Exhibit 10.20
                    FIRST AMENDMENT TO SECOND AMENDED
                 AND RESTATED REVOLVING CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT (this "Amendment") made as of the 1st day of December,
1995, by and among WELLSFORD RESIDENTIAL PROPERTY TRUST, a Maryland real
estate investment trust ("Borrower"), THE FIRST NATIONAL BANK OF BOSTON,
individually ("FNBB"), the other lenders which are a party to this
Amendment, and THE FIRST NATIONAL BANK OF BOSTON, as Agent (the
"Agent").


                           W I T N E S E T H:

     WHEREAS, Borrower, Agent and the lenders a party thereto entered
into that certain Second Amended and Restated Revolving Credit Agreement
dated June 30, 1995 (the "Credit Agreement"); and

     WHEREAS, Borrower has requested that Agent, FNBB and the other
lenders which are a party hereto modify and amend certain terms and
provisions of the Credit Agreement;

     NOW, THEREFORE, for and in consideration of the sum of TEN and
NO/100 DOLLARS ($10.00), and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties
hereto do hereby covenant and agree as follows:

     1.   Definitions.  All the terms used herein which are not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.

     2.   Modification of the Credit Agreement.  Borrower, Banks and
Agent do hereby modify and amend the Credit Agreement as follows:

          (a)  By inserting the following definitions in Section 1.1 of
the Credit Agreement:

               "Bonds.  The Palomino Park Public Improvements
          Corporation Assessment Lien Revenue Bonds Series
          1995-$14,755,000.00.

               Bond Trustee.  United States Trust Company of New York or
          its permitted successors and assigns.

               LC Expiration Date.  The date upon which the Letter of
          Credit has expired by its terms and been returned to the
          Letter of Credit Issuer or has otherwise been surrendered to
          the Letter of Credit Issuer without possibility of any further
          drawing thereunder, and (i) all amounts owing to the Letter of
          Credit Issuer under the Reimbursement Agreement and the other
          Related Documents have been paid in full, and (ii) all
          Obligations hereunder with respect to the Letter of Credit or
          Loans made pursuant to Section 2.9 have been paid in full.

               LC Exposure.  The sum, as of any date of determination,
          of (i) the maximum amount which the Letter of Credit Issuer
          may be required to pay on such date or at any future time
          under the Letter of Credit (without regard to any amounts that
          as of such date of determination have been advanced and may be
          reinstated in the future), plus (ii) the aggregate amount of
          all payments that have been made by Letter of Credit Issuer
          with respect to the Letter of Credit but have not been
          reimbursed by the Borrower or any other person pursuant to the
          Reimbursement Agreement or the promissory notes executed
          pursuant thereto or converted into Loans pursuant to Section
          2.9 hereof.

               Letter of Credit Commitment.  With respect to each Bank
          the amount set forth on Schedule 1 hereto as the amount of
          such Bank's Lender of Credit Commitment to make or maintain
          advances with respect to the Letter of Credit, as the same may
          be changed from time to time in accordance with the terms of
          this Agreement.  The Letter of Credit Commitment shall equal
          $15,773,702.00 in the aggregate, except as such amount may be
          reduced from time to time in accordance with the terms of this
          Agreement; it being agreed that the Letter of Credit
          Commitment shall not exceed $15,773,702.00.

               Letter of Credit Commitment Percentage.  With respect to
          each Bank the percentage set forth on Schedule 1 hereto as
          such Bank's percentage of the aggregate Letter of Credit
          Commitments of all of the Banks, as the same may be changed
          from time to time in accordance with the terms of this
          Agreement.

               Palomino Park.  Palomino Park Public Improvements
          Corporation, a Colorado nonprofit corporation.

               Reimbursement Agreement.  The Letter of Credit
          Reimbursement Agreement among Palomino Park, Borrower and
          Letter of Credit Issuer, dated as of December 1, 1995,
          relating to the Letter of Credit, together with all
          amendments, modifications, restatements, supplements or
          consolidations thereof.

               Related Documents.  The "Related Documents," as such term
          is defined in the Reimbursement Agreement, together with all
          amendments, modifications, restatements, supplements or
          consolidations thereof.

               Revolver Commitment.  With respect to each Bank the
          amount set forth on Schedule 1 hereto as the amount of such
          Bank's Revolver Commitment to make or maintain Loans to the
          Borrower (other than with respect to advances relating to the
          Letter of Credit pursuant to Section 2.9), as the same may be
          changed from time to time in accordance with the terms of this
          Agreement. The Revolver Commitment shall equal $133,000,000.00
          in the aggregate, as such amount may be changed from time to
          time in accordance with the terms of this Agreement.

               Revolver Commitment Percentage.  With respect to each
          Bank, the percentage set forth on Schedule 1 hereto as such
          Bank's percentage of the aggregate Revolver Commitments of all
          of the Banks, as the same may be changed from time to time in
          accordance with the terms of this Agreement.

