SECOND AMENDMENT

                                       TO

                                CREDIT AGREEMENT

                                       AND

                              OTHER LOAN DOCUMENTS


                                      AMONG


                         HOMESTEAD VILLAGE INCORPORATED,



                            THE LENDERS NAMED HEREIN,


                                       AND


                                 COMMERZBANK AG,
                    NEW YORK BRANCH, AS AGENT FOR THE LENDERS







                           DATED AS OF APRIL 24, 1998



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          SECOND AMENDMENT TO CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS


                  SECOND  AMENDMENT TO CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS
(this  "Amendment"),  dated  as of  April  24,  1998,  among  HOMESTEAD  VILLAGE
INCORPORATED,  a Maryland  corporation  (the  "Borrower"),  COMMERZBANK  AG, LOS
ANGELES  BRANCH,  and the other  lenders  listed on  Exhibit A  attached  to the
Agreement  (as  hereinafter  defined),  as  amended  from  time to time  (each a
"Lender" and  collectively,  the "Lenders") and COMMERZBANK AG, NEW YORK BRANCH,
as agent for the Lenders (the "Agent").

                              W I T N E S S E T H:


                  WHEREAS, the Borrower entered into a revolving credit facility
in an  amount  up to  $50,000,000.00  with  the  Lenders  pursuant  to a  Credit
Agreement dated as of May 6, 1997, among the Borrower, as borrower, the Lenders,
as lenders  and the  Agent,  as  amended  by the First  Amendment  to the Credit
Agreement  and Other Loan  Documents on August 25, 1997 (the  "Agreement");  all
capitalized  terms used herein and not defined  herein  shall have the  meanings
ascribed respectively thereto in the Agreement;

                  WHEREAS,  pursuant to Borrower's request,  Lenders have agreed
to modify the  Agreement  and the other  Loan  Documents,  as more  particularly
hereinafter provided.

                  NOW,  THEREFORE,  in  consideration  of the  mutual  covenants
herein  contained,  and other good and valuable  consideration,  the receipt and
sufficiency of which are hereby  acknowledged,  the Agreement and the other Loan
Documents are hereby modified as follows:

                  1.       Amendment to Credit Agreement.  The     Agreement  is
hereby amended as follows:

                  (a) The term "Alternate Rate" as defined in Section 1.1 of the
         Agreement shall mean, as of any Applicable  Margin  Adjustment  Date, a
         per annum rate equal to th e greater of (a) the Prime Lending Rate plus
         the Prime Rate Applicable  Margin,  and (b) the Federal Funds Rate plus
         the Federal Funds Applicable Margin;

                  (b) The term "Applicable  Margin" as defined in Section 1.1 of
         the Agreement and as referred to in Section 2.6(a) shall be
         changed  to  "LIBOR  Applicable  Margin"  an d  shall  mean,  as of any
         Applicable Margin Adjustment Date (i) if the Leverage  Percentage as of
         such  Applicable  Margin  Adjustment  Date is less than fifteen percent
         (15%),  one  hundred  fifty (150) basis  points,  (ii) if the  Leverage
         Percentage as of such Applicable  Margin Adjustment Date is equal to or
         greater than fifteen  percent (15%) but less than  twenty-five  percent
         (25%),  two  hundred  (200)  basis  points,  and (iii) if the  Leverage
         Percentage as of such Applicable  Margin Adjustment Date is equal to or
         greater  than  twenty-five  percent  (25%)  and  up  to  a  maximum  of
         thirty-eight percent (38%), two hundred fifty (250) basis points.

                  (c) The term  "Applicable  Margin  Adjustment  Date"  shall be
         added to Section 1.1 of the  Agreement and shall mean the date on which
         any Applicable Margin Adjustment Event occurs.


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                  (d) The term  "Applicable  Margin  Adjustment  Event" shall be
         added to Section 1.1 of the  Agreement and shall mean (i) the making of
         any Advance, and (ii) the receipt and collection by Agent, on behalf of
         the  Lenders,  of any  portion of the unpaid  principal  balance of the
         Loan.

                  (e) The term "Debt  Service"  as defined in Section  1.1 shall
         now include Construction Interest.

                  (f) The term "Federal Funds Applicable  Margin" shall be added
         to Section  1.1 of the  Agreement  and shall mean as of any  Applicable
         Margin  Adjustment  Date  (i) if the  Leverage  Percentage  as of  such
         Applicable  Margin  Adjustment Date is less than fifteen percent (15%),
         one hundred (100) basis points,  (ii) if the Leverage  Percentage as of
         such  Applicable  Margin  Adjustment  Date is equal to or greater  than
         fifteen  percent (15%) but less than  twenty-five  percent  (25%),  one
         hundred fifty (150) basis points, and (iii) if the Leverage  Percentage
         as of such  Applicable  Margin  Adjustment  Date is equal to or greater
         than  twenty-five  percent  (25%) and up to a maximum  of  thirty-eight
         percent (38%), two hundred (200) basis points.

