AMERICA FIRST TAX EXEMPT INVESTORS LP, S-4, 1998-04-20

AMERICA FIRST TAX EXEMPT INVESTORS LP
S-4, 1998-04-20

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<PAGE>
As filed with the Securities and Exchange Commission on April 17, 1998
Registration No. 333-
----

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4

Registration Statement
Under the Securities Act of 1933

AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
(Exact name of registrant as specified in its charter)

Delaware 47-0810385 6799
- ---------------------------- ------------------- -------------------------
(State or other jurisdiction (I.R.S. Employer (Primary Standard
of incorporation or Identification No.) Industrial Classification
organization) Code Number)

Suite 400, 1004 Farnam Street
Omaha, Nebraska 68102
(402) 444-1630
--------------------------------------
(Address, including ZIP Code, and telephone number,
including area code, of registrant's principal executive offices)

Michael Yanney
Suite 400, 1004 Farnam Street
Omaha, Nebraska 68102
(402) 444-1630
--------------------------------------
(Name, address, including ZIP Code, and telephone number,
including area code, of agent for service)
Copies to:
------------------------
Steven P. Amen, Esq.
Kutak Rock
1650 Farnam Street
Omaha, Nebraska 68102
(402) 346-6000

Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective and after conditions in the Merger Agreement have been satisfied.

If any of the securities being registered on the Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box:
------
Calculation of Registration Fee
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities to be Amount to be Offering Aggregate Offering Amount of
Registered Registered Price Per BUC(2) Price(2) *Registration Fee
- ---------------------------- -------------- ------------------ -------------------- -------------------
<S> <C> <C> <C> <C>
Beneficial Unit Certificates
("BUCs")(1) 9,979,128 BUCs $7.4375 $74,219,765 $21,895

</TABLE>
(1)BUCs represent assigned limited partnership interest in the registrant.
(2)Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(f)(1) based on the average of the high and low sales prices of a BUC
of America First Tax Exempt Mortgage Fund Limited Partnership on the NASDAQ
National Market System on April 13, 1998.

The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
NOTICE OF ACTION REQUIRING CONSENT OF BUC HOLDERS
[ ], 1998

America First Capital Associates Limited Partnership Two (the "General
Partner"), the general partner of America First Tax Exempt Mortgage Fund
Limited Partnership (the "Existing Fund"), is seeking the written consent of
the holders of Beneficial Unit Certificates ("BUCs") representing assigned
limited partnership interests in the Existing Fund to a proposed transaction
(the "Transaction") consisting of a merger of the Existing Fund with America
First Tax Exempt Investors, L.P., a newly formed Delaware limited partnership
(the "New Fund"). Pursuant to the terms of the Agreement of Merger between
the Existing Fund and the New Fund (the "Merger Agreement"): (i) the New Fund
will be the surviving partnership and will succeed to all of the assets and
liabilities of the Existing Fund; (ii) the limited partnership agreement of
the New Fund (the "New Partnership Agreement") will control the operations of
the New Fund after the Transaction; and (iii) BUC holders in the Existing Fund
will receive one BUC in the New Fund for each BUC they hold in the Existing
Fund as of [Record Date], 1998. The form of the New Partnership Agreement and
the Merger Agreement are attached as Appendices A and B, respectively, to the
Consent Solicitation Statement/Prospectus accompanying this Notice.

The Transaction has been proposed by the General Partner in an effort to
increase cash distributions to BUC holders, and thereby increase market value
of the BUCs, by transferring the assets of the Existing Fund to the New Fund
which will have the ability to acquire additional tax-exempt bonds secured by
multifamily residential properties. The New Fund intends to finance the
acquisition of additional tax-exempt bonds by causing the tax-exempt bonds it
acquires from the Existing Fund to be either (i) deposited into a trust that
will issue two classes of beneficial ownership or (ii) reissued in a manner
creating two classes of bonds. In either case, the senior trust interests or
class of bonds (either referred to as the "Senior Interests") will be sold to
unaffiliated investors and the New Fund will seek to use the proceeds of such
sales to acquire additional tax-exempt bonds secured by apartment complexes.
The subordinate class of trust interests or bonds (either the "Subordinate
Interests") will be retained by the New Fund. It is anticipated that the
respective rights of the holders of the Senior Interests and the Subordinate
Interests will allow the Senior Interests to receive investment-grade ratings
from nationally recognized rating agencies. The additional bonds, if any,
acquired by the New Fund are not expected to be rated. As a result the Senior
Interests are expected to bear tax-exempt interest at rates which are below
the rates the New Fund expects to earn on the additional tax-exempt mortgage
bonds it acquires. Therefore, the New Fund expects to be able to increase its
overall interest income by selling the low interest rate Senior Interests to
unaffiliated parties and reinvesting the proceeds in additional unrated
tax-exempt bonds secured by multifamily residential housing which bear
interest at a higher rate than the Senior Interests. The General Partner
would cause the New Fund to repeat this process with the additional tax-exempt
bonds acquired by the New Fund in order to further increase the New Fund's
potential net interest income.

Enclosed herewith is a Consent Solicitation Statement/Prospectus setting forth
information with respect to the Transaction. No meeting of BUC holders will
be held in connection with the Transaction. Only BUC holders of record at the
close of business on [Record Date], 1998 will be entitled to receive this
notice and to grant or withhold their consent to the Transaction. BUC holders
are requested to complete, sign and date the enclosed consent card, which is
solicited on behalf of the General Partner, and return it promptly in the
envelope enclosed for that purpose. Your consent will not be revocable after
delivery.

AMERICA FIRST CAPITAL
ASSOCIATES LIMITED PARTNERSHIP
TWO, General Partner

By America First Companies L.L.C.,
General Partner

/s/ Michael Thesing
----------------------------------
Michael Thesing, Secretary
Omaha, Nebraska
[ ], 1998

IMPORTANT: THE PROMPT RETURN OF YOUR CONSENT WILL SAVE THE EXPENSE OF FURTHER
SOLICITATION.
<PAGE>
CONSENT

AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP

THIS CONSENT IS SOLICITED ON BEHALF OF THE GENERAL PARTNER OF AMERICA FIRST
TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP.

The undersigned, being the holder of record of the number of Beneficial Unit
Certificates ("BUCs") representing assigned limited partnership interests in
America First Tax Exempt Mortgage Fund Limited Partnership (the "Existing
Fund") hereby authorizes America First Fiduciary Corporation Number Five (the
"Limited Partner") to grant or withhold consent to the matter set forth below
or abstain from granting or withholding the undersigned's consent as indicated
below.

APPROVAL OF MERGER WITH AMERICA FIRST TAX EXEMPT INVESTORS, L.P.:

FOR AGAINST ABSTAIN
------ ------ ------

THIS CONSENT WHEN PROPERLY EXECUTED, WILL BE VOTED BY THE LIMITED PARTNER IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED BUC HOLDER. IF NO DIRECTION IS
MADE, THIS CONSENT WILL BE VOTED FOR THE MERGER WITH AMERICA FIRST TAX EXEMPT
INVESTORS, L.P.
(continued and to be signed on the reverse hereof)

[Form of Reverse Side of Consent]

This consent is not revocable by the undersigned. The undersigned hereby
acknowledges receipt of a Notice of Action Requiring Consent of BUC holders of
the Existing Fund and the Consent Solicitation Statement/Prospectus prior to
the signing of this consent card.

Dated: [ ], 1998.

----------------------------------
Signature

----------------------------------
(Signature if held jointly)

Please sign exactly as name appears on this consent card. When BUCs are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title. If a
corporation, please sign in full corporate name by an authorized officer. If
a partnership, please sign in partnership name by an authorized person.

This Prospectus and the information contained herein are subject to completion
or amendment. A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These securities may not
be sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This Prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such State.

PLEASE MARK, SIGN, DATE AND RETURN THIS CONSENT CARD USING THE ENCLOSED
ENVELOPE SO THAT IT ARRIVES NO LATER THAN 5:00 P.M. CENTRAL TIME ON [DATE],
1998.

<PAGE>
Preliminary Prospectus
Subject to Completion Dated April 17, 1998

AMERICA FIRST TAX EXEMPT MORTGAGE FUND
LIMITED PARTNERSHIP
CONSENT SOLICITATION STATEMENT
- ----------------------------------------
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
PROSPECTUS

This Consent Solicitation Statement/Prospectus is being furnished to the
holders of Beneficial Unit Certificates ("BUCs") representing assigned limited
partnership interests in America First Tax Exempt Mortgage Fund Limited
Partnership (the "Existing Fund") in connection with the solicitation of the
written consents of the BUC holders to a transaction (the "Transaction")
consisting of a merger of the Existing Fund with America First Tax Exempt
Investors, L.P., a newly formed Delaware limited partnership (the "New Fund"),
pursuant to the terms of an Agreement of Merger between the Existing Fund and
the New Fund (the "Merger Agreement"). Upon completion of the Transaction,
the separate existence of the Existing Fund will cease and BUC holders of the
Existing Fund will become BUC holders of the New Fund. Consummation of the
Transaction is subject to various conditions, including approval thereof by a
majority in interest of the BUC holders of the Existing Fund. This Consent
Solicitation Statement/Prospectus also constitutes the Prospectus of the New
Fund with respect to the issuance of 9,979,128 BUCs representing assigned
limited partnership interests in the New Fund to the holders of BUCs in the
Existing Fund in connection with the Transaction.

A consent card is included with this Consent Solicitation Statement/Prospectus
and BUC holders are asked to complete, date and sign the consent card and
return it to Service Data Corporation in the enclosed envelope as soon as
possible. In order to be valid, consents must be received by Service Data
Corporation by 5:00 p.m. Central Time on [Date], 1998. A consent will be
valid only if it is executed by or on behalf of a person who is a beneficial
holder of a BUC as of [Record Date], 1998 (the "Record Date"). An otherwise
valid consent will be deemed to grant consent to the Transaction if it is not
marked to withhold consent or to abstain. A consent may not be revoked after
the consent card is delivered to Service Data Corporation. No meeting of BUC
holders will be held with respect to the Transaction.

THE TRANSACTION INVOLVES CERTAIN RISKS, ADVERSE CONSEQUENCES AND CONFLICTS OF
INTEREST THAT SHOULD BE CONSIDERED BY BUC HOLDERS. IN PARTICULAR, BUC HOLDERS
SHOULD CONSIDER THE FOLLOWING:

In order to acquire additional tax-exempt bonds secured by multifamily real
estate, the New Fund intends to sell securities (the "Senior Interests")
having senior rights with respect to the principal and interest paid on the
New Fund's tax-exempt mortgage bonds. The New Fund will retain residual trust
interests or subordinate debt securities (the "Subordinate Interests")
relating to the same tax-exempt bonds. If the principal and interest payments
on the underlying tax-exempt bonds do not generate sufficient amounts to pay
principal and interest on both the Senior Interests and the Subordinate
Interests, the holders of the Senior Interests will be paid the full amount
owed to them prior to any payment to the New Fund with respect to the
Subordinate Interests.

The limited partnership agreement of the New Fund is different from the
limited partnership agreement of the Existing Fund. Notably, the limited
partnership agreement of the New Fund will allow the General Partner to sell
Senior Interests without the consent of BUC holders and to reinvest the
proceeds from the sale of Senior Interests in additional tax-exempt mortgage
bonds. The limited partnership agreement of the Existing Fund requires BUC
holder consent for the sale of substantially all assets of the Existing Fund
and would require that the proceeds from the sale of any assets be distributed
to BUC holders rather than reinvested. Certain other differences exist
between the limited partnership agreements which may be adverse to the BUC
holders.

There can be no assurance that the New Fund will be able to invest any
amounts raised from the sale of Senior Interests in additional tax-exempt
mortgage bonds.

(continued on inside cover page)

FOR A MORE COMPLETE DISCUSSION OF RISK FACTORS WHICH SHOULD BE CONSIDERED IN
EVALUATING THE TRANSACTION, SEE "RISK FACTORS" ON PAGE [ ].

<PAGE>
This Consent Solicitation Statement/Prospectus and the consent cards are first
being mailed to BUC holders on or about [ ], 1998.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS CONSENT SOLICITATION STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OR THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

The date of the Consent Solicitation Statement/Prospectus is [ ], 1998

The acquisition of additional tax-exempt bonds will entail risks generally
associated with investing in unrated debt securities. BUC holders will be
dependent on the General Partner to evaluate additional tax-exempt bonds
acquired by the New Fund and to negotiate the terms thereof. It is not
expected that there will be a liquid market for any of the tax-exempt bonds or
Subordinated Interests held by the New Fund.

There are alternatives to the Transaction, including (i) continuing the
Existing Fund with its present assets and (ii) liquidating the tax-exempt
bonds held by the Existing Fund and distributing the proceeds to the BUC
holders. The General Partner expects to realize greater economic benefits for
itself if the Transaction is completed than if any of the alternatives thereto
are undertaken. By approving the Transaction, the BUC holders will
effectively preclude the pursuit of any of these alternatives.

Certain expenses of the Transaction which are payable by the Existing Fund
may be avoided if the Transaction is not consummated.

There is no current trading market for the BUCs of the New Fund and there
can be no assurance that one will develop.

BUC holders voting against the Transaction will not be entitled to any
appraisal or other dissenters' rights under Delaware law and will not be
afforded any by the Existing Fund.

<PAGE>
AVAILABLE INFORMATION

America First Tax Exempt Mortgage Fund Limited Partnership (the "Existing
Fund") is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith
files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Regional Offices of the Commission located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and 75 Park Place, New York, New York
10007. Copies of such material may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates.

This Consent Solicitation Statement/Prospectus omits certain information
contained in the Registration Statement on Form S-4 and exhibits relating
thereto, including any amendments (the "Registration Statement") of which this
Consent Solicitation Statement/Prospectus is a part, and which America First
Tax Exempt Investors, L.P. (the "New Fund") has filed with the Commission
under the Securities Act of 1933, as amended (the "Securities Act").
Reference is made to such Registration Statement for further information with
respect to the New Fund and the BUCs of the New Fund offered hereby.
Statements contained herein or incorporated herein by reference concerning the
provisions of documents are summaries of such documents, and each such
statement is qualified in all respects by the provisions of such exhibit or
other document to which reference is thereby made for a full statement of the
provisions thereof. A copy of the Registration Statement, with exhibits, may
be obtained from the Commission's offices (at the above addresses) upon
payment of the fees prescribed by the rules and regulations of the Commission,
or examined there without charge.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, previously filed by the Existing Fund with the
Commission pursuant to the Exchange Act, are incorporated herein by reference:

the Existing Fund's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.

Each additional document filed by the Existing Fund pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Consent Solicitation Statement/Prospectus and prior to the last date upon
which Consents may be validly returned by BUC holders of the Existing Fund,
shall be deemed to be incorporated by reference in this Consent Solicitation
Statement/Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated by
reference will be deemed to be modified or superseded for the purpose of this
Consent Solicitation Statement/Prospectus to the extent that such statement
contained therein or in any other subsequently filed document which also is,
or is deemed to be, incorporated by reference modifies or supersedes such
statement. Any such statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of this Consent
Solicitation Statement/Prospectus.

The Existing Fund has incorporated certain of its reports filed with the
Commission into the Registration Statement. The Existing Fund will provide
without charge to each person, including any beneficial owner of its BUCs, to
whom a copy of this Consent Solicitation Statement/Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all reports incorporated by reference in the Registration Statement, other
than exhibits to such documents. Such written or oral request should be
directed to Maurice E. Cox, Jr. at America First Companies L.L.C., Suite 400,
1004 Farnam Street, Omaha, Nebraska, telephone number (402) 444-1630.

<PAGE>
FORWARD-LOOKING STATEMENTS

This Consent Solicitation Statement/Prospectus and the reports of the Existing
Fund incorporated by reference herein contain certain forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the New Fund or the Existing Fund to
be materially different from results or plans expressed or implied by such
forward-looking statements. Such factors include, among other things, adverse
changes in the real estate or tax-exempt bond markets, risk of default under
the mortgage bonds, interest rate fluctuations, tax treatment of the New Fund
or the Existing Fund and their investments, environmental/safety requirements,
adequacy of insurance coverage, and general and local economic and business
conditions. Although the General Partner believes that the assumptions
underlying the forward-looking statements are reasonable, any of the
assumptions could be inaccurate and, therefore, there can be no assurance that
the forward-looking statements included or incorporated by reference in this
Consent Solicitation Statement/Prospectus will prove to be accurate. In light
of the significant uncertainties inherent in the forward-looking statements,
the inclusion of such information should not be regarded as a representation
by the General Partner or any other person that the objectives and plans of
the New Fund or the Existing Fund will be achieved.

<PAGE>
TABLE OF CONTENTS

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Transaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purposes Of The Transaction. . . . . . . . . . . . . . . . . . . . . . . 1
Background For The Transaction . . . . . . . . . . . .. . . . . . . . . 1
Consideration Of Alternatives . . . . . . . . . . . . . . . . . . . . . 4
Recommendation Of The General Partner. . . . . . . . . . . . . . . . . . 4
Fairness Determination Of The General Partner. . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consent Of Buc Holders . . . . . . . . . . . . . . . . . . . . . . . . . 6
Comparison Of The New Partnership Agreement And The
Current Partnership Agreement. . . . . . . . . . . . . . . . . . . . . . 6
Transferability Of Bucs. . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . 11
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SUMMARY FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . 12
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
New Fund May Create Senior Interests . . . . . . . . . . . . . . . . . . 13
New Fund May Reinvest In Additional Mortgage Bonds . . . . . . . . . . . 13
Differences In Limited Partnership Agreement May Be Adverse To Buc Holders 14
Conflicts Of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Possible Alternatives To The Transaction Will Not Be Pursued . . . . . . 15
Expenses Of The Transaction. . . . . . . . . . . . . . . . . . . . . . . 15
Potential Lack Of Public Trading Market For Bucs . . . . . . . . . . . . 15
No Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 16
SOLICITATION OF BUC HOLDER CONSENT. . . . . . . . . . . . . . . . . . . . 16
Solicitation By The General Partner. . . . . . . . . . . . . . . . . . . 16
Communicating With Other Buc Holders . . . . . . . . . . . . . . . . . . 18
THE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Terms Of The Merger Agreement. . . . . . . . . . . . . . . . . . . . . . 19
Issuance Of Bucs Of The New Fund . . . . . . . . . . . . . . . . . . . . 20
Costs Of The Transaction . . . . . . . . . . . . . . . . . . . . . . . . 21
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Background And Reasons For The Transaction . . . . . . . . . . . . . . . 21
Recommendation Of The General Partner . . . . . . . . . . . . . . . . . 25
Consideration Of Alternative Courses Of Action . . . . . . . . . . . . . 26
Fairness Determination Of The General Partner. . . . . . . . . . . . . . 27
INFORMATION RELATING TO THE EXISTING FUND . . . . . . . . . . . . . . . . 27
Description Of Business. . . . . . . . . . . . . . . . . . . . . . . . . 27
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Voting Securities And Beneficial Ownership Thereof By
Principal Buc Holders, Directors And Officers . . . . . . . . . . . . . . 34
Market For The Existing Fund's Bucs And Related Buc Holder Matters . . . 34
SELECTED FINANCIAL DATA OF THE EXISTING FUND . . . . . . . . . . . . . . 36

INFORMATION RELATING TO THE NEW FUND. . . . . . . . . . . . . . . . . . . 36
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Partners Of The New Fund . . . . . . . . . . . . . . . . . . . . . . . . 38
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
TERMS OF THE NEW PARTNERSHIP AGREEMENT. . . . . . . . . . . . . . . . . . 39
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Formation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Management Of The New Fund . . . . . . . . . . . . . . . . . . . . . . . 40
Allocations And Distributions. . . . . . . . . . . . . . . . . . . . . . 40
Other Payments To The General Partner. . . . . . . . . . . . . . . . . . 43
Liability Of Partners And Buc Holders. . . . . . . . . . . . . . . . . . 45
Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Removal Or Withdrawal Of The General Partner . . . . . . . . . . . . . . 47
Effect Of Removal, Bankruptcy, Dissolution Or Withdrawal
Of A General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Dissolution And Liquidation. . . . . . . . . . . . . . . . . . . . . . . 48
Designation Of Tax Matters Partner . . . . . . . . . . . . . . . . . . . 49
Books And Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Other Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Derivative Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
DESCRIPTION OF THE BUCS OF THE NEW FUND . . . . . . . . . . . . . . . . . 50
Beneficial Unit Certificates . . . . . . . . . . . . . . . . . . . . . . 50
Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTION . . . . . . . 51
Partnership Status . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Treatment Of The New Fund As A Publicly Traded Partnership . . . . . . . 52
Consequences Of A Merger . . . . . . . . . . . . . . . . . . . . . . . . 52
Nondeductibility Of Interest Expense . . . . . . . . . . . . . . . . . . 53
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
GLOSSARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

SUMMARY

The following is a summary of certain information contained elsewhere in this
Consent Solicitation Statement/Prospectus and the Appendices hereto. This
summary does not purport to be a complete statement of all material
information relating to the Agreement of Limited Partnership (the "New
Partnership Agreement") of the New Fund and the Agreement of Merger (the
"Merger Agreement"), between the Existing Fund and the New Fund and is subject
to, and qualified in its entirety by, the more detailed information and
financial statements contained or incorporated by reference in this Consent
Solicitation Statement/Prospectus. The forms of the New Partnership Agreement
and the Merger Agreement are attached as Appendices A and B, respectively, to
this Consent Solicitation Statement/Prospectus. BUC holders should read this
Consent Solicitation Statement/Prospectus in its entirety prior to returning
the consent card enclosed herewith. Certain terms used herein are defined in
the "GLOSSARY."

