----

----

| Delaware                                                       | 47-0810385                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 1004 Farnam Street, Suite 400                                  | Omaha, Nebraska 68102                |
| (Address of principal executive offices)                       | (Zip Code)                           |
|                                                           |                                 |
| (402) 444-1630                                                 |
| (Registrant's telephone number, including area code)           |

| Large accelerated filer o | Accelerated filer  x | Non- accelerated filer  o           | Smaller reporting company  o |
|--------------------------------|--------------------------------|-----------------------------------------------|----------------------------------------|
|                           |                           | (do not check if a smaller reporting company) |                                   |

----

----

| Item 1 | Financial Statements (Unaudited)                                                                                                                |   |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|   | Condensed Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009                                                                | 1      |
|   | Condensed Consolidated Statements of Operations for the three months ended March 31, 2010 and 2009                                              | 2      |
|   | Condensed Consolidated Statements of Partners’ Capital and Comprehensive Income (Loss) for the three months ended March 31, 2010 and 2009 | 3      |
|   | Condensed Statement of Cash Flows for the three months ended March 31, 2010 and 2009                                                            | 4      |
|   | Notes to Condensed Consolidated Financial Statements                                                                                            | 5      |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                     | 22     |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk                                                                                      | 32     |
| Item 4 | Controls and Procedures                                                                                                                         | 32     |

| Item 1A | Risk Factors | 33 |
|---------|--------------|----|
| Item 6  | Exhibits     | 33 |

| SIGNATURES |   | 34 |
|------------|--------|----|

| · | current maturities of our financing arrangements and our ability to renew or refinance such financing arrangements; |
|--------|---------------------------------------------------------------------------------------------------------------------|
| · | defaults on the mortgage loans securing our tax-exempt mortgage revenue bonds; |
|--------|--------------------------------------------------------------------------------|

| · | risks associated with investing in multifamily apartments, including changes in business conditions and the general economy; |
|--------|------------------------------------------------------------------------------------------------------------------------------|
| · | changes in short-term interest rates; |
|--------|---------------------------------------|

| · | our ability to use borrowings to finance our assets; |
|--------|------------------------------------------------------|
| · | current negative economic and credit market conditions; and |
|--------|-------------------------------------------------------------|

| · | changes in government regulations affecting our business. |
|--------|-----------------------------------------------------------|

----

Item 1.  Financial Statements.

CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                            |   | March 31, |        |   | December 31, |   |
|-------------------------------------------------------------------------------------------------|--------|-----------|-------------|--------|--------------|--------|
|                                                                                            |   | 2010      |        |   | 2009         |   |
| Assets                                                                                          |   |      |        |   |         |   |
| Cash and cash equivalents                                                                       |   | $         | 8,599,121   |   |         | $      | 17,280,535 |   |
| Restricted cash                                                                                 |   |      | 12,510,943  |   |         |   | 5,277,217 |   |
| Interest receivable                                                                             |   |      | 2,985,917   |   |         |   | 993,181 |   |
| Tax-exempt mortgage revenue bonds, at fair value                                                |   |      | 77,447,332  |   |         |   | 69,399,763 |   |
| Real estate assets:                                                                             |   |      |        |   |         |   |   |   |
| Land                                                                                            |   |      | 12,782,123  |   |         |   | 13,403,655 |   |
| Buildings and improvements                                                                      |   |      | 93,025,141  |   |         |   | 100,255,779 |   |
| Real estate assets before accumulated depreciation                                              |   |      | 105,807,264 |   |         |   | 113,659,434 |   |
| Accumulated depreciation                                                                        |   |      | (20,342,570 | )      |         |   | (21,868,541 | ) |
| Net real estate assets                                                                          |   |      | 85,464,694  |   |         |   | 91,790,893 |   |
| Other assets                                                                                    |   |      | 7,261,193   |   |         |   | 6,029,131 |   |
| Total Assets                                                                                    |   | $         | 194,269,200 |   |         | $      | 190,770,720 |   |
|                                                                                            |   |      |        |   |         |   |   |   |
| Liabilities                                                                                     |   |      |        |   |         |   |   |   |
| Accounts payable, accrued expenses and other liabilities                                        |   | $         | 3,064,495   |   |         | $      | 3,931,848 |   |
| Distribution payable                                                                            |   |      | 2,759,664   |   |         |   | 2,757,945 |   |
| Debt financing                                                                                  |   |      | 55,209,000  |   |         |   | 55,363,333 |   |
| Mortgages payable                                                                               |   |      | 30,072,162  |   |         |   | 30,116,854 |   |
| Total Liabilities                                                                               |   |      | 91,105,321  |   |         |   | 92,169,980 |   |
|                                                                                            |   |      |        |   |         |   |   |   |
| Commitments and Contingencies (Note 13)                                                         |   |      |        |   |         |   |   |   |
|                                                                                            |   |      |        |   |         |   |   |   |
| Partners' Capital                                                                               |   |      |        |   |         |   |   |   |
| General partner                                                                                 |   |      | 304,545     |   |         |   | 271,051 |   |
| Beneficial Unit Certificate holders                                                             |   |      | 133,968,842 |   |         |   | 130,482,881 |   |
| Unallocated deficit of Consolidated VIEs                                                        |   |      | (31,170,471 | )      |         |   | (32,215,697 | ) |
| Total Partners' Capital                                                                         |   |      | 103,102,916 |   |         |   | 98,538,235 |   |
| Noncontrolling interest (Note 5)                                                                |   |      | 60,963      |   |         |   | 62,505 |   |
| Total Capital                                                                                   |   |      | 103,163,879 |   |         |   | 98,600,740 |   |
| Total Liabilities and Capital                                                                   |   | $         | 194,269,200 |   |         | $      | 190,770,720 |   |
|                                                                                            |   |      |        |   |         |   |   |   |
| The accompanying notes are an integral part of the condensed consolidated financial statements. |   |

----

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                                           |   | For the Three Months Ended, |              |
|------------------------------------------------------------------------------------------------|--------|-----------------------------|-------------------|
|                                                                                           |   | March 31, 2010              |              |   | March 31, 2009 |   |
| Revenues:                                                                                      |   |                        |              |   |   |   |
|   Property revenues                                                                       |   | $                           | 3,521,493         |   |   | $ | 3,751,243 |   |
|   Mortgage revenue bond investment income                                                 |   |                        | 1,480,571         |   |   |   | 948,344 |   |
|   Other interest income                                                                   |   |                        | 96,932            |   |   |   | 34,015 |   |
| Total Revenues                                                                                 |   |                        | 5,098,996         |   |   |   | 4,733,602 |   |
| Expenses:                                                                                      |   |                        |              |   |   |   |   |   |
|   Real estate operating (exclusive of items shown below)                                  |   |                        | 2,055,774         |   |   |   | 2,360,643 |   |
|   Depreciation and amortization                                                           |   |                        | 1,197,017         |   |   |   | 1,580,872 |   |
|   Interest                                                                                |   |                        | 992,120           |   |   |   | 1,190,869 |   |
|   General and administrative                                                              |   |                        | 508,235           |   |   |   | 576,762 |   |
| Total Expenses                                                                                 |   |                        | 4,753,146         |   |   |   | 5,709,146 |   |
| Income (loss) from continuing operations                                                       |   |                        | 345,850           |   |   |   | (975,544 | ) |
| Income from discontinued operations (including gain on bond redemption of $26,514,809 in 2009) |   |                        | -                 |   |   |   | 26,734,754 |   |
| Net income                                                                                     |   |                        | 345,850           |   |   |   | 25,759,210 |   |
|   Less: net loss attributable to noncontrolling interest                                  |   |                        | 1,542             |   |   |   | 3,860 |   |
| Net income - America First Tax Exempt Investors, L. P.                                         |   | $                           | 347,392           |   |   | $ | 25,763,070 |   |
|                                                                                           |   |                        |              |   |   |   |   |   |
| Net income allocated to:                                                                       |   |                        |              |   |   |   |   |   |
|   General Partner                                                                         |   | $                           | 10,386            |   |   | $ | 574,090 |   |
|   Limited Partners - BUC holders                                                          |   |                        | 1,028,168         |   |   |   | 1,645,450 |   |
|   Unallocated deficit of Consolidated VIEs                                                |   |                        | (691,162          | ) |   |   | 23,543,530 |   |
|   Noncontrolling interest                                                                 |   |                        | (1,542            | ) |   |   | (3,860 | ) |
|                                                                                           |   | $                           | 345,850           |   |   | $ | 25,759,210 |   |
|                                                                                           |   |                        |              |   |   |   |   |   |
| BUC holders' interest in net income per unit (basic and diluted):                              |   |
| Net income, basic and diluted, per unit                                                        |   | $                           | 0.05              |   |   | $ | 0.12 |   |
|                                                                                           |   |                        |              |   |   |   |   |   |
| Weighted average number of units outstanding,basic and diluted                                 |   |                        |   21,842,928 |   |   |   |   13,512,928 |   |
|                                                                                           |   |                        |              |   |   |   |   |   |
| The accompanying notes are an integral part of the consolidated financial statements.          |   |