               Stated Amount.  The term "Stated Amount" shall have the
          meaning given to such term in Paragraph 2 of the Letter of
          Credit.";

          (b)  By deleting the definition of the terms "Commitment,"
"Commitment Percentage," "Letter of Credit," "Letter of Credit Request"
and "Loans" appearing in Section 1.1 of the Credit Agreement, and
inserting in lieu thereof the following:

               "Commitment.  With respect to each Bank the Letter of
          Credit Commitment and Revolver Commitment for such Bank, as
          the same may be changed from time to time in accordance with
          the terms of this Agreement.

               Commitment Percentage.  With respect to each Bank, the
          percentage set forth on Schedule 1 hereto as such Bank's
          percentage of the aggregate Letter of Credit Commitments and
          Revolver Commitments of all of the Banks.

               Letter of Credit.  The Irrevocable Letter of Credit No.
          967-95 in the stated amount of $15,773,702.00 issued by Letter
          of Credit Issuer, dated December 1, 1995, together with any
          replacements, substitutes, amendments, modifications or
          supplements thereto permitted by this Agreement.

               Letter of Credit Issuer.  Dresdner Bank AG, New York
          Branch, or any other branch or agency thereof which may issue
          a substitute Letter of Credit as permitted in the
          Reimbursement Agreement.

               Loans.  The aggregate Loans to be made by the Banks
          hereunder, including without limitation, Loans made pursuant
          to Section 2.1 and Section 2.9.";

          (c)  By deleting Section 2.1 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:

          "Section 2.1.  Commitment to Lend.  Subject to the terms and
     conditions set forth in this Agreement, each of the Banks severally
     agrees to lend to the Borrower, and the Borrower may borrow (and
     repay and reborrow) from time to time between the Closing Date and
     the Maturity Date upon notice by the Borrower to the Agent given in
     accordance with Section 2.6, such sums as are requested by the
     Borrower for the purposes set forth in Section 7.11 up to a maximum
     aggregate principal amount outstanding (after giving effect to all
     amounts requested) at any one time equal to such Bank's Commitment,
     provided, that, in all events no Default or Event of Default shall
     have occurred and be continuing, and provided, further that at any
     time the LC Exposure shall be greater than zero or any Loan made
     pursuant to Section 2.9 shall remain Outstanding, none of the Banks
     shall have any obligation to have an aggregate principal amount
     outstanding under this Section 2.1 at any time greater than such
     Banks' Revolver Commitment.  In no event shall the outstanding
     principal amount of the Loans pursuant to this Section 2.1 at any
     time exceed the Total Commitment (or, if the LC Exposure is greater
     than zero or any Loan made pursuant to Section 2.9 shall remain
     Outstanding, the aggregate of the Revolver Commitments) or cause a
     violation of the covenants set forth in Section 7.15 nor shall the
     sum of (a) the outstanding principal amount of the Loans made
     pursuant to this Section 2.1, and (b) the amount of the LC Exposure
     and Loans made pursuant to Section 2.9 at any time exceed the Total
     Commitment or cause a violation of the covenants set forth in
     Section 7.15.  The Loans pursuant to Section 2.1 shall be made pro
     rata in accordance with each Bank's Commitment Percentage or if
     prior to the LC Expiration Date, the Revolver Commitment
     Percentage.  The funding of a Loan hereunder shall constitute a
     representation and warranty by the Borrower that all of the
     conditions set forth in Section 10 and Section 11, in the case of
     the initial Loan and Section 11, in the case of all other Loans,
     have been satisfied on the date of such funding.";

          (d)  By deleting Section 2.2 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:

          "Section 2.2.  Facility Fee.  The Borrower agrees to pay to
     the Agent for the accounts of the Banks in accordance with their
     respective Commitment Percentages a facility fee calculated at the
     rate of one-fourth of one percent (0.25%) per annum on the average
     amount by which the Total Commitment exceeds the outstanding
     principal amount of Loans made pursuant to Section 2.1 and Section
     2.9 plus the amount of the LC. Exposure during each calendar
     quarter or portion thereof commencing on the date hereof and ending
     on the Maturity Date, provided, however, that in the event for any
     quarter the ratio (expressed as a percentage) of (a) the average
     amount of the outstanding principal amount of the Loans made
     pursuant to Section 2.1 and Section 2.9 plus the amount of the LC
     Exposure during such quarter to (b) the Total Commitment is greater
     than sixty percent (60%), then the facility fee shall be calculated
     at the rate of one-eighth of one percent (0.125%) for such quarter. 
     The facility fee shall be payable quarterly in arrears on the first
     day of each calendar quarter for the immediately preceding calendar
     quarter or portion thereof, and on any earlier date on which the
     Commitments shall be reduced or shall terminate as provided in
     Section 2.3, with a final payment on the Maturity Date.";

          (e)  By deleting Section 2.3 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:

