<PAGE>

                   CONSOLIDATED, AMENDED, RENEWED AND RESTATED
                                  MORTGAGE NOTE


$122,028,471
                                                              New York, New York
                                                              August 7, 1998

                  This  CONSOLIDATED,  AMENDED,  RENEWED AND  RESTATED  MORTGAGE
NOTE,  dated as of August 7, 1998 (the  "Note"),  is made by  HOMESTEAD  VILLAGE
LIMITED PARTNERSHIP ("Maker"), a Delaware limited partnership having a principal
office at c/o Homestead Village Incorporated,  2100 RiverEdge Parkway,  Atlanta,
Georgia 30328, in favor of MIDLAND LOAN SERVICES,  INC., a Delaware  corporation
(together with its successors and assigns, "Payee"), having its principal office
at 210 West 10th Street, Kansas City, Missouri 64105.

                  WHEREAS,  Payee is the holder by  assignment  of those certain
mortgage  notes  described  on Schedule A annexed  hereto and made a part hereof
(the  "Original  Notes")  made by  Homestead  Village  Incorporated,  a Maryland
corporation ("Homestead") and Atlantic Homestead Village Limited Partnership,  a
Delaware limited partnership ("AHV"), which Original Notes have been assigned by
Homestead and AHV to, and assumed by, Maker;

               WHEREAS,  the  principal  indebtedness  evidenced by the Original
Notes is Ninety-Eight  Million  Twenty-Eight  Thousand Four Hundred  Seventy-One
Dollars ($98,028,471);

                  WHEREAS, on the date hereof, Assignee made an additional  loan
to Assignor in the amount of $24,000,000;

                  WHEREAS,  the Maker and Payee  intend to  consolidate,  amend,
renew,  restate,  supercede,  substitute  and replace the Original  Note by this
Note,  and  this  Note  shall  evidence  one  consolidated   joint  and  several
indebtedness of Maker in the principal amount of ONE HUNDRED  TWENTY-TWO MILLION
TWENTY EIGHT  THOUSAND  FOUR  HUNDRED  SEVENTY ONE DOLLARS  ($122,028,471)  (the
"Loan"); and

                  WHEREAS,  Maker and Payee  intend  these  recitals  to form an
integral part or this Note.

                  NOW THEREFORE,  by Maker's execution and delivery of this Note
and Payee's  acceptance of delivery from Maker of this Note, this Note is deemed
to consolidate,  amend,  renew and restate and substitute the Original Notes and
the same are hereby restated in their entirety to read as follows:



<PAGE>



                  FOR  VALUE  RECEIVED,  Maker  promises  to pay to the order of
Payee, or its assigns,  the Principal  Amount (as defined below),  together with
interest  from the date  hereof as  provided  in this  Note.  Interest  accruing
hereunder  shall be  calculated  on the basis of a 360-day  year and the  actual
number of days elapsed.

                  WHEN USED HEREIN,  the following  capitalized terms shall have
the following meanings.

                  "Anticipated  Securitization  Maturity  Date"  if  applicable,
shall mean the date so designated by the Securitization  Extension Notice, which
date shall not be earlier than June 30, 2006 or later than June 30, 2008.

                  "Commencement  Date" shall mean the first  Business Day of the
month following the Closing Date.

                  "Closing Date" shall be the date of this Note.

                  "Default  Rate" shall be the then interest rate  applicable to
the Loan Amount (i.e.,  Initial Interest Rate,  Securitization  Interest Rate or
Revised  Interest  Rate)  immediately  prior to an Event  of  Default,  plus 5.0
percent (5.0%) per annum.

                  "Final  Maturity Date" shall mean the later of (i) the Initial
Maturity Date and (ii) if the Securitization  Extension Notice is delivered, the
date that is provided in the  Securitization  Extension  Notice (as  hereinafter
defined),  which date shall be between  the  twentieth  (20th) and  twenty-third
(23rd) anniversary of the Anticipated Securitization Maturity Date.

                  "Initial  Interest  Rate" shall mean (a) from the date of this
Note  through  but not  including  October  1,  1998,  a rate of LIBOR plus 1.70
percent  (1.70%) per annum,  and from October 1, 1998 through but not  including
December 1, 1998, a rate of LIBOR plus 2.00 percent (2.0%), and from December 1,
1998 through but not  including  the Initial  Maturity  Date, at a rate of LIBOR
plus 2.25 percent (2.25%).

