FOURTH AMENDMENT TO
                                   SECOND AMENDED AND RESTATED AGREEMENT
                                           OF LIMITED PARTNERSHIP
                                                     OF
                                        SYDNEY ENGEL ASSOCIATES L.P.


        This Fourth  Amendment to the Second  Amended and Restated  Agreement of
Limited Partnership ("Second Amendment") of SYDNEY ENGEL ASSOCIATES L.P. is made
and entered into as of the 18th day of April, 1997, by and among the undersigned
parties.

        WHEREAS,  as of  June  1,  1990,  THE  ENGEL  GROUP,  INC.,  a New  York
corporation  with an office at 124  Atlantic  Avenue,  Lynbrook,  New York 11563
("Engel"), THE RICHMAN GROUP, INC., a Delaware corporation with an office at 599
West Putnam Avenue,  Greenwich,  Connecticut  06830  ("Richman") and TWIN CASTLE
GROUP INC., a New York  corporation  with an office at 550 Brush Avenue,  Bronx,
New York  10465  ("Twin  Castle")  (Engel,  Richman  and Twin  Castle  sometimes
hereinafter being referred to collectively as the "Original  General  Partners")
and AMERICAN TAX CREDIT PROPERTIES III L.P., a Delaware limited partnership with
an office c/o Richman (the "Limited  Partner")  entered into the Second  Amended
and Restated Agreement of Limited  Partnership (the "Agreement") of Sydney Engel
Associates L.P. (the "Partnership");

        WHEREAS,  as of March 24, 1997,  the Original  General  Partners and the
Limited  Partner  entered into a First  Amendment of the Agreement,  which inter
alia,  authorized  the  execution  of a  Certificate  of Adoption of the Revised
Limited  Partnership Act (Article 8-A of the Partnership Law of the State of New
York) (the  "Revised  Act") and an  Amendment  thereto  changing the name of the
Partnership to Sydney Engel Associates L.P.;

        WHEREAS,  as of today's date, and immediately  prior to the execution of
this Agreement,  the Original  General  Partners and the Limited Partner entered
into (i) a Second Amendment of the Agreement, which, inter alia, effectuated the
withdrawal  of Twin  Castle  as a General  Partner  and the  acquisition  of its
interest by the Partnership, and (ii) a Third Amendment of the Agreement, which,
inter, alia,  reassigned the interests of the Partners and authorized the filing
of a  Certificate  with the New York State  Department of State  reflecting  the
interest of Engel as the sole General Partner;

        WHEREAS,  in order to achieve Final  Closing,  the Lenders  required the
Partnership to purchase a guaranteed investment contract;

        WHEREAS,  although  the  completion  of the  Apartment  Complex  and the
delivery of economic benefits was timely,  due to technical  circumstances,  the
Partnership experienced a significant delay in achieving Final Closing;

        WHEREAS,  the Investment  Partnership  received a benefit as a result of
the delay in paying the  Fourth  Installment  while  continuing  to receive  the
economic  benefits  from  the  Partnership,  and  as a  result,  the  Investment
Partnership  has agreed to  increase  the amount of the  Fourth  Installment  by
$206,881; and

        WHEREAS,  the parties now desire to enter into this Fourth  Amendment to
(i)  continue  the  Partnership  and (ii)  increase  the  amount  of the  Fourth
Installment from $1,017,894 to $1,224,775.

        NOW, THEREFORE, in consideration of the foregoing, of mutual promises of
the parties hereto and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,  the parties agree to continue the
Partnership  pursuant to the Revised Act, as set forth in this Fourth Amendment,
as follows:






<PAGE>

        1. All initially  capitalized  terms shall have the meanings ascribed to
them in the Agreement,  unless otherwise provided herein.  This Agreement may be
signed in counterparts.

        2. Section  5.01(c) and Schedule A of the  Agreement are each amended by
deleting  "$2,994,993"   wherever  it  appears  and  substituting   "$3,201,874"
therefor.

        3.        Section   5.01(c)(iii)  of  the  Agreement  is  amended  by  
deleting   "$1,017,894"   and substituting "$1,224,775" therefor.

        4.  Except  as set  forth  herein,  the  Partnership  Agreement  remains
unmodified and in full force and effect.

        IN WITNESS  WHEREOF,  the parties  have affixed  their  signatures  to 
this Fourth  Amendment to the Second Amended and Restated Agreement of Limited 
Partnership of Sydney Engel Associates L.P. as of the date first above written.


                                GENERAL PARTNERS:
                                           
ATTEST/WITNESS:                              THE ENGEL GROUP, INC.


/s/ Joan Hartstein                               By: /s/ Sydney Engel
                                                  Sydney Engel, President

                                LIMITED PARTNER:

                                    AMERICAN TAX CREDIT PROPERTIES III L.P.

                          By:  Richman  Tax  Credit  Properties  III L.P.,  its
                                 general partner

ATTEST/WITNESS:        By:  Richman   Housing   Credits  Inc.,  its  general
                                   partner


/s/ Chip Krafnick                                By: /s/ Neal Ludeke
                                                Neal Ludeke, Vice President








<PAGE>
STATE OF NEW YORK                  )
                              )     SS.:
COUNTY OF NASSAU                   )

        On this 26th day of June, 1997,  before me personally came Sydney Engel,
to me known,  who being by me duly sworn,  did depose and say that he resides at
206 Albon Road, Hewlett,  New York; that he is the President of THE ENGEL GROUP,
INC., the corporation  described in and which executed the foregoing instrument;
and that he signed his name  thereto by order of the board of  directors of said
corporation.




                                Michael S. Weiss
                                  Notary Public




STATE OF                                       )
                             )      SS.:  GREENWICH
COUNTY OF                                   )

        On this 27th day of June,  1997,  before me personally came NEAL LUDEKE,
to me known,  who being by me duly sworn,  did depose and say that he resides at
26 Rising  Rock  Road,  Stamford,  CT 06903;  that he is the  Vice-President  of
RICHMAN HOUSING  CREDITS INC., the  corporation  described in and which executed
the foregoing  instrument;  which  corporation is the general partner of RICHMAN
TAX CREDIT  PROPERTIES  III L.P.,  the general  partner of  AMERICAN  TAX CREDIT
PROPERTIES  III L.P.,  the limited  partnership  which  executed  the  foregoing
instrument;  that  the  execution  of the  instrument  by  AMERICAN  TAX  CREDIT
PROPERTIES  III L.P. was duly  authorized  according to the Limited  Partnership
Agreement; that RICHMAN HOUSING CREDITS INC., the general partner of its general
partner,  executed the instrument on behalf of the limited partnership  pursuant
to said  authorization and that he signed his name thereto by order of the board
of directors of said corporation.


                                                   /s/ Mary K. Holzer
                                  Notary Public