----

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL AND COMPREHENSIVE INCOME (LOSS)

|                             |                                                      |   | General Partner |     |   | # of Units |       |   | Beneficial Unit Certificate Holders |   |        | Unallocated Deficit of Consolidated VIEs |   |   | Noncontrolling Interest |       |   | Total  |   |   | Accumulated Other Comprehensive Income (Loss) |   |
|----------------------------------|-----------------------------------------------------------|--------|-----------------|----------|--------|------------|------------|--------|-------------------------------------|--------|-------------|------------------------------------------|--------|--------|-------------------------|------------|--------|--------|--------|--------|-----------------------------------------------|--------|
|  Balance at January 1, 2010 |                                                      | $      | 271,051         |     |   |       | 21,842,928 |   |                                | $      | 130,482,881 |                                     |   | $      | (32,215,697             | )          |   | $      | 62,505 |   |                                          | $      | 98,600,740 |   |   | $ | (11,009,231 | ) |
|                             | Deconsolidation of VIEs - (Note 3)                        |   |            | 15,881   |   |       |       | -      |                                |   |        | 1,572,185                                |   |   |                    | 1,736,388  |   |   |   | -      |                                          |   |   | 3,324,454 |   |   |   | 1,588,066 |   |
|                             | Consolidation of VIEs - (Note 3)                          |   |            | 27,523   |   |       |       | -      |                                |   |        | 2,724,760                                |   |   |                    | -          |   |   |   | -      |                                          |   |   | 2,752,283 |   |   |   | 2,752,283 |   |
|                             | Distributions paid or accrued                             |   |            | (29,298  | )      |       |       | -      |                                |   |        | (2,730,366                               | )      |   |                    | -          |   |   |   | -      |                                          |   |   | (2,759,664 | ) |   |   | - |   |
|                             | Comprehensive income:                                     |   |            |     |   |       |       |   |                                |   |        |                                     |   |   |                    |       |   |   |   |   |                                          |   |   |   |   |   |   |   |   |
|                             | Net Income (loss)                                         |   |            | 10,386   |   |       |       | -      |                                |   |        | 1,028,168                                |   |   |                    | (691,162   | )      |   |   | (1,542 | )                                             |   |   | 345,850 |   |   |   | - |   |
|                             | Unrealized gain on securities                             |   |            | 9,002    |   |       |       | -      |                                |   |        | 891,214                                  |   |   |                    | -          |   |   |   | -      |                                          |   |   | 900,216 |   |   |   | 900,216 |   |
|                             | Comprehensive income before noncontrolling interest       |   |            |     |   |       |       |   |                                |   |        |                                     |   |   |                    |       |   |   |   |   |                                          |   |   | 1,246,066 |   |   |   | - |   |
|                             | Comprehensive loss attributable to noncontolling interest |   |            | -        |   |       |       | -      |                                |   |        | -                                        |   |   |                    | -          |   |   |   | -      |                                          |   |   | 1,542 |   |   |   | - |   |
|                             | Comprehensive income attributable to Partnership          |   |            | -        |   |       |       | -      |                                |   |        | -                                        |   |   |                    | -          |   |   |   | -      |                                          |   |   | 1,244,524 |   |   |   | - |   |
|  Balance at March 31, 2010  |                                                      | $      | 304,545         |     |   |       | 21,842,928 |   |                                | $      | 133,968,842 |                                     |   | $      | (31,170,471             | )          |   | $      | 60,963 |   |                                          | $      | 103,163,879 |   |   | $ | (5,768,666 | ) |
|                             |                                                      |   |            |     |   |       |       |   |                                |   |        |                                     |   |   |                    |       |   |   |   |   |                                          |   |   |   |   |   |   |   |   |
|                             |                                                      |   |            |     |   |       |       |   |                                |   |        |                                     |   |   |                    |       |   |   |   |   |                                          |   |   |   |   |   |   |   |   |
|                             |                                                      |   |            |     |   |       |       |   |                                |   |        |                                     |   |   |                    |       |   |   |   |   |                                          |   |   |   |   |   |   |   |   |
|                             |                                                      |   | General Partner |     |   | # of Units |       |   | Beneficial Unit Certificate Holders |   |        | Unallocated Deficit of Consolidated VIEs |   |   | Noncontrolling Interest |       |   | Total  |   |   | Accumulated Other Comprehensive Income (Loss) |   |
|  Balance at January 1, 2009 |                                                      | $      | 261,785         |     |   |       | 13,512,928 |   |                                | $      | 93,277,480  |                                     |   | $      | (52,711,654             | )          |   | $      | 67,716 |   |                                          | $      | 40,895,327 |   |   | $ | (16,857,807 | ) |
|                             | Noncontrolling interest contribution                      |   |            | -        |   |       |       | -      |                                |   |        | -                                        |   |   |                    | -          |   |   |   | 6,329  |                                          |   |   | 6,329 |   |   |   | - |   |
|                             | Distributions paid or accrued                             |   |            | (608,082 | )      |       |       | -      |                                |   |        | (1,824,245                               | )      |   |                    | -          |   |   |   | -      |                                          |   |   | (2,432,327 | ) |   |   | - |   |
|                             | Reclssification of Tier II income                         |   |            | 607,201  |   |       |       | -      |                                |   |        | (607,201                                 | )      |   |                    | -          |   |   |   | -      |                                          |   |   | - |   |   |   | - |   |
|                             | Comprehensive income:                                     |   |            |     |   |       |       |   |                                |   |        |                                     |   |   |                    |       |   |   |   |   |                                          |   |   |   |   |   |   |   |   |
|                             | Net Income (loss)                                         |   |            | 574,090  |   |       |       | -      |                                |   |        | 1,645,450                                |   |   |                    | 23,543,530 |   |   |   | (3,860 | )                                             |   |   | 25,759,210 |   |   |   | - |   |
|                             | Unrealized gain on securities                             |   |            | 38,358   |   |       |       | -      |                                |   |        | 3,797,436                                |   |   |                    | -          |   |   |   | -      |                                          |   |   | 3,835,794 |   |   |   | 3,835,794 |   |
|                             | Comprehensive income before noncontrolling interest       |   |            |     |   |       |       |   |                                |   |        |                                     |   |   |                    |       |   |   |   |   |                                          |   |   | 29,595,004 |   |   |   |   |   |
|                             | Comprehensive loss attributable to noncontolling interest |   |            | -        |   |       |       | -      |                                |   |        | -                                        |   |   |                    | -          |   |   |   | -      |                                          |   |   | 3,860 |   |   |   | - |   |
|                             | Comprehensive income attributable to Partnership          |   |            | -        |   |       |       | -      |                                |   |        | -                                        |   |   |                    | -          |   |   |   | -      |                                          |   |   | 29,598,864 |   |   |   | - |   |
|  Balance at March 31, 2009  |                                                      | $      | 873,352         |     |   |       | 13,512,928 |   |                                | $      | 96,288,920  |                                     |   | $      | (29,168,124             | )          |   | $      | 70,185 |   |                                          | $      | 68,064,333 |   |   | $ | (13,022,013 | ) |

----

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                                                             |   | For the years ended, |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|------------|
|                                                                                                                                             |   | March 31, 2010       |       |   | March 31, 2009 |   |
| Cash flows from operating activities:                                                                                                            |   |                 |       |   |   |   |
| Net income                                                                                                                                       |   | $                    | 345,850    |   |   | $ | 25,759,210 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:                                                                |   |                 |       |   |   |   |   |   |
| Depreciation and amortization expense                                                                                                            |   |                 | 1,197,017  |   |   |   | 1,580,872 |   |
| Non-cash loss on derivatives                                                                                                                     |   |                 | 115,030    |   |   |   | 453,366 |   |
| Gain on sale of discontinued operations                                                                                                          |   |                 | -          |   |   |   | (26,514,809 | ) |
| Changes in operating assets and liabilities, net of effect of acquisitions                                                                       |   |                 |       |   |   |   |   |   |
| Increase in interest receivable                                                                                                                  |   |                 | (1,056,569 | ) |   |   | (372,422 | ) |
| Increase in other assets                                                                                                                         |   |                 | (1,030,635 | ) |   |   | (527,907 | ) |
| Decrease in accounts payable, accrued expenses and other liabilities                                                                             |   |                 | (386,872   | ) |   |   | (1,287,916 | ) |
| Net cash used by operating activities                                                                                                            |   |                 | (816,179   | ) |   |   | (909,606 | ) |
| Cash flows from investing activities:                                                                                                            |   |                 |       |   |   |   |   |   |
| Proceeds from sale of discontinued operations                                                                                                    |   |                 | -          |   |   |   | 32,000,000 |   |
| Increase in restricted cash                                                                                                                      |   |                 | (1,625,158 | ) |   |   | (189,709 | ) |
| Restricted cash - debt collateral                                                                                                                |   |                 | (4,675,919 | ) |   |   | (23,552,000 | ) |
| Capital expenditures                                                                                                                             |   |                 | (170,374   | ) |   |   | (178,536 | ) |
| Acquisition of partnerships, net of cash acquired                                                                                                |   |                 | -          |   |   |   | (729,964 | ) |
| Transfer of cash to unconsolidated VIE upon deconsolidation                                                                                      |   |                 | (88,949    | ) |   |   | - |   |
| Transfer of cash from consolidated VIE upon consolidation                                                                                        |   |                 | 1,977      |   |   |   | - |   |
| Principal payments received on tax-exempt mortgage revenue bonds                                                                                 |   |                 | 25,000     |   |   |   | 20,000 |   |
| Net cash (used) provided by investing activities                                                                                                 |   |                 | (6,533,423 | ) |   |   | 7,369,791 |   |
| Cash flows from financing activities:                                                                                                            |   |                 |       |   |   |   |   |   |
| Distributions paid                                                                                                                               |   |                 | (2,757,945 | ) |   |   | (2,432,327 | ) |
| Derivative settlements                                                                                                                           |   |                 | -          |   |   |   | (84,388 | ) |
| Increase in liabilities related to restricted cash                                                                                               |   |                 | 1,625,158  |   |   |   | 189,709 |   |
| Principal payments on debt financing and mortgage payable                                                                                        |   |                 | (199,025   | ) |   |   | (36,660 | ) |
| Net cash used by financing activities                                                                                                            |   |                 | (1,331,812 | ) |   |   | (2,363,666 | ) |
| Net (decrease) increase in cash and cash equivalents                                                                                             |   |                 | (8,681,414 | ) |   |   | 4,096,519 |   |
| Cash and cash equivalents at beginning of period, including cash and cash equivalents of discontinued operations of $0 and $164,866 respectively |   |                 | 17,280,535 |   |   |   | 7,361,140 |   |
| Cash and cash equivalents at end of period                                                                                                       |   | $                    | 8,599,121  |   |   | $ | 11,457,659 |   |
|                                                                                                                                             |   |                 |       |   |   |   |   |   |
| Cash paid during the period for interest                                                                                                         |   | $                    | 751,303    |   |   | $ | 1,048,282 |   |
| Liabilites assumed in the acquisition of partnerships                                                                                            |   | $                    | -          |   |   | $ | 6,506,329 |   |
| Distributions declared but not paid                                                                                                              |   | $                    | 2,759,664  |   |   | $ | 2,432,327 |   |
|                                                                                                                                             |   |                 |       |   |   |   |   |   |
| The accompanying notes are an integral part of the condensed consolidated financial statements.                                                  |   |                 |       |   |   |   |   |   |