The Transaction

The General Partner is seeking the consent of the BUC holders of the Existing
Fund to a transaction (the "Transaction") in which Existing Fund will be
merged into the New Fund. The New Fund is a newly formed Delaware limited
partnership the business of which is to acquire and hold direct or indirect
interests in tax-exempt mortgage bonds secured by multifamily residential
properties. As a result of the Transaction, the New Fund will acquire all of
the assets and liabilities of the Existing Fund, including the seven
participating tax-exempt mortgage bonds currently held by the Existing Fund
that were issued by various state and municipal issuers to provide
construction and permanent financing of seven multifamily residential
properties.

Upon completion of the Transaction, persons holding BUCs in the Existing Fund
as of the Record Date will become BUC holders of the New Fund and the New
Partnership Agreement will control the operations of the New Fund after the
Transaction. The General Partner and Limited Partner of the Existing Fund
will be the General Partner and Limited Partner of the New Fund after the
Transaction. Upon completion of the Transaction, the principal executive
offices of the New Fund will remain at Suite 400, 1004 Farnam Street, Omaha,
Nebraska 68102, and the telephone number of the New Fund will remain (402)
444-1630. See "THE TRANSACTION," "INFORMATION RELATING TO THE EXISTING FUND"
and "INFORMATION RELATING TO THE NEW FUND."

Purposes of the Transaction

The Transaction has been proposed in an effort to increase the amount of
federally tax-exempt cash distributions to the BUC holders by acquiring
additional tax-exempt mortgage bonds secured by apartment complexes. The
General Partner also anticipates that the trading price of the BUCs will
increase if the amount of cash distributions paid to BUC holders can be
increased.

Background for the Transaction

As of December 31, 1997, the Existing Fund held seven tax-exempt mortgage
bonds secured by apartment complexes in five states. At that time, four of
the Existing Fund's participating tax-exempt mortgage bonds were classified as
nonperforming loans and the Existing Fund accepted interest payments from the
owners of the properties securing these nonperforming bonds in amounts less
than the full amount of base interest due on these bonds. In addition, while
contingent interest has been paid on one of the three performing bonds, the
General Partner did not believe that any contingent interest will be paid to
the Existing Fund on any of its other bonds. Accordingly, the possibility of
the Existing Fund increasing the amount of tax-exempt interest received by it
from its current portfolio of mortgage bonds was limited to marginal increases
in the operating performance of the properties securing the bonds.

In addition, principal and accrued interest on six of the bonds became due and
payable on December 1, 1997 and will become due and payable on the remaining
bond on July 1, 1998 (the "Repayment Dates"). The terms of the bonds require
that the underlying properties be sold or refinanced on the Repayment Dates
and that the net proceeds of such sale or refinancing be applied to the
payment of principal and accrued interest on the bonds, including any accrued
contingent interest. The estimated market value of the properties at December
31, 1997 was approximately $5,500,000 less than the outstanding principal
balance of the bonds. Therefore, if these properties were sold or refinanced
on the Repayment Dates, it was expected that the net proceeds from the sale or
refinancing would not have been sufficient to repay the principal balance of
these bonds. Each of the bonds is a "nonrecourse" obligation of the property
owner and, therefore, the net proceeds from the sale or refinancing of the
property is the only source of repayment for the bonds. Accordingly, the
General Partner anticipates that the Existing Fund will suffer an
irretrievable loss of capital if the bonds had been repaid pursuant to their
terms on the Repayment Dates. Therefore, if the bonds were repaid on the
Repayment Dates, the Existing Fund would not achieve one of its principal
investment objectives, which is the preservation of investors' capital.

In order to avoid this loss of capital, the General Partner has proposed that
the Existing Fund continue to hold the bonds beyond the respective Repayment
Dates. In order to do this, the bonds will be reissued pursuant to the
"remarketing" provisions contained on each of the bonds. By remarketing the
bonds to the Existing Fund according to their terms, the General Partner may
continue to work to improve the economic performance and value of the
properties which it hopes will improve the chances of the bonds being repaid
in full. However, in order to maintain the status of a remarketed bond as
federally tax-exempt, the base interest rate on the bond is required to be
reset, if necessary, to a level at which the projected net revenues of the
property financed by the bond will be sufficient to pay the full debt service
on the bond. Furthermore, the maximum amount of contingent interest payable
on such bond would be reduced to a level at which the full amount of
contingent interest would be payable from projected net revenues and net sale
proceeds from the property. Therefore, it is expected that the remarketed
bonds will bear base interest at rates that are lower than the 8.5% per annum
interest rate in effect prior to remarketing. In addition, the maximum
interest rate, including contingent interest, payable on the remarketed bonds
is expected to be less than the 16% per annum in effect prior to the
remarketing.

The reduction in the stated base and contingent interest rates on the
remarketed bonds is not expected to have an immediate effect on the Existing
Fund's interest income because the Existing Fund has been accepting interest
payments for less than the full amount of base interest due on most of the
bonds. However, the reduction in base and contingent interest rates on the
remarketed bonds will limit the ability of the Existing Fund to participate in
additional net cash flow generated by any future improvements in the economic
performance of the properties. Accordingly, the Existing Fund is expected to
earn a relatively static amount of interest income in the future. On the
other hand, the General Partner believes it is likely that the administrative
expenses of operating the Existing Fund will continue to escalate over time.
Accordingly, the General Partner anticipates that the amount of net cash flow
which the Existing Fund will have available for distribution to the BUC
holders will decline over time.

In an attempt to increase the amount of tax-exempt interest income available
for distribution to BUC holders, the General Partner is proposing that the
assets and liabilities of the Existing Fund be transferred to the New Fund.
Unlike the Existing Fund, the New Fund will have the ability to acquire
additional tax-exempt bonds secured by multifamily residential properties. In
addition to new tax-exempt bonds which may be issued to finance development or
rehabilitation of apartment complexes, a substantial number of existing
tax-exempt mortgage bonds are outstanding that were originated in the late
1980s to finance the construction of apartment complexes. In light of the
current interest rate environment, the General Partner believes that many
apartment complex owners may be interested in refinancing the mortgage loans
underlying these existing bonds. Such refinancings would result in the
reissuance of the tax-exempt mortgage bonds making them available for
acquisition by the New Fund.

The New Fund intends to finance the acquisition of additional tax-exempt bonds
by causing the tax-exempt bonds it acquires from the Existing Fund to be
either (i) deposited into a trust that will issue two classes of beneficial
ownership or (ii) reissued in a manner creating two classes of bonds. In
either case, the senior trust interests or class of bonds (either referred to
as the "Senior Interests") will be sold to unaffiliated investors and the New
Fund will seek to use the proceeds of such sales to acquire additional
tax-exempt bonds secured by apartment complexes. The New Fund may also use
interest income to supplement the amount of sale proceeds available to invest
in additional mortgages. A residual interest in the trust or a subordinate
class of bonds (either the "Subordinate Interests") will be retained by the
New Fund. It is anticipated that the respective rights of the holders of the
Senior Interests and the Subordinate Interests will allow the Senior Interests
to receive investment-grade ratings from nationally recognized rating
agencies. The additional tax-exempt mortgage bonds acquired by the New Fund
are not expected to be rated. As a result the Senior Interests are expected
to bear tax-exempt interest at rates which will be below the interest rates
the New Fund expects to earn on the additional tax-exempt mortgage bonds.
Therefore, the New Fund expects to be able to increase its overall interest
income by selling the low interest rate Senior Interests to unaffiliated
parties and reinvesting the proceeds in additional unrated tax-exempt bonds
secured by multifamily residential housing which bear interest at a higher
rate than the Senior Interests. Although the terms on which the New Fund may
acquire additional tax-exempt mortgage bonds, if any, are not known at this
time, the General Partner expects to be able to have such bonds provide for
the payment of contingent interest to the New Fund.

The General Partner would cause the New Fund to repeat this process with the
additional tax-exempt bonds acquired by the New Fund in order to further
increase the New Fund's potential net interest income. Accordingly, the
General Partner would expect the amount of cash available for distribution to
be increased through this mechanism. There can be no assurance, however, that
the distributions to BUC holders will increase by pursuing this strategy.

In addition, the General Partner believes that if it is able to increase the
amount of cash distributions paid to BUC holders in the New Fund over the
level of distributions currently paid to BUC holders of the Existing Fund,
that the BUCs of the New Fund may trade at prices above the prevailing prices
at which the BUCs in the Existing Fund currently trade. See "THE
TRANSACTION-General" and "-Background and Reasons for the Transaction" and
"INFORMATION RELATING TO THE NEW FUND-Business."

The relative amount of Subordinate Interests representing subordinate
interests in trusts will be limited to the extent necessary to avoid
subjecting the New Fund to the registration provision of the Investment
Company Act of 1940.

Consideration of Alternatives

In addition to the proposed Transaction, the General Partner considered the
options of (i) causing the bonds to be repaid and dissolving the Existing Fund
or (ii) continuing the Existing Fund with its current portfolio of tax-exempt
bonds. For the reasons set forth under "THE TRANSACTION-Consideration of
Alternative Courses of Action," the General Partner has rejected each of the
alternatives in favor of the Transaction. However, if the Transaction is not
approved, the General Partner will reconsider other options available to the
Existing Fund.

Recommendation of the General Partner

The General Partner believes that the Transaction is in the best interests of
the Existing Fund and all of its BUC holders and recommends the approval
thereof by the BUC holders. See "THE TRANSACTION-Recommendation of the
General Partner."

Fairness Determination of the General Partner

The General Partner, including the Board of Managers of America First
Companies L.L.C. (the general partner of the General Partner)("America
First"), believes that the terms of the Transaction are fair to the BUC
holders for the reasons discussed under "THE TRANSACTION-Fairness
Determination of the General Partner." The General Partner has not obtained a
fairness opinion or any other evaluation of the Transaction from an investment
banker or other third party.

Risk Factors

BUC holders of the Existing Fund should consider the following risk factors in
connection with the Transaction. See "RISK FACTORS" on page [ ].

The limited partnership agreement of the New Fund is different from the
limited partnership agreement of the Existing Fund. Notably, the limited
partnership agreement of the New Fund will allow the General Partner to sell
Senior Interests without the consent of BUC holders and to reinvest the
proceeds from the sale of Senior Interests and interest income earned by the
New Fund in additional tax-exempt mortgage bonds. The limited partnership
agreement of the Existing Fund requires BUC holder consent for the sale of
substantially all assets of the Existing Fund and would require that the net
proceeds from the sale of any assets and all net interest income be
distributed to BUC holders rather than reinvested. Certain other differences
exist between the limited partnership agreements which may be adverse to the
BUC holders.

There can be no assurance that the New Fund will be able to invest any
amounts raised from the sale of Senior Interests in additional tax-exempt
mortgage bonds.

The acquisition of additional tax-exempt bonds will entail many of the risks
generally associated with investing in unrated debt securities. BUC holders
will be dependent on the General Partner to evaluate additional tax-exempt
bonds acquired by the New Fund and to negotiate the terms thereof. It is not
expected that there will be a liquid market for any of the tax-exempt bonds or
Subordinated Interests held by the New Fund.

Certain expenses of the Transaction which are payable by the Existing Fund
may be avoided if the Transaction is not consummated.

There is no current trading market for the BUCs of the New Fund and there
can be no assurance that one will develop.

BUC holders voting against the Transaction will not be entitled to any
appraisal or other dissenters' rights under Delaware law and will not be
afforded any by the Existing Fund.

Consent of BUC Holders

The General Partner will not hold a meeting of the BUC holders to consider the
Transaction, but instead is seeking the written consent of BUC holders as
provided in Section 10.02 of the Current Partnership Agreement. The
Transaction may not be consummated without the consent of the holders of a
majority of the outstanding BUCs of the Existing Fund.

A consent card is included with this Consent Solicitation Statement/Prospectus
and BUC holders are asked to complete, date and sign the consent card and
return it to Service Data Corporation in the enclosed envelope as soon as
possible. In order to be valid, consents must be received by Service Data
Corporation by 5:00 p.m. Central Time on [Date], 1998, unless such date is
extended by the General Partner in its sole discretion. An otherwise valid
consent card will be deemed to grant consent to the Transaction if it is not
marked to withhold consent or to abstain. A BUC holder may not revoke its
consent after the consent card is delivered to Service Data Corporation. See
"SOLICITATION OF BUC HOLDER CONSENT."

Comparison of the New Partnership Agreement
and the Current Partnership Agreement

In general, the terms of the New Partnership Agreement are the same as those
of the Current Partnership Agreement. However, there are some important
differences between the New Partnership Agreement and the Current Partnership
Agreement. These differences include (i) granting authority to the General
Partner to (A) cause the sale of the Senior Interests to unaffiliated parties
without the consent of the BUC holders and (B) to reinvest the proceeds from
the sale of the Senior Interests (which amounts may be supplemented with
interest income earned by the New Fund) in additional tax-exempt bonds secured
by apartment complexes, (ii) allowing the New Fund to hold the Subordinate
Interests which will have rights in the collateral which are junior to those
of the Senior Interests, (iii) changes in the allocation of cash distributions
between the BUC holders and the General Partner, (iv) allowing an affiliate of
the General Partner to provide property management services with respect to a
property acquired in foreclosure at competitive prices rather than at the
lower of such prices or its cost, (v) a change in the method of determining
the value of the General Partner's interest in the event of the General
Partner's removal and (vi) the elimination of a requirement that BUC holders
unanimously consent to amendments affecting cash distributions. See "TERMS OF
NEW PARTNERSHIP AGREEMENT."

The following table sets forth the fees and cash distributions that the
General Partner and its affiliates currently receive from the Existing Fund
and the fees and cash distributions that the General Partner and its
affiliates will receive from the New Fund after the Transaction and assuming
the New Fund is able to sell Senior Interests and use the proceeds to acquire
additional tax-exempt bonds.

<TABLE>
<CAPTION>
Type of
Compensation Existing Fund New Fund
- -------------- ------------------------------------------------------- -----------------------------------------------------
<S> <C> <C>
Administrative 0.45% per annum of the original principal amount of Same as Existing Fund. Upon the acquisition of
Fee bonds. The Administrative Fee is payable by the additional mortgage bonds, the General Partner will
owners of the properties financed by the tax-exempt become entitled to an Administrative Fee payable by
bonds held by the Existing Fund out of available cash the owners of the properties underlying such
flow after payment of base interest on the bonds. additional mortgage bonds out of property cash flow
The General Partner did not receive any after the payment of base interest on the additional
Administrative Fees during the year ended December bonds. The amount of any additional Administrative
31, 1997. Unpaid Administrative Fees accrue and are Fees cannot be estimated because the amount of
payable out of the net proceeds of a sale or additional bonds, if any, that the New Fund may
refinancing of a property after repayment of acquire is not known.
principal and accrued base interest on the related
bond.

The Administrative Fee becomes payable by the
Existing Fund only with respect to properties that
have been foreclosed. Because the Existing Fund does
not hold any foreclosed properties, it did not pay
any Administrative Fees to the General Partner during
the year ended December 31, 1997. If the Existing
Fund were to foreclose on all Bonds which are
currently in default, the Administrative Fees payable
by the Existing Fund could be as high as $213,417 per
annum.

Mortgage A Mortgage Placement Fee of .675% of the principal Same as Existing Fund. Upon the acquisition of
Placement Fee amount of the original bonds was paid to the General additional mortgage bonds, the General Partner will
Partner by the owners of the financed properties out be entitled to a Mortgage Placement Fee in an amount
of bond proceeds. None was paid by the Existing equal to .675% of the principal amount of any
Fund. No Mortgage Placement Fees were paid to the additional tax-exempt bonds acquired by the New
General Partner during the year ended December 31, Fund. Mortgage Placement Fees will be paid by the
1997. owner of the properties underlying such additional
mortgage bonds out of bond proceeds. The amount of
any additional Mortgage Placement Fees, if any, that
may be earned by the General Partner cannot be
estimated because the amount of additional bonds, if
any, that the New Fund may acquire is not known.

Property Paid by the Existing Fund with respect to properties Paid by New Fund with respect to properties acquired
Management acquired in foreclosure of tax-exempt mortgage in foreclosure of tax-exempt mortgage bonds. Not to
fees paid to bonds. Not to exceed the lesser of (i) 5% of the exceed the lesser of (i) 5% of the gross revenue of
affiliated gross revenue of the managed property, (ii) the fees the managed property or (ii) the fees charged by
management charged by unaffiliated property managers in the same unaffiliated property managers in the same geographic
company geographic area or (iii) the actual cost of providing area. Amount could increase over amount which would
such services. No property management fees were paid be paid by Current Fund because fees are no longer
by the Existing Fund during year ended December 31, limited to the property manager's cost.
1997.
Paid by owners of properties which engage affiliate
Paid by the owners of three properties financed by of General Partner as property manager at negotiated
tax-exempt mortgage bonds held by the Existing Fund rates. Amount will increase over level paid by
at negotiated rates. Property management fees of and the General Partner's affiliated property
$270,616 were earned during year ended December 31, management company assumes management of the
1997. underlying properties. The amount of the increase,
if any, cannot be estimated because the number of
additional properties, if any, and the revenues
generated thereby are not known.

Distributions 1% of Net Interest Income not representing contingent 1% of Net Interest Income not representing contingent
of Net Interest interest until BUC holders receive a cumulative interest. 25% of Net Interest Income representing
Income noncompounded return of 11% per annum on Adjusted contingent interest of up to 0.9% per annum of the
Capital Contributions; 10% of such Net Interest principal amount of all mortgage bonds. Will
Income thereafter. 25% of such Net Interest Income increase above the amount currently distributed by
representing contingent interest of up to 0.9% per the Existing Fund if additional bonds are acquired
annum of the principal amount of all mortgage bonds. which generate additional Net Interest Income or if
Total of $84,658 was paid to the General Partner greater amounts of contingent interest are received
during year ended December 31, 1997. by the New Fund. Not able to estimate since future
Net Interest Income and amounts of contingent
interest are not known.

<PAGE>
Type of
Compensation Existing Fund New Fund
- -------------- ------------------------------------------------------- -----------------------------------------------------

Distributions None of the portion representing a return on None, except for 25% of Net Residual Proceeds
of Net Residual principal of tax-exempt bonds. 25% of Net Residual representing contingent interest of up to 0.9% per
Proceeds Proceeds representing contingent interest of up to annum of the principal amount of all mortgage bonds
0.9% per annum of the principal amount of all (when combined with prior distributions of Net
mortgage bonds (when combined with prior Interest Income representing contingent interest).
distributions of Net Interest Income representing
contingent interest). None of the remaining portion Will increase if New Fund generates a greater amount
representing contingent interest until BUC holders of Net Residual Proceeds from contingent interest
receive an amount (when combined with all prior than Existing Fund. Not able to estimate since
distributions to BUC holders) equal to the sum of future amounts of contingent interest, if any, is not
their initial Adjusted Capital Contributions plus a known.
cumulative noncompounded annual return of 11% on
their Adjusted Capital Contributions; then 100% of
Net Residual Proceeds to the extent of 10% of all Net
Residual Proceeds representing contingent interest
distributed to all partners exclusive of the
following amounts. Thereafter, 10% of any remaining
Net Residual Proceeds representing contingent
interest.

None during year ended December 31, 1997.
</TABLE>

In addition to the foregoing, the General Partner will continue to be
reimbursed for certain expenses it and its affiliates incur in connection with
the business of the New Fund. See "TERMS OF THE NEW PARTNERSHIP
AGREEMENT-Payments to the General Partner" and "-Allocations and
Distributions."

Transferability of BUCs

BUCs of the New Fund will be freely transferable, subject to certain
restrictions set forth in the New Partnership Agreement which are identical to
those in the Current Partnership Agreement. The BUCs in the New Fund have
been approved for inclusion on The NASDAQ Stock Market under the symbol
"[ATAXZ]" upon consummation of the Transaction. See "DESCRIPTION OF THE BUCS
OF THE NEW FUND-Transfers."