                  "Initial  Maturity Date" shall mean June 30, 1999 or, if the 2
Year Extension Notice is delivered, then June 30, 2001.

                  "Interest  Period" shall mean each successive period following
the first  Payment  Date,  commencing  on a Payment  Date and  ending on the day
immediately preceding the following Payment Date.

                  "LIBOR" shall mean the one (1) month London Interbank  Offered
Rate for dollar  denominated  deposits  with  respect to each  Interest  Period,
rounded up to the nearest one  sixteenth of one percent  (1/16 %), as determined
by Lender in its sole and absolute  discretion on the first  Business Day of any
Interest  Period and the Interest  Rate shall be adjusted on the first  Business
Day of the following Interest Period to reflect any changes in LIBOR.

                  "Monthly  Amount"  shall  be the  applicable  monthly  payment
required  hereunder at the Initial  Interest Rate, the  Securitization  Interest
Rate, if applicable or the Revised Interest Rate, if applicable, as the case may
be.

                  "Mortgage"  shall mean that certain  Consolidated  Amended and
Restated  Mortgage,  Deed of Trust,  Deed to Secure  Debt,  Security  Agreement,
Financing Statement, Fixture Filing and Assignment of Leases, Rents and Security
Deposits, dated as of the Closing Date, from Maker to Payee.

                  "Payment  Date" shall be the first  Business Day of each month
commencing on the first  business day of the second full month after the Closing
Date and continuing to and including the Final Maturity Date.

                  "Principal Amount" $122,028,471

                  "Revised  Interest  Rate" shall mean,  if  applicable,  on and
after the Anticipated  Securitization Maturity Date, the Securitization Interest
Rate plus 2.0 percent (2.0%).

                  "Securitization  Interest  Rate"  shall mean,  if  applicable,
during the Securitization  Extension Term (as hereinafter defined), a rate equal
to either LIBOR or the Treasury Rate, plus 2.50 percent (2.50%),  as selected in
Payee's sole discretion;  provided, however, that if the aggregate Net Operating
Income  from  all of the  Properties,  as  determined  by  Payee in its sole and
absolute  discretion,  for the twelve (12) month period  commencing  on June 30,
1998 and ending on June 30, 1999, as adjusted with an assumed  management fee of
4% of Operating Income (as defined in the Mortgage) and an FF&E reserve of 4% of
Operating  Income,  is less than  $18,000,000,  at a rate  equal to LIBOR or the
Treasury Rate, as selected in Payee's sole discretion, plus 3.5 percent (3.5%).


<PAGE>

                   "Treasury Rate" shall mean, as of the Initial  Maturity Date,
the  yields,   calculated  by  linear  interpolation  (rounded  to  the  nearest
one-thousandth  of one  percent  (1%)) of  noncallable  United  States  Treasury
obligations  with a term of  fifteen  years,  on the  basis of  Federal  Reserve
Statistical  Release  H.15  Selected  Interest  Rates  under  the  heading  U.S.
Governmental Security/Treasury Constant Maturities or other recognized source of
comparable  financial market information selected by Payee for the week prior to
the Initial Maturity Date.

                  All capitalized  terms not otherwise defined herein shall have
the meanings set forth in the Mortgage.

                  The  Principal  Amount and interest  thereon shall be due  and
payable in lawful money of the United States as follows:


                  (a) On the date hereof,  all interest on  the  unpaid  balance
         through the end of the month in which the Closing  Date occurs shall be
         due and payable.  Thereafter,  commencing on the Commencement  Date and
         continuing  until the Initial  Maturity Date,  monthly  installments of
         interest in the Monthly  Amount at the Initial  Interest  Rate shall be
         due and payable.  Each monthly installment shall be due on each Payment
         Date.

                  (b) In the event  the  Securitization  Extension   Notice  (as
         hereinafter defined), is delivered, during the Securitization Extension
         Term (as hereinafter defined),  monthly installments of interest in the
         Monthly  Amount at the  Securitization  Interest  Rate shall be due and
         payable. Each monthly installment shall be due on each Payment Date.