----

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

----

----

----

|                             | Balance Sheet   |   | Carrying |       |   | Maximum Exposure |   |
|----------------------------------|-----------------|--------|----------|------------|--------|------------------|--------|
|                             | Classification  |   | Value    |       |   | to Loss          |   |
| Ashley Square Apartments         |            |   |     |       |   |             |   |
| Tax Exempt Mortgage Revenue Bond | Bond Investment |   | $        | 6,528,795  |   |             | $      | 6,500,000 |   |
| Property Loan                    | Other Asset     |   |     | 215,000    |   |             |   | 3,461,342 |   |
|                             |            |   | $        | 6,743,795  |   |             | $      | 9,961,342 |   |
|                             |            |   |     |       |   |             |   |   |   |
| Cross Creek Apartments           |            |   |     |       |   |             |   |   |   |
| Tax Exempt Mortgage Revenue Bond | Bond Investment |   | $        | 7,347,093  |   |             | $      | 5,871,004 |   |
| Property Loans                   | Other Asset     |   |     | 2,882,754  |   |             |   | 2,882,754 |   |
|                             |            |   | $        | 10,229,847 |   |             | $      | 8,753,758 |   |

----

|                                               |   | Partnership as of March 31, 2010 |        |   | Consolidated VIEs as of March 31, 2010 |   |        | Consolidation -Elimination as of March 31, 2010 |   |   | Total as of March 31, 2010 |   |
|----------------------------------------------------|--------|----------------------------------|-------------|--------|----------------------------------------|--------|-------------|-------------------------------------------------|--------|--------|----------------------------|--------|
| Assets                                             |   |                             |        |   |                                   |   |        |                                            |   |   |                       |   |
| Cash and cash equivalents                          |   | $                                | 8,476,150   |   |                                   | $      | 122,971     |                                            |   | $      | -                          |   |   | $ | 8,599,121 |   |
| Restricted cash                                    |   |                             | 7,788,162   |   |                                   |   | 4,722,781   |                                            |   |   | -                          |   |   |   | 12,510,943 |   |
| Interest receivable                                |   |                             | 8,013,381   |   |                                   |   | -           |                                            |   |   | (5,027,464                 | )      |   |   | 2,985,917 |   |
| Tax-exempt mortgage revenue bonds                  |   |                             | 127,290,158 |   |                                   |   | -           |                                            |   |   | (49,842,826                | )      |   |   | 77,447,332 |   |
| Real estate assets:                                |   |                             |        |   |                                   |   |        |                                            |   |   |                       |   |   |   |   |   |
| Land                                               |   |                             | 6,736,351   |   |                                   |   | 6,045,772   |                                            |   |   | -                          |   |   |   | 12,782,123 |   |
| Buildings and improvements                         |   |                             | 37,456,013  |   |                                   |   | 55,641,339  |                                            |   |   | (72,211                    | )      |   |   | 93,025,141 |   |
| Real estate assets before accumulated depreciation |   |                             | 44,192,364  |   |                                   |   | 61,687,111  |                                            |   |   | (72,211                    | )      |   |   | 105,807,264 |   |
| Accumulated depreciation                           |   |                             | (3,801,237  | )      |                                   |   | (16,541,333 | )                                               |   |   | -                          |   |   |   | (20,342,570 | ) |
| Net real estate assets                             |   |                             | 40,391,127  |   |                                   |   | 45,145,778  |                                            |   |   | (72,211                    | )      |   |   | 85,464,694 |   |
| Other assets                                       |   |                             | 20,001,558  |   |                                   |   | 1,518,044   |                                            |   |   | (14,258,409                | )      |   |   | 7,261,193 |   |
| Total Assets                                       |   | $                                | 211,960,536 |   |                                   | $      | 51,509,574  |                                            |   | $      | (69,200,910                | )      |   | $ | 194,269,200 |   |
|                                               |   |                             |        |   |                                   |   |        |                                            |   |   |                       |   |   |   |   |   |
| Liabilities                                        |   |                             |        |   |                                   |   |        |                                            |   |   |                       |   |   |   |   |   |
| Accounts payable, accrued expenses and other       |   | $                                | 1,331,357   |   |                                   | $      | 31,744,901  |                                            |   | $      | (30,011,763                | )      |   | $ | 3,064,495 |   |
| Distribution payable                               |   |                             | 2,759,664   |   |                                   |   | -           |                                            |   |   | -                          |   |   |   | 2,759,664 |   |
| Debt financing                                     |   |                             | 55,209,000  |   |                                   |   | -           |                                            |   |   | -                          |   |   |   | 55,209,000 |   |
| Mortgage payable                                   |   |                             | 30,072,162  |   |                                   |   | 54,404,000  |                                            |   |   | (54,404,000                | )      |   |   | 30,072,162 |   |
| Total Liabilities                                  |   |                             | 89,372,183  |   |                                   |   | 86,148,901  |                                            |   |   | (84,415,763                | )      |   |   | 91,105,321 |   |
| Partners' Capital                                  |   |                             |        |   |                                   |   |        |                                            |   |   |                       |   |   |   |   |   |
| General Partner                                    |   |                             | 304,545     |   |                                   |   | -           |                                            |   |   | -                          |   |   |   | 304,545 |   |
| Beneficial Unit Certificate holders                |   |                             | 122,222,845 |   |                                   |   | -           |                                            |   |   | 11,745,997                 |   |   |   | 133,968,842 |   |
| Unallocated deficit of Consolidated VIEs           |   |                             | -           |   |                                   |   | (34,639,327 | )                                               |   |   | 3,468,856                  |   |   |   | (31,170,471 | ) |
| Total Partners' Capital                            |   |                             | 122,527,390 |   |                                   |   | (34,639,327 | )                                               |   |   | 15,214,853                 |   |   |   | 103,102,916 |   |
| Noncontrolling interest                            |   |                             | 60,963      |   |                                   |   | -           |                                            |   |   | -                          |   |   |   | 60,963 |   |
| Total Capital                                      |   |                             | 122,588,353 |   |                                   |   | (34,639,327 | )                                               |   |   | 15,214,853                 |   |   |   | 103,163,879 |   |
| Total Liabilities and Partners' Capital            |   | $                                | 211,960,536 |   |                                   | $      | 51,509,574  |                                            |   | $      | (69,200,910                | )      |   | $ | 194,269,200 |   |