Federal Income Tax Consequences

For federal income tax purposes the New Fund will be treated as a continuation
of the Existing Fund with a change of name and, accordingly, BUC holders will
not recognize any income, gain or loss as a result of the Transaction.
Consummation of the Transaction is conditioned on, among other things, receipt
of an opinion of counsel to this effect.

The New Fund has received an opinion of counsel that it will be treated as a
partnership for federal income tax purposes and BUC holders will be recognized
as partners for federal income tax purposes. See "MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF THE TRANSACTION."

Accounting Treatment

The Transaction will not result in a change in the New Fund's financial
statement treatment of any asset or liability of the Existing Fund or of the
capital account of any partner or BUC holder. See "THE TRANSACTION-Accounting
Treatment."

<PAGE>
SUMMARY FINANCIAL INFORMATION

The following table sets forth certain financial data of the Existing Fund
which has been derived from the audited financial statements of the Existing
Fund as of and for the five-year period ended December 31, 1997. The
financial statements as of December 31, 1997 and 1996 and for each of the
three years in the period ended December 31, 1997 have been audited by Coopers
& Lybrand L.L.P., independent accountants for the Existing Fund, and are
incorporated by reference in this Consent Solicitation Statement/Prospectus.
<TABLE>
<CAPTION>
For Year Ended December 31,
----------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Mortgage bond investment income $ 6,169,500 $ 6,134,812 $ 6,159,236 $ 5,973,373 $ 5,461,438
Rental income - - - - 5,148,252
Interest income on temporary cash
investments 53,554 47,247 42,319 24,046 31,700
Contingent interest income 124,682 154,539 166,940 211,319 192,343
General and administrative expenses (678,487) (648,784) (585,926) (478,438) (1,033,708)
Real estate operating expenses - - - - (2,457,071)
Depreciation - - - - (1,205,631)
Interest expense - - - - (400,931)
------------ ------------ ------------ ------------ ------------
Net income $ 5,669,249 $ 5,687,814 $ 5,782,569 $ 5,730,300 $ 5,736,392
============ ============ ============ ============ ============
Net income, basic and diluted, per
Beneficial Unit Certificate (BUC) $ .56 $ .56 $ .57 $ .56 $ .56
============ ============ ============ ============ ============
Total cash distributions paid or accrued
per BUC $ .54 $ .54 $ .54 $ .54 $ .7350
============ ============ ============ ============ ============
Investment in tax-exempt mortgage
bonds at estimated fair value $ 71,126,000 $ 66,026,000 $ 66,026,000 $ 66,026,000 $ 66,026,000
============ ============ ============ ============ ============
Total assets $ 73,213,016 $ 68,014,454 $ 67,698,916 $ 67,379,656 $ 67,137,170
============ ============ ============ ============ ============
</TABLE>

<PAGE>
RISK FACTORS

There are certain disadvantages, adverse consequences and risks to the BUC
holders which may result from the consummation of the proposed Transaction,
including the following. BUC holders should read this entire Consent
Solicitation Statement/Prospectus and consider carefully the following risk
factors before granting their consent to the Transaction.

New Fund May Create Senior Interests

The New Fund intends to finance the acquisition of additional tax-exempt bonds
by causing tax-exempt bonds acquired by the New Fund from the Existing Fund to
be either (i) deposited into a trust that will issue two classes of beneficial
ownership or (ii) reissued in a manner creating two classes of bonds. In
either case, the senior trust interests or class of bonds (either referred to
as the "Senior Interests") will be sold to unaffiliated investors and a
residual interest in the trust or the subordinate class of bonds (either the
"Subordinate Interests") will be retained by the New Fund. The ultimate
source of principal and interest payments on both the Senior Interests and the
Subordinate Interests will be the net cash flow generated by the apartment
complexes financed with the underlying mortgage bonds or from the net proceeds
from the sale of such real estate. However, the holders of the Senior
Interests will have rights with respect to the net cash flow and net sale
proceeds from such real estate which will be senior to those of the New Fund
which will hold the Subordinate Interests. Therefore, in the event that such
net cash flow or net sale proceeds from the financed properties are
insufficient to pay the full amount of principal and interest due on the
Senior Interests and the Subordinate Interests, the holders of the Senior
Interests will receive the full amount due to them before the New Fund will
receive any amount due to it on the Subordinate.

New Fund May Reinvest in
Additional Mortgage Bonds

The New Fund expects to acquire additional tax-exempt bonds secured by
multifamily apartment projects. However, there can be no assurance that the
New Fund will be able to invest any amounts raised from the sale of Senior
Interests in additional tax-exempt mortgage bonds. If the New Fund is unable
to reinvest the amounts raised from the sale of Senior Interests in additional
tax-exempt mortgage bonds bearing interest at a rate higher than the interest
rate on the Senior Interests, the amount of interest income earned by the New
Fund could be less than the amount of interest income it earned prior to the
sale of the Senior Interests.

The acquisition of additional tax-exempt bonds will entail risks generally
associated with investing in unrated debt securities. Such risks include the
possibility of default in the payment of principal and interest on such
bonds. It is expected that such bonds will not be personal obligations of the
borrowers and the New Fund will be relying solely on the value of the
underlying real estate as security for the payment of principal and interest.
The ability of the underlying property to pay debt service on the bonds may be
affected by a number of factors, many of which are beyond the direct control
of the property owner. Such factors include general and local economic
conditions, the relative supply of apartments and alternative housing in the
market area, interest rates on home mortgage loans, government regulation and
the cost of compliance therewith, taxes and inflation. As with the tax-exempt
mortgage bonds held by the Existing Fund, there is not expected to be a
regular trading market for the additional bonds acquired by the New Fund.

If the property securing a bond is not operated in accordance with various
requirements, the interest paid to the New Fund on such bond may become
subject to federal and state income taxes. In most cases, the operation of
the properties underlying additional tax-exempt bonds acquired by the New Fund
will be managed by the owners of such properties who will not be affiliated
with, or under the control of, the New Fund.

BUC holders will not have an opportunity to review additional bond investments
prior to the time they decide whether or not to consent to the Transaction or
prior to the time the New Fund makes such acquisition. Accordingly, BUC
holders will be dependent on the General Partner to evaluate additional bond
investments made by the New Fund and to negotiate the terms thereof.

Differences in Limited Partnership Agreement
May Be Adverse to BUC Holders

The New Partnership Agreement differs from the Current Partnership Agreement
in certain material respects and some of the differences may be adverse to the
BUC holders.

The Current Partnership Agreement prohibits the Existing Fund from reinvesting
its net interest income or the proceeds received from the sale or repayment of
its tax-exempt mortgage bonds. All such amounts are required to be
distributed to BUC holders or, to the extent deemed necessary by the General
Partner, held in the Existing Fund's reserve fund. Accordingly, the Current
Partnership Agreement would not authorize the General Partner to apply the
proceeds from the sale of Senior Interests or any net interest income to
acquire additional tax-exempt bonds. In contrast, the New Partnership
Agreement authorizes the General Partner to invest such amounts in additional
tax-exempt bonds secured by multifamily real estate, rather than distribute
such proceeds to the BUC holders. In addition, in order for the New Fund to
hold the Subordinate Interests, it was necessary to eliminate the restriction
on holding junior trust deeds contained in the Current Partnership Agreement.

The New Partnership Agreement will allow an affiliate of the General Partner
to provide property management services with respect to apartment complexes
acquired by the New Fund in foreclosure for fees which are no higher than (i)
those charged by unaffiliated property management companies in the same
geographical area or (ii) 5% of the gross revenues of the managed property.
The Current Partnership Agreement provides that such property management
services must be provided at the lower of (i) such competitive fees, (ii) 5%
of the gross revenues of the managed property or (iii) the cost of providing
such services. Therefore, it is possible that if the New Fund acquires
ownership of a property through foreclose of a mortgage bond and the General
Partner's affiliate is engaged to manage the property, the New Fund could pay
such affiliate more to manage the property than could the Existing Fund.

The New Partnership Agreement has also eliminated the provision of the Current
Partnership Agreement which provides that no amendment could be adopted which
would have the effect of delaying or reducing the amount of cash distributions
to a BUC holder without the consent of such BUC holder. The effect of this
change is to allow such an amendment to be adopted with the consent of a
majority in interest of the BUC holders rather than the unanimous consent of
BUC holders. In addition, the New Partnership Agreement uses a different
method to value the economic interest of the General Partner in the event it
is removed as such by the BUC holders.

Conflicts of Interest

The General Partner has a conflict of interest in recommending the Transaction
to BUC holders because the General Partner expects to receive increased
amounts of fees and cash distributions as a result of the Transaction. Since
the New Fund will have the ability to acquire additional tax-exempt mortgage
bonds, the General Partner expects to receive additional Administrative Fees
from the owners of the properties financed by such additional bonds. The
General Partner also expects to earn Mortgage Placement Fees in connection
with the acquisition of additional bonds. The General Partner will
participate in the cash distributions from the New Fund (although to a
potentially lesser degree than it does in the Existing Fund) and, to the
extent the acquisition by the New Fund of additional bonds allows it to
distribute a greater amount of cash than does the Existing Fund, the cash
distributions to the General Partner will increase. The amount, if any, of
additional cash distributions cannot be currently estimated. In addition, by
virtue of the Transaction, the General Partner may also be able to earn fees
and be entitled to expense reimbursements for a longer period of time than it
would if the Existing Fund were liquidated. Finally, if the General Partner
is removed, the value of the General Partner's interest in the New Fund will
reflect the present value of future Administrative Fees and distributions of
Net Interest Income, rather than its interest in the current liquidation value
of the New Fund's assets. Accordingly, the General Partner expects to realize
greater economic benefits if the Transaction is completed than if any of the
alternatives thereto are undertaken.

Possible Alternatives to the Transaction
Will Not Be Pursued

Alternatives to the Transaction include (i) allowing the Existing Fund to
continue to hold a portfolio consisting of the existing Bonds and (ii)
dissolution of the Existing Fund and liquidation of its assets. The General
Partner expects to realize greater economic benefits for itself if the
Transaction is completed than if any of the alternatives thereto are
undertaken. By approving the Transaction, the BUC holders will effectively
preclude the pursuit on any of these alternatives.

Expenses of the Transaction

Expenses of the Transaction are expected to be approximately $[ ] and
will be paid by the Existing Fund. Certain of the expenses may be avoided if
the Transaction is not consummated. See "THE TRANSACTION-Costs of the
Transaction."

Potential Lack of Public Trading Market for BUCs

BUCs of the New Fund will be newly issued securities and there can be no
assurance that a public trading market in the New Fund's BUCs will develop or
that the BUCs of the New Fund will trade at or above the prices at which the
Existing Fund's BUCs currently trade or would trade in the future if the
Transaction were not consummated. In addition, the transferability of the New
Fund's BUCs may be limited in certain circumstances similar to those set forth
in the Current Partnership Agreement. See "DESCRIPTION OF THE BUCS OF THE NEW
FUND-Transfers."

No Dissenters' Rights

BUC holders voting against the Transaction will not be entitled to any
appraisal or other dissenters' rights under Delaware law and will not be
afforded any by the Existing Fund.

SOLICITATION OF BUC HOLDER CONSENT
Solicitation by the General Partner

The General Partner is seeking the consent of the BUC holders of the Existing
Fund to the Transaction consisting of the merger of the Existing Fund and the
New Fund pursuant to the terms of the Merger Agreement and Delaware law. As a
result of the Transaction, all of the assets and liabilities of the Existing
Fund will become assets and liabilities of the New Fund and the separate
existence of the Existing Fund will terminate. Under the terms of the Current
Partnership Agreement, the transfer of all the assets of the Existing Fund in
a single transaction and the dissolution of the Existing Fund requires the
consent of the holders of a majority of the outstanding BUCs. Accordingly,
the Transaction may not be consummated without the consent of the holders of a
majority of the outstanding BUCs of the Existing Fund.

THE MATTER TO WHICH THE BUC HOLDERS ARE REQUESTED TO CONSENT IS OF GREAT
IMPORTANCE TO THE EXISTING FUND AND THE BUC HOLDERS. ACCORDINGLY, BUC HOLDERS
ARE URGED TO READ AND CAREFULLY CONSIDER THE INFORMATION PRESENTED IN THIS
CONSENT SOLICITATION STATEMENT/PROSPECTUS AND TO COMPLETE, DATE, SIGN AND
PROMPTLY RETURN THE ENCLOSED CONSENT CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.

The General Partner will not hold a meeting of the BUC holders to consider the
Transaction, but instead is seeking the written consent of BUC holders as
provided in Section 10.02 of the Current Partnership Agreement. Each BUC
holder of the Existing Fund is being asked to vote as follows:

YES, I approve of the merger of the Existing Fund and the New Fund.
or
NO, I do not approve of the merger of the Existing Fund and the New Fund.

THE GENERAL PARTNER BELIEVES THAT THE TERMS OF THE TRANSACTION ARE FAIR AND IN
THE BEST INTERESTS OF THE EXISTING FUND AND ALL OF ITS BUC HOLDERS AND
RECOMMENDS THE APPROVAL THEREOF BY THE BUC HOLDERS.

Only BUC holders of record at the close of business on the Record Date will be
entitled to receive this notice and to grant or withhold their consent to the
Transaction. Under the terms of the Current Partnership Agreement, BUC
holders are entitled to one vote for each BUC they hold as of the Record
Date. As of the Record Date, there was a total of 9,979,128 BUCs
outstanding. Therefore, the affirmative vote of the holders of 4,989,565 BUCs

is required to approve the Transaction. As of the Record Date, no BUCs were
beneficially owned by the General Partner, America First or any of the
officers and managers of America First.

In order to be valid, consents must be received by Service Data Corporation by
5:00 p.m. Central Time on [Date], 1998, which date may be extended by the
General Partner in its sole discretion. If the General Partners receives
valid consents to the Transaction from the holders of a majority of the
outstanding BUCs prior to such date, it may proceed with the consummation of
the Transaction at such earlier time. Consent cards should be returned in the
enclosed envelope to Service Data Corporation at the following address:

Service Data Corporation
2424 South 130th Circle
Omaha, NE 68144

An otherwise valid consent card will be deemed to grant consent to the
Transaction if it is not marked to withhold consent or to abstain.
Abstentions and broker nonvotes will have the same effect as a vote against
the Transaction. BUC holders who withhold consent or abstain will have no
right to require the Existing Fund to purchase their BUCs or any other rights
similar to those available to dissenting shareholders of corporations under
Delaware law. A BUC holder may not revoke its consent after the consent card
is delivered to Service Data Corporation.

Consents of the BUC holders will be tabulated by Service Data Corporation of
Omaha, Nebraska. Service Data Corporation currently serves as the transfer
agent and registrar for the Existing Fund and for other public limited
partnerships sponsored by America First Companies L.L.C. (the general partner
of the General Partner) ("America First"), but is not otherwise affiliated
with the General Partner.

The Existing Fund will bear all costs associated with preparing, assembling
and mailing the Consent Solicitation Statement/Prospectus and any supplemental
solicitation materials. Certain officers and employees of America First may
solicit consents without additional compensation therefor other than
reimbursement for actual and reasonable out-of-pocket expenses incurred by
such persons in connection with such solicitation. Brokerage firms,
fiduciaries, nominees and others will be reimbursed for out-of-pocket expenses
incurred by them in connection with forwarding consent materials to beneficial
holders of BUCs held in their names. In addition to the use of the mails,
consents may be solicited by officers and regular employees of America First,
who will not be specifically compensated for such services, by means of
personal calls upon or telephonic communications with BUC holders or their
representatives. Moreover, the General Partner may engage the services of a
professional proxy solicitation firm in connection with the solicitation of
consents.

Communicating With Other BUC Holders

Under Rule 14a-7 of the Securities Exchange Act of 1934, as amended, the
Existing Fund, upon written request from a BUC holder, will deliver to such
BUC holder (i) a statement of the approximate number of BUC holders of the
Existing Fund and (ii) the estimated cost of mailing proxy materials or
similar communications to the BUC holders of the Existing Fund. In addition,
under such rule, a BUC holder has the right, at his or her option, to have the
Existing Fund (i) mail (at the BUC holder's expense) any such materials which
the BUC holder desires to deliver to the other BUC holders of the Existing
Fund in connection with the Transaction or (ii) to have the Existing Fund
deliver, within five business days of the receipt of the request, a reasonably
current list of the names and addresses of the BUC holders of the Existing
Fund as of the Record Date. The Existing Fund may require a requesting BUC
holder to pay the reasonable cost of duplicating and mailing such BUC holder
list. Any such requests should be sent to Mr. Maurice E. Cox, Jr., America
First Companies L.L.C., Suite 400, 1004 Farnam Street, Omaha, Nebraska, 68102.

THE TRANSACTION
General

The General Partner has proposed a merger between the Existing Fund and the
New Fund pursuant to which (i) the separate existence of the Existing Fund
will cease and the New Fund will be the surviving partnership and will succeed
to all of the assets and liabilities of the Existing Fund, (ii) the New
Partnership Agreement will control the operations of the New Fund after the
Transaction and (iii) BUC holders in the Existing Fund will become BUC holders
in the New Fund and will receive one BUC in the New Fund for each BUC they
hold in the Existing Fund as of the Record Date. The assets of the Existing
Fund being acquired by the New Fund as a result of the Transaction include
seven tax-exempt bonds which are secured by apartment complexes.

The Transaction has been proposed by the General Partner in an effort to
increase cash distributions to BUC holders, increase net asset value and
increase market value of the BUCs by transferring the assets of the Existing
Fund to the New Fund which will have the ability to acquire additional
tax-exempt bonds secured by multifamily residential properties. The New Fund
intends to finance the acquisition of additional tax-exempt bonds by causing
the tax-exempt bonds acquired by it from the Existing Fund to be either (i)
deposited into a trust that will issue two classes of beneficial ownership or
(ii) reissued in a manner creating two classes of bonds. In either case, the
senior trust interests or class of bonds (either referred to as the "Senior
Interests") will be sold to unaffiliated investors and the New Fund will seek
to use the proceeds of such sales to acquire additional tax-exempt bonds
secured by apartment complexes. The New Fund may also use interest income to
supplement the amount of sale proceeds available to invest in additional
mortgages. A residual interest in the trust or a subordinate class of bonds
(either the "Subordinate Interests") will be retained by the New Fund. It is
anticipated that the respective rights of the holders of the Senior Interests
and the Subordinate Interests will allow the Senior Interests to receive
investment-grade ratings from nationally recognized rating agencies. The
additional tax-exempt mortgage bonds acquired by the New Fund are not expected
to be rated. As a result the Senior Interests are expected to bear tax-exempt
interest at rates which will be below the interest rates the New Fund expects
to earn on the additional tax-exempt mortgage bonds. Therefore, the New Fund
expects to be able to increase its overall interest income by selling the low
interest rate Senior Interests to unaffiliated parties and reinvesting the
proceeds in additional unrated tax-exempt bonds secured by multifamily
residential housing which bear interest at a higher rate than the Senior
Interests. The General Partner would cause the New Fund to repeat this
process with the additional tax-exempt bonds acquired by the New Fund in order
to further increase the New Fund's potential net interest income. There can
be no assurance, however, that the distributions to BUC holders will increase
by pursuing this strategy. See "Background and Reasons for the Transaction,"
below.

The New Fund and the Existing Fund have entered into the Merger Agreement and
will consummate the Transaction pursuant to the terms thereof promptly after
the receipt of consents from BUC holders owning a majority of the outstanding
BUCs of the Existing Fund. If the consent of a majority in interest of the
BUC holders of the Existing Fund is not received, or all other conditions to
the Transaction are not satisfied, by December 31, 1998, the Merger Agreement
will terminate. In addition, the Merger Agreement may be terminated by a
majority of the board of managers of America First before or after the receipt
of consents from BUC holders at any time prior to the closing date of the
Transaction. If the Transaction is not consummated, the General Partner will
reconsider other options available to the Existing Fund.

As a result of the Transaction, the New Fund will acquire all of the assets of
the Existing Fund, including the seven tax-exempt Bonds currently held by the
Existing Fund, and will become subject to all of the liabilities of the
Existing Funds.

Terms of the Merger Agreement

The following is a summary of the material terms of the Merger Agreement.
This summary does not purport to be complete and is subject to, and qualified
in its entirety by, the terms of the Merger Agreement, a copy of which is
attached as Appendix B of this Consent Solicitation Statement/Prospectus and
is incorporated by reference herein.

