FIRST AMENDMENT TO
                                   SECOND AMENDED AND RESTATED AGREEMENT
                                           OF LIMITED PARTNERSHIP
                                                     OF
                                          SYDNEY ENGEL ASSOCIATES


        This First  Amendment to the Second  Amended and  Restated  Agreement of
Limited  Partnership  ("First Amendment") of SYDNEY ENGEL ASSOCIATES is made and
entered  into as of the 24th day of March,  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  "General  Partners"  or
individually  as a "General  Partner")  and AMERICAN TAX CREDIT  PROPERTIES  III
L.P.,  a  Delaware  limited  partnership  with an office c/o  Richman  ("Limited
Partner")  entered  into the Second  Amended and  Restated  Agreement of Limited
Partnership (the  "Agreement") of Sydney Engel  Associates (the  "Partnership");
and

        WHEREAS,  the parties now desire to enter into this First  Amendment  to
(i) continue the Partnership,  (ii) amend the address of the Principal Executive
Offices and the Agent for Service of Process and (iii) authorize the filing of a
Certificate  of Adoption and  Certificate  of Amendment  with the New York State
Department of State in accordance with Article 8-A of the Partnership Law of the
State of New York (the "Revised Act").

        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 First  Amendment,
as follows:

        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. The  undersigned  hereby  continue the  Partnership  as a limited  
           partnership under the Revised Act.

        3. Upon the execution of the First Amendment by the parties hereto,  the
Managing  General  Partner shall take all actions  necessary and  appropriate to
assure the prompt  filing of a  Certificate  of Adoption  and a  Certificate  of
Amendment  pursuant,  respectively,  to  Sections  121-1202  and  121-202 of the
Revised Act in the form annexed hereto as Exhibit "A",  together with such other
documents  as may be required by the Revised  Act. All fees for the filing shall
be paid out of the Partnership's assets.

        4.      Section 1.02 of the Agreement is amended to read as follows:

        "Name.  The name of the Partnership is SYDNEY ENGEL ASSOCIATES L.P."

        5.  Section  1.03 of the  Agreement is amended to provide  that the 
             principal  executive  office of the Partnership shall remain c/o 
The Engel Group, Inc., but at the following  address:  124 Atlantic Avenue,
Lynbrook, New York 11563.

        6.  The  execution  of  this  First  Amendment  by the  Limited  Partner
constitutes  its consent to the amendment of the  Agreement  pursuant to Article
XIV thereof.




<PAGE>
<TABLE>
<CAPTION>


        IN WITNESS  WHEREOF,  the parties have affixed their  signatures to this
First  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:
<S>                                              <C>
ATTEST/WITNESS:                                  THE ENGEL GROUP, INC.


/s/ Michael S. Weiss                             By: /s/ Sydney Engel
                                                       Sydney Engel, President


ATTEST/WITNESS:                                  THE RICHMAN GROUP, INC.


/s/ Ann H. McGuire                               By: /s/ Richard P. Richman
                                                  Richard P. Richman, President


ATTEST/WITNESS:                                  TWIN CASTLE GROUP, INC.


/s/ Vincent Anzalone                             By: /s/ Michael Contillo
                                                    Michael Contillo, 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/ Mary K. Holzer                     By: /s/ David Salzman
                                      David Salzman, Vice President


</TABLE>







<PAGE>

STATE OF NEW YORK      )
                              )     SS.:
COUNTY OF NASSAU       )

        On this 15th day of April, 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.


                                                   /s/ Michael S. Weiss
                                  Notary Public




STATE OF CONNECTICUT )
                             )          SS.: Greenwich
COUNTY OF Fairfield)

        On this 18th day of April,  1997,  before me personally  came Richard P.
Richman  to me known,  who being by me duly  sworn,  did  depose and say that he
resides at 7 Dwight Lane, Greenwich, Ct., 06831; that he is the President of THE
RICHMAN  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.


                                                   /s/ Mary K. Holzer
                                  Notary Public




STATE OF NEW YORK      )
                              )              SS.:
COUNTY OF BRONX        )

        On this  14th day of March,  1997,  before me  personally  came  MICHAEL
CONTILLO,  to me known,  who being by me duly sworn,  did depose and say that he
resides at 550 Brush Avenue,  Bronx,  New York; that he is the President of TWIN
CASTLE  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.


                                                   /s/ Vincent Anzalone
                                  Notary Public






<PAGE>

STATE OF CONN.)
                             )              SS.: Greenwich
COUNTY OF FAIRFIELD)

        On this  18th day of  April,  1997,  before  me  personally  came  DAVID
SALZMAN,  to me known,  who being by me duly  sworn,  did depose and say that he
resides  at 12  Varian  Lane,  Scarsdale,  New  York,  10583;  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/ Ann H. McGuire
                                  Notary Public