----

|                                               |   | Partnership as of December 31, 2009 |        |   | Consolidated VIEs as of December 31, 2009 |   |        | Consolidation -Elimination as of December 31, 2009 |   |   | Total as of December 31, 2009 |   |
|----------------------------------------------------|--------|-------------------------------------|-------------|--------|-------------------------------------------|--------|-------------|----------------------------------------------------|--------|--------|-------------------------------|--------|
| Assets                                             |   |                                |        |   |                                      |   |        |                                               |   |   |                          |   |
| Cash and cash equivalents                          |   | $                                   | 17,009,418  |   |                                      | $      | 271,117     |                                               |   | $      | -                             |   |   | $ | 17,280,535 |   |
| Restricted cash                                    |   |                                | 3,137,244   |   |                                      |   | 2,139,973   |                                               |   |   | -                             |   |   |   | 5,277,217 |   |
| Interest receivable                                |   |                                | 6,075,991   |   |                                      |   | -           |                                               |   |   | (5,082,810                    | )      |   |   | 993,181 |   |
| Tax-exempt mortgage revenue bonds                  |   |                                | 125,703,198 |   |                                      |   | -           |                                               |   |   | (56,303,435                   | )      |   |   | 69,399,763 |   |
| Real estate assets:                                |   |                                |        |   |                                      |   |        |                                               |   |   |                          |   |   |   |   |   |
| Land                                               |   |                                | 6,736,351   |   |                                      |   | 6,667,304   |                                               |   |   | -                             |   |   |   | 13,403,655 |   |
| Buildings and improvements                         |   |                                | 37,375,063  |   |                                      |   | 65,512,057  |                                               |   |   | (2,631,341                    | )      |   |   | 100,255,779 |   |
| Real estate assets before accumulated depreciation |   |                                | 44,111,414  |   |                                      |   | 72,179,361  |                                               |   |   | (2,631,341                    | )      |   |   | 113,659,434 |   |
| Accumulated depreciation                           |   |                                | (3,324,801  | )      |                                      |   | (18,543,740 | )                                                  |   |   | -                             |   |   |   | (21,868,541 | ) |
| Net real estate assets                             |   |                                | 40,786,613  |   |                                      |   | 53,635,621  |                                               |   |   | (2,631,341                    | )      |   |   | 91,790,893 |   |
| Other assets                                       |   |                                | 19,843,456  |   |                                      |   | 1,714,940   |                                               |   |   | (15,529,265                   | )      |   |   | 6,029,131 |   |
| Total Assets                                       |   | $                                   | 212,555,920 |   |                                      | $      | 57,761,651  |                                               |   | $      | (79,546,851                   | )      |   | $ | 190,770,720 |   |
|                                               |   |                                |        |   |                                      |   |        |                                               |   |   |                          |   |   |   |   |   |
| Liabilities and Owners' Equity                     |   |                                |        |   |                                      |   |        |                                               |   |   |                          |   |   |   |   |   |
| Accounts payable, accrued expenses and other       |   | $                                   | 1,618,741   |   |                                      | $      | 41,691,171  |                                               |   | $      | (39,378,064                   | )      |   | $ | 3,931,848 |   |
| Distribution Payable                               |   |                                | 2,757,945   |   |                                      |   | -           |                                               |   |   | -                             |   |   |   | 2,757,945 |   |
| Debt financing                                     |   |                                | 55,363,333  |   |                                      |   | -           |                                               |   |   | -                             |   |   |   | 55,363,333 |   |
| Mortgage payable                                   |   |                                | 30,116,854  |   |                                      |   | 57,764,026  |                                               |   |   | (57,764,026                   | )      |   |   | 30,116,854 |   |
| Total Liabilities                                  |   |                                | 89,856,873  |   |                                      |   | 99,455,197  |                                               |   |   | (97,142,090                   | )      |   |   | 92,169,980 |   |
| Partners' Capital                                  |   |                                |        |   |                                      |   |        |                                               |   |   |                          |   |   |   |   |   |
| General Partner                                    |   |                                | 271,051     |   |                                      |   | -           |                                               |   |   | -                             |   |   |   | 271,051 |   |
| Beneficial Unit Certificate holders                |   |                                | 122,365,491 |   |                                      |   | -           |                                               |   |   | 8,117,390                     |   |   |   | 130,482,881 |   |
| Unallocated deficit of Consolidated VIEs           |   |                                | -           |   |                                      |   | (41,693,546 | )                                                  |   |   | 9,477,849                     |   |   |   | (32,215,697 | ) |
| Total Partners' Capital                            |   |                                | 122,636,542 |   |                                      |   | (41,693,546 | )                                                  |   |   | 17,595,239                    |   |   |   | 98,538,235 |   |
| Noncontrolling interest                            |   |                                | 62,505      |   |                                      |   | -           |                                               |   |   | -                             |   |   |   | 62,505 |   |
| Total Capital                                      |   |                                | 122,699,047 |   |                                      |   | (41,693,546 | )                                                  |   |   | 17,595,239                    |   |   |   | 98,600,740 |   |
| Total Liabilities and Partners' Capital            |   | $                                   | 212,555,920 |   |                                      | $      | 57,761,651  |                                               |   | $      | (79,546,851                   | )      |   | $ | 190,770,720 |   |

----

|                                                          |   | Partnership        |      |   | Consolidated VIEs  |   |       | Consolidation-Elimination |   |   | Total              |   |
|---------------------------------------------------------------|--------|--------------------|-----------|--------|--------------------|--------|------------|---------------------------|--------|--------|--------------------|--------|
|                                                          |   | For the three |      |   | For the three |   |       | For the three        |   |   | For the three |   |
|                                                          |   | months ended       |      |   | months ended       |   |       | months ended              |   |   | months ended       |   |
|                                                          |   | March 31, 2010     |      |   | March 31, 2010     |   |       | March 31, 2010            |   |   | March 31, 2010     |   |
| Revenues:                                                     |   |               |      |   |               |   |       |                      |   |   |               |   |
| Property revenues                                             |   | $                  | 1,753,591 |   |               | $      | 1,767,902  |                      |   | $      | -                  |   |   | $ | 3,521,493 |   |
| Mortgage revenue bond investment income                       |   |               | 2,296,285 |   |               |   | -          |                      |   |   | (815,714           | )      |   |   | 1,480,571 |   |
| Other interest income                                         |   |               | 96,932    |   |               |   | -          |                      |   |   | -                  |   |   |   | 96,932 |   |
|      Total Revenues                  |   |               | 4,146,808 |   |               |   | 1,767,902  |                      |   |   | (815,714           | )      |   |   | 5,098,996 |   |
| Expenses:                                                     |   |               |      |   |               |   |       |                      |   |   |               |   |   |   |   |   |
| Real estate operating (exclusive of items shown below)        |   |               | 959,702   |   |               |   | 1,096,072  |                      |   |   | -                  |   |   |   | 2,055,774 |   |
| Depreciation and amortization                                 |   |               | 668,858   |   |               |   | 541,415    |                      |   |   | (13,256            | )      |   |   | 1,197,017 |   |
| Interest                                                      |   |               | 973,002   |   |               |   | 1,364,637  |                      |   |   | (1,345,519         | )      |   |   | 992,120 |   |
| General and administrative                                    |   |               | 508,235   |   |               |   | -          |                      |   |   | -                  |   |   |   | 508,235 |   |
|     Total Expenses                        |   |               | 3,109,797 |   |               |   | 3,002,124  |                      |   |   | (1,358,775         | )      |   |   | 4,753,146 |   |
| Net income (loss)                                             |   |               | 1,037,011 |   |               |   | (1,234,222 | )                         |   |   | 543,061            |   |   |   | 345,850 |   |
| Less: net loss attributable to noncontrolling interest        |   |               | 1,542     |   |               |   | -          |                      |   |   | -                  |   |   |   | 1,542 |   |
| Net income (loss) - America First Tax Exempt Investors, L. P. |   | $                  | 1,038,553 |   |               | $      | (1,234,222 | )                         |   | $      | 543,061            |   |   | $ | 347,392 |   |
|                                                          |   |               |      |   |               |   |       |                      |   |   |               |   |   |   |   |   |
|                                                          |   | Partnership        |      |   | Consolidated VIEs  |   |       | Consolidation-Elimination |   |   | Total              |   |
|                                                          |   | For the three |      |   | For the three |   |       | For the three        |   |   | For the three |   |
|                                                          |   | months ended       |      |   | months ended       |   |       | months ended              |   |   | months ended       |   |
|                                                          |   | March 31, 2009     |      |   | March 31, 2009     |   |       | March 31, 2009            |   |   | March 31, 2009     |   |
| Revenues:                                                     |   |               |      |   |               |   |       |                      |   |   |               |   |   |   |   |   |
| Property revenues                                             |   | $                  | 1,631,698 |   |               | $      | 2,119,545  |                      |   | $      | -                  |   |   | $ | 3,751,243 |   |
| Mortgage revenue bond investment income                       |   |               | 4,643,013 |   |               |   | -          |                      |   |   | (3,694,669         | )      |   |   | 948,344 |   |
| Other interest income                                         |   |               | 34,015    |   |               |   | -          |                      |   |   | -                  |   |   |   | 34,015 |   |
| Loss on the sale of security                                  |   |               | (127,495  | )      |               |   | -          |                      |   |   | 127,495            |   |   |   | - |   |
|      Total Revenues                  |   |               | 6,181,231 |   |               |   | 2,119,545  |                      |   |   | (3,567,174         | )      |   |   | 4,733,602 |   |
| Expenses:                                                     |   |               |      |   |               |   |       |                      |   |   |               |   |   |   |   |   |
| Real estate operating (exclusive of items shown below)        |   |               | 1,035,657 |   |               |   | 1,324,986  |                      |   |   | -                  |   |   |   | 2,360,643 |   |
| Property loan loss                                            |   |               | 74,999    |   |               |   | -          |                      |   |   | (74,999            | )      |   |   | - |   |
| Depreciation and amortization                                 |   |               | 1,005,711 |   |               |   | 589,615    |                      |   |   | (14,454            | )      |   |   | 1,580,872 |   |
| Interest                                                      |   |               | 1,272,422 |   |               |   | 1,510,844  |                      |   |   | (1,592,397         | )      |   |   | 1,190,869 |   |
| General and administrative                                    |   |               | 576,762   |   |               |   | -          |                      |   |   | -                  |   |   |   | 576,762 |   |
|     Total Expenses                        |   |               | 3,965,551 |   |               |   | 3,425,445  |                      |   |   | (1,681,850         | )      |   |   | 5,709,146 |   |
| Income (loss) from continuing operations                      |   |               | 2,215,680 |   |               |   | (1,305,900 | )                         |   |   | (1,885,324         | )      |   |   | (975,544 | ) |
| Income (loss) from discontinued operations                    |   |               | -         |   |               |   | 34,786,444 |                      |   |   | (8,051,690         | )      |   |   | 26,734,754 |   |
| Net income (loss)                                             |   |               | 2,215,680 |   |               |   | 33,480,544 |                      |   |   | (9,937,014         | )      |   |   | 25,759,210 |   |
| Less: net loss attributable to noncontrolling interest        |   |               | 3,860     |   |               |   | -          |                      |   |   | -                  |   |   |   | 3,860 |   |
| Net income (loss) - America First Tax Exempt Investors, L. P. |   | $                  | 2,219,540 |   |               | $      | 33,480,544 |                      |   | $      | (9,937,014         | )      |   | $ | 25,763,070 |   |