                  (g) The term "Leverage  Percentage"  shall be added to Section
         1.1 and shall mean, as of any  Applicable  Margin  Adjustment  Date and
         after giving effect to any Applicable  Margin  Adjustment  Event giving
         rise thereto,  the quotient of the outstanding  principal amount of the
         Loan, divided by Eligible Costs, expressed as a percentage. In no event
         shall such Leverage Percentage be permitted to exceed 38%.

                  (h) The term "Maturity  Date" as defined in Section 1.1 of the
         Agreement shall mean April 23, 1999.

                  (i) The term "Mortgaged  Properties" as defined in Section 1.1
         shall be  amended by  inserting  after the word  "which"  the words "is
         located in a Suburban Area and which".

                  (j) The term "Prime Rate Applicable  Margin" shall be added to
         Section 1.1 of the Agreement and shall mean as of any Applicable Margin
         Adjustment  Date (i) if the Leverage  Percentage as of such  Applicable
         Margin  Adjustment Date is less than fifteen percent (15%),  fifty (50)
         basis points,  (ii) if the Leverage  Percentage  as of such  Applicable
         Margin  Adjustment  Date is equal to or greater  than  fifteen  percent
         (15%) but less than twenty-five  percent (25%), one hundred (100) basis
         points,  and (iii) if the  Leverage  Percentage  as of such  Applicable
         Margin Adjustment Date is equal to or greater than twenty-five  percent
         (25%) and up to a maximum of  thirty-eight  percent (38%),  one hundred
         fifty (150) basis points.

                  (k) The term "Suburban  Area" shall be added to Section 1.1 of
         the  Agreement  and shall mean such area  outside a major  metropolitan
         city.

                  (l) The term  "Commitment" as defined in Section 2.1(b) of the
         Agreement shall mean $150,000,000;




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                  (m) The  following  shall be added as last sentence to Section
          2.6(a):

                           "The   LIBOR   Applicable   Margin,   Federal   Funds
                           Application  Margin and Prime Rate Application Margin
                           shall  be  recalculated,  and  the  interest  on each
                           Advance   shall  be   correspondingly   increased  or
                           decreased,  on  and  as  of  each  Applicable  Margin
                           Adjustment  Date. In the event that the date on which
                           the  interest  on any  Advance  is  converted  to, or
                           otherwise  commences to accrue at, the Alternate Rate
                           is a date that is not an Applicable Margin Adjustment
                           Date,  then the Alternate Rate shall be calculated on
                           the basis of the Leverage  Percentage  as of the most
                           recent Applicable Margin Adjustment Date."

                  (n) Add Section 2.9(c) which shall state as follows:

                           "The  Borrower  shall apply upon  receipt (i) all net
                           proceeds from its equity offerings to repay on a pari
                           passu basis the Loan and the Indebtedness referred to
                           in Section 5.3(a)(vii) of the Agreement, and (ii) all
                           other  amounts  and  fees  due to the  Agent  and the
                           Lenders  under  this  Agreement  and the  other  Loan
                           Documents."

                  (o) The first  sentence of Section  2.10 of the  Agreement  is
         hereby deleted in its entirety and replaced with the following:

                           "Section 2.10  Fees.  The   Borrower shall pay to the
                           Agent for the account of the Lenders a commitment fee
                           (the "Commitment Fee") equal  to  0.375  per annum of
                           the Average Undrawn Balance of the Commitment."

                  (p) Add new section 5.3(a)(vii) which shall state as follows:

                           "Indebtedness  under that  certain  Credit  Agreement
                           dated as of April 24, 1998,  between Borrower,  Agent
                           and one or more  lenders  with  regard to a revolving
                           credit  facility  of  up to  an  aggregate  principal
                           amount of $50,000,000.00."

                  (q) The  covenant  for  "Total  Debt" as set forth in  Section
         5.3(b) of the Agreement is hereby  deleted in its entirety and replaced
         with the following:

                           "(b)  Total  Debt.   Permit  there  to  be  aggregate
                           Indebtedness  of the  Borrower of more than an amount
                           equal to  fifty-five  percent  (55%)  of Gross  Asset
                           Value,  or permit there to be aggregate  Indebtedness
                           of the  Borrower  which is  secured by a Lien of more
                           than an amount equal to fifty  percent (50%) of Gross
                           Asset Value."



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                  (r) The  covenant  for "Debt  Service  Ratios" as set forth in
         Section  5.3(c) of the Agreement is hereby  deleted in its entirety and
         replaced with the following:

                           "(c) Debt Service Ratios.  Maintain a ratio of EBITDA
                           to Debt  Service  on a  quarterly  basis  (i) for the
                           first calender  quarter of 1998 of less than 1.1:1.0,
                           (ii) for the second calender  quarter of 1998 of less
                           than 1.25:1.0,  and (iii) of less than 1.75:1.0 after
                           the second calender quarter of 1998."

                  (s) The  covenant  for  "Stockholders  Equity" as set forth in
         Section  5.3(c) of the Agreement is hereby  deleted in its entirety and
         replaced with the following:

                           "(f)     Stockholders  Equity.  Permit  Stockholders'
                           Equity to be less than $325,000,000.00."