Effect of the Merger. Under the terms of the Merger Agreement (i) the
separate existence of the Existing Fund will cease and the New Fund will be
the surviving partnership and will succeed to all of the assets and
liabilities of the Existing Fund, (ii) the New Partnership Agreement will
control the operations of the New Fund after the Transaction and (iii) BUC
holders in the Existing Fund will become BUC holders of the New Fund and will
receive one BUC in the New Fund for each BUC they hold in the Existing Fund as
of the Record Date.

The partners of the New Fund prior to the Transaction are the General Partner
and the Limited Partner. The Limited Partner is also the sole limited partner
of the Existing Fund and has assigned its limited partner interest in the
Existing Fund to the BUC holders of the Existing Fund. Upon consummation of
the Transaction, the interests of the General Partner and Initial Limited
Partner in the Existing Fund will be converted into a general partner interest
and limited partner interest, respectively, in the New Fund and the Limited
Partner will assign its limited partner interest in the New Fund to the BUC
holders of the Existing Fund. As a result, persons holding BUCs in the
Existing Fund will become BUC holders of the New Fund and will receive one BUC
in the New Fund for each BUC they hold in the Existing Fund on the Record Date.

Conditions to Consummation of the Transfer of Assets. The closing for the
Transaction will take place promptly after the General Partner has received
the consent to the Transaction from the holders of a majority of the
outstanding BUCs of the Existing Fund. The receipt of such consent by no
later than December 31, 1998 (unless such date is extended by the General
Partner in its sole discretion) is a condition to closing the Transaction and
if it is not obtained, or all other conditions to closing are not satisfied or
waived, the Merger Agreement will terminate. Other conditions to closing
include (i) the declaration of effectiveness of the registration statement for
the BUCs of the New Fund under the Securities Act of 1933; (ii) obtaining
appropriate clearance for each state securities or "blue sky" administrator;
(iii) the delivery of a tax opinion acceptable to the General Partner to the
effect that for federal income tax purposes holders of BUCs in the Existing
Fund will not recognize any income, gain or loss as a result of the
Transaction; and (iv) the approval of the BUCs of the New Fund for inclusion
on The NASDAQ Stock Market.

Termination of the Merger Agreement. The Merger Agreement may be terminated
by a majority of the board of managers of America First before or after the
receipt of consents from BUC holders at any time prior to the effective time
of the certificate of merger filed with the Secretary of State of the State of
Delaware relating to the Transaction.

Issuance of BUCs of the New Fund

Service Data Corporation of Omaha, Nebraska acts as registrar and transfer
agent for the Existing Fund and will serve as registrar and transfer agent for
the New Fund. As promptly as practical after the closing of the Transaction,
Service Data Corporation will mail to each BUC holder of the Existing Fund of
record on the Record Date a letter of transmittal along with instructions for
the exchange of BUCs of the Existing Fund for BUCs of the New Fund.

BUC HOLDERS SHOULD NOT SEND IN THEIR BUCS WITH THE CONSENT CARD. BUCS SHOULD
ONLY BE RETURNED ALONG WITH THE LETTER OF TRANSMITTAL FORM FROM SERVICE DATA
CORPORATION.

Upon surrender by a BUC holder to Service Data Corporation of the certificate
for his or her BUCs in the Existing Fund together with a properly executed
letter of transmittal and any other required documents, Service Data
Corporation will issue and mail a certificate for the same number of BUCs of
the New Fund to the BUC holder.

Notwithstanding the failure of a BUC holder to surrender his or her Existing
Fund BUCs for BUCs in the New Fund, such BUC holder will be recognized as a
BUC holder in the New Fund for all purposes and will be entitled to all rights
thereof, including the right to receive cash distributions and allocations of
income and expenses. However, there will be no transfers of BUCs in the
Existing Fund recognized after the closing date of the Transaction. If
certificates for Existing Fund BUCs are presented for transfer after the
closing date of the Transaction, they will be returned to the presenter
together with a form of letter of transmittal and exchange instructions.

If a certificate for Existing Fund BUCs has been lost, stolen or destroyed,
Service Data Corporation will issue BUCs in the New Fund only upon receipt of
appropriate evidence as to such loss, theft or destruction, appropriate
evidence as to the ownership of such BUCs by the claimant and appropriate and
customary indemnification, including, when appropriate, the posting of a
bond. Neither the New Fund, the Existing Fund or Service Data Corporation
will be liable to any holder of BUCs in the Existing Fund for any amount
properly delivered to any public official pursuant to applicable abandoned
property, escheat or similar laws.

Costs of the Transaction

The Existing Fund expects to incur approximately $[ ] of expenses in
connection with the Transaction which include legal and accounting fees,
printing and mailing expense, registration fees with the Securities and
Exchange Commission and state securities administrators, solicitation costs
and transfer taxes. Such expenses will be paid by the Existing Fund and most
will be incurred whether or not the Transaction is consummated.

Accounting Treatment

The Transaction will not result in a change in the New Fund's financial
statement treatment of any asset or liability of the Existing Fund or of the
capital account of any partner or BUC holder.

Regulatory Matters

The Transaction will not be subject to the requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and, other than federal
proxy solicitation rules relating to the solicitation of BUC holder consents
and state and federal regulations relating to the offering of the New Fund's
BUCs, no other federal or state regulatory requirements must be complied with
and no approval thereunder must be obtained in connection with the Transaction.

Background and Reasons for the Transaction

The Existing Fund was formed to invest in tax-exempt mortgage bonds which were
issued by state and local housing authorities to provide construction and
permanent financing of apartment complexes. Using the net proceeds from the
public offering of BUCs, the Existing Fund acquired 14 tax-exempt bonds with
an aggregate principal amount of $177,196,000, each of which was secured by a
first mortgage on the apartment complex financed by the bonds. The investment
objectives of the Existing Fund were to provide (i) safety and preservation of
capital, (ii) regular distribution of federally tax-exempt interest from the
payment of base interest on the bonds and (iii) a potential for an enhanced
federally tax-exempt yield from the "contingent interest" earned through a
participation in the net cash flow from the properties financed by the bonds
and in the net proceeds from the sale or refinancing of such properties.

The overbuilding of apartment complexes in the United States from the time the
Existing Fund invested in these bonds resulted in adverse market conditions
for apartment complexes in many of the markets in which the properties
financed by the Existing Fund were located. Since that time, the resulting
competitive conditions have kept rents at most of these properties below the
levels needed to produce sufficient operating cash flow to allow the owners
thereof to pay the full amount of base interest on the bonds. During the
period from 1988 to 1991, the Existing Fund foreclosed on the apartment
complexes securing seven of the tax-exempt bonds it held as a result of the
default by the owners of these properties to fulfill their obligations under
the bonds. In May 1993, the Existing Fund transferred these seven properties
along with related debt, cash and certain other assets and liabilities to
America First REIT, Inc. (the "REIT") in exchange for all of the common stock
of the REIT. The REIT shares were subsequently distributed pro rata to the
BUC holders of the Existing Fund as of the record date established therefor.
On June 29, 1995, the REIT was merged with and into a subsidiary of
Mid-America Apartment Communities, Inc. an unaffiliated publicly traded real
estate investment trust.

Of the remaining seven tax-exempt bonds held by the Existing Fund, three were
classified as performing loans and four were classified as nonperforming loans
as of December 31, 1997. The Existing Fund currently accepts interest
payments from the owners of the properties securing the nonperforming bonds in
amounts less than the full amount of base interest due on these bonds. The
amount of foregone interest on nonperforming loans equaled $443,456 and
$442,725 for the years ended December 31, 1997 and 1996, respectively. While
contingent interest has been paid on one of the performing bonds, the amount
of contingent interest paid on this bond decreased significantly over the past
several years. The General Partner does not believe that any contingent
interest will be paid to the Existing Fund on its other bonds in the
foreseeable future.

The seven bonds held by the Existing Fund have terms expiring at various times
from December 1, 2006 to December 1, 2015. However, each of the bonds
stipulates that principal and accrued interest thereon, including accrued
contingent interest, will be due and payable to the Existing Fund after twelve
years. Accordingly, principal and accrued interest on six of the Existing
Fund's bonds became due and payable on December 1, 1997 and will become due
and payable on the remaining bond on July 1, 1998 (the "Repayment Dates").
The terms of the bonds require that the underlying properties be sold or
refinanced on the Repayment Dates and that the net proceeds of such sale or
refinancing be applied to the payment of principal and accrued interest on the
bonds, including any accrued contingent interest. If a property is not sold
as of an Repayment Date, the amount of contingent interest payable to the
Existing Fund is to be based on an appraisal of the property's fair market
value.

The estimated market value of the properties at December 31, 1997 was
$5,500,000 less than the outstanding principal balance of the bonds secured by
those properties. In addition, there could be no assurance that the owner of
the properties would realize net cash proceeds from the sale or refinancing of
these properties in amounts sufficient to repay the full principal balance of
the bonds secured by these properties. Therefore, if the properties were sold
or refinanced on the Repayment Dates, it was expected that the net proceeds
from the sale or refinancing would not have been sufficient to repay the
principal balance of these bonds. Each of the bonds is a "nonrecourse"
obligation of the property owner and, therefore, the net proceeds from the
sale or refinancing of the property is the only source of repayment for the
bonds. Accordingly, the General Partner believes that the Existing Fund would
have suffered an irretrievable loss of capital if the bonds had been repaid
pursuant to their terms on the Repayment Dates. Therefore, if the bonds were
repaid on the Repayment Dates, the Existing Fund would not achieve one of its
principal investment objectives, which is the preservation of investors'
capital. In addition, it was unlikely that the sale or refinancing of any of
these properties would have produced sufficient net proceeds to allow for the
payment of accrued contingent interest on the bonds as of the Repayments Dates.

In order to avoid this result, the General Partner determined that the
Existing Fund should retain its interests in the bonds beyond the Repayment
Dates. However, if the Existing Fund were to simply allow the current bonds
to remain outstanding beyond the stated Repayment Date, it had been advised
that continuing to accept interest payments for less than the full amount of
base interest on the nonperforming bonds could cause the interest received on
these bonds to become taxable for federal income tax purposes. In general,
the Fund has been advised that the Internal Revenue Service could take the
position that (i) such continuing forbearance could cause the Bonds to be
treated as if they had been exchanged for new taxable bonds secured by the
same properties or (ii) that the Fund has become the equity owner of these
properties for tax purposes and, therefore, was receiving distributions of net
rental income from the properties rather than interest on the Bonds. In
either case, cash distributions made by the Fund to BUC holders representing
amounts received from these properties would become subject to income taxes.

However, because each of the bonds have terms extending beyond the Repayment
Date, they provide that they may be "remarketed" as of the Repayment Date. In
general, upon the remarketing of a bond, the base interest rate will be reset,
if necessary, to a level at which the projected net revenues of the property
will be sufficient to pay the full debt service on the bond. Furthermore, the
maximum amount of contingent interest payable on the bond would be reduced to
a level at which the full amount of contingent interest would be payable from
projected net revenues and net sale proceeds from the property. Other
provisions of the bond, including its principal amount and maturity, would not
be changed as a result of the remarketing.

By remarketing the bonds according to their terms, the Fund would be able to
retain its interest in the bonds and maintain their status as tax-exempt
bonds. Accordingly, the General Partner has proposed that the Existing Fund
continue to hold all of the bonds beyond their respective remarketing dates.
It is expected that the remarketed bonds will bear base interest and
contingent interest at rates which are less than the rates in effect on the
bonds prior to the remarketing. The General Partner believes that it will be
in the Existing Fund's best interest to agree to these reductions in the
stated base and contingent interest rates because such reductions are not
expected to have an immediate effect on the Existing Fund's interest income.
This is because the Existing Fund has been accepting interest payments for
less than the full amount of base interest due on four of the seven bonds. In
addition, only one bond has ever paid any contingent interest, and the amount
paid is well below the maximum amount of contingent interest payable on such
bond. However, the reduction in base and contingent interest rates on the
remarketed bonds limits the ability of the Existing Fund to participate in
additional net cash flow generated by any future improvements in the economic
performance of the properties. Accordingly, the General Partner expects the
Existing Fund will earn a relatively static amount of interest income in the
future.

On the other hand, it is likely that the administrative expenses of operating
the Existing Fund, including investor servicing expenses, custodial and
transfer agent fees, report preparation and distribution expenses and
accounting and legal fees, will continue to escalate over time. Therefore,
the General Partner anticipates that the amount of net cash flow which the
Existing Fund will have available for distribution to the BUC holders will
decline over time.

Because of certain limitations in the Current Partnership Agreement, the
General Partner is proposing that assets and liabilities of the Existing Fund
be transferred to the New Fund which will have the authority to undertake
certain steps designed to increase the amount of tax-exempt interest income
available for distribution to BUC holders. Unlike the Existing Fund, the New
Fund will have the ability to acquire additional tax-exempt bonds secured by
multifamily residential properties.

Such tax-exempt housing bonds are issued by state and local housing
authorities in order to finance the development or rehabilitation of apartment
complexes in which a specified percentage of apartment units must be made
available for rent to persons of low and moderate income. In addition to
newly issued bonds, a substantial number of tax-exempt mortgage bonds are
outstanding. Many of these existing bonds, particularly those issued in the
late 1980s, bear interest rates which are substantially higher than
currently-prevailing tax-exempt interest rates. Therefore, the owners of the
properties financed by these existing tax-exempt mortgage bonds may be
interested in refinancing the mortgages underlying those bonds. Accordingly,
the General Partner believes that there is an opportunity for the New Fund to
acquire additional tax-exempt mortgage bonds at this time.

The New Fund intends to finance the acquisition of additional tax-exempt bonds
by causing the tax-exempt bonds acquired by it from the Existing Fund to be
either (i) deposited into a trust that will issue two classes of beneficial
ownership or (ii) reissued in a manner creating two classes of bonds. In
either case, the senior trust interests or class of bonds (either referred to
as the "Senior Interests") will be sold to unaffiliated investors and the New
Fund will seek to use the proceeds of such sales to acquire additional
tax-exempt bonds secured by apartment complexes. The New Fund may also use
interest income to supplement the amount of sale proceeds available to invest
in additional mortgages. A residual interest in the trust or a subordinate
class of bonds (either the "Subordinate Interests") will be retained by the
New Fund. It is anticipated that the respective rights of the holders of the
Senior Interests and the Subordinate Interests will allow the Senior Interests
to receive investment-grade ratings from nationally recognized rating
agencies. The additional tax-exempt mortgage bonds acquired by the New Fund
are not expected to be rated. As a result the Senior Interests are expected
to bear tax-exempt interest at rates which will be below the interest rates
the New Fund expects to earn on the additional tax-exempt mortgage bonds.
Therefore, the New Fund expects to be able to increase its overall interest
income by selling the low interest rate Senior Interests to unaffiliated
parties and reinvesting the proceeds in additional unrated tax-exempt bonds
secured by multifamily residential housing which bear interest at a higher
rate than the Senior Interests. Although the terms on which the New Fund may
acquire additional tax-exempt mortgage bonds, if any, are not known at this
time, the General Partner expects to be able to negotiate contingent interest
provisions with respect to some or all of the additional bonds.

However, the terms of the Current Partnership Agreement do not provide clear
authority for the General Partner to undertake this strategy to increase cash
available for distribution. In particular, the Current Partnership Agreement
prohibits the General Partner from selling all or substantially all of the
assets of the Existing Fund without the consent of the holders of a majority
of the outstanding BUCs. There are relevant court cases which have
interpreted the term "substantially all" to mean a majority of a partnership's
assets. Accordingly, if the Existing Fund were to sell the Senior Interests
to unaffiliated investors, it would have arguably sold substantially all of
the Existing Fund's assets in the process. Accordingly, the General Partner
would need to obtain the consent of the BUC holders prior to undertaking this
transaction.

In addition, the Current Partnership Agreement prohibits the Existing Fund
from investing in junior trust deeds. This prohibition would preclude the
Existing Fund from placing its assets in a subordinate position to third party
lenders. Accordingly, the Existing Fund could not retain the Subordinate
Interests if the Senior Interests secured by the same real property were sold
to an unaffiliated party.

Finally, the Current Partnership Agreement prohibits the Existing Partnership
from reinvesting its "Net Residual Proceeds." As defined, "Residual Proceeds"
can be read to include the proceeds received from the sale of the Senior
Interests. The Current Partnership Agreement requires that Residual Proceeds,
less any amounts used to pay expenses or placed in reserve, be distributed to
BUC holders and, therefore, could not be used to acquire additional tax-exempt
bonds for the Existing Fund. Because the Existing Fund has no clear authority
to sell the Senior Interests, to retain the Subordinate Interests or to
reinvest the proceeds from the sale of the Senior Interests to acquire
additional bonds, it will not be able to increase the amount of interest
income beyond that which it is currently receiving.

In addition to these restrictions on the Existing Fund's ability to sell
existing assets and use the proceeds to acquire additional tax-exempt bonds,
the terms of the Current Partnership Agreement do not allow an amendment to
the Current Partnership Agreement which would have the result of delaying the
timing of any distribution to a BUC holder without the consent of such BUC
holder. Accordingly, any amendment to the Current Partnership Agreement
allowing for the reinvestment of Net Residual Proceeds would require unanimous
consent of the BUC holders which, as a practical matter, would be extremely
difficult or impossible to obtain. For this reason, the General Partner has
proposed that the Existing Fund merge into the New Fund with the New Fund
being the surviving partnership of the merger and the New Partnership
Agreement controlling the operations of the New Fund. The New Partnership
Agreement authorizes the New Fund to sell the Senior Interests, retain the
Subordinate Interests and reinvest the proceeds from the sale of the Senior
Interests to acquire additional tax-exempt bonds.

Recommendation of the General Partner

For the reasons set forth above, the General Partner believes that the
Transaction is in the best interest of the Existing Fund and its BUC holders
and recommends that the BUC holders grant their consent to the Transaction.

Consideration of Alternative Courses of Action

Causing the Bonds To Be Repaid and Liquidation of Existing Fund. Each of the
bonds stipulates that principal and accrued interest thereon, including
accrued contingent interest, will be due and payable to the Existing Fund on
their respective Repayment Date. The Repayment Date for six of the Existing
Fund's bonds was December 1, 1997 and the Repayment Date for the remaining
bond is July 1, 1998. The terms of the bonds require that the underlying
properties be sold or refinanced on the Repayment Dates and that the net
proceeds of such sale or refinancing be applied to the payment of principal
and accrued interest on the bonds, including any accrued contingent interest.
The Current Partnership Agreement provides that upon repayment of all of the
bonds, the Existing Fund is to be dissolved and its remaining assets
liquidated and distributed among the BUC holders and the General Partner.

The General Partner has rejected this alternative because it is inconsistent
with the Existing Fund's investment objective of preserving its capital. The
Existing Fund invested a total of $76,626,000 in the seven tax-exempt bonds
that it continues to hold. Because the principal balance of the bonds does
not amortize over their terms, the aggregate principal balance of these bonds
remains $76,626,000. Although the bonds are secured by first deeds of trust
on the financed properties, the only source of funds to repay principal and
interest on the bonds on the Repayment Date is the net proceeds from the sale
or refinancing of the properties. Based on an analysis of the fair market
value of the properties securing the bonds, the General Partner has estimated
the fair market value of the properties securing the bonds as of the initial
Repayment Date to be only $71,126,000. Accordingly, assuming the properties
could be sold for the full amount of their estimated fair market value, the
proceeds of such sales, net of associated costs, were not expected to be
sufficient to repay the full principal balance of the bonds on the Repayment
Date. The Fund has no recourse against the owners of the properties for any
deficiency in the payment of principal or interest on the bonds. Therefore,
the General Partner determined that this course of action would have resulted
in an irretrievable loss of capital to the BUC holders.

Likewise, the value of the bonds, and the price a third party might be willing
to pay for them, will be affected by the current value of the underlying
properties. Therefore, if the Existing Fund were to sell the bonds at this
time, the General Partner would expect the Existing Fund to receive net
proceeds therefrom which would be less than the full principal amount of the
bonds.

The properties owned or financed by the Existing Fund have generally
experienced improvements in operating results over recent years and the
General Partner expects this trend to continue. As operating results for
these properties improve, the value of the properties should also increase
and, therefore, the amount of bond principal received by the Existing Fund
upon the repayment of the bonds or the amount of proceeds from the sale of the
bonds should also increase over time. Because a liquidation of the Existing
Fund's assets at this time would result in a significant loss of original
capital to the BUC holders and would preclude the BUC holders from securing
any benefit from potential increases in the value of the Existing Fund's
assets in the future, the General Partner determined that it would not be in
the best interest of the Existing Fund and the BUC holders to liquidate the
Existing Fund at this time.

Continuing Existing Fund With Its Current Assets. Although the General
Partner determined that it would not be in the best interest of the BUC to
cause the bonds to be repaid on the Repayment Dates or sold at this time, it
has rejected the alternative of simply continuing to operate the Existing Fund
with its current portfolio of tax-exempt bonds because the amount of cash
available for distribution to BUC holders is expected to decrease over time
and to be less than the amounts available if the Transaction is consummated.

