<PAGE>
 
                      GUARANTY OF COMPLETION AND PAYMENT           Exhibit 10.10
                      ----------------------------------          


     THIS GUARANTY OF COMPLETION AND PAYMENT (this "Guaranty") is made and
entered into as of the 17th day of October, 1996, by (i) HOMESTEAD VILLAGE
INCORPORATED ("Guarantor"), to and for the benefit of (ii) SECURITY CAPITAL
ATLANTIC INCORPORATED, a Maryland corporation ("Atlantic").

                                    RECITALS
                                    --------

     A.   Pursuant to that certain Funding Commitment Agreement (the "Funding
Agreement") dated as of the date hereof, by and among Guarantor, Atlantic and
Atlantic Homestead Village Limited Partnership, a Delaware limited partnership,
Atlantic has agreed to loan up to an aggregate maximum amount of $98,028,471
(the "Loan") to Guarantor and/or any Subsidiary (as such term is in the Funding
Agreement) for the purpose of acquiring and developing the Projects (as defined
in the Funding Agreement).  The Loan is (i) evidenced by certain Amended and
Restated Promissory Notes in the aggregate face amount of the Loan (which notes,
together with any other notes delivered from time to time to evidence the Loan,
and all amendments and restatements to any of such notes are collectively called
the "Notes"), and (ii) secured by various Security Documents (as defined in the
Funding Agreement).

     B.   All terms used herein, but not defined herein, shall have the meanings
ascribed to them in the Funding Agreement.

     C.   Atlantic is willing to advance the funds of the Loan pursuant to the
Funding Agreement only on condition that the Guarantor deliver this Guaranty.

     D.   Guarantor has a direct or indirect financial interest in each
Subsidiary, and is therefore benefitted by the making of the Loan.

                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of these Recitals, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby covenants and agrees as follows:

     1.   Recitals.  The foregoing Recitals are hereby incorporated herein and
made a substantive part hereof.
<PAGE>
 
     2.   Completion Guaranty.

          (a)  Construction Matters.  So long as Atlantic disburses the proceeds
of the Loan in accordance with the terms and provisions of the Funding
Agreement, Guarantor irrevocably and unconditionally fully guarantees to
Atlantic the following:  (a) payment of all costs of the design, engineering and
construction of each Project (including the furnishing thereof) undertaken by a
Subsidiary; and (b) completion of construction of each Project undertaken by a
Subsidiary (including the furnishing thereof) substantially in accordance with
the Plans for such Project and in compliance with applicable codes, ordinances,
laws, statutes, rules and regulations of any governmental authority having
jurisdiction.

          (b)  Excess Costs.  In the event that the actual cost of the design,
engineering and construction of a Project undertaken by a Subsidiary exceeds the
amount available for such Project from the Loan proceeds, including any Owner's
Contingency in the Project Budget for such Project, Guarantor shall pay such
costs ("Excess Costs") as and when they become due and payable. It is understood
that Guarantor's obligation under the preceding sentence is not subject to the
subject Subsidiary's initial obligation to do so pursuant to the terms of the
Funding Agreement.

          (c)  Completion.  For the purposes of this Guaranty, the construction
of the Improvements shall be deemed to have been completed at such time as Final
Completion has occurred pursuant to the terms of the Funding Agreement.

          (d)  Indemnification of Atlantic.  Guarantor shall indemnify and hold
Atlantic and its agents, officers and employees harmless from and against all
claims, expenses, loss and liability of any and every kind other than those
arising out of the gross negligence or willful misconduct of Atlantic,
including, without limitation, attorneys' fees, arising out of or in connection
with the design, engineering, construction and completion of each Project and,
so long as Atlantic disburses the proceeds of the Loan in accordance with the
terms and provisions of the Funding Agreement, shall protect each Project from
any mechanic's, materialmen's or similar liens that may be filed against such
Project.  Guarantor shall not have any right of recourse against Atlantic or its
agents and employees by reason of any action such parties may take or omit to
take under the provisions of this Guaranty or under the provisions of the
Funding Agreement.

          (e)  Completion of Construction.  If Guarantor shall fail to cause
Final Completion of a Project undertaken by a Subsidiary with Loan Proceeds to
be achieved, or shall otherwise fail to pursue diligently the performance of the
obligations of Guarantor hereunder, immediately upon receipt of a written demand
given to Guarantor by Atlantic in the manner herein provided, Atlantic, at its
option, shall have the right to cause the completion of the subject Project
either before or after or simultaneously with any other remedy of Atlantic
against Guarantor and/or such Subsidiary, with such changes or modifications in
the Plans and in any contracts and subcontracts relating thereto which Atlantic
deems reasonably necessary, and to

                                      -2-
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expend such sums as Atlantic deems proper in its sole and unreviewable
discretion in order to so complete the same and to pay costs of construction of
the same theretofore incurred by the subject Subsidiary and/or Guarantor, and
Guarantor shall pay all such amounts (which constitute Excess Costs) with
interest thereon at the default rate provided for in the Notes calculated from
the date of Guarantor's default, to Atlantic upon demand.  So long as all
conditions precedent to Atlantic's obligations to make disbursements under the
Funding Agreement are satisfied, Atlantic shall continue to make disbursements
in the manner specified in the Funding Agreement.

          (f)  No Release.  The liability of Guarantor shall not be terminated,
affected, impaired or reduced in any way by any delay, failure or refusal of
Atlantic to exercise any right or remedy Atlantic may have against any person,
including, without limitation, any Subsidiary, any general contractor, any
subcontractor or any other guarantors liable for all or any part of the costs of
construction of a Project guaranteed herein by Guarantor, or by the release of
any Subsidiary from performance or observance of any of the agreements,
covenants, terms or conditions contained in the Funding Agreement, by the
operation of law or otherwise, whether made with or without notice to Guarantor.

          (g)  Termination of Completion Guaranty.  Satisfaction by Guarantor of
any liability hereunder at any one time with respect to payment of any amounts
required under this Guaranty shall not discharge Guarantor with respect to any
further amounts that may be required hereunder at any other time for the subject
Project or any other Project, it being the intent hereof that this Guaranty and
the obligations of Guarantor under this Guaranty shall be continuing and
irrevocable until the date on which Final Completion of all Subsidiary Projects
funded under the Funding Agreement has occurred and all costs and expenses
incurred in connection therewith have been paid in full (the "Completion
Termination Date").  Further, if at any time all or any part of any payment made
by Guarantor under or with respect to this Guaranty is or must be rescinded or
returned for any reason whatsoever (including, but not limited to, the
insolvency, bankruptcy or reorganization of a Subsidiary or Guarantor), then
Guarantor's obligations hereunder shall, to the extent of the payment rescinded
or returned, be deemed to have continued in existence, notwithstanding such
previous payment made by Guarantor or receipt of payment by Atlantic, and
Guarantor's obligations hereunder shall continue to be effective or be
reinstated, as the case may be, as to such payment, all as though such previous
payment by Guarantor had never been made.

          (h)  Modifications by Atlantic.  Guarantor acknowledges that any
Subsidiary may (and/or Atlantic may at any time enter into agreements with any
Subsidiary receiving Loan proceeds to) amend, modify or change the Plans
applicable to such Subsidiary's Project, any contracts or subcontracts relating
to the Project and/or the Funding Agreement or any other documents evidencing,
securing or relating to the Loan, or may at any time waive or release any
provision or provisions thereof and, with reference thereto, may make and enter
into all such agreements as such Subsidiary and/or Atlantic may deem proper or
desirable, without any notice

                                      -3-
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or further assent from Guarantor, and without in any manner impairing or
affecting this Guaranty or any of Atlantic's rights hereunder or any of
Guarantor's obligations hereunder.

     3.   Guaranty of Payment.  Guarantor also irrevocably and unconditionally
fully guarantees to Atlantic to pay and perform when due the Liabilities.
"Liabilities" shall mean all obligations of the Subsidiaries to Atlantic of any
kind whatsoever, howsoever created, arising or evidenced, whether pursuant to a
covenant, representation, warranty, indemnity or other agreement of kind,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due, under the Notes or any of the other Loan Documents.
Obligations under the Loan Documents shall include the obligation to pay
interest under the Notes executed by any Subsidiary, including interest at the
post-maturity or default rate.

     4.   Nature of the Guaranty.  This Guaranty shall be direct, immediate, and
primary, and is one of payment and performance and not just collection.
Atlantic shall be under no obligation to pursue its rights against a Subsidiary
or any other right or remedy available to it or pursue any collateral or
security before proceeding against Guarantor.  Guarantor expressly waives all
rights it may have now or in the future under any statute, or at common law, or
at law or in equity, or otherwise, including, without limitation, any rights
Guarantor may have to compel Atlantic to proceed in respect of the Guarantor's
obligation hereunder against any Subsidiary or any other party or against any
security for the payment or performance of Guarantor's obligation hereunder
before proceeding against, or as a condition to proceeding against, Guarantor.
All payments made pursuant to this Guaranty shall be made in United States
currency to Atlantic in immediately available funds, without reduction for any
recoupment, set-off, counterclaim or defense based upon any claim that Guarantor
may have against any Subsidiary.  The obligations and liabilities of Guarantor
pursuant to this Guaranty shall be unconditional, irrespective of the
genuineness, validity, priority, regularity or enforceability of the Notes or
the Loan Documents or any other circumstance which might otherwise constitute a
legal or equitable discharge of a surety or guarantor.

     5.   Rights of Atlantic to Deal With Subsidiaries and Guarantor.  Guarantor
hereby assents to any and all terms and agreements between Atlantic and any
Subsidiaries receiving Loan proceeds or between Atlantic and any person,
including Guarantor, who guarantees in whole or in part the payment or
performance of any Subsidiary's obligations with respect to Atlantic, and all
amendments and modifications thereof, whether presently existing or hereafter
made and whether oral or in writing.  Atlantic may, without compromising,
impairing, diminishing, or in any way releasing Guarantor from any obligations
hereunder and without notifying or obtaining the prior approval of Guarantor at
any time or from time to time:  (a) waive or excuse a default or defaults by a
Subsidiary or any person who has guaranteed in whole or in part any of such
Subsidiary's obligations, or delay in the exercise by Atlantic of any or all of
Atlantic's rights or remedies with respect to such default or defaults; (b)
grant extensions of time for payment or performance by a Subsidiary or any
person who has guaranteed in whole or in part any of such Subsidiary's
obligations, including Guarantor; (c) release, substitute, exchange, surrender
or add collateral of a Subsidiary or of any person who has guaranteed in

                                      -4-
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whole or in part any of such Subsidiary's obligations, or waive, release or
subordinate, in whole or in part, any lien or security interest held by Atlantic
on any real or personal property securing payment or performance, in whole or in
part, of a Subsidiary's obligations, including Guarantor; (d) release a
Subsidiary or any person who has guaranteed in whole or in part any of such
Subsidiary's obligations, including Guarantor; (e) apply payments made by a
Subsidiary, or by any person who has guaranteed in whole or in part, any of such
Subsidiary's obligations, including, without limitation, Guarantor, to any sums
owed by a Subsidiary to Atlantic, in any order or manner, or to any specific
account or accounts, as Atlantic may elect; (f) modify, change, renew, extend or
amend in any respect Atlantic's agreement with a Subsidiary or any person who
has guaranteed in whole or in part any of such Subsidiary's obligations,
including Guarantor, or any documents, instrument or writing embodying or
reflecting the same.

     6.   Waivers by Guarantor.  Guarantor waives (a) any and all notices
whatsoever with respect to this Guaranty or with respect to any Subsidiary's
obligations, including, but not limited to, notice of: (i) Atlantic's acceptance
hereof or Atlantic's intention to act, or Atlantic's action, in reliance hereon;
(ii) the present existence or future incurring of any Subsidiary's obligations
or any terms or amounts thereof or any change therein; (iii) default by a
Subsidiary or any surety, pledgor, grantor of security, guarantor or other
person who has guaranteed or secured in whole or in part such Subsidiary's
obligations, including Guarantor; and (iv) the obtaining or release of any
guaranty or surety agreement (in addition to this Guaranty), pledge, assignment
or other security for any of a Subsidiary's obligations; and (b) (i) presentment
and demand for payment of any sum due from a Subsidiary or any person who has
guaranteed in whole or in part any of such Subsidiary's obligations, including
Guarantor, and protest of nonpayment; (ii) notice of default by a Subsidiary or
any person who has guaranteed in whole or in part any of such Subsidiary's
obligations and notice of any extension of time for payment or performance under
the Note and any other indulgences granted by Atlantic to a Subsidiary; (iii)
demand for performance by a Subsidiary or any person who has guaranteed in whole
or in part any of such Subsidiary's obligations, including Guarantor; (iv) to
the fullest extent legally possible, any and all defenses which may now or
hereafter exist by virtue of any statutes of limitations, valuation, marshaling,
forbearance, redemption, exemption, appraisement, stay or moratorium laws or
other similar laws now or hereafter in effect; and (v) all other notices and
demands otherwise required by law which Guarantor may lawfully waive.  Atlantic
may (without notice to or consent of the Guarantor, and with or without
consideration) release, compromise, settle with or proceed against Guarantor
without releasing, lessening or affecting the obligations hereunder or under any
of the documents relating to the Loan.  It is the intention hereof that
Guarantor shall remain liable as a principal until payment in full of all
indebtedness and performance and observance of the terms, covenants and
conditions of the Notes and of each other Loan Document to be performed and
observed by any Subsidiaries, notwithstanding any act, omission or thing which
might otherwise operate as a legal or equitable discharge of Guarantor.
Guarantor shall be responsible for obtaining information regarding its
Subsidiaries, including, but not limited to, any changes in the business or
financial condition of any Subsidiaries, and Atlantic shall have no duty to
notify Guarantor of any such information.
  
                                      -5-
<PAGE>
 
     7.   Collection Expenses.  Guarantor shall pay to Atlantic, upon demand,
all losses, costs and expenses, including attorneys' fees, if collection is
referred to an attorney, that may be incurred by Atlantic in attempting to cause
satisfaction of Guarantor's liability under this Guaranty.

     8.   Invalidity of Any Part.  If any provision or part of any provision of
this Guaranty shall for any reason be held invalid, illegal or unenforceable in
any respect, such other provisions or the remaining part of any effective
provisions of this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision or part thereof had never been contained herein, but
only to the extent of its invalidity, illegality or unenforceability.

     9.   Impairment of Subrogation Rights.  Guarantor agrees that it shall have
no right of subrogation whatsoever with respect to the Notes, or to the monies
due or unpaid thereon, or to any collateral securing the same, unless and until
Atlantic shall have received payment in full of all sums due under the Notes and
the Loan Documents.  Guarantor waives and releases Atlantic from any damages
which Guarantor may incur as a result of any intentional or unintentional or
negligent action or inaction of Atlantic impairing, diminishing or destroying
any rights of subrogation which Guarantor may have upon payment of any of the
Subsidiaries' obligations.  Guarantor further agrees that all the present and
future indebtedness to Guarantor of any Subsidiary receiving Loan proceeds shall
be and hereby is subordinated, assigned and transferred to Atlantic.
Notwithstanding any other provision of this Guaranty to the contrary, if
Guarantor is or becomes an "insider" (as defined in Section 101 of the United
States Bankruptcy Code) with respect to its Subsidiaries or any other guarantor,
Guarantor irrevocably waives any and all rights of contribution,
indemnification, reimbursement or any similar right against any of its
Subsidiaries and/or such other guarantor (including any right of subrogation),
whether such rights arise under an express or implied contract or by operation
of law; it being the specific intention of this sentence that in any bankruptcy
or insolvency proceeding filed by or against such Subsidiary or any other
guarantor, no guarantor, including the Guarantor, shall be deemed a "creditor"
(as defined in Section 101 of the United State Bankruptcy Code) of any
Subsidiary or any other guarantor by reason of the existence of this Guaranty
with the result that the exercise of such rights would require Atlantic to
return to the bankruptcy estate of any Subsidiary or any other guarantor any
payments received by Atlantic on account of the obligations guaranteed hereby.
Subject to the limitations set forth in the preceding sentence, until all of the
obligations guaranteed hereby have been duly and punctually performed to the
satisfaction of Atlantic, Guarantor shall not be subrogated to any right of
Atlantic against any Subsidiary, any other guarantor or any collateral, and any
moneys, property or other consideration received at any time by Guarantors from
any Subsidiary in connection with such rights of subrogation prior to the
performance by such Subsidiary of all the obligations guaranteed hereby shall be
held in trust for Atlantic and shall be paid or transferred to Atlantic upon
demand therefor.  Guarantor agrees not to assert any right of contribution
against any other guarantor of the obligations guaranteed hereby in any manner
that is inconsistent with the preceding two sentences.
 
                                      -6-
<PAGE>
 
     10.  Remedies Cumulative.  Each right, power and remedy of Atlantic under
this Guaranty, the Note, the Loan Documents or any other agreement or instrument
signed by a Subsidiary or Guarantor or under applicable laws shall be cumulative
and concurrent, and the exercise of any one or more of them shall not preclude
the simultaneous or later exercise by Atlantic of any or all such other rights,
powers or remedies at law or in equity or under this Guaranty.  No failure or
delay by Atlantic to insist upon the strict performance of any one or more of
its rights, powers or remedies consequent upon a breach thereof or default
hereunder shall constitute a waiver thereof, or preclude Atlantic from
exercising any such right, power or remedy.  By accepting partial payment on
this Guaranty, Atlantic shall not be deemed to have waived the right either to
require prompt payment when due and payment of all other amounts payable under
this Guaranty or to exercise any rights and remedies available to it in order to
collect all such other amounts.  No modification, change, waiver or amendment of
this Guaranty shall be deemed to be made by Atlantic unless in writing and
signed by Atlantic, and each such waiver, if any, shall apply only with respect
to the specific instance involved and only to the extent expressly provided
therein.

     11.  No Action By Atlantic to Impair Enforcement of Rights Hereunder.  No
act of commission or omission of any kind or at any time upon the part of
Atlantic in respect of any matter whatsoever, shall in any way affect or impair
its right to enforce any right, power or benefit under this Guaranty, and no
set-off, counterclaim, reduction or diminution of an obligation, or any defense
of any kind or nature which Guarantor has or may have against Atlantic, shall be
available to Guarantor or against Atlantic.

     12.  Limitation of Liability of Subsidiary Not to Affect Liability of the
Guarantor Hereunder.  Without limiting the foregoing, it is specifically
understood that any impairment, modification, limitation or discharge of the
liability of any Subsidiary under any Note or any other Loan Document arising
out of or by virtue of any act of bankruptcy, or any arrangement, reorganization
or similar proceeding for relief of debtors under Federal or state law initiated
by or against such Subsidiary shall not affect, impair, modify, limit or
discharge the liability of Guarantor hereunder in any manner whatsoever, and
this Guaranty shall remain and continue in full force and effect.  It is the
intent and purpose of this Guaranty that Guarantor shall and do hereby waive all
rights and benefits which might accrue to them by reason of any such
proceedings, and Guarantor agrees that it shall be liable for the full amount of
the obligations guaranteed by them hereby, irrespective of, and without regard
to, any impairment, modification, limitation or discharge of the liability of
such Subsidiary under such Note or any or all of the Loan Documents that may
result from any such proceedings.

     13.  Independent Obligations of Guarantor.  The obligations of Guarantor
hereunder are irrevocable and are independent of the Loan or other obligations
of any Subsidiary, and a separate action or actions may be brought and
prosecuted against Guarantor, regardless of whether any action is brought
against such Subsidiary or whether such Subsidiary is joined in any such action
or actions.
 
                                      -7-
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     14.  Choice of Law; Consent to Jurisdiction; Venue.  This Guaranty, having
been executed, sealed and delivered in the State of New Mexico shall be
construed, interpreted and enforced under the internal laws (and not the laws
pertaining to conflicts or choice of law) of the State of New Mexico.  Should
any provision of this Guaranty require judicial interpretation, it is agreed
that the court interpreting or considering same shall not apply the presumption
that the terms hereof shall be more strictly construed against a party by reason
of the rule or conclusion that a document should be construed more strictly
against the party who itself or through its agent prepared the same, it being
agreed that all parties hereto have participated in the preparation of this
Guaranty and that each party consulted (or had the opportunity to consult) legal
counsel before the execution of this Guaranty.  Guarantor consents to the
jurisdiction of the courts of any county in the State of New Mexico selected by
Atlantic and to the jurisdiction of any United States District Court in the
State of New Mexico, if jurisdiction exists.