          "Section 2.3.  Reduction and Termination of Commitment.  The
     Borrower shall have the right at any time and from time to time
     upon five Business Days' prior written notice to the Agent to
     reduce by $1,000,000 or an integral multiple of $100,000 in excess
     thereof or to terminate entirely the unborrowed portion of the
     Commitments, whereupon the Commitments of the Banks shall be
     reduced pro rata in accordance with their respective Commitment
     Percentages of the amount specified in such notice or, as the case
     may be, terminated, any such termination or reduction to be without
     penalty (unless such termination or reduction requires repayment of
     a Eurodollar Rate Loan); provided, however that the Commitments
     shall not be reduced below the amount of the LC Exposure.  Promptly
     after receiving any notice of the Borrower delivered pursuant to
     this Section 2.3, the Agent will notify the Banks of the substance
     thereof.  Upon the effective date of any such reduction or
     termination, the Borrower shall pay to the Agent for the respective
     accounts of the Banks the full amount of any facility fee under
     Section 2.2 then accrued on the amount of the reduction.  No
     reduction or termination of the Commitment may be reinstated.  At
     any time that any amount is available to be drawn under the Letter
     of Credit or may be reinstated thereunder, the Letter of Credit
     Commitment may be reduced only as provided in Paragraph 3(b) of the
     Letter of Credit, and in the event of any reduction in the Letter
     of Credit Commitment as provided herein, the Revolver Commitment
     shall be increased on a dollar for dollar basis.  In the event that
     the Letter of Credit Commitment shall be reduced and the Revolver
     Commitment increased as provided in the preceding sentence, the
     Revolver Commitment Percentages and Letter of Credit Commitment
     Percentages shall be adjusted in the following manner: (i) Letter
     of Credit Issuer's Letter of Credit Commitment Percentage shall
     equal fifty percent (50%); (ii) the sum of each Bank's Letter of
     Credit Commitment and Revolver Commitment shall continue to equal
     such Bank's Commitment; (iii) the Revolver Commitment and the
     Letter of Credit Commitment, respectively, shall be equal for all
     Banks that have equal Commitment Percentages; and (iv) Agent in the
     exercise of its good faith judgment, while attempting to maintain
     the relative proportions of the Banks existing prior to such
     reallocation, shall allocate the increase in the Revolver
     Commitment, and, subject to clause (i) above, the decrease in the
     Letter of Credit Commitment among the Banks in such manner as Agent
     shall determine.  Following such allocation, the Revolver
     Commitment, the Letter of Credit Commitment, the Revolver
     Commitment Percentages and the Letter of Credit Commitment
     Percentages of the Banks shall be recalculated by Agent, and such
     calculations shall be binding upon Borrower and the Banks.";

          (f)  By inserting the following sentence at the end of Section
2.7 of the Credit Agreement:

          "To the extent that Section 2.1 shall only require a Bank to
     make available its Revolver Commitment Percentage of a requested
     Loan, the references in this Section 2.7 to a Bank's Commitment
     Percentage shall be deemed to be a reference to such Bank's
     Revolver Commitment Percentage.";

          (g)  By deleting the fourth (4th) sentence of Section
2.8(a)(iv) of the Credit Agreement, in inserting in lieu thereof the
following:

          "In the event that the amount approved by the Agent, the Banks
     and the Potential Banks pursuant to Section 2.8(a)(iv) for such
     extension is less than the Total Commitment, then the Borrower may
     not request, and the Banks shall not be obligated to make, any
     Loans pursuant to Section 2.1 for a period which is thirty (30)
     days prior to the then effective Maturity Date which, when added to
     the LC Exposure and any Loans made pursuant to Section 2.1 and
     Section 2.9, would be in excess of the amount of the Total
     Commitments approved by the Banks and the Potential Banks. ";

          (h)  By deleting Section 2.9 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:

          "Section 2.9  Letter of Credit.

          (a)  The Borrower has requested that Letter of Credit Issuer
     provide the Letter of Credit as credit enhancement for the Bonds. 
     Park at Highlands LLC, a Subsidiary of the Borrower, is the owner
     of Real Estate located in Douglas County, Colorado which will be
     benefitted by the issuance of the Bonds and the improvements to be
     constructed with the proceeds from the issuance of the Bonds.  The
     issuance of the Bonds and the Letter of Credit will inure to the
     direct interest and benefit of the Borrower.  The Borrower
     acknowledges and agrees that the Letter of Credit Issuer would not
     have agreed to provide the Letter of Credit unless the Banks agreed
     to participate in advances made thereunder as provided in this
     Agreement, and the Banks would not have agreed to participate in
     such advances without (i) the agreement of the Borrower to repay
     such advances in accordance with the terms of this Agreement and
     (ii) the reservation of the Letter of Credit Commitment from the
     Total Commitment.