The General Partner does not expect the amount of interest income generated by
the Existing Fund's current portfolio of tax-exempt bonds to increase
substantially over time. This expectation is due, in part, to the lower base
and contingent interest rates that the bonds are expected to bear after the
remarketing of the bonds. On the other hand, the General Partner believes
that the administrative expenses of operating the Existing Fund will continue
to escalate over time. Accordingly, the General Partner anticipates that the
amount of net cash flow which the Existing Fund will have available for
distribution to the BUC holders will decline over time. Although there can be
no assurance that pursuing the Transaction will make a greater amount of cash
available for distribution to the BUC holders, the New Fund will have the
ability to acquire additional assets and increase the average interest rate
earned on its assets which should, in turn, allow it to generate more cash
than the Existing Fund. See "THE

TRANSACTION-Background and Reasons for the Transaction."
Fairness Determination of the General Partner

The General Partner, including the Board of Managers of America First,
believes that the terms of the Transaction are fair to the BUC holders. The
General Partner bases this determination on the following: (i) BUC holders
will receive one BUC in the New Fund for each BUC they hold in the Existing
Fund and, accordingly, will have the same interest in the assets and cash
available for distributions of New Fund after the Transaction as they did in
the Existing Fund prior to the Transaction, (ii) the interest of the General
Partner in the cash distributions of New Fund is no greater than its interest
in the Existing Fund, (iii) fees payable to the General Partner and its
affiliates by the New Fund with respect to the assets acquired from the
Existing Fund will be the same as currently received by the General Partner
and (iv) any fees payable by the New Fund to the General Partner or its
affiliates with respect to additional assets acquired by the New Fund will be
at the same rates as those currently paid by the Existing Fund.

The General Partner has not obtained a fairness opinion or any other
evaluation of the Transaction from an investment banker or other third party.

INFORMATION RELATING TO THE EXISTING FUND
Description of Business

The Existing Fund is a Delaware limited partnership which was formed on
November 11, 1985 for the purpose of acquiring a portfolio of tax-exempt
participating mortgage bonds which were issued to provide construction and
permanent financing for apartment complexes and other commercial or industrial
real estate. The original investment objectives of the Existing Fund were to
provide (i) safety and preservation of the Existing Fund's capital, (ii)
regular distribution of federally tax-exempt interest and (iii) a potential
for an enhanced federally tax-exempt yield as a result of the Existing Fund's
participation in the net cash flow from the properties financed by the
tax-exempt participating mortgage bonds and in the net proceeds from the sale
or refinancing of such properties.

The Existing Fund issued a total of 9,979,128 BUCs representing assigned
limited partnership interests in a public offering which raised net proceeds
of approximately $185,500,000. The Existing Fund acquired 14 tax-exempt bonds
which were issued by various state and local housing authorities to provide
construction and permanent financing for 14 apartment complexes located in 10
states. The bonds provide for the payment of base interest at a fixed rate
and for contingent interest based on a participation in the net cash flow and
the net sale or refinancing proceeds from the properties financed thereby.
The principal amounts of the bonds do not amortize over their terms, but are
payable in full upon the maturity thereof along with any unpaid base and
contingent interest. The bonds had terms ranging from 21 to 30 years, but the
Existing Fund had the right to cause the owners of the financed properties to
sell or refinance the properties from time to time after 10 years and to repay
the full principal amount of the bonds and all unpaid base and contingent
interest accrued at that time. In addition, after 12 years the owners of the
financed properties are required to sell or refinance the properties and repay
the full principal amount of the bonds and all unpaid base and contingent
interest accrued at that time. Because of the contingent interest feature of
the bonds, the return to the Existing Fund from the bonds depended to a
substantial degree upon the economic performance of the properties financed by
the bonds.

The Existing Fund acquired seven of the properties securing its bonds through
foreclosure or similar actions as a result of defaults by the property owners
under the terms of the bonds. On May 7, 1993, the Partnership announced the
formation of a subsidiary company called America First REIT, Inc., a real
estate investment trust (the "REIT"). On June 1, 1993, the Existing Fund
transferred the seven real estate properties acquired in settlement of bonds,
along with related debt, cash and certain other assets and liabilities to the
REIT in exchange for all of the issued and outstanding shares of the REIT's
common stock. Thereafter, the Existing Fund distributed all shares of the
REIT to the BUC holders of the Existing Fund in the ratio of one share of REIT
stock for every four Bucs they held as of the record date for this
distribution. As a result, the Existing Fund no longer has any interest in
these bonds or the properties which had secured these bonds.

As of December 31, 1997, the Existing Fund continues to hold seven tax-exempt
bonds with a carrying value, net of allowance for loan losses, of
$71,126,000. Of these remaining seven bonds, only three have paid all base
interest payments as and when due. The Existing Fund accepts the total net
cash flow generated by the four properties securing the other four bonds as
payment of interest on these bonds. The amount of net cash flow generated by
these properties is less than the full amount of base interest due on the
bonds. The amount of foregone interest on the bonds equaled $443,456 in 1997,
$442,725 in 1996 and $442,279 in 1995. Notwithstanding the interest
shortfalls, the Existing Fund has elected not to foreclose or seek a deed in
lieu of foreclosure in order to continue to receive tax-exempt interest rather
than taxable net rental income from the properties.

The amount of net cash flow generated by these properties is, in part, a
function of rental and occupancy rates and operating expenses. The level of
occupancy and rents that can be charged are directly affected by the supply
of, and demand for, apartments in the market areas in which a property is
located. This, in turn, is affected by several factors such as local or
national economic conditions, the amount of new apartment or warehouse
construction and interest rates on single-family mortgage loans. In addition,
factors such as government regulation (such as zoning laws), inflation, real
estate and other taxes, labor problems and natural disasters can affect the
economic operations of a property. In each city in which the Existing Fund's
properties are located, such properties compete with a substantial number of
other income-producing real estate of the same types. Apartment complexes
also compete with single-family housing that is either owned or leased by
potential tenants. The principal method of competition is to offer
competitive rental rates. The Existing Fund's properties also compete by
emphasizing regular maintenance and property amenities.

The Existing Fund is engaged solely in the business of providing financing for
the acquisition and improvement of real estate and the operation of real
estate acquired in foreclosure. Accordingly, the presentation of information
about industry segments is not applicable and would not be material to an
understanding of the Existing Fund's business taken as a whole.

The General Partner believes that each of the properties financed by the
Existing Fund is in compliance in all material respects with federal, state
and local regulations regarding hazardous waste and other environmental
matters and the General Partner is not aware of any environmental
contamination at any of such properties that would require any material
capital expenditure by the Existing Fund for the remediation thereof.

Management

The Existing Fund has no employees. Certain services are provided to the
Existing Fund by employees of America First and the Existing Fund reimburses
America First for such services at cost. The Existing Fund is not charged,
and does not reimburse, for the services performed by managers and officers of
America First.

The Existing Fund has no directors or officers. Management of the Existing
Fund consists of the General Partner and its general partner, America First.
The following individuals are managers and executive officers of America First
and each serves for a term of one year:

Name Position Held Position Held Since

Michael B. Yanney Chairman of the Board, 1987
President, Chief Executive
Officer and Manager

Michael Thesing Vice President, Secretary, 1987
Treasurer and Manager

William S. Carter, M.D. Manager 1994

George Kubat Manager 1994

Martin Massengale Manager 1994

Alan Baer Manager 1994

Gail Walling Yanney Manager 1996

Mariann Byerwalter Manager 1997

Michael B. Yanney, 64, is the Chairman and Chief Executive Officer of various
Affiliates of America First which manage public investment funds which have
raised over $1.3 billion since 1984. From 1977 until the organization of the
first such fund in 1984, Mr. Yanney was principally engaged in the ownership
and management of commercial banks. Mr. Yanney also has investments in
private corporations engaged in a variety of businesses. From 1961 to 1977,
Mr. Yanney was employed by Omaha National Bank and Omaha National Corporation,
where he held various positions, including the position of Executive Vice
President and Treasurer of the holding company. Mr. Yanney also serves as a
member of the boards of directors of Burlington Northern Santa Fe Corporation,
Forest Oil Corporation, MFS Communications Company, Inc., C-Tec Corporation
and PKS Information Services, Inc.

Michael Thesing, 43, has been Vice President and Chief Financial Officer of
affiliates of America First since July 1984. From January 1984 until July
1984 he was employed by various companies controlled by Mr. Yanney. He was a
certified public accountant with Coopers & Lybrand L.L.P. from 1977 through
1983.

William S. Carter, M.D., 71, is a retired physician. Dr. Carter practiced
medicine for 30 years in Omaha, Nebraska, specializing in otolaryngology
(disorders of the ears, nose and throat).

George Kubat, 52, is the President and Chief Executive Officer of Phillips
Manufacturing Co., an Omaha, Nebraska-based manufacturer of drywall and
construction materials. Prior to assuming that position in November 1992, Mr.
Kubat was an accountant with Coopers & Lybrand L.L.P. in Omaha, Nebraska from
1969. He was the tax partner in charge of the Omaha office from 1981 to
1992. Mr. Kubat currently serves on the board of directors of Sitel
Corporation, American Business Information, Inc. and G.B. Foods Corporation.

Martin Massengale, 64, is the President Emeritus of the University of
Nebraska. Prior to becoming President of the University of Nebraska in 1991,
he served as interim President from August 1989, as Chancellor of the
University of Nebraska-Lincoln from June 1981 through December 1990 and as
Vice Chancellor for Agriculture and Natural Resources from 1976 to 1981.
Prior to that time, he was a professor and associate dean of the College of
Agriculture at the University of Arizona. Dr. Massengale also serves on the
board of directors of Woodmen Accident & Life Insurance Company and IBP, Inc.

Alan Baer, 75, is presently Chairman of Alan Baer & Associates, Inc., a
management company located in Omaha, Nebraska. He is also Chairman of Lancer
Hockey, Inc., Baer Travel Services, Wessan Telemarketing, Total Security
Systems, Inc. and several other businesses. Mr. Baer is the former Chairman
and Chief Executive Officer of the Brandeis Department Store chain which,
before its acquisition, was one of the larger retailers in the Midwest. Mr.
Baer has also owned and served on the board of managers of several banks in
Nebraska and Illinois.

Gail Walling Yanney, 62, is a retired physician. Dr. Yanney practiced
anesthesia and was most recently the Executive Director of the Clarkson
Foundation until October of 1995. In addition, she was a director of FirsTier
Bank, N.A., Omaha prior to its merger with First Bank, N.A. Dr. Yanney is the
wife of Michael Yanney.

Mariann Byerwalter, 37, is Vice President of Business Affairs and Chief
Financial Officer of Stanford University. From 1988 to 1996, Ms. Byerwalter
was Executive Vice President of America First Eureka Holdings Inc. ("AFEH"),
an affiliate of the General Partner, and its subsidiary, EurekaBank, a
federal savings bank operating in the San Francisco Bay area. In addition,
from 1993 to 1996, she was the Chief Financial Officer and Chief Operating
Officer of AFEH and EurekaBank. Ms. Byerwalter was an officer of BankAmerica
Corporation from 1984 until 1987, including Vice President and Executive
Assistant to the President of Bank of America and Vice President of the bank's
Corporate Planning and Development Department.

Properties

The Existing Fund does not own any real property. However, as of March 31,
1998, the Existing Fund held seven tax-exempt bonds, each of which is secured
by a first deed of trust on a multifamily apartment complex. The following
table sets forth certain information regarding the properties securing the
seven tax-exempt mortgage bonds held by the Existing Fund as of March 31, 1998:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Average Outstanding
Number Square Principal
Property Name Location of Units Feet/Unit Balance
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Woodbridge Apartments of Bloomington, IN 280 892 $12,600,000
Bloomington III
Ashley Point at Eagle Crest Evansville, IN 150 910 6,700,000
Woodbridge Apartments of Louisville, KY 190 934 8,976,000
Louisville II
Northwoods Lake
Apartments Duluth, GA 492 964 25,250,040
Ashley Square Des Moines, IA 144 963 6,500,000
Shoals Crossing Atlanta, Georgia 176 926 4,500,000
Arama Apartments Miami, Florida 293 562 12,100,000
--------
1,725
========
- -------------------------------------------------------------------------------------------
</TABLE>
In the opinion of the General Partner, each of the properties is adequately
covered by insurance.

The average annual occupancy rate and average effective rental rate per unit
for each of the Existing Fund's properties for each of the last five years are
listed in the following table:
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Woodbridge Apts. of Bloomington III
Average Occupancy Rate 90% 95% 93% 96% 96%
Average Effective Annual Rental Per Unit $ 6,957 $ 7,251 $ 6,848 $ 6,701 $ 6,416

Ashley Point of Eagle Crest
Average Occupancy Rate 99% 96% 96% 93% 94%
Average Effective Annual Rental Per Unit $ 6,423 $ 6,163 $ 6,032 $ 5,686 $ 5,662

Woodbridge Apts. of Louisville II
Average Occupancy Rate 95% 95% 93% 96% 96%
Average Effective Annual Rental Per Unit $ 7,075 $ 6,880 $ 6,451 $ 6,504 $ 6,131

Northwoods Lake Apts.
Average Occupancy Rate 94% 94% 97% 98% 97%
Average Effective Annual Rental Per Unit $ 7,263 $ 7,188 $ 7,101 $ 6,806 $ 6,403

Ashley Square
Average Occupancy Rate 96% 97% 98% 98% 98%
Average Effective Annual Rental Per Unit $ 6,792 $ 6,728 $ 6,764 $ 6,574 $ 6,366

Shoals Crossing
Average Occupancy Rate 95% 93% 95% 96% 96%
Average Effective Annual Rental Per Unit $ 4,942 $ 4,712 $ 4,649 $ 4,458 $ 4,428

Arama Apartments
Average Occupancy Rate 98% 99% 99% 99% 99%
Average Effective Annual Rental Per Unit $ 7,467 $ 7,517 $ 7,156 $ 7,355 $ 6,925
</TABLE>

Legal Proceedings

There are no material pending legal proceedings to which the Existing Fund is
a party or to which any of its assets are subject.

Voting Securities and Beneficial Ownership Thereof
by Principal BUC Holders, Directors and Officers

Only BUC holders of record at the close of business on the Record Date will be
entitled to consent to the Transaction. On the Record Date, a total of
9,979,128 BUCs were issued and outstanding. Each BUC is entitled to one vote
with respect to the matter for which consent is sought hereby.

As of the Record Date, no person was known by the General Partner to own
beneficially more than 5% of the Existing Fund's BUCs. In addition, no
partner of the General Partner (including America First), and no manager or
officer of America First owned any of the Existing Fund's BUCs as of the
Record Date.

Market for the Existing Fund's BUCs
and Related BUC Holder Matters

Market Information. The BUCs of the Existing Fund trade on The NASDAQ Stock
Market under the trading symbol "AFTXZ." The following table sets forth the
high and low final sale prices for the Existing Fund's BUCs for each quarterly
period from January 1, 1996 through [Date], 1998:

1996 High Low
1st Quarter $7 $6-1/4
2nd Quarter $6-7/8 $6-1/8
3rd Quarter $7 $6-1/4
4th Quarter $7-1/4 $6-3/8

1997 High Low
1st Quarter $7-3/8 $6-11/16
2nd Quarter $7-3/8 $6-11/16
3rd Quarter $7-3/8 $7
4th Quarter $7-3/4 $7-1/16

1998 High Low
1st Quarter $8 $7-1/4
2nd Quarter (through [Date]) $[ ] $[ ]

On [Date], 1998, the date prior to the date of the Consent Solicitation
Statement/Prospectus, the high and low sale prices of the Existing Fund's BUCs
were $[ ] and $[ ] per BUC, respectively.

BUC Holders. The approximate number of holders of the Existing Fund's BUCs on
the Record Date was [Number].

Distributions. Cash distributions are being made on a monthly basis. Total
cash distributions of $5,388,729, or $.54 per BUC, were paid or accrued to BUC
holders during each of the fiscal years ended December 31, 1997 and December
31, 1996. The cash distributions paid per BUC during each such period were as
follows:

SELECTED FINANCIAL DATA
OF THE EXISTING FUND

Business

The New Fund is a newly formed Delaware limited partnership which was formed
on April 2, 1998 for the purpose of acquiring, holding, selling and otherwise
dealing with direct and indirect interests in tax-exempt bonds secured by
multifamily residential properties and interests therein. The New Fund will
commence operations upon consummation of the Transaction at which time it will
acquire the all of the assets and liabilities of the Existing Fund, including
the seven tax-exempt mortgage bonds currently held by the Existing Fund.
There is no presentation of financial statements or other financial
information of the New Fund in this Consent Solicitation Statement/Prospectus
because the New Fund has not been capitalized and has not commenced operations.

The New Fund will have explicit authority to acquire additional tax-exempt
bonds secured by a first mortgage or deed of trust on multifamily residential
properties. Such bonds would be similar to the bonds currently held by the
Existing Fund in that they will be issued by various state and local
governments, their agencies and authorities to finance the construction of
apartments in their respective jurisdictions. As with the bonds held by the
Existing Fund, the governmental entities which issue these bonds are under no
obligation to make payment of principal and interest thereon, nor will their
taxing power be pledged to do so. The sole source of funds to pay principal
and interest on these types of bonds is the net cash flow generated by the
operation or sale of the financed real estate. In addition, such bonds are
typically structured as "nonrecourse" obligations which are secured solely by
the underlying real estate. Accordingly, the owners of the real estate will
not be liable to the New Fund in the event of a default under the bonds. The
General Partner does not anticipate that any such bonds will be insured by any
governmental or nongovernmental entity or have any other type of credit
enhancement associated with them. Accordingly, the General Partner does not
expect any of the additional bonds which the New Fund may acquire to be rated
by a nationally recognized securities rating organization.

In general, the New Fund would seek to acquire all of the tax-exempt bonds
secured by a particular multifamily property, but in some cases would consider
buying less than the full amount of such bonds. Such bonds may be either
outstanding bonds available in the secondary markets or newly issued or
reissued bonds. Although the interest rates on such additional bonds is not
known at this time, the New Fund will only acquire such bonds if the yield to
the New Fund exceeds the average interest rate payable by the New Fund on the
Senior Interests described below. The additional bonds may or may not provide
for contingent interest or other rights to participate in the net cash flow
generated by the underlying properties.

In order for the interest paid on such bonds to be exempt from federal income
taxation, the owners of the properties financed by the issuance of the bonds
must operate the properties in compliance with the terms of a regulatory
agreement. Among other things, such regulatory agreements require that a
specified percentage of the rental units in the property be occupied (or held
available for occupancy on a continuous basis) by individuals or families with
incomes which are less than 80% of the median gross income levels in the
geographic area. Such limitations are generally imposed for a period of 10
years. If the owner of a property defaults in its obligations under a
regulatory agreement, it may result in the interest on the bonds secured by
that property to become subject to income tax. Such a failure would also
constitute a default under the related bonds. In that case, the New Fund will
be entitled to declare such bonds due and payable and pursue such other
remedies available to it under the terms of the bonds, including foreclosure
on the property. An affiliate of the General Partner may, in certain cases,
be engaged as the manager of a property underlying a tax-exempt bond held by
the New Fund. In such cases, the General Partner's affiliate would have the
responsibility for complying with the regulatory agreements relating to the
managed properties.

In general, the New Fund intends to acquire and hold tax-exempt bonds as long
term investments. Additional bonds acquired by the New Fund would generally
be expected to have terms of up to 24 years; however, if the New Fund buys
bonds in the secondary market, the remaining term of these bonds could be
substantially less.

The New Fund intends to finance the acquisition of additional tax-exempt bonds
by causing the tax-exempt bonds acquired by it from the Existing Fund to be
either (i) deposited into a trust that will issue two classes of beneficial
ownership or (ii) reissued in a manner creating two classes of bonds. In
either case, the senior trust interests or class of bonds (either referred to
as the "Senior Interests") will be sold to unaffiliated investors and the New
Fund will seek to use the proceeds of such sales to acquire additional
tax-exempt bonds secured by apartment complexes. The New Fund may also use
interest income to supplement the amount of sale proceeds available to invest
in additional mortgages. A residual interest in the trust or a subordinate
class of bonds (either the "Subordinate Interests") will be retained by the
New Fund. It is anticipated that the respective rights of the holders of the
Senior Interests and the Subordinate Interests will allow the Senior Interests
to receive investment-grade ratings from nationally recognized rating
agencies. The additional tax-exempt mortgage bonds acquired by the New Fund
Interests are not expected to be rated. As a result the Senior Interests are
expected to bear tax-exempt interest at rates which are below the interest
rates the New Fund expects to earn on the additional tax-exempt mortgage
bonds. Therefore, the New Fund expects to be able to increase its overall
interest income by selling the low interest rate Senior Interests to
unaffiliated parties and reinvesting the proceeds in additional unrated
tax-exempt bonds secured by multifamily residential housing which bear
interest at a higher rate than the Senior Interests. The General Partner
would cause the New Fund to repeat this process with the additional tax-exempt
bonds acquired by the New Fund in order to further increase the New Fund's
potential net interest income. Accordingly, the General Partner would expect
the amount of cash available for distribution to be increased through this
mechanism. There can be no assurance, however, that the distributions to BUC
holders will increase by pursuing this strategy. Although the New Partnership
Agreement authorizes the General Partner to cause the New Fund to borrow money
generally, the General Partner does anticipate that the New Fund will borrow
money.