                  (c) In  the  event  the  Securitization  Extension  Notice  is
         delivered  and Maker does not pay the entire  Principal  Amount of this
         Note and any other  amounts  outstanding  on or before the  Anticipated
         Securitization  Maturity Date, then interest shall thereafter accrue on
         the unpaid principal balance from time to time outstanding on this Note
         at the Revised  Interest  Rate and Maker  shall pay on the  Anticipated
         Securitization  Maturity Date and on each Payment Date thereafter up to
         and  including  the Final  Maturity  Date the payments  provided for in
         Section 4 of the Cash  Collateral  Agreement (as defined  below) in the
         order of priority set forth  therein.  Interest  accrued at the Revised
         Interest Rate and not paid pursuant to the preceding  sentence shall be
         deferred and added to the Debt and shall accrue interest at the Revised
         Interest Rate (to the extent permitted by applicable law) (such accrued
         interest is hereinafter referred to as "Accrued Interest").  All of the
         Debt, including Accrued Interest, shall be due and payable on the Final
         Maturity Date.

                  (d) In addition,  all amounts  advanced  by Payee  pursuant to
         applicable  provisions of the Loan Documents (as hereinafter  defined),
         together  with any  interest at the  Default  Rate  (payable  after any
         applicable  grace period set forth herein or in the  Mortgage) or other
         charges as  therein  provided,  shall be  immediately  due and  payable
         hereunder.  In the  event any such  advance  is not so repaid by Maker,
         Payee may, at its option,  first apply any payments received  hereunder
         to repay said  advances  together  with any  interest  thereon or other
         charges as provided in the Loan  Documents,  and the  balance,  if any,
         shall be applied in payment  of any  installment  then due.  The entire
         remaining  unpaid  balance  of  principal  of this Note,  all  interest
         accrued thereon and all other sums payable  hereunder or under the Loan
         Documents  (collectively,  the "Debt") shall be due and payable in full
         on the Final Maturity Date.

                  (e)  Amounts  due on this Note shall be  payable,  without any
         counterclaim, setoff or deduction whatsoever, at the office of Payee or
         its agent or designee at the address set forth in the recitals above or
         at such other place as Payee or its agent or designee  may from time to
         time designate in writing.



<PAGE>



                  2.   This   Note   is  secured  by  (i)  the   Mortgage   (the
"Mortgage"),  (ii) an  Assignment of Rents and Leases of even date herewith from
Maker  to  Payee,  recorded  in the  above  referenced  recording  offices  (the
"Assignment  ") and (iii) all other  documents  executed  by Maker to or for the
benefit of Payee. The Mortgage, Assignment and any other instrument given at any
time to  evidence or secure this Note are  hereinafter  collectively  called the
"Loan Documents."

                  3.   At any time prior to the  Initial  Maturity  Date,  Maker
shall have the right to prepay the  principal of this Note in full or in part on
any  Payment  Date or on any other date  provided  that Maker pays any  breakage
costs or other  costs  reasonably  incurred  by  Payee  in  connection  with any
prepayment  of the Loan or any date other than a Payment Date.  Such  prepayment
shall be made upon not less than  fourteen  (14) days' prior  written  notice to
Payee,  (such  date  of  prepayment  shall  hereinafter  be  referred  to as the
"Prepayment  Date").  If the Final Maturity Date is extended  beyond the Initial
Maturity Date by a Securitization  Extension  Notice,  then Maker shall have the
right to  prepay  the  principal  of this Note  only in  accordance  with and as
provided by the provisions of Securitization Extension Notice.

