                (in thousands)
<S>                                                        <C>            <C>
     Net cash provided by operating activities             $ 1,705        $ 2,595
        Payments on mortgage notes payable                    (610)          (640)
        Property improvements and replacements              (1,030)        (1,179)
        Change in restricted escrows, net                      (56)           185
        Changes in reserves for net operating
           liabilities                                         479           (475)
        Additions to operating reserves                       (488)          (486)
     Net cash provided by operations                         $ 0            $ 0
</TABLE>

During the nine months ended September 30, 2002 and 2001, the Corporate  General
Partner  reserved  approximately  $488,000 and $486,000,  respectively,  to fund
capital improvements at its properties.

Note C - Refinancing of Mortgage Notes Payable

On May 15, 2002,  the  Partnership  refinanced the mortgages  encumbering  River
Reach Apartments.  The refinancing  replaced the first mortgage of approximately
$6,048,000 and the second mortgage of approximately $252,000 with a new mortgage
in the amount of $10,654,000. The new mortgage carries a stated interest rate of
7.16% compared to the 7.60% interest rate on the old mortgages.  Payments on the
mortgage  loan are due monthly  until the loan matures on June 1, 2022, at which
time it is scheduled to be fully  amortized.  Total  capitalized loan costs were
approximately  $292,000  during the nine months ended  September  30, 2002.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $48,000 during the nine months ended September 30, 2002 due to the
write off of unamortized loan costs and debt discounts.  This amount is included
in interest  expense.  In  addition,  the  Partnership  was  required to deposit
approximately  $100,000 in a repair  escrow  account with the lender in order to
complete required repairs at the property.

On September 16, 2002,  the  Partnership  refinanced  the mortgages  encumbering
Rocky Creek Apartments and Carriage House Apartments. These loans have initially
been refinanced  under an interim credit facility  ("Interim  Credit  Facility")
which  has a  term  of  three  months.  The  Interim  Credit  Facility  includes
properties  in other  partnerships  that are  affiliated  with the  Partnership.
However,  the Interim Credit Facility  creates  separate loans for each property
that are not  cross-collateralized  or  cross-defaulted  with the other property
loans.  During  the  three  month  term  of the  Interim  Credit  Facility,  the
properties will be required to make  interest-only  payments.  The first month's
interest, which was paid at the date of the refinancing, was calculated at LIBOR
plus 70 basis  points.  Interest for the following two months will be calculated
at LIBOR plus 150 basis points and is due monthly.

The Corporate General Partner  anticipates that the Interim Credit Facility will
be transferred to a different  lender before the end of the three-month  term of
the  Interim  Credit  Facility  and  converted  to a permanent  credit  facility
("Permanent  Credit Facility") with a maturity of five years, with one five-year
extension option. This Permanent Credit Facility will also create separate loans
for each property that are not  cross-collateralized or cross-defaulted with the
other property loans.  Each note under this Permanent Credit Facility will begin
as a variable rate loan with the option of converting to a fixed rate loan after
three  years.  The  interest  rate on the  variable  rate loans will be 85 basis
points over the Fannie Mae  discounted  mortgage-backed  security  index ( % for
October  2002),  and the rate will reset monthly.  Each loan will  automatically
renew at the end of each month. In addition,  monthly principal payments will be
required based on a 30-year  amortization  schedule,  using the interest rate in
effect  during the first  month that any  property  is on the  Permanent  Credit
Facility. The loans will be prepayable without penalty.

The refinancing of the Rocky Creek  Apartments loans replaced the first mortgage
of approximately  $1,753,000 and second mortgage of approximately $74,000 with a
new  mortgage in the amount of  $2,340,000.  Total  capitalized  loan costs were
approximately  $103,000  during the nine months ended  September  30, 2002.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $6,000 during the nine months ended September 30, 2002 due to the
write off of unamortized loan costs and debt discounts.  This amount is included
in interest expense.

The  refinancing  of the  Carriage  House  Apartments  loans  replaced the first
mortgage  of  approximately  $1,616,000  and second  mortgage  of  approximately
$68,000 with a new mortgage in the amount of $1,898,000.  Total capitalized loan
costs were  approximately  $88,000  during the nine months ended  September  30,
2002. The Partnership  recognized a loss on the early  extinguishment of debt of
approximately  $5,000 during the nine months ended September 30, 2002 due to the
write off of unamortized loan costs and debt discounts.  This amount is included
in interest  expense.  In  addition,  the  Partnership  was  required to deposit
approximately  $198,000 in a repair  escrow  account with the lender in order to
complete required repairs at the property.

Note D - Transactions with Affiliated Parties

The  Partnership  has no employees  and is dependent  on the  Corporate  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The  Partnership  Agreement  provides  for (i) certain
payments to affiliates for services and (ii)  reimbursement  of certain expenses
incurred by affiliates on behalf of the Partnership.

Affiliates of the Corporate  General Partner are entitled to receive 5% of gross
receipts from all of the  Registrant's  properties as compensation for providing
property   management   services.   The  Partnership  paid  to  such  affiliates
approximately $351,000 and $348,000 for the nine months ended September 30, 2002
and 2001, respectively, which is included in operating expenses.

Affiliates  of  the  Corporate   General  Partner  received   reimbursements  of
accountable  administrative  expenses  amounting to  approximately  $326,000 and
$454,000 for the nine months ended  September  30, 2002 and 2001,  respectively,
which are  included  in  general  and  administrative  expenses  and  investment
properties.   Included  in  these  amounts  are  fees  related  to  construction
management services provided by an affiliate of the Corporate General Partner of
approximately  $68,000 and $217,000 for the nine months ended September 30, 2002
and 2001, respectively.  The construction management service fees are calculated
based on a percentage of current year additions to investment properties.

Pursuant  to the  Partnership  Agreement  and in  connection  with  the  sale of
Foxfire/Barcelona Village during 2000, the Corporate General Partner is entitled
to a  commission  of up to 1% for its  assistance  in the sale.  Payment of such
commission  is  subordinate  to the limited  partners  receiving a cumulative 7%
return on their  investment.  This return has not yet been met, and accordingly,
the fee of approximately $142,000 was accrued in 2000, and is included in due to
affiliates in the accompanying balance sheet at September 30, 2002.

During the nine  months  ended  September  30,  2002,  the  Partnership  paid an
affiliate of the Corporate General Partner approximately  $149,000 for brokerage
fees  associated  with the  refinancing of River Reach  Apartments,  Rocky Creek
Apartments  and  Carriage  House  Apartments.  This  amount is included in other
assets as a loan cost on the accompanying balance sheet.

During the nine months ended  September 30, 2002, the Corporate  General Partner
advanced the Partnership  funds to cover expenses  related to the refinancing of
River Reach Apartments totaling approximately  $320,000. This advance was repaid
by the  Partnership  prior to September 30, 2002.  Interest was charged at prime
plus 1%. Interest expense on this advance was approximately  $1,000 for the nine
months ended September 30, 2002.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated  with the Corporate  General Partner.  During the nine months ended
September  30,  2002 and 2001,  the  Partnership  paid AIMCO and its  affiliates
approximately  $102,000 and $125,000,  respectively,  for insurance coverage and
fees associated with policy claims administration.

Note E - Legal Proceedings

In March 1998, several putative  unitholders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Corporate General Partner filed a motion seeking dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended complaint.  The Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.  The  Corporate  General  Partner  and  affiliated
defendants  oppose the motion.  On April 29,  2002,  the Court held a hearing on
plaintiffs' motion for class  certification and took the matter under submission
after further briefing,  as order by the court, was submitted by the parties. On
July 10, 2002,  the Court  entered an order  vacating the current  trial date of
January 13, 2003 (as well as the  pre-trial  and  discovery  cut-off  dates) and
stayed the case in its entirety through November 7, 2002 so that the parties can
have an  opportunity  to discuss  settlement.  On October  30,  2002,  the court
entered an order extending the stay in effect through January 10, 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Corporate  General Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the complaint. The parties are currently in the midst of briefing that appeal.

The Corporate General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases will be  material  to the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.


<PAGE>




Item 2.     Management's Discussion and Analysis or Plan of Operation

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for forward-looking  statements in certain circumstances.  The matters discussed
in this report contain certain forward-looking  statements,  including,  without
limitation,  statements regarding future financial performance and the effect of
government regulations. The discussions of the Registrant's business and results
of operations,  including forward-looking statements pertaining to such matters,
do not take into account the effects of any changes to the Registrant's business
and  results of  operations.  Actual  results may differ  materially  from those
described in the forward-looking statements and will be affected by a variety of
risks and factors  including,  without  limitation:  national and local economic
conditions; the terms of governmental regulations that affect the Registrant and
interpretations of those regulations;  the competitive  environment in which the
Registrant  operates;  financing risks,  including the risk that cash flows from
operations  may be  insufficient  to meet  required  payments of  principal  and
interest;  real estate risks, including variations of real estate values and the
general  economic  climate in local markets and  competition for tenants in such
markets; and possible environmental liabilities. Readers should carefully review
the Registrant's financial statements and the notes thereto, as well as the risk
factors  described in the documents the Registrant  files from time to time with
the Securities and Exchange Commission.

The Partnership's investment properties consist of five apartment complexes. The
following  table sets forth the average  occupancy of the properties for each of
the nine months ended September 30, 2002 and 2001:

                                                            Average
                                                           Occupancy
       Property                                        2002          2001

       Rocky Creek Apartments
         Augusta, Georgia                              93%            96%

       Carriage House Apartments
         Gastonia, North Carolina                      92%            88%

       Nottingham Square Apartments
         Des Moines, Iowa                              95%            95%

       River Reach Apartments
         Jacksonville, Florida                         96%            96%

       Village Garden Apartments
         Fort Collins, Colorado                        91%            96%

The increase in average  occupancy at Carriage House Apartments is attributed to
a more aggressive marketing campaign and an improved local economy. The decrease
in average occupancy at Rocky Creek is due to more tenants  purchasing homes due
to lower  interest  rates.  The decrease in average  occupancy at Village Garden
Apartments is attributed to changing economic conditions in the local market and
more tenants purchasing homes due to low interest rates.

Results of Operations

The Partnership  realized net income of approximately  $145,000 and $552,000 for
the three and nine months ended  September  30, 2002,  compared to net income of
approximately  $206,000  and  $628,000  for the  three  and  nine  months  ended
September  30,  2001.  The  decrease  in net  income for the nine  months  ended
September 30, 2002 is due to the reduction in 2001 of certain  accruals  related
to the sale of  Foxfire/Barcelona  Apartments  during  2000 which is included in
income from  discontinued  operations,  partially offset by an increase in total
revenues.  Effective  January 1, 2002,  the  Partnership  adopted  Statement  of
Financial  Accounting  Standards  No. 144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets",  which  established  standards for the way that
public business  enterprises report information about long-lived assets that are
either  being held for sale or have  already  been  disposed of by sale or other
means.  The standard  requires that results of operations for a long-lived asset
that is being held for sale or has  already  been  disposed  of be reported as a
discontinued  operation  on  the  statement  of  operations.  As a  result,  the
accompanying  statements of operations  have been restated as of January 1, 2001
to  reflect  the  operations  of  Foxfire/Barcelona  Apartments  as income  from
discontinued  operations  due to its sale in  November  2000.  During  the first
quarter of 2001, certain accruals of approximately  $132,000 related to the sale
of  Foxfire/Barcelona  Apartments  in November  2000 were reversed due to actual
costs being less than  anticipated.  This accrual reversal is included as income
from discontinued operations in the nine months ended September 30, 2001.

The Partnership  recognized  income from continuing  operations of approximately
$552,000 for the nine months ended  September 30, 2002,  compared to income from
continuing  operations  of  approximately  $496,000  for the nine  months  ended
September 30, 2001. The Partnership recognized income from continuing operations
of  approximately  $145,000  for the three  months  ended  September  30,  2002,
compared to income from continuing operations of approximately  $206,000 for the
three months ended September 30, 2001.

The  increase in income from  continuing  operations  for the nine months  ended
September 30, 2002 is due to an increase in total revenues and a slight decrease
in total  expenses.  The decrease in income from  continuing  operations for the
three months ended September 30, 2002 is due to a decrease in total revenues and
a slight  increase in total  expenses.  Total  revenues  decreased for the three
month period due to a decrease in rental income  partially offset by an increase
in other income.  Total  revenues  increased for the nine month period due to an
increase in rental and other income. Rental income increased primarily due to an
increase in occupancy at Carriage House, a decrease in concessions at all of the
Registrant's  investment  properties  and  increases in average  rental rates at
three of the Registrant's investment properties partially offset by decreases in
occupancy at Rocky Creek and Village Gardens Apartments and decreases in average
rental  rates at Rocky Creek and  Carriage  House  Apartments.  During the three
month period,  these  increases  were offset by an increase in bad debt expense,
especially at Nottingham Square Apartments. Other income increased primarily due
to increased utility reimbursements,  lease cancellation fees, late charges, and
cleaning damage fees primarily at Nottingham Square Apartments, partially offset
by a decrease in interest  income as a result of lower  average cash balances in
interest bearing accounts.

Total expenses  decreased for the nine months ended September 30, 2002 primarily
due to a decrease  in  operating  expenses  partially  offset by an  increase in
depreciation  and interest  expenses.  Total  expenses  increased  for the three
months ended September 30, 2002 due to an increase in depreciation  and interest
expenses  partially offset by reduced  operating  expenses.  Operating  expenses
decreased  primarily  due to a decrease in  property  expenses  and  maintenance
expenses,  partially  offset by an  increase  in  insurance  expenses.  Property
expenses decreased due to a decrease in utilities  especially at Village Gardens
Apartments  and  decrease  in  maintenance  salaries  at all  of the  investment
properties.  Maintenance  expenses  decreased  due to a decrease in snow removal
expense at  Nottingham  Square,  as well as an overall  decrease in  maintenance
costs at all of the investment properties. Insurance expense increased due to an
increase in hazard  insurance at River Reach and Nottingham  Square  Apartments.
Depreciation  expense  increased due to property  improvements  and replacements
placed in service during the past twelve months at the Partnership's  investment
properties.  Interest  expense  increased  due to the  refinance  of River Reach
Apartments  on May 15, 2002 and the  refinances  of Rocky Creek  Apartments  and
Carriage  House  Apartments  on  September  16,  2002 which  increased  the debt
balance.

General  and  administrative  expenses  remained  relatively  constant  over the
comparable  periods.  Included  in general and  administrative  expenses at both
September 30, 2002 and 2001 are  reimbursements  to the Managing General Partner
allowed under the  Partnership  Agreement  associated with its management of the
Partnership.  Also  included in general and  administrative  expenses  are costs
associated  with  quarterly  and  annual   communications  which  investors  and
regulatory agencies and the annual audit required by the Partnership Agreement.

As part of the ongoing business plan of the Partnership,  the Corporate  General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expenses.  As part of this plan,  the  Corporate  General  Partner  attempts  to
protect  the  Partnership  from the  burden of  inflation-related  increases  in
expenses by increasing  rents and  maintaining a high overall  occupancy  level.
However,  due to  changing  market  conditions,  which can  result in the use of
rental  concessions and rental reductions to offset softening market conditions,
there is no guarantee that the Corporate General Partner will be able to sustain
such a plan.

Liquidity and Capital Resources

At  September  30,  2002,  the  Partnership  held cash and cash  equivalents  of
approximately $805,000 compared to approximately $493,000 at September 30, 2001.
Cash and cash equivalents  increased  approximately  $240,000 since December 31,
2001 due to  approximately  $1,705,000 of cash provided by operating  activities
partially  offset  by  approximately  $1,086,000  and  $379,000  of cash used in
investing  and  financing  activities,  respectively.  Cash  used  in  investing
activities consisted of property  improvements and replacements and net deposits
to restricted escrows maintained by the mortgage lenders. Cash used in financing
activities consisted of distributions to partners,  repayments of mortgage notes
payable and advances from affiliates,  loan costs paid and principal payments on
mortgage  notes  payable which were  partially  offset by proceeds from mortgage
notes payable and advances from affiliates.  The Registrant  invests its working
capital reserves in interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the investment  properties to adequately  maintain the
physical  assets and other operating needs of the Partnership and to comply with
Federal,  state  and local  legal and  regulatory  requirements.  The  Corporate
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional  compliance
measures with regard to governance,  disclosure, audit and other areas. In light
of these changes,  the  Partnership  expects that it will incur higher  expenses
related  to  compliance,  including  increased  legal  and audit  fees.  Capital
improvements planned for each of the Registrant's properties are detailed below.

Rocky Creek Apartments

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately $75,000 in budgeted and non-budgeted capital improvements at Rocky
Creek Apartments primarily consisting of floor covering  replacements,  plumbing
enhancements,  air  conditioning  replacements and appliance  replacements.  The
improvements  were funded from  operating  cash flow.  Capital  improvements  of
approximately  $75,000  have been  budgeted  for 2002 which  include  electrical
enhancements,  roof replacement,  and water heater, floor covering and appliance
replacements.  Additional  improvements may be considered and will depend on the
physical condition of the property as well as anticipated cash flow generated by
the property.

Carriage House Apartments

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately  $93,000 in budgeted  and  non-budgeted  capital  improvements  at
Carriage House Apartments primarily  consisting of floor covering  replacements,
plumbing enhancements, wall coverings, air conditioning replacements and a water
sub-metering  project.  These  improvements were funded from operating cash flow
and replacement  reserves.  Capital  improvements of approximately  $82,000 have
been budgeted for 2002 which include appliance and floor covering  replacements,
water  submetering  project  and  air  conditioning  unit  upgrades.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as replacement  reserves and anticipated cash flow generated by
the property.

Nottingham Square Apartments

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately  $445,000 in budgeted and  non-budgeted  capital  improvements  at
Nottingham   Square   Apartments   primarily   consisting   of  floor   covering
replacements,  door replacements,  fire suppression improvements and balcony and
pool  improvements.  These  improvements  were funded from  operating cash flow.
Capital improvements of approximately $416,000 have been budgeted for 2002 which
include  floor  covering  replacements,   swimming  pool  improvements,  fencing
upgrades,   parking  lot  improvements  and  structural   upgrades.   Additional
improvements may be considered and will depend on the physical  condition of the
property as well as replacement  reserves and anticipated cash flow generated by
the property.

River Reach Apartments

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately  $221,000  in  capital  improvements  at  River  Reach  Apartments
primarily  consisting  of  floor  covering  and  appliance   replacements,   air
conditioning   replacements,   exterior   painting  and  recreational   facility
enhancements. These improvements were funded from operating cash and replacement
reserves.  Capital improvements of approximately $335,000 have been budgeted for
2002 which include floor covering, air conditioning, and appliance replacements,
fitness equipment, landscaping improvements, exterior painting, and plumbing and
electrical  enhancements.  Additional  improvements  may be considered  and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.

Village Garden Apartments

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately  $57,000 in capital  improvements  at  Village  Garden  Apartments
primarily consisting of floor covering  replacements and electrical and plumbing
improvements.  These  improvements were funded from operating cash flow. Capital
improvements of approximately $150,000 have been budgeted for 2002 which include
floor covering and appliance  replacements,  fitness  equipment and water heater
replacements.  Additional  improvements may be considered and will depend on the
physical  condition  of  the  property  as  well  as  replacement  reserves  and
anticipated cash flow generated by the property.

The additional  capital  expenditures will be incurred only if cash is available
from  operations  and  Partnership  reserves.  To the extent that such  budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.

On May 15, 2002,  the  Partnership  refinanced the mortgages  encumbering  River
Reach Apartments.  The refinancing  replaced the first mortgage of approximately
$6,048,000 and the second mortgage of approximately $252,000 with a new mortgage
in the amount of $10,654,000. The new mortgage carries a stated interest rate of
7.16% compared to the 7.60% interest rate on the old mortgages.  Payments on the
mortgage  loan are due monthly  until the loan matures on June 1, 2022, at which
time it is scheduled to be fully  amortized.  Total  capitalized loan costs were
approximately  $292,000  during the nine months ended  September  30, 2002.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $48,000 during the nine months ended September 30, 2002 due to the
write off of unamortized loan costs and debt discounts.  This amount is included
in interest  expense.  In  addition,  the  Partnership  was  required to deposit
approximately  $100,000 in a repair  escrow  account with the lender in order to
complete required repairs at the property.

On September 16, 2002,  the  Partnership  refinanced  the mortgages  encumbering
Rocky Creek Apartments and Carriage House Apartments. These loans have initially
been refinanced  under an interim credit facility  ("Interim  Credit  Facility")
which  has a  term  of  three  months.  The  Interim  Credit  Facility  includes
properties  in other  partnerships  that are  affiliated  with the  Partnership.
However,  the Interim Credit Facility  creates  separate loans for each property
that are not  cross-collateralized  or  cross-defaulted  with the other property
loans.  During  the  three  month  term  of the  Interim  Credit  Facility,  the
properties will be required to make  interest-only  payments.  The first month's
interest, which was paid at the date of the refinancing, was calculated at LIBOR
plus 70 basis  points.  Interest for the following two months will be calculated
at LIBOR plus 150 basis points and is due monthly.

The Corporate General Partner  anticipates that the Interim Credit Facility will
be transferred to a different  lender before the end of the three-month  term of
the  Interim  Credit  Facility  and  converted  to a permanent  credit  facility
("Permanent  Credit Facility") with a maturity of five years, with one five-year
extension option. This Permanent Credit Facility will also create separate loans
for each property that are not  cross-collateralized or cross-defaulted with the
other property loans.  Each note under this Permanent Credit Facility will begin
as a variable rate loan with the option of converting to a fixed rate loan after
three  years.  The  interest  rate on the  variable  rate loans will be 85 basis
points over the Fannie Mae  discounted  mortgage-backed  security  index ( % for
October  2002),  and the rate will reset monthly.  Each loan will  automatically
renew at the end of each month. In addition,  monthly principal payments will be
required based on a 30-year  amortization  schedule,  using the interest rate in
effect  during the first  month that any  property  is on the  Permanent  Credit
Facility. The loans will be prepayable without penalty.
The refinancing of the Rocky Creek  Apartments loans replaced the first mortgage
of approximately  $1,753,000 and second mortgage of approximately $74,000 with a
new  mortgage in the amount of  $2,340,000.  Total  capitalized  loan costs were
approximately  $103,000  during the nine months ended  September  30, 2002.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $6,000 during the nine months ended September 30, 2002 due to the
write off of unamortized loan costs and debt discounts.  This amount is included
in interest expense.

The  refinancing  of the  Carriage  House  Apartments  loans  replaced the first
mortgage  of  approximately  $1,616,000  and second  mortgage  of  approximately
$68,000 with a new mortgage in the amount of $1,898,000.  Total capitalized loan
costs were  approximately  $88,000  during the nine months ended  September  30,
2002. The Partnership  recognized a loss on the early  extinguishment of debt of
approximately  $5,000 during the nine months ended September 30, 2002 due to the
write off of unamortized loan costs and debt discounts.  This amount is included
in interest  expense.  In  addition,  the  Partnership  was  required to deposit
approximately  $198,000 in a repair  escrow  account with the lender in order to
complete required repairs at the property.

The Partnership's  current assets are thought to be sufficient for any near term
needs (exclusive of capital improvements) of the Partnership.  Nottingham Square
has mortgage indebtedness of approximately $6,544,000,  net of discounts,  which
has a maturity date of November 2002. The Corporate General Partner is currently
planning to refinance  the debt maturing in November 2002 prior to its maturity.
If the  property  cannot be  refinanced  or sold for a  sufficient  amount,  the
Partnership will risk losing such property through foreclosure.

The  mortgages   encumbering  River  Reach  and  Village  Garden  Apartments  of
approximately $14,932,000 mature in June 2022 and January 2021, respectively, at
which time the mortgages are scheduled to be fully amortized.

The  mortgages   encumbering  Rocky  Creek  and  Carriage  House  Apartments  of
approximately  $4,238,000  mature  November 2002 and are  automatically  renewed
monthly.

The Partnership  distributed the following  amounts during the nine months ended
September 30, 2002 and 2001 (in thousands except per unit data):

<TABLE>
<CAPTION>

                     Nine Months          Per          Nine Months          Per
                        Ended           Limited           Ended           Limited
                    September 30,     Partnership     September 30,     Partnership
                         2002             Unit             2001             Unit

<S>                     <C>              <C>              <C>              <C>
Operations              $ 406            $ 9.49           $1,999           $46.76
Sale (1)                    --               --            1,237            29.23
Refinance (2)            3,961            93.59               --               --
                        $4,367          $103.08           $3,236           $75.99
</TABLE>

(1)  From  the  sale of  Foxfire/Barcelona  Apartments  in  2000.  (2)  From the
refinance of River Reach Apartments in May, 2002.

Future cash  distributions  will depend on the levels of net cash generated from
operations,   the  availability  of  cash  reserves,  and  the  timing  of  debt
maturities,   refinancings,   and/or  property  sales.  The  Partnership's  cash
available  for  distribution  is  reviewed on a monthly  basis.  There can be no
assurance that the Partnership  will generate  sufficient funds from operations,
after required  capital  improvements,  to permit further  distributions  to its
partners during the remainder of 2002 or subsequent  periods.  In addition,  the
Partnership is restricted from making distributions if the amount in the reserve
account  maintained by the mortgage lender for Nottingham  Square  Apartments is
less than $400 per apartment  unit at the property.  At September 30, 2002,  the
reserve account was adequately funded with a balance of approximately $479,000.

Other

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates  owned 27,729 limited  partnership  units
(the "Units") in the Partnership representing 65.52% of the outstanding Units at
September  30,  2002. A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire additional units of limited partnership  interest in the
Partnership  in  exchange  for cash or a  combination  of cash and  units in the
operating  partnership  of AIMCO  either  through  private  purchases  or tender
offers. Under the Partnership  Agreement,  unitholders holding a majority of the
Units are  entitled to take action  with  respect to a variety of matters  which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the Corporate General Partner.  As a result of its ownership of
65.52% of the  outstanding  Units,  AIMCO is in a position to control all voting
decisions with respect to the Registrant. Although the Corporate General Partner
owes fiduciary duties to the limited partners of the Partnership,  the Corporate
General Partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the  Corporate  General  Partner,  as managing  general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Corporate General Partner to AIMCO, as its sole stockholder.

Critical Accounting Policies and Estimates

The financial  statements are prepared in accordance with accounting  principles
generally  accepted in the United States which require the  Partnership  to make
estimates and  assumptions.  The  Partnership  believes that of its  significant
accounting  policies,  the following may involve a higher degree of judgment and
complexity.

Impairment of Long-Lived Assets

Investment  properties  are  recorded at cost,  less  accumulated  depreciation,
unless  considered  impaired.  If  events  or  circumstances  indicate  that the
carrying  amount of a property may be  impaired,  the  Partnership  will make an
assessment of its  recoverability  by estimating  the  undiscounted  future cash
flows,  excluding  interest  charges,  of the property.  If the carrying  amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's  investment  properties.  These  factors  include  changes  in the
national,  regional and local economic  climate;  local  conditions,  such as an
oversupply  of  multifamily   properties;   competition   from  other  available
multifamily  property  owners and changes in market  rental  rates.  Any adverse
changes in these factors could cause an impairment in the Partnership's assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized monthly as it is earned. The
Partnership will offer rental concessions during  particularly slow months or in
response  to  heavy  competition  from  other  similar  complexes  in the  area.
Concessions are charged to income as incurred.

ITEM 3.     CONTROLS AND PROCEDURES

The principal executive officer and principal financial officer of the Corporate
General Partner, who are the equivalent of the Partnership's principal executive
officer and principal financial officer,  respectively,  have, within 90 days of
the filing date of this quarterly  report,  evaluated the  effectiveness  of the
Partnership's  disclosure  controls and  procedures  (as defined in Exchange Act
Rules  (13a-14(c)  and  (15d-14(c))  and have  determined  that such  disclosure
controls and procedures are adequate.  There have been no significant changes in
the Partnership's internal controls or in other factors that could significantly
affect the  Partnership's  internal  controls since the date of evaluation.  The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.

<PAGE>

                           PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Corporate General Partner filed a motion seeking dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended complaint.  The Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.  The  Corporate  General  Partner  and  affiliated
defendants  oppose the motion.  On April 29,  2002,  the Court held a hearing on
plaintiffs' motion for class  certification and took the matter under submission
after further briefing,  as order by the court, was submitted by the parties. On
July 10, 2002,  the Court  entered an order  vacating the current  trial date of
January 13, 2003 (as well as the  pre-trial  and  discovery  cut-off  dates) and
stayed the case in its entirety through November 7, 2002 so that the parties can
have an  opportunity  to discuss  settlement.  On October  30,  2002,  the court
entered an order extending the stay in effect through January 10, 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Corporate  General Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the complaint. The parties are currently in the midst of briefing that appeal.

The Corporate General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases will be  material  to the
Partnership's overall operations.


<PAGE>



ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a) Exhibits:

                  Exhibit 3, Amended and Restated  Certificate  and Agreement of
                  Limited  Partnership  (Exhibit A to the Prospectus included in
                  Registrant's Amendment No. 1 to Registration Statement,  filed
                  March 21, 1984 (File No. 2-86995),  is incorporated  herein by
                  reference).

                  Exhibit  10(iii)(j),  Loan  Agreement  by  and  among  Shelter
                  Properties  VI, and other  affiliated  partnerships,  and GMAC
                  Commercial Mortgage Corporation, a California corporation,  to
                  secure credit facility, dated September 16, 2002.

                  Exhibit  10(iii)(k),  Multifamily  Note by and  among  Shelter
                  Properties  VI and GMAC  Commercial  Mortgage  Corporation,  a
                  California  corporation,   to  secure  loan  for  Rocky  Creek
                  Apartments.

                  Exhibit  10(iii)(l),  Multifamily  Note by and  among  Shelter
                  Properties  VI and GMAC  Commercial  Mortgage  Corporation,  a
                  California  corporation,  to secure  loan for  Carriage  House
                  Apartments.

                  Exhibit 99,  Certification of Chief Executive  Officer and
                  Chief Financial Officer.

            b) Reports on Form 8-K filed during the quarter ended  September 30,
                  2002:

                  None.


<PAGE>


                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



                              SHELTER PROPERTIES VI

                                 By:     Shelter Realty VI Corporation
                                         Corporate General Partner

                                 By:     /s/Patrick J. Foye
                                         Patrick J. Foye
                                         Executive Vice President

                                 By:     /s/Thomas C. Novosel
                                         Thomas C. Novosel
                                         Senior Vice President
                                         and Chief Accounting Officer

                                 Date:   November 14, 2002


<PAGE>



                                  CERTIFICATION


I, Patrick J. Foye, certify that:


1. I have reviewed this  quarterly  report on Form 10-QSB of Shelter  Properties
VI;


2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities, particularly during the period in which this quarterly report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and


      c)  Presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  November 13, 2002

                                    /s/Patrick J. Foye
                                    Patrick J. Foye
                                    Executive  Vice  President of Shelter Realty
                                    VI  Corporation,  equivalent  of  the  chief
                                    executive officer of the Partnership


<PAGE>



                                  CERTIFICATION


I, Paul J. McAuliffe, certify that:


1. I have reviewed this  quarterly  report on Form 10-QSB of Shelter  Properties
VI;


2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities, particularly during the period in which this quarterly report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and


      c)  Presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: November 13, 2002

                                    /s/Paul J. McAuliffe
                                    Paul J. McAuliffe
                                    Executive Vice President and Chief Financial
                                    Officer  of Shelter  Realty VI  Corporation,
                                    equivalent of the chief financial officer of
                                    the Partnership


<PAGE>


Exhibit 99


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002



In connection with the Quarterly Report on Form 10-QSB of Shelter  Properties VI
Limited  Partnership  (the  "Partnership"),   for  the  quarterly  period  ended
September 30, 2002 as filed with the Securities  and Exchange  Commission on the
date hereof (the  "Report"),  Patrick J. Foye,  as the  equivalent  of the chief
executive officer of the Partnership,  and Paul J. McAuliffe,  as the equivalent
of the chief  financial  officer  of the  Partnership,  each  hereby  certifies,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)  The Report fully complies with the  requirements  of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects,  the  financial  condition  and  results  of  operations  of  the
     Partnership.