          (b)  In the event that the Letter of Credit Issuer shall honor
     any draw or other presentation for payment under the Letter of
     Credit and the amount so paid by Letter of Credit Issuer shall not
     be reimbursed by the Borrower or any other Person in the manner and
     within the time period set forth in Section 2.1 or Section 2.2 of
     the Reimbursement Agreement, the Letter of Credit Issuer shall
     promptly notify the Agent in writing of the amount of such draw and
     whether such draw was an "Interest Drawing," a "Principal Drawing'
     or a "Liquidity Drawing" (as such terms are defined in the Letter
     of Credit).  In the event such notice shall be delivered to Agent
     on or before 10:00 a.m. (Boston time) of a Business Day, the Agent
     shall, prior to the end of such Business Day, without notice to or
     the consent of the Borrower, notify the Banks of such draw, and the
     Banks shall make available to the Agent in accordance with Section
     2.7 their respective Letter of Credit Commitment Percentages of the
     amount so paid by the Letter of Credit Issuer on or before 12:00
     noon (Boston time) on the next Business Day; provided, however,
     that the Letter of Credit Issuer shall automatically and without
     further action be deemed to have advanced to itself on such
     Business Day the amount of its Letter of Credit Commitment
     Percentage of such draw without funding the same to the Agent. 
     Each Bank's obligation to make such payment to the Agent shall not
     be limited or impaired by the occurrence or continuance of any
     Default or Event of Default by Borrower, the failure to meet any
     condition that otherwise must be met for the funding of any Loan,
     or the failure of any other Bank to make any payment under this
     Section 2.9(b), and each Bank further agrees that such payment
     shall be made without any offset, abatement, withholding or
     reduction whatsoever except as otherwise provided in any
     intercreditor agreement among the Banks and Agent.  The proceeds of
     such funding by the Banks received by 12:00 noon (Boston time)
     shall be paid by the Agent to the Letter of Credit Issuer on such
     Business Day (or if received after such time, by the close of the
     following Business Day) and all such amounts advanced by the Banks
     hereunder (including, without limitation, the Letter of Credit
     Issuer) shall be evidenced by the Notes.  The amount so drawn shall
     from the date of such advance by the Banks pursuant to this Section
     2.9 be considered Loans for all purposes hereunder bearing interest
     as provided in Section 2.5(a); provided, however, that the Borrower
     shall pay the Letter of Credit Issuer interest at the rate and upon
     the terms contained in the Reimbursement Agreement on the amount so
     drawn from the date of such advance by the Letter of Credit Issuer
     until the date of such advance by the Banks to Agent as provided
     above.  The Borrower irrevocably authorizes each Bank to make or
     cause to be made such advances at such time notwithstanding the
     fact that any other conditions to the obligations of the Banks to
     make such advances to the Borrower under this Agreement may not
     have been satisfied.  At such time as the Banks shall fund or be
     deemed to have funded a Loan pursuant to this Section 2.9(b), the
     Borrower will be deemed to have reimbursed the Letter of Credit
     Issuer under the Reimbursement Agreement for such amounts, and the
     Borrower and Palomino Park therefore shall no longer be obligated
     to reimburse such amounts pursuant to the Reimbursement Agreement,
     and such obligation shall thereafter be evidenced by the Notes. 
     The provisions of Section 2.7 shall apply to any Banks failing or
     refusing to fund its Letter of Credit Commitment Percentage with
     respect to any such draw, and shall not affect the Borrower's and
     Palomino Park's reimbursement obligations under the Reimbursement
     Agreement and the Related Documents being deemed to have been
     satisfied; provided, however, that the Borrower's and Palomino
     Park's obligations under the Reimbursement Agreement and the
     Related Documents with respect to a payment made under the Letter
     of Credit shall not be deemed to have been reimbursed in the event
     that all of the Banks fail or refuse to fund a Loan with respect
     thereto pursuant to this Section 2.9(b) and none of such Banks
     cures such failure or refusal within the time period permitted in
     any intercreditor agreement among the Banks and Agent.  If after
     receipt of such funding from any Bank the Letter of Credit Issuer
     receives payment from the Borrower or any other source on account
     of the reimbursement obligation that was so funded, or the interest
     accrued thereon, the Letter of Credit Issuer shall remit such
     payment to the Agent for distribution to the Banks to the extent of
     their participation therein.

          (c)  Provided that no Event of Default shall have occurred,
     the Borrower may in connection with any prepayment of the
     Obligations designate that any such prepayment be applied to reduce
     the amount of Loans made pursuant to this Section 2.9 in order to
     cause a reinstatement of the Letter of Credit in accordance with
     its terms.  Unless the amount of any "Liquidity Drawing" (as
     defined in the Reimbursement Agreement) honored by Letter of Credit
     Issuer is reimbursed by the Borrower or any other person to Letter
     of Credit Issuer pursuant to Section 2.2 of the Reimbursement
     Agreement in the manner and within the time period set forth in
     Section 2.2 of the Reimbursement Agreement, no amount available to
     be drawn under the Letter of Credit shall bc reinstated except as
     provided in this Section 2.9(c).

          (d)  The Borrower acknowledges and agrees that the terms and
     conditions of the Reimbursement Agreement and the Related Documents
     are independent of the terms and provisions of this Agreement and
     the other Loan Documents and shall not diminish, restrict or
     otherwise limit the terms of this Agreement or any other of the
     Loan Documents.  The Reimbursement Agreement and the Related
     Documents are not, and shall not be deemed to be, a novation,0
     cancellation, satisfaction or substitution of this Agreement or any
     other Loan Documents or the Obligations.

          (e)  Unless all of the Banks otherwise consent in writing, the
     term of the Letter of Credit shall not be extended or renewed, nor
     shall the terms of the Letter of Credit be amended, modified or
     waived.  The amount drawn under the Letter of Credit shall reduce
     on a dollar for dollar basis the amount available to be drawn under
     the Letter of Credit Commitment and the Total Commitment as a Loan;
     provided, however, that the amount available to be drawn under the
     Letter of Credit Commitment shall increase to the extent that
     amounts available to be drawn under the Letter of Credit are
     reinstated as provided in the first sentence of Section 2.9(c).