                  4.   If Maker  defaults in the payment of any  installment  of
principal  and  interest  on the  date on  which  it  shall  fall  due or in the
performance of any of the other agreements, conditions, covenants, provisions or
stipulations  contained  in this  Note  or in the  Loan  Documents,  and if such
default  (other than related to the payment of  principal  and  interest)  shall
continue  beyond  any  applicable  notice or grace  period  provided  for in the
Mortgage so as to constitute an Event of Default thereunder,  then Payee, at its
option and without  further  notice to Maker,  may declare  immediately  due and
payable the entire unpaid principal balance of this Note, together with interest
thereon at an annual rate from and after the date of such  default  equal to the
Default Rate,  together  with all sums due from Maker under the Loan  Documents,
anything herein or in the Loan Documents to the contrary notwithstanding.  After
an Event of Default,  interest  shall  accrue,  relating back to the date of the
default that gave rise to the Event of Default, at the Default Rate,  regardless
of whether Payee  accelerates  the principal  balance of the Note. The foregoing
provision shall not be construed as a waiver by Payee of its right to pursue any
other remedies  available to it under the Mortgage,  this Note or any other Loan
Document,  nor shall it be construed to limit in any way the  application of the
Default Rate. Any payment hereunder may be enforced and recovered in whole or in
part at such time by one or more of the remedies  provided to Payee in this Note
or in the Loan Documents.  In the event that: (i) this Note or any Loan Document
is  placed in the hands of an  attorney  for  collection  or  enforcement  or is
collected or enforced through any legal proceeding; (ii) an attorney is retained
to represent Payee in any  bankruptcy,  reorganization,  receivership,  or other
proceedings affecting creditors' rights and involving a claim under this Note or
any Security  Document;  (iii) an attorney is retained to protect or enforce the
lien of the Mortgage or any other Loan Document; or (iv) an attorney is retained
to represent Payee in any other  proceedings  whatsoever in connection with this
Note,  the  Mortgage,  any of the other  Loan  Documents  or any  portion of the
Mortgaged Property subject thereto, then Maker shall pay to Payee all reasonable
attorney's fees, costs and expenses incurred in connection therewith,  including
costs of appeal, together with interest on any judgment obtained by Payee at the
Default Rate or at the rate permitted by applicable law.


<PAGE>

                  5.    If  Maker   defaults  in  the  payment  of  any  monthly
installment  on the Payment  Date and such  default is not cured within five (5)
days,  then Maker shall pay to Payee a late payment charge in an amount equal to
five percent (5%) of the amount of the  installment  not paid as aforesaid which
late charge  shall relate back to the date when such  installment  was first due
and  payable.  Said late charge  payments,  if payable,  shall be secured by the
Mortgage and the other Loan Documents, shall be payable without notice or demand
by Payee,  and are  independent  of and have no effect  upon the rights of Payee
under paragraph 4 above. No late charge will be assessed on principal payable on
the Final Maturity Date.

                  6.    Notwithstanding  any other provision of this Note, Payee
shall have the following rights to extend the term of this Note:

                  (a) Payee shall have the right until  December 15, 1998,  upon
delivery of a written notice to Maker (the "2 Year Extension Notice"), to extend
the term of the Loan to June 30,  2001.  Upon  delivery of the 2 Year  Extension
Notice,  (i) the Initial Maturity Date shall be deemed to be June 30, 2001; (ii)
the Initial Interest Rate shall be deemed to be LIBOR plus 2.25 percent (2.25%),
(iii) Maker shall be required to deliver to Payee (A) legal  opinions  regarding
the  non-consolidation  of Maker  with any other  Person  and any other  matters
reasonably  requested  by  Payee  in  the  2  Year  Extension  Notice,  from  an
independent counsel acceptable to Payee, in its sole and absolute discretion and
in form and substance  acceptable  to Payee in its sole and absolute  discretion
and (B) all  other  documents  identified  in the 2 Year  Extension  Notice  and
customarily  required by Payee in  connection  with the closing of similar loans
that have not been previously  delivered to Payee and (iv) Payee shall no longer
have the right to deliver the  Securitization  Extension  Notice (as hereinafter
defined) pursuant to the terms of Section 6(b).