                                    /s/Patrick J. Foye
                              Name: Patrick J. Foye
                              Date: November 13, 2002


                                   /s/Paul J. McAuliffe
                             Name: Paul J. McAuliffe
                             Date: November 13, 2002


This  certification  accompanies  the  Report  pursuant  to  Section  906 of the
Sarbanes-Oxley  Act of 2002 and shall not,  except to the extent required by the
Sarbanes-Oxley  Act of 2002, be deemed filed by the  Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.



<PAGE>


                                                              EXHIBIT 10(iii)(j)



                                 LOAN AGREEMENT


                                  BY AND AMONG


BIG WALNUT,  L.P.; VILLA NOVA, LIMITED  PARTNERSHIP;  DAVIDSON  DIVERSIFIED REAL
ESTATE I, L.P.; LAKE EDEN ASSOCIATES,  L.P.; AIMCO  STEEPLECHASE,  L.P.; SHELTER
PROPERTIES VI LIMITED PARTNERSHIP; WOODMERE ASSOCIATES, L.P.; SHELTER PROPERTIES
VI LIMITED PARTNERSHIP;


                                       AND


                      GMAC COMMERCIAL MORTGAGE CORPORATION


                                   DATED AS OF


                               September 16, 2002

<PAGE>




                                TABLE OF CONTENTS


                                                                           Page

LOAN AGREEMENT                                                               1
ARTICLE 1 THE LOANS..........................................................2
   SECTION 1.01.  Commitment to Make Loans...................................2
   SECTION 1.02.  Maturity Date of Loans; Prepayments........................2
   SECTION 1.03.  Requests for Loans.........................................3
   SECTION 1.04.  Principal Interest Payments on Loans.......................3
   SECTION 1.05.  Intentionally Omitted......................................5
   SECTION 1.06.  Notes......................................................5
   SECTION 1.07.  Extension of Variable Facility Termination Date............5
   SECTION 1.08.  Conversion from a Variable Loan to a Fixed Loan............5
   SECTION 1.09.  Limitations on Right to Convert............................6
   SECTION 1.10.  Conditions to Conversion...................................6
ARTICLE 2 THE LOANS..........................................................7
   SECTION 2.01.  Rate Setting for Variable Loans and Fixed Loans............7
   SECTION 2.02.  Loan Confirmation Instrument for Variable Loans............7
   SECTION 2.03.  Breakage and other Costs...................................7
   SECTION 2.04.  Initial Loans..............................................8
   SECTION 2.05.  Determination of Loan Amount and Valuations................8
ARTICLE 3 ADDITIONAL LOANS...................................................9
   SECTION 3.01.  Right to Additional Loans..................................9
   SECTION 3.02.  Procedure for Additional Loans.............................9
   SECTION 3.03.  Conditions of Additional Loans.............................9
ARTICLE 4 CONDITIONS PRECEDENT TO REQUESTS..................................10
   SECTION 4.01.  Conditions Applicable to the Initial Loan Request, Conversion
   Requests, Additional Loan Requests and Termination Requests..............10
   SECTION 4.02.  Conditions Precedent to Initial Loans.....................11
   SECTION 4.03.  Conditions Precedent to Additional Loans and Addition of the
   Additional Mortgaged Property to the Collateral Pool.....................12
   SECTION 4.04.  Conditions Precedent to Conversion........................12
   SECTION 4.05.  Delivery of Documents Related to each Mortgaged Property..13
ARTICLE 5 REPRESENTATIONS AND WARRANTIES....................................13
   SECTION 5.01.  Representations and Warranties of Borrower................13
   SECTION 5.02.  Representations and Warranties of Lender..................14
ARTICLE 6 FEES    ..........................................................14
   SECTION 6.01.  Standby Fee...............................................14
   SECTION 6.02.  Origination Fees..........................................14
   SECTION 6.03.  Due Diligence Fees........................................15
   SECTION 6.04.  Legal Fees and Expenses...................................15
   SECTION 6.05.  Collateral Release Fee....................................16
   SECTION 6.06.  Look-back Fee.............................................16
   SECTION 6.07.  Failure to Close any Request..............................16
ARTICLE 7 EVENTS OF DEFAULT.................................................16
   SECTION 7.01.  Events of Default.........................................16
ARTICLE 8 REMEDIES..........................................................16
   SECTION 8.01.  Remedies; Waivers.........................................16
   SECTION 8.02.  Waivers; Rescission of Declaration........................17
   SECTION 8.03.  Lender's Right to Protect Collateral and Perform Covenants and
   Other Obligations..........................................................17
   SECTION 8.04.  No Remedy Exclusive.......................................17
   SECTION 8.05.  No Waiver.................................................17
   SECTION 8.06.  No Notice.................................................18
ARTICLE 9 RIGHTS OF FANNIE MAE..............................................18
   SECTION 9.01.  Special Pool Purchase Contract............................18
   SECTION 9.02.  Assignment of Rights......................................18
   SECTION 9.03.  Replacement of Lender.....................................18
   SECTION 9.04.  Fannie Mae and Lender Fees and Expenses...................19
   SECTION 9.05.  Third-Party Beneficiary...................................19
ARTICLE 10 INTEREST RATE PROTECTION.........................................19
   SECTION 10.01. Interest Rate Protection..................................19
   SECTION 10.02. Cap Terms.................................................19
   SECTION 10.03. Cap Security Agreement; Delivery of Cap Payments..........20
   SECTION 10.04. Termination...............................................20
   SECTION 10.05. Performance Under Cap Documents...........................20
   SECTION 10.06. Escrow Provisions.........................................20
ARTICLE 11 MISCELLANEOUS PROVISIONS.........................................21
   SECTION 11.01. Counterparts..............................................21
   SECTION 11.02. Amendments, Changes and Modifications.....................21
   SECTION 11.03. Right to Complete or Partial Termination of Loan Commitment.
   22
   SECTION 11.04. Payment of Costs, Fees and Expenses.......................22
   SECTION 11.05. Payment Procedure.........................................23
   SECTION 11.06. Payments on Business Days.................................23
   SECTION 11.07. Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial.
   23
   SECTION 11.08. Severability..............................................24
   SECTION 11.09. Notices...................................................25
   SECTION 11.10. Further Assurances and Corrective Instruments.............26
   SECTION 11.11. Term of this Agreement....................................26
   SECTION 11.12. Assignments; Third-Party Rights...........................27
   SECTION 11.13. Headings..................................................27
   SECTION 11.14. General Interpretive Principles...........................27
   SECTION 11.15. Interpretation............................................27
   SECTION 11.16. Standards for Decisions, Etc..............................27
   SECTION 11.17. Decisions in Writing......................................27



<PAGE>


EXHIBITS


EXHIBIT A              Schedule of Initial Mortgaged Property, Initial
                       Valuation and Loan Amount
EXHIBIT B              Fixed Loan Note
EXHIBIT C              Variable Loan Note
EXHIBIT D              Conversion Request
EXHIBIT E              Rate Form
EXHIBIT F              Loan Confirmation Instrument
EXHIBIT G              Loan Request
EXHIBIT H              Additional Loan Request
EXHIBIT I              Interest Rate Cap Security, Pledge and Assignment
                       Agreement
EXHIBIT J              Termination Request
EXHIBIT K              Guaranty


APPENDIX I  ......Definitions






<PAGE>




                                 LOAN AGREEMENT

      THIS LOAN  AGREEMENT is made as of the 16th day of September,  2002 by and
among (i) BIG WALNUT, L.P., a Delaware limited partnership,  VILLA NOVA, LIMITED
PARTNERSHIP, a Tennessee limited partnership DAVIDSON DIVERSIFIED REAL ESTATE I,
L.P., a Delaware limited  partnership,  LAKE EDEN  ASSOCIATES,  L.P., a Delaware
limited partnership,  AIMCO STEEPLECHASE,  L.P., a Delaware limited partnership,
SHELTER PROPERTIES VI LIMITED PARTNERSHIP, a South Carolina limited partnership,
WOODMERE ASSOCIATES, L.P., a Delaware limited partnership, SHELTER PROPERTIES VI
LIMITED  PARTNERSHIP,  a South  Carolina  limited  partnership  (individually  a
"Borrower" and  collectively  with any Additional  Borrower  becoming a party to
this  Agreement from time to time, the  "Borrowers"),  and (ii) GMAC  COMMERCIAL
MORTGAGE CORPORATION, a California corporation (the "Lender").

                                    RECITALS

      A.....Each  Borrower  owns a  Multifamily  Residential  Property  as  more
particularly  described in Exhibit A to this Agreement (unless otherwise defined
or the context clearly  indicates  otherwise,  capitalized  terms shall have the
meanings ascribed to such terms in Appendix I of this Agreement).

      B.....Each Borrower has requested that Lender make a Loan to such Borrower
in the  original  principal  amount set forth on Exhibit A, each of which  Loans
initially shall be a Variable Loan.

C. To secure the obligations of each Borrower under this Agreement and the other
Loan Documents executed in connection with the Loan made to such Borrower,  such
Borrower shall pledge its respective  Collateral to Lender. The Collateral shall
be composed of (i)  Security  Instruments  encumbering  a  Borrower's  ownership
interest in the Multifamily Residential Property listed on Exhibit A as owned by
such Borrower and (ii) the other  Security  Documents  executed by such Borrower
pursuant to this Agreement or the Loan Documents.

      D.....The  parties hereto  anticipate that, from time to time,  Additional
Loans will be made to  Additional  Borrowers  under the terms and  conditions of
this  Agreement.  At the  time of the  making  of  such  Additional  Loans,  the
applicable  Additional  Borrower  will become a party to this  Agreement and the
other  applicable  Loan  Documents.  Additional  Loans  shall  be  available  to
Additional  Borrowers in a maximum aggregate principal amount Outstanding at any
time, together with all other then Outstanding Loans, of $210,000,000.

      E.....Subject to the terms,  conditions and limitations of this Agreement,
Lender has agreed to make the Initial Loans to each of the Borrowers and to make
Additional Loans to Additional Borrowers from time to time.

      NOW,  THEREFORE,  Borrowers  and Lender,  in  consideration  of the mutual
promises and agreements contained in this Agreement, hereby agree as follows:

ARTICLE 1...

                                    THE LOANS

SECTION 1.01......Commitment to Make Loans.

      Subject to the terms, conditions and limitations of this Agreement, Lender
agrees to make Loans to the Borrowers,  in the case of the Initial Loans, on the
Initial  Closing  Date,  and in the  case  of  Additional  Loans  to  Additional
Borrowers,  on the dates provided in Additional Loan Requests. No Loans shall be
increased  after an Initial Closing as a result of increases in the Valuation of
any Mortgaged  Property.  Each Loan shall be a Variable Loan on the Closing Date
of such Loan. A Borrower  shall be  permitted  to convert the  Variable  Loan to
which it is party (but not less than the  entirety  of any  Variable  Loan) to a
Fixed Loan pursuant to Sections 1.08, 1.09 and 1.10 of this Agreement.

SECTION 1.02......Maturity Date of Loans; Prepayments.

(a) Variable Loans. The maturity date of each Variable Loan shall be the earlier
of (i) the  termination  of this  Agreement  pursuant to subsection  (e) of this
Section 1.02, (ii) the fifth anniversary  (unless such date is extended pursuant
to Section 1.07 of this Agreement,  in which case, the tenth anniversary) of the
Initial Closing Date or (iii) the maturity date of any  outstanding  MBS, unless
either (A) not less than five  Business  Days prior to the maturity  date of the
outstanding  MBS, a Borrower has requested that the  outstanding  MBS be renewed
with a new MBS or converted to a Fixed Loan to take effect on the maturity  date
of the  outstanding  MBS and such  new MBS has been  issued  or  conversion  has
occurred or (B) the MBS is automatically  renewed, which automatic renewal shall
occur in the  event  that a  Borrower  does not make the  request  set  forth in
subpart  (iii)(A)  above  and does not give  Lender  notice  not less  than five
Business  days  prior  to the  maturity  date of the  outstanding  MBS  that the
Variable Loan related to such outstanding MBS shall be paid on the maturity date
of such  outstanding  MBS.  Any MBS that is issued  as a result of an  automatic
renewal of a maturing MBS as contemplated by subpart (iii)(B) above shall have a
maturity date of three (3) months after the MBS Issue Date.  Except for fundings
that occur prior to the Fannie Mae Purchase  Date and for fundings  resulting in
payment of partial  month  interest  as  contemplated  in Section  1.04(a),  the
Variable  Loans shall be funded by the sale of a series of MBSs, in an aggregate
amount  sufficient to fund the outstanding  aggregate  principal  balance of the
Variable  Loans.  The MBS  Issue  Date for each MBS  shall be the first day of a
month and the  maturity  date of the MBS funding the  Variable  Loans,  shall be
specified from time to time by each of the Borrowers,  each of which dates shall
be a date which  completes  one (1),  three (3), six (6) or nine (9) full months
after  each MBS Issue  Date,  provided  that,  no more than  three (3) times per
Calendar Year, with the consent of Lender, to facilitate the sale of a Mortgaged
Property,  an  Additional  Loan  on an  Additional  Mortgaged  Property  or  the
conversion of a Variable  Loan to a Fixed Loan,  the maturity date of an MBS may
be a date other than as required by this sentence which  completes not less than
one (1) full month  after an MBS Issue  Date.  No MBS shall be issued  after the
last day of the Variable Loan Availability Period.

      For these purposes, a year shall be deemed to consist of 12 30-day months.
For example,  the date which completes three full months after September 1 shall
be December 1; and the date which  completes  three full months after  January 1
shall be April 1.

(b) Fixed Loans.  The  maturity  date of any Fixed Loan shall be  determined  in
accordance with Section 1.08 of this Agreement.

(c) Prepayment of Variable Loans.  Except as otherwise set forth in this Section
1.02(c) and Section  1.02(e)  below,  Variable  Loans are prepayable at any time
without penalty or premium,  provided that no return,  refund or credit shall be
given for any Discount  paid by Borrower in connection  with any Variable  Loan.
The  issuance of an MBS on a Rollover  Date to fund the  repayment of a maturing
MBS shall not be a prepayment  of the related  Variable  Loan under this Section
1.02(c)  and the  proceeds  of such  issuance  shall not be deemed a separate or
independent  advance under the Security  Instrument.  A Termination  Fee will be
payable in  connection  with any  prepayment of a Variable Loan or the payoff of
any  Variable  Loan prior to the date three (3) years after the Initial  Closing
Date, provided that if the Variable Facility  Termination Date has been extended
pursuant to Section 1.07 of this  Agreement,  the date eight (8) years after the
Variable  Facility   Termination  Date.   Notwithstanding   the  foregoing,   no
Termination Fee shall be due (i) in connection with the conversion of a Variable
Loan to a Fixed Loan or (ii) if the  prepayment  or payoff is of a Variable Loan
unless the  prepayment  or payoff is in  conjunction  with a partial or complete
termination of the Loan commitment pursuant to Section 11.03 of this Agreement.

(d) Prepayment of Fixed Loans.  Fixed Loans are not prepayable at any time prior
to maturity,  provided that, notwithstanding the foregoing,  Borrower may prepay
not less than all of any Fixed Loan pursuant to the yield maintenance provisions
of the Fixed Loan Note evidencing each such Fixed Loan.

(e) Termination Prior to Fannie Mae Purchase Date.  Notwithstanding  anything in
this  Agreement to the contrary (i) all Borrowers may terminate  this  Agreement
and prepay all Loans in full at any time prior to the Fannie Mae  Purchase  Date
upon five (5) Business Days prior  written  notice to Lender and (ii) Lender may
terminate  this Agreement and require that Borrower pay all Loans in full if the
Fannie Mae Purchase  Date has not  occurred on or before  December 16, 2002 upon
twenty (20) Business Days written  notice given on or at any time after November
15, 2002. In the event this Agreement is terminated  pursuant to this subsection
(e), no Termination Fee shall be paid by Borrower.  Borrower and Lender agree to
execute  a  supplement  to this  Agreement  confirming  that on the  Fannie  Mae
Purchase Date, this Agreement is in full force and effect (as it may be modified
in connection with the purchase by Fannie Mae) and that no notice of termination
has been given by either party.

SECTION 1.03......Requests for Loans.

      Borrower  shall  request  a Loan by  giving  Lender a Loan  Request  or an
Additional Loan Request in accordance with Section 2.04 or Section 3.02.

SECTION 1.04......Principal and Interest Payments on Loans.

(a) Partial  Month  Interest.  Prior to the Fannie Mae  Purchase  Date or in the
event an MBS is issued on a date other  than the first day of a calendar  month,
Lender  shall fund one or more of the  Variable  Loans,  as may be  requested by
Borrowers from funds available to Lender from sources other than the proceeds of
the  issuance  of MBS.  Borrower  shall  pay  interest  on the  original  stated
principal  amount of its Loan for the partial  month  period  commencing  on the
Closing  Date of such Loan and ending on the last day of the  calendar  month in
which such  Closing  Date occurs.  Commencing  on the Fannie Mae Purchase  Date,
Borrower  shall pay interest on its  Variable  Loan at a rate per annum equal to
the  greater of (1) the Coupon  Rate as  determined  by Lender  plus a number of
basis points  equal to the  Variable  Loan Fee, and (2) a rate based on Lender's
cost of funds plus a number of basis points equal to the Variable  Loan Fee, and
approved in advance,  in writing,  by Borrower.  If Borrower elects to convert a
Variable  Loan to a Fixed Loan on a  Conversion  Date  occurring on a date other
than a Rollover Date,  Borrower shall pay interest for such Fixed Loan at a rate
per annum  equal to the  greater  of (1) the  interest  rate for the Fixed  Loan
described  in  subsection  (c)(i) of this  Section  1.04 and (2) a rate based on
Lender's cost of funds, plus a number of basis points equal to the Variable Loan
Fee, and approved in advance, in writing, by Borrower.

(b) Variable Loans.

(i) Discount. Each Variable Loan shall be a discount loan once the MBS is issued
following  the Fannie Mae  Purchase  Date and the stated  principal  amount of a
Variable  Loan on the MBS  Issue  Date  shall  be the sum of the  Price  and the
Discount.  The Price and Discount of each  Variable  Loan shall be determined in
accordance  with the  procedures set forth in Section 2.01. The Discount will be
comprised of interest  paid to the  purchaser of each MBS and the balance of the
proceeds of the Variable Loan made available by Lender to Borrower will be equal
to the Price.  Borrower shall pay to Lender,  in advance of each MBS Issue Date,
the Discount due in respect of such MBS. In no event shall  Borrower be entitled
to any return or refund of the Discount or any portion thereof.

(ii) Variable Loan Fee. In addition to paying the Discount and the partial month
interest,  if any, Borrower shall pay monthly  installments of the Variable Loan
Fee to Lender for each Variable Loan Outstanding from the initial MBS Issue Date
to the  maturity  date of its  Variable  Loan.  The  Variable  Loan Fee shall be
payable in advance,  in accordance with the terms of the Variable Loan Note. The
first  installment  shall be  payable  on or prior to the  Closing  Date for the
Variable  Loan and shall  apply to the first full  calendar  month of such Loan.
Subsequent  installments  shall be  payable  on the first  day of each  calendar
month,  commencing  on the first day of the second full  calendar  month of such
Variable  Loan,  to the earlier of (i) its maturity date or (ii) if the Variable
Loan is converted to a Fixed Loan,  the maturity  date of the MBS issued to fund
the Variable Loan to be repaid on the Conversion  Date. Each  installment of the
Variable Loan Fee shall be in an amount equal to the product of (1) the Variable
Loan Fee, and (2) the original  stated  principal  amount of the Variable  Loan,
divided by 12.

(c) Coupon Rate for Fixed Loans.
(i) Coupon  Rate.  Each Fixed Loan shall bear  interest  at a Coupon  Rate,  per
annum,  equal to the MBS  Pass-Through  Rate (as  determined in accordance  with
Section 2.01 hereof) for such Fixed Loan.

(ii) Fixed Loan Fee. In addition to paying any partial month  interest,  if any,
as described in Section 1.04(a) hereinabove,  Borrower shall pay the Coupon Rate
for the Fixed Loan monthly in arrears, in accordance with the terms of the Fixed
Loan Note to Lender from the  applicable  MBS Issue Date to the maturity date of
the Fixed Loan. The first  installment shall be payable on the first day of each
calendar  month,  commencing on the first day of the second full calendar  month
following  the MBS Issue  Date for the MBS  funding  a Fixed  Loan  through  the
maturity date of such Fixed Loan.  Each  installment of the Fixed Loan Fee shall
be in an amount  equal to the  product  of (1) the Fixed  Loan Fee,  and (2) the
principal amount of the Fixed Loan, divided by 12.

(d) Principal  Payments.  The Borrower shall make monthly principal  payments in
respect of each Loan in an amount  sufficient  to fully  repay the Loan over the
Amortization  Period.  In the case of Variable  Loans,  such principal  payments
shall be in accordance with the amortization  schedule attached to each Variable
Note and  shall be  applied  to reduce  the  principal  amount  of the  relevant
Variable Loan on the Rollover Date next  occurring  after the making of any such
monthly payment.

(e) Interest Payments Prior to the Fannie Mae Purchase Date. Prior to the Fannie
Mae Purchase  Date,  the Borrower  shall make  interest  payments on its Loan as
provided in the Note evidencing such Loan.

SECTION 1.05......Intentionally Omitted.

SECTION 1.06......Notes.

(a) Variable  Loans.  The  obligation of each  Borrower to repay its  respective
Variable Loan shall be evidenced by a separate Variable Loan Note. Each Variable
Loan Note  shall be  payable  to the  order of  Lender  and shall be made in the
original principal amount of the Variable Loan to Borrower.

(b) Fixed Loans.  The obligation of each Borrower to repay its respective  Fixed
Loan shall be  evidenced  by a Fixed  Loan  Note.  Each Fixed Loan Note shall be
payable  to the order of  Lender  and  shall be made in the  original  principal
amount of the Fixed Loan to the Borrower.

SECTION 1.07......Extension of Variable Facility Termination Date.

      Borrowers shall have the right to extend the Variable Facility Termination
Date for one (1) period of five (5) years  ("Extension")  upon  satisfaction  of
each of the following conditions:

(a) Borrowers  provide written notice requesting the Extension and setting forth
the term of the  extension  ("Extension  Notice") to Lender not less than thirty
(30) nor more  than  ninety  (90)  days  prior  to the then  effective  Variable
Facility Termination Date.

(b) No Event of Default or Potential  Event of Default exists on either the date
the  Extension  Notice  is  given  or on the then  effective  Variable  Facility
Termination Date.

(c) All of the  representations  and  warranties of each  Borrower  contained in
Article 5 of this Agreement and the other Loan Documents are true and correct in
all material  respects on the date the Extension Notice is given and on the then
effective Variable Facility Termination Date.

(d) Each  Borrower is in compliance  with all of the covenants  contained in the
Loan  Documents  on the  date the  Extension  Notice  is  given  and on the then
effective Variable Facility Termination Date.

      Upon receipt of the Extension  Notice and upon  compliance with conditions
set forth above,  the Variable  Facility  Termination Date shall be extended for
five (5) years on the terms and  conditions  contained in this Agreement and the
other Loan Documents, provided that the Fees applicable to the Variable Facility
during  the  Extension  shall  be as  agreed  to by  the  parties  prior  to the
Extension.

SECTION 1.08......Conversion from a Variable Loan to a Fixed Loan.

      Subject to the limitations set forth in Section 1.09,  Borrower shall have
the right, from time to time prior to the date three (3) years after the Initial
Closing  Date,  to convert all,  but not part of, any  Variable  Loan to a Fixed
Loan.

(a)  Request.  To convert  any  Variable  Loan to a Fixed Loan,  Borrower  shall
deliver a Conversion Request to Lender.  Each Conversion Request shall designate
(1) the particular  Variable Loan to be converted and (2) the requested maturity
date of such Fixed Loan.

(b) Maturity of Fixed Loans.  The  requested  maturity  date for each Fixed Loan
specified by the Borrower in its  Conversion  Request  shall not be earlier than
the date following seven (7) years after the Conversion Date for such Fixed Loan
and shall not be later than the date ten (10) years  after the  Initial  Closing
Date.

(c) Amount of Fixed Loan. The principal  amount of any Fixed Loan shall be equal
to the Outstanding principal amount of the Variable Loan being converted.

(d) Terms and Conditions of Fixed Loans. The terms and conditions, including but
not limited to the Fixed Loan Fee, applicable to any Fixed Loan converted from a
Variable Loan shall be consistent  with the terms and  conditions  applicable to
fixed rate loans  then  being  purchased  by Fannie Mae under the Fannie Mae DUS
program with a similar principal  balance and having similar  maturity,  Loan to
Value Ratio, Debt Service Coverage Ratio,  collateral type and quality and other
material terms applicable to the proposed Fixed Loan at the time of the proposed
conversion.

(e) Closing.  Subject to Section 1.09 and provided that all conditions contained
in Section 1.10 are satisfied,  Lender shall permit the requested  conversion to
close at offices  designated by Lender on a Conversion  Date selected by Lender,
and occurring  within 30 Business Days after Lender's  receipt of the Conversion
Request  (or on such  other date as  Borrower  and  Lender  may  agree).  At the
closing,  Lender and Borrower  shall  execute and deliver,  at the sole cost and
expense  of  Borrower,  in  form  and  substance  satisfactory  to  Lender,  the
Conversion Documents.

SECTION 1.09......Limitations on Right to Convert.

      Borrower's  right to  convert  all of a  Variable  Loan to a Fixed Loan is
subject to the following limitations:

(a) Conversion  Date. The Conversion  Date shall occur on a Rollover Date during
the Variable Loan Availability  Period. If such Conversion Date occurs on a date
other than a Rollover  Date,  the  Borrower  shall pay interest for such partial
month as described in Section 1.04(a) hereof.

(b) Prepayment Upon Conversion.  Payment of any Variable Loan upon conversion to
a Fixed Loan shall not be  considered  prepayment  within the meaning of Section
1.02(c) hereof.

(c) Fannie Mae Purchase  Date. No Conversion  Request may be delivered  prior to
the Fannie Mae Purchase Date.

SECTION 1.10......Conditions to Conversion.

      The  conversion  of all or any of the  Variable  Loans to a Fixed  Loan is
subject to the  satisfaction,  on or before the Closing Date, of the  conditions
precedent contained in Sections 4.01 and 4.05.

ARTICLE 2

                                    THE LOANS

SECTION 2.01......Rate Setting for Variable Loans and Fixed Loans.

      Interest  rates in effect for each Loan after the Fannie Mae Purchase Date
shall be set in accordance with the following procedures:

(a) Preliminary,  Nonbinding Quote. At Borrower's  request Lender shall quote an
estimate of the MBS  Pass-Through  Rate (for a proposed  Fixed Loan) or Discount
(for  a  proposed  Variable  Loan).  Lender's  quote  shall  be  based  on (1) a
solicitation  of bids from  institutional  investors  selected  by Lender in its
reasonable commercial judgment and (2) the proposed terms and amount of the Loan
selected by Borrower. The quote shall not be binding upon Lender.

(b) Rate Setting.  If the applicable Borrower satisfies all of the conditions to
Lender's  obligation to make the Loan,  then  Borrower may submit to Lender,  by
facsimile  transmission before 1:00 p.m.  Washington,  D.C. time on any Business
Day ("Rate  Setting  Date"),  a completed and executed Rate Form.  The Rate Form
shall specify the amount,  term, MBS Issue Date,  Facility Fee, any breakage fee
deposit amount,  the proposed maximum Coupon Rate ("Maximum Annual Coupon Rate")
and Closing Date for the Loan.

(c) Rate  Confirmation.  Within one Business Day after receipt of the Rate Form,
Lender shall solicit bids from institutional investors selected by Lender in its
reasonable  commercial judgment,  based on the information in the Rate Form and,
provided the actual  Coupon Rate (if the low bid were  accepted)  would be at or
below the Maximum Annual Coupon Rate, shall obtain a commitment for the purchase
of an MBS on the  proposed  Rollover  Date  meeting the terms  described  in the
related Rate Form.  Lender shall then  complete  and  countersign  the Rate Form
thereby  confirming the amount,  term, MBS Issue Date, MBS Delivery Date, or MBS
Pass-Through  Rate, Fixed Loan Fee or Variable Loan Fee, Coupon Rate,  Discount,
Price, and Rollover Date for the Loan ("MBS  Commitment") and shall  immediately
deliver by facsimile transmission the Rate Form to Borrower.

SECTION 2.02......Loan Confirmation Instrument for Variable Loans.

      On or before  the  applicable  MBS Issue  Date for a  Variable  Loan,  the
applicable  Borrower  shall execute and deliver to Lender a fully  executed Loan
Confirmation  Instrument,  confirming  the amount,  term,  MBS Issue  Date,  MBS
Delivery Date, Variable Loan Fee, Coupon Rate, Discount,  Price and Closing Date
for the MBS related to a Variable Loan,  and Borrower's  obligation to repay the
Variable  Loan in  accordance  with the terms of the Variable Loan Note and this
Agreement.  Upon the funding of the MBS,  Lender shall insert the MBS Issue Date
on the Loan  Confirmation  Instrument  and deliver a copy of the completed  Loan
Confirmation  Instrument  to Borrower  to evidence  the funding on the MBS Issue
Date and to confirm that the Loan Confirmation Instrument is not effective until
such date.  Lender's failure to do so shall not invalidate the Loan Confirmation
Instrument  or otherwise  affect in any way any  obligation of Borrower to repay
its  respective   Variable  Loan  in  accordance  with  the  Loan   Confirmation
Instrument, the Variable Loan Note and the other Loan Documents.

SECTION 2.03......Breakage and other Costs.

      If Lender fails to fulfill the MBS Commitment and the proposed Loan is not
made on the terms set forth in Lender's  Loan  Confirmation  Instrument  for any
reason other than Lender's or the potential  investor's default,  Borrower shall
pay all  reasonable  out-of-pocket  costs payable to the potential  investor and
other reasonable  costs,  fees and damages incurred by Lender in connection with
its failure to fulfill the MBS Commitment.  Lender reserves the right to require
Borrower  to post a deposit  at the time the Lender  obtains an MBS  Commitment.
Such deposit  shall be  refundable  to Borrower upon the delivery of the related
MBS.

SECTION 2.04......Initial Loans.

      Prior to receipt of the Initial Loans,  each Borrower shall deliver a Loan
Request to Lender,  modified in accordance  with the terms of this  Agreement in
effect  prior to the Fannie Mae  Purchase  Date.  If upon  submitting  such Loan
Request  all  conditions  precedent  contained  in  Sections  4.01  and 4.02 are
satisfied,  on or before the Initial Closing Date, Lender shall make the Initial
Loans to each of the Borrowers.
SECTION 2.05......Determination of Loan Amount and Valuations.

(a) Initial Determinations. Prior to the Closing Date for any Loan, Lender shall
determine  (i) the Loan Amount for each Loan and the  Valuation  for the related
Mortgaged  Property  and (ii) the Debt  Service  Coverage  Ratio and the Loan to
Value Ratio for the related Mortgaged  Property.  The determinations  made as of
any Closing  Date shall  remain  unchanged  until the first  anniversary  of the
Closing  Date of such  Loan,  except  for Loans  closed  prior to the Fannie Mae
Purchase Date, which shall be subject to redetermination prior to the Fannie Mae
Purchase Date in accordance with Fannie Mae DUS Guide Underwriting Requirements,
as applied by Fannie  Mae,  in which  event such  redetermination  shall  remain
unchanged  until the first  anniversary  of the Fannie Mae Purchase  Date.  Each
Borrower acknowledges that such redetermination may result in a Loan Amount that
is less than the Loan  Amount on the  Closing  Date and in such event a Borrower
shall be  required  to prepay a portion of its Loan on the  Fannie Mae  Purchase
Date.