          (f)  Without duplication hereunder, the Borrower shall pay to
     the Letter of Credit Issuer a non-refundable letter of credit
     facing fee as provided in Section  2.8 of the Reimbursement
     Agreement.

          (g)  The Borrower shall pay to the Agent for the account of
     the Banks in accordance with their respective Letter of Credit
     Commitment Percentages, a non-refundable letter of credit retention
     fee calculated at the rate of one percent (1.0%) per annum of the
     Stated Amount (without regard to reductions in the Stated Amount
     subject to reinstatement, it being understood that reductions
     effected by submission of a certificate in the form of Exhibit "D"
     to the Letter of Credit are not subject to reinstatement). The
     first payment of such fee shall be due January 1, 1996 for the
     period from the date of issuance of the Letter of Credit through
     December 31, 1995, and shall be payable quarterly in arrears
     thereafter on the first (1st) day of each calendar quarter
     thereafter for each quarter or portion thereafter, and on any
     earlier date upon which the Letter of Credit shall expire or
     terminate.

          (h)  On the LC Expiration Date, the Letter of Credit
     Commitment shall be merged into the Revolver Commitment (which
     shall then equal the Total Commitment) and the Borrower may borrow
     (and repay and reborrow) such amounts as provided in this
     Agreement, and each Bank's Commitment Percentage shall be
     determined based upon the ratio that the sum of such Bank's
     Commitment bears to the Total Commitment."

          (i)  By deleting the words "(including Letters of Credit
outstanding and accepted but unpaid)", appearing in the second (2nd) and
third (3rd) lines of Section 3.2 of the Credit Agreement, and inserting
in lieu thereof the words "(which for the purposes hereof shall include
the LC Exposure)";

          (j)  By inserting the following sentence at the end of Section
3.4 of the Credit Agreement:

          "Notwithstanding the foregoing, except as otherwise provided
     in Section 2.9(c) with respect to a reinstatement of the Letter of
     Credit, each partial prepayment of the Loans shall be applied to
     reduce the Loans made under Section 2.1 and the Loans made under
     Section 2.9 on a pro rata basis based upon the aggregate amount of
     each type of Loan Outstanding.";

          (k)  By deleting Section 4.4(c) of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:

          "(c) The obligations of the Borrower to the Banks under this
     Agreement shall be absolute, unconditional and irrevocable, and
     shall not be subject to any right of setoff or counterclaim against
     any Bank, and shall be paid and performed strictly in accordance
     with the terms of this Agreement, under all circumstances
     whatsoever, including, without limitation, the following
     circumstances: (i) any lack of validity or enforceability of this
     Agreement, any other Loan Document or any Related Document; (ii)
     any improper use which may be made of any Letter of Credit or any
     improper acts or omissions of any beneficiary or transferee of any
     Letter of Credit in connection therewith; (iii) any amendment or
     waiver of, or any consent to departure from, all or any of the
     Related Documents, this Agreement or any other Loan Document other
     than, with respect to any particular obligation, the specific
     waiver by the Banks of such particular obligation under this
     Agreement, such Related Document or such Loan Document; (iv) the
     existence of any claim, setoff, defense or any right which the
     Borrower may have at any time against the Bond Trustee, any
     beneficiary or any transferee of the Letter of Credit (or Persons
     for whom the Bond Trustee, any such beneficiary or any such
     transferee may be acting), the Banks (other than the defense of
     payment to the Banks in accordance with the terms of this
     Agreement) or any other Person, whether in connection with the
     Letter of Credit, this Agreement, any other Loan Document, or any
     other Related Document, the transactions contemplated herein or
     therein or any unrelated transaction; (v) any statement,
     certificate or any other document presented under the Letter of
     Credit proving to be forged, fraudulent, invalid or insufficient in
     any respect or any statement therein being untrue or inaccurate in
     any respect whatsoever; (vi) any breach of any agreement or dispute
     among or between Borrower and Bond Trustee, any beneficiary or
     transferee of the Letter of Credit, Palomino Park or any other
     Person; (vii) any irregularity in the transaction with respect to
     which the Letter of Credit is issued, including any fraud by the
     Bond Trustee or any beneficiary or transferee of the Letter of
     Credit; (viii) any non-application or misapplication by the Bond
     Trustee of the proceeds of any drawing under the Letter of Credit
     or any other act or omission of the Bond Trustee or any other
     Person in connection with the Letter of Credit; (ix) payment by the
     Letter of Credit Issuer under the Letter of Credit against
     presentation of a certificate which does not comply with the terms
     of the Letter of Credit, (x) any extension of time for or delay,
     renewal or compromise of or other indulgence or modification
     granted or agreed to by the Banks with or without notice to or
     approval by the Borrower with respect to the transactions
     contemplated by this Agreement and the Reimbursement Agreement
     other than, with respect to any particular obligation or cost, the
     specific modification to the Borrower by the Banks of such
     particular obligation or cost; and (xi) any other circumstance or
     happening whatsoever, whether or not similar to any of the
     foregoing. Nothing herein shall limit any rights which the Borrower
     may have against the Letter of Credit Issuer pursuant to Section
     8.1 of the Reimbursement Agreement.