----

|                      |   | March 31, 2010              |       |
|---------------------------|--------|-----------------------------|------------|
| Description of Tax-Exempt |   | Cost adjusted for pay-downs |       |   | Unrealized Gain |   |   | Unrealized Loss |   |   | Estimated Fair Value |   |
| Mortgage Revenue Bonds    |   |                        |       |   |   |   |   |   |
|                      |   |                        |       |   |   |   |   |   |   |   |   |   |
| Ashley Square             |   | $                           | 6,500,000  |   |   | $ | 28,795 |   |   | $ | - |   |   | $ | 6,528,795 |   |
| Bella Vista               |   |                        | 6,740,000  |   |   |   | - |   |   |   | (867,505 | ) |   |   | 5,872,495 |   |
| Bridle Ridge              |   |                        | 7,885,000  |   |   |   | - |   |   |   | (1,142,221 | ) |   |   | 6,742,779 |   |
| Brookstone                |   |                        | 7,351,469  |   |   |   | 806,132 |   |   |   | - |   |   |   | 8,157,601 |   |
| Clarkson College          |   |                        | 5,911,665  |   |   |   | - |   |   |   | (566,077 | ) |   |   | 5,345,588 |   |
| Cross Creek               |   |                        | 5,871,004  |   |   |   | 1,476,089 |   |   |   |   |   |   |   | 7,347,093 |   |
| Runnymede                 |   |                        | 10,825,000 |   |   |   | - |   |   |   | (1,256,241 | ) |   |   | 9,568,759 |   |
| South Park                |   |                        | 11,919,860 |   |   |   | 597,232 |   |   |   | - |   |   |   | 12,517,092 |   |
| Woodland Park             |   |                        | 15,662,000 |   |   |   | - |   |   |   | (4,137,117 | ) |   |   | 11,524,883 |   |
| Woodlynn Village          |   |                        | 4,550,000  |   |   |   | - |   |   |   | (707,753 | ) |   |   | 3,842,247 |   |
|                      |   | $                           | 83,215,998 |   |   | $ | 2,908,248 |   |   | $ | (8,676,914 | ) |   | $ | 77,447,332 |   |
|                      |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                      |   | December 31, 2009           |       |
| Description of Tax-Exempt |   | Cost adjusted for pay-downs |       |   | Unrealized Gain |   |   | Unrealized Loss |   |   | Estimated Fair Value |   |
| Mortgage Revenue Bonds    |   |                        |       |   |   |   |   |   |
|                      |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bella Vista               |   | $                           | 6,740,000  |   |   | $ | - |   |   | $ | (946,161 | ) |   | $ | 5,793,839 |   |
| Bridle Ridge              |   |                        | 7,885,000  |   |   |   | - |   |   |   | (1,143,404 | ) |   |   | 6,741,596 |   |
| Brookstone                |   |                        | 7,351,469  |   |   |   | 379,508 |   |   |   | - |   |   |   | 7,730,977 |   |
| Clarkson College          |   |                        | 5,936,665  |   |   |   | - |   |   |   | (620,670 | ) |   |   | 5,315,995 |   |
| Gardens of DeCordova      |   |                        | 4,853,000  |   |   |   | - |   |   |   | (1,302,060 | ) |   |   | 3,550,940 |   |
| Gardens of Weatherford    |   |                        | 4,686,000  |   |   |   | - |   |   |   | (1,450,223 | ) |   |   | 3,235,777 |   |
| Runnymede                 |   |                        | 10,825,000 |   |   |   | - |   |   |   | (1,385,383 | ) |   |   | 9,439,617 |   |
| South Park                |   |                        | 11,919,860 |   |   |   | 427,699 |   |   |   | - |   |   |   | 12,347,559 |   |
| Woodland Park             |   |                        | 15,662,000 |   |   |   | - |   |   |   | (4,210,416 | ) |   |   | 11,451,584 |   |
| Woodlynn Village          |   |                        | 4,550,000  |   |   |   | - |   |   |   | (758,121 | ) |   |   | 3,791,879 |   |
|                      |   | $                           | 80,408,994 |   |   | $ | 807,207 |   |   | $ | (11,816,438 | ) |   | $ | 69,399,763 |   |

----

----

| Consolidated VIEs                                                                                     |                                                         |
|-------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|
| Property Name                                                                                         | Location                                                     |   | Number of Units |   |   | Land |   |   | Buildings and Improvements |   |   | Carrying Value at March 31, 2010 |   |
| Bent Tree Apartments                                                                                  | Columbia, SC                                                 |   |   | 232 |   |   |   | 986,000 |   |   |   | 11,497,809 |   |   | $ | 12,483,809 |   |
| Fairmont Oaks Apartments                                                                              | Gainsville, FL                                               |   |   | 178 |   |   |   | 850,400 |   |   |   | 8,312,874 |   |   |   | 9,163,274 |   |
| Gardens of DeCordova                                                                                  | Granbury, TX                                                 |   |   | 76 |   |   |   | 530,825 |   |   |   | 4,799,934 |   |   |   | 5,330,759 |   |
| Gardens of Weatherford                                                                                | Weatherford, TX                                              |   |   | 76 |   |   |   | 381,747 |   |   |   | 2,722,524 |   |   |   | 3,104,271 |   |
| Iona Lakes Apartments                                                                                 | Ft. Myers, FL                                                |   |   | 350 |   |   |   | 1,900,000 |   |   |   | 17,302,623 |   |   |   | 19,202,623 |   |
| Lake Forest Apartments                                                                                |         Daytona Beach, FL |   |   | 240 |   |   |   | 1,396,800 |   |   |   | 11,005,575 |   |   |   | 12,402,375 |   |
|                                                                                                  |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 61,687,111 |   |
| Less accumulated depreciation (depreciation expense of approximately $524,000 for first quarter, 2010 |                                                         |   |   | (16,541,333 | ) |
|                                                                                                  |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 45,145,778 |   |
|                                                                                                  |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated VIEs                                                                                     |                                                         |
| Property Name                                                                                         | Location                                                     |   | Number of Units |   |   | Land |   |   | Buildings and Improvements |   |   | Carrying Value at December 31, 2009 |   |
| Ashley Square                                                                                         | Des Moines, IA                                               |   |   | 144 |   |   |   | 650,000 |   |   |   | 7,602,048 |   |   | $ | 8,252,048 |   |
| Bent Tree Apartments                                                                                  | Columbia, SC                                                 |   |   | 232 |   |   |   | 986,000 |   |   |   | 11,484,397 |   |   |   | 12,470,397 |   |
| Fairmont Oaks Apartments                                                                              | Gainsville, FL                                               |   |   | 178 |   |   |   | 850,400 |   |   |   | 8,285,551 |   |   |   | 9,135,951 |   |
| Iona Lakes Apartments                                                                                 | Ft. Myers, FL                                                |   |   | 350 |   |   |   | 1,900,000 |   |   |   | 17,269,181 |   |   |   | 19,169,181 |   |
| Lake Forest Apartments                                                                                | Daytona Beach, FL                                            |   |   | 240 |   |   |   | 1,396,800 |   |   |   | 10,990,328 |   |   |   | 12,387,128 |   |
| Cross Creek Apartments                                                                                |         Beaufort, SC      |   |   | 144 |   |   |   | 844,103 |   |   |   | 7,289,210 |   |   |   | 8,133,313 |   |
|                                                                                                  |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 69,548,018 |   |
| Less accumulated depreciation (depreciation expense of approximately $2.6 million in 2009)            |                                                         |   |   |   |   |   |   | (18,543,740 | ) |
|                                                                                                  |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 51,004,278 |   |

|                                    |   |           |       |   |              |   |
|-----------------------------------------|--------|----------------|------------|--------|-------------------|--------|
|                                    |   | March 31, 2010 |       |   | December 31, 2009 |   |
| Property loan receivable                |   | $              | 13,254,913 |   |              | $      | 4,303,941 |   |
| Less: Allowance for property loans      |   |           | (8,521,400 | )      |              |   | (735,719 | ) |
| Judgment receivable                     |   |           | 710,690    |   |              |   | 713,543 |   |
| Less: Allowance for judgment receivable |   |           | (700,000   | )      |              |   | (700,000 | ) |
| Deferred financing costs - net          |   |           | 1,010,882  |   |              |   | 757,174 |   |
| Prepaid insurance                       |   |           | 624,785    |   |              |   | 607,980 |   |
| Prepaid other                           |   |           | 31,843     |   |              |   | - |   |
| Fair value of derivative contracts      |   |           | 25,477     |   |              |   | 140,507 |   |
| Assets held for sale                    |   |           | 375,000    |   |              |   | 375,000 |   |
| Other receivables                       |   |           | 449,003    |   |              |   | 566,705 |   |
|  Total Other Assets                |   | $              | 7,261,193  |   |              | $      | 6,029,131 |   |