(b) Monitoring  Determinations.  Once each Calendar Quarter  following the First
Anniversary,  with  respect to any  Variable  Loan or, if only  Fixed  Loans are
Outstanding,  once each Calendar Year,  within 20 Business Days after a Borrower
has  delivered to Lender the reports  required by Loan  Documents  and if Lender
reasonably decides that changed market or property  conditions  warrant,  Lender
may determine the Valuation,  Debt Service  Coverage Ratio and the Loan to Value
Ratio  for  one or  more  of the  Mortgaged  Properties  and  compliance  of the
applicable  Borrower  with the  covenants  set forth in the Loan  Documents.  In
determining Valuations,  Lender shall use Cap Rates based on its internal survey
and analysis of cap rates for comparable sales in the vicinity of the applicable
Mortgaged  Property,  with such adjustments as Lender in its reasonable judgment
deems appropriate and without any obligation to use any information  provided by
Borrower. If Lender is unable to determine a Cap Rate for a particular Mortgaged
Property,  Lender  shall have the  right,  not more than once  annually,  at the
applicable  Borrower's expense, to obtain a market study in order to establish a
Cap Rate.  Lender shall promptly  disclose its  determinations to the applicable
Borrower. Until redetermined, the outstanding Valuations shall remain in effect.
Notwithstanding  anything  in this  Agreement  to the  contrary,  no  change  in
Valuation,  the Loan to Value Ratio or the Debt Service  Coverage  Ratio for any
Mortgaged  Property shall (i) result in a Potential Event of Default or Event of
Default,  (ii)  require  the  prepayment  of any Loans,  or (iii)  preclude  the
issuance of an MBS on a Rollover Date.

ARTICLE 3

                                ADDITIONAL LOANS

SECTION 3.01......Right to Additional Loans.

      Subject  to the  terms  and  conditions  of this  Article,  an  Additional
Borrower  shall  have  the  right,  from  time to time  during  the Term of this
Agreement, to obtain Additional Loans.

SECTION 3.02......Procedure for Additional Loans.

(a)  Request.  An  Additional  Borrower  may deliver to Lender  Additional  Loan
Requests from time to time. Each Additional Loan Request shall be accompanied by
the  following:  (i) the  information  required  by the DUS  Guide  Underwriting
Requirements with respect to the proposed Additional  Mortgaged Property and any
additional  information Lender may reasonably  request;  and (ii) the payment of
all Additional Collateral Due Diligence Fees.

(b) Underwriting.  An Additional  Borrower may obtain the Additional Loan if the
proposed Additional  Mortgaged Property has a Debt Service Coverage Ratio of not
less  than 1.10 to 1.0 and a Loan to Value  Ratio of not more  than 65%.  Lender
shall evaluate the proposed Additional Mortgaged Property in accordance with the
DUS Guide Underwriting Requirements,  and shall make underwriting determinations
as to the Debt Service  Coverage  Ratio and the Loan to Value Ratio on the basis
of the lesser of (1) the acquisition price of the proposed Additional  Mortgaged
Property if purchased by the Additional Borrower within 12 months of the related
Additional  Loan  Request and (2) a Valuation  made with respect to the proposed
Additional Mortgaged Property.  Within 30 Business Days after receipt of (1) the
Additional Loan Request and (2) all reports, certificates and documents required
by  the  DUS  Guide  Underwriting  Requirements,  including  a  zoning  analysis
undertaken in accordance  with Section 206 of Part III of the DUS Guide,  Lender
shall notify the Additional  Borrower whether it shall consent to the Additional
Loan Request. Within five Business Days after receipt of Lender's consent to the
Additional Loan Request,  an Additional  Borrower shall notify Lender whether it
elects to obtain  the  Additional  Loan.  If the  Additional  Borrower  fails to
respond within the period of five Business Days, it shall be conclusively deemed
to have elected not to obtain the Additional Loan.

(c) Closing.  If Lender consents to the Additional Loan Request,  the Additional
Borrower  timely  elects  to  obtain  the  Additional  Loan  and all  conditions
precedent  contained  in Section  4.03 and all General  Conditions  contained in
Section 4.01 are satisfied,  Lender shall make the Additional Loan, at a closing
to be held at offices designated by Lender on a Closing Date selected by Lender,
occurring within 30 Business Days after Lender's receipt of Borrower's  election
(or on such other date as the Additional Borrower and Lender may agree).

SECTION 3.03......Conditions of Additional Loans.

(a) Maximum Amount of Additional Loans. The maximum aggregate original principal
amount of any Additional Loan shall not, together with the outstanding principal
balance of all other Loans, exceed $210,000,000.

(b) Minimum Amount of Additional  Loans.  The minimum amount of each  Additional
Loan is  $3,000,000,  provided  that,  no more than three (3) times per Calendar
Year with the consent of Lender to facilitate the sale of a Mortgaged  Property,
an Additional Loan for an Additional  Mortgaged  Property or the conversion of a
Variable  Loan to a Fixed  Loan,  Additional  Loans  may be made in an  original
principal amount of not less than $1,000,000.

(c) Terms and Conditions.  The terms and conditions applicable to all Additional
Loans shall be the terms and conditions  applicable to all Loans made under this
Agreement.

ARTICLE 4

                        CONDITIONS PRECEDENT TO REQUESTS

SECTION    4.01......Conditions   Applicable   to  the  Initial  Loan   Request,
           Conversion   Requests,   Additional  Loan  Requests  and  Termination
           Requests.

      The obligation of Lender to close the  transaction  requested in a Request
for a particular  Borrower shall be subject to the following general  conditions
precedent ("General  Conditions") in addition to any other conditions  precedent
contained in this Agreement applicable to a Borrower.

(a) Payment of Expenses.  The payment by the applicable Borrower of Lender's and
Fannie Mae's  reasonable  fees and expenses  applicable to  Borrower's  Loan and
payable in accordance  with this Agreement,  including,  but not limited to, the
legal fees and expenses described in Section 6.04.

(b) No Material Adverse Change. Except in connection with a Termination Request,
there has been no material adverse change in the financial  condition,  business
or prospects of the applicable  Borrower or AIMCO or in the physical  condition,
operating performance or value of the Mortgaged Property securing the Loan, from
the  condition,  business or prospects  reflected in the  financial  statements,
reports and other  information  obtained by Lender during its review of Borrower
and AIMCO and the applicable Mortgaged Property securing the Loan.

(c) No Default.  Except in connection  with a Termination  Request,  there shall
exist no Event of Default or Potential Event of Default of the relevant Borrower
on the Closing Date for the Request and, after giving effect to the  transaction
described  in the  Request,  no Event of Default or  Potential  Event of Default
shall have occurred.

(d) No Insolvency.  Except in connection with a Termination Request,  receipt by
Lender on the Closing Date for the Request,  of evidence  satisfactory to Lender
that neither the applicable  Borrower nor AIMCO is insolvent (within the meaning
of any  applicable  federal or state laws  relating to  bankruptcy or fraudulent
transfers) or will be rendered insolvent by the transactions contemplated by the
Loan Documents, or, after giving effect to such transactions,  will be left with
an  unreasonably  small  capital  with  which  to  engage  in  its  business  or
undertakings,  or will have intended to incur,  or believe that it has incurred,
debts beyond its ability to pay such debts as they mature or will have  intended
to hinder, delay or defraud any existing or future creditor.

(e) No  Untrue  Statements.  The Loan  Documents  applicable  to the  requesting
Borrower shall not contain any untrue or misleading statement of a material fact
and shall not fail to state a material  fact  necessary to make the  information
contained therein not misleading.

(f) Representations  and Warranties.  All representations and warranties made by
the  requesting  Borrower  and  AIMCO  in the Loan  Documents  shall be true and
correct in all  material  respects on the Closing  Date for the Request with the
same force and effect as if such representations and warranties had been made on
and as of the Closing Date for the Request.

(g) No  Condemnation  or  Casualty.  Except  in  connection  with a  Termination
Request,  there shall not be pending or  threatened  any  condemnation  or other
taking, whether direct or indirect,  against the Mortgaged Property securing the
applicable  Loan  and  there  shall  not  have  occurred  any  casualty  to  any
improvements  located on such  Mortgaged  Property,  which casualty would have a
material adverse effect on the continued operations of such Mortgaged Property.

(h)  Delivery of Closing  Documents.  Except in  connection  with a  Termination
Request,  the receipt by Lender of the  following,  each dated as of the Closing
Date for the  Request,  in form and  substance  satisfactory  to  Lender  in all
respects:

(i) The Loan Documents applicable to the requesting Borrower; and

(ii) Such other documents, instruments,  approvals (and, if requested by Lender,
certified  duplicates  of executed  copies  thereof)  and opinions as Lender may
reasonably request.

(i) Covenants.  The requesting  Borrower and AIMCO are in full  compliance  with
each of the covenants contained in the Loan Documents,  without giving effect to
any notice and cure rights of Borrower.

(j) Opinion. Except in connection with a Termination Request, favorable opinions
of counsel to Borrower and AIMCO as to the due organization and qualification of
Borrower   and  AIMCO,   the  due   authorization,   execution,   delivery   and
enforceability of each Loan Document executed in connection with the Request and
such other matters as Lender may reasonably require.

SECTION 4.02......Conditions Precedent to Initial Loans.

      The  obligation  of Lender to make the Initial  Loans to the  Borrowers is
subject to the following conditions precedent:

(a) Receipt by Lender of a fully executed Loan Request for each Initial Loan;

(b) Intentionally omitted.

(c) The Debt Service  Coverage  Ratio for each Mortgaged  Property  securing the
Initial Loan shall be not less than 1.10:1.0;

(d) The Loan to Value Ratio for the  Mortgaged  Property  securing  each Initial
Loan shall not be greater than 65%;

(e) Intentionally omitted.

(f) Intentionally omitted.
(g)  Receipt by Lender of the  portion of the  Origination  Fee due  pursuant to
Section 6.02 and the Due Diligence Fees due pursuant to Section 6.03(a);

(h) Delivery of a Note, duly executed by each of the relevant Borrowers, each in
the amount and reflecting the terms of the relevant Initial Loan;

(i) Receipt by Lender of a Guaranty, duly executed by AIMCO; and

(j) Receipt of all documents  required for the closing of the Initial Loan under
the DUS Guide.

SECTION  4.03......Conditions  Precedent to Additional Loans and Addition of the
Additional Mortgaged Property to the Collateral Pool.

      The  obligation  of Lender  to make a  requested  Additional  Loan for any
Additional Mortgaged Property is subject to the following conditions precedent:

(a) Receipt by Lender of the fully executed Additional Loan Request;

(b)  Delivery  by Lender  to the  Additional  Borrower  of the Rate Form for the
Additional Loan;

(c) If  required  by  Section  6.02,  receipt  by Lender of the  portion  of the
Origination Fee not previously paid and the Additional  Collateral Due Diligence
Fee;

(d)  Receipt  by  Lender  of  confirmation  that a Cap is in place  meeting  the
requirements of Article 10 of this Agreement, if required;

(e) The Coverage and LTV Tests for the Additional Loan will be satisfied;

(f) Delivery of a Note, duly executed by the relevant  Additional  Borrower,  in
the amount and reflecting all of the terms of the Additional Loan;

(g) Receipt of all  documents  required for the closing of the  Additional  Loan
under the DUS Guide;

(h) Receipt by Lender of a Guaranty, duly executed by AIMCO; and

(i) If the aggregate of the original Loan Amounts for all Loans made pursuant to
this  Agreement  exceeds  $210,000,000,  receipt  by  Lender  of the  Collateral
Addition Fee.

(j) Prior to the Fannie Mae Purchase Date, Lender shall consider but may decline
to make Additional  Loans if the total amount of all Loans  initially  funded is
more  than  15 or the  aggregate  amount  of all  Loans  made  pursuant  to this
Agreement exceeds $105,000,00000.

SECTION 4.04......Conditions Precedent to Conversion.

      The  conversion  of any  Variable  Loan to a Fixed  Loan is subject to the
satisfaction of the following  additional  conditions precedent on or before the
Conversion Date:

(a) After giving effect to the requested  conversion,  the Debt Service Coverage
Ratio for the Mortgaged Property securing such Fixed Loans will be not less than
1.35:1.0 and the Loan to Value Ratio for the  Mortgaged  Property  securing such
Fixed Loans will be not more than 65%;

(b)  Receipt  by Lender of an  endorsement  to each  Title  Insurance  Policy or
Policies related to the Mortgaged Property or Properties securing the Loan to be
converted, amending the effective date of the Title Insurance Policy or Policies
to the Closing Date and showing no additional  exceptions to coverage other than
the exceptions shown on the Initial Closing Date and other  exceptions  approved
by Lender; and

(c) Receipt by Lender of one or more  counterparts of each Conversion  Document,
dated as of the  Conversion  Date,  signed by each of the  parties  (other  than
Lender) to such Conversion Document.

(d) The Conversion  Request shall not be made until the Fannie Mae Purchase Date
occurs.

SECTION 4.05......Delivery of Documents Related to each Mortgaged Property.

      It shall be a condition  precedent  to the making of each Loan that Lender
receive from the relevant Borrower each of the documents and reports required by
the DUS Guide in connection with the Mortgaged  Property  securing such Loan, in
form and substance satisfactory to Lender in all respects. Borrower acknowledges
and agrees that any such document or report that is not received or is otherwise
not  satisfactory  to Lender in some  respects  shall remain a  requirement  and
condition to the  occurrence  of the Fannie Mae  Purchase  Date.  Each  Borrower
hereby  agrees to use its best  efforts to  satisfy  all such  requirements  and
conditions prior to the Fannie Mae Purchase Date and  acknowledges  that failure
to do so may cause the Fannie Mae Purchase Date to be delayed or not to occur at
all.

ARTICLE 5

                         REPRESENTATIONS AND WARRANTIES

SECTION 5.01......Representations and Warranties of Borrower.

      Each Borrower hereby represents and warrants to Lender for itself (but not
as to any other Borrower) as follows:

(a) Due Organization; Qualification.

(i) Borrower is qualified  to transact  business and is in good  standing in the
State in which it is  organized  and in each  other  jurisdiction  in which such
qualification  and/or  standing is  necessary to the conduct of its business and
where the failure to be so qualified would adversely affect the validity of, the
enforceability  of, or the ability of such  Borrower to perform the  Obligations
under the Agreement and the other Loan Documents.  Such Borrower is qualified to
transact  business and is in good  standing in the State in which the  Mortgaged
Property owned by it is located.

(ii) Such Borrower's  principal place of business,  principal  office and office
where it keeps its books and  records  as to the  Collateral  is  located at the
address set out in Section 11.09 of the Agreement.

(b) Power and Authority. Such Borrower has the requisite power and authority (a)
to own its  properties  and to carry on their  business as now  conducted and as
contemplated  to  be  conducted  in  connection  with  the  performance  of  the
Obligations  under the Agreement and under the other Loan  Documents to which it
is a party and (b) to  execute  and  deliver  the  Agreement  and the other Loan
Documents and to carry out the  transactions  contemplated  by the Agreement and
the other Loan Documents to which it is a party.

(c) Due Authorization.  The execution, delivery and performance of the Agreement
and the other Loan Documents to which it is a party have been duly authorized by
all necessary  action and  proceedings by or on behalf of such Borrower,  and no
further  approvals or filings of any kind,  including  any approval of or filing
with any Governmental  Authority,  are required by or on behalf of such Borrower
as a condition to the valid execution, delivery and performance by such Borrower
of the Agreement or any of the other Loan Documents to which it is a party.

(d) Valid and Binding Obligations. The Agreement and the other Loan Documents to
which it is a party have been duly  authorized,  executed and  delivered by such
Borrower  and  constitute  the  legal,  valid and  binding  obligations  of such
Borrower,  enforceable against such Borrower in accordance with their respective
terms,  except as such  enforceability may be limited by applicable  bankruptcy,
insolvency,  reorganization,  moratorium or similar laws or equitable principles
affecting  the  enforcement  of  creditors'  rights  generally  or by  equitable
principles or by the exercise of discretion by any court.

(e) No Default.  The  execution,  delivery and  performance  of the  obligations
imposed on such Borrower under the Loan Documents to which it is a party and the
Security  Documents  will not cause such  Borrower  to be in  default  under the
provisions of any agreement, judgment or order to which such Borrower is a party
or by which such Borrower is bound.

(f)  Representations and Warranties in Other Loan Documents True. Each and every
representation  and  warranty  set forth in any of the other Loan  Documents  to
which such Borrower is a party is true and correct in all material respects.

SECTION 5.02......Representations and Warranties of Lender.

      Lender hereby represents and warrants to each Borrower as follows:

(a) Due Organization.  Lender is a corporation duly organized,  validly existing
and in good standing under the laws of the State of California.

(b) Power and Authority. Lender has the requisite power and authority to execute
and deliver this Agreement and to perform its obligations under this Agreement.

(c) Due  Authorization.  The execution and delivery by Lender of this Agreement,
and the consummation by it of the  transactions  contemplated  thereby,  and the
performance  by it of its  obligations  thereunder,  have been duly and  validly
authorized by all necessary action and proceedings by it or on its behalf.

ARTICLE 6

                                      FEES

SECTION 6.01......Standby Fee.

      Borrowers shall pay the Standby Fee to Lender  commencing on the first day
after the First Anniversary to the end of the Term of the Agreement. The Standby
Fee shall be the  obligation of each Borrower based on the ratio of a Borrower's
Initial  Loan to all Loans then  outstanding.  The  Standby Fee shall be payable
monthly,  in arrears,  on the first Business Day following the end of the month,
except that the Standby Fee for the last month during the Term of this Agreement
shall be paid on the last day of the Term of this  Agreement.  AIMCO shall agree
to pay the total amount of the Standby Fee.

SECTION 6.02......Origination Fees.

      Origination  Fee.  Each  Borrower  shall pay to Lender its  prorata  share
(based upon Loan amount) of an  origination  fee equal to  $1,470,000  (which is
equal to the product obtained by multiplying (i) the maximum principal amount of
Loans  that can be  outstanding  at any time  hereunder  ($210,000,000)  by (ii)
0.70%) (the "Origination Fee"). $735,000 of the Origination Fee shall be payable
on the Initial  Closing Date and the balance of the Origination  Fee,  $735,000,
shall be payable on the  earlier of (A)  December  31,  2002 and (B) the date on
which the  aggregate  original  principal  amount of Loans made  pursuant to the
Agreement exceeds $105,000,000.  On the Initial Closing Date, Lender shall apply
a credit in the amount of $3,874 against the  Origination  Fee, which credit may
be allocated among Borrowers.  AIMCO shall agree to pay the entire amount of the
Origination Fee.

SECTION 6.03......Due Diligence and Processing Fees.

(a) Due Diligence  Fees.  Each Borrower  shall pay to Lender due diligence  fees
("Due Diligence Fees") with respect to the Mortgaged  Property securing its Loan
in an amount equal to the actual  out-of-pocket  expenses  incurred by Lender in
connection with Lender's due diligence plus $5,500.

            Borrowers have previously paid to Lender a deposit in respect of the
Due Diligence  Fees in the amount of  $50,000.00  and shall pay the remainder of
the Due  Diligence  Fees,  if any relating to  Borrower's  Loan or its Mortgaged
Property,  to  Lender  on the  Initial  Closing  Date.  Any  portion  of the Due
Diligence Fee  deposited  with Lender by Borrower not actually used by Lender to
cover due  diligence  expenses  for  Borrower's  Loan or the  related  Mortgaged
Property shall be promptly refunded to Borrower.

(b) Additional Due Diligence Fees for  Additional  Collateral.  Each  Additional
Borrower  shall pay to Lender  additional  due diligence  fees (the  "Additional
Collateral  Due  Diligence  Fees")  with  respect to each  Additional  Mortgaged
Property in an amount  equal to the actual  costs of Lender's  due  diligence on
such  Mortgaged  Properties,  including  but not limited to third party  reports
required by Lender plus $5,500.  The  Additional  Collateral  Due Diligence Fees
shall be paid together with any Additional Request.

(c) Variable Rate Funding Fee.  Borrower shall pay the Variable Rate Funding Fee
when submitting to Lender a Rate Form for processing.

SECTION 6.04......Legal Fees and Expenses.

(a)  Initial  Legal  Fees.  Borrower  shall pay, or  reimburse  Lender for,  all
reasonable  out-of-pocket  legal  fees and  expenses  incurred  by Lender and by
Fannie Mae in connection  with the  preparation,  review and negotiation of this
Agreement,  any  other  Loan  Documents  and any  other  documents  executed  in
connection with the transaction contemplated hereby and the proposed transfer of
the Loans to Fannie Mae.  Lender's  legal fees for the specific  property  level
work for each Initial Loan  (excluding  legal fees related to this Agreement and
other Loan  Documents not relating to the  documentation  of  individual  Loans)
shall not exceed $5,000 per Initial Loan.

(b) Fees and Expenses Associated with Requests. Borrower shall pay, or reimburse
Lender and Fannie Mae for, all reasonable costs and expenses  incurred by Lender
and Fannie Mae, including the out-of-pocket  legal fees and expenses incurred by
Lender and Fannie Mae in connection with the preparation, review and negotiation
of all documents,  instruments and  certificates to be executed and delivered in
connection with each Request submitted by Borrower, the performance by Lender of
any of its  obligations  with respect to such Request,  the  satisfaction of all
conditions  precedent to Borrower's rights or Lender's  obligations with respect
to such Request, and all transactions related to any of the foregoing, including
the cost of title  insurance  premiums and applicable  recordation  and transfer
taxes and charges and all other reasonable costs and expenses in connection with
such  Request.  The  obligations  of  Borrower  under this  subsection  shall be
absolute and unconditional,  regardless of whether the transaction  requested in
any such Request actually occurs.  Borrower shall pay such costs and expenses to
Lender on the Closing  Date for a  particular  Request,  or, as the case may be,
after  demand  by  Lender if Lender  determines  that such  Request  will not be
approved.

SECTION 6.05......Collateral Release Fee.

      In  connection  with  the  release  of any  Mortgaged  Property  from  the
applicable Security  Instrument,  the Borrower shall, prior to such release, pay
Lender the Collateral Release Fee.

SECTION 6.06......Look-back Fee.

      On the date 31 months after the Initial  Closing Date,  AIMCO shall pay to
Lender the  Look-back  Fee, if any. The  Look-back  Fee shall not be payable if,
prior to the date 30 months after the Initial  Closing Date,  this Agreement has
been  terminated  and  Borrower  has paid  the  applicable  Termination  Fee and
satisfied all of each  Borrower's  Obligations  under this Agreement and each of
the other Loan Documents.

SECTION 6.07......Failure to Close any Request.

      If  Borrower  makes a Request  and fails to close on the  Request  for any
reason  other than the default by Lender or the  proposed  purchaser  of an MBS,
then Borrower shall pay to Lender and Fannie Mae all damages  incurred by Lender
and Fannie Mae in connection with the failure to close.

ARTICLE 7

                                EVENTS OF DEFAULT

SECTION 7.01......Events of Default.

      The  occurrence  of  a  default  under  any  Loan  Document  related  to a
Borrower's  Loan beyond the cure period,  if any, set forth  therein shall be an
Event of Default under this Agreement.  Notwithstanding the foregoing,  an Event
of Default  with  respect to a Loan,  Mortgaged  Property or Borrower  shall not
constitute an Event of Default with respect to any other Borrower.

ARTICLE 8

                                    REMEDIES

SECTION 8.01......Remedies; Waivers.

      Upon the occurrence of an Event of Default,  Lender may do any one or more
of the  following  with respect to the  respective  Loans secured by a Mortgaged
Property to which the Event of Default  pertains (or the  Borrower  causing such
Event of Default ) related (without  presentment,  protest or notice of protest,
all of which are expressly waived by each Borrower):

(a) by written notice to the defaulting Borrower, to be effective upon dispatch,
declare the  principal  of, and interest on, the  Borrower's  Loan and all other
sums owing by such Borrower to Lender under any of the Loan Documents  forthwith
due and payable,  whereupon the relevant  Loans will terminate and the principal
of, and  interest  on, the Loans and all other sums owing by  Borrower to Lender
under any of the Loan Documents will become forthwith due and payable.

(b) Lender  shall have the right to pursue any other  remedies  available  to it
under any of the Loan Documents.

(c) Lender shall have the right to pursue all remedies available to it at law or
in equity, including obtaining specific performance and injunctive relief.

SECTION 8.02......Waivers; Rescission of Declaration.

      Lender shall have the right,  to be exercised in its complete  discretion,
to waive any breach hereunder (including the occurrence of an Event of Default),
by a writing  setting  forth the terms,  conditions,  and extent of such  waiver
signed by Lender and  delivered to the Borrower.  Unless such writing  expressly
provides  to the  contrary,  any  waiver so  granted  shall  extend  only to the
specific event or occurrence  which gave rise to the waiver and not to any other
similar event or occurrence which occurs subsequent to the date of such waiver.

SECTION 8.03......Lender's Right to Protect Collateral and Perform Covenants and
Other Obligations.

      If Borrower  fails to perform the  covenants and  agreements  contained in
this Agreement or any of the other Loan Documents to which it is a party and the
same constitutes an Event of Default which has occurred and is continuing,  then
Lender at Lender's option,  upon five (5) Business Days' prior notice (except in
an  emergency,  in which case no notice is required) to the  Borrower,  may make
such  appearances,  disburse  such  sums and take such  action  as Lender  deems
necessary, in its sole discretion,  to protect Lender's interest,  including (i)
disbursement  of  reasonable  attorneys'  fees,  (ii) entry  upon the  Mortgaged
Property to make repairs and  replacements,  (iii)  procurement of  satisfactory
insurance as provided in Section 5 of the Security  Instrument  encumbering  the
Mortgaged Property,  and (iv) if the Security Instrument  encumbers a leasehold,
exercise of any option to renew or extend the ground lease on behalf of Borrower
and the curing of any  default of Borrower  in the terms and  conditions  of the
ground lease.  Any amounts  disbursed by Lender  pursuant to this Section,  with
interest thereon,  shall become  additional  indebtedness of Borrower secured by
the Loan Documents.  Unless Borrower and Lender agree to other terms of payment,
such amounts shall be  immediately  due and payable and shall bear interest from
the date of  disbursement  at the interest  rate in effect from time to time for
the relevant Loan unless collection from the applicable  Borrower of interest at
such rate would be contrary to applicable law, in which event such amounts shall
bear  interest at the highest rate which may be collected  from  Borrower  under
applicable law. Nothing  contained in this Section shall require Lender to incur
any expense or take any action hereunder.

SECTION 8.04......No Remedy Exclusive.

      Unless otherwise  expressly  provided,  no remedy herein conferred upon or
reserved is intended to be exclusive  of any other  available  remedy,  but each
remedy  shall be  cumulative  and shall be in addition to other  remedies  given
under the Loan Documents or existing at law or in equity.

SECTION 8.05......No Waiver.

      No delay or  omission to exercise  any right or power  accruing  under any
Loan Document  upon the happening of any Event of Default or Potential  Event of
Default  shall  impair  any such  right or power or shall be  construed  to be a
waiver thereof,  but any such right and power may be exercised from time to time
and as often as may be deemed expedient.

SECTION 8.06......No Notice.

      To  entitle  Lender to  exercise  any  remedy  reserved  to Lender in this
Article, it shall not be necessary to give any notice, other than such notice as
may be expressly  required under the applicable  provisions of this Agreement or
any of the other Loan Documents.

ARTICLE 9

                              RIGHTS OF FANNIE MAE

SECTION 9.01......Special Pool Purchase Contract.

      Borrower and Lender have each entered  into this Loan  Agreement  with the
expectation  that Fannie Mae shall enter into an agreement with Lender ("Special
Pool Purchase Contract"), pursuant to which, inter alia, (i) Lender shall assign
all of its rights but none of its obligations,  which Lender expressly  retains,
under this  Agreement to Fannie Mae, (ii) Fannie Mae shall accept the assignment
of Lender's  rights,  (iii)  subject to the terms,  limitations  and  conditions
contained in the Special Pool  Purchase  Contract,  Fannie Mae shall  purchase a
100% participation  interest in each Loan issued under this Agreement by issuing
to Lender a series of MBS,  each MBS in such series in the amount and for a term
equal to the Loan  purchased  and backed by an  interest  in Fixed Loan Notes or
Variable Loan Notes,  as the case may be, and the separate  Collateral  securing
each of the  Notes,  (iv)  Lender  shall  assign to Fannie  Mae all of  Lender's
interest in the Notes and  Collateral  securing the Loans,  and (v) Lender shall
service the loans evidenced by the Notes. The parties expressly  acknowledge and
agree that  Borrowers,  Lender and Fannie Mae may offer  comments  and  proposed
amendments and revisions to this Agreement and the other Loan Documents and that
nothing  herein shall be deemed to be  acceptable  to or binding upon Fannie Mae
until the Special Pool  Purchase  Contract is fully  executed  and  delivered by
Fannie Mae and Lender and  Borrowers,  Lender and Fannie Mae are in agreement on
the final form of this Agreement and the other Loan Documents.

SECTION 9.02......Assignment of Rights.

      Each Borrower acknowledges and consents to the assignment to Fannie Mae of
all of the rights of Lender under this  Agreement and all other Loan  Documents,
including  the right and power to make all decisions on the part of Lender to be
made under this  Agreement  and the other Loan  Documents,  but Fannie  Mae,  by
virtue of this assignment,  shall not be obligated to perform the obligations of
Lender under this Agreement or the other Loan Documents.

SECTION 9.03......Replacement of Lender.

      At the request of Fannie Mae made after the Fannie Mae Purchase Date, each
Borrower and Lender shall agree to the assumption by another  lender  designated
by Fannie Mae (which  lender shall meet Fannie Mae's then current  standards for
lenders for credit  facilities  of the type and size of the Loans  evidenced  by
this  Agreement),  of all of the  obligations of Lender under this Agreement and
the other Loan  Documents,  and/or any related  servicing  obligations,  and, at
Fannie Mae's option, the concurrent release of Lender from its obligations under
this  Agreement  and the other  Loan  Documents,  and/or any  related  servicing
obligations,  and shall execute all releases,  modifications and other documents
which  Fannie  Mae   determines  are  necessary  or  desirable  to  effect  such
assumption.

SECTION 9.04......Fannie Mae and Lender Fees and Expenses.

      A Borrower's obligation to pay fees, costs or expenses incurred or charged
by Lender  pursuant to this Agreement  shall be deemed to provide for Borrower's
payment of all reasonable fees, costs and expenses incurred or charged by Lender
or Fannie Mae in connection with Borrower's respective Loan.

SECTION 9.05......Third-Party Beneficiary.

      Each  Borrower  hereby  acknowledge  and agree that  Fannie Mae is a third
party beneficiary of all of the  representations,  warranties and covenants made
by such Borrower to, and all rights under this Agreement conferred upon, Lender,
and,  by virtue of its status as  third-party  beneficiary  and/or  assignee  of
Lender's rights under this Agreement, Fannie Mae shall have the right to enforce
all of the provisions of this Agreement against Borrower.

ARTICLE 10

                            INTEREST RATE PROTECTION

SECTION 10.01.....Interest Rate Protection.

(a) The Initial Cap. To protect against fluctuations in interest rates, Borrower
shall make arrangements for Caps to be in place and maintained at all times with
respect to each Variable Loan Outstanding.  The Cap for each Variable Loan shall
be in place for a period  beginning  on the Closing  Date of each such  Variable
Loan and ending not  earlier  than the  earlier of (i) three (3) years after the
Closing Date of such Variable Loan and (ii) the Variable Loan  Termination  Date
then in effect (the "Initial Cap Period"). Notwithstanding the foregoing, Lender
shall not require the Cap to be in place until the Fannie Mae Purchase Date.

(b) Subsequent Caps.  Subject to the other terms of this Article 10,  additional
Caps (each, a "Subsequent  Cap") shall be required upon expiration of the Cap in
place for the  Initial  Cap Period,  such  Subsequent  Cap to be in effect for a
period  beginning  on the last day of the  Initial  Cap  Period  and  ending not
earlier than the Variable Loan Termination Date then in effect.  If the Variable
Loan  Termination  Date is extended  pursuant to Section 1.07 of this Agreement,
the terms of this Article 10 shall apply as if the first day of the period after
the original Variable Loan Termination Date is the Closing Date for the Loan. It
is the  intention  of the  parties,  and a  condition  of the making of Variable
Loans,  that the Borrower  shall obtain,  and shall maintain at all times during
the Term of this Agreement so long as any Variable Loan is Outstanding,  Caps in
an aggregate  notional  principal amount equal to each Variable Loan Outstanding
and covering the entire term of the  Variable  Loans and meeting the  conditions
set forth in Section 10.02.