          (d)  As among the Agent, the Banks and the Borrower, Borrower
     assumes all risks of the acts or omissions of the Bond Trustee and
     any transferee of the Letter of Credit with respect to its use of
     the Letter of Credit. None of the Agent or the Banks nor any of
     their respective officers or directors shall be liable or
     responsible for: (i) the use which may be made of the Letter of
     Credit or for any acts or omissions of the Bond Trustee and any
     beneficiary or transferee in connection therewith; (ii) any
     reference which may be made to this Agreement, the Reimbursement
     Agreement or the Letter of Credit in any agreements, instruments or
     other documents; (iii) the validity, sufficiency or genuineness of
     any document, or of any endorsement(s) thereon, even if any such
     document should in fact prove to be in any or all respects,
     invalid, insufficient, fraudulent or forged or any statement
     therein should in fact prove to be untrue or inaccurate in any
     respect whatsoever; (iv) payment by Letter of Credit Issuer against
     presentation of documents which do not comply with the terms of the
     Letter of Credit, including failure of any documents to bear any
     reference or adequate reference to the Letter of Credit; or (v) any
     other circumstances whatsoever in making or failing to make payment
     under the Letter of Credit. Without limiting the foregoing, the
     Letter of Credit Issuer may accept any document that appears on its
     face to be in order, without responsibility for further
     investigation. The determination of whether a drawing has been made
     under the Letter of Credit prior to its expiration date or whether
     a drawing made under the Letter of Credit is in proper and
     sufficient form shall be made by the Letter of Credit Issuer in its
     sole discretion, which determination shall be conclusive and
     binding upon Borrower to the extent permitted by law. Borrower
     hereby waives any right to object to any payment made under the
     Letter of Credit with regard to a drawing that is in the form
     provided in the Letter of Credit, but which varies with respect to
     punctuation, capitalization, spelling or similar matters of form. 
     Notwithstanding the forgoing, the Letter of Credit Issuer (but not
     Agent or any of the other Banks) shall be liable to Borrower for
     acts or events described in subsections (i) through (v) above to
     the extent, but only to the extent, of any direct, as opposed to
     indirect or special or consequential, damages suffered by Borrower
     which Borrower proves were caused by: (x) the gross negligence or
     willful misconduct of the Letter of Credit Issuer in determining
     whether any draft or demand presented under the Letter of Credit
     complies with the terms and conditions therefor stated in the
     Letter of Credit, or (y) the willful failure of the Letter of
     Credit Issuer to pay any draft or demand presented under the Letter
     of Credit strictly complying with the terms and conditions of the
     Letter of Credit; provided, however, that the maximum amount of
     damages recoverable by Borrower as provided above is expressly
     limited as provided in the Reimbursement Agreement to the Stated
     Amount of the Letter of Credit.";

          (l)  By deleting the words "(including Loans and other
outstanding Letters of Credit (including Letters of Credit accepted but
unpaid))" appearing in the fifth (5th), sixth (6th) and seventh (7th)
lines of Section 7.1 5(a)(i) of the Credit Agreement, and inserting in
lieu thereof the words: "(including Loans and the LC Exposure");

          (m)  By inserting the following paragraph as Section 12.1(q)
of the Credit Agreement, appearing on page 64 thereof:

          "(q)  The Borrower or Palomino Park shall fail to perform any
     term, covenant or agreement contained in the Reimbursement
     Agreement or any of the other Related Documents;";

          (n)  By deleting the words "amount of the outstanding Letters
of Credit (including Letters of Credit accepted but unpaid)" appearing
in the twenty-eighth (28th) and twenty-ninth (29th) lines of Section
12.3 of the Credit Agreement, and inserting in lieu thereof the words
"amount of the LC Exposure";

          (o)  By inserting the following clause following the words "be
made among the Bank's pro rata" appearing in the fourteenth (14th) line
of Section 12.4(b) of the Credit Agreement, appearing on page 66
thereof:

          "(it being agreed that such amounts shall be applied pro rata
     among the Banks between the aggregate Obligations relating to Loans
     made pursuant to Section 2.1 and Loans made pursuant to Section
     2.9)";

          (p)  By inserting the following clause prior to the words "in
each case including" appearing in the thirtieth (30th) line of Section
16 of the Credit Agreement, appearing on page 73 thereof:

          "(h)  any untrue statement or alleged untrue statement of
     any material fact contained or incorporated by reference in
     any private placement memorandum, official statement,
     preliminary official statement or other agreement relating to
     the Bonds or the Letter of Credit (other than information
     relating to the Letter of Credit Issuer and provided by the
     Letter of Credit Issuer for inclusion therein), or the
     omission or alleged omission to state in any private placement
     memorandum, official statement, preliminary official statement
     or other agreement relating to the Bonds or the Letter of
     Credit any material fact necessary to make such statements, in
     light of the circumstances under which they are or were made,
     not misleading, (i) the execution and delivery or transfer of,
     or payment or failure to pay under, the Letter of Credit, (j)
     the issuance and sale of the Bonds, or (k) the use of the
     proceeds of the Bonds,";

          (q)  By inserting the following Section 32 to the Credit
Agreement:

          "Section 32.  Additional Waivers.  Borrower hereby agrees that
     its obligations under this Agreement and the Loan Documents shall
     not be affected or impaired by, and hereby waives and agrees not to
     assert or take advantage of any defense based on: (a) the
     incapacity or lack of authority of Palomino Park or any other
     Person, or the failure of Agent or Letter of Credit Issuer to file
     or enforce a claim against the estate (either in administration,
     bankruptcy or in any other proceeding) of Palomino Park or any
     other Person; (b) the voluntary or involuntary liquidation, sale or
     other disposition of all or substantially all of the assets of
     Palomino Park; (c) the voluntary or involuntary receivership,
     insolvency, bankruptcy, assignment for the benefit of creditors,
     reorganization, assignment, composition, or readjustment of, or any
     similar proceeding affecting, Palomino Park or any other Person, or
     any of Palomino Park's or such other Person's properties or assets;
     (d) the failure of the Agent, Letter of Credit Issuer or any of the
     Banks to give notice of the existence, creation or incurrence of
     any new or additional Obligation or of any action or nonaction on
     the part of any other Person whomsoever in connection with any
     Obligation; (e) any failure or delay of the Agent or the Letter of
     Credit Issuer to commence an action against Palomino Park, to
     assert or enforce any remedies against Palomino Park under the
     Reimbursement Agreement or any other of the Related Documents, or
     to realize upon any security; (f) any failure of any duty on the
     part of the Agent, Letter of Credit Issuer or any of the Banks to
     disclose to Borrower any facts it may now or hereafter know
     regarding Palomino Park or the Bonds, whether such facts materially
     increase the risk to Borrower or not; (g) the invalidity or
     unenforceability of the Bonds, the Reimbursement Agreement or the
     other Related Documents; (h) the compromise, settlement, release or
     termination of any or all of the obligations of Palomino Park under
     the Reimbursement Agreement or the other Related Documents; or (i)
     to the fullest extent permitted by law, any other legal, equitable
     or surety defenses whatsoever to which Borrower might otherwise be
     entitled, it being the intention that the obligations of Borrower
     hereunder are absolute, unconditional and irrevocable Borrower
     further expressly waives any and all rights of subrogation to
     Agent, Letter of Credit Issuer and the Banks against any Person
     having any liability with respect to the Bonds (including, without
     limitation, Palomino Park), and Borrower hereby waives any rights
     to enforce any remedy which Agent, Letter of Credit Issuer or the
     Banks may have against any Person having any liability with respect
     to the Bonds (including, without limitation, Palomino Park), and
     any rights to participate in any collateral for such Person's
     obligations.";

          (r)  By deleting Schedule 1 attached to the Credit Agreement
in its entirety, and inserting in lieu thereof Schedule 1 attached
hereto and made a part hereof;

          (s)  All references in the Credit Agreement to "Letters of
Credit" shall be deemed to refer to the Letter of Credit;

          (t)  All references in Credit Agreement to "Letters of Credit
accepted but unpaid" shall be deemed to refer to "any draws under the
Letter of Credit accepted but unpaid"; and

          (u)  Any amounts which may now or hereafter be owed by
Borrower to Letter of Credit Issuer under the Reimbursement Agreement or
the Related Documents shall in all circumstances be considered unsecured
Indebtedness of Borrower for the purposes of the Credit Agreement,
regardless of whether Letter of Credit Issuer may now or hereafter have
any collateral (such as pledged Bonds or a deed of trust) for such
obligations.

     3.   Notes.  All references in the Notes to the Credit Agreement
shall be deemed a reference to the Credit Agreement as modified and
amended herein.

     4.   No Default.  By execution hereof, the Borrower certifies that
the Borrower is and will be in compliance with all covenants under the
Loan Documents after the issuance of the Letter of Credit.  Each of the
representations and warranties made by or on behalf of the Borrower and
its Subsidiaries in or in connection with this Amendment, the
Reimbursement Agreement or the other Related Documents is true and
correct and no Default or Event of Default has occurred and is
continuing.

     5.   Waiver of Claims.  Borrower acknowledges, represents and
agrees that to the best of Borrower's knowledge and belief after
reasonable inquiry and investigation, Borrower has no defenses, setoffs,
claims, counterclaims or causes of action of any kind or nature
whatsoever with respect to the Loan Documents, the administration or
funding of the Loans or with respect to any acts or omissions of Agent
or any of the Banks, or any past or present officers, agents or
employees of Agent or any of the Banks.

     6.   Ratification.  Except as hereinabove set forth, all terms,
covenants and provisions of the Credit Agreement remain unaltered and in
full force and effect, and the parties hereto do hereby expressly ratify
and confirm the Credit Agreement as modified and amended herein. 
Nothing in this Amendment shall be deemed or construed to constitute,
and there has not otherwise occurred, a novation, cancellation,
satisfaction, release, extinguishment or substitution of the
indebtedness evidenced by the Notes or the other obligations of Borrower
under the Loan Documents.