The relative amount Subordinate Interests representing subordinate interests
in trusts will be limited to the extent necessary to avoid subjecting the New
Fund to the registration provisions of the Investment Company Act of 1940.

The New Fund will be engaged solely in the business of investing in tax-exempt
bonds secured by multifamily housing projects. Accordingly, the presentation
of information about industry segments is not applicable and would not be
material to an understanding of the New Fund's business taken as a whole.

Partners of the New Fund

The General Partner of the Existing Fund will be the General Partner of the
New Fund. Accordingly, the persons responsible for the management of the New
Fund will be the same persons who are currently responsible for the management
of the Existing Fund. See "INFORMATION RELATING TO THE EXISTING
FUND-Management."

In addition, Mr. Joseph N. Grego will act as portfolio manager of the New Fund
and will be responsible for identifying, evaluating and acquiring additional
properties for the New Fund. Mr. Grego, 51, has been employed by America
First since 1989 and is responsible for the acquisition and management of
various real estate and mortgage investments, including office, apartment and
retirement properties. From 1980 to 1989, Mr. Grego held several positions
with E.F. Hutton and Shearson Lehman Hutton, including president and director
of Hutton Real Estate Services, Inc., where he was responsible for the asset
management of 74 properties nationwide consisting of 3.6 million square feet
of commercial real estate and 8,300 apartment units. From 1974 to 1980 Mr.
Grego held positions with Levitt Corporation and Cavanaugh Communities
Corporation, both real estate development companies. Mr. Grego beneficially
owned 2,000 BUCs of the Existing Fund as of the Record Date.

The Limited Partner of the New Fund will be America First Fiduciary
Corporation Number Five, a Nebraska corporation, which is wholly owned by
America First and is the Limited Partner of the Existing Fund. The Limited
Partner will undertake no business activity other than to serve as the Limited
Partner of the New Fund.

Properties

The New Fund currently has no assets, but will acquire the seven tax-exempt
bonds currently held by the Existing Fund, upon consummation of the
Transaction. For certain information with respect to the properties
underlying these bonds, see "INFORMATION RELATING TO THE EXISTING
FUND-Properties."

Legal Proceedings

There are no material pending legal proceedings to which the New Fund is a
party or to which any of its assets are subject.

TERMS OF THE NEW PARTNERSHIP AGREEMENT

General

The following is a summary of certain material terms of the New Partnership
Agreement. This summary does not purport to be complete and is subject to,
and qualified in its entirety by, the terms of the New Partnership Agreement,
the form of which is attached as Appendix A of this Consent Solicitation
Statement/Prospectus and is incorporated by reference herein. In many
respects, the terms of the New Partnership Agreement are the same as those of
the Current Partnership Agreement. There are, however, some important
differences.

Formation

The New Fund has been formed under the terms of the Delaware Revised Uniform
Limited Partnership Act (the "Delaware Act"). Upon consummation of the
Transaction, the capital accounts of the General Partner and Limited Partner
in the Existing Fund will be treated as capital contributions to the New Fund
and the interest of the Limited Partner will be assigned to the BUC holders
who will become BUC holders in the New Fund. BUC holders will not be limited
partners of the New Fund and will have no right to be admitted as such.

Management of the New Fund

Under the terms of the New Partnership Agreement, the General Partner has full
and exclusive authority to manage the business affairs of the New Fund. Such
authority specifically includes the power to cause the New Fund to (i) sell
Senior Interests (whether they represent a senior interest in a trust to which
tax-exempt bonds have been transferred by the New Fund in exchange for a
beneficial interest therein or a senior class in the New Fund's bonds) to
unaffiliated parties and retain Subordinate Interests (whether they represent
a subordinate class of interest in such trust or a subordinate class of bonds)
which provide for a right to receive payments of principal and interest which
are subordinate to the Senior Interests and (ii) apply the proceeds from the
sale of the Senior Interests to the acquisition of additional tax-exempt
bonds. The New Partnership Agreement imposes certain limitations on the
authority of the General Partner, including restrictions on the ability of the
General Partner to dissolve the New Fund without the consent of a majority in
interest of the BUC holders.

Other than certain limited voting rights discussed under "Voting Rights,"
neither the Limited Partner nor the BUC holders will have any authority to
transact business for, or participate in the management of, the New Fund. The
only recourse available to BUC holders in the event that the General Partner
takes actions with respect to the business of the New Fund with which BUC
holder do not agree, is to vote to remove the General Partner and admit a
substitute general partner. See "Removal or Withdrawal of the General
Partner," below.

Allocations and Distributions

Net Interest Income. The New Partnership Agreement provides that all Net
Interest Income generated by the New Fund which is not contingent interest
will be distributed 99% to BUC holders and 1% to the General Partner. In
contrast, the Current Partnership Agreement provides that the General Partner
will receive 10% of all Net Interest Income which is not contingent interest
distributed after the BUC holders of the Existing Fund have received a
cumulative noncompounded annual return of 11% on their Adjusted Capital
Contributions in the Existing Fund. Therefore, unlike the Current Partnership
Agreement, the New Partnership Agreement limits the interest of the General
Partner to 1% of Net Income which is not contingent interest regardless of the
return paid to BUC holders. To date, the General Partner has never received
more than 1% of such Net Interest Income during any fiscal year.
Distributions of Net Interest Income to the General Partner during the year
ended December 31, 1997 equaled approximately $53,487. In addition, both the
Current Partnership Agreement and New Partnership Agreement provides that the
General Partner is entitled to 25% of Net Interest Income representing
contingent interest up to a maximum amount equal to 0.9% per annum of the
principal amount of all mortgage bonds held by the Existing Fund or the New
Fund, as the case may be. During the year ended December 31, 1997, the
General Partner received total distributions of Net Interest Income
representing contingent interest equal to $31,171.

Interest Income of the New Fund includes all cash receipts except for (i)
capital contributions, (ii) Residual Proceeds or (iii) the proceeds of any
loan or the refinancing of any loan. "Net Interest Income" of the New Fund
means all Interest Income plus any amount released from the Reserve for
distribution less expenses and debt service payments and any amount deposited
in the Reserve or used or held for the acquisition of additional tax-exempt
bonds. This differs from the concept of "Net Interest Income" used in the
Current Partnership Agreement in that it would allow the General Partner to
use Interest Income for the acquisition of additional tax-exempt bonds. The
Current Partnership Agreement does not allow Interest Income to be used for
this purpose. Notwithstanding this authority, the General Partner expects
that it will use Interest Income to acquire additional bonds only in cases
where it is necessary to supplement amounts available from the sale of Senior
Interests in order to close a particular acquisition.

Net Residual Proceeds. The New Partnership Agreement provides that Net
Residual Proceeds (whether representing a return of principal or contingent
interest) will be distributed 100% to the BUC holders, except that 25% of Net
Residual Proceeds representing contingent interest will be distributed to the
General Partner until it receives a maximum amount per annum (when combined
with all distributions to it of Net Interest Income representing contingent
interest during the year) equal to 0.9% of the principal amount of the New
Fund's mortgage bonds. The Current Partnership Agreement provides that Net
Residual Proceeds representing a return of principal will be distributed 100%
to the BUC holders and that 25% of Net Residual Proceeds representing
contingent interest will be distributed to the General Partner until it
receives a maximum amount per annum (when combined with all distributions of
Net Interest Income representing contingent interest during the year) equal to
0.9% of the principal amount of the Existing Fund's mortgage bonds. However,
the Current Partnership Agreement provides that remaining Net Residual
Proceeds representing contingent interest will be distributed (i) 100% to the
BUC holders until the BUC holders have received an amount (when combined with
all prior distributions to them by the Existing Fund) equal to the sum of $20
per BUC plus a cumulative, noncompounded annual return of 11% on their
"Adjusted Capital Contributions" as existing from time to time; (ii) then 100%
to the General Partner until the General Partner receives an aggregate amount
equal to 10% of the total distributions to all parties (including, for this
purpose, distributions of Net Interest Income); (iii) then 90% to the BUC
holders and 10% to the General Partner. Therefore, by adopting the New
Partnership Agreement, the General Partner will no longer have a right to
participate in Net Residual Proceeds representing contingent interest after it
receives a total of 0.9% per annum of the principal amount of the mortgage
bonds held by the New Fund. The Existing Fund has not made any distributions
of Net Residual Proceeds to date.

Under the terms of the New Partnership Agreement, Residual Proceeds means all
amounts received by the New Fund upon the sale of any asset or from the
repayment of principal of any bond. Net Residual Proceeds means, with respect
to any distribution period, all Residual Proceeds received by the New Fund
during such distribution period, plus any amounts released from the Reserve
for distribution less all expenses that are directly attributable to the sale
of an asset, amounts used to discharge indebtedness and any amount deposited
in the Reserve or used or held for the acquisition of additional tax-exempt
bonds. This differs from the concept of "Net Residual Proceeds" used in the
Current Partnership Agreement in that it would allow the General Partner to
use Residual Proceeds for the acquisition of additional tax-exempt bonds. The
Current Partnership Agreement does not allow Residual Proceeds to be used for
this purpose. Notwithstanding this authority, the General Partner does not
intend to use this authority to acquire additional bonds indefinitely without
distributing Net Residual Proceeds to the BUC holders. Rather, it is designed
to afford the General Partner the ability to increase the number of bonds in
which the New Fund will hold an interest in order to increase the Net Interest
Income from, and value of, the New Fund.

Distributions Upon Liquidation. The New Fund will have a term expiring on
December 31, 2015 unless terminated earlier as provided in the New Partnership
Agreement. Upon the dissolution of the New Fund, the proceeds from the
liquidation of its assets will be first applied to the payment of the
obligations and liabilities of the New Fund and the establishment of any
reserve therefor as the General Partner determines to be necessary and then
distributed to the General Partner and the BUC holders in proportion to, and
to the extent of, their respective capital account balances and then in the
same manner as Net Residual Proceeds.

Timing of Cash Distributions. The General Partner expects to continue to make
monthly cash distributions to BUC holders after the Transaction. However, the
New Partnership Agreement, like the Current Partnership Agreement, allows the
General Partner to make cash distributions on a quarterly or semiannual
basis. Regardless of the distribution period selected by the General Partner,
cash distributions must be made within 60 days of the end of each such period.

Allocation of Income and Losses. Income and losses of the New Fund will be
allocated among the partners and BUC holders in the same manner as such
allocations are currently made by the Existing Fund. Accordingly, income and
losses from operations will be allocated 99% to the BUC holders and 1% the
General Partner. Income arising from a sale of or liquidation of the New
Fund's assets will be first allocated to the General Partner in an amount
equal to the Net Residual Proceeds or liquidation proceeds distributed to the
General Partner from such transaction and the balance will be distributed to
the BUC holders. Losses from a sale of a property or from a liquidation of
the New Fund will be allocated among the General Partner and the BUC holders
in the same manner as the Net Residual Proceeds or liquidation proceeds from
such transaction are distributed.

Allocation Among BUC Holders. Allocations of cash distributions and of income
and losses will be made among BUC holders of the New Fund in the same manner
as such allocations are made among BUC holders of the Existing Fund. Income
and losses will be allocated on a monthly basis to the BUC holders of record
as of the last day of a month. If a BUC holder is recognized as the record
holder of BUCs on such date, such BUC holder will be allocated all income and
losses for such month.

Cash distributions will be made to the BUC holders of record as of the last
day of each distribution period. If the New Fund recognizes a transfer prior
to the end of a distribution period, the transferee will be deemed to be the
holder for the entire distribution period and will receive the entire cash
distribution for such period. Accordingly, if the General Partner selects a
quarterly or semiannual distribution period, the transferor of BUCs during
such a distribution period may be recognized as the record holder of the BUCs
at the end of one or more months during such period and be allocated income or
losses for such months, but not be recognized as the record holder of the BUCs
at the end of the period and, therefore, not be entitled to a cash
distribution for such period.

The General Partner retains the right to change the method by which income and
losses of the New Fund will be allocated between buyers and sellers of BUCs
during a distribution period, based on consultation with tax counsel and
accountants. However, no change may be made in the method of allocation
income or losses without written notice to the BUC holders at least 10 days
prior to the proposed effectiveness of such change, unless otherwise required
by law.

Reimbursement of Expenses. In addition, the New Fund will reimburse the
General Partner or its affiliates on a monthly basis for the actual
out-of-pocket costs of direct telephone and travel expenses incurred by them
in connection with the business of the New Fund, direct out-of-pocket fees,
expenses and charges paid by them to third parties for rendering legal,
auditing, accounting, bookkeeping, computer, printing and public relations
services, expenses of preparing and distributing reports to BUC holders, an
allocable portion of the salaries and fringe benefits of nonofficer employees
of America First, insurance premiums (including premiums for liability
insurance which will cover the New Fund, the General Partner and America
First), the cost of compliance with all state and federal regulatory
requirements and NASDAQ listing fees and charges and other payments to third
parties for services rendered to the New Fund. The General Partner will also
be reimbursed for any expenses it incurs acting as tax matters partner for the
New Fund. The New Fund will not reimburse the General Partner or its
affiliates for the travel expenses of the president of America First or for
any items of general overhead, including, but not limited to, rent, utilities
or the use of computers, office equipment or other capital items owned by the
General Partner or its affiliates. The New Fund will not reimburse the
General Partner or America First for any salaries or fringe benefits of any
partner of the General Partner or of the officers or board of managers of
America First regardless of whether such persons provide services to the New
Fund. The New Fund's independent accountants are required to verify that any
reimbursements received by the General Partner from the New Fund were for
expenses incurred by the General Partner or its affiliates in connection with
the conduct of the business and affairs of the New Fund or the acquisition and
management of its assets and were otherwise permissible reimbursements under
the terms of the New Partnership Agreement. The annual report to BUC holders
is required to itemize the amounts reimbursed to the General Partner and its
affiliates.

Other Payments to the General Partner

Fees. In addition to its share of Net Interest Income and Net Residual
Proceeds and reimbursement for expenses, the General Partner or its affiliates
will be entitled to the following:

(i) an Administrative Fee in an amount equal to 0.45% per annum of principal
amount of the tax-exempt mortgage bonds held by the New Fund;

(ii) Mortgage Placement Fees in connection with the acquisition of additional
tax-exempt bonds by the New Fund in an amount equal to .675% of the purchase
price paid by the New Fund for such bonds; and

(iii) property management fees paid in connection with the management of
certain properties financed by the New Fund.

The Administrative Fee will be payable by the owners of the properties
financed by the tax-exempt bonds held by the New Fund, but will be subordinate
to the payment of all base interest to the New Fund on the bonds. Each of the
tax-exempt bonds currently held by the Existing Fund provide for the payment
of this Administrative Fee to the General Partner and the General Partner
expects to negotiate the payment of the Administrative Fee in connection with
the acquisition of additional tax-exempt mortgage bonds by the New Fund. As
with the Current Partnership Agreement, the New Partnership Agreement provides
that the New Fund will pay the Administrative Fee to the General Partner with
respect to any foreclosed mortgage bonds. The amount of any additional
Administrative Fees cannot be estimated because the amount of additional
bonds, if any, that the New Fund may acquire is not known.

Mortgage Placement Fees will be paid to the General Partner in connection with
the identification and evaluation of additional tax-exempt bonds for
acquisition and the consummation of such acquisitions. All Mortgage
Acquisition Fees will be paid by the owners of the properties financed by the
acquired mortgage bonds out of bond proceeds. The amount of any additional
Mortgage Placement Fees, if any, that may be earned by the General Partner
cannot be estimated because the amount of additional bonds, if any, that the
New Fund may acquire is not known.

America First Properties Management Company, L.L.C. ("Properties Management")
is an affiliate of the General Partner which is engaged in the management of
apartment complexes. Properties Management currently manages three of the
properties financed by the Existing Fund and is expected to continue to do so
after the Transaction. Properties Management may also seek to become the
manager of apartment complexes financed by additional mortgage bonds acquired
by the New Fund, subject to negotiation with the owners of such properties.
If the New Fund acquires ownership of any property through foreclosure of a
tax-exempt mortgage bond, Properties Management may provide property
management services for such property and, in such case, the New Fund will pay
Properties Management its fees for such services. Under the New Partnership
Agreement, such fees paid to Properties Management may not exceed the lesser
of (i) the fees charged by unaffiliated property managers in the same
geographic area or (ii) five percent of the gross revenues of the managed
property. In contrast, the Current Partnership Agreement provides that
property management fees paid by the Existing Fund may not exceed the lesser
of (A) 5% of the gross revenues of such property, (B) the fees charged by
unaffiliated property managers in the same geographic area or (C) the
Properties Management's actual cost of providing property management services
for such property. Therefore, it is possible that, if the New Fund forecloses
on a mortgage bond and retains Properties Management to manage the property
securing the bond, the amount of property management fees paid to Properties
Management under the New Partnership Agreement will be greater than the amount
payable under the Current Partnership Agreement. For the year ended December
31, 1997, the Properties Management earned a total of $270,616 for the
management of three properties financed by the Existing Fund, none of which
was paid by the Existing Fund. The amount of property management fees which
Properties Manager will earn after the consummation of the Transaction cannot
be estimated at this time since the number of financed properties for which it
undertakes management and the revenues generated by such properties are not
known.

Liability of Partners and BUC Holders

Under the Delaware Act and the terms of the New Partnership Agreement, the
General Partner will be liable to third parties for all general obligations of
the New Fund to the extent not paid by the New Fund. However, the New
Partnership Agreement (in the same manner as the Current Partnership
Agreement) provides that the General Partner has no liability to the New Fund
for any act or omission reasonably believed to be within the scope of
authority conferred by the New Partnership Agreement and in the best interest
of the New Fund; provided that the course of conduct giving rise to the
threatened, pending or completed claim, action or suit did not constitute
fraud, bad faith, negligence, misconduct or a breach of its fiduciary
obligations to the BUC holders. Therefore, BUC holders may have a more
limited right of action against the General Partner than they would have
absent those limitations in the New Partnership Agreement. The New
Partnership Agreement also provides for indemnification of the General Partner
and its affiliates by the New Fund for certain liabilities which the General
Partner and its affiliates may incur under the Securities Act of 1933, as
amended, and in dealings with the New Fund and third parties on behalf of the
New Fund. To the extent that the provisions of the New Partnership Agreement
include indemnification for liabilities arising under the Securities Act of
1933, as amended, such provisions are, in the opinion of the Securities and
Exchange Commission, against public policy and, therefore, unenforceable.

No BUC holder will be personally liable for the debts, liabilities, contracts
or any other obligations of the New Fund unless, in addition to the exercise
of his rights and powers as a BUC holder, he takes part in the control of the
business of the New Fund. It should be noted, however, that the Delaware Act
prohibits a limited partnership from making a distribution which causes the
liabilities of the limited partnership to exceed the fair value of its
assets. Any limited partner who receives a distribution knowing that the
distribution was made in violation of this provision of the Delaware Act, is
liable to the limited partnership for the amount of the distribution. This
provision of the Delaware Act probably applies to BUC holders as well as
partners of the New Fund. In any event, the New Partnership Agreement
provides that, to the extent the Limited Partner is required to return any
distributions or repay any amount by law or pursuant to the New Partnership
Agreement, each BUC holder who has received any portion of such distributions
is required to repay his proportionate share of such distribution to the
Limited Partner immediately upon notice by the Limited Partner to such BUC
holder. Furthermore, the New Partnership Agreement allows the General Partner
to withhold future distributions to BUC holders until the amount so withheld
equals the amount required to be returned by the Limited Partner. Because
BUCs are transferable, it is possible that distributions may be withheld from
a BUC holder who did not receive the distribution required to be returned.

Voting Rights

The New Partnership Agreement provides that the Limited Partner will vote its
limited partnership interests as directed by the BUC holders. Accordingly,
the BUC holders, by vote of a majority in interest thereof, may:

(i) amend the New Partnership Agreement (provided that the concurrence of the
General Partner is required for any amendment which modifies the compensation
or distributions to which the General Partner is entitled, or which affects
the duties of the General Partner);

(ii) dissolve the New Fund;

(iii) remove any General Partner and consent to the admission of a successor
General Partner; or

(iv) terminate an agreement under which the General Partner provides goods and
services to the New Fund.