----

----

|       |   |   |       |
|------------|--------|--------|------------|
| 2010       |   | $      | 69,036,086 |   |
| 2011       |   |   | 9,926,173  |   |
| 2012       |   |   | 30,780     |   |
| 2013       |   |   | 6,288,123  |   |
| Thereafter |   |   | -          |   |
| Total      |   | $      | 85,281,162 |   |

----

|   Date Purchased |   | Notional Amount |       |   | Effective Capped Rate |   | Maturity Date |   | Purchase Price    |   |   Counterparty |
|-----------------------|--------|-----------------|------------|--------|-----------------------|--------|---------------|--------|-------------------|--------|---------------------|
|                  |   |            |       |   |                  |
|                  |   |            |       |   |                  |   |          |   |              |   |                |
| June 18, 2009         |   | $               | 50,000,000 |   |                  |   | 4.65          | %      | December 31, 2010 |   | $                   | 554,000 |   | Bank of America |
|                  |   |            |       |   |                  |   |          |   |              |   |                |   |   |   |
| July 9, 2009          |   | $               | 12,793,570 |   |                  |   | 2.05          | %      | July 10, 2010     |   | $                   | 51,500 |   | JP Morgan |
|                  |   |            |       |   |                  |   |          |   |              |   |                |   |   |   |
| October 29, 2008      |   | $               | 4,480,000  |   |                  |   | 6.00          | %      | November 1, 2011  |   | $                   | 26,512 |   | Bank of America |

----

|                                                          |   | For the Three Months Ended |        |
|---------------------------------------------------------------|--------|----------------------------|-------------|
|                                                          |   | March 31, 2010             |        |   | March 31, 2009 |   |
|  Total revenue                                           |   |                       |        |   |   |   |
|  Tax-Exempt Bond Investments                             |   | $                          | 2,393,217   |   |   | $ | 4,549,533 |   |
|  MF Properties                                           |   |                       | 1,753,591   |   |   |   | 1,631,698 |   |
|  Consolidated VIEs                                       |   |                       | 1,767,902   |   |   |   | 2,119,545 |   |
|  Consolidation/eliminations                              |   |                       | (815,714    | ) |   |   | (3,567,174 | ) |
|  Total revenue                                           |   | $                          | 5,098,996   |   |   | $ | 4,733,602 |   |
|                                                          |   |                       |        |   |   |   |   |   |
|  Interest expense                                        |   |                       |        |   |   |   |   |   |
|  Tax-Exempt Bond Investments                             |   | $                          | 539,784     |   |   | $ | 1,022,620 |   |
|  MF Properties                                           |   |                       | 433,218     |   |   |   | 249,802 |   |
|  Consolidated VIEs                                       |   |                       | 1,364,637   |   |   |   | 1,510,844 |   |
|  Consolidation/eliminations                              |   |                       | (1,345,519  | ) |   |   | (1,592,397 | ) |
|  Total interest expense                                  |   | $                          | 992,120     |   |   | $ | 1,190,869 |   |
|                                                          |   |                       |        |   |   |   |   |   |
|  Depreciation expense                                    |   |                       |        |   |   |   |   |   |
|  Tax-Exempt Bond Investments                             |   | $                          | -           |   |   | $ | - |   |
|  MF Properties                                           |   |                       | 476,436     |   |   |   | 400,428 |   |
|  Consolidated VIEs                                       |   |                       | 523,299     |   |   |   | 578,366 |   |
|  Consolidation/eliminations                              |   |                       | -           |   |   |   | - |   |
|  Total depreciation expense                              |   | $                          | 999,735     |   |   | $ | 978,794 |   |
|                                                          |   |                       |        |   |   |   |   |   |
|  Income (loss) from continuing operations                |   |                       |        |   |   |   |   |   |
|  Tax-Exempt Bond Investments                             |   | $                          | 1,191,317   |   |   | $ | 2,601,522 |   |
|  MF Properties                                           |   |                       | (154,306    | ) |   |   | (385,842 | ) |
|  Consolidated VIEs                                       |   |                       | (1,234,222  | ) |   |   | (1,305,900 | ) |
|  Consolidation/eliminations                              |   |                       | 543,061     |   |   |   | (1,885,324 | ) |
|  Income (loss) from continuing operations                |   | $                          | 345,850     |   |   | $ | (975,544 | ) |
|                                                          |   |                       |        |   |   |   |   |   |
|  Net income (loss)                                       |   |                       |        |   |   |   |   |   |
|  Tax-Exempt Bond Investments                             |   | $                          | 1,191,317   |   |   | $ | 2,601,522 |   |
|  MF Properties                                           |   |                       | (152,764    | ) |   |   | (381,982 | ) |
|  Consolidated VIEs                                       |   |                       | (1,234,222  | ) |   |   | 33,480,544 |   |
|  Consolidation/eliminations                              |   |                       | 543,061     |   |   |   | (9,937,014 | ) |
| Net income (loss) - America First Tax Exempt Investors, L. P. |   | $                          | 347,392     |   |   | $ | 25,763,070 |   |
|                                                          |   |                       |        |   |   |   |   |   |
|                                                          |   | March 31,2010              |        |   | December 31, 2009 |   |
|  Total assets                                            |   |                       |        |   |   |   |   |   |
|  Tax-Exempt Bond Investments                             |   | $                          | 186,631,920 |   |   | $ | 186,493,868 |   |
|  MF Properties                                           |   |                       | 53,814,904  |   |   |   | 54,064,969 |   |
|  Consolidated VIEs                                       |   |                       | 51,509,574  |   |   |   | 57,761,651 |   |
|  Consolidation/eliminations                              |   |                       | (97,687,198 | ) |   |   | (107,549,768 | ) |
|  Total assets                                            |   | $                          | 194,269,200 |   |   | $ | 190,770,720 |   |
|                                                          |   |                       |        |   |   |   |   |   |
|  Total partners' capital                                 |   |                       |        |   |   |   |   |   |
|  Tax-Exempt Bond Investments                             |   | $                          | 126,038,292 |   |   | $ | 125,995,908 |   |
|  MF Properties                                           |   |                       | 6,096,237   |   |   |   | 6,250,542 |   |
|  Consolidated VIEs                                       |   |                       | (34,639,324 | ) |   |   | (41,693,546 | ) |
|  Consolidation/eliminations                              |   |                       | 5,607,711   |   |   |   | 7,985,331 |   |
|  Total partners' capital                                 |   | $                          | 103,102,916 |   |   | $ | 98,538,235 |   |

----

----

| ·   | Defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3 inputs are unobservable inputs for asset or liabilities. |
|--------------------|------------------------------------------------------------------|