     7.   Counterparts.  This Amendment may be executed in any number of
counterparts which shall together constitute but one and the same
agreement.

     8.   Miscellaneous.  This Amendment shall be construed and enforced
in accordance with the laws of the Commonwealth of Massachusetts.  This
Amendment shall be binding upon and shall inure to the benefit of the
parties hereto and their respective permitted successors,
successors-in-title and assigns as provided in the Credit Agreement.

     IN WITNESS WHEREOF, the parties hereto have hereto set their hands
and affixed their seals as of the day and year first above written.

THE FIRST NATIONAL BANK OF BOSTON, individually and as Agent


By:/s/ Jeffrey Warwick
   -----------------------
    Vice President

     (BANK SEAL)


WELLSFORD RESIDENTIAL PROPERTY TRUST


By:/s/ Gregory F. Hughes   
  ------------------------
Title:  Vice President

     (CORPORATE SEAL)


BANK OF AMERICA ILLINOIS


By:/s/ Robert P. McKenny
  ---------------------------
Title:  Vice President

     (BANK SEAL)


BANK ONE, ARIZONA, NA


By:/s/ John W. Boyd
   ------------------
Title:  Vice President

     (BANK SEAL)


THE FIRST NATIONAL BANK OF CHICAGO


By:/s/ James D. Benko
  ----------------------
Title:  Assistant Vice President

(BANK SEAL)

CORESTATES BANK, N.A.


By:/s/ Gary S. Kinn
  -------------------

Title:  Vice President

     (BANK SEAL)


SHAWMUT BANK, N A.


By:/s/ Margaret A. Mulcahy
   ------------------------
Title:  Vice President

     (BANK SEAL)


DRESDNER BANK, AG New York Branch and Grand Cayman Branch


By:/s/ Richard W. Conroy                
Title: Vice President

Attest:/s/ Andrew K. Mittag             
       Title: Vice President

     (BANK SEAL)

KREDIETBANK N.V.


By:/s/ Francis Payne                                      
Title:  Assistant V.P.

By:/s/ Robert Snauffer                  
Title: Vice President

(BANK SEAL)
<PAGE>
<TABLE>
<CAPTION>
                                                            SCHEDULE I

                                                       BANKS AND COMMITMENTS


                                                                            Revolver                       Letter of Credit
                                              Commitment     Revolver      Commitment   Letter of Credit      Commitment
Name and Address                Commitment    Percentage    Commitment     Percentage     Commitment          Percentage
----------------                ----------    ----------    ----------     ----------   ----------------   ----------------

<S>                          <C>             <C>        <C>              <C>           <C>                   <C>        
The First National Bank of    $30,000,000.00    20.000%   $28,000,000.00   21.052632%    $2,000,000.00        11.764706%
 Boston
100 Federal Street
Boston, Massachusetts 02110
Attn:  Real Estate Division

Eurodollar Lending Office
  Same as above

Bank of America Illinois      $20,000,000.00    13.333%   $18,800,000.00   14.135338%    $1,200,000.00         7.058824%
231 South LaSalle Street
15th Floor
Chicago, Illinois 60697
Attn: Mr. Bob McKenny

Eurodollar Lending Office
  Same as above

Bank One, Arizona, NA         $20,000,000.00    13.333%   $18,800,000.00   14.135338%    $1,200,000.00         7.058824%
Real Estate Lending
Dept. A-387
241 North Central Avenue
Phoenix, Arizona 85004
Attn:  Mr. John Boyd

Eurodollar Lending Office
  Same as above

The First National Bank       $20,000,000.00   13.3333%   $18,800,000.00   14.135338%    $1,200,000.00         7.058824%
 of Chicago
One First National Plaza
Mail Suite 0151
Chicago, Illinois  
  60670-0577
Attn:  Mr. James D. Benko

Eurodollar Lending Office
  Same as above

Shawmut Bank, NA              $20,000,000.00    13.333%   $18,800,000.00   14.135338%    $1,200,000.00         7.058824%
Commercial Real Estate
One Federal Street
OF 3003
Boston, Massachusetts  
  02211
Attn:  
  Ms. Margaret A. Mulcahy

Eurodollar Lending Office
  Same as above

Dresdner Bank, AG New York    $15,000,000.00      10.0%   $ 6,500,000.00    4.887218%    $8,500,000.00        50.000000%
 Branch and Grand Cayman
  Branch
75 Wall Street
New York, New York  
  10005-2889
Attn:  Mr. Richard Conroy

Eurodollar Lending Office
  Same as above

Kredietbank, N.V.             $15,000,000.00      10.0%   $14,000,000.00   10.526316%    $1,000,000.00         5.882353%
125 West 55th Street
New York, New York  10019
Attn:  Mr. Frank Payre

Eurodollar Lending Office
  Same as above

CoreStates Bank, N.A.         $10,000,000.00      10.0%    $9,300,000.00    6.992481%   $   700,000.00         4.117647%
Real Estate and Construction
 Finance
1339 Chestnut Street
Philadelphia, Pennsylvania  19107-7618
Attn:  Mr. Gary S. Kinn

Eurodollar Lending Office
  Same as above

Percentages may not equal 
100% due to rounding.

</TABLE>