In addition, without the consent of a majority in interest of the BUC holders,
the General Partner may not, among other things:

(v) sell or otherwise dispose of all or substantially all of the assets of the
New Fund in a single transaction (provided that the General Partner may sell
the last property owned by the New Fund without such consent);

(vi) elect to dissolve the New Fund; or

(vii) admit an additional General Partner.

The General Partner may at any time call a meeting of the BUC holders, call
for a vote without a meeting of the BUC holders or otherwise solicit the
consent of the BUC holders and is required to call such a meeting or vote or
solicit consents following receipt of a written request therefor signed by 10%
or more in interest of the BUC holders. The New Fund does not intend to hold
annual or other periodic meetings of BUC holders. Although the New
Partnership Agreement permits the consent of the BUC holders to be given after
the act is done with respect to which the consent is solicited, the General
Partner does not intend to act without the prior consent of the BUC holders,
in such cases where consent of the BUC holders is required, except in
extraordinary circumstances where inaction may have a material adverse affect
on the interest of the BUC holders.

Reports

Within 120 days after the end of the fiscal year, the General Partner will
distribute a report to BUC holders which shall include (i) financial
statements of the New Fund for such year which have been audited by the New
Fund's independent public accountant, (ii) a report of the activities of the
New Fund during such year and (iii) a statement (which need not be audited)
showing distributions of Net Interest Income and Net Residual Proceeds. The
annual report will also include a detailed statement of the amounts of fees
and expense reimbursements paid to the General Partner and its affiliates by
the New Fund during the fiscal year.

Within 60 days after the end of first three quarters of each fiscal year, the
General Partner will distribute a report which shall include (i) unaudited
financial statements of the New Fund for such quarter (ii) a report of the
activities of the New Fund during such quarter and (iii) a statement showing
distributions of Net Interest Income and Net Residual Proceeds during such
quarter.

The New Fund will also provide BUC holders with a report on Form K-1 or other
information required for federal and state income tax purposes within 75 days
of the end of each year.

Removal or Withdrawal

of the General Partner

The BUC holders may, by vote of a majority in interest, remove the General
Partner from the New Fund with or without cause and appoint a successor
general partner.

The General Partner may not withdraw voluntarily from the New Fund or sell,
transfer or assign all or any portion of its interest in the New Fund, unless
a substitute General Partner has been admitted in accordance with the terms of
the New Partnership Agreement. With the consent of a majority in interest of
the BUC holders, the General Partner may at any time designate one or more
persons as additional general partners, provided that the interests of the BUC
holders in the New Fund are not reduced thereby. The designation must meet
the conditions set out in the New Partnership Agreement and comply with the
provisions of the Delaware Act with respect to admission of an additional
general partner. In addition to the requirement that the admission of a
person as successor or additional general partner have the consent of the
majority in interest of the BUC holders, the New Partnership Agreement
requires, among other things, that (i) such person agrees to and executes the
New Partnership Agreement and (ii) counsel for the Partnership or BUC holders
renders an opinion that such person's admission is in accordance with the
Delaware Act.

Effect of Removal, Bankruptcy, Dissolution
or Withdrawal of a General Partner

In the event of a removal, bankruptcy, dissolution or withdrawal of the
General Partner, it will cease to be the General Partner, but will remain
liable for obligations arising prior to the time it ceases to act in that
role. The former General Partner's interest in the New Fund will be converted
into a limited partner interest having the same rights to share in the
allocations of income and losses of the New Fund and distributions of Net
Interest Income, Net Residual Proceeds and cash distributions upon liquidation
of the New Fund as it did as General Partner. Any successor General Partner
shall have the option, but not the obligation, to acquire all or a portion of
the interest of the removed General Partner at its then fair market value.
The Current Partnership Agreement provides that the fair market value of the
General Partner's interest for such purposes is to be based on its share of
the proceeds resulting from an immediate liquidation of the assets of the
Existing Fund. Under the Current Partnership Agreement, the General Partner
could receive up to 10% of Net Residual Proceeds, including such amounts
distributed upon liquidation of the Existing Fund. However, it is not
expected that the Existing Fund will generate enough Net Residual Proceeds
upon a liquidation to entitle the General Partner to receive any distributions
of Net Residual Proceeds other than a limited amount of contingent interest.
The New Partnership Agreement provides that the General Partner will not
participate in the distribution of Net Residual Proceeds, other than in a
limited amount of contingent interest. Therefore, calculating the fair market
value of the General Partner's interest on the basis of liquidation value will
result in a value which is close to zero. The General Partner believes that
this is not an adequate valuation of the interest it will retain in the New
Fund upon its removal, bankruptcy, dissolution or withdrawal and does not
believe that it should be required to sell its interest to a successor General
Partner at a price that does not reflect the true value of the retained
interest. In order to provide the General Partner with a meaningful value for
its interest in the New Fund in the event it is removed as General Partner,
the New Partnership Agreement bases the fair market value of the General
Partner's interest on the present value of its future Administrative Fees and
distributions of Net Interest Income plus any amount which would be paid to
the removed General Partner upon an immediate liquidation of the New Fund.
Any disputes over valuation would be settled by the successor General Partner
and removed General Partner through arbitration. As a result of this change,
the General Partner would expect to receive substantially more from a
successor General Partner for its interest upon its removal from the New Fund
than it would upon its removal from the Existing Fund. The amendment of this
provision affects only the price that a successor General Partner would pay to
a removed General Partner and will not affect the amount of cash distributions
to be received by the removed General Partner from the New Fund, including the
amounts, if any, distributable to the former General Partner upon dissolution
of the New Fund or sale of its assets.

Amendments

In addition to amendments to the New Partnership Agreement adopted by a
majority in interest of the BUC holders, the New Partnership Agreement may be
amended by the General Partner, without the consent of the BUC holders, in
certain limited respects if such amendments are not materially adverse to the
interest of the BUC holders. In addition, the General Partner is authorized
to amend the New Partnership Agreement to admit additional, substitute or
successor partners into the New Fund if such admission is effected in
accordance with the terms of the New Partnership Agreement.

Dissolution and Liquidation

The New Fund will continue in full force and effect until December 31, 2016,
unless terminated earlier as a result of:

(viii) the passage of 90 days following the bankruptcy, dissolution,
withdrawal or removal of a General Partner who is at that time the sole
General Partner, unless all of the remaining partners (it being understood
that for purposes of this provision the Limited Partner shall vote as directed
by a majority in interest of the BUC holders) agree in writing to continue the
business of the New Fund and a successor General Partner is designated within
such 90-day period;

(ix) the passage of 180 days after the repayment, sale or other disposition of
all of the New Fund's properties and substantially all its other assets;

(x) the election by a majority in interest of BUC holders or by the General
Partner (subject to the consent of a majority in interest of the BUC holders)
to dissolve the New Fund; or

(xi) any other event causing the dissolution of the New Fund under the laws of
the State of Delaware.

Upon dissolution of the New Fund, its assets will be liquidated and after the
payment of its obligations and the setting up of any reserves for
contingencies that the General Partner considers necessary, any proceeds from
the liquidation will be distributed as set forth under "Allocations and
Distributions-Distributions Upon Liquidation."

Designation of Tax Matters Partner

The General Partner will designate itself as the New Fund's "tax matters
partner" for purposes of federal income tax audits pursuant to Section 6231 of
the Code and the regulations thereunder. Each BUC holder agrees to execute
such documents as may be necessary or appropriate to evidence such appointment.

Books and Records

The books and records of the Partnership shall be maintained at the office of
the New Fund located at Suite 400, 1004 Farnam Street, Omaha Nebraska 68102
and shall be available there for examination and copying by any BUC holder or
his duly authorized representative, during ordinary business hours. The
records of the New Fund will include a list of the names and addresses of all
BUC holders and BUC holders will have the right to secure, upon written
request to the General Partner and payment of reasonable expenses in
connection therewith, a list of the names and addresses of, and the number of
BUCs held by, all BUC holders.

Accounting Matters

The fiscal year of the New Fund will be the calendar year. The books and
records of the New Fund shall be maintained on an accrual basis in accordance
with generally accepted accounting principles.

Other Activities

The New Partnership Agreement, like the Current Partnership Agreement, allows
the General Partner and its affiliates to engage generally in other business
ventures and provides that BUC holders will have no rights with respect
thereto by virtue of the New Partnership Agreement. In addition, the New
Partnership Agreement provides that an affiliate of the General Partner may
acquire and hold debt securities or other interests secured by a property that
also secures a mortgage bond held by the New Fund, provided that such mortgage
bond is not junior or subordinate to the interest held by such affiliate.

Derivative Actions

The New Partnership Agreement provides that a BUC holder may bring a
derivative action on behalf of the New Fund to recover a judgment to the same
extent as a limited partner has such rights under the Delaware Act. The
Delaware Act provides for the right to bring a derivative action, although it
only authorizes a partner of a partnership to bring such an action. There is
no specific judicial or statutory authority governing the question of whether
an assignee of a partner (such as a BUC holder) has the right to bring a
derivative action where a specific provision exists in the partnership
agreement granting such rights. Furthermore, there is no express statutory
authority for a limited partner's class action in Delaware, and whether a
class action may be brought by BUC holders to recover damages for breach of
the General Partner's fiduciary duties in Delaware state courts is unclear.

DESCRIPTION OF THE BUCS OF THE NEW FUND

Beneficial Unit Certificates

BUCs represent beneficial assignments by the Limited Partner of its limited
partner interest in the New Fund. Although BUC holders will not be limited
partners of the New Fund and have no right to be admitted as limited partners,
they will be bound by the terms of the New Partnership Agreement and will be
entitled to the same economic benefits, including the same share of income,
gains, losses, deductions, credits and cash distributions, as if they were
limited partners of the New Fund.

A majority in interest of the BUC holders (voting through the Limited
Partner), without the concurrence of the General Partner, may, among other
things, (i) amend the New Partnership Agreement (with certain restrictions),
(ii) approve or disapprove the sale of all or substantially all of the New
Fund's assets in a single transaction (other than a transfer necessary to
create or sell Senior Interests), (iii) dissolve the New Fund or (iv) remove
the General Partner and elect a replacement therefor. The General Partner may
not dissolve the New Fund without the consent of a majority in interest of the
BUC holders.

Transfers

The BUCs will be issued in registered form only and, except as noted below,
will be transferable upon consummation of the Transaction. The BUCs have been
accepted for inclusion on The NASDAQ Stock Market upon notice of issuance.
However, there can be no assurance that a public trading market for the BUCs
will develop.

A purchaser of BUCs will be recognized as a BUC holder for all purposes on the
books and records of the New Fund on the day on which the General Partner (or
other transfer agent appointed by the General Partner) receives satisfactory
evidence of the transfer of BUCs. All BUC holder rights, including voting
rights, rights to receive distributions and rights to receive reports, and all
allocations in respect of BUC holders, including allocations of income and
expenses, will vest in, and be allocable to, BUC holders as of the close of
business on such day. Service Data Corporation of Omaha, Nebraska, has been
appointed by the General Partner to act as the registrar and transfer agent
for the BUCs.

A transfer or assignment of 50% or more of the outstanding BUCs within a
12-month period may terminate the New Fund for federal income tax purposes,
which may result in adverse tax consequences to BUC holders. In order to
protect against such a termination, the New Partnership Agreement permits the
General Partner to suspend or defer any transfers or assignments of BUCs at
any time after it determines that 45% or more of all BUCs may have been
transferred (as defined by the federal income tax laws) within a 12-month
period and that the resulting termination of the New Fund for tax purposes
would adversely affect the economic interests of the BUC holders. Any
deferred transfers will be effected (in chronological order to the extent
practicable) on the first day of the next succeeding period in which transfers
can be effected without causing a termination of the New Fund for tax purposes
or any adverse effects from such termination, as the case may be.

In addition, the New Partnership Agreement grants the General Partner the
authority to take such action as it deems necessary or appropriate, including
action with respect to the manner in which BUCs are being or may be
transferred or traded, in order to preserve the status of the New Fund as a
partnership for federal income tax purposes or to insure that BUC holders will
be treated as limited partners for federal income tax purposes.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

OF THE TRANSACTION

The following is a summary of the material federal income tax considerations
associated with the Transaction. The summary was prepared by Kutak Rock,
legal counsel to the General Partner. This discussion is based upon the
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations, reported rulings and decisions thereunder, as in effect as of
the date of this Consent Solicitation Statement/Prospectus (or, in the case of
certain regulations, proposed as of such date), all of which are subject to
change, retroactively or prospectively, and to possibly differing
interpretations. This discussion does not purport to deal with the federal
income or other tax consequences applicable to all BUC holders in light of
their particular investment circumstances or to all categories of BUC holders,
some of whom may be subject to special rules (including, for example,
insurance companies, tax-exempt organizations, financial institutions,
broker-dealers, subchapter S corporations, recipients of Social Security
income, United States branches of foreign corporations and persons who are not
citizens or residents of the United States). No ruling on the federal, state
or local tax considerations relevant to the Transaction has been or will be
requested from the Internal Revenue Service (the "Service") or from any other
tax authority. Moreover, no assurance can be given that the conclusions
reached by counsel would be accepted by the Service or, if challenged by the
Service, sustained in court.

As discussed below, counsel has opined that, based on the assumptions set
forth in the discussion below, the New Fund will be treated for federal income
tax purposes as a partnership and the BUC holders will be subject to tax as
partners. Moreover, counsel has opined that, based on the assumptions set
forth in the discussion below, the formation of the New Fund and the merger of
the Existing Fund and the New Fund should be nontaxable to the Existing Fund,
the New Fund and the BUC holders.

Each BUC holder is advised to consult his or her own tax advisor regarding the
specific tax consequences to him or her of the Transaction and of potential
changes in applicable tax laws.

Partnership Status

The New Fund will be formed as a limited partnership under Delaware law and it
will not file any election with the Internal Revenue Service (the "Service")
to be treated as an association taxable as a corporation. Under the recently
adopted "check-the-box" regulations promulgated by the Service, absent such
election, an entity such as the New Fund will be treated as a partnership for
income tax purposes. Although the New Fund has received no opinion of counsel
or private letter ruling from the Service as to its tax status, its status as
a partnership should not be subject to challenge by the Service.

Because the New Fund will be treated as a partnership for income tax purposes,
it will not be liable for any income tax. Rather, all items of the New Fund's
income, gain, loss, deduction or tax credit will be allocated to its partners
and the BUC holders, who will be subject to taxation on their distributive
share thereof. Taxable income allocated by the New Fund to BUC Holders with
respect to a taxable year may exceed the amount of cash distributed by the New
Fund to BUC holders for such year.

The New Fund is not intended to act as a "tax shelter" and will not register
as such with the Service.

Treatment of the New Fund as a

Publicly Traded Partnership

The listing of the New Fund's BUCs for trading on The NASDAQ Stock Market will
cause the New Fund to be treated as a "publicly traded partnership" under
section 7704 of the Code, thus continuing the publicly traded partnership
status of the Existing Fund. A publicly traded partnership is generally
taxable as a corporation unless 90% or more of its gross income is
"qualifying" income. Qualifying income includes interest, dividends, real
property rents, gain from the sale or other disposition of real property, gain
from the sale or other disposition of capital assets held for the production
of interest or dividends and certain other items.

Substantially all of the New Fund's gross income will continue to be
tax-exempt interest income on mortgage bonds, all of which constitutes
qualifying income. As long as 90% or more of the New Fund's gross income
consists of qualifying income, the New Fund will be treated as a partnership
for federal income tax purposes. If for any reason less than 90% of the New
Fund's gross income constituted qualifying income, the New Fund would be
taxable as a corporation rather than a partnership for federal income tax
purposes, with the consequences described above in "Partnership Status."

Consequences of a Merger

The merger of the Existing Fund and the New Fund pursuant to the terms of the
Merger Agreement will be treated as a tax-free continuation of the Existing
Fund for federal income tax purposes. Accordingly, no gain or loss will be
recognized by the Existing Fund, the New Fund or the BUC holders as a result
thereof. The adjusted basis of the New Fund in the assets acquired from the
Existing Fund will be equal to the adjusted basis of the Existing Fund therein
as of the effective date of the Transaction. Since the New Fund will have the
same adjusted basis in the transferred assets as the Existing Fund, the
holding period of the New Fund in the transferred assets will include the
holding period of the Existing Fund in such assets. Likewise, the BUC
holders' adjusted basis in the New Fund BUCs will be equal to their adjusted
basis in the Existing Fund BUCs. A BUC holder will include the holding period
of his or her Existing Fund BUCs in his or her holding period for the New Fund
BUCs.

Nondeductibility of Interest Expense

The Code generally prohibits the deduction of interest on indebtedness which
is either incurred or continued for the purpose of either purchasing or
carrying tax-exempt obligations. In the case of a partnership, the partners
are required to take into account their proportionate share of the tax-exempt
obligations held, and the indebtedness incurred, by the partnership in
combination with such obligations held, or any debt incurred, in their
individual capacities. While the New Fund's assets will consist primarily of
tax-exempt mortgage bonds, it does not intend to incur any significant amounts
of indebtedness to purchase or carry tax-exempt mortgage bonds. However, the
New Fund is not prohibited from borrowing and, to the extent that it does, any
interest paid by it with respect to indebtedness may not be deductible by BUC
holders.

LEGAL MATTERS

The validity of the issuance of the BUCs of the New Fund offered pursuant to
his Consent Solicitation Statement/Prospectus will be passed upon for the New
Fund by Kutak Rock, a partnership including professional corporations, Omaha,
Nebraska. In addition, the description of federal income tax consequences
under the caption "MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE
TRANSACTION" is based on the opinion of Kutak Rock.

EXPERTS

The Financial Statements of the Existing Fund as of December 31, 1997 and 1996
and for each of the three years in the period ended December 31, 1997 have
been incorporated by reference herein in reliance on the reports of Coopers &
Lybrand L.L.P., independent certified public accountants, and on the authority
of said firm as experts in auditing and accounting.

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN OR INCORPORATED BY REFERENCE INTO THIS CONSENT SOLICITATION
STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS CONSENT SOLICITATION
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED BY THIS CONSENT SOLICITATION
STATEMENT/PROSPECTUS, OR THE SOLICITATION OF A BUC HOLDER'S CONSENT, IN ANY
JURISDICTION TO OR FROM ANY PERSON TO OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION OF AN OFFER OR CONSENT IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS CONSENT SOLICITATION STATEMENT/PROSPECTUS NOR THE
ISSUANCE OR SALE OF ANY SECURITIES HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET
FORTH OR INCORPORATED HEREIN SINCE THE DATE HEREOF.

GLOSSARY

Certain terms used in this Consent Solicitation Statement/Prospectus shall
have the following meanings, unless the context requires otherwise:

"Administrative Fee" means the fee paid to the General Partner for the
administration of the New Fund and its assets in an amount equal to 0.45% per
annum of the principal balance of the tax-exempt bonds held by the New Fund.

"America First" means America First Companies L.L.C., a Delaware limited
liability company which is the general partner of the General Partner.

"BUCs" means beneficial unit certificates representing assignments of the
Limited Partner's limited partner interests in the Existing Fund or the New
Fund, as the case may be.

"Code" means the Internal Revenue Code of 1986, as amended, or any
corresponding provision or provisions of succeeding law.

"Commission" means the Securities and Exchange Commission.

"Current Partnership Agreement" means the Agreement of Limited Partnership,
dated November 11, 1985, of the Existing Fund.

"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
which consists of Title 6, Chapter 17 of the Delaware Code Annotated.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Existing Fund" means America First Tax Exempt Mortgage Fund Limited
Partnership, a Delaware limited partnership.

"General Partner" means America First Capital Associates Limited Partnership
Two, a Delaware limited partnership which is the General Partner of the
Existing Fund and the New Fund.

"Interest Income" means all cash receipts of the Existing Fund or the New
Fund except for (i) capital contributions, (ii) amounts received upon the
repayment or sale of a bond or other asset which do not represent accrued
interest thereon other than accrued interest which represents accrued
contingent interest or (iii) the proceeds of any loan.

"Limited Partner" means America First Fiduciary Corporation Number Five, a
Nebraska corporation which is the Limited Partner of the Existing Fund and the
New Fund.

"Merger Agreement" means the Agreement of Merger, dated April 10, 1998, by and
between the Existing Fund and the New Fund relating to the Transaction.

"Mortgage Placement Fee" means the fee payable to the General Partner from the
proceeds of additional tax-exempt bonds acquired by the New Fund in an amount
equal to .675% of the principal balances of such bonds.