                  (t) Add new Section 6.1(i) which shall state as follows:

                           "(i)     New Credit Agreement. An Event   of  Default
                           (as defined in that certain Credit Agreement referred
                           to in Section 5.3(a)(vii)) shall occur.

                  (u)  Exhibit A  attached  to the  Agreement  is deleted in its
         entirety and replaced with Exhibit A attached hereto.

                  (v)  Exhibit B attached  hereto is added to the  Agreement  as
Exhibit O.

                  2. Amendment to All Loan  Documents.  Simultaneously  herewith
the  Borrower  has  executed  and  delivered  to Agent a (i) Second  Amended and
Restated Promissory Note which effectuates  certain of the amendments  contained
herein, and (ii) a Letter of Comfort from Security Capital Group Incorporated in
the form of Exhibit O to the Agreement confirming its commitment to fund all the
capital  needs of the Borrower  other than debt during the term of the Agreement
up to an amount of $150,000,000 (the "Letter of Comfort"). All references in the
Loan Documents to the  "Promissory  Note" shall be deemed to refer to the Second
Amended and Restated  Promissory  Note.  All references in the Loan Documents to
the "Credit  Agreement"  shall be deemed to refer to the  Agreement  as modified
pursuant to the terms hereof. All references in any one of the Loan Documents to
any of the other  Loan  Documents  shall be deemed to refer to such  other  Loan
Documents  as  modified  pursuant  to the  terms  hereof.  In the  event  of any
inconsistency  or conflict  between the terms and  provisions of any of the Loan
Documents and the terms and provisions of this Second  Amendment,  the terms and
provisions of this Second  Amendment shall control and be binding,  it being the
agreement  and  intent of the  Borrower,  Lenders  and Agent  that the terms and
provisions contained or referred to in the Loan Documents shall hereby be and be
deemed  to be  amended  and  modified  to the  extent,  but only to the  extent,
necessary to give effect to the terms and provisions of this Second Amendment.

                  3. Borrower's Representations.  Borrower hereby certifies that
the following statements are true on the date hereof:

                  (a)      No Default or Event of  Default  has  occurred and is
                  continuing;



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                  (b) Other than the  representation  in the second  sentence of
         Section  4.5(a) of the Credit  Agreement  which  shall  apply as of the
         Closing  Date,  all  representations  and  warranties  contained in the
         Agreement,  before and after giving  effect to this  Amendment are true
         and  correct in all  material  respects  with the same effect as though
         such  representations  and  warranties  are  being  made as of the date
         hereof  and the  Borrower,  before  and  after  giving  effect  to this
         Amendment is in compliance in all material  respects with all covenants
         and agreements contained in the Agreement and the other Loan Documents;

                  (c)      There has been no Material Adverse Change;

                  (d) All  statements and  certifications  contained in the most
         recent certificate delivered to Agent pursuant to Section 5.2(e) of the
         Agreement,  before and after giving  effect to this  Amendment are true
         and  correct in all  material  respects  with the same effect as though
         such  statements  and  certifications  are  being  made as of the  date
         hereof;

                  (e) Except as expressly  modified  hereby,  the  Agreement and
         other Loan Documents remain unmodified and in full force and effect and
         are hereby ratified and confirmed in all respects;

                  (f) The Borrower has no offsets,  counterclaims or defenses to
         the enforcement of, or otherwise with respect to, the Agreement  and/or
         other Loan Documents as hereby modified; and

                  (g) This Second Amendment is hereby incorporated into and made
         a part of the Loan Documents.  This Second  Amendment and the Letter of
         Comfort shall constitute Loan Documents for all purposes.

                  4. Execution in  Counterparts.  This Amendment may be executed
in separate counterparts,  each of which when so executed and delivered shall be
deemed to be an original and all of which taken  together  shall  constitute one
and the same instrument.

                  5.  Governing  Law.  This  Amendment  shall be governed by and
construed in accordance with the internal laws of the State of New York.

                  6.       Headings.  Section headings  in  this  Amendment  are
included  herein  for  convenience of reference only and shall not  constitute a
part of this Amendment for any other purpose.


                     [Signatures are on the Following Page]


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                  IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their respective officers and officer of the General
Partner, as the case may be, hereunto duly authorized as of the date first above
written.


                                             HOMESTEAD VILLAGE INCORPORATED


                                             By:___________________________
                                              Name:
                                              Title:

                                             COMMERZBANK AG, New York Branch,
                                               as Agent


                                             By:________________________________
                                              Name:
                                              Title:


                                             By:________________________________
                                              Name:
                                              Title:

                                             COMMERZBANK AG, Los Angeles Branch,
                                              as a lender


                                             By:________________________________
                                              Name:
                                              Title:


                                             By:________________________________
                                              Name:
                                              Title:

                                           WELLS FARGO BANK NATIONAL ASSOCIATION
                                             as a lender

                                             By:________________________________
                                              Name:
                                              Title: