<PAGE>

                                FOURTH AMENDMENT


         THIS FOURTH AMENDMENT (the "Amendment") to the Credit Agreement
referred to below is entered into as of the 15th day of March, 2001, by and
among INSIGNIA FINANCIAL GROUP, INC. (FORMERLY KNOWN AS "INSIGNIA/ESG HOLDINGS,
INC."), a corporation organized under the laws of Delaware (the "Borrower"), THE
LENDERS SIGNATORY HERETO (collectively, the "Lenders"), FIRST UNION NATIONAL
BANK, as Administrative Agent, and LEHMAN COMMERCIAL PAPER INC., as Syndication
Agent (collectively, the "Agents").


                              STATEMENT OF PURPOSE

         The Borrower, the Lenders and the Agents are parties to a certain
Credit Agreement dated as of October 22, 1998, as heretofore amended by the
First Amendment dated March 19, 1999, by the Second Amendment dated July 21,
1999 and by the Third Amendment dated August 25, 2000 (as so amended, the
"Credit Agreement"), pursuant to which the Lenders have agreed to make, and have
made, certain Extensions of Credit to the Borrower.

         The Borrower has requested the Lenders to amend the Credit Agreement in
the respects provided in this Amendment.

         NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto hereby agree as follows:

         I.       AMENDMENT OF CREDIT AGREEMENT.
                  -----------------------------

                  (a)      Section 1.1 is hereby amended in the following
                           respects:

                           (i) By deleting the defined terms "Controlled
                  Co-Investment Entities" and "Uncontrolled Co-Investment
                  Entities."

                           (ii) By deleting the defined term "Co-Investment
                  Entity" in its entirety and inserting the following in lieu
                  thereof:

                                    "Co-Investment Entity" means any
                           corporation, limited liability company, partnership
                           or other form of entity (i) in which the Borrower or
                           a Subsidiary of the Borrower owns an equity interest
                           pursuant to a joint venture or similar arrangement
                           with one or more Persons who own more than fifty
                           percent (50%) of the ownership or other equity
                           interests in such entity, (ii) which has as its sole
                           business the ownership of real property, the
                           rendering of services and furnishing of products
                           customarily provided by landlords, or the ownership
                           of the debt (including the securitization of such
                           debt) of entities which own real property, and (iii)
                           which does not engage in any real estate development
                           activities for its own account.


<PAGE>

                  (b) Section 4.1(c)is hereby amended by deleting the first
         paragraph of such section in its entirety and inserting the following
         in lieu thereof:

                           (c) Applicable Margin. The Applicable Margin provided
                  for in Section 4.1(a) with respect to the Loans (the
                  "Applicable Margin") shall be determined by reference to the
                  Leverage Ratio in accordance with the following chart:

<TABLE>
<CAPTION>
                                                                Applicable Margin         Per Annum
                  Level             Leverage Ratio                    LIBOR +            Base Rate +

<S>                 <C>             <C>                                <C>                    <C>
                      I             Greater than 2.25 to 1.00          2.50%                  1.00%

                     II             Equal to or less than              2.25%                  .75%
                                    2.25 to 1.00 but greater
                                    than 1.50 to 1.00

                    III             Equal to or less than              2.00%                  .50%
                                    1.50 to 1.00
</TABLE>

                  (c) Section 4.3(a) is hereby amended by deleting the second
         paragraph thereof in its entirety and inserting the following in lieu
         thereof:

                           The Commitment Fee Rate provided for above shall
                  equal the percentage set forth below corresponding to the
                  Level at which the Applicable Margin is determined in
                  accordance with Section 4.1(c). Any change in the applicable
                  Level at which the Applicable Margin is determined shall
                  result in a corresponding and simultaneous change in the
                  Commitment Fee Rate.

                                    Level            Commitment Fee Rate

                                    I                         0.500%

                                    II                        0.500%

                                    III                       0.375%

                  (d) Section 10.4 is hereby amended by deleting the same in its
         entirety and inserting the following in lieu thereof:

                           SECTION 10.4 Limitations on Loans, Advances,
                  Investments and Acquisitions. Purchase, own, invest in or
                  otherwise acquire, directly or indirectly, any capital stock,
                  interests in any partnership or joint venture, evidence of
                  Debt or other obligation or security, substantially all or a
                  portion of the business or assets of any other Person or any
                  other


                                       2
<PAGE>

                  investment or interest whatsoever in any other Person, or make
                  or permit to exist, directly or indirectly, any loans,
                  advances or extensions of credit to, or any investment in cash
                  or by delivery of property in, any Person, or enter into,
                  directly or indirectly, any commitment or option in respect of
                  the foregoing except:

                                    (a) investments in Unrestricted Subsidiaries
                           and Affiliates existing on the date of the Fourth
                           Amendment to this Credit Agreement and the other
                           existing loans, advances and investments described on
                           Schedule 10.4;

                                    (b) investments in (i) marketable direct
                           obligations issued or unconditionally guaranteed by
                           the United States of America or any agency thereof
                           maturing within 120 days from the date of acquisition
                           thereof, (ii) marketable direct obligations issued by
                           any State of the United States or any political
                           subdivision of any such State or any public
                           instrumentality thereof maturing within 120 days from
                           the date of acquisition thereof and, at the time of
                           acquisition, having the highest or second highest
                           rating obtainable from S&P or Moody's; (iii)
                           commercial paper maturing within 120 days from the
                           date of the acquisition thereof, and, at the time of
                           acquisition, having a rating of A-1 or higher by S&P
                           or P-1 or higher by Moody's, (iv) certificates of
                           deposit maturing no more than 120 days from the date
                           of creation thereof issued by commercial banks
                           incorporated or licensed under the laws of the United
                           States of America, each having combined capital,
                           surplus and undivided profits of not less than
                           $500,000,000 and having a rating of A or better by a
                           nationally recognized rating agency; (v) time
                           deposits maturing no more than 30 days from the date
                           of creation thereof with commercial banks or savings
                           banks or savings and loan associations each having
                           membership either in the FDIC or the deposits of
                           which are insured by the FDIC and in amounts not
                           exceeding the maximum amounts of insurance
                           thereunder; (vi) eligible bankers' acceptances,
                           repurchase agreements and tax-exempt municipal bonds
                           having a maturity of less than one year and in each
                           case having a rating, or being the full recourse
                           obligation of a Person whose senior debt rating has a
                           rating, of A or higher by S&P or Moody's; or (vii)
                           any money market fund organized under the laws of the
                           United States or any State thereof;

                                    (c) investments in the form of acquisitions
                           of all or substantially all of the business or a line
                           of business (whether by the acquisition of capital
                           stock or other ownership interest, assets or any
                           combination thereof) of any other Person (or
                           investments, including loans and deposits, in
                           anticipation thereof), if (i) no


                                       3
<PAGE>

                           Default or Event of Default then exists or would be
                           created thereby, (ii) the Borrower has delivered to
                           the Agents and the Lenders a certificate of the Chief
                           Financial Officer or Treasurer of the Borrower (on
                           behalf of the Borrower) demonstrating pro forma
                           compliance with the covenants contained in Article IX
                           both before and after giving effect to such
                           acquisition, and (iii) any acquired Person is, in the
                           reasonable opinion of the Borrower, in a similar or
                           complementary line of business to that of the
                           Borrower or any of its Restricted Subsidiaries;

                                    (d) investments in or loans to Restricted
                           Subsidiaries;

                                    (e) investments in or loans to Unrestricted
                           Subsidiaries not engaged in real estate development
                           activities for their own account, provided that the
                           aggregate amount of such investments and loans,
                           together with all Contingent Obligations of the
                           Borrower and its Restricted Subsidiaries on account
                           of Debt of such Unrestricted Subsidiaries, shall at
                           no time exceed $10,000,000, which amount shall be in
                           addition to existing loans, advances and investments
                           described on Schedule 10.4;

                                    (f) (i) loans to officers and directors of
                           the Borrower and its Restricted Subsidiaries to
                           finance the purchase of newly issued capital stock of
                           the Borrower pursuant to its executive stock purchase
                           program and (ii) other loans to executive officers
                           and directors not to exceed (in the case of this
                           clause (ii)) an aggregate of $5,000,000 at any time
                           outstanding; and

                                    (g) investments in or loans to (i)
                           Co-Investment Entities and (ii) Unrestricted
                           Subsidiaries engaged in real estate development
                           activities for their own account (herein, "Real
                           Estate Unrestricted Subsidiaries"), provided that the
                           aggregate amount of such investments and loans under
                           this subsection (g), together with all Contingent
                           Obligations of the Borrower and its Restricted
                           Subsidiaries on account of Debt of Co-Investment
                           Entities and Real Estate Unrestricted Subsidiaries,
                           shall at no time exceed an aggregate of $100,000,000
                           plus gains and minus losses actually realized from
                           such investments and loans); and provided further
                           that, the aggregate of all loans to and investments
                           in and Contingent Obligations on account of the Debt
                           of Real Estate Unrestricted Subsidiaries shall at no
                           time exceed an aggregate of $35,000,000 (plus gains
                           and minus losses actually realized from such
                           investments and loans) plus amounts available but
                           unused for investments or loans under Section
                           10.4(e). (Amounts committed to capital calls shall
                           not be deemed to have been invested where the
                           Borrower has the sole


                                       4
<PAGE>

                           power to make the capital call and the call has not
                           in fact been made.)

                           (e) Schedule 10.4 to the Credit Agreement is deleted
                  in its entirety and the new Schedule 10.4 attached hereto is
                  inserted in lieu thereof.


         II. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Agents and the Lenders that:

                  (a) The execution and delivery of this Amendment by the
         Borrower and the Subsidiary Guarantors and the performance of the
         Credit Agreement, as amended and modified by this Amendment, and the
         other Loan Documents, do not and will not violate any law, rule or
         regulation, or constitute a breach of the Articles of Incorporation,
         Bylaws or corporate resolutions of the Borrower or any Subsidiary
         Guarantor or any agreement to which the Borrower or any Subsidiary
         Guarantor is a party or by which its or their assets are bound. The
         Borrower and each of the Subsidiary Guarantors has the power and
         authority and has taken all necessary action to authorize the
         execution, delivery and performance of this Amendment. The Credit
         Agreement, as amended and modified by this Amendment, and the other
         Loan Documents, constitute legal, valid and binding obligations of the
         Borrower and the Subsidiary Guarantors, enforceable in accordance with
         their respective terms.

                  (b) The representations and warranties of the Borrower and its
         Subsidiaries contained in Article VI of the Credit Agreement and in the
         other Loan Documents are true and correct in all material respects on
         and as of the date of this Amendment with the same effect as if made on
         and as of such date, except to the extent that such representations and
         warranties expressly relate to an earlier date (in which case such
         representations and warranties were true and correct in all material
         respects on and as of such earlier date).

                  (c) No Default or Event of Default exists.


         III.     GENERAL PROVISIONS.

         (a) Limited Amendment. Except as otherwise provided herein, the Credit
Agreement and each other Loan Document shall continue to be, and shall remain,
in full force and effect. This Amendment shall not be deemed (i) to be a waiver
of, or consent to, or a modification or amendment of, any other term or
condition of the Credit Agreement or of any other term or condition of the other
Loan Documents or (ii) to prejudice any other right or rights which the Agents
or any Lender may now have or may have in the future under or in connection with
the Credit Agreement or the other Loan Documents or any of the instruments or
agreements referred to therein, as the same may be amended or modified from time
to time.

         (b) Counterparts. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.



                                       5
<PAGE>

         (c) Definitions. All capitalized terms used and not defined herein
shall have the meanings given thereto in the Credit Agreement.

         (d) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         (e) Expenses. All expenses incurred in connection with the preparation
and negotiation of this Amendment and with the fulfillment of the requirements
hereunder shall be borne by the Borrower. If any documentary or recording tax
should be assessed or the affixing of any stamps be required by local, state or
federal governments, the Borrower shall pay the tax and cost of such stamps.

         (f) Conflicting Terms. In the event of any conflict or inconsistency
between the terms of this Amendment and the Credit Agreement and the other Loan
Documents, this Amendment shall control.

         (g) Cross-References. All references in the Credit Agreement, or in any
other Loan Document, to the terms "Credit Agreement" or "Agreement" or other
similar reference shall be deemed to refer to the Credit Agreement as amended or
modified by this Amendment. In addition, all notices, requests, certificates and
other instruments executed and delivered after the execution and delivery of
this Amendment may refer to the Credit Agreement without making specific
reference to this Amendment, but nevertheless all such references shall include
this amendment of the Credit Agreement unless the context otherwise requires.

         (h) Successors and Assigns. Whenever in this Amendment any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party and all covenants, provisions and
agreements by or on behalf of the Borrower which are contained in this Amendment
shall inure to the benefit of the successors and assigns of the Agents and
Lenders.

         IV. JOINDER OF THE GUARANTORS. The Subsidiary Guarantors join in the
execution and delivery of this Amendment solely for the purpose of evidencing
their consent thereto, and to acknowledge that the Guaranty Agreement remains in
full force and effect with respect to the Credit Agreement as amended hereby.


                           [Signature Pages to Follow]



                                       6
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.

                                BORROWER:

                                INSIGNIA FINANCIAL GROUP, INC.
                                (formerly known as Insignia/ESG Holdings, Inc.)


                                By:      /s/ Adam B. Gilbert
                                         ---------------------------------------
                                         Name:    Adam B. Gilbert
                                         Title:   Executive Vice President


                                LENDERS:

                                FIRST UNION NATIONAL BANK, as
                                Administrative Agent and Lender


                                By:      /s/ Douglas A. Nickel
                                         ---------------------------------------
                                         Name:    Douglas A. Nickel
                                         Title:   Vice President


                                LEHMAN COMMERCIAL PAPER INC., as Syndication
                                Agent and Lender


                                By:      /s/ Michael Swanson
                                         ---------------------------------------
                                         Name:    Michael Swanson
                                         Title:   Authorized Signatory




<PAGE>

                                LEHMAN BROTHERS BANKHAUS AG,
                                LONDON BRANCH


                                By:      /s/ Anil Lonawi
                                         ---------------------------------------
                                         Name:    Anil Lonawi
                                         Title:   Loans Administration


                                BANK AUSTRIA CREDITANSTALT
                                CORPORATE FINANCE, INC.


                                By:      /s/ Peter W. Wood
                                         ---------------------------------------
                                         Name:    Peter W. Wood
                                         Title:   Senior Vice President


                                By:      /s/ Anthony Mugno
                                         ---------------------------------------
                                         Name:    Anthony Mugno
                                         Title:   Vice President



<PAGE>



                                THE BANK OF NEW YORK


                                By:      /s/ Anthony I. Verzi
                                         ---------------------------------------
                                         Name:    Anthony I. Verzi
                                         Title:   Vice President


                                BARCLAYS BANK PLC


                                By:      /s/ Matthew Tuck
                                         ---------------------------------------
                                         Name:    Matthew Tuck
                                         Title:   Associate Director and VP


                                LASALLE BANK NATIONAL ASSOCIATION

                                By:      /s/ Michael J. Harris
                                         ---------------------------------------
                                         Name:    Michael J. Harris
                                         Title:   Vice President


                                NATIONAL CITY BANK


                                By:      /s/ Andrew J. Walshaw
                                         ---------------------------------------
                                         Name:    Andrew J. Walshaw
                                         Title:   Vice President


                                BANK OF AMERICA, N.A.


                                By:      /s/ John Grindley
                                         ---------------------------------------
                                         Name:    John Grindley
                                         Title:   Senior Vice President




<PAGE>



                                GUARANTORS:

                                BARNES MORRIS PARDOE & FOSTER
                                MANAGEMENT SERVICES, L.L.C.
                                By:      Insignia/ESG, Inc., its manager


                                By:      /s/ Adam B. Gilbert
                                         ---------------------------------------
                                         Name:    Adam B. Gilbert
                                         Title:   Executive Vice President


                                DOUGLAS ELLIMAN, LLC
                                By:      Insignia Residential Group, Inc.,
                                         Its Managing Member


                                By:      /s/ Adam B. Gilbert
                                         ---------------------------------------
                                         Name:    Adam B. Gilbert
                                         Title:   Executive Vice President


                                E.S.G. OPERATING CO., INC.
                                FC&S MANAGEMENT COMPANY
                                GOLDIE B. WOLFE & COMPANY
                                IPCG, INC.
                                INSIGNIA E C CORPORATION
                                INSIGNIA/ESG CAPITAL CORPORATION
                                INSIGNIA/ESG, INC.
                                INSIGNIA/ESG OF COLORADO, INC.
                                INSIGNIA COMMERCIAL INVESTMENTS GROUP, INC.
                                INSIGNIA COMMERCIAL MANAGEMENT, INC.
                                INSIGNIA RO, INC.
                                INSIGNIA RESIDENTIAL GROUP, INC.
                                REALTY ONE, INC.
                                S.I.A., INC.


                                By:      /s/ Adam B. Gilbert
                                         ---------------------------------------
                                         Name:    Adam B. Gilbert
                                         Title:   Executive Vice President





<PAGE>


                                  SCHEDULE 10.4
                    Existing Loans, Advances and Investments



















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