SECTION 10.02.....Cap Terms.

      Each Cap shall:

(a)  provide  for a  notional  principal  amount  equal  at  all  times  to  the
outstanding principal balance of the related Variable Loan;

(b) be in effect for the terms required in Section 10.01;

(c) provide for a notional  interest  rate not greater than the lowest  interest
rate  that  would  result in a Debt  Service  Coverage  Ratio for the  Mortgaged
Property  securing  the Loan  subject  to the Cap of not less than 1.1 to 1 (the
"Cap Interest Rate");

(d) require the counterparty to make interest payments on the notional principal
amount at a rate equal to the amount by which the then  applicable  Coupon  Rate
exceeds the Cap Interest Rate;

(e)  require  the  counterparty  to make such  interest  payments  to an account
pledged to Lender pursuant to the Cap Security Agreement; and

(f) be evidenced,  governed and secured on terms and conditions, and pursuant to
documentation  (the "Cap Documents"),  in form and content  acceptable to Fannie
Mae, and with a counterparty approved by Fannie Mae.

SECTION 10.03.....Cap Security Agreement; Delivery of Cap Payments.

      Pursuant  to  a  Cap  Security  Agreement,  Lender  shall  be  granted  an
enforceable, perfected, first priority lien on and security interest in each Cap
and payments due under the Cap (including scheduled and termination payments) in
order to secure  Borrower's  obligations  to Lender under this  Agreement.  With
respect to each Cap, the Cap Security Agreement must be delivered by Borrower to
Lender no later than the effective date of the Cap.

SECTION 10.04.....Termination.

      Borrower shall not  terminate,  transfer or consent to any transfer of any
existing  Cap  without  Lender's  prior  written  consent as long as Borrower is
required to maintain a Cap pursuant to this Agreement;  provided,  however, that
if,  and at such time as,  any  Variable  Loan is  converted  to a Fixed Loan or
repaid in full, Borrower shall have the right to terminate the existing Cap with
respect to such Variable Loan.

SECTION 10.05.....Performance Under Cap Documents.

      Borrower  agrees to comply fully with, and to otherwise  perform when due,
its  obligations  under,  all applicable Cap Documents and all other  agreements
evidencing,  governing  and/or securing any Cap arrangement  contemplated  under
this Article 10.  Borrower  shall not exercise,  without  Lender's prior written
consent, and shall exercise, at Lender's direction, any rights or remedies under
any Cap Document, including without limitation the right of termination.

SECTION 10.06.....Escrow Provisions.

(a) Monthly Cap Escrow Payment. Until Borrower obtains a Cap or Caps that have a
term through the entire term of each Variable Loan, the Borrower  shall,  on the
first Business Day of each month, deposit with the Lender the Monthly Cap Escrow
Payment.  The "Monthly Cap Escrow Payment"  means,  with respect to the first 24
months  after the purchase of a Cap for less than the entire  remaining  term of
any portion of the Variable Loan Commitment (the "Original Escrow  Period"),  an
amount  equal to one  twenty-fourth  (1/24) of 100% of the cost,  as  reasonably
estimated  quarterly by the Lender,  to obtain any required  Subsequent Cap plus
any amount  required to increase the Cap Escrow Fund to the amount then required
to be funded in the Cap Escrow  Fund based on the then  current  cost  estimate.
After the Original Escrow Period, the Monthly Cap Escrow Payment means an amount
equal to the excess of

            (i) 100% of the cost,  as  reasonably  estimated  by the Lender,  to
      obtain any required Subsequent Cap, over

            (ii) the  amount  in the Cap  Escrow  Fund on the  date  immediately
      preceding  the date of  calculation,  provided  that such amount  shall be
      calculated  quarterly  until  the  final of three (3)  months  before  the
      expiration of the Cap then in effect,  during which three (3) month period
      such amount shall be calculated monthly.

      In no event shall the Borrower be required to make  deposits  into the Cap
Escrow Fund if the amount in the Cap Escrow  Fund equals or exceeds  100% of the
cost,  as then  reasonably  estimated  by the  Lender,  to obtain  any  required
Subsequent Cap.

(b) Cap Escrow Fund. The Lender shall deposit the Monthly Cap Escrow Payments in
an interest  bearing  account (the "Cap Escrow  Fund") which meets the standards
for custodial accounts as required by Lender from time to time. (The Monthly Cap
Escrow  Payment  and all other  funds in the Cap  Escrow  Fund are  referred  to
collectively as the "Cap Escrow Fund"). Lender or a designated representative of
Lender  shall have the sole right to make  withdrawals  from such  account.  All
interest  earned on funds in the Cap  Escrow  Fund  shall be added to and become
part of the Cap Escrow  Fund.  Lender  shall not be  responsible  for any losses
resulting  from the  investment  of the Cap  Escrow  Fund or for  obtaining  any
specific  level or  percentage  of earnings on such  investment.  If required by
applicable  law,  provided that no Event of Default exists under any of the Loan
Documents,  Lender shall pay to Borrower  the interest  earned on the Cap Escrow
Fund  once  each  year.  Borrower  assigns  to  Lender  the Cap  Escrow  Fund as
additional  security  for  all of the  Borrower's  obligations  under  the  Loan
Documents; provided, however, Lender shall apply funds in the Cap Escrow Fund to
purchase the next  Subsequent Cap required.  To the extent such Cap Escrow Funds
are  insufficient  to purchase any required  Subsequent  Cap, the Borrower shall
promptly  remit such funds to the Lender or the  provider of the Cap. Any amount
in the Cap Escrow Fund not used to purchase a  Subsequent  Cap shall be returned
to the Borrower at such time as Lender determines that no additional  Subsequent
Caps will be required to be purchased.

ARTICLE 11

                            MISCELLANEOUS PROVISIONS

SECTION 11.01.....Counterparts.

      To facilitate  execution,  this Agreement may be executed in any number of
counterparts. It shall not be necessary that the signatures of, or on behalf of,
each party,  or that the  signatures of all persons  required to bind any party,
appear on each counterpart, but it shall be sufficient that the signature of, or
on behalf of, each party,  appear on one or more counterparts.  All counterparts
shall collectively  constitute a single agreement.  It shall not be necessary in
making proof of this Agreement to produce or account for more than the number of
counterparts  containing the  respective  signatures of, or on behalf of, all of
the parties hereto.

SECTION 11.02.....Amendments, Changes and Modifications.

      This Agreement may be amended,  changed,  modified,  altered or terminated
only by written instrument or written  instruments signed by Lender and Borrower
affected thereby.

SECTION 11.03.....Right to Complete or Partial Termination of Loan Commitment.

      Subject to the terms and conditions of this Article,  Borrowers shall have
the  right to  permanently  reduce  the  amount  of Loans  available  under  the
Agreement.

(a) Procedure for Complete or Partial Termination of Loan Commitment

(i) Request. To permanently reduce the Loan commitment,  Borrowers shall deliver
a Termination Request to Lender. A permanent reduction of the Loan commitment to
$0 shall be referred to as a "Complete  Termination."  The  Termination  Request
shall include the following:

                        (A) The  proposed  amount of the  reduction  in the Loan
      commitment; and

                        (B)   Unless   there  is  a  Complete   Termination,   a
      designation  by  Borrower of the Loans,  if any,  which will be prepaid in
      connection with such termination.

(ii) Closing. If all General Conditions contained in Section 4.01 are satisfied,
Lender shall reduce the Loan commitment,  to the amount designated by Borrowers,
at a closing  to be held at  offices  designated  by  Lender  on a Closing  Date
selected by Lender,  within thirty (30) Business Days after Lender's  receipt of
the  Termination  Request  (or on such  other date as  Borrowers  and Lender may
agree),  by (A)  payment in full of all  Variable  Loans  required to be paid to
reduce the aggregate  unpaid  principal  balance of all Loans  Outstanding to no
greater  than  the  reduced  commitment,   (B)  payment  of  the  Variable  Loan
Termination  Fee, and (C) executing  and  delivering  all  documents  reasonably
required by Lender to evidence the reduction in the Loan commitment.

SECTION 11.04.    Payment of Costs, Fees and Expenses.

      Borrower shall pay, on demand,  all  reasonable  fees,  costs,  charges or
expenses  (including the fees and expenses of attorneys,  accountants  and other
experts) incurred by Lender in connection with:

(a) Any amendment,  consent or waiver to this Agreement or the Loan Documents to
which  Borrower  is a party  (whether  or not any such  amendments,  consents or
waivers are entered into).

(b) Defending or participating  in any litigation  arising from actions by third
parties  and  brought  against  or  involving  Lender  with  respect  to (i) the
Mortgaged  Property securing  Borrower's Loan, (ii) any event, act, condition or
circumstance   in  connection   with  such  Mortgaged   Property  or  (iii)  the
relationship  between  Lender and Borrower in connection  with this Agreement or
any of the transactions contemplated by this Agreement.

(c) The  administration or enforcement of, or preservation of rights or remedies
under,  this  Agreement or any other Loan  Documents or in  connection  with the
foreclosure  upon,  sale  of or  other  disposition  of any  Collateral  granted
pursuant to the Loan Documents.

(d) Any disclosure  documents  related to a Loan,  including the reasonable fees
and expenses of Lender's attorneys and accountants.

Borrower  shall also pay, on demand,  any  transfer  taxes,  documentary  taxes,
assessments  or  charges  made by any  governmental  authority  by reason of the
execution,  delivery, filing, recordation,  performance or enforcement of any of
the Loan Documents to which it is a party or its Loan.  Any attorneys'  fees and
expenses  payable by Borrower  pursuant  to this  Section  shall be  recoverable
separately  from and in addition to any other amount  included in such judgment,
and such  obligation  is intended to be severable  from the other  provisions of
this  Agreement  and to survive  and not be merged into any such  judgment.  Any
amounts payable by Borrower  pursuant to this Section,  with interest thereon if
not paid when due, shall become  additional  indebtedness of Borrower secured by
the Loan Documents to which it is a party. Such amounts shall bear interest from
the date such amounts are due until paid in full at the interest rates in effect
from time to time for the  relevant  Loan  unless  collection  from  Borrower of
interest at such rate would be contrary to  applicable  law, in which event such
amounts shall bear interest at the highest rate which may be collected  from the
Borrower  under  applicable  law. The  provisions of this Section are cumulative
with, and do not exclude the application and benefit to Lender of, any provision
of any other  Loan  Document  relating  to any of the  matters  covered  by this
Section.

SECTION 11.05.    Payment Procedure.

      All payments to be made to Lender pursuant to this Agreement or any of the
Loan Documents  shall be made in lawful currency of the United States of America
and in immediately  available funds by wire transfer to an account designated by
Lender before 1:00 p.m. (Eastern Standard time) on the date when due.

SECTION 11.06.    Payments on Business Days.

      In any case in which the date of  payment to Lender or the  expiration  of
any time period hereunder occurs on a day which is not a Business Day, then such
payment or expiration of such time period need not occur on such date but may be
made on the next  succeeding  Business  Day with the same force and effect as if
made on the day of maturity or expiration  of such period,  except that interest
shall  continue  to accrue for the period  after such date to the next  Business
Day.

SECTION 11.07.    Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial.

      PRIOR TO THE  FANNIE  MAE  PURCHASE  DATE,  THIS LOAN  AGREEMENT  SHALL BE
GOVERNED BY,  INTERPRETED,  CONSTRUED AND ENFORCED PURSUANT TO AND IN ACCORDANCE
WITH THE LAWS OF THE  DISTRICT  OF COLUMBIA  (EXCLUDING  THE LAW  APPLICABLE  TO
CONFLICTS OR CHOICE OF LAW), BUT THE NOTES, THE SECURITY DOCUMENTS AND ALL OTHER
LOAN  DOCUMENTS  SHALL BE  GOVERNED  BY,  INTERPRETED,  CONSTRUED  AND  ENFORCED
PURSUANT  TO AND IN  ACCORDANCE  WITH THE  LAWS OF THE  JURISDICTION  WHERE  THE
MORTGAGED PROPERTY SECURING A LOAN IS LOCATED.

      ON AND AFTER THE FANNIE MAE PURCHASE DATE AND NOTWITHSTANDING  ANYTHING IN
THE NOTES,  THE  SECURITY  DOCUMENTS  OR ANY OF THE OTHER LOAN  DOCUMENTS TO THE
CONTRARY,  EACH OF THE TERMS AND  PROVISIONS,  AND RIGHTS AND OBLIGATIONS OF THE
BORROWER UNDER THE NOTES AND OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY,  SHALL
BE  GOVERNED  BY,  INTERPRETED,  CONSTRUED  AND  ENFORCED  PURSUANT  TO  AND  IN
ACCORDANCE  WITH  THE  LAWS  OF THE  DISTRICT  OF  COLUMBIA  (EXCLUDING  THE LAW
APPLICABLE TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO THE EXTENT OF PROCEDURAL AND
SUBSTANTIVE   MATTERS  RELATING  ONLY  TO  (1)  THE  CREATION,   PERFECTION  AND
FORECLOSURE OF LIENS AND SECURITY  INTERESTS,  AND ENFORCEMENT OF THE RIGHTS AND
REMEDIES,  AGAINST THE MORTGAGED PROPERTIES,  WHICH MATTERS SHALL BE GOVERNED BY
THE LAWS OF THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS LOCATED, (2) THE
PERFECTION,  THE EFFECT OF PERFECTION  AND  NON-PERFECTION  AND  FORECLOSURE  OF
SECURITY  INTERESTS ON PERSONAL  PROPERTY (OTHER THAN DEPOSIT  ACCOUNTS),  WHICH
MATTERS  SHALL BE GOVERNED  BY THE LAWS OF THE  JURISDICTION  DETERMINED  BY THE
CHOICE OF LAW PROVISIONS OF THE DISTRICT OF COLUMBIA UNIFORM COMMERCIAL CODE AND
(3) THE PERFECTION,  THE EFFECT OF PERFECTION AND NON-PERFECTION AND FORECLOSURE
OF  DEPOSIT  ACCOUNTS,  WHICH  MATTERS  SHALL  BE  GOVERNED  BY THE  LAWS OF THE
JURISDICTION IN WHICH THE DEPOSIT  ACCOUNT IS LOCATED.  BORROWER AGREES THAT ANY
CONTROVERSY ARISING UNDER OR IN RELATION TO THE NOTES, THE SECURITY DOCUMENTS OR
ANY OTHER LOAN DOCUMENT SHALL BE, EXCEPT AS OTHERWISE PROVIDED HEREIN, LITIGATED
IN THE DISTRICT OF COLUMBIA.  THE LOCAL AND FEDERAL COURTS AND AUTHORITIES  WITH
JURISDICTION IN DISTRICT OF COLUMBIA SHALL, EXCEPT AS OTHERWISE PROVIDED HEREIN,
HAVE JURISDICTION OVER ALL CONTROVERSIES WHICH MAY ARISE UNDER OR IN RELATION TO
THE LOAN  DOCUMENTS,  INCLUDING THOSE  CONTROVERSIES  RELATING TO THE EXECUTION,
JURISDICTION,  BREACH,  ENFORCEMENT OR COMPLIANCE  WITH THE NOTES,  THE SECURITY
DOCUMENTS OR ANY OTHER ISSUE ARISING UNDER,  RELATING TO, OR IN CONNECTION  WITH
ANY OF THE  LOAN  DOCUMENTS.  THE  BORROWER  IRREVOCABLY  CONSENTS  TO  SERVICE,
JURISDICTION,  AND VENUE OF SUCH  COURTS  FOR ANY  LITIGATION  ARISING  FROM THE
NOTES, THE SECURITY DOCUMENTS OR ANY OF THE OTHER LOAN DOCUMENTS,  AND WAIVE ANY
OTHER  VENUE TO WHICH THEY MIGHT BE  ENTITLED  BY VIRTUE OF  DOMICILE,  HABITUAL
RESIDENCE OR OTHERWISE.  NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT LENDER
FROM BRINGING ANY SUIT,  ACTION OR PROCEEDING OR EXERCISING  ANY RIGHTS  AGAINST
BORROWER  AND AIMCO  AND  AGAINST  THE  COLLATERAL  IN ANY  OTHER  JURISDICTION.
INITIATING  SUCH SUIT,  ACTION OR  PROCEEDING OR TAKING SUCH ACTION IN ANY OTHER
JURISDICTION  SHALL IN NO EVENT  CONSTITUTE A WAIVER OF THE AGREEMENT  CONTAINED
HEREIN  THAT THE LAWS OF  DISTRICT  OF  COLUMBIA  SHALL  GOVERN  THE  RIGHTS AND
OBLIGATIONS OF BORROWER AND LENDER AS PROVIDED  HEREIN OR THE SUBMISSION  HEREIN
BY BORROWER AND TO PERSONAL  JURISDICTION  WITHIN THE DISTRICT OF COLUMBIA.  THE
BORROWER (I)  COVENANTS  AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO
ANY ISSUE  ARISING  UNDER ANY OF THE LOAN  DOCUMENTS  TRIABLE BY A JURY AND (II)
WAIVE ANY RIGHT TO TRIAL BY JURY TO THE EXTENT  THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST. THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A JURY  TRIAL  WOULD  OTHERWISE  ACCRUE.
FURTHER, THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER
(INCLUDING, BUT NOT LIMITED TO, LENDER'S COUNSEL) HAS REPRESENTED,  EXPRESSLY OR
OTHERWISE,  TO THE BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THE  PROVISIONS
OF  THIS  SECTION.  THE  FOREGOING  PROVISIONS  WERE  KNOWINGLY,  WILLINGLY  AND
VOLUNTARILY  AGREED TO BY BORROWER  UPON  CONSULTATION  WITH  INDEPENDENT  LEGAL
COUNSEL SELECTED BY BORROWER'S FREE WILL.

SECTION 11.08.    Severability.

      In the event any provision of this Agreement or in any other Loan Document
shall be held  invalid,  illegal  or  unenforceable  in any  jurisdiction,  such
provision  will be severable from the remainder  hereof as to such  jurisdiction
and the validity,  legality and enforceability of the remaining  provisions will
not in any way be affected or impaired in any jurisdiction.

SECTION 11.09.    Notices.

(a)  Manner of Giving  Notice.  Each  notice,  direction,  certificate  or other
communication  hereunder (in this Section  referred to collectively as "notices"
and singly as a "notice")  which any party is required or  permitted  to give to
the other  party  pursuant  to this  Agreement  shall be in writing and shall be
deemed to have been duly and sufficiently given if:

(i) personally delivered with proof of delivery thereof (any notice so delivered
shall be deemed to have been received at the time so delivered);

(ii) sent by Federal Express (or other similar  overnight  courier)  designating
morning  delivery (any notice so delivered shall be deemed to have been received
on the Business Day it is delivered by the courier);

(iii) sent by telecopier or facsimile  machine which  automatically  generates a
transmission  report  that  states  the date and time of the  transmission,  the
length of the document transmitted,  and the telephone number of the recipient's
telecopier  or facsimile  machine (to be  confirmed  with a copy thereof sent in
accordance  with  paragraphs  (1) or (2) above  within two  Business  Days) (any
notice so  delivered  shall be deemed to have been  received  (i) on the date of
transmission,  if so transmitted  before 5:00 p.m. (local time of the recipient)
on a Business  Day, or (ii) on the next Business  Day, if so  transmitted  on or
after  5:00  p.m.  (local  time  of  the  recipient)  on a  Business  Day  or if
transmitted on a day other than a Business Day);

addressed to the parties as follows:

            As to Borrower:   c/o AIMCO Properties, L.P.
                              2000 South Colorado Boulevard
                              Tower 2, Suite 100
                              Denver, CO  80222
                              Attention:  Patti K. Fielding
                              Telecopy No.:  (303) 300-3241

            with a copy to:         c/o AIMCO Properties, L.P.
                              2000 South Colorado Boulevard
                              Tower 2, Suite 100
                              Denver, CO  80222
                              Attention:  Miles Cortez, Esquire
                              Telecopy No.:  (303) 300-3297

            As to Lender:           GMAC Commercial Mortgage Corporation
                              200 Witmer Road
                              Horsham, PA  19044
                              Attention:
                              Telecopy No.:

            with a copy to:         GMAC Commercial Mortgage Corporation
                              200 Witmer Road
                              Horsham, PA  19044
                              Attention:
                              Telecopy No.:

            As to Fannie Mae: Fannie Mae
                           3939 Wisconsin Avenue, N.W.
                           Washington, D.C. 20016-2899
                              Attention:  Vice President for
                                       Multifamily Asset Management
                          Telecopy No.: (202) 752-5016

            with a copy to:         Arter & Hadden LLP
                              1801 K Street, N.W.
                              Suite 400K
                              Washington, D.C.  20006
                              Attention:  Lawrence H. Gesner, Esquire
                              Telecopy No.:  (202) 857-0172

(b) Change of Notice  Address.  Any party may, by notice given  pursuant to this
Section,  change the person or persons and/or address or addresses, or designate
an additional person or persons or an additional  address or addresses,  for its
notices, but notice of a change of address shall only be effective upon receipt.
Each  party  agrees  that it shall not refuse or reject  delivery  of any notice
given hereunder, that it shall acknowledge, in writing, receipt of the same upon
request by the other  party and that any notice  rejected or refused by it shall
be deemed  for all  purposes  of this  Agreement  to have been  received  by the
rejecting party on the date so refused or rejected, as conclusively  established
by the records of the U.S. Postal Service, the courier service or facsimile.

(c) Fannie Mae.  Notices to Fannie Mae shall  neither be required nor  effective
until the Fannie Mae Purchase Date.

SECTION 11.10.    Further Assurances and Corrective Instruments.

(a) Further Assurances. To the extent permitted by law, the parties hereto agree
that they shall, from time to time,  execute,  acknowledge and deliver, or cause
to be executed,  acknowledged and delivered,  such  supplements  hereto and such
further  instruments as Lender or Borrower may request and as may be required in
the  opinion  of  Lender  or its  counsel  to  effectuate  the  intention  of or
facilitate the performance of this Agreement or any Loan Document.

(b) Further Documentation. Without limiting the generality of subsection (a), in
the event any  further  documentation  or  information  is required by Lender to
correct patent mistakes in the Loan Documents,  materials  relating to the Title
Insurance Policies or the funding of the Loans, Borrower shall provide, or cause
to be provided to Lender, at Borrower's cost and expense,  such documentation or
information.  Borrower  shall execute and deliver to Lender such  documentation,
including any amendments,  corrections, deletions or additions to the Notes, the
Security  Instruments  or the other Loan  Documents to which it is a party as is
reasonably required by Lender.

(c) Compliance with Investor  Requirements.  Without  limiting the generality of
subsection  (a),  Borrower  shall  do  anything  necessary  to  comply  with the
reasonable  requirements  of Lender to enable Lender to sell any MBS backed by a
Loan.

SECTION 11.11.    Term of this Agreement.

      This Agreement shall continue in effect until the Termination Date.

SECTION 11.12.    Assignments; Third-Party Rights.

      No  Borrower  shall  assign  this  Agreement,   or  delegate  any  of  its
obligations  hereunder,  without the prior written consent of Lender. Lender may
assign its rights and obligations  under this Agreement  separately or together,
without any Borrower's consent,  but may not delegate its obligations under this
Agreement after the Fannie Mae Purchase Date except as provided in Section 9.03.

SECTION 11.13.    Headings.

      Article and Section  headings used herein are for convenience of reference
only, are not part of this Agreement and are not to affect the  construction of,
or to be taken into consideration in interpreting, this Agreement.

SECTION 11.14.    General Interpretive Principles.

      For purposes of this Agreement,  except as otherwise expressly provided or
unless the context otherwise  requires,  (i) the terms defined in Appendix I and
elsewhere in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be  deemed  to  include  the  other  genders;  (ii)  accounting  terms not
otherwise  defined herein have the meanings  assigned to them in accordance with
GAAP;  (iii)  references  herein  to  "Articles,"   "Sections,"   "subsections,"
"paragraphs"  and other  subdivisions  without  reference  to a document  are to
designated Articles, Sections, subsections, paragraphs and other subdivisions of
this Agreement;  (iv) a reference to a subsection without further reference to a
Section is a reference  to such  subsection  as contained in the same Section in
which the reference  appears,  and this rule shall also apply to paragraphs  and
other  subdivisions;  (v) a  reference  to an Exhibit  or a  Schedule  without a
further  reference  to the document to which the Exhibit or Schedule is attached
is a  reference  to an Exhibit or  Schedule  to this  Agreement;  (vi) the words
"herein," "hereof,"  "hereunder" and other words of similar import refer to this
Agreement  as a whole and not to any  particular  provision;  and (vii) the word
"including" means "including, but not limited to."

SECTION 11.15.    Interpretation.

      The  parties  hereto  acknowledge  that each  party  and their  respective
counsel have participated in the drafting and revision of this Agreement and the
Loan  Documents.  Accordingly,  the parties agree that any rule of  construction
which disfavors the drafting party shall not apply in the interpretation of this
Agreement  and the Loan  Documents  or any  amendment or  supplement  or exhibit
hereto or thereto.

SECTION 11.16.    Standards for Decisions, Etc.

      Unless otherwise provided herein, if Lender's approval is required for any
matter hereunder,  such approval may be granted or withheld in Lender's sole and
absolute discretion.  Unless otherwise provided herein, if Lender's designation,
determination, selection, estimate, action or decision is required, permitted or
contemplated hereunder, such designation,  determination,  selection,  estimate,
action or decision shall be made in Lender's sole and absolute discretion.

SECTION 11.17.    Decisions in Writing.

      Any approval, designation, determination, selection, action or decision of
Lender or Borrower must be in writing to be effective.

      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.




                     (Signatures appear on following pages)



<PAGE>


BORROWER:

BIG WALNUT, L.P., a Delaware limited partnership

By: Davidson Diversified Properties, Inc., a
Tennessee corporation, its general partner



By:
Patti K. Fielding
Senior Vice President


<PAGE>




VILLA NOVA, LIMITED Partnership, a Tennessee
limited partnership

By: Davidson Properties, Inc., a Tennessee
corporation, its managing general partner



By:
Patti K. Fielding
Senior Vice President


<PAGE>




DAVIDSON DIVERSIFIED REAL ESTATE I, L.P., a
Delaware limited partnership

By: Davidson Diversified Properties, Inc., a
Tennessee corporation, its managing
general partner



By:
Patti K. Fielding
Senior Vice President


<PAGE>




LAKE EDEN ASSOCIATES, L.P., a Delaware limited
partnership

By: Jacques-Miller Associates, a Tennessee
general partnership, its managing general
partner

By: JMA Equities, L.P., a Delaware limited
partnership, its managing partner

By: MAE JMA, Inc., a Delaware
corporation, its managing general
partner



By:
Patti K. Fielding
Senior Vice President


<PAGE>




AIMCO STEEPLECHASE, L.P., a Delaware limited
partnership

By: AIMCO Holdings, L.P., a Delaware limited
partnership, its sole general partner

By: AIMCO Holdings QRS, Inc., a Delaware
corporation, its sole general partner



By:
Patti K. Fielding
Senior Vice President


<PAGE>




SHELTER PROPERTIES VI LIMITED PARTNERSHIP, a
South Carolina limited partnership

By: Shelter Realty VI Corporation, a South
Carolina corporation, its corporate
general partner



By:
Patti K. Fielding
Senior Vice President


<PAGE>




WOODMERE ASSOCIATES, L.P., a Delaware limited
partnership

By: Jacques-Miller Associates, a Tennessee
general partnership, its managing general
partner

By: JMA Equities, L.P., a Delaware limited
partnership, its managing partner

By: MAE JMA, Inc., a Delaware
corporation, its general partner



By:
Patti K. Fielding
Senior Vice President


<PAGE>




SHELTER PROPERTIES VI LIMITED PARTNERSHIP, a
South Carolina limited partnership

By: Shelter Realty VI Corporation, a South
Carolina corporation, its corporate
general partner



By:
Patti K. Fielding
Senior Vice President





<PAGE>


LENDER:

GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation



By:
Name:
Title:


<PAGE>


                                       A-1

                                    EXHIBIT A

--------------------------------------------------------------------------------
              Mortgaged Property               Initial Valuation   Loan Amount
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Big Walnut Apartments (Whitehall, OH)              $8,800,000.00   $5,720,000.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Villa Nova Apartments (Indianapolis, IN)           $3,900,000.00   $2,535,000.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Versailles on the Lake Apartments (Fort            $3,724,000.00   $2,420,600.00
Wayne, IN)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lebanon Station Apartments (Columbus, OH)         $10,550,000.00   $6,857,500.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Emerald Ridge Apartments (Tyler, TX)               $9,500,000.00   $6,168,575.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Rocky Creek Apartments (Augusta, GA)               $3,600,000.00   $2,340,000.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Woodmere Apartments (Cincinnati, OH)               $4,700,000.00   $2,223,000.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Carriage House Apartments (Gastonia, NC)           $2,920,000.00   $1,898,000.00
--------------------------------------------------------------------------------


<PAGE>


                                       B-7

                                    EXHIBIT B



                                 Fixed Loan Note



                                 FIXED LOAN NOTE





US $____________                                              __________, 20__





FOR VALUE RECEIVED, the undersigned  ("Borrower") jointly and severally (if more
than one) promises to pay to the order of GMAC COMMERCIAL MORTGAGE  CORPORATION,
a      _________________      corporation,      the     principal     sum     of
___________________________   __________________________________________________
Dollars  (US  $____________________),  with  interest  on the  unpaid  principal
balance at the annual rate of __________________ percent (____%).

      This Note is executed and  delivered by Borrower  pursuant to that certain
Loan Agreement dated as of ______________, 2002 by and between Borrower, certain
other Borrowers  signatory thereto and Lender (as amended from time to time, the
"Loan Agreement"),  to evidence the obligation of Borrower to repay a Fixed Loan
made by Lender to Borrower in accordance  with the terms of the Loan  Agreement.
This Note is entitled to the benefit and security of the Loan Documents provided
for in the Loan Agreement, to which reference is hereby made, for a statement of
all the terms and  conditions  under  which the Fixed Loan  evidenced  hereby is
made.

1. Defined  Terms.  As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness"  means the principal of, interest
on,  or any  other  amounts  due at any time  under,  this  Note,  the  Security
Instrument  or any other Loan  Document,  including  prepayment  premiums,  late
charges,  default interest, and advances to protect the security of the Security
Instrument  under  Section 12 of the Security  Instrument.  Event of Default and
other  capitalized  terms  used but not  defined  in this  Note  shall  have the
meanings  given to such terms in the Loan  Agreement  or, if not  defined in the
Loan Agreement,  as defined in the Security  Instrument (as defined in Paragraph
5).

2.  Address for  Payment.  All  payments due under this Note shall be payable at
GMAC Commercial  Mortgage  Corporation,  200 Witmer Road,  Horsham, PA 19044, or
such other place as may be designated  by written  notice to Borrower from or on
behalf of Lender.

3. Payment of Principal  and Interest.  Principal and interest  shall be paid as
follows:

(a) Unless  disbursement of principal is made by Lender to Borrower on the first
day of the month,  interest for the period beginning on the date of disbursement
and ending on and including the last day of the month in which such disbursement
is made  shall be  payable  simultaneously  with  the  execution  of this  Note.
Interest  under  this Note  shall be  computed  on the  basis of a 360-day  year
consisting of twelve 30-day months.

(b)  Consecutive  monthly  installments  of principal and interest,  each in the
amount of
______________________________________________________________________________
Dollars (US  $__________________________),  shall be payable on the first day of
each month  beginning  on  __________________,  _____,  until the entire  unpaid
principal  balance  evidenced by this Note is fully paid.  Any accrued  interest
remaining  past due for 30 days or more shall be added to and become part of the
unpaid principal  balance and shall bear interest at the rate or rates specified
in this Note,  and any  reference  below to  "accrued  interest"  shall refer to
accrued interest which has not become part of the unpaid principal balance.  Any
remaining    principal   and   interest    shall   be   due   and   payable   on
___________________________________  or on any earlier  date on which the unpaid
principal  balance of this Note  becomes due and  payable,  by  acceleration  or
otherwise (the "Maturity Date").  The unpaid principal balance shall continue to
bear interest after the Maturity Date at the Default Rate set forth in this Note
until and including the date on which it is paid in full.