----

|                                                                                                                                                                                  |   |                             |       |                                                           | Fair Value Measurements at March 31, 2010                      |                                         |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|----------------------------------------------------------------|----------------------------------------------------------------|----------------------------------------------|
|                                                                                                                                                                                  |   | Assets/Liabilities at Fair Value |       | Quoted Prices in Active Markets for Identical Assets (Level 1) |                                                           |                                         | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |
| Description                                                                                                                                                                           |   |                             |       |                                                           |                                                           |                                         |   |
| Assets                                                                                                                                                                                |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |   |   |
|     Tax-exempt Mortgage Revenue Bonds                                                                                                                             |   | $                                | 77,447,332 |                                                           |                                                           |                                         | - |   |   |   | - |   |   | $ | 77,447,332 |   |
|      Interest Rate Derivatives                                                                                                                               |   |                             | 25,477     |                                                           |                                                           |                                         | - |   |   |   | - |   |   |   | 25,477 |   |
| Total Assets at Fair Value                                                                                                                                                            |   | $                                | 77,472,809 |                                                           |                                                           | $                                            | - |   |   | $ | - |   |   | $ | 77,472,809 |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           | For three months ended March 31, 2010        |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           | Fair Value Measurements Using Significant    |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           | Unobservable Inputs (Level 3)                |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           | Tax-exempt Mortgage Revenue Bonds            |   |   | Interest Rate Derivatives |   |   | Total |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |
| Beginning Balance January 1, 2010                                                                                                                                                     |   |                             |       |                                                           |                                                           | $                                            | 69,399,763 |   |   | $ | 140,507 |   |   | $ | 69,540,270 |   |
| VIE deconsolidation                                                                                                                                                                   |   |                             |       |                                                           |                                                           |                                         | 12,371,004 |   |   |   | - |   |   |   | 12,371,004 |   |
| VIE consolidation                                                                                                                                                                     |   |                             |       |                                                           |                                                           |                                         | (9,539,000 | ) |   |   | - |   |   |   | (9,539,000 | ) |
|      Total gains (losses) (realized/unrealized)                                                                                                              |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |   |   |   |   |   |   |
|           Included in earnings                                                                                                      |   |                             |       |                                                           |                                                           |                                         | - |   |   |   | (115,030 | ) |   |   | (115,030 | ) |
|           Included in other comprehensive income                                                                                    |   |                             |       |                                                           |                                                           |                                         | 5,240,565 |   |   |   | - |   |   |   | 5,240,565 |   |
|      Purchases, issuances and settlements                                                                                                                    |   |                             |       |                                                           |                                                           |                                         | (25,000 | ) |   |   | - |   |   |   | (25,000 | ) |
| Ending Balance March 31, 2010                                                                                                                                                         |   |                             |       |                                                           |                                                           | $                                            | 77,447,332 |   |   | $ | 25,477 |   |   | $ | 77,472,809 |   |
| Total amount of losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of March 31, 2010 |   |                             | $          | -                                                              |                                                           |                                         | $ | (115,030 | ) |   | $ | (115,030 | ) |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           | Fair Value Measurements at December 31, 2009 |   |
|                                                                                                                                                                                  |   | Assets/Liabilities at Fair Value |       |                                                           | Quoted Prices in Active Markets for Identical Assets (Level 1) |                                         |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |   |
| Description                                                                                                                                                                           |   |                             |       |                                                           |                                                           |                                         |   |   |
| Assets                                                                                                                                                                                |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |   |   |   |   |   |   |
|     Tax-exempt Mortgage Revenue Bonds                                                                                                                             |   | $                                | 69,399,763 |                                                           |                                                           |                                         | - |   |   |   | - |   |   | $ | 69,399,763 |   |
|      Interest Rate Derivatives                                                                                                                               |   |                             | 140,507    |                                                           |                                                           |                                         | - |   |   |   | - |   |   |   | 140,507 |   |
| Total Assets at Fair Value                                                                                                                                                            |   | $                                | 69,540,270 |                                                           |                                                           | $                                            | - |   |   | $ | - |   |   | $ | 69,540,270 |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           | For three months ended March 31, 2009        |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           | Fair Value Measurements Using Significant    |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           | Unobservable Inputs (Level 3)                |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           | Tax-exempt Mortgage Revenue Bonds            |   |   | Interest Rate Derivatives |   |   | Total |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |
| Beginning Balance January 1, 2009                                                                                                                                                     |   |                             |       |                                                           |                                                           | $                                            | 44,492,526 |   |   | $ | 302,849 |   |   | $ | 44,795,375 |   |
|      Total gains (losses) (realized/unrealized)                                                                                                              |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |   |   |   |   |   |   |
|           Included in earnings                                                                                                      |   |                             |       |                                                           |                                                           |                                         | - |   |   |   | (453,366 | ) |   |   | (453,366 | ) |
|           Included in other comprehensive income                                                                                    |   |                             |       |                                                           |                                                           |                                         | 3,835,794 |   |   |   | - |   |   |   | 3,835,794 |   |
|      Purchases, issuances and settlements                                                                                                                    |   |                             |       |                                                           |                                                           |                                         | (20,000 | ) |   |   | - |   |   |   | (20,000 | ) |
| Ending Balance March 31, 2009                                                                                                                                                         |   |                             |       |                                                           |                                                           | $                                            | 48,308,320 |   |   | $ | (150,517 | ) |   | $ | 48,157,803 |   |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |   |   |   |   |   |   |
| Total amount of losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of March 31, 2009 |   |                             |  $    |  -                                                        |                                                           |                                         |  $ |  (453,366 |  ) |   |  $ |  (453,366 | ) |
|                                                                                                                                                                                  |   |                             |       |                                                           |                                                           |                                         |   |   |   |   |   |   |

----

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

----

----

|   Property Name                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |     Location  |   | Number of Units |   |   | Number of Units Occupied |   |   | Percentage of Occupied Units as of March 31, |   |   | Economic Occupancy (1) for the period ended March 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|--------|-----------------|--------|--------|--------------------------|--------|--------|----------------------------------------------|--------|--------|-------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |   |            |   |   |                     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |   |            |   | 2010   |                     |   | 2009   |                                         |   | 2010   |                                                  |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |   |            |   |   |                     |   |   |                                         |   |   |                                                  |   |   |   |   |   |   |   |
| Non-Consolidated Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                    |   |            |   |   |                     |   |   |                                         |   |   |                                                  |   |   |   |   |   |   |   |
| Ashley Square Apartments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Des Moines, IA          |   |            | 144    |   |                     |   | 126    |                                         |   |   | 88                                                    | %      |   |   | 97 | % |   |   | 83 | % |   |   | 92 | % |
| Bella Vista Apartments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Gainesville, TX         |   |            | 144    |   |                     |   | 132    |                                         |   |   | 92                                                    | %      |   |   | 95 | % |   |   | 88 | % |   |   | 94 | % |
| Bridle Ridge Apartments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Greer, SC               |   |            | 152    |   |                     |   | 139    |                                         |   |   | 91                                                    | %      |   |   | 84 | % |   |   | 86 | % |   |   | 85 | % |
| Brookstone Apartments (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Wakegan, IL             |   |            | 168    |   |                     |   | 158    |                                         |   |   | 94                                                    | %      |   |   | n/a |   |   |   | 88 | % |   |   | n/a |   |
| Clarkson College                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Omaha, NE               |   |            | 142    |   |                     |   | 113    |                                         |   |   | 80                                                    | %      |   |   | 80 | % |   |   | 77 | % |   |   | 81 | % |
| Cross Creek Apartments (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Beaufort, SC            |   |            | 144    |   |                     |   | 143    |                                         |   |   | 99                                                    | %      |   |   | n/a |   |   |   | 81 | % |   |   | n/a |   |
| Runnymede Apartments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Austin, TX              |   |            | 252    |   |                     |   | 238    |                                         |   |   | 94                                                    | %      |   |   | 97 | % |   |   | 97 | % |   |   | 100 | % |
| South Park Ranch Apartments (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Austin, TX              |   |            | 192    |   |                     |   | 180    |                                         |   |   | 94                                                    | %      |   |   | n/a |   |   |   | 89 | % |   |   | n/a |   |
| Woodland Park (4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Topeka, KS              |   |            | 236    |   |                     |   | n/a    |                                         |   |   | n/a                                                   |   |   |   | n/a |   |   |   | n/a |   |   |   | n/a |   |
| Woodlynn Village                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Maplewood, MN           |   |            | 59     |   |                     |   | 56     |                                         |   |   | 95                                                    | %      |   |   | 92 | % |   |   | 97 | % |   |   | 96 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |   |            | 1,633  |   |                     |   | 1,285  |                                         |   |   | 92                                                    | %      |   |   | 93 | % |   |   | 88 | % |   |   | 93 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |   |            |   |   |                     |   |   |                                         |   |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated VIEs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                    |   |            |   |   |                     |   |   |                                         |   |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bent Tree Apartments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Columbia, SC            |   |            | 232    |   |                     |   | 221    |                                         |   |   | 95                                                    | %      |   |   | 89 | % |   |   | 79 | % |   |   | 79 | % |
| Fairmont Oaks Apartments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Gainsville, FL          |   |            | 178    |   |                     |   | 162    |                                         |   |   | 91                                                    | %      |   |   | 87 | % |   |   | 77 | % |   |   | 85 | % |
| Gardens of DeCordova (4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Granbury, TX            |   |            | 76     |   |                     |   | n/a    |                                         |   |   | n/a                                                   |   |   |   | n/a |   |   |   | n/a |   |   |   | n/a |   |
| Gardens of Weatherford (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Weatherford, TX         |   |            | 76     |   |                     |   | n/a    |                                         |   |   | n/a                                                   |   |   |   | n/a |   |   |   | n/a |   |   |   | n/a |   |
| Iona Lakes Apartments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Ft. Myers, FL           |   |            | 350    |   |                     |   | 312    |                                         |   |   | 89                                                    | %      |   |   | 80 | % |   |   | 67 | % |   |   | 64 | % |
| Lake Forest Apartments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Daytona Beach, FL       |   |            | 240    |   |                     |   | 210    |                                         |   |   | 88                                                    | %      |   |   | 89 | % |   |   | 71 | % |   |   | 80 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |   |            | 1,152  |   |                     |   | 905    |                                         |   |   | 91                                                    | %      |   |   | 87 | % |   |   | 72 | % |   |   | 75 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |   |            |   |   |                     |   |   |                                         |   |   |                                                  |
| MF Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |            |   |   |                     |   |   |                                         |   |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Churchland                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Chesapeake, VA          |   |            | 124    |   |                     |   | 116    |                                         |   |   | 94                                                    | %      |   |   | 93 | % |   |   | 92 | % |   |   | 87 | % |
| Crescent Village                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Cincinnati, OH          |   |            | 90     |   |                     |   | 80     |                                         |   |   | 89                                                    | %      |   |   | 88 | % |   |   | 77 | % |   |   | 77 | % |
| Eagle Ridge                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Erlanger, KY            |   |            | 64     |   |                     |   | 60     |                                         |   |   | 94                                                    | %      |   |   | 80 | % |   |   | 82 | % |   |   | 70 | % |
| Glynn Place                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Brunswick, GA           |   |            | 128    |   |                     |   | 96     |                                         |   |   | 75                                                    | %      |   |   | 84 | % |   |   | 63 | % |   |   | 74 | % |
| Greens of Pine Glen                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Durham, NC              |   |            | 168    |   |                     |   | 157    |                                         |   |   | 93                                                    | %      |   |   | 92 | % |   |   | 85 | % |   |   | 93 | % |
| Meadowview                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Highland Heights, KY    |   |            | 118    |   |                     |   | 102    |                                         |   |   | 86                                                    | %      |   |   | 89 | % |   |   | 78 | % |   |   | 87 | % |
| Postwoods I                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Reynoldsburg, OH        |   |            | 92     |   |                     |   | 75     |                                         |   |   | 82                                                    | %      |   |   | 96 | % |   |   | 81 | % |   |   | 86 | % |
| Postwoods II                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Reynoldsburg, OH        |   |            | 88     |   |                     |   | 80     |                                         |   |   | 91                                                    | %      |   |   | 98 | % |   |   | 84 | % |   |   | 92 | % |
| Willow Bend                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Columbus (Hilliard), OH |   |            | 92     |   |                     |   | 89     |                                         |   |   | 97                                                    | %      |   |   | 97 | % |   |   | 89 | % |   |   | 99 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |   |            | 964    |   |                     |   | 855    |                                         |   |   | 89                                                    | %      |   |   | 91 | % |   |   | 81 | % |   |   | 84 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |   |            |   |   |                     |   |   |                                         |   |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1)Economic occupancy is presented for the three months ended March 31, 2010 and 2009, and is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Actual occupancy is a point in time measure while economic occupancy is a measurement over the period presented, therefore, economic occupancy for a period may exceed the actual occupancy at any point in time. |                    |
| (2) This property is still under construction as of March 31, 2010, and therefore has no occupancy data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |
| (3)Previous period occupancy numbers are not available, as this is a new investment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                    |
| (4)Construction on these properties has been completed and the properties are in a lease up and stabilization period. As of March 31, 2010, Gardens of Decordova has leased 30 of a total of 76 units and Woodland Park has leased 110 of a total of 236 units.                                                                                                                                                                                                                                                                                                                    |                    |