                  (b) Provided  Payee has not  previously  delivered  the 2 Year
Extension Notice, Payee shall have the right at any time prior to June 10, 1999,
upon the delivery of a written  notice to Maker (the  "Securitization  Extension
Notice"), to extend the term of the Loan for an additional seven (7) to ten (10)
year period,  as  determined by Payee in its sole and absolute  discretion.  The
period  between  the  Initial  Maturity  Date  and the  date  identified  in the
Securitization Extension Notice as the Anticipated  Securitization Maturity Date
shall  be  herein  referred  to as the  "Securitization  Extension  Term."  Upon
delivery  of  the   Securitization   Extension   Notice,   (i)  the  Anticipated
Securitization  Maturity  Date shall be deemed to be the date  specified  as the
Anticipated Securitization Maturity Date in the Securitization Extension Notice;
(ii)  the  Final  Maturity  Date  shall  be the  date  that is  provided  in the
Securitization  Extension Notice (as hereinafter  defined),  which date shall be
between  the  twentieth  (20th)  and  twenty-third  (23rd)  anniversary  of  the
Anticipated Securitization Maturity Date; (iii) the Securitization Interest Rate
beginning  on July 1, 1999 shall be deemed to be a rate equal to either LIBOR or
the  Treasury  Rate,  plus 2.50  percent  (2.50%),  as selected in Payee's  sole
discretion;  provided,  however, that if the aggregate Net Operating Income from
all  of the  Properties,  as  determined  by  Payee  in its  sole  and  absolute
discretion,  for the twelve (12) month  period  commencing  on June 30, 1998 and
ending on June 30, 1999,  as adjusted  with an assumed  management  fee of 4% of
Operating  Income and an FF&E  reserve of 4% of Operating  Income,  is less than
$18,000,000,  then the Securitization  Interest Rate shall be deemed to be LIBOR
or the Treasury Rate, as selected in Payee's sole  discretion,  plus 3.5 percent
(3.5%);  (iv) Maker shall be  required  to pay to Payee on the Initial  Maturity
Date an extension fee payment equal to $1,220,285 (i.e., one percent (1%) of the
Principal  Amount) and (v) Maker shall be required to deliver to Payee (A) legal
opinions regarding the  non-consolidation of Maker with any other Person and any
other  matters  reasonably  requested by Payee in the  Securitization  Extension
Notice,  from an  independent  counsel  acceptable  to  Payee,  in its  sole and
absolute  discretion  and in form and substance  acceptable to Payee in its sole
and  absolute  discretion  and  (B)  all  other  documents   identified  in  the
Securitization  Extension Notice and customarily required by Payee in connection
with the closing of similar  loans that have not been  previously  delivered  to
Payee


<PAGE>

                  7.   Maker and all endorsers,  sureties and guarantors  hereby
jointly and  severally  waive all  applicable  exemption  rights,  valuation and
appraisement,  presentment  for  payment,  demand,  notice of demand,  notice of
nonpayment  or  dishonor,  protest  and notice of protest of this Note,  and all
other notices in connection with the delivery, acceptance,  performance, default
or  enforcement of the payment of this Note.  Maker and all endorsers,  sureties
and guarantors consent to any and all extensions of time,  renewals,  waivers or
modifications  that may be granted by Payee with respect to the payment or other
provisions  of this  Note  and to the  release  of the  collateral  or any  part
thereof,  with or  without  substitution,  and  agree  that  additional  makers,
endorsers,  guarantors or sureties may become  parties  hereto without notice to
them or  affecting  their  liability  hereunder.  SUBJECT TO THE  PROVISIONS  OF
SECTION  33 OF THE  MORTGAGE,  MAKER  ACKNOWLEDGES  THAT IT SHALL BE LIABLE  AND
RESPONSIBLE FOR (I) THE DEBT, (II) ALL SUMS THAT WILL, FROM TIME TO TIME, BECOME
DUE AND PAYABLE UNDER THIS NOTE,  (III) ANY OF THE OBLIGATIONS  CONTAINED IN, OR
THAT MAY ARISE FROM, ANY OF THE LOAN DOCUMENTS AND (IV) ANY AND ALL  OBLIGATIONS
UNDER ANY LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATION, THE MORTGAGE.

                  8.   Payee  shall not be  deemed,  by any act of  omission  or
commission,  to have waived any of its rights or remedies  hereunder unless such
waiver  is in  writing  and  signed  by  Payee,  and  then  only  to the  extent
specifically set forth in writing.  A waiver of one event shall not be construed
as  continuing  or as a bar to or waiver of any right or remedy to a  subsequent
event.

                  9.   This Note has been negotiated,  executed and delivered in
the State of New York and shall be governed by and construed in accordance  with
the  internal  laws of the  State of New York  (the  "State"),without  regard to
choice of law rules.