(c)      Any regularly  scheduled monthly  installment of principal and interest
         that is received by Lender before the date it is due shall be deemed to
         have  been  received  on  the  due  date  solely  for  the  purpose  of
         calculating interest due.

4.       Application of Payments. If at any time Lender receives,  from Borrower
         or otherwise,  any amount applicable to the Indebtedness  which is less
         than all amounts  due and  payable at such time,  Lender may apply that
         payment to amounts  then due and payable in any manner and in any order
         determined  by Lender,  in Lender's  discretion.  Borrower  agrees that
         neither  Lender's  acceptance  of a payment from  Borrower in an amount
         that is less  than  all  amounts  then  due and  payable  nor  Lender's
         application of such payment shall constitute or be deemed to constitute
         either a waiver of the unpaid amounts or an accord and satisfaction.

5.       Security.  The  Indebtedness  is  secured,  among  other  things,  by a
         multifamily mortgage,  deed to secure debt or deed of trust dated as of
         the date of this Note (the  "Security  Instrument"),  and  reference is
         made to the Security  Instrument for other rights of Lender  concerning
         the collateral for the Indebtedness.

6.       Acceleration.  If an Event of Default has occurred  and is  continuing,
         the  entire  unpaid  principal  balance,  any  accrued  interest,   the
         prepayment  premium  payable under  Paragraph 10, if any, and all other
         amounts  payable under this Note and any other Loan  Document  shall at
         once become due and payable, at the option of Lender, without any prior
         notice to  Borrower.  Lender may  exercise  this  option to  accelerate
         regardless of any prior forbearance.

7.       Late Charge.  If any monthly  installment due hereunder is not received
         by  Lender  on or  before  the 10th day of each  month or if any  other
         amount payable under this Note or under the Security  Instrument or any
         other Loan  Document is not received by Lender within 10 days after the
         date such  amount is due,  counting  from and  including  the date such
         amount is due,  Borrower shall pay to Lender,  immediately  and without
         demand by Lender,  a late  charge  equal to 5 percent  of such  monthly
         installment or other amount due. Borrower acknowledges that its failure
         to make timely payments will cause Lender to incur additional  expenses
         in  servicing  and  processing  the loan  evidenced  by this  Note (the
         "Loan"),  and  that  it  is  extremely  difficult  and  impractical  to
         determine  those  additional  expenses.  Borrower  agrees that the late
         charge  payable  pursuant  to  this  Paragraph  represents  a fair  and
         reasonable estimate,  taking into account all circumstances existing on
         the date of this Note, of the additional  expenses Lender will incur by
         reason of such late payment. The late charge is payable in addition to,
         and not in lieu of, any interest  payable at the Default Rate  pursuant
         to Paragraph 8.

8.       Default Rate. So long as any monthly  installment  or any other payment
         due under  this  Note  remains  past due for 30 days or more,  interest
         under this Note shall accrue on the unpaid  principal  balance from the
         earlier  of the due date of the first  unpaid  monthly  installment  or
         other payment due, as applicable,  at a rate (the "Default Rate") equal
         to the lesser of 4 percentage points above the rate stated in the first
         paragraph  of this  Note or the  maximum  interest  rate  which  may be
         collected from Borrower under  applicable law. If the unpaid  principal
         balance and all accrued  interest  are not paid in full on the Maturity
         Date, the unpaid principal  balance and all accrued interest shall bear
         interest  from the Maturity  Date at the Default  Rate.  Borrower  also
         acknowledges that its failure to make timely payments will cause Lender
         to incur  additional  expenses in servicing  and  processing  the Loan,
         that,  during the time that any monthly  installment  or payment  under
         this  Note is  delinquent  for more  than 30 days,  Lender  will  incur
         additional  costs and expenses  arising from its loss of the use of the
         money due and from the adverse  impact on Lender's  ability to meet its
         other   obligations   and  to  take   advantage  of  other   investment
         opportunities,  and that it is extremely  difficult and  impractical to
         determine   those   additional   costs  and  expenses.   Borrower  also
         acknowledges  that,  during the time that any  monthly  installment  or
         other payment due under this Note is delinquent  for more than 30 days,
         Lender's risk of  nonpayment of this Note will be materially  increased
         and Lender is  entitled  to be  compensated  for such  increased  risk.
         Borrower agrees that the increase in the rate of interest payable under
         this  Note  to  the  Default  Rate  represents  a fair  and  reasonable
         estimate, taking into account all circumstances existing on the date of
         this Note, of the  additional  costs and expenses  Lender will incur by
         reason  of  the  Borrower's   delinquent  payment  and  the  additional
         compensation  Lender is entitled to receive for the increased  risks of
         nonpayment associated with a delinquent loan.

9.       Limits on Personal Liability.

(a)      Except as otherwise  provided in this  Paragraph 9, Borrower shall have
         no personal  liability under this Note, the Security  Instrument or any
         other Loan  Document for the repayment of the  Indebtedness  or for the
         performance  of any  other  obligations  of  Borrower  under  the  Loan
         Documents,  and  Lender's  only  recourse for the  satisfaction  of the
         Indebtedness and the performance of such obligations  shall be Lender's
         exercise  of its  rights and  remedies  with  respect to the  Mortgaged
         Property  and any other  collateral  held by Lender as security for the
         Indebtedness.  This limitation on Borrower's  liability shall not limit
         or impair  Lender's  enforcement of its rights against any guarantor of
         the Indebtedness or any guarantor of any obligations of Borrower.

(b)      Borrower  shall be  personally  liable to Lender for the repayment of a
         portion of the  Indebtedness  equal to any loss or damage  suffered  by
         Lender as a result of (1)  failure of  Borrower  to pay to Lender  upon
         demand after an Event of Default, all Rents to which Lender is entitled
         under  Section  3(a) of the Security  Instrument  and the amount of all
         security deposits collected by Borrower from tenants then in residence;
         (2)  failure  of  Borrower  to  apply  all   insurance   proceeds   and
         condemnation  proceeds  as  required by the  Security  Instrument;  (3)
         failure of Borrower to comply with Section 14(d) or (e) of the Security
         Instrument  relating to the delivery of books and records,  statements,
         schedules and reports; (4) fraud or written material  misrepresentation
         by Borrower or any officer,  director,  partner,  member or employee of
         Borrower  in  connection  with the  application  for or creation of the
         Indebtedness or any request for any action or consent by Lender; or (5)
         failure to apply Rents,  first, to the payment of reasonable  operating
         expenses  (other than Property  management  fees that are not currently
         payable pursuant to the terms of an Assignment of Management  Agreement
         or any other  agreement  with Lender  executed in  connection  with the
         Loan) and then to amounts ("Debt Service  Amounts")  payable under this
         Note, the Security  Instrument or any other Loan Document  (except that
         Borrower will not be personally  liable (i) to the extent that Borrower
         lacks the legal right to direct the  disbursement  of such sums because
         of a bankruptcy,  receivership or similar judicial proceeding,  or (ii)
         with  respect to Rents that are  distributed  in any  calendar  year if
         Borrower has paid all operating  expenses and Debt Service  Amounts for
         that calendar year).

(c)      Borrower shall become  personally liable to Lender for the repayment of
         all of the  Indebtedness  upon the  occurrence  of any of the following
         Events of  Default:  (1)  Borrower's  acquisition  of any  property  or
         operation of any  business not  permitted by Section 33 of the Security
         Instrument; or (2) a Transfer that is an Event of Default under Section
         21 of the Security Instrument.

(d)      To the extent that Borrower has personal liability under this Paragraph
         9, Lender may exercise its rights against Borrower  personally  without
         regard to whether Lender has exercised any rights against the Mortgaged
         Property  or any other  security,  or pursued  any rights  against  any
         guarantor,  or pursued any other rights  available to Lender under this
         Note,  the Security  Instrument,  any other Loan Document or applicable
         law. For purposes of this  Paragraph 9, the term  "Mortgaged  Property"
         shall not include  any funds that (1) have been  applied by Borrower as
         required  or  permitted  by  the  Security   Instrument  prior  to  the
         occurrence of an Event of Default,  or (2) Borrower was unable to apply
         as  required  or  permitted  by the  Security  Instrument  because of a
         bankruptcy, receivership, or similar judicial proceeding.
10.      Voluntary and Involuntary Prepayments.

(a)      A prepayment premium shall be payable in connection with any prepayment
         made under this Note as provided below:

(1)      Borrower  may  voluntarily  prepay  all (but not less  than all) of the
         unpaid  principal  balance of this Note on the last  Business  Day of a
         calendar  month if Borrower has given Lender at least 30 days,  but not
         more  than  60  days,  prior  notice  of its  intention  to  make  such
         prepayment. Such notice shall be addressed to Lender and shall include,
         at a  minimum,  the  date  upon  which  Borrower  intends  to make  the
         prepayment.  If  Borrower  fails to prepay  this Note  within  five (5)
         Business Days of the stated date of  prepayment,  Lender shall have the
         right to  recalculate  the  prepayment  premium  pursuant to Schedule A
         based upon the date that  Borrower  actually  prepays  this Note.  Such
         prepayment  shall be made by paying (A) the amount of  principal  being
         prepaid, (B) all accrued interest, (C) all other sums due Lender at the
         time of such  prepayment,  and (D) the  prepayment  premium  calculated
         pursuant  to  Schedule A. For all  purposes,  including  the accrual of
         interest,  any prepayment  received by Lender on any day other than the
         last calendar day of the month shall be deemed to have been received on
         the last  calendar  day of such month.  For  purposes  of this Note,  a
         "Business Day" means any day other than a Saturday, Sunday or any other
         day on which Lender is not open for business.

(2)      Upon Lender's  exercise of any right of  acceleration  under this Note,
         Borrower  shall  pay  to  Lender,  in  addition  to the  entire  unpaid
         principal  balance  of  this  Note  outstanding  at  the  time  of  the
         acceleration,  (A) all accrued  interest  and all other sums due Lender
         under this Note and the other Loan  Documents,  and (B) the  prepayment
         premium calculated pursuant to Schedule A.

(3) Any  application  by  Lender  of any  collateral  or other  security  to the
repayment of any portion of the unpaid  principal  balance of this Note prior to
the  Maturity  Date and in the absence of  acceleration  shall be deemed to be a
partial prepayment by Borrower, requiring the payment to Lender by Borrower of a
prepayment premium.  The amount of any such partial prepayment shall be computed
so as to provide to Lender a prepayment  premium computed pursuant to Schedule A
without Borrower having to pay out-of-pocket any additional amounts.

(b)      Notwithstanding  the  provisions  of  Paragraph  10(a),  no  prepayment
         premium  shall be payable  with respect to (A) any  prepayment  made no
         more than 90 days  before  the  Maturity  Date,  or (B) any  prepayment
         occurring as a result of the  application of any insurance  proceeds or
         condemnation award under the Security Instrument.

(c)      Schedule A is hereby incorporated by reference into this Note.

(d)      Any required  prepayment of less than the unpaid  principal  balance of
         this Note shall not extend or postpone  the due date of any  subsequent
         monthly installments or change the amount of such installments,  unless
         Lender agrees otherwise in writing.

(e) Borrower  recognizes that any prepayment of the unpaid principal  balance of
this Note,  whether  voluntary or  involuntary  or  resulting  from a default by
Borrower,  will result in Lender's incurring loss, including  reinvestment loss,
additional expense and frustration or impairment of Lender's ability to meet its
commitments  to third  parties.  Borrower  agrees to pay to Lender  upon  demand
damages  for the  detriment  caused by any  prepayment,  and  agrees  that it is
extremely  difficult  and  impractical  to ascertain the extent of such damages.
Borrower  therefore  acknowledges  and agrees that the  formula for  calculating
prepayment  premiums set forth on Schedule A represents a reasonable estimate of
the damages Lender will incur because of a prepayment.

(f)      Borrower further acknowledges that the prepayment premium provisions of
         this  Note  are a  material  part of the  consideration  for  the  loan
         evidenced by this Note,  and  acknowledges  that the terms of this Note
         are in other  respects  more  favorable  to Borrower as a result of the
         Borrower's voluntary agreement to the prepayment premium provisions.

11.      Costs and  Expenses.  Borrower  shall pay on demand  all  expenses  and
         costs,  including  fees and  out-of-pocket  expenses of  attorneys  and
         expert  witnesses and costs of  investigation,  incurred by Lender as a
         result of any default under this Note or in connection  with efforts to
         collect any amount due under this Note, or to enforce the provisions of
         any  of  the  other  Loan   Documents,   including  those  incurred  in
         post-judgment  collection  efforts  and  in any  bankruptcy  proceeding
         (including  any  action  for  relief  from  the  automatic  stay of any
         bankruptcy   proceeding)  or  judicial  or   non-judicial   foreclosure
         proceeding.

12.      Forbearance.  Any  forbearance  by  Lender in  exercising  any right or
         remedy  under this Note,  the  Security  Instrument,  or any other Loan
         Document or otherwise afforded by applicable law, shall not be a waiver
         of or preclude the  exercise of that or any other right or remedy.  The
         acceptance by Lender of any payment after the due date of such payment,
         or in an amount which is less than the required payment, shall not be a
         waiver of  Lender's  right to require  prompt  payment  when due of all
         other  payments or to exercise  any right or remedy with respect to any
         failure to make prompt  payment.  Enforcement by Lender of any security
         for  Borrower's  obligations  under this Note shall not  constitute  an
         election by Lender of remedies  so as to preclude  the  exercise of any
         other right or remedy available to Lender.

13.      Waivers.  Presentment,  demand, notice of dishonor,  protest, notice of
         acceleration,  notice of intent to  demand  or  accelerate  payment  or
         maturity,  presentment for payment,  notice of nonpayment,  grace,  and
         diligence in collecting the Indebtedness are waived by Borrower and all
         endorsers  and  guarantors  of this  Note  and all  other  third  party
         obligors.

14.      Loan  Charges.  Borrower  agrees to pay an  effective  rate of interest
         equal to the sum of the interest rate provided for in this Note and any
         additional  rate of  interest  resulting  from  any  other  charges  of
         interest or in the nature of interest  paid or to be paid in connection
         with the loan  evidenced  by this Note and any other fees or amounts to
         be  paid by  Borrower  pursuant  to any of the  other  Loan  Documents.
         Neither  this  Note  nor  any of the  other  Loan  Documents  shall  be
         construed to create a contract for the use, forbearance or detention of
         money requiring  payment of interest at a rate greater than the maximum
         interest  rate  permitted to be charged  under  applicable  law. If any
         applicable  law  limiting  the  amount  of  interest  or other  charges
         permitted to be collected from Borrower in connection  with the Loan is
         interpreted  so that any interest or other  charge  provided for in any
         Loan  Document,  whether  considered  separately or together with other
         charges provided for in any other Loan Document, violates that law, and
         Borrower  is  entitled  to the  benefit of that law,  that  interest or
         charge is hereby  reduced to the extent  necessary  to  eliminate  that
         violation.  The amounts, if any, previously paid to Lender in excess of
         the  permitted  amounts shall be applied by Lender to reduce the unpaid
         principal balance of this Note. For the purpose of determining  whether
         any  applicable  law limiting  the amount of interest or other  charges
         permitted  to  be  collected  from  Borrower  has  been  violated,  all
         Indebtedness  that constitutes  interest,  as well as all other charges
         made in connection  with the  Indebtedness  that  constitute  interest,
         shall be deemed to be allocated and spread ratably over the stated term
         of  the  Note.  Unless  otherwise  required  by  applicable  law,  such
         allocation  and  spreading  shall be effected in such a manner that the
         rate of interest so computed is uniform  throughout  the stated term of
         the Note.

15.      Commercial Purpose.  Borrower represents that the Indebtedness is being
         incurred by  Borrower  solely for the purpose of carrying on a business
         or commercial  enterprise,  and not for  personal,  family or household
         purposes.

16.      Counting of Days.  Except where otherwise  specifically  provided,  any
         reference in this Note to a period of "days" means  calendar  days, not
         Business Days.

17.      Governing  Law;  Consent to  Jurisdiction;  WAIVER OF JURY  TRIAL.  The
         provisions of Section 11.06 of the Loan Agreement  (entitled "Choice of
         Law;  Consent  to  Jurisdiction;  Waiver  of Jury  Trial")  are  hereby
         incorporated  into this Note by this reference to the fullest extent as
         if the text of such Section were set forth in its entirety herein.

18.      Captions.  The  captions  of  the  paragraphs  of  this  Note  are  for
         convenience only and shall be disregarded in construing this Note.

19.      Notices.  All  notices,  demands and other  communications  required or
         permitted to be given by Lender to Borrower pursuant to this Note shall
         be given in accordance with Section 11.08 of the Security Documents.

20.      Consent to Jurisdiction and Venue. Borrower agrees that any controversy
         arising   under  or  in  relation  to  this  Note  shall  be  litigated
         exclusively  in the  jurisdiction  in which  the Land is  located  (the
         "Property Jurisdiction").  The state and federal courts and authorities
         with  jurisdiction  in the Property  Jurisdiction  shall have exclusive
         jurisdiction  over all  controversies  which  shall  arise  under or in
         relation  to this  Note.  Borrower  irrevocably  consents  to  service,
         jurisdiction,  and venue of such  courts  for any such  litigation  and
         waives  any  other  venue to which it might be  entitled  by  virtue of
         domicile, habitual residence or otherwise.

21.      WAIVER OF TRIAL BY JURY.  BORROWER  AND  LENDER  EACH (A) AGREES NOT TO
         ELECT A TRIAL BY JURY WITH  RESPECT  TO ANY ISSUE  ARISING  OUT OF THIS
         NOTE OR THE  RELATIONSHIP  BETWEEN THE  PARTIES AS LENDER AND  BORROWER
         THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY
         JURY WITH  RESPECT  TO SUCH  ISSUE TO THE  EXTENT  THAT ANY SUCH  RIGHT
         EXISTS NOW OR IN THE  FUTURE.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
         SEPARATELY  GIVEN BY EACH PARTY,  KNOWINGLY  AND  VOLUNTARILY  WITH THE
         BENEFIT OF COMPETENT LEGAL COUNSEL.

      ATTACHED SCHEDULES.  The following Schedules are attached to this Note:

            -----
             X       Schedule A    Prepayment Premium (required)
            -----

            -----
                     Schedule B    Modifications to Multifamily Note
            -----

      IN WITNESS  WHEREOF,  Borrower has signed and  delivered  this Note or has
caused  this  Note  to  be  signed  and   delivered   by  its  duly   authorized
representative.

                                    BORROWER









                                    __________________________________________



                                    __________________________________________

                                   Borrower's Social Security/Employer ID Number





<PAGE>


                                       B-9



                                   SCHEDULE A



                               PREPAYMENT PREMIUM



      Any prepayment  premium  payable under  Paragraph 10 of this Note shall be
computed as follows:

(a)               If the  prepayment  is made  during  the  first  ______  years
                  beginning  on the date of the  Note  (the  "Yield  Maintenance
                  Period"), the prepayment premium shall be the greater of:

(i)               1% of the amount of principal being prepaid; or

(ii)              The product obtained by multiplying:

(A)               the amount of principal being prepaid,

                        by

(B) the difference  obtained by subtracting  from the interest rate on this Note
the yield rate (the "Yield Rate") on the __________% U.S.  Treasury Security due
_________________________ (the "Specified U.S. Treasury Security"), as the Yield
Rate is reported in The Wall Street  Journal on the  twenty-fifth  Business  Day
preceding (x) the date Borrower stated to be the intended prepayment date in its
notice of prepayment given to Lender where  prepayment is voluntary,  or (y) the
date Lender  accelerates the Loan or otherwise accepts a prepayment  pursuant to
Paragraph 10(a)(3) of this Note,

                        by

(C) the present value factor calculated using the following formula:

                                    1 - (1 + r)-n

                                        r

                                 [r = Yield Rate

                                     n = the number of 365-day years (or 366-day
                                    years,  if  applicable),  and  any  fraction
                                    thereof,  remaining  between the  Prepayment
                                    Date  and  the   expiration   of  the  Yield
                                    Maintenance Period]

                              In the event that no Yield Rate is  published  for
                              the Specified  U.S.  Treasury  Security,  then the
                              nearest equivalent U.S. Treasury Security shall be
                              selected   at   Lender's   discretion.    If   the
                              publication of such Yield Rates in The Wall Street
                              Journal is  discontinued,  Lender shall  determine
                              such Yield Rates from another  source  selected by
                              Lender.

                              For   purposes  of   subparagraph   (ii)(C),   the
                              "Prepayment  Date"  shall  be (x) in the case of a
                              voluntary  prepayment,   the  date  on  which  the
                              prepayment is made, and (y) in any other case, the
                              date  on  which  Lender   accelerates  the  unpaid
                              principal balance of this Note.

(b)               If the  prepayment  is made after the  expiration of the Yield
                  Maintenance  Period but more than 90 days before the  Maturity
                  Date,  the  prepayment  premium  shall be 1% of the  amount of
                  principal being prepaid.











                                    _____________________________

                                               INITIAL(S)



<PAGE>


                                      B-10



                          SCHEDULE B TO FIXED LOAN NOTE



                        MODIFICATIONS TO MULTIFAMILY NOTE









<PAGE>


                                       C-9

                                    EXHIBIT C



                               Variable Loan Note



SECTION 11.18.                                        ______________ Apartments



SECTION 11.19.    MULTIFAMILY NOTE

                                 (VARIABLE LOAN)





US $__________________                                   As of _________, 2002





      FOR VALUE RECEIVED,  the undersigned  ("Borrower")  promises to pay to the
order of GMAC COMMERCIAL MORTGAGE  CORPORATION,  a California  corporation,  the
principal  sum of  _________________________  Dollars  and  00/100  Dollars  (US
$________________________),  with  interest on each  Variable  Loan at an annual
rate as calculated in Section 3 hereof.

      This Note is executed and  delivered by Borrower  pursuant to that certain
Loan Agreement, dated as of _____________,  2002, by and among Borrower, certain
other  borrowers  signatory  thereto  and Lender (as  amended,  supplemented  or
otherwise  modified  or  amended  and  restated  from  time to time,  the  "Loan
Agreement"),  to evidence the  obligation  of Borrower to repay a Variable  Loan
made by Lender to Borrower in accordance  with the terms of the Loan  Agreement.
This Note is entitled to the benefit and security of the Loan Documents provided
for in the Loan Agreement,  to which reference is hereby made for a statement of
all of the terms and conditions  under which the Variable Loan evidenced  hereby
is made. The Loan Agreement  requires certain of the terms of each Variable Loan
to be evidenced by a Loan Confirmation Instrument,  and reference is hereby made
to each such Loan Confirmation Instrument for such terms.

1. Defined  Terms.  As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness"  means the principal of, interest
on,  or any  other  amounts  due at any time  under,  this  Note,  the  Security
Instruments  or any other Loan Document,  including  prepayment  premiums,  late
charges,  default interest, and advances to protect the security of the Security
Instruments under Section 12 of the Security  Instruments.  Event of Default and
other  capitalized  terms  used but not  defined  in this  Note  shall  have the
meanings  given to such terms in the Loan  Agreement  or, if not  defined in the
Loan Agreement,  as defined in the Security Instruments (as defined in Paragraph
5).

2.                Address for Payment. All payments due under this Note shall be
                  payable at GMAC Commercial  Mortgage  Corporation,  200 Witmer
                  Road,  Horsham,  PA  19044,  or  such  other  place  as may be
                  designated by written  notice to Borrower from or on behalf of
                  Lender.

3.                Payment of  Principal  and  Interest.  Principal  and interest
                  shall be paid as follows:

(a)               This Note shall  evidence  a  Variable  Loan made from time to
                  time under the Loan  Agreement.  The Variable  Loan shall bear
                  interest at a rate  determined in accordance with Section 2.01
                  of the Loan  Agreement,  except as provided in subsection  (e)
                  below.

(b)               Borrower  shall pay imputed  interest on each Variable Loan in
                  advance in the form of a Discount in  accordance  with Section
                  1.04(b) of the Loan Agreement  (except that Borrower shall pay
                  actual  interest on the  Variable  Loan for the partial  month
                  period, if any, in accordance with Section 1.04(a) of the Loan
                  Agreement).

(c) Borrower shall make monthly  payments of principal each in the amount as set
forth on the  attached  Amortization  Schedule.  Lender  shall  apply  each such
principal  payment  to the  outstanding  principal  amount  of the  Loan  on the
Rollover Date next  following  receipt of any such payment.  If not sooner paid,
the entire principal amount of the Variable Loan shall be due and payable on the
earlier of (i) the termination of the Loan Agreement  pursuant to subsection (e)
of  Section  1.02  thereof,  (ii) the  fifth  anniversary  (unless  such date is
extended  pursuant to Section  1.07 of the Loan  Agreement,  in which case,  the
tenth anniversary) of the Initial Closing Date or (iii) the maturity date of any
outstanding MBS, unless either (A) not less than five Business Days prior to the
maturity  date of the  outstanding  MBS,  a  Borrower  has  requested  that  the
outstanding  MBS be renewed  with a new MBS or converted to a Fixed Loan to take
effect on the  maturity  date of the  outstanding  MBS and such new MBS has been
issued or conversion has occurred or (B) the MBS is automatically renewed, which
automatic  renewal  shall  occur in the event that a Borrower  does not make the
request set forth in subpart  (iii)(A) above and does not give Lender notice not
less than five Business days prior to the maturity date of the  outstanding  MBS
that the  Variable  Loan  related to such  outstanding  MBS shall be paid on the
maturity date of such  outstanding  MBS (the "Maturity  Date").  Any MBS that is
issued as a result of an automatic  renewal of a maturing MBS as contemplated by
subpart  (iii)(B) above shall have a maturity date of three (3) months after the
MBS Issue Date.

(d)               In addition to payment of principal and the Discount, Borrower
                  shall pay the Variable  Loan Fee due on each  Variable Loan in
                  accordance with Section 1.04(b)(ii) of the Loan Agreement.

(e)  Notwithstanding  any contrary  provisions  of  subsection  (b), (c) and (d)
above, prior to the Fannie Mae Purchase Date, Borrower shall pay interest on its
Variable Rate Loan in arrears at a rate equal to (i) LIBOR Rate plus a number of
basis  points  equal to the  Variable  Loan Fee for the  thirty  (30) day period
commencing  on the  Initial  Closing  Date and (ii) after such  thirty  (30) day
period,  the higher of (A) LIBOR Rate plus 150 basis  points or (B) a rate based
on Lender's  costs of funds,  as  determined  by Lender,  plus a number of basis
points equal to the Variable  Loan Fee,  for the period from and  including  the
thirty-first  (31st)  day after the  Initial  Closing  Date until the Fannie Mae
Purchase  Date. For purposes of the previous  sentence,  the LIBOR Rate shall be
reset  every  ninety (90) days  commencing  on the date that is ninety (90) days
after the Initial Closing Date. On the date hereof,  Borrower shall pay interest
in advance from the date hereof  through  October 15, 2002. On November 15, 2002
and on the fifteenth  (15th) day of each  calendar  month  thereafter,  Borrower
shall pay interest in arrears calculated for the actual number of days since the
fifteenth (15th) day of the previous calendar month.

4.  Application of Payments.  If at any time Lender  receives,  from Borrower or
otherwise,  any  amount  applicable  to the  Indebtedness  that is less than all
amounts due and payable at such time,  Lender may apply that  payment to amounts
then due and  payable in any manner and in any order  determined  by Lender,  in
Lender's  discretion.  Borrower  agrees that neither  Lender's  acceptance  of a
payment  from  Borrower in an amount that is less than all amounts  then due and
payable nor Lender's  application of such payment shall  constitute or be deemed
to  constitute  either  a  waiver  of  the  unpaid  amounts  or  an  accord  and
satisfaction.

5.                Security.  The Indebtedness is secured, among other things, by
                  a multifamily  mortgage,  deed to secure debt or deed of trust
                  dated as of the date of this Note (the "Security Instruments")
                  and  reference is made to the Security  Instruments  for other
                  rights   of  Lender   concerning   the   collateral   for  the
                  Indebtedness.

6.                Acceleration.  If an  Event of  Default  has  occurred  and is
                  continuing,  the entire unpaid principal balance,  any accrued
                  interest,  the prepayment  premium payable under Paragraph 10,
                  if any, and all other amounts  payable under this Note and any
                  other Loan Document  shall at once become due and payable,  at
                  the  option  of  Lender,  without  any  additional  notice  to
                  Borrower.  Lender  may  exercise  this  option  to  accelerate
                  regardless of any prior forbearance.

7. Late  Charge.  If any  monthly  amount  payable  under this Note or under the
Security  Instrument or any other Loan Document is not received by Lender within
10 days after the amount is due,  Borrower shall pay to Lender,  immediately and
without  demand by Lender,  a late  charge  equal to 5 percent  of such  amount.
Borrower acknowledges that its failure to make timely payments will cause Lender
to incur  additional  expenses in servicing and processing the loan evidenced by
this Note (the "Loan"),  and that it is extremely  difficult and  impractical to
determine  those  additional  expenses.  Borrower  agrees  that the late  charge
payable  pursuant to this Paragraph  represents a fair and reasonable  estimate,
taking into account all circumstances  existing on the date of this Note, of the
additional  expenses Lender will incur by reason of such late payment.  The late
charge is payable in addition  to, and not in lieu of, any  interest  payable at
the Default Rate pursuant to Paragraph 8.

8. Default  Rate.  So long as any monthly  installment  or any other payment due
under this Note remains past due for 30 days or more,  interest  under this Note
shall accrue on the unpaid principal balance from the earlier of the due date of
the first unpaid monthly  installment or other payment due, as applicable,  at a
rate (the "Default  Rate") equal to the lesser of 4 percentage  points above the
rate stated in the first  paragraph  of this Note or the maximum  interest  rate
which may be  collected  from  Borrower  under  applicable  law.  If the  unpaid
principal  balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal  balance and all accrued interest shall bear interest
from the Maturity Date at the Default Rate.  Borrower also acknowledges that its
failure to make timely payments will cause Lender to incur  additional  expenses
in servicing and  processing  the Loan,  that,  during the time that any monthly
installment  or  payment  under this Note is  delinquent  for more than 30 days,
Lender will incur additional costs and expenses arising from its loss of the use
of the money due and from the  adverse  impact on  Lender's  ability to meet its
other obligations and to take advantage of other investment  opportunities,  and
that it is extremely  difficult and  impractical to determine  those  additional
costs and expenses.  Borrower also  acknowledges  that, during the time that any
monthly  installment  or payment due under this Note is delinquent for more than
30 days,  Lender's risk of nonpayment of this Note will be materially  increased
and Lender is entitled  to be  compensated  for such  increased  risk.  Borrower
agrees that the increase in the rate of interest  payable under this Note to the
Default Rate represents a fair and reasonable estimate,  taking into account all
circumstances  existing on the date of this Note,  of the  additional  costs and
expenses  Lender will incur by reason of Borrower's  delinquent  payment and the
additional compensation Lender is entitled to receive for the increased risks of
nonpayment associated with a delinquent loan.

9.                Limits on Personal Liability.

(a)               Except as otherwise  provided in this  Paragraph  9,  Borrower
                  shall have no personal liability under this Note, the Security
                  Instrument or any other Loan Document for the repayment of the
                  Indebtedness or for the  performance of any other  obligations
                  of  Borrower  under  the Loan  Documents,  and  Lender's  only
                  recourse  for the  satisfaction  of the  Indebtedness  and the
                  performance of such obligations  shall be Lender's exercise of
                  its rights and remedies with respect to the Mortgaged Property
                  and any other  collateral  held by Lender as security  for the
                  Indebtedness.  This  limitation on Borrower's  liability shall
                  not limit or impair Lender's enforcement of its rights against
                  any  guarantor  of the  Indebtedness  or any  guarantor of any
                  obligations of Borrower.

(b)               Borrower  shall  be  personally   liable  to  Lender  for  the
                  repayment of a portion of the  Indebtedness  equal to any loss
                  or damage  suffered  by Lender as a result of (1)  failure  of
                  Borrower  to pay to  Lender  upon  demand  after  an  Event of
                  Default,  all Rents to which Lender is entitled  under Section
                  3(a) of the Security Instrument and the amount of all security
                  deposits collected by Borrower from tenants then in residence;
                  (2) failure of Borrower to apply all  insurance  proceeds  and
                  condemnation  proceeds as required by the Security Instrument;
                  (3) failure of Borrower to comply with Section 14(d) or (e) of
                  the Security  Instrument relating to the delivery of books and
                  records,  statements,  schedules  and  reports;  (4)  fraud or
                  written material misrepresentation by Borrower or any officer,
                  director,   partner,   member  or   employee  of  Borrower  in
                  connection  with  the  application  for  or  creation  of  the
                  Indebtedness  or any  request  for any  action or  consent  by
                  Lender;  or (5) failure to apply Rents,  first, to the payment
                  of  reasonable   operating   expenses   (other  than  Property
                  management fees that are not currently payable pursuant to the
                  terms of an Assignment  of  Management  Agreement or any other
                  agreement  with Lender  executed in connection  with the Loan)
                  and then to amounts  ("Debt  Service  Amounts")  payable under
                  this Note, the Security  Instrument or any other Loan Document
                  (except that Borrower will not be personally liable (i) to the
                  extent  that  Borrower  lacks  the legal  right to direct  the
                  disbursement   of  such   sums   because   of  a   bankruptcy,
                  receivership  or  similar  judicial  proceeding,  or (ii) with
                  respect to Rents that are  distributed in any calendar year if
                  Borrower  has paid all  operating  expenses  and Debt  Service
                  Amounts for that calendar year).

(c)               Borrower  shall  become  personally  liable to Lender  for the
                  repayment of all of the  Indebtedness  upon the  occurrence of
                  any  of  the  following  Events  of  Default:  (1)  Borrower's
                  acquisition  of any  property or operation of any business not
                  permitted by Section 33 of the Security  Instrument;  or (2) a
                  Transfer  that is an Event of Default  under Section 21 of the
                  Security Instrument.

(d)               To the extent that Borrower has personal  liability under this
                  Paragraph 9, Lender may exercise its rights  against  Borrower
                  personally  without regard to whether Lender has exercised any
                  rights against the Mortgaged  Property or any other  security,
                  or pursued any rights  against any  guarantor,  or pursued any
                  other rights available to Lender under this Note, the Security
                  Instrument,  any other Loan  Document or  applicable  law. For
                  purposes of this  Paragraph 9, the term  "Mortgaged  Property"
                  shall not  include  any funds  that (1) have been  applied  by
                  Borrower as required or permitted  by the Security  Instrument
                  prior  to  the  occurrence  of an  Event  of  Default,  or (2)
                  Borrower  was unable to apply as required or  permitted by the
                  Security Instrument because of a bankruptcy,  receivership, or
                  similar judicial proceeding.

10.               Voluntary and Involuntary  Prepayments.  Pursuant to the terms
                  of the Loan Agreement, Borrower shall pay the entire amount of
                  the Discount on any Variable Loan in advance. Accordingly, any
                  Variable  Loan may be  prepaid  in whole or in part and at any
                  time without penalty. Borrower shall give Lender five Business
                  Days advance notice of any prepayment.

11. Costs and Expenses. Borrower shall pay on demand all reasonable expenses and
costs,  including  reasonable fees and  out-of-pocket  expenses of attorneys and
expert witnesses and costs of  investigation,  incurred by Lender as a result of
any default under this Note or in connection  with efforts to collect any amount
due under  this  Note,  or to enforce  the  provisions  of any of the other Loan
Documents,  including those incurred in post-judgment  collection efforts and in
any  bankruptcy  proceeding  (including any action for relief from the automatic
stay of any  bankruptcy  proceeding)  or  judicial or  non-judicial  foreclosure
proceeding.

12.  Forbearance.  Any  forbearance  by Lender in exercising any right or remedy
under  this  Note,  the  Security  Instrument,  or any other  Loan  Document  or
otherwise  afforded by applicable  law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy.  The  acceptance by Lender of any
payment after the due date of such  payment,  or in an amount which is less than
the required payment,  shall not be a waiver of Lender's right to require prompt
payment  when due of all other  payments or to exercise any right or remedy with
respect to any  failure to make  prompt  payment.  Enforcement  by Lender of any
security for  Borrower's  obligations  under this Note shall not  constitute  an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

13.               Waivers.  Except as expressly  provided in the Loan Agreement,
                  presentment,  demand, notice of dishonor,  protest,  notice of
                  acceleration, notice of intent to demand or accelerate payment
                  or maturity,  presentment  for payment,  notice of nonpayment,
                  grace, and diligence in collecting the Indebtedness are waived
                  by Borrower and all endorsers and  guarantors of this Note and
                  all other third party obligors.

14. Loan Charges. If any applicable law limiting the amount of interest or other
charges  permitted to be collected from Borrower in connection  with the Loan is
interpreted  so that any  interest  or  other  charge  provided  for in any Loan
Document,  whether considered separately or together with other charges provided
for in any other Loan  Document,  violates that law, and Borrower is entitled to
the benefit of that law, that interest or charge is hereby reduced to the extent
necessary to eliminate that  violation.  Borrower agrees to an effective rate of
interest  that is the  stated  rate of  interest  plus  any  additional  rate of
interest  resulting  from  any  other  charges  or fees  that  are to be paid by
Borrower to Lender that may be found by a court of competent  jurisdiction to be
interest.  The  amounts,  if any,  previously  paid to  Lender  in excess of the
permitted  amounts  shall be applied  by Lender to reduce  the unpaid  principal
balance of this Note. For the purpose of determining  whether any applicable law
limiting the amount of interest or other charges  permitted to be collected from
Borrower has been violated,  all Indebtedness that constitutes interest, as well
as all other charges made in connection  with the  Indebtedness  that constitute
interest,  shall be deemed to be  allocated  and spread  ratably over the stated
term of the Note.  Unless otherwise  required by applicable law, such allocation
and  spreading  shall be  effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of the Note.

15.               Commercial Purpose.  Borrower represents that the Indebtedness
                  is being  incurred  by  Borrower  solely  for the  purpose  of
                  carrying on a business or commercial  enterprise,  and not for
                  personal, family or household purposes.

16.               Counting  of  Days.   Except  where   otherwise   specifically
                  provided,  any  reference  in this  Note to a period of "days"
                  means calendar days, not Business Days.

17.               Governing Law; Consent to Jurisdiction;  WAIVER OF JURY TRIAL.
                  The   provisions  of  Section  11.07  of  the  Loan  Agreement
                  (entitled  "Choice of Law; Consent to Jurisdiction;  Waiver of
                  Jury  Trial") are hereby  incorporated  into this Note by this
                  reference to the fullest extent as if the text of such Section
                  were set forth in its entirety herein.

18.               Captions.  The captions of the paragraphs of this Note are for
                  convenience  only and shall be disregarded in construing  this
                  Note.

19.               Notices.   All  notices,   demands  and  other  communications
                  required  or  permitted  to be given  by  Lender  to  Borrower
                  pursuant  to this  Note  shall  be given  in  accordance  with
                  Section 11.09 of the Loan Agreement.

20.               Security  for this Note.  Reference is made hereby to the Loan
                  Agreement and the Security Documents for additional rights and
                  remedies of Lender relating to the  indebtedness  evidenced by
                  this  Note.  Each  Security  Document  shall  be  released  in
                  accordance with the provisions of the Security Documents.

21.               Loan May Not Be  Reborrowed.  Borrower may not  re-borrow  any
                  amounts under this Note which it has  previously  borrowed and
                  repaid under this Note.

22.               Default  Under Loan  Agreement and Other Loan  Documents.  The
                  occurrence of an Event of Default under the Loan  Agreement or
                  any Other Loan Document shall constitute an "Event of Default"
                  under this Note, and,  accordingly,  upon the occurrence of an
                  Event  of  Default  under  the  Loan  Agreement,   the  entire
                  principal  amount  outstanding  hereunder and accrued interest
                  thereon shall at once become due and payable, at the option of
                  the holder hereof.

23. Loan Confirmation  Instruments;  Accounting for Variable Loans. The terms of
the Loan  Agreement  and this Note  govern the  repayment,  and all other  terms
relating  to  the  Variable  Loan.  However,   Borrower  shall  execute  a  Loan
Confirmation  Instrument  to create a physical  instrument  evidencing  each MBS
issued to fund the Variable Loan. The Loan Confirmation  Instrument  executed by
Borrower in accordance  with Section 2.02 of the Loan Agreement  shall set forth
the amount,  term,  Discount,  Closing Date and certain  other terms of each MBS
issued  to fund the  Variable  Loan.  The  Loan  Confirmation  Instrument  shall
conclusively  establish each of the terms  described in the preceding  sentence,
absent manifest  error.  The MBS evidenced by the Loan  Confirmation  Instrument
does not represent a separate  indebtedness from that evidenced by this Note. In
making  proof of this  Note,  no other  documents  other than this Note shall be
required.  In making proof of the amount and terms of the  outstanding  Variable
Loans under this Note, this Note, the related Loan Confirmation Instruments, and
Lender's records concerning  payments made by Borrower under this Note, shall be
conclusive  evidence of the terms and outstanding  amounts of the Variable Loan,
absent manifest error.

24.  Priority of Loans.  To the extent each MBS issued to fund or renew the Loan
evidenced by this Note shall be deemed to secure a separate  Variable  Loan, the
lien of each Security  Document executed by Borrower from time to time to secure
this  Note,  shall  secure  each  separate  Variable  Loan (and the lien of each
Security  Instrument and other Security  Document executed by Borrower to secure
its  obligations  under the Loan Documents) to the same extent and with the same
effect as if the Variable  Loan had been made (and any guaranty  obligation  had
been  incurred)  on the date on which (i) with  respect to each  other  Security
Instrument,  the  Security  Instrument  is recorded  in the land  records of the
jurisdiction  in which the real property  covered by the Security  Instrument is
located, or (ii) with respect to each other Security Document, the date on which
the Security Document is executed and delivered to Lender.




                    [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]




<PAGE>



      IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal
or has  caused  this  Note to be signed  and  delivered  under  seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.







                                    ________________________________,

                                       a ______________________________



                                    By:   __________________________, its
                                          ________________________



                                          By:   __________________________

                                                  Name:___________________

                                                  Title:____________________







<PAGE>




      Pay  to the  order  of  ________________________________________,  without
recourse.







                                    GMAC COMMERCIAL MORTGAGE CORPORATION, a
                                      California corporation







                                    By:

                                      Name:

                                     Title:



<PAGE>


                                       D-2

                                    EXHIBIT D



                               Conversion Request



      THE LOAN  AGREEMENT  REQUIRES  THERE TO OCCUR AT A  CLOSING  TO BE HELD AT
OFFICES  DESIGNATED  BY YOU ON A CLOSING  DATE  SELECTED BY YOU,  AND  OCCURRING
WITHIN 30 BUSINESS DAYS AFTER YOUR RECEIPT OF THE CONVERSION REQUEST (OR ON SUCH
OTHER DATE TO WHICH WE MAY AGREE), AS LONG AS NONE OF THE LIMITATIONS  CONTAINED
IN SECTION 1.09 OF THE LOAN AGREEMENT IS VIOLATED,  AND ALL CONDITIONS CONTAINED
IN SECTION 1.10 OF THE LOAN AGREEMENT ARE SATISFIED.

____________________, ______

VIA: _______________________


GMAC Commercial Mortgage Corporation

200 Witmer Road

Horsham, PA  19044





[Note: Subject to change in the event Lender or its address changes]

Re:   CONVERSION  REQUEST  issued  pursuant  to  Loan  Agreement,  dated  as  of
      ____________,  by and between the undersigned ("Borrower"),  certain other
      borrowers  signatory thereto and Lender (as amended from time to time, the
      "Loan Agreement").

Ladies and Gentlemen:

This   constitutes   a  Conversion   Request   pursuant  to  the  terms  of  the
above-referenced Loan Agreement.

      Section 1. Request. Borrower hereby requests that there occur a conversion
of the Variable  Loan to a Fixed Loan in  accordance  with the terms of the Loan
Agreement. The amount of the conversion shall be $_________________________.

      Maturity Date of current
      MBS issued to fund Variable Loan: ________________________________

      Amount of Variable Loan:            ________________________________


      (Note: Any Fixed Loans made in conjunction with a conversion of a Variable
      Loan  must be  accompanied  by a Loan  Request  and shall be  reviewed  in
      accordance with the terms of the Loan Agreement.)

      All  documents,  instruments  and  certificates  required to be  delivered
pursuant to the  conditions  contained  in Section  1.10 of the Loan  Agreement,
including the Conversion  Documents,  will be delivered on or before the Closing
Date.

      Section 2. Capitalized  Terms. All capitalized  terms used but not defined
in this  Request  shall  have the  meanings  ascribed  to such terms in the Loan
Agreement.

                                   Sincerely,


                                    ________________________________,

                                    a ______________________________



                                    By:   __________________________, its
                                          ________________________



                                          By:   ______________________________

                                          Name: ______________________________

                                     Title:      ______________________________





<PAGE>


                                       E-3

                                    EXHIBIT E



                                    Rate Form



      Pursuant to Section  2.01(b) of that  certain Loan  Agreement  dated as of
________________  (as amended from time to time,  the "Loan  Agreement")  by and
among GMAC COMMERCIAL  MORTGAGE  CORPORATION,  a  _________________  corporation
("Lender"),  the  undersigned  (the  "Borrower"),  and certain  other  borrowers
signatory  thereto,  Borrower  hereby  requests  that Lender cause Fannie Mae to
issue an MBS with the following terms:

      Designation of Loan           _____ Fixed Loan

      (Check One)             _____ Variable Loan

      FOR VARIABLE LOAN ONLY:

            Proposed Discount Rate              ________ %

            Loan Amount                         $______________________

            Term                                _______ months

            MBS Issue Date                      _______________, _______

            Variable Loan Fee                   _______________________

            Maximum Annual Coupon Rate          ________ %

            Price                               _______________________

            Breakage Fee Deposit                      $______________________

            Closing Date no later than                _______________, _______




<PAGE>


      FOR FIXED LOAN ONLY:

            Proposed Pass-Through Rate                ________ %

            Loan Amount                         $______________________

            Term                                _______ months

            MBS Issue Date                      _______________, _______

            Fixed Facility Fee                        _______________________

            Maximum Annual Coupon Rate          ________ %

            Amortization Period                       _______________________

            Closing Date no later than                _______________, _______


      Lender will provide Borrower with written  confirmation when and if it has
obtained  a  commitment  for  the  purchase  of a  Fannie  Mae  MBS  having  the
characteristics  described  above. In the event that the lowest available Coupon
Rate is greater than that specified  above,  Lender will not proceed without the
prior written authorization of Borrower.

      Borrower certifies that all conditions  contained in Article 2 of the Loan
Agreement  that are required to be satisfied  will be satisfied on or before the
Closing Date.

      Defined  terms used herein shall have the same meaning as set forth in the
Loan Agreement.



Dated: ____________________, ____


                                    ________________________________,

                                    a ______________________________



                                    By:   __________________________, its
                                          ________________________



                                          By:   ______________________________

                                          Name: ______________________________

                                     Title:      ______________________________






<PAGE>


      Pursuant to Section 2.01(c) of the Loan Agreement,  Lender hereby confirms
      that it has obtained a commitment  for the purchase of a Fannie Mae MBS in
      conformance with the terms noted above except for the following:
      .





Dated:  ______________________________________________


                              GMAC COMMERCIAL MORTGAGE CORPORATION, a
                               corporation





                              By:

                              Name:

                              Title:


    Rate Setting Date: ____________________, ______, ___:___ AM/PM Eastern Time





<PAGE>


                                       F-3

                                    EXHIBIT F



                          Loan Confirmation Instrument



      THIS LOAN CONFIRMATION INSTRUMENT (the "Loan Confirmation  Instrument") is
made as of the ____ day of _______________,  _____, by _____________________,  a
_______________________ ("Borrower") for the benefit of GMAC COMMERCIAL MORTGAGE
CORPORATION, a _________________ corporation ("Lender").

                                    RECITALS

A. Borrower, certain other borrowers signatory thereto and Lender are parties to
that certain Loan Agreement,  dated as of  ___________________  (as amended from
time to time, the "Loan Agreement").

B. All of Lender's right,  title and interest in the Loan Agreement and the Loan
Documents  executed in connection  with the Loan  Agreement or the  transactions
contemplated  by the Loan Agreement have been assigned to Fannie Mae pursuant to
that certain Assignment of Loan Agreement and Other Loan Documents,  dated as of
________________  (the  "Assignment").  Fannie  Mae has not  assumed  any of the
obligations of Lender under the Loan Agreement or the Loan Documents as a result
of the Assignment. Fannie Mae has designated Lender as the servicer of the Loans
contemplated by the Loan Agreement.

C. In accordance with this Loan Confirmation  Instrument and the Loan Agreement,
Lender is  requesting  that Fannie Mae issue an MBS to fund a Variable Loan made
to Borrower.

D. Borrower is executing this Loan Confirmation  Instrument pursuant to the Loan
Agreement  to  confirm  certain  terms of the Loan  Agreement  and that  certain
Variable  Loan Note dated the same date as the Loan  Agreement  in the  original
principal  amount of  $_________________  (as  amended  from  time to time,  the
"Variable  Note")  relating to the Variable Loan,  and Borrower's  obligation to
repay the Loan in  accordance  with the terms of the Variable Note and this Loan
Confirmation Instrument.

      NOW,  THEREFORE,  Borrower,  in consideration of Lender's  requesting that
Fannie Mae issue an MBS to fund a Variable Loan, and for other good and valuable
consideration,  the receipt  and  sufficiency  of which is hereby  acknowledged,
hereby agree as follows:

      Section 1. Confirmation of Loan and Terms of MBS. Borrower hereby confirms
the following  terms of the Variable Loan, and confirms and agrees that it shall
repay the Loan to Lender in  accordance  with the terms of the Variable Note and
the Loan Agreement:

      Loan Amount                               $_______________________

      MBS Term                                  _______ months

      MBS Issue Date                            _________________, ______

      Variable Loan Fee                         $_______________________

      Coupon Rate                               _______ %

      Discount                                  _______ %

      Price                                     ________________________

      Closing Date                                    _______________, ________

Section 2.  Beneficiaries.  This Loan  Confirmation  Instrument  is made for the
express benefit of Lender.

      Section 3. Purpose.  The terms of the Loan Agreement and the Variable Note
govern  the  repayment,  and all other  terms  relating  to the  Variable  Loan.
However,  this  Loan  Confirmation  Instrument  has been  executed  to  create a
physical  instrument  evidencing  the  above-described  Loan and MBS  under  the
Variable Note. The Variable Loan and the MBS evidenced by this Loan Confirmation
Instrument do not represent a separate  indebtedness  from that evidenced by the
Variable Note.

      Section  4.  Effectiveness  of Loan  Confirmation  Instrument.  This  Loan
Confirmation Instrument will not be effective until the sale of the MBS has been
completed,  at  which  time  Lender  shall  note  the  date of such  funding  by
completing the date block at the foot of this Loan Confirmation Instrument,  and
executing  this Loan  Confirmation  Instrument  below such date block,  and such
completion shall be binding on Borrower, absent manifest error.

      Section 5.  Capitalized  Terms.  All  capitalized  terms used in this Loan
Confirmation Instrument which are not specifically defined herein shall have the
respective meanings set forth in the Loan Agreement.

      Section 6. Counterparts. This Loan Confirmation Instrument may be executed
in  counterparts  by the  parties  hereto,  and each such  counterpart  shall be
considered an original and all such  counterparts  shall  constitute one and the
same instrument.



                    [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]





<PAGE>


      IN  WITNESS  WHEREOF,   Borrower  has  executed  this  Loan   Confirmation
Instrument  as an  instrument  under  seal as of the day and  year  first  above
written.





                                    ________________________________,

                                    a ______________________________



                                    By:   __________________________, its
                                          ________________________



                                          By:   ______________________________

                                          Name: ______________________________

                                    Title:      ______________________________







-----------------------------------------------------


Date of Funding:   _______________________, _______
-----------------------------------------------------


                                    GMAC COMMERCIAL MORTGAGE CORPORATION, a
                                   corporation





                                    By:

                                    Name:

                                    Title:




<PAGE>


                                       G-3

                                    EXHIBIT G



                                  Loan Request



THE LOAN  AGREEMENT  REQUIRES YOU TO MAKE THE  REQUESTED  INITIAL  LOAN,  IF ALL
CONDITIONS CONTAINED IN SECTION 2.04(a) OF THE LOAN AGREEMENT ARE SATISFIED,  AT
A CLOSING TO BE HELD ON THE INITIAL CLOSING DATE.

____________________, ______

VIA: _______________________


GMAC Commercial Mortgage Corporation

200 Witmer Road

Horsham, PA  19044



[Note: Subject to change in the event Lender or its address changes]

Re: LOAN REQUEST issued pursuant to Loan Agreement, dated as of _____________ by
and between the  undersigned  ("Borrower"),  certain other  borrowers  signatory
thereto, and Lender (as amended from time to time, the "Loan Agreement")

Ladies and Gentlemen:

This  constitutes a Loan Request  pursuant to the terms of the  above-referenced
Loan Agreement.

      Section 1. Request.  Borrower  hereby  requests that Lender make a Loan in
accordance  with the terms of the Loan  Agreement.  Following is the information
required by the Loan Agreement with respect to this Request:

      (a)   Amount. The amount of the Initial Loan shall be $_____________.

      (b)   Accompanying Documents. All documents,  instruments and certificates
            required to be  delivered  pursuant to the  conditions  contained in
            Article 4 of the Loan  Agreement,  including  (i) a  confirmed  Rate
            Form, and (ii) a Loan  Confirmation  Instrument will be delivered on
            or before the Closing Date.

      (c)   Wiring  Information.  Please wire the Initial  Loan on or before the
            Closing  Date into our  account  in  accordance  with the  following
            wiring information:

                  ___________________________________________

                  ___________________________________________

                  ___________________________________________

Section 2. Capitalized Terms. All capitalized terms used but not defined in this
Request shall have the meanings ascribed to such terms in the Loan Agreement.



                    (Remainder of page intentionally left blank)



<PAGE>


                                   Sincerely,





                                    ________________________________,

                                    a ______________________________



                                    By:   __________________________, its
                                          ________________________



                                          By:   ______________________________

                                          Name: ______________________________

                                     Title:      ______________________________





<PAGE>


                                       H-2

                                    EXHIBIT H



                             Additional Loan Request



      THE LOAN  AGREEMENT  REQUIRES YOU TO PERMIT THE REQUESTED  INCREASE IN THE
LOAN,  AT A CLOSING TO BE HELD AT OFFICES  DESIGNATED  BY YOU ON A CLOSING  DATE
SELECTED BY YOU,  AND  OCCURRING  WITHIN  THIRTY (30)  BUSINESS  DAYS AFTER YOUR
RECEIPT OF THE LOAN  INCREASE  REQUEST  (OR ON SUCH OTHER DATE AS WE AGREE),  AS
LONG AS ALL CONDITIONS  CONTAINED IN SECTIONS 3.01, 3.02, 3.03, 4.01 AND 4.03 OF
THE LOAN  AGREEMENT ARE  SATISFIED.  REFERENCE IS MADE TO THE LOAN AGREEMENT FOR
THE SCOPE OF LENDER'S OBLIGATIONS WITH RESPECT TO THIS REQUEST.

____________________, ______

VIA: _______________________


GMAC Commercial Mortgage Corporation

200 Witmer Road

Horsham, PA  19044



[Note: Subject to change in the event Lender or its address changes]

Re:  ADDITIONAL  LOAN REQUEST  issued  pursuant to Loan  Agreement,  dated as of
____________,  by  and  between  the  undersigned  ("Borrower"),  certain  other
borrowers  signatory thereto and Lender (as amended from time to time, the "Loan
Agreement")

Ladies and Gentlemen:

This  constitutes  an  Additional  Loan  Request  pursuant  to the  terms of the
above-referenced Loan Agreement.

      Section  1.  Request.   Borrower  hereby  requests  that  Lender  make  an
Additional Loan in accordance with the terms of the Loan Agreement. Following is
the information required by the Loan Agreement with respect to this Request:

      (a)   Amount. The amount of the Additional Loan shall be $_____________.

      (b)   Accompanying Documents. All documents,  instruments and certificates
            required to be  delivered  pursuant to the  conditions  contained in
            Article 4 of the Loan Agreement, including (i) a confirmed Rate Form
            and (ii) a Loan  Confirmation  Instrument  will be  delivered  on or
            before the Closing Date.

      (c)   Wiring Information. Please wire the Additional Loan on or before the
            Closing  Date into our  account  in  accordance  with the  following
            wiring information:

                  ___________________________________________

                  ___________________________________________

                  ___________________________________________



Section 2. Capitalized Terms. All capitalized terms used but not defined in this
Request shall have the meanings ascribed to such terms in the Loan Agreement.

                                   Sincerely,

                                    ________________________________,

                                    a ______________________________



                                    By:   __________________________, its
                                          ________________________



                                          By:   ______________________________

                                          Name: ______________________________

                                     Title:      ______________________________



<PAGE>




                                       I-6

                                    EXHIBIT I



            Interest Rate Cap Security, Pledge and Assignment Agreement



      This INTEREST RATE CAP SECURITY,  PLEDGE AND  ASSIGNMENT  AGREEMENT  (this
"Agreement"),   dated  as  of  ____________,   ______,   is  by  and  among  (i)
________________________,  a  ______________________  (the "Grantor"),  and (ii)
GMAC  COMMERCIAL   MORTGAGE   CORPORATION,   a   _________________   corporation
("Lender").

                                    RECITALS:

A. Grantor,  certain other borrowers signatory thereto,  and Lender are party to
that certain Loan Agreement dated as of ___________________  (such agreement, as
the same may be  amended,  supplemented  or  otherwise  modified  or amended and
restated, from time to time, the "Loan Agreement"), pursuant to which Lender has
agreed to provide Loans in accordance  with and subject to the terms of the Loan
Agreement. As set forth in Section 1.2 of this Agreement,  all capitalized terms
not otherwise  defined herein shall have their respective  meanings set forth in
the Loan Agreement.

B. As required by the Loan Agreement,  the Grantor has made arrangements for the
acquisition of a Cap or Caps pursuant to certain documents attached as Exhibit A
to this Agreement (the "Cap Documents").

C. As security for the Grantor's  obligations  under the Loan  Agreement and the
Note, the Grantor and the Lender are entering into this Agreement.

      NOW, THEREFORE,  in consideration of the mutual covenants and undertakings
set forth in this  Agreement  and other  good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the Grantor and the
Lender agree as follows:

1. Incorporation of Recitals; Definitions; Interpretation; Reference Materials.

1.1. Incorporation of Recitals. The recitals set forth in this Agreement are, by
this reference, incorporated into and deemed a part of this Agreement.

1.2.  Definitions.  Capitalized  terms  used in this  Agreement  shall  have the
meanings given to those terms in this Agreement.  Capitalized terms used in this
Agreement and not defined in this Agreement,  but defined in the Loan Agreement,
shall have the meanings given to those terms in the Loan Agreement.

1.3.  Interpretation.  Words  importing  any gender  include  all  genders.  The
singular form of any word used in this Agreement  shall include the plural,  and
vice versa,  unless the context  otherwise  requires.  Words  importing  persons
include natural persons, firms, associations, partnerships and corporations. The
parties hereto  acknowledge  that each party and their  respective  counsel have
participated  in the drafting and revision of this Agreement.  Accordingly,  the
parties agree that any rule of  construction  which disfavors the drafting party
shall not apply in the  interpretation  of this  Agreement  or any  statement or
supplement or exhibit hereto.

1.4. Reference  Materials.  Sections mentioned by number only are the respective
sections of this  Agreement  so numbered.  Reference to "this  section" or "this
subsection"  shall refer to the  particular  section or subsection in which such
reference  appears.  Any captions,  titles or headings preceding the text of any
section and any table of contents or index attached to this Agreement are solely
for  convenience of reference and shall not constitute part of this Agreement or
affect its meaning, construction or effect.

2. Collateral and Obligations; Further Assurances.

2.1. Security Interest in Collateral.  To secure the Grantor's obligations under
the Loan Agreement,  the Note and the other Loan Documents (the  "Obligations"),
the Grantor hereby assigns, pledges and grants a security interest to the Lender
in and to all of the Grantor's right, title and interest in and to the following
(collectively, the "Collateral"):

(i) the Cap and the Cap Documents;

(ii) any and all moneys (collectively,  "Payments") payable to the Grantor, from
time to time,  pursuant to the Cap Documents by the  counterparty  under the Cap
Documents (the "Counterparty");

(iii) all rights of the Grantor under any of the foregoing, including all rights
of the Grantor to the  Payments,  contract  rights and general  intangibles  now
existing or hereafter arising with respect to any or all of the foregoing;

(iv) all rights,  liens and  security  interests or  guarantees  now existing or
hereafter  granted by the Counterparty or any other person to secure or guaranty
payment of the Payments due pursuant to the Cap Documents;

(v) all documents,  writings,  books, files, records and other documents arising
from or relating to any of the  foregoing,  whether  now  existing or  hereafter
arising;

(vi) all extensions, renewals and replacements of the foregoing; and

(vii) all cash and  non-cash  proceeds  and  products  of any of the  foregoing,
including, without limitation,  interest, dividends, cash, instruments and other
property  from time to time  received,  receivable or otherwise  distributed  or
distributable  in  respect  of or in  exchange  for  any or  all  of  the  other
Collateral.

3. Delivery of Cap Documents.

3.1 Acquisition of Cap; Delivery of Cap Documents. The Grantor has, on or before
the date of this  Agreement,  executed and  delivered  the Cap  Documents to the
Counterparty  and has delivered to the Lender fully  executed  originals of such
Cap  Documents.  True,  complete and correct copies of the Cap Documents and all
amendments  thereto,  fully  executed by all parties,  are attached as Exhibit A
hereto.  The Grantor hereby  represents and warrants to the Lender that there is
no additional  security for or any other arrangements or agreements  relating to
the Cap Documents.

3.2 Obligations  Remain  Absolute.  Nothing  contained  herein shall relieve the
Grantor  of its  primary  obligation  to pay all  amounts  due in respect of its
obligations under the Loan Agreement, the Note or the Other Loan Documents.

4. Representations and Warranties.

4.1  Representations  and Warranties of the Grantor.  The Grantor represents and
warrants to the Lender on the Closing Date that:

(i) it has all requisite power and authority to enter into this Agreement and to
carry out its  obligations  under this  Agreement;  the execution,  delivery and
performance  of  this  Agreement  and  the   consummation  of  the  transactions
contemplated by this Agreement have been duly authorized by all necessary action
on the part of the Grantor;  this Agreement has been duly executed and delivered
by it and is the  valid  and  binding  obligation  of the  Grantor,  enforceable
against it in accordance with its terms; and

(ii) it is the legal and beneficial  owner of, and has good and marketable title
to (and full right and authority to assign),  the Collateral,  free and clear of
all Liens.

5. Maintenance, Administration of Cap.

5.1 Compliance with Reimbursement  Agreement.  The Grantor agrees to comply with
the provisions of the Loan Agreement related to obtaining and maintaining at all
applicable times a Cap which satisfies the requirements of the Loan Agreement.

5.2 Event of Default.  Upon the  occurrence  and during the  continuance  of any
"Event of  Default"  under the Loan  Agreement,  the  Lender  shall have and may
exercise the same rights,  powers,  and remedies with respect to the  Collateral
that  the  Grantor  may  exercise,   which  rights,  powers,  and  remedies  are
incorporated  herein by this reference for all purposes.  In furtherance and not
in limitation of the foregoing,  the Lender shall have all rights,  remedies and
recourses with respect to the  Collateral  granted in the Loan Agreement and any
other instrument executed in connection therewith,  or existing at common law or
equity (including  specifically  those granted by the Uniform Commercial Code as
adopted in the District of Columbia,  the right of offset, the right to sell the
Collateral at public or private sale, and the right to receive  distributions to
Grantor,  and such rights and remedies (i) shall be cumulative  and  concurrent,
(ii) may be pursued separately, successively or concurrently against the Grantor
and any other party obligated under the Obligations,  or against the Collateral,
or any other security for the Obligations, at the sole discretion of the Lender,
(iii) may be  exercised  as often as occasion  therefor  shall  arise,  it being
agreed by Grantor  that the exercise or failure to exercise any of same shall in
no event be  construed  as a waiver or release  thereof  or of any other  right,
remedy or recourse, and (iv) are intended to be and shall be, non-exclusive.

      If the proceeds of sale,  collection or other  realization  of or upon the
Collateral are  insufficient to cover the costs and expenses of such realization
and the payment in full of the Obligations,  the Grantor shall remain liable for
any deficiency  (subject to the applicable  non-recourse  provisions of the Loan
Agreement).

      Upon the  occurrence  and  continuance  of an "Event of Default" under the
Loan  Agreement,  in case of any sale by the  Lender  of any of the  Collateral,
which may be elected at the option and in the complete discretion of the Lender,
the  Collateral so sold may be retained by the Lender until the selling price is
paid by the  purchaser,  but the Lender shall not incur any liability in case of
failure of the purchaser to take up and pay for the  Collateral so sold. In case
of any such failure,  such Collateral so sold may be again similarly sold. After
deducting all costs or expenses of every kind  (including,  without  limitation,
the reasonable  attorneys' fees and legal expenses incurred by the Lender),  the
Lender shall apply the residue of the proceeds of any sale or sales in repayment
of the  principal  and  interest  due under the Note and any other  amounts  due
Lender in connection therewith in such manner as the Lender may deem advisable.

6. Miscellaneous Provisions.

4.1  Termination.  This  Agreement  shall  terminate  upon  the  date  which  is
ninety-one  (91) days  after the date on which  all  amounts  due under the Loan
Agreement,  the  Note and the  other  Loan  Documents  have  been  paid in full,
provided that during such  ninety-one  (91) day period no Act of Bankruptcy  (as
defined  below) shall have occurred.  "Act of Bankruptcy"  means the filing of a
petition  in  bankruptcy  or  other  commencement  of a  bankruptcy  or  similar
proceeding  by  or  against  the  Grantor  under  any   applicable   bankruptcy,
insolvency,  reorganization  or similar law now in effect or any such proceeding
by  or  against  the  Grantor  under  any  applicable  bankruptcy,   insolvency,
reorganization  or similar law in effect after the date of this Agreement.  Upon
termination of this Agreement, all Collateral shall be reassigned to the Grantor
without recourse, representation or warranty.

4.2  Attorney-In-Fact.  Without  limiting  any rights or powers  granted by this
Agreement to the Lender,  upon the occurrence and during the  continuance of any
"Event of Default" under the Loan Agreement,  the Lender is hereby appointed the
attorney-in-fact  of the Grantor for the purpose of carrying out the  provisions
of this Agreement and taking any action and executing any instruments  which the
Lender may deem necessary or advisable to accomplish the purposes hereof,  which
appointment as  attorney-in-fact  is  irrevocable  and coupled with an interest.
Without  limiting the  generality  of the  foregoing,  the Lender shall have the
right and power to receive,  endorse and collect all checks made  payable to the
order of the Grantor representing any dividend, payment or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same.

4.3 Further Assurances. At any time and from time to time, at the expense of the
Grantor,  the Grantor shall  promptly  execute and deliver to Lender all further
instruments and documents, and take all further action, that may be necessary or
desirable,  or that  Lender  may  request,  in order to carry out the intent and
purposes  of this  Agreement  or to enable  Lender to  exercise  and enforce its
rights and remedies under this Agreement all at the sole expense of the Grantor.

4.4 Expenses.  The Grantor agrees to pay to Lender all reasonable  out-of-pocket
expenses (including reasonable expenses for legal services of every kind) of, or
incident  to, the  preservation  of rights  under or  enforcement  of any of the
provisions of this Agreement or performance by Lender of any  obligations of the
Grantor in  respect of the  Collateral  which  Grantor  has failed or refused to
perform,  or  any  actual  or  attempted  sale,  or any  exchange,  enforcement,
collection,  compromise or  settlement in Collateral  and defending or asserting
rights and claims of Lender in respect  thereof,  by  litigation  or  otherwise,
including  expenses of  insurance,  and all such expenses  shall be  Obligations
hereby secured.

a. No Deemed  Waiver.  No  failure on the part of Lender or any of its agents to
exercise,  and no course of dealing with respect to, and no delay in exercising,
any right,  power or remedy  hereunder  shall operate as a waiver  thereof;  nor
shall  any  single or  partial  exercise  by Lender or any of its  agents of any
right,  power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other  right,  power or remedy.  The remedies  herein are
cumulative and are not exclusive of any remedies provided by law.

b.  Entire  Agreement.  This  Agreement  constitutes  the entire  agreement  and
supersedes  all prior  agreements  and  understandings,  both  written and oral,
between the parties to this Agreement with respect to the subject matter of this
Agreement. This Agreement may not be amended, changed, waived or modified except
by a writing executed by each party hereto.

c. Successors and Assigns.  This Agreement shall inure to the benefit of, and be
enforceable  by, the  Grantor  and Lender and their  respective  successors  and
permitted assigns, and nothing herein expressed or implied shall be construed to
give any other person any legal or equitable rights under this Agreement.

d. Notices.  The  provisions of Section  11.08 of the Loan  Agreement  (entitled
"Notices") are hereby  incorporated into this Agreement by this reference to the
fullest  extent  as if the  text of such  provisions  were  set  forth  in their
entirety herein.

e.  Governing  Law.  The  provisions  of  Section  11.06 of the  Loan  Agreement
(entitled  "Choice of Law; Consent to  Jurisdiction;  Waiver of Jury Trial") are
hereby  incorporated into this Agreement by this reference to the fullest extent
as if the text of such provisions were set forth in their entirety herein.

f.  Severability.  If any term or other  provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy,  all
other conditions and provisions of this Agreement shall  nevertheless  remain in
full  force  and  effect  so long as the  economic  or  legal  substance  of the
transactions  contemplated  hereby  is not  affected  in any  manner  materially
adverse to any party.

g.  Multiple  Counterparts.  This  Agreement may be  simultaneously  executed in
multiple counterparts, all of which shall constitute one and the same instrument
and each of which shall be, and shall be deemed to be, an original.

      The  Grantor and Lender  have  caused  this  Agreement  to be signed as an
instrument  under seal, on the date first  written  above,  by their  respective
officers duly authorized.

(a)

<PAGE>


                                                GRANTOR



                                    ________________________________,

                                    a ______________________________



                                    By:   __________________________, its
                                          ________________________



                                          By:   ______________________________

                                          Name: ______________________________

                                     Title:      ______________________________





(i) LENDER


                                    GMAC COMMERCIAL MORTGAGE CORPORATION, a
                                       _____________________ corporation





                                    By:

                                    Name:

                                    Title:






<PAGE>


                                       I-7

                                    EXHIBIT A


                                  Cap Documents

                                 (See Attached)




<PAGE>


                                       J-2

                                    EXHIBIT J



                               Termination Request



      THE LOAN  AGREEMENT  PURSUANT TO WHICH THIS REQUEST IS DELIVERED  REQUIRES
YOU TO PERMIT THE LOAN COMMITMENT TO BE REDUCED TO THE AMOUNT  DESIGNATED BY US,
AT A CLOSING TO BE HELD AT OFFICES  DESIGNATED BY YOU ON A CLOSING DATE SELECTED
BY YOU,  WITHIN FIFTEEN (15) BUSINESS DAYS AFTER YOUR RECEIPT OF THE TERMINATION
REQUEST  (OR ON SUCH  OTHER  DATE TO  WHICH  WE MAY  AGREE),  IF ALL  CONDITIONS
CONTAINED  IN  SECTION  11.03  ARE  SATISFIED.  REFERENCE  IS MADE  TO THE  LOAN
AGREEMENT  FOR THE  SCOPE  OF THE  LENDER'S  OBLIGATIONS  WITH  RESPECT  TO THIS
REQUEST.

____________________, ______

VIA: _______________________


GMAC Commercial Mortgage Corporation

200 Witmer Road

Horsham, PA  19044



[Note: Subject to change in the event Lender or its address changes]

Re: LOAN  TERMINATION  REQUEST issued  pursuant to Loan  Agreement,  dated as of
____________,  by  and  between  the  undersigned  ("Borrower"),  certain  other
borrowers  signatory thereto and Lender (as amended from time to time, the "Loan
Agreement")

Ladies and Gentlemen:

This   constitutes  a  Termination   Request   pursuant  to  the  terms  of  the
above-referenced Loan Agreement.

      Section 1. Request.  The Borrower hereby requests a permanent reduction in
the  amount  of the Loan  commitment  in  accordance  with the terms of the Loan
Agreement.  Following is the  information  required by the Loan  Agreement  with
respect to this Request:

            (a) Amount of Reduction.  The amount of the  permanent  reduction in
      the Loan commitment is as follows:

      Amount of Reduction:
                                    $

      Resulting Amount of

      Loan commitment:
                        $

            (b)  Required  Prepayments.  Following  are any Loans  that shall be
      prepaid in connection with the permanent reduction in the Loan commitment:

      Closing Date of Loan:   _____________________________________

      Maturity Date of Loan:  _____________________________________

      Amount of Loan:         _____________________________________

            (c)   Accompanying   Documents.   All  documents,   instruments  and
      certificates required to be delivered pursuant to the conditions contained
      in Section 11.03 of the Loan  Agreement will be delivered on or before the
      Closing Date.

Section 2.  Prepayments and Termination Fee. The Borrower shall pay the required
amount of the prepayment for any required to be prepaid, and the required amount
of the  Termination  Fee,  pursuant  to the terms of  Section  11.03 of the Loan
Agreement,  as two of the  conditions  to the  permanent  reduction  in the Loan
Commitment.

Section 3. Capitalized Terms. All capitalized terms used but not defined in this
Request shall have the meanings ascribed to such terms in the Master Agreement.

                                   Sincerely,

                                    ________________________________,

                                    a ______________________________



                                    By:   __________________________, its
                                          ________________________



                                          By:   ______________________________

                                          Name: ______________________________

                                    Title:      ______________________________





<PAGE>




                                    EXHIBIT K



                                    Guaranty



                                             ________________________ Apartments


                       EXCEPTIONS TO NON-RECOURSE GUARANTY


      This Exceptions to Non-Recourse  Guaranty  ("Guaranty") is entered into as
of  ___________________,  by the undersigned (the "Key Principal" whether one or
more),  for the benefit of GMAC COMMERCIAL  MORTGAGE  CORPORATION,  a California
corporation, and/or any subsequent holder of the Note (the "Lender").


                                    RECITALS

      A. Lender has agreed to execute that certain Loan  Agreement,  dated as of
_________________________  (as amended,  supplemental  or otherwise  modified or
amended  and  restated  from time to time,  the "Loan  Agreement"),  pursuant to
which,  inter alia,  Lender has  agreed,  subject to the terms,  conditions  and
limitations    of    the    Loan    Agreement,     to    make    a    loan    to
____________________________,  a  _______________________  (the "Borrower") from
time to time to be  evidenced  by the Note (the  "Loan").  Terms used herein not
defined herein have the definition given them in the Loan Agreement.

      B. The  repayment of the Loan and all of the  Obligations  of the Borrower
under the Loan  Agreement or the other Loan  Documents  are  guaranteed  by this
Exceptions  to  Non-Recourse  Guaranty  to the  extent  of  Borrower's  personal
liability  as  provided  in  Section  9 of the Note  evidencing  the Loan and as
provided herein. Except for such obligations  described herein,  Guarantor shall
have no liability in connection with, or responsibility to perform,  under or in
accordance with the Loan Agreement or other Loan Documents.

      C. Guarantor owns,  directly or indirectly,  an ownership  interest in the
Borrower  and will  receive a direct and  material  benefit from the Loan to the
Borrower.

      D. Lender is willing to make the Loan to the  Borrower  only if  Guarantor
agrees to enter into this Exceptions to Non-Recourse Guaranty.

      NOW,  THEREFORE,  in order to induce  Lender to make the Loan to Borrower,
and in consideration thereof, Key Principal agrees as follows:

      "Indebtedness"  and other  capitalized  terms used but not defined in this
Guaranty shall have the meanings assigned to them in the Security Instrument.

      Key  Principal   hereby   absolutely,   unconditionally   and  irrevocably
guarantees to Lender the full and prompt  payment when due,  whether at maturity
or earlier, by reason of acceleration or otherwise, and at all times thereafter,
of all amounts for which Borrower is personally  liable under Paragraph 9 of the
Note.

      The  obligations  of Key Principal  under this Guaranty  shall survive any
foreclosure  proceeding,  any foreclosure sale, any delivery of any deed in lieu
of foreclosure, and any release of record of the Security Instrument.

      Key   Principal's   obligations   under  this   Guaranty   constitute   an
unconditional guaranty of payment and not merely a guaranty of collection.

      The  obligations  of Key Principal  under this Guaranty shall be performed
without  demand  by  Lender  and  shall  be  unconditional  irrespective  of the
genuineness,  validity,  regularity or  enforceability of the Note, the Security
Instrument,  or any  other  Loan  Document,  and  without  regard  to any  other
circumstance which might otherwise  constitute a legal or equitable discharge of
a surety  or a  guarantor.  Key  Principal  hereby  waives  the  benefit  of all
principles or provisions of law,  statutory or otherwise,  which are or might be
in conflict  with the terms of this  Guaranty  and agrees  that Key  Principal's
obligations shall not be affected by any circumstances,  whether or not referred
to in this  Guaranty,  which might  otherwise  constitute  a legal or  equitable
discharge of a surety or a guarantor.  Key Principal  hereby waives the benefits
of any right of discharge  under any and all statutes or other laws  relating to
guarantors  or  sureties  and  any  other  rights  of  sureties  and  guarantors
thereunder.  Without  limiting the  generality of the  foregoing,  Key Principal
hereby waives,  to the fullest extent permitted by law,  diligence in collecting
the Indebtedness,  presentment,  demand for payment,  protest,  all notices with
respect to the Note and this Guaranty which may be required by statute,  rule of
law or otherwise to preserve  Lender's  rights against Key Principal  under this
Guaranty,  including  notice of acceptance,  notice of any amendment of the Loan
Documents,  notice of the occurrence of any default or Event of Default,  notice
of intent to accelerate,  notice of acceleration,  notice of dishonor, notice of
foreclosure,  notice of protest,  and notice of the incurring by Borrower of any
obligation or  indebtedness.  Key Principal  also waives,  to the fullest extent
permitted by law, all rights to require Lender to (a) proceed  against  Borrower
or any other guarantor of Borrower's  payment or performance with respect to the
Indebtedness  (an "Other  Guarantor"),  (b) if  Borrower or any  guarantor  is a
partnership,  proceed  against any general partner of Borrower or the guarantor,
(c)  proceed  against or  exhaust  any  collateral  held by Lender to secure the
repayment  of the  Indebtedness,  or (d) pursue  any other  remedy it may now or
hereafter have against Borrower,  or, if Borrower is a partnership,  any general
partner of Borrower.

      At any time or from time to time and any number of times,  without  notice
to Key Principal and without  affecting the liability of Key Principal,  (a) the
time for payment of the  principal  of or interest  on the  Indebtedness  may be
extended or the  Indebtedness  may be renewed in whole or in part;  (b) the time
for  Borrower's  performance  of or  compliance  with any  covenant or agreement
contained  in the Note,  the  Security  Instrument  or any other Loan  Document,
whether presently existing or hereinafter  entered into, may be extended or such
performance  or compliance may be waived;  (c) the maturity of the  Indebtedness
may be  accelerated  as provided in the Note,  the Security  Instrument,  or any
other Loan Document;  (d) the Note, the Security  Instrument,  or any other Loan
Document  may be  modified  or amended by Lender and  Borrower  in any  respect,
including  an increase in the  principal  amount;  and (e) any  security for the
Indebtedness may be modified, exchanged,  surrendered or otherwise dealt with or
additional security may be pledged or mortgaged for the Indebtedness.

      If more than one person  executes this Guaranty,  the obligations of those
persons  under  this  Guaranty  shall  be  joint  and  several.  Lender,  in its
discretion,  may (a) bring suit against Key Principal, or any one or more of the
Persons  constituting  Key  Principal,  and any  Other  Guarantor,  jointly  and
severally, or against any one or more of them; (b) compromise or settle with any
one or more of the Persons  constituting Key Principal,  or any Other Guarantor,
for such consideration as Lender may deem proper; (c) release one or more of the
Persons constituting Key Principal, or any Other Guarantor,  from liability; and
(d) otherwise  deal with Key Principal  and any Other  Guarantor,  or any one or
more of them,  in any  manner,  and no such  action  shall  impair the rights of
Lender to collect from Key  Principal  any amount  guaranteed  by Key  Principal
under this Guaranty. Nothing contained in this paragraph shall in any way affect
or impair the rights or  obligations  of Key Principal with respect to any Other
Guarantor.

      Any indebtedness of Borrower held by Key Principal now or in the future is
and shall be  subordinated  to the  Indebtedness  and any such  indebtedness  of
Borrower shall be collected,  enforced and received by Key Principal, as trustee
for Lender, but without reducing or affecting in any manner the liability of Key
Principal under the other provisions of this Guaranty.

      Key  Principal  shall have no right of,  and hereby  waives any claim for,
subrogation or reimbursement against Borrower or any general partner of Borrower
by reason of any payment by Key  Principal  under this  Guaranty,  whether  such
right or claim  arises at law or in equity or under  any  contract  or  statute,
until the  Indebtedness  has been paid in full and there has expired the maximum
possible period  thereafter  during which any payment made by Borrower to Lender
with respect to the  Indebtedness  could be deemed a preference under the United
States Bankruptcy Code.

      If any payment by Borrower is held to  constitute a  preference  under any
applicable bankruptcy,  insolvency,  or similar laws, or if for any other reason
Lender is  required  to  refund  any sums to  Borrower,  such  refund  shall not
constitute a release of any liability of Key Principal  under this Guaranty.  It
is the intention of Lender and Key Principal  that Key  Principal's  obligations
under  this  Guaranty  shall  not  be  discharged   except  by  Key  Principal's
performance of such obligations and then only to the extent of such performance.

      Key Principal shall from time to time, upon request by Lender,  deliver to
Lender such financial statements as Lender may reasonably require.

      Lender may assign its rights under this  Guaranty in whole or in part and,
upon any such  assignment,  all the terms and  provisions of this Guaranty shall
inure to the benefit of such assignee to the extent so assigned.  The terms used
to  designate  any of the parties  herein  shall be deemed to include the heirs,
legal representatives, successors and assigns of such parties.

      This Guaranty and the other Loan Documents  represent the final  agreement
between  the  parties  and  may  not  be  contradicted  by  evidence  of  prior,
contemporaneous  or  subsequent  oral  agreements.  There are no unwritten  oral
agreements  between  the  parties.  All  prior  or  contemporaneous  agreements,
understandings,  representations,  and statements,  oral or written,  are merged
into this Guaranty and the other Loan Documents. Key Principal acknowledges that
it has  received a copy of the Note and all other Loan  Documents.  Neither this
Guaranty nor any of its provisions may be waived, modified, amended, discharged,
or  terminated  except by an  agreement in writing  signed by the party  against
which the  enforcement of the waiver,  modification,  amendment,  discharge,  or
termination is sought, and then only to the extent set forth in that agreement.

      Key Principal agrees that any controversy  arising under or in relation to
this Guaranty shall be litigated  exclusively in the jurisdiction where the Land
is located  (the  "Property  Jurisdiction").  The state and  federal  courts and
authorities with jurisdiction in the Property  Jurisdiction shall have exclusive
jurisdiction  over all  controversies  which shall arise under or in relation to
this Guaranty, the Note, the Security Instrument or any other Loan Document. Key
Principal  irrevocably  consents  to  service,  jurisdiction,  and venue of such
courts for any such  litigation  and waives any other venue to which it might be
entitled by virtue of domicile, habitual residence or otherwise.

      Key Principal (or each Key  Principal,  if more than one) agrees to notify
Lender (in the manner for giving notices  provided in Section 31 of the Security
Instrument)  of any change in Key  Principal's  address  within 10 Business Days
after such change of address occurs.

      KEY PRINCIPAL AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH
RESPECT TO ANY ISSUE  ARISING OUT OF THIS GUARANTY OR THE  RELATIONSHIP  BETWEEN
THE PARTIES AS  GUARANTOR  AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B)
WAIVES ANY RIGHT TO TRIAL BY JURY WITH  RESPECT TO SUCH ISSUE TO THE EXTENT THAT
ANY SUCH RIGHT  EXISTS NOW OR IN THE  FUTURE.  THIS  WAIVER OF RIGHT TO TRIAL BY
JURY IS  SEPARATELY  GIVEN BY EACH PARTY,  KNOWINGLY  AND  VOLUNTARILY  WITH THE
BENEFIT OF COMPETENT LEGAL COUNSEL.

      IN WITNESS  WHEREOF,  Key Principal has signed and delivered this Guaranty
or has caused this  Guaranty to be signed and  delivered by its duly  authorized
representative.



<PAGE>


                                 Key Principal:

                                    AIMCO PROPERTIES, L.P., a Delaware limited
                                   partnership



                                    By:  AIMCO-GP, Inc., a Delaware corporation,
                                         its general partner







                                       By:

                                              Patti K. Fielding

                                             Senior Vice President





<PAGE>


                                    EXHIBIT A



                MODIFICATIONS TO EXCEPTIONS TO NON-RECOURSE GUARANTY



      The following  modifications  are made to the  Exceptions to  Non-recourse
Guaranty which precedes this Exhibit:



1.____Recitals A-D,  as set forth on page  one,  have been used in the place and
            stead of recitals A-C in the standard form 4501.


2.          Paragraph 11 is hereby  deleted in its entirety and the following is
            inserted in lieu thereof:



                  "(11)  Guarantor  shall  from time to time,  upon  request  by
            Lender  deliver to Lender such  financial  statements  as Lender may
            reasonably  request subject to a  confidentiality  agreement in form
            and content reasonably  satisfactory to Guarantor and Lender.  After
            the  providing  by  Guarantor  of any  statement,  report  or  other
            information  on a  collective  basis to  Standard & Poor's,  Moody's
            Investors  Service,  Duff & Phelps,  Fitch  and/or any other  rating
            agency,  and/or  after  providing  any  statement,  report  or other
            information on a collective basis to the banks or other institutions
            providing   unsecured  lines  of  credit  and  loans  to  Guarantor,
            Guarantor  shall promptly  furnish such  statement,  report or other
            information to Lender."



            As used in this  Paragraph  11, the phrase "on a  collective  basis"
            means as provided to a group as a whole as opposed to an  individual
            basis, e.g.,  providing  information to a rating agency or to a bank
            to respond to a particular request of such rating agency or bank.



3. Paragraph 2 is hereby modified by adding the following sentence:



            "In  addition  Guarantor  hereby  agrees to pay the Standby Fee, the
            Origination  Fee  and  the  Look-back  Fee as  defined  in the  Loan
            Agreement as a primary obligation of Guarantor."

       4.   All capitalized terms used in this Exhibit not specifically  defined
            herein  shall  have  the  meanings  set  forth  in the  text  of the
            Exceptions to Non-Recourse Guaranty that precedes this Exhibit or in
            the Loan Agreement.









                                          ___________________________

                                          GUARANTOR'S INITIALS



<PAGE>
                                                                EXHIBIT 10(iii)k



                                                        Rocky Creek Apartments

                                MULTIFAMILY NOTE
                                 (VARIABLE LOAN)


US $2,340,000.00                                      As of September 16, 2002


      FOR VALUE RECEIVED,  the undersigned  ("Borrower")  promises to pay to the
order of GMAC COMMERCIAL MORTGAGE  CORPORATION,  a California  corporation,  the
principal sum of Two Million Three  Hundred  Forty  Thousand  Dollars and 00/100
Dollars (US  $2,340,000.00),  with  interest on each  Variable Loan at an annual
rate as calculated in Section 3 hereof.

      This Note is executed and  delivered by Borrower  pursuant to that certain
Loan Agreement,  dated as of September 16, 2002, by and among Borrower,  certain
other  borrowers  signatory  thereto  and Lender (as  amended,  supplemented  or
otherwise  modified  or  amended  and  restated  from  time to time,  the  "Loan
Agreement"),  to evidence the  obligation  of Borrower to repay a Variable  Loan
made by Lender to Borrower in accordance  with the terms of the Loan  Agreement.
This Note is entitled to the benefit and security of the Loan Documents provided
for in the Loan Agreement,  to which reference is hereby made for a statement of
all of the terms and conditions  under which the Variable Loan evidenced  hereby
is made. The Loan Agreement  requires certain of the terms of each Variable Loan
to be evidenced by a Loan Confirmation Instrument,  and reference is hereby made
to each such Loan Confirmation Instrument for such terms.

1. Defined  Terms.  As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness"  means the principal of, interest
on,  or any  other  amounts  due at any time  under,  this  Note,  the  Security
Instruments  or any other Loan Document,  including  prepayment  premiums,  late
charges,  default interest, and advances to protect the security of the Security
Instruments under Section 12 of the Security  Instruments.  Event of Default and
other  capitalized  terms  used but not  defined  in this  Note  shall  have the
meanings  given to such terms in the Loan  Agreement  or, if not  defined in the
Loan Agreement,  as defined in the Security Instruments (as defined in Paragraph
5).

2.  Address for  Payment.  All  payments due under this Note shall be payable at
GMAC Commercial  Mortgage  Corporation,  200 Witmer Road,  Horsham, PA 19044, or
such other place as may be designated  by written  notice to Borrower from or on
behalf of Lender.

3. Payment of Principal  and Interest.  Principal and interest  shall be paid as
follows:

(a) This Note shall  evidence  a Variable  Loan made from time to time under the
Loan  Agreement.  The Variable Loan shall bear interest at a rate  determined in
accordance  with  Section  2.01 of the Loan  Agreement,  except as  provided  in
subsection (e) below.

(b) Borrower shall pay imputed  interest on each Variable Loan in advance in the
form of a Discount in  accordance  with  Section  1.04(b) of the Loan  Agreement
(except that  Borrower  shall pay actual  interest on the Variable  Loan for the
partial month period,  if any, in  accordance  with Section  1.04(a) of the Loan
Agreement).

(c) Borrower shall make monthly  payments of principal each in the amount as set
forth on the  attached  Amortization  Schedule.  Lender  shall  apply  each such
principal  payment  to the  outstanding  principal  amount  of the  Loan  on the
Rollover Date next  following  receipt of any such payment.  If not sooner paid,
the entire principal amount of the Variable Loan shall be due and payable on the
earlier of (i) the termination of the Loan Agreement  pursuant to subsection (e)
of  Section  1.02  thereof,  (ii) the  fifth  anniversary  (unless  such date is
extended  pursuant to Section  1.07 of the Loan  Agreement,  in which case,  the
tenth anniversary) of the Initial Closing Date or (iii) the maturity date of any
outstanding MBS, unless either (A) not less than five Business Days prior to the
maturity  date of the  outstanding  MBS,  a  Borrower  has  requested  that  the
outstanding  MBS be renewed  with a new MBS or converted to a Fixed Loan to take
effect on the  maturity  date of the  outstanding  MBS and such new MBS has been
issued or conversion has occurred or (B) the MBS is automatically renewed, which
automatic  renewal  shall  occur in the event that a Borrower  does not make the
request set forth in subpart  (iii)(A) above and does not give Lender notice not
less than five Business days prior to the maturity date of the  outstanding  MBS
that the  Variable  Loan  related to such  outstanding  MBS shall be paid on the
maturity date of such  outstanding  MBS (the "Maturity  Date").  Any MBS that is
issued as a result of an automatic  renewal of a maturing MBS as contemplated by
subpart  (iii)(B) above shall have a maturity date of three (3) months after the
MBS Issue Date.

(d) In addition to payment of principal and the Discount, Borrower shall pay the
Variable  Loan  Fee  due on  each  Variable  Loan  in  accordance  with  Section
1.04(b)(ii) of the Loan Agreement.

(e)  Notwithstanding  any contrary  provisions  of  subsection  (b), (c) and (d)
above, prior to the Fannie Mae Purchase Date, Borrower shall pay interest on its
Variable Rate Loan in arrears at a rate equal to (i) LIBOR Rate plus a number of
basis  points  equal to the  Variable  Loan Fee for the  thirty  (30) day period
commencing  on the  Initial  Closing  Date and (ii) after such  thirty  (30) day
period,  the higher of (A) LIBOR Rate plus 150 basis  points or (B) a rate based
on Lender's  costs of funds,  as  determined  by Lender,  plus a number of basis
points equal to the Variable  Loan Fee,  for the period from and  including  the
thirty-first  (31st)  day after the  Initial  Closing  Date until the Fannie Mae
Purchase  Date. For purposes of the previous  sentence,  the LIBOR Rate shall be
reset  every  ninety (90) days  commencing  on the date that is ninety (90) days
after the Initial Closing Date. On the date hereof,  Borrower shall pay interest
in advance from the date hereof  through  October 15, 2002. On November 15, 2002
and on the fifteenth  (15th) day of each  calendar  month  thereafter,  Borrower
shall pay interest in arrears calculated for the actual number of days since the
fifteenth (15th) day of the previous calendar month.

4.  Application of Payments.  If at any time Lender  receives,  from Borrower or
otherwise,  any  amount  applicable  to the  Indebtedness  that is less than all
amounts due and payable at such time,  Lender may apply that  payment to amounts
then due and  payable in any manner and in any order  determined  by Lender,  in
Lender's  discretion.  Borrower  agrees that neither  Lender's  acceptance  of a
payment  from  Borrower in an amount that is less than all amounts  then due and
payable nor Lender's  application of such payment shall  constitute or be deemed
to  constitute  either  a  waiver  of  the  unpaid  amounts  or  an  accord  and
satisfaction.

5. Security.  The Indebtedness is secured,  among other things, by a multifamily
mortgage, deed to secure debt or deed of trust dated as of the date of this Note
(the "Security  Instruments") and reference is made to the Security  Instruments
for other rights of Lender concerning the collateral for the Indebtedness.

6.  Acceleration.  If an Event of Default has  occurred and is  continuing,  the
entire unpaid principal  balance,  any accrued interest,  the prepayment premium
payable under  Paragraph  10, if any, and all other  amounts  payable under this
Note and any other Loan  Document  shall at once become due and payable,  at the
option of Lender, without any additional notice to Borrower. Lender may exercise
this option to accelerate regardless of any prior forbearance.

7. Late  Charge.  If any  monthly  amount  payable  under this Note or under the
Security  Instrument or any other Loan Document is not received by Lender within
10 days after the amount is due,  Borrower shall pay to Lender,  immediately and
without  demand by Lender,  a late  charge  equal to 5 percent  of such  amount.
Borrower acknowledges that its failure to make timely payments will cause Lender
to incur  additional  expenses in servicing and processing the loan evidenced by
this Note (the "Loan"),  and that it is extremely  difficult and  impractical to
determine  those  additional  expenses.  Borrower  agrees  that the late  charge
payable  pursuant to this Paragraph  represents a fair and reasonable  estimate,
taking into account all circumstances  existing on the date of this Note, of the
additional  expenses Lender will incur by reason of such late payment.  The late
charge is payable in addition  to, and not in lieu of, any  interest  payable at
the Default Rate pursuant to Paragraph 8.