     15.  Counterparts.  This Guaranty may be executed in any number of
counterparts, each of which shall be considered an original for all purposes;
provided, however, that all such counterparts shall together constitute one and
the same instrument.

     16.  Binding Nature.  This Guaranty shall inure to the benefit of, and be
enforceable by, Atlantic and its successors and assigns, and shall be binding
upon and enforceable against the Guarantor and its legal and personal
representatives, heirs, successors and assigns.  This Guaranty may be assigned
by Atlantic, or any other holder of the Note at any time or from time to time.

     17.  Joint and Several Nature.  In the event there exists more than one
Guarantor, all obligations, responsibilities, warranties, representations and
liabilities hereunder shall be joint and several.

     18.  Notices.  Any and all notices or other communications hereunder shall
be deemed to have been duly given if in writing and if transmitted by hand-
delivery, Federal Express, Express Mail or other nationally recognized overnight
courier or by certified mail, return receipt requested, as follows:

     To Atlantic:                Security Capital Atlantic Incorporated
                                 7777 Market Center Avenue
                                 El Paso, Texas  79912
                                 Attention:  James C. Potts

     To Guarantor:               Homestead Village Incorporated
                                 125 Lincoln Avenue, Suite 300
                                 Santa Fe, New Mexico  87501
                                 Attention:  David C. Dressler, Jr.

                                      -8-
<PAGE>
 
     With a copy to:             Mayer, Brown & Platt
                                 141 East Palace Avenue
                                 Santa Fe, New Mexico  87501
                                 Attention:  Caroline Brower, Esquire

or to such other address as either party may furnish to the other by notice in
accordance with this Paragraph 18.

     19.  Tense; Gender.  As used herein, the plural shall refer to and include
the singular, and the singular the plural, and the use of any gender shall
include and refer to any other gender.

     20.  Time of Essence.  Guarantor and Atlantic expressly agree that time
shall be of the essence in the performance of obligations of Guarantor under
this Guaranty.

     21.  Entire Agreement.  This Guaranty sets forth the final and entire
agreement between the parties hereto with respect hereto and is intended to be
an integration of all prior negotiations and understandings.  Atlantic and
Guarantor and their respective agents shall not be bound by any terms,
conditions, statements, warranties or representations, oral or written, express
or implied, not set forth or incorporated herein.

     22.  WAIVER OF JURY TRIAL, ETC.  GUARANTOR AND ATLANTIC (BY ITS ACCEPTANCE
HEREOF) WAIVES ANY RIGHT TO A TRIAL BY JURY OF ANY OR ALL ISSUES ARISING IN ANY
ACTION OR PROCEEDING BETWEEN GUARANTOR AND ATLANTIC OR THEIR SUCCESSORS OR
ASSIGNS, UNDER OR CONNECTED WITH THE LOAN, THIS GUARANTY OR ANY OF ITS
PROVISIONS OR ANY OF THE LOAN DOCUMENTS, AND AGREES THAT THE OBLIGATION
EVIDENCED BY THIS GUARANTY IS AN EXEMPTED TRANSACTION UNDER THE TRUTH-IN-LENDING
ACT, 15 U.S.C. SECTION 1601, ET SEQ.  THIS WAIVER IS KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY MADE BY ATLANTIC AND GUARANTOR, AND GUARANTOR ACKNOWLEDGES THAT
NEITHER ATLANTIC NOR ANY PERSON ACTING ON BEHALF OF ATLANTIC HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT.  GUARANTOR FURTHER ACKNOWLEDGES THAT IT HAS BEEN
OR HAD THE OPPORTUNITY TO BE REPRESENTED IN THE SIGNING OF THIS GUARANTY AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE
WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

                                      -9-
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     IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty of Completion
and Payment as of the date first set forth above.

                                         GUARANTOR:

 
                                         HOMESTEAD VILLAGE INCORPORATED
ATTEST:


/s/ Jeffrey A. Klopf                     By:/s/ David C. Dressler, Jr.
---------------------------                ---------------------------
Jeffrey A. Klopf, Secretary              Its:
                                             --------------------------
[Corporate Seal]


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