                  10.    The  parties   hereto  intend  and  believe  that  each
provision  in this  Note  comports  with all  applicable  law.  However,  if any
provision  in this  Note is found by a court  of law to be in  violation  of any
applicable  law, and if such court should declare such provision of this Note to
be  unlawful,  void or  unenforceable  as written,  then it is the intent of all
parties hereto that such  provision  shall be given full force and effect to the
fullest possible extent that is legal, valid and enforceable, that the remainder
of this Note  shall be  construed  as if such  unlawful,  void or  unenforceable
provision  were not  contained  therein,  and that the rights,  obligations  and
interest of Maker and the holder  hereof under the  remainder of this Note shall
continue in full force and effect;  provided,  however, that if any provision of
this Note which is found to be in violation of any  applicable  law concerns the
imposition of interest hereunder, the rights, obligations and interests of Maker
and Payee with respect to the imposition of interest hereunder shall be governed
and controlled by the provisions of the following paragraph.

                  11.   It being the intention of Payee and Maker to comply with
the laws of the State with regard to the rate of interest charged hereunder,  it
is agreed that,  notwithstanding any provision to the contrary in this Note, the
Mortgage,  or any of the other  Loan  Documents,  no such  provision,  including
without  limitation  any  provision  of this Note  providing  for the payment of
interest or other charges, shall require the payment or permit the collection of
any amount  ("Excess  Interest")  in excess of the  maximum  amount of  interest
permitted by law to be charged for the use or detention,  or the  forbearance in
the  collection,  of all or any portion of the  indebtedness  evidenced  by this
Note. If any Excess  Interest is provided for, or is  adjudicated to be provided
for, in this Note,  the Mortgage,  or any of the other Loan  Documents,  then in
such event:

                           (i)    the provisions of this paragraph shall govern;
<PAGE>

                           (ii)   Maker shall not be obligated to pay any Excess
                  Interest;

                           (iii)    any  Excess  Interest  that  Payee  may have
                  received  hereunder  shall,  at the  option of  Payee,  be (x)
                  applied as a credit against the unpaid principal  balance then
                  due under this Note,  accrued and unpaid interest  thereon not
                  to exceed the maximum  amount  permitted by law, or both,  (y)
                  refunded to the payor  thereof or (z) any  combination  of the
                  foregoing;

                           (iv)   the applicable interest rate or rates provided
                  for herein shall be automatically  subject to reduction to the
                  maximum  lawful rate allowed to be  contracted  for in writing
                  under the applicable  usury laws of the aforesaid  State,  and
                  this Note, the Mortgage and the other Loan Documents  shall be
                  deemed to have been,  and shall be,  reformed  and modified to
                  reflect such reduction in such interest rate or rates; and

                           (v)    Maker  shall  not have any  action  or  remedy
                  against  Payee for any  damages  whatsoever  or any defense to
                  enforcement  of this  Note,  the  Mortgage  or any other  Loan
                  Document  arising  out of the  payment  or  collection  of any
                  Excess Interest  (provided such Excess Interest is paid as set
                  forth above).

                  12.   Upon any endorsement,  assignment,  or other transfer of
this Note by Payee or by  operation  of law,  the term  "Payee," as used herein,
shall mean such endorsee,  assignee,  or other  transferee or successor to Payee
then  becoming the holder of this Note.  This Note shall inure to the benefit of
Payee and its successors  and assigns and shall be binding upon the  undersigned
and its  successors  and assigns.  The term "Maker" as used herein shall include
the  respective  successors  and assigns,  legal and  personal  representatives,
executors, administrators, devisees, legatees and heirs of Maker.

                  13.    Any  notice,  demand or other  communication  which any
party may  desire or may be  required  to give to any  other  party  shall be in
writing and shall be given as provided in the Mortgage.

                  14.    To the  extent  that  Maker  makes a  payment  or Payee
receives any payment or proceeds  for Maker's  benefit,  which are  subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, debtor in possession,  receiver,  custodian or any other
party under any bankruptcy  law,  common law or equitable  cause,  then, to such
extent,  the  obligations of Maker  hereunder  intended to be satisfied shall be
revived and  continue as if such  payment or proceeds  had not been  received by
Payee.


<PAGE>

                  15.   Maker  shall  execute  and  acknowledge  (or cause to be
executed  and  acknowledged)  and deliver to Payee all  documents,  and take all
actions,  reasonably  required  by Payee from time to time to confirm the rights
created or now or hereafter  intended to be created under this Note and the Loan
Documents,  to protect and further the validity,  priority and enforceability of
this Note and the Loan Documents,  to subject to the Loan Documents any property
of Maker  intended by the terms of any one or more of the Loan  Documents  to be
encumbered  by the Loan  Documents,  or otherwise  carry out the purposes of the
Loan Documents and the transactions contemplated thereunder;  provided, however,
that no such  further  actions,  assurances  and  confirmations  shall  increase
Maker's obligations under this Note.

                  16.  No  modification,   amendment,   extension,  discharge,
termination or waiver (a  "Modification")  of any provision of this Note, or any
one or more of the other Loan  Documents,  nor consent to any departure by Maker
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought,  and then such waiver or
consent shall be effective only in the specific  instance,  and for the purpose,
for which given. Except as otherwise expressly provided herein, no notice to, or
demand on, Maker shall  entitle Maker to any other or future notice or demand in
the same,  similar or other  circumstances.  Payee does not hereby agree to, nor
does Payee hereby commit itself to, enter into any Modification.

                  17.   Maker hereby  expressly and  unconditionally  waive,  in
connection  with any suit,  action or proceeding  brought by Payee on this Note,
any and  every  right  it may have to (a) a trial by  jury,  (b)  interpose  any
counterclaim  therein  (other than a  counterclaim  which if not asserted in the
suit,  action or  proceeding  brought by Payee on this Note could be barred) and
(c) have the same  consolidated  with any  other or  separate  suit,  action  or
proceeding.


                  18.    Notwithstanding  anything in this Note, the Mortgage or
the other Loan Documents, no personal liability shall be asserted or enforceable
against (i) Maker, (ii) any Affiliate of Maker, (iii) any Person owning directly
or  indirectly,  any legal or  beneficial  interest in Maker or any Affiliate of
Maker, or (iv) any partner, principal, officer, controlling person, beneficiary,
trustee,  advisor,  shareholder,  employee,  agent, Affiliate or director of any
Persons  described  in  clauses  (i)  through  (iii)  above  (collectively,  the
"Exculpated  Parties") by Payee in respect of the  Obligations,  this Note,  the
Mortgage  or any other  Loan  Document,  or the  making,  issuance  or  transfer
thereof,  all such liability,  if any, being expressly waived by Payee, and each
successive  holder of this Note shall accept the Mortgage and this Note upon the
express  condition  of this  provision  and  limitation  that in the case of the
occurrence and continuance of an Event of Default,  Payee's remedies in its sole
discretion shall be any or all of:

               (1)  Foreclosure of the lien of the Mortgage in accordance   with
                    the terms and provisions set forth in the Mortgage;

               (2)  Action  against any other security  at  any  time  given  to
                    secure the payment of this  Note and under  the  other  Loan
                    Documents; and

               (3)  Exercise of any other remedy  set forth in the  Mortgage  or
                    any other Loan Document.


<PAGE>

                  The lien of any  judgment  against  Maker  and any  proceeding
instituted on, under or in connection  with this Note or the Mortgage,  or both,
shall  not  extend  to any  property  now or  hereafter  owned  by  Maker or any
Exculpated  Party other than the Net  Operating  Income from,  and the ownership
interest of Maker in, the  Mortgaged  Property  and the other  security  for the
payment of the Mortgage or this Note.

                  Notwithstanding  anything to the  contrary in this Note or any
of the Loan Documents,  Payee shall not be deemed to have waived any right which
Payee may have under Section 506(a),  506(b), 1111(b) or any other provisions of
the Bankruptcy Code to file a claim for the full amount of the Debt evidenced by
this Note or to require that all collateral  shall continue to secure all of the
Debt owing to Payee in accordance with the Loan Documents.

                  Notwithstanding  anything in this Note to the contrary,  there
shall at no time be any limitation on Maker's liability for the payment to Payee
of: (1) condemnation  awards or insurance  proceeds which Maker has received and
to which Payee is entitled pursuant to the terms of this Note or any of the Loan
Documents  to the extent the same have not been applied  toward  payment of sums
due under this Note or the Mortgage,  or used for the repair or  replacement  of
the Mortgaged  Property  pursuant to the Mortgage,  or (2) all loss,  damage and
expense  as  incurred  by Payee  and  arising  from any  fraud,  or  intentional
misrepresentation  of Maker,  or (3) any  misappropriation  of Rents or security
deposits by Maker or any  Affiliate  of Maker after an Event of Default,  to the
extent of such misappropriation.