8. Default  Rate.  So long as any monthly  installment  or any other payment due
under this Note remains past due for 30 days or more,  interest  under this Note
shall accrue on the unpaid principal balance from the earlier of the due date of
the first unpaid monthly  installment or other payment due, as applicable,  at a
rate (the "Default  Rate") equal to the lesser of 4 percentage  points above the
rate stated in the first  paragraph  of this Note or the maximum  interest  rate
which may be  collected  from  Borrower  under  applicable  law.  If the  unpaid
principal  balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal  balance and all accrued interest shall bear interest
from the Maturity Date at the Default Rate.  Borrower also acknowledges that its
failure to make timely payments will cause Lender to incur  additional  expenses
in servicing and  processing  the Loan,  that,  during the time that any monthly
installment  or  payment  under this Note is  delinquent  for more than 30 days,
Lender will incur additional costs and expenses arising from its loss of the use
of the money due and from the  adverse  impact on  Lender's  ability to meet its
other obligations and to take advantage of other investment  opportunities,  and
that it is extremely  difficult and  impractical to determine  those  additional
costs and expenses.  Borrower also  acknowledges  that, during the time that any
monthly  installment  or payment due under this Note is delinquent for more than
30 days,  Lender's risk of nonpayment of this Note will be materially  increased
and Lender is entitled  to be  compensated  for such  increased  risk.  Borrower
agrees that the increase in the rate of interest  payable under this Note to the
Default Rate represents a fair and reasonable estimate,  taking into account all
circumstances  existing on the date of this Note,  of the  additional  costs and
expenses  Lender will incur by reason of Borrower's  delinquent  payment and the
additional compensation Lender is entitled to receive for the increased risks of
nonpayment associated with a delinquent loan.

9. Limits on Personal Liability.

(a) Except as otherwise  provided in this  Paragraph 9,  Borrower  shall have no
personal  liability  under this Note, the Security  Instrument or any other Loan
Document for the repayment of the  Indebtedness  or for the  performance  of any
other  obligations  of Borrower  under the Loan  Documents,  and  Lender's  only
recourse for the  satisfaction of the  Indebtedness  and the performance of such
obligations  shall be Lender's  exercise of its rights and remedies with respect
to the Mortgaged  Property and any other  collateral  held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair  Lender's  enforcement  of  its  rights  against  any  guarantor  of  the
Indebtedness or any guarantor of any obligations of Borrower.

(b) Borrower shall be personally liable to Lender for the repayment of a portion
of the  Indebtedness  equal to any loss or damage suffered by Lender as a result
of (1)  failure  of  Borrower  to pay to Lender  upon  demand  after an Event of
Default,  all  Rents to which  Lender  is  entitled  under  Section  3(a) of the
Security  Instrument  and the  amount  of all  security  deposits  collected  by
Borrower  from tenants then in  residence;  (2) failure of Borrower to apply all
insurance  proceeds  and  condemnation  proceeds  as  required  by the  Security
Instrument;  (3) failure of Borrower to comply with Section  14(d) or (e) of the
Security Instrument  relating to the delivery of books and records,  statements,
schedules  and  reports;  (4) fraud or  written  material  misrepresentation  by
Borrower or any officer,  director,  partner,  member or employee of Borrower in
connection  with the  application  for or  creation of the  Indebtedness  or any
request  for any action or consent by  Lender;  or (5)  failure to apply  Rents,
first,  to the payment of  reasonable  operating  expenses  (other than Property
management  fees  that are not  currently  payable  pursuant  to the terms of an
Assignment of Management  Agreement or any other  agreement with Lender executed
in  connection  with the  Loan) and then to  amounts  ("Debt  Service  Amounts")
payable  under this Note,  the Security  Instrument  or any other Loan  Document
(except  that  Borrower  will not be  personally  liable (i) to the extent  that
Borrower lacks the legal right to direct the  disbursement  of such sums because
of a  bankruptcy,  receivership  or similar  judicial  proceeding,  or (ii) with
respect to Rents that are  distributed in any calendar year if Borrower has paid
all operating expenses and Debt Service Amounts for that calendar year).

(c) Borrower shall become  personally  liable to Lender for the repayment of all
of the  Indebtedness  upon the  occurrence  of any of the  following  Events  of
Default: (1) Borrower's acquisition of any property or operation of any business
not permitted by Section 33 of the Security  Instrument;  or (2) a Transfer that
is an Event of Default under Section 21 of the Security Instrument.

(d) To the extent that Borrower has personal  liability  under this Paragraph 9,
Lender may exercise its rights  against  Borrower  personally  without regard to
whether  Lender has exercised any rights  against the Mortgaged  Property or any
other  security,  or pursued any rights  against any  guarantor,  or pursued any
other rights available to Lender under this Note, the Security  Instrument,  any
other Loan  Document or  applicable  law. For purposes of this  Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or  permitted by the  Security  Instrument  prior to the
occurrence  of an Event of  Default,  or (2)  Borrower  was  unable  to apply as
required  or  permitted  by the  Security  Instrument  because of a  bankruptcy,
receivership, or similar judicial proceeding.

10.  Voluntary and  Involuntary  Prepayments.  Pursuant to the terms of the Loan
Agreement,  Borrower shall pay the entire amount of the Discount on any Variable
Loan in advance.  Accordingly,  any Variable  Loan may be prepaid in whole or in
part and at any time without  penalty.  Borrower shall give Lender five Business
Days advance notice of any prepayment.

11. Costs and Expenses. Borrower shall pay on demand all reasonable expenses and
costs,  including  reasonable fees and  out-of-pocket  expenses of attorneys and
expert witnesses and costs of  investigation,  incurred by Lender as a result of
any default under this Note or in connection  with efforts to collect any amount
due under  this  Note,  or to enforce  the  provisions  of any of the other Loan
Documents,  including those incurred in post-judgment  collection efforts and in
any  bankruptcy  proceeding  (including any action for relief from the automatic
stay of any  bankruptcy  proceeding)  or  judicial or  non-judicial  foreclosure
proceeding.

12.  Forbearance.  Any  forbearance  by Lender in exercising any right or remedy
under  this  Note,  the  Security  Instrument,  or any other  Loan  Document  or
otherwise  afforded by applicable  law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy.  The  acceptance by Lender of any
payment after the due date of such  payment,  or in an amount which is less than
the required payment,  shall not be a waiver of Lender's right to require prompt
payment  when due of all other  payments or to exercise any right or remedy with
respect to any  failure to make  prompt  payment.  Enforcement  by Lender of any
security for  Borrower's  obligations  under this Note shall not  constitute  an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

13. Waivers.  Except as expressly  provided in the Loan Agreement,  presentment,
demand, notice of dishonor, protest, notice of acceleration, notice of intent to
demand or accelerate  payment or maturity,  presentment  for payment,  notice of
nonpayment,  grace,  and diligence in collecting the  Indebtedness are waived by
Borrower and all endorsers and guarantors of this Note and all other third party
obligors.

14. Loan Charges. If any applicable law limiting the amount of interest or other
charges  permitted to be collected from Borrower in connection  with the Loan is
interpreted  so that any  interest  or  other  charge  provided  for in any Loan
Document,  whether considered separately or together with other charges provided
for in any other Loan  Document,  violates that law, and Borrower is entitled to
the benefit of that law, that interest or charge is hereby reduced to the extent
necessary to eliminate that  violation.  Borrower agrees to an effective rate of
interest  that is the  stated  rate of  interest  plus  any  additional  rate of
interest  resulting  from  any  other  charges  or fees  that  are to be paid by
Borrower to Lender that may be found by a court of competent  jurisdiction to be
interest.  The  amounts,  if any,  previously  paid to  Lender  in excess of the
permitted  amounts  shall be applied  by Lender to reduce  the unpaid  principal
balance of this Note. For the purpose of determining  whether any applicable law
limiting the amount of interest or other charges  permitted to be collected from
Borrower has been violated,  all Indebtedness that constitutes interest, as well
as all other charges made in connection  with the  Indebtedness  that constitute
interest,  shall be deemed to be  allocated  and spread  ratably over the stated
term of the Note.  Unless otherwise  required by applicable law, such allocation
and  spreading  shall be  effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of the Note.

15.  Commercial  Purpose.  Borrower  represents  that the  Indebtedness is being
incurred  by  Borrower  solely for the  purpose  of  carrying  on a business  or
commercial enterprise, and not for personal, family or household purposes.

16.  Counting  of  Days.  Except  where  otherwise  specifically  provided,  any
reference in this Note to a period of "days" means  calendar  days, not Business
Days.

17. Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL. The provisions
of Section  11.07 of the Loan  Agreement  (entitled  "Choice of Law;  Consent to
Jurisdiction;  Waiver of Jury Trial") are hereby  incorporated into this Note by
this  reference  to the fullest  extent as if the text of such  Section were set
forth in its entirety herein.

18.  Captions.  The captions of the paragraphs of this Note are for  convenience
only and shall be disregarded in construing this Note.

19. Notices. All notices, demands and other communications required or permitted
to be given by  Lender  to  Borrower  pursuant  to this  Note  shall be given in
accordance with Section 11.09 of the Loan Agreement.

20.  Security for this Note.  Reference is made hereby to the Loan Agreement and
the Security  Documents for additional rights and remedies of Lender relating to
the  indebtedness  evidenced  by this  Note.  Each  Security  Document  shall be
released in accordance with the provisions of the Security Documents.

21. Loan May Not Be  Reborrowed.  Borrower may not  re-borrow  any amounts under
this Note which it has previously borrowed and repaid under this Note.

22. Default Under Loan Agreement and Other Loan Documents.  The occurrence of an
Event of  Default  under the Loan  Agreement  or any Other Loan  Document  shall
constitute an "Event of Default"  under this Note,  and,  accordingly,  upon the
occurrence of an Event of Default under the Loan Agreement, the entire principal
amount  outstanding  hereunder and accrued interest thereon shall at once become
due and payable, at the option of the holder hereof.

23. Loan Confirmation  Instruments;  Accounting for Variable Loans. The terms of
the Loan  Agreement  and this Note  govern the  repayment,  and all other  terms
relating  to  the  Variable  Loan.  However,   Borrower  shall  execute  a  Loan
Confirmation  Instrument  to create a physical  instrument  evidencing  each MBS
issued to fund the Variable Loan. The Loan Confirmation  Instrument  executed by
Borrower in accordance  with Section 2.02 of the Loan Agreement  shall set forth
the amount,  term,  Discount,  Closing Date and certain  other terms of each MBS
issued  to fund the  Variable  Loan.  The  Loan  Confirmation  Instrument  shall
conclusively  establish each of the terms  described in the preceding  sentence,
absent manifest  error.  The MBS evidenced by the Loan  Confirmation  Instrument
does not represent a separate  indebtedness from that evidenced by this Note. In
making  proof of this  Note,  no other  documents  other than this Note shall be
required.  In making proof of the amount and terms of the  outstanding  Variable
Loans under this Note, this Note, the related Loan Confirmation Instruments, and
Lender's records concerning  payments made by Borrower under this Note, shall be
conclusive  evidence of the terms and outstanding  amounts of the Variable Loan,
absent manifest error.

24.  Priority of Loans.  To the extent each MBS issued to fund or renew the Loan
evidenced by this Note shall be deemed to secure a separate  Variable  Loan, the
lien of each Security  Document executed by Borrower from time to time to secure
this  Note,  shall  secure  each  separate  Variable  Loan (and the lien of each
Security  Instrument and other Security  Document executed by Borrower to secure
its  obligations  under the Loan Documents) to the same extent and with the same
effect as if the Variable  Loan had been made (and any guaranty  obligation  had
been  incurred)  on the date on which (i) with  respect to each  other  Security
Instrument,  the  Security  Instrument  is recorded  in the land  records of the
jurisdiction  in which the real property  covered by the Security  Instrument is
located, or (ii) with respect to each other Security Document, the date on which
the Security Document is executed and delivered to Lender.

      IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal
or has  caused  this  Note to be signed  and  delivered  under  seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.





                 [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]





<PAGE>



                                    SHELTER PROPERTIES VI LIMITED
                                       PARTNERSHIP, a South Carolina limited
                                       partnership

                                    By:   Shelter Realty VI Corporation, a
                                         South Carolina corporation, its
                                         corporate general partner



                                         By:   ___________________________
                                             Patti K. Fielding
                                             Senior Vice President



<PAGE>



      Pay  to the  order  of  ________________________________________,  without
recourse.



                                    GMAC COMMERCIAL MORTGAGE CORPORATION, a
                                      California corporation



                                       By:
                                       Robert D. Falese, III
                                       Vice President



<PAGE>
                                                      EXHIBIT 10(iii)(l)


                                                     Carriage House Apartments

                                MULTIFAMILY NOTE
                                 (VARIABLE LOAN)


US $1,898,000.00                                      As of September 16, 2002


      FOR VALUE RECEIVED,  the undersigned  ("Borrower")  promises to pay to the
order of GMAC COMMERCIAL MORTGAGE  CORPORATION,  a California  corporation,  the
principal  sum of One Million  Eight  Hundred  Ninety  Eight  Dollars and 00/100
Dollars (US  $1,898,000.00),  with  interest on each  Variable Loan at an annual
rate as calculated in Section 3 hereof.

      This Note is executed and  delivered by Borrower  pursuant to that certain
Loan Agreement,  dated as of September 16, 2002, by and among Borrower,  certain
other  borrowers  signatory  thereto  and Lender (as  amended,  supplemented  or
otherwise  modified  or  amended  and  restated  from  time to time,  the  "Loan
Agreement"),  to evidence the  obligation  of Borrower to repay a Variable  Loan
made by Lender to Borrower in accordance  with the terms of the Loan  Agreement.
This Note is entitled to the benefit and security of the Loan Documents provided
for in the Loan Agreement,  to which reference is hereby made for a statement of
all of the terms and conditions  under which the Variable Loan evidenced  hereby
is made. The Loan Agreement  requires certain of the terms of each Variable Loan
to be evidenced by a Loan Confirmation Instrument,  and reference is hereby made
to each such Loan Confirmation Instrument for such terms.

1. Defined  Terms.  As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness"  means the principal of, interest
on,  or any  other  amounts  due at any time  under,  this  Note,  the  Security
Instruments  or any other Loan Document,  including  prepayment  premiums,  late
charges,  default interest, and advances to protect the security of the Security
Instruments under Section 12 of the Security  Instruments.  Event of Default and
other  capitalized  terms  used but not  defined  in this  Note  shall  have the
meanings  given to such terms in the Loan  Agreement  or, if not  defined in the
Loan Agreement,  as defined in the Security Instruments (as defined in Paragraph
5).

2.  Address for  Payment.  All  payments due under this Note shall be payable at
GMAC Commercial  Mortgage  Corporation,  200 Witmer Road,  Horsham, PA 19044, or
such other place as may be designated  by written  notice to Borrower from or on
behalf of Lender.

3. Payment of Principal  and Interest.  Principal and interest  shall be paid as
follows:

(a) This Note shall  evidence  a Variable  Loan made from time to time under the
Loan  Agreement.  The Variable Loan shall bear interest at a rate  determined in
accordance  with  Section  2.01 of the Loan  Agreement,  except as  provided  in
subsection (e) below.

(b) Borrower shall pay imputed  interest on each Variable Loan in advance in the
form of a Discount in  accordance  with  Section  1.04(b) of the Loan  Agreement
(except that  Borrower  shall pay actual  interest on the Variable  Loan for the
partial month period,  if any, in  accordance  with Section  1.04(a) of the Loan
Agreement).

(c) Borrower shall make monthly  payments of principal each in the amount as set
forth on the  attached  Amortization  Schedule.  Lender  shall  apply  each such
principal  payment  to the  outstanding  principal  amount  of the  Loan  on the
Rollover Date next  following  receipt of any such payment.  If not sooner paid,
the entire principal amount of the Variable Loan shall be due and payable on the
earlier of (i) the termination of the Loan Agreement  pursuant to subsection (e)
of  Section  1.02  thereof,  (ii) the  fifth  anniversary  (unless  such date is
extended  pursuant to Section  1.07 of the Loan  Agreement,  in which case,  the
tenth anniversary) of the Initial Closing Date or (iii) the maturity date of any
outstanding MBS, unless either (A) not less than five Business Days prior to the
maturity  date of the  outstanding  MBS,  a  Borrower  has  requested  that  the
outstanding  MBS be renewed  with a new MBS or converted to a Fixed Loan to take
effect on the  maturity  date of the  outstanding  MBS and such new MBS has been
issued or conversion has occurred or (B) the MBS is automatically renewed, which
automatic  renewal  shall  occur in the event that a Borrower  does not make the
request set forth in subpart  (iii)(A) above and does not give Lender notice not
less than five Business days prior to the maturity date of the  outstanding  MBS
that the  Variable  Loan  related to such  outstanding  MBS shall be paid on the
maturity date of such  outstanding  MBS (the "Maturity  Date").  Any MBS that is
issued as a result of an automatic  renewal of a maturing MBS as contemplated by
subpart  (iii)(B) above shall have a maturity date of three (3) months after the
MBS Issue Date.

(d) In addition to payment of principal and the Discount, Borrower shall pay the
Variable  Loan  Fee  due on  each  Variable  Loan  in  accordance  with  Section
1.04(b)(ii) of the Loan Agreement.

(e)  Notwithstanding  any contrary  provisions  of  subsection  (b), (c) and (d)
above, prior to the Fannie Mae Purchase Date, Borrower shall pay interest on its
Variable Rate Loan in arrears at a rate equal to (i) LIBOR Rate plus a number of
basis  points  equal to the  Variable  Loan Fee for the  thirty  (30) day period
commencing  on the  Initial  Closing  Date and (ii) after such  thirty  (30) day
period,  the higher of (A) LIBOR Rate plus 150 basis  points or (B) a rate based
on Lender's  costs of funds,  as  determined  by Lender,  plus a number of basis
points equal to the Variable  Loan Fee,  for the period from and  including  the
thirty-first  (31st)  day after the  Initial  Closing  Date until the Fannie Mae
Purchase  Date. For purposes of the previous  sentence,  the LIBOR Rate shall be
reset  every  ninety (90) days  commencing  on the date that is ninety (90) days
after the Initial Closing Date. On the date hereof,  Borrower shall pay interest
in advance from the date hereof  through  October 15, 2002. On November 15, 2002
and on the fifteenth  (15th) day of each  calendar  month  thereafter,  Borrower
shall pay interest in arrears calculated for the actual number of days since the
fifteenth (15th) day of the previous calendar month.

4.  Application of Payments.  If at any time Lender  receives,  from Borrower or
otherwise,  any  amount  applicable  to the  Indebtedness  that is less than all
amounts due and payable at such time,  Lender may apply that  payment to amounts
then due and  payable in any manner and in any order  determined  by Lender,  in
Lender's  discretion.  Borrower  agrees that neither  Lender's  acceptance  of a
payment  from  Borrower in an amount that is less than all amounts  then due and
payable nor Lender's  application of such payment shall  constitute or be deemed
to  constitute  either  a  waiver  of  the  unpaid  amounts  or  an  accord  and
satisfaction.

5. Security.  The Indebtedness is secured,  among other things, by a multifamily
mortgage, deed to secure debt or deed of trust dated as of the date of this Note
(the "Security  Instruments") and reference is made to the Security  Instruments
for other rights of Lender concerning the collateral for the Indebtedness.

6.  Acceleration.  If an Event of Default has  occurred and is  continuing,  the
entire unpaid principal  balance,  any accrued interest,  the prepayment premium
payable under  Paragraph  10, if any, and all other  amounts  payable under this
Note and any other Loan  Document  shall at once become due and payable,  at the
option of Lender, without any additional notice to Borrower. Lender may exercise
this option to accelerate regardless of any prior forbearance.

7. Late  Charge.  If any  monthly  amount  payable  under this Note or under the
Security  Instrument or any other Loan Document is not received by Lender within
15 days after the amount is due,  Borrower shall pay to Lender,  immediately and
without  demand by Lender,  a late  charge  equal to 5 percent  of such  amount.
Borrower acknowledges that its failure to make timely payments will cause Lender
to incur  additional  expenses in servicing and processing the loan evidenced by
this Note (the "Loan"),  and that it is extremely  difficult and  impractical to
determine  those  additional  expenses.  Borrower  agrees  that the late  charge
payable  pursuant to this Paragraph  represents a fair and reasonable  estimate,
taking into account all circumstances  existing on the date of this Note, of the
additional  expenses Lender will incur by reason of such late payment.  The late
charge is payable in addition  to, and not in lieu of, any  interest  payable at
the Default Rate pursuant to Paragraph 8.

8. Default  Rate.  So long as any monthly  installment  or any other payment due
under this Note remains past due for 30 days or more,  interest  under this Note
shall accrue on the unpaid principal balance from the earlier of the due date of
the first unpaid monthly  installment or other payment due, as applicable,  at a
rate (the "Default  Rate") equal to the lesser of 4 percentage  points above the
rate stated in the first  paragraph  of this Note or the maximum  interest  rate
which may be  collected  from  Borrower  under  applicable  law.  If the  unpaid
principal  balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal  balance and all accrued interest shall bear interest
from the Maturity Date at the Default Rate.  Borrower also acknowledges that its
failure to make timely payments will cause Lender to incur  additional  expenses
in servicing and  processing  the Loan,  that,  during the time that any monthly
installment  or  payment  under this Note is  delinquent  for more than 30 days,
Lender will incur additional costs and expenses arising from its loss of the use
of the money due and from the  adverse  impact on  Lender's  ability to meet its
other obligations and to take advantage of other investment  opportunities,  and
that it is extremely  difficult and  impractical to determine  those  additional
costs and expenses.  Borrower also  acknowledges  that, during the time that any
monthly  installment  or payment due under this Note is delinquent for more than
30 days,  Lender's risk of nonpayment of this Note will be materially  increased
and Lender is entitled  to be  compensated  for such  increased  risk.  Borrower
agrees that the increase in the rate of interest  payable under this Note to the
Default Rate represents a fair and reasonable estimate,  taking into account all
circumstances  existing on the date of this Note,  of the  additional  costs and
expenses  Lender will incur by reason of Borrower's  delinquent  payment and the
additional compensation Lender is entitled to receive for the increased risks of
nonpayment associated with a delinquent loan.

9. Limits on Personal Liability.

(a) Except as otherwise  provided in this  Paragraph 9,  Borrower  shall have no
personal  liability  under this Note, the Security  Instrument or any other Loan
Document for the repayment of the  Indebtedness  or for the  performance  of any
other  obligations  of Borrower  under the Loan  Documents,  and  Lender's  only
recourse for the  satisfaction of the  Indebtedness  and the performance of such
obligations  shall be Lender's  exercise of its rights and remedies with respect
to the Mortgaged  Property and any other  collateral  held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair  Lender's  enforcement  of  its  rights  against  any  guarantor  of  the
Indebtedness or any guarantor of any obligations of Borrower.

(b) Borrower shall be personally liable to Lender for the repayment of a portion
of the  Indebtedness  equal to any loss or damage suffered by Lender as a result
of (1)  failure  of  Borrower  to pay to Lender  upon  demand  after an Event of
Default,  all  Rents to which  Lender  is  entitled  under  Section  3(a) of the
Security  Instrument  and the  amount  of all  security  deposits  collected  by
Borrower  from tenants then in  residence;  (2) failure of Borrower to apply all
insurance  proceeds  and  condemnation  proceeds  as  required  by the  Security
Instrument;  (3) failure of Borrower to comply with Section  14(d) or (e) of the
Security Instrument  relating to the delivery of books and records,  statements,
schedules  and  reports;  (4) fraud or  written  material  misrepresentation  by
Borrower or any officer,  director,  partner,  member or employee of Borrower in
connection  with the  application  for or  creation of the  Indebtedness  or any
request  for any action or consent by  Lender;  or (5)  failure to apply  Rents,
first,  to the payment of  reasonable  operating  expenses  (other than Property
management  fees  that are not  currently  payable  pursuant  to the terms of an
Assignment of Management  Agreement or any other  agreement with Lender executed
in  connection  with the  Loan) and then to  amounts  ("Debt  Service  Amounts")
payable  under this Note,  the Security  Instrument  or any other Loan  Document
(except  that  Borrower  will not be  personally  liable (i) to the extent  that
Borrower lacks the legal right to direct the  disbursement  of such sums because
of a  bankruptcy,  receivership  or similar  judicial  proceeding,  or (ii) with
respect to Rents that are  distributed in any calendar year if Borrower has paid
all operating expenses and Debt Service Amounts for that calendar year).

(c) Borrower shall become  personally  liable to Lender for the repayment of all
of the  Indebtedness  upon the  occurrence  of any of the  following  Events  of
Default: (1) Borrower's acquisition of any property or operation of any business
not permitted by Section 33 of the Security  Instrument;  or (2) a Transfer that
is an Event of Default under Section 21 of the Security Instrument.

(d) To the extent that Borrower has personal  liability  under this Paragraph 9,
Lender may exercise its rights  against  Borrower  personally  without regard to
whether  Lender has exercised any rights  against the Mortgaged  Property or any
other  security,  or pursued any rights  against any  guarantor,  or pursued any
other rights available to Lender under this Note, the Security  Instrument,  any
other Loan  Document or  applicable  law. For purposes of this  Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or  permitted by the  Security  Instrument  prior to the
occurrence  of an Event of  Default,  or (2)  Borrower  was  unable  to apply as
required  or  permitted  by the  Security  Instrument  because of a  bankruptcy,
receivership, or similar judicial proceeding.

10.  Voluntary and  Involuntary  Prepayments.  Pursuant to the terms of the Loan
Agreement,  Borrower shall pay the entire amount of the Discount on any Variable
Loan in advance.  Accordingly,  any Variable  Loan may be prepaid in whole or in
part and at any time without  penalty.  Borrower shall give Lender five Business
Days advance notice of any prepayment.

11. Costs and Expenses. Borrower shall pay on demand all reasonable expenses and
costs,  including  reasonable fees and  out-of-pocket  expenses of attorneys and
expert witnesses and costs of  investigation,  incurred by Lender as a result of
any default under this Note or in connection  with efforts to collect any amount
due under  this  Note,  or to enforce  the  provisions  of any of the other Loan
Documents,  including those incurred in post-judgment  collection efforts and in
any  bankruptcy  proceeding  (including any action for relief from the automatic
stay of any  bankruptcy  proceeding)  or  judicial or  non-judicial  foreclosure
proceeding.

12.  Forbearance.  Any  forbearance  by Lender in exercising any right or remedy
under  this  Note,  the  Security  Instrument,  or any other  Loan  Document  or
otherwise  afforded by applicable  law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy.  The  acceptance by Lender of any
payment after the due date of such  payment,  or in an amount which is less than
the required payment,  shall not be a waiver of Lender's right to require prompt
payment  when due of all other  payments or to exercise any right or remedy with
respect to any  failure to make  prompt  payment.  Enforcement  by Lender of any
security for  Borrower's  obligations  under this Note shall not  constitute  an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

13. Waivers.  Except as expressly  provided in the Loan Agreement,  presentment,
demand, notice of dishonor, protest, notice of acceleration, notice of intent to
demand or accelerate  payment or maturity,  presentment  for payment,  notice of
nonpayment,  grace,  and diligence in collecting the  Indebtedness are waived by
Borrower and all endorsers and guarantors of this Note and all other third party
obligors.

14. Loan Charges. If any applicable law limiting the amount of interest or other
charges  permitted to be collected from Borrower in connection  with the Loan is
interpreted  so that any  interest  or  other  charge  provided  for in any Loan
Document,  whether considered separately or together with other charges provided
for in any other Loan  Document,  violates that law, and Borrower is entitled to
the benefit of that law, that interest or charge is hereby reduced to the extent
necessary to eliminate that  violation.  Borrower agrees to an effective rate of
interest  that is the  stated  rate of  interest  plus  any  additional  rate of
interest  resulting  from  any  other  charges  or fees  that  are to be paid by
Borrower to Lender that may be found by a court of competent  jurisdiction to be
interest.  The  amounts,  if any,  previously  paid to  Lender  in excess of the
permitted  amounts  shall be applied  by Lender to reduce  the unpaid  principal
balance of this Note. For the purpose of determining  whether any applicable law
limiting the amount of interest or other charges  permitted to be collected from
Borrower has been violated,  all Indebtedness that constitutes interest, as well
as all other charges made in connection  with the  Indebtedness  that constitute
interest,  shall be deemed to be  allocated  and spread  ratably over the stated
term of the Note.  Unless otherwise  required by applicable law, such allocation
and  spreading  shall be  effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of the Note.

15.  Commercial  Purpose.  Borrower  represents  that the  Indebtedness is being
incurred  by  Borrower  solely for the  purpose  of  carrying  on a business  or
commercial enterprise, and not for personal, family or household purposes.

16.  Counting  of  Days.  Except  where  otherwise  specifically  provided,  any
reference in this Note to a period of "days" means  calendar  days, not Business
Days.

17. Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL. The provisions
of Section  11.07 of the Loan  Agreement  (entitled  "Choice of Law;  Consent to
Jurisdiction;  Waiver of Jury Trial") are hereby  incorporated into this Note by
this  reference  to the fullest  extent as if the text of such  Section were set
forth in its entirety herein.

18.  Captions.  The captions of the paragraphs of this Note are for  convenience
only and shall be disregarded in construing this Note.

19. Notices. All notices, demands and other communications required or permitted
to be given by  Lender  to  Borrower  pursuant  to this  Note  shall be given in
accordance with Section 11.09 of the Loan Agreement.

20.  Security for this Note.  Reference is made hereby to the Loan Agreement and
the Security  Documents for additional rights and remedies of Lender relating to
the  indebtedness  evidenced  by this  Note.  Each  Security  Document  shall be
released in accordance with the provisions of the Security Documents.

21. Loan May Not Be  Reborrowed.  Borrower may not  re-borrow  any amounts under
this Note which it has previously borrowed and repaid under this Note.

22. Default Under Loan Agreement and Other Loan Documents.  The occurrence of an
Event of  Default  under the Loan  Agreement  or any Other Loan  Document  shall
constitute an "Event of Default"  under this Note,  and,  accordingly,  upon the
occurrence of an Event of Default under the Loan Agreement, the entire principal
amount  outstanding  hereunder and accrued interest thereon shall at once become
due and payable, at the option of the holder hereof.

23. Loan Confirmation  Instruments;  Accounting for Variable Loans. The terms of
the Loan  Agreement  and this Note  govern the  repayment,  and all other  terms
relating  to  the  Variable  Loan.  However,   Borrower  shall  execute  a  Loan
Confirmation  Instrument  to create a physical  instrument  evidencing  each MBS
issued to fund the Variable Loan. The Loan Confirmation  Instrument  executed by
Borrower in accordance  with Section 2.02 of the Loan Agreement  shall set forth
the amount,  term,  Discount,  Closing Date and certain  other terms of each MBS
issued  to fund the  Variable  Loan.  The  Loan  Confirmation  Instrument  shall
conclusively  establish each of the terms  described in the preceding  sentence,
absent manifest  error.  The MBS evidenced by the Loan  Confirmation  Instrument
does not represent a separate  indebtedness from that evidenced by this Note. In
making  proof of this  Note,  no other  documents  other than this Note shall be
required.  In making proof of the amount and terms of the  outstanding  Variable
Loans under this Note, this Note, the related Loan Confirmation Instruments, and
Lender's records concerning  payments made by Borrower under this Note, shall be
conclusive  evidence of the terms and outstanding  amounts of the Variable Loan,
absent manifest error.

24.  Priority of Loans.  To the extent each MBS issued to fund or renew the Loan
evidenced by this Note shall be deemed to secure a separate  Variable  Loan, the
lien of each Security  Document executed by Borrower from time to time to secure
this  Note,  shall  secure  each  separate  Variable  Loan (and the lien of each
Security  Instrument and other Security  Document executed by Borrower to secure
its  obligations  under the Loan Documents) to the same extent and with the same
effect as if the Variable  Loan had been made (and any guaranty  obligation  had
been  incurred)  on the date on which (i) with  respect to each  other  Security
Instrument,  the  Security  Instrument  is recorded  in the land  records of the
jurisdiction  in which the real property  covered by the Security  Instrument is
located, or (ii) with respect to each other Security Document, the date on which
the Security Document is executed and delivered to Lender.

      IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal
or has  caused  this  Note to be signed  and  delivered  under  seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.





                 [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]





<PAGE>



                                    SHELTER PROPERTIES VI LIMITED
                                       PARTNERSHIP, a South Carolina limited
                                       partnership

                                    By:   Shelter Realty VI Corporation, a
                                         South Carolina corporation, its
                                         corporate general partner



                                         By:
                                         _________________________________
                                             Patti K. Fielding
                                             Senior Vice President


<PAGE>



      Pay  to the  order  of  ________________________________________,  without
recourse.



                                    GMAC COMMERCIAL MORTGAGE CORPORATION, a
                                      California corporation



                                       By:
                                       Robert D. Falese, III
                                       Vice President