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|                                                              |   | For the Three Months Ended March 31, 2010 |      |   | For the Three Months Ended March 31, 2009 |   |       | Dollar Change |   |
|-------------------------------------------------------------------|--------|-------------------------------------------|-----------|--------|-------------------------------------------|--------|------------|---------------|--------|
| Revenues:                                                         |   |                                      |      |   |                                      |   |       |          |   |
| Property revenues                                                 |   | $                                         | 3,521,493 |   |                                      | $      | 3,751,243  |          |   | $ | (229,750 | ) |
| Mortgage revenue bond investment income                           |   |                                      | 1,480,571 |   |                                      |   | 948,344    |          |   |   | 532,227 |   |
| Other interest income                                             |   |                                      | 96,932    |   |                                      |   | 34,015     |          |   |   | 62,917 |   |
|      Total Revenues                      |   |                                      | 5,098,996 |   |                                      |   | 4,733,602  |          |   |   | 365,394 |   |
|                                                              |   |                                      |      |   |                                      |   |       |          |   |   |   |   |
| Expenses:                                                         |   |                                      |      |   |                                      |   |       |          |   |   |   |   |
| Real estate operating (exclusive of items shown below)            |   |                                      | 2,055,774 |   |                                      |   | 2,360,643  |          |   |   | (304,869 | ) |
| Depreciation and amortization                                     |   |                                      | 1,197,017 |   |                                      |   | 1,580,872  |          |   |   | (383,855 | ) |
| Interest                                                          |   |                                      | 992,120   |   |                                      |   | 1,190,869  |          |   |   | (198,749 | ) |
| General and administrative                                        |   |                                      | 508,235   |   |                                      |   | 576,762    |          |   |   | (68,527 | ) |
|     Total Expenses                            |   |                                      | 4,753,146 |   |                                      |   | 5,709,146  |          |   |   | (956,000 | ) |
|                                                              |   |                                      |      |   |                                      |   |       |          |   |   |   |   |
| Income from continuing operations                                 |   |                                      | 345,850   |   |                                      |   | (975,544   | )             |   |   | 1,321,394 |   |
| Income from discontinued operations                               |   |                                      | -         |   |                                      |   | 26,734,754 |          |   |   | (26,734,754 | ) |
| Net income                                                        |   |                                      | 345,850   |   |                                      |   | 25,759,210 |          |   |   | (25,413,360 | ) |
| Less: net loss attributable to noncontrolling interest            |   |                                      | 1,542     |   |                                      |   | 3,860      |          |   |   | (2,318 | ) |
| Net income  - America First Tax Exempt Investors, L. P. |   | $                                         | 347,391   |   |                                      | $      | 25,763,070 |          |   | $ | (25,415,678 | ) |
|                                                              |   |                                      |      |   |                                      |   |       |          |   |   |   |   |

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|                                                   |   | For the Three Months Ended March 31, 2010 |      |   | For the Three Months Ended March 31, 2009 |   |      | Dollar Change |   |
|--------------------------------------------------------|--------|-------------------------------------------|-----------|--------|-------------------------------------------|--------|-----------|---------------|--------|
| Revenues:                                              |   |                                      |      |   |                                      |   |      |          |   |
| Property revenues                                      |   | $                                         | 1,753,591 |   |                                      | $      | 1,631,698 |          |   | $ | 121,893 |   |
| Mortgage revenue bond investment income                |   |                                      | 2,296,285 |   |                                      |   | 4,643,013 |          |   |   | (2,346,728 | ) |
| Other interest income                                  |   |                                      | 96,932    |   |                                      |   | 34,015    |          |   |   | 62,917 |   |
| Loss on sale of securities                             |   |                                      | -         |   |                                      |   | (127,495  | )             |   |   | 127,495 |   |
|    Total Revenues                       |   |                                      | 4,146,808 |   |                                      |   | 6,181,231 |          |   |   | (2,034,423 | ) |
| Expenses:                                              |   |                                      |      |   |                                      |   |      |          |   |   |   |   |
| Real estate operating (exclusive of items shown below) |   |                                      | 959,702   |   |                                      |   | 1,035,657 |          |   |   | (75,955 | ) |
| Property loan loss                                     |   |                                      | -         |   |                                      |   | 74,999    |          |   |   | (74,999 | ) |
| Depreciation and amortization                          |   |                                      | 668,858   |   |                                      |   | 1,005,711 |          |   |   | (336,853 | ) |
| Interest                                               |   |                                      | 973,002   |   |                                      |   | 1,272,422 |          |   |   | (299,420 | ) |
| General and administrative                             |   |                                      | 508,235   |   |                                      |   | 576,762   |          |   |   | (68,527 | ) |
|    Total Expenses                       |   |                                      | 3,109,797 |   |                                      |   | 3,965,551 |          |   |   | (855,754 | ) |
| Net income                                             |   |                                      | 1,037,011 |   |                                      |   | 2,215,680 |          |   |   | (1,178,669 | ) |
| Less: net loss attributable to noncontrolling interest |   |                                      | 1,542     |   |                                      |   | 3,860     |          |   |   | (2,318 | ) |
| Net Income - America First Tax Exempt Investors, L.P.  |   | $                                         | 1,038,553 |   |                                      | $      | 2,219,540 |          |   | $ | (1,180,987 | ) |
|                                                   |   |                                      |      |   |                                      |   |      |          |   |   |   |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | For the Three Months Ended March 31, 2010 |       |   | For the Three Months Ended March 31, 2009 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|------------|--------|-------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                      |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                      |       |   |
| Net income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                                         | 347,392    |   |                                      | $      | 25,763,070 |   |
| Net (income) loss related to VIEs and eliminations due to consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                      | 691,162    |   |                                      |   | (23,543,530 | ) |
| Net income before impact of VIE consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                                         | 1,038,554  |   |                                      | $      | 2,219,540 |   |
| Change in fair value of derivatives and interest rate derivative amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                      | 115,030    |   |                                      |   | 453,366 |   |
| Depreciation and amortization expense (Partnership only)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                      | 668,858    |   |                                      |   | 1,005,711 |   |
| Tier 2 Income distributable to the General Partner (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                      | -          |   |                                      |   | (574,890 | ) |
| Provision for loan loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                      | -          |   |                                      |   | 74,999 |   |
| Loss on bond sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                      | -          |   |                                      |   | 127,495 |   |
| CAD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $                                         | 1,822,442  |   |                                      | $      | 3,306,221 |   |
| Weighted average number of units outstanding, basic and diluted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                      | 21,842,928 |   |                                      |   | 13,512,928 |   |
| Net income, basic and diluted, per unit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                                         | 0.05       |   |                                      | $      | 0.12 |   |
| Total CAD per unit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                                         | 0.08       |   |                                      | $      | 0.24 |   |
| Distributions per unit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                                         | 0.1250     |   |                                      | $      | 0.1350 |   |
| (1) As described in Note 2 to the consolidated financial statements, Net Interest Income representing contingent interest and Net Residual Proceeds representing contingent interest (Tier 2 income) will be distributed 75% to the BUC holders and 25% to the General Partner. This adjustment represents the 25% of Tier 2 income due to the General Partner. For first quarter 2009, the early redemption of Woodbridge - Bloomington generated approximately $1.4 million and Woodbridge - Louisville generated approximately $917,000 of Tier 2 income. No Tier 2 income was earned during first quarter 2010. |   |

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Item 4.  Controls and Procedures.

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Item 1A. Risk Factors.

Item 6.  Exhibits.

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SIGNATURES

| Date:  May 10, 2010 | By: /s/ Mark Hiatt                                           |
|-------------------------------|--------------------------------------------------------------|
|                          |        Mark Hiatt              |
|                          |        Chief Executive Officer |   |

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