                  19.ab Any legal action or proceeding with respect to this Note
and any action for enforcement of any judgment in respect thereof may be brought
in the  courts of the State of New York or of the United  States of America  for
the Southern  District of New York, and, by execution and delivery of this Note,
Maker hereby  accepts for itself and in respect of its  property,  generally and
unconditionally,  the  non-exclusive  jurisdiction  of the aforesaid  courts and
appellate courts from any thereof.  Maker irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by service of process  upon Maker at the address  for notices set forth  herein.
Maker hereby irrevocably waives any objection which it may now or hereafter have
to the laying of venue of any of the aforesaid  actions or  proceedings  arising
out of or in connection  with this Note brought in the courts  referred to above
and hereby  further  irrevocably  waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect the right of Payee
to serve  process in any other  manner  permitted  by law or to  commence  legal
proceedings or otherwise proceed against Maker in any other jurisdiction.

                  20.    This  Note  may  be  executed  in  counterparts,  which
together shall constitute one and the same instrument.

                  21.   Payee shall maintain a register,  setting forth the name
of the  holder or holders of this  Note.  From time to time,  at the  request of
Maker, Payee shall inform Maker of the name or name of such holder(s).


<PAGE>

                  22.   Maker and Payee agree that the interest rate,  from time
to time,  applicable to the Loan Amount or any other amounts due under this Note
shall not exceed the Maximum  Lawful Rate (as  hereinafter  defined).  Maker and
Payee agree that the Default Rate hereunder  shall not exceed the Maximum Lawful
Rate,  and in no event shall the late  charges set forth in  paragraph 5 hereof,
together  with all other  interest on the  indebtedness  evidenced by this Note,
exceed the Maximum Lawful Rate. Maker and Payee agree that if all or any portion
of the late payment  charge  described in Section 5 of this Note,  or all or any
portion of the  Prepayment  Premium (as may be  provided  in the  Securitization
Extension  Notice) is deemed to be interest  under  applicable  law, in no event
shall interest in excess of the Maximum  Lawful Rate be due or payable.  As used
herein,  "Maximum  Lawful Rate " means the  maximum  rate (or, if the context so
permits or requires, an amount calculated at such rate) of interest that, at the
time in question, would not cause the interest charged on this Note at such time
to exceed the  maximum  amount  that Payee  would be  allowed to  contract  for,
charge, take, reserve or receive under applicable law after taking into account,
to the extent required by applicable law, any and all relevant payments, fees or
charges under this Note or the other Loan  Documents.  If under  applicable  law
there is no legal  limitation  on the  amount  or rate of  interest  that may be
charged on amounts outstanding under this Note, there shall be no Maximum Lawful
Rate,  notwithstanding  any reference thereto herein or in any of the other Loan
Documents. This paragraph shall control over any contrary provision set forth in
this Note or in the other Loan Documents.



<PAGE>



                  IN  WITNESS   WHEREOF,   Maker  and  Payee  have  caused  this
Consolidated,  Amended,  Renewed and Restated  Mortgage  Note to be executed and
delivered as of the day and year first above written.

                                 MAKER:

                                 HOMESTEAD VILLAGE LIMITED PARTNERSHIP,
                                 a Delaware limited partnership

                                 By:   HVI Incorporated, a Delaware corporation,
                                       its General Partner


                                       By:________________________________
                                          Name:    Laura L. Hamilton
                                          Title:   Senior Vice President


                                          Attest:______________________________
                                          Name:    J. Michael Dugan
                                          Title:  Assistant Secretary

                                 [CORPORATE SEAL]

Signed, sealed and delivered
in the presence of:

______________________________
Witness

______________________________
Witness


<PAGE>










                                  PAYEE:

                                  MIDLAND LOAN SERVICES, INC.,
                                  a Delaware corporation


                                  By:________________________________
                                  Name: Alan H. Torgler
                                  Title:


                                  [CORPORATE SEAL]


Signed, sealed and delivered
in the presence of:

________________________________
Witness

________________________________
Witness