"Net Interest Income" means all Interest Income received by the Existing or
the New Fund plus any amount released from the Reserve for distribution, less
amounts used to pay expenses and/or discharge indebtedness, any amount
deposited in the Reserve, and (in the case of the New Fund) used or held for
the acquisition of additional tax-exempt bonds.

"Net Residual Proceeds" means all Residual Proceeds received by the Existing
Fund, plus any amounts released from the Reserve for distribution, less all
expenses that are directly attributable to the sale or refinancing of a
property, amounts used to discharge indebtedness, any amount deposited in the
Reserve, and (in the case of the New Fund) used or held for the acquisition of
additional tax-exempt bonds.

"New Fund" means America First Tax Exempt Investors, L.P., a Delaware limited
partnership.

"New Partnership Agreement" means the Agreement of Limited Partnership of the
New Fund.

"Record Date" means [ ], 1998, the date established
by the General Partner to determine which BUC holders will be entitled to
receive notice of, and to grant or withhold their consent to, the Transaction.

"Reserve" means those funds withheld from Interest Income or Residual Proceeds
by the General Partner from time to time in order to provide working capital
for the New Fund and which may be used for any purpose relating to the
operation thereof, including the acquisition of additional tax-exempt bonds.

"Residual Proceeds" means all amounts received by the Existing Fund or the New
Fund from the repayment or sale of a bond or other asset except amounts
representing accrued interest on a bond other than accrued contingent interest.

"Securities Act" means the Securities Act of 1933, as amended.

"Senior Interest" means a senior interest in a trust that holds tax-exempt
mortgage bonds or a senior class of tax-exempt mortgage bonds.

"Service" means the Internal Revenue Service.

"Subordinate Interest" means a junior or residual interest in a trust that
holds tax-exempt mortgage bonds or a junior class of tax-exempt mortgage bonds.

"Tax matters partner" means the partner of the New Fund designated as such
under Section 6231 of the Code by the General Partner. The initial tax
matters partner of the New Fund will be the General Partner.

"Transaction" means the merger of the Existing Fund and the New Fund pursuant
to which (i) the separate existence of the Existing Fund will cease and the
New Fund will be the surviving partnership and will succeed to all of the
assets and liabilities of the Existing Fund, (ii) the New Partnership
Agreement will control the operations of the New Fund after the Transaction
and (iii) persons holding BUCs in the Existing Fund as of the Record Date will
become BUC holders of the New Fund and will receive one BUC in the New Fund
for each BUC they hold in the Existing Fund.

<PAGE>
APPENDIX A
AMERICA FIRST
TAX EXEMPT INVESTORS, L.P.
AGREEMENT OF LIMITED PARTNERSHIP

<PAGE>

ARTICLE I
DEFINED TERMS 1
ARTICLE II
NAME, PLACE OF BUSINESS, PURPOSE AND TERM
Section 2.01. Name. 7
Section 2.02. Principal Office and Name and Address of Resident Agent. 7
Section 2.03. Purpose. 7
Section 2.04. Term. 7
ARTICLE III
PARTNERS AND CAPITAL
Section 3.01. General Partner. 8
Section 3.02. Limited Partner. 8
Section 3.03. Partnership Capital. 8
Section 3.04. Liability of Partners and BUC Holders. 9
ARTICLE IV
DISTRIBUTIONS OF CASH; ALLOCATIONS OF INCOME AND LOSS
Section 4.01. Distributions of Net Interest Income. 9
Section 4.02. Distributions of Net Residual Proceeds and of Liquidation
Proceeds. 9
Section 4.03. Allocation of Income and Loss From Operations. 10
Section 4.04. Allocation of Income and Loss Arising From a Repayment, Sale or
Liquidation. 10
Section 4.05. Determination of Allocations and Distributions Among Limited
Partners and BUC Holders. 11
Section 4.06. Capital Accounts. 12
Section 4.07. Rights to Distributions. 12
ARTICLE V
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER
Section 5.01. Management of the Partnership. 12
Section 5.02. Authority of the General Partner. 13
Section 5.03. Authority of General Partner and Its Affiliates To Deal With
Partnership. 15
Section 5.04. General Restrictions on Authority of the General Partner. 16
Section 5.05. Compensation and Fees. 18
Section 5.06. Duties and Obligations of the General Partner. 19
Section 5.07. Delegation of Authority. 19
Section 5.08. Other Activities. 20
Section 5.09. Limitation on Liability of the General Partner and Initial
Limited Partner; Indemnification. 20
Section 5.10. Special Amendments to the Agreement. 21
ARTICLE VI
CHANGES IN GENERAL PARTNERS
Section 6.01. Withdrawal of General Partner. 21
Section 6.02. Admission of a Successor or Additional General Partner. 21
Section 6.03. Removal of a General Partner. 22
Section 6.04. Effect of Incapacity of a General Partner. 22
ARTICLE VII
TRANSFERABILITY OF BUCS AND LIMITED PARTNERS' INTERESTS
Section 7.01. Free Transferability of BUCs. 24
Section 7.02. Restrictions on Transfers of BUCs and of Interests of Limited
Partners Other Than the Initial Limited Partner. 24
Section 7.03. Assignees of Limited Partners Other Than the Initial Limited
Partner. 25
Section 7.04. Joint Ownership of Interests. 26

ARTICLE VIII
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP
Section 8.01. Events Causing Dissolution. 27
Section 8.02. Liquidation. 28
ARTICLE IX
BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS
Section 9.01. Books and Records. 29
Section 9.02. Accounting Basis and Fiscal Year. 29
Section 9.03. Reports. 29
Section 9.04. Designation of Tax Matters Partner. 30
Section 9.05. Expenses of Tax Matters Partner. 30
ARTICLE X
MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS AND BUC HOLDERS
Section 10.01. Meetings. 31
Section 10.02. Voting Rights of Limited Partners and BUC Holders. 32
Section 10.03. Opinion Regarding Effect of Action by Limited Partners and BUC
Holders. 33
Section 10.04. Other Activities. 33
ARTICLE XI
ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS TO BUC HOLDERS AND RIGHTS OF BUC
HOLDERS
Section 11.01. Assignment of Limited Partnership Interests to BUC Holders. 34
Section 11.02. Rights of BUC Holders. 35
Section 11.03. Voting by the Initial Limited Partner on Behalf of BUC
Holders. 35
Section 11.04. Preservation of Tax Status. 36
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Appointment of the General Partner as Attorney-in-Fact. 37
Section 12.02. Signatures. 38
Section 12.03. Amendments. 38
Section 12.04. Binding Provisions. 39
Section 12.05. Applicable Law. 39
Section 12.06. Separability of Provisions. 39
Section 12.07. Captions. 39
Section 12.08. Entire Agreement. 39
TESTIMONIUM. 41

SCHEDULE A
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
AGREEMENT OF LIMITED PARTNERSHIP

This Agreement is made as of [ ], 1998 by and between
America First Capital Associates Limited Partnership Two (the "General
Partner") and America First Fiduciary Corporation Number Five (the "Initial
Limited Partner"), who by joining in this Agreement agree to become partners
in a limited partnership under the laws of the State of Delaware.

ARTICLE II

DEFINED TERMS

The defined terms used in this Agreement shall, unless the context otherwise
requires, have the meanings specified in this Article I. The singular shall
include the plural and the masculine genders shall include the feminine and
neuter gender, and vice versa, as the context requires.

"Accountants" means such nationally recognized firm of independent public
accountants as shall be engaged from time to time by the General Partner on
behalf of the Partnership.

"Act" means the Delaware Revised Uniform Limited Partnership Act, which
consists of Title 6, Chapter 17 of the Delaware Code Annotated, as it may be
amended or revised from time to time, or any other provision of Delaware law
which may, from time to time, supersede part or all of the Delaware Revised
Uniform Limited Partnership Act.

"AFCA" means America First Capital Associates Limited Partnership Two, a
Delaware limited partnership, the General Partner.

"Affiliate" means, when used with reference to a specified Person, (i) any
Person who directly or indirectly controls or is controlled by or is under
common control with the specified Person, (ii) any Person who is (or has the
power to designate) an officer of, general partner in or trustee of, or serves
(or has the power to designate a person to serve) in a similar capacity with
respect to, the specified Person, or of which the specified Person is an
officer, general partner or trustee, or with respect to which the specified
Person serves in a similar capacity, and (iii) any Person who, directly or
indirectly, is the beneficial owner of 10% or more of any class of equity
securities of the specified Person or of which the specified Person is
directly or indirectly the owner of 10% or more of any class of equity
securities. An Affiliate of the Partnership or the General Partner does not
include any limited partner of the General Partner if such Person is not
otherwise an Affiliate of the Partnership or the General Partner.

"Agreement" means this Limited Partnership Agreement, as originally executed
and as amended from time to time.

"Bankruptcy" or "Bankrupt" as to any Person means the filing of a petition for
relief by such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or like provision of law or insolvency of such Person as finally determined by
a court proceeding.

"Bond" or "Bonds" means the tax-exempt housing bonds issued by various state
or local authorities in order to provide construction and permanent financing
for apartment complexes and which are held by the Partnership from time to
time.

"BUC" means a Limited Partnership Interest which is credited to the Initial
Limited Partner on the books and records of the Partnership and assigned by
the Initial Limited Partner to a BUC Holder.

"BUC Holder" means any Person who has been assigned one or more Limited
Partnership Interests by the Initial Limited Partner pursuant to Section
11.01. A BUC Holder is not a Limited Partner and will have no right to be
admitted as a Limited Partner.

"Business Day" means any day other than a Saturday, Sunday or a day on which
banking institutions in either New York, New York or Omaha, Nebraska are
obligated by law or executive order to be closed.

"Capital Account" means the capital account of a Partner or a BUC Holder as
described in Section 4.06 hereof.

"Capital Contribution" means the total amount contributed to the capital of
the Partnership by or on behalf of all Partners or any class of Partners or by
any one Partner, as the context may require (or by the predecessor holders of
the Partnership Interests of such Persons) and, with respect to a BUC Holder,
the Capital Contribution of the Initial Limited Partner made on behalf of such
BUC Holder.

"Cause" means conduct which constitutes fraud, bad faith, negligence,
misconduct or breach of a fiduciary duty.

"Certificate" means the certificate of limited partnership filed pursuant to
Section 17-201 of the Act.

"Code" means the Internal Revenue Code of 1986, as amended, or any
corresponding provision or provisions of succeeding law.

"Consent" means either the consent given by a vote at a meeting called and
held in accordance with the provisions of Section 10.01 hereof or the written
consent, as the case may be, of a Person to do the act or thing for which the
consent is solicited, or the act of granting such consent, as the context may
require. Consent given after the act or thing is done with respect to which
the Consent is solicited shall be deemed to relate back to the date such act
or thing was done.

"Contingent Interest" means (i) any Interest Income paid from the net cash
flow of a Project (or any Residual Proceeds paid from the proceeds of a Sale
or refinancing of the Project), the payment of either of which is not required
under the terms of the Mortgage Loan unless there is specified cash flow from
a Project or other specified contingencies are satisfied, and (ii) any amounts
received by the Partnership on the sale or other disposition of a Mortgage
Loan other than amounts representing repayment of principal and amounts
constituting Interest Income.

"Counsel" means the law firm representing the General Partner in connection
with the operation of the Partnership or the law firm, if any, selected by the
General Partner to represent the Partnership.

"Distribution Date" means a Business Day selected by the General Partner for
the distribution of Net Interest Income or Net Residual Proceeds with respect
to a Distribution Period, which Business Day shall be no later than 60 days
following the last day of the Distribution Period to which such Distribution
Date relates.

"Distribution Period" means the period of time selected by the General Partner
for which the distribution of Net Interest Income or Net Residual Proceeds is
made, which period may be no longer than six calendar months.

"General Partner" means AFCA or any Person or Persons who, at the time of
reference thereto, have been admitted as successors to the Partnership
Interest of AFCA or as additional General Partners, in each such Person's
capacity as a General Partner.

"Incapacity" or "Incapacitated" means, as to any Person, death, the
adjudication of incompetency or insanity, Bankruptcy, dissolution,
termination, withdrawal pursuant to Section 6.01 or removal pursuant to
Section 6.03, as the case may be, of such Person.

"Income" means the taxable income of the Partnership as determined in
accordance with the Partnership's method of accounting and computed under
Section 703 of the Code; any item of taxable income required to be separately
stated on the Partnership's federal income tax return pursuant to Section
703(a)(1) of the Code; and any income of the Partnership excluded from the
gross income of the Partnership for federal income tax purposes under Section
103 of the Code.

"Initial Limited Partner" means America First Fiduciary Corporation Number
Five, a Nebraska corporation, or any Person or Persons who, at the time of
reference thereto, have been admitted to the Partnership, with the consent of
the General Partner, as successors to the Limited Partnership Interest of
America First Fiduciary Corporation Number Five.

"Interest Income" means all cash receipts of the Partnership with respect to
any period except for (i) Capital Contributions, (ii) amounts received by the
Partnership upon a Repayment or upon the sale or other disposition of a
Mortgage Loan or other Partnership asset which do not represent accrued
interest on the Mortgage Loan other than accrued interest which represents
accrued Contingent Interest, or (iii) the proceeds of any loan to the
Partnership or the refinancing of any loan, including proceeds received from
the reissuance of any Mortgage Loan.

"Limited Partner" means any Person who is a Limited Partner, including the
Initial Limited Partner, at the time of reference thereto, in such Person's
capacity as a Limited Partner of the Partnership. A BUC Holder is not a
Limited Partner and has no right to be admitted as a Limited Partner.

"Limited Partnership Interest" means the Partnership Interest held by a
Limited Partner, including the Limited Partnership Interests assigned to BUC
Holders.

"Liquidation Proceeds" means all cash receipts of the Partnership (other than
Operating Income and Sale Proceeds) arising from the liquidation of the
Partnership's assets in the course of the dissolution of the Partnership.

"Loss" means taxable losses of the Partnership, as determined in accordance
with the Partnership's method of accounting and computed under Section 703 of
the Code; any item of loss or expense required to be separately stated on the
Partnership's federal income tax return pursuant to Section 703(a)(1) of the
Code; and any expenditures of the Partnership not deductible in computing its
taxable income and not properly treated as a capital expenditure.

"Merger Agreement" means the Agreement of Merger, dated April 10, 1998, by and
between the Partnership and the Prior Partnership pursuant to which the
Partnership and the Prior Partnership will be merged in accordance with the
provisions of the Act with the Partnership being the surviving partnership.

"Merger Date" means the effective date of the merger of the Partnership and
the Prior Partnership specified in the Merger Agreement.

"Monthly Record Date" means the last day of a calendar month.

"Mortgage Investment" means a direct or indirect interests in tax-exempt
mortgage revenue bonds secured by a Property, including residual interests in
one or more trusts which hold tax-exempt mortgage revenue bonds.

"Net Interest Income" means, with respect to any Distribution Period, all
Interest Income received by the Partnership during such Distribution Period,
plus any amounts previously set aside as Reserves from Interest Income which
the General Partner releases from Reserves as being no longer necessary to
hold as part of Reserves, less (i) expenses of the Partnership (including fees
and reimbursements paid to the General Partner but excluding any expenses of
the Partnership which are directly attributable to the sale of a Mortgage
Loan) paid from Interest Income during the Distribution Period (other than
operating expenses paid from previously established Reserves), (ii) all cash
payments made from Interest Income during such Distribution Period to
discharge Partnership indebtedness, and (iii) all amounts from Interest Income
set aside as Reserves or used to acquire additional Mortgage Investments
during such Distribution Period. Net Interest Income will consist of Net
Interest Income (Tier 1), Net Interest Income (Tier 2) and Net Interest Income
(Tier 3). During each Distribution Period the additions and deductions from
Interest Income set forth above shall be first applied against Net Interest
Income (Tier 1).

"Net Interest Income (Tier 1)" means, with respect to any Distribution Period,
all Net Interest Income, other than Contingent Interest, received by the
Partnership during such Distribution Period.

"Net Interest Income (Tier 2)" means, with respect to any Distribution Period,
all Net Interest Income representing Contingent Interest received by the
Partnership during such Distribution Period up to an amount which, when
combined with all prior amounts of Contingent Interest distributed pursuant to
Sections 4.02(b) and 4.03(b), aggregates 0.9% per annum of the principal
amount of the Mortgage Investments during the period such Mortgage Investments
are held by the Partnership or the Predecessor Partnership.

"Net Interest Income (Tier 3)" means, with respect to any Distribution Period,
all Net Interest Income representing Contingent Interest received by the
Partnership during such Distribution Period in excess of any Contingent
Interest included in Net Interest Income (Tier 2).

"Net Residual Proceeds" means, with respect to any Distribution Period, all
Residual Proceeds received by the Partnership during such Distribution Period,
plus any amounts previously set aside as Reserves from Residual Proceeds which
the General Partner releases from Reserves as being no longer necessary to
hold as part of Reserves, less (i) all expenses of the Partnership which are
directly attributable to a Repayment or sale or other disposition of a
Mortgage Loan, (ii) all cash payments made from Residual Proceeds during such
Distribution Period to discharge Partnership indebtedness and (iii) all
amounts from Residual Proceeds set aside as Reserves or used to acquire
additional Mortgage Investments during such Distribution Period or held by the
Partnership to acquire additional Mortgage Investments in future Distribution
Periods. Net Residual Income will consist of Net Residual Income (Tier 1),
Net Interest Residual (Tier 2) and Net Residual Income (Tier 3). During each
Distribution Period the additions and deductions from Residual Income set
forth above shall be first applied against Net Residual Income (Tier 1).

"Net Residual Proceeds (Tier 1)" means, with respect to any Distribution
Period, all Net Residual Proceeds received by the Partnership during such
Distribution Period representing the principal amount of a Mortgage Loan which
is the subject of a Repayment, sale or other disposition, plus any amounts
previously set aside as Reserves from Residual proceeds which the General
Partner releases from Reserves for distribution.

"Net Residual Proceeds (Tier 2)" means, with respect to any Distribution
Period, all Net Residual Proceeds representing Contingent Interest received by
the Partnership during such Distribution Period up to an amount which, when
combined with all prior amounts of Contingent Interest distributed pursuant to
Sections 4.02(b) and 4.03(b) and the Contingent Interest to be distributed by
the Partnership pursuant to Section 4.02(b) for the current Distribution
Period, aggregates 0.9% per annum of the principal amount of the Mortgage
Investments during the period such Mortgage Investments are held by the
Partnership or the Predecessor Partnership.

"Net Residual Proceeds (Tier 3)" means, with respect to any Distribution
Period, all Net Residual Proceeds representing Contingent Interest received by
the Partnership during such Distribution Period in excess of any Contingent
Interest included in Net Residual Proceeds (Tier 2).

"Notice" means a writing, containing the information required by this
Agreement to be communicated to any Person, personally delivered to such
Person or sent by registered, certified or regular mail, postage prepaid, to
such Person at the last known address of such Person.

"Partner" means the General Partner or any Limited Partner.

"Partnership" means the limited partnership created by this Agreement and
known as the America First Tax Exempt Investors, L.P., as said limited
partnership may from time to time be constituted.

"Partnership Interest" means the entire ownership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled under this Agreement,
together with the obligations of such Partner to comply with all the terms and
provisions of this Agreement and the Act.

"Person" means any individual, partnership, corporation, trust, association or
other legal entity.

"Prior Partnership" means America First Tax Exempt Mortgage Fund Limited
Partnership, a Delaware limited partnership.

"Prior Partnership Agreement" means the Agreement of Limited Partnership,
dated November 11, 1985, of the Prior Partnership.

"Property" or "Properties" means the real property, including land and the
buildings thereon, which is secured by a mortgage or other similar encumbrance
backing a Mortgage Investment held by the Partnership.

"Repayment" means the payment of the Contingent Interest and outstanding
principal upon the maturity of a Mortgage Investment or at such earlier time
as the Partnership may require the payment of outstanding principal.

"Regulations" means the United States Treasury Regulations promulgated or
proposed under the Code.

"Reserve" means such amount of funds as shall be withheld from Interest Income
or Residual Proceeds by the General Partner from time to time in order to
provide working capital for the Partnership and which may be used for any
purpose relating to the operation of the Partnership and its Mortgage
Investments, including the acquisition of additional Mortgage Investments.

"Residual Proceeds" means all amounts received by the Partnership upon a
Repayment or upon the sale of or other disposition of a Mortgage Investment or
other Partnership asset except for amounts representing accrued interest on a
Mortgage Investment (other than accrued Contingent Interest). Amounts
representing accrued interest (other than accrued Contingent Interest)
received by the Partnership upon a Repayment or upon the sale or other
disposition of a Mortgage Investment shall be included in Interest Income.
Residual Proceeds will not include any amount received by the Partnership
representing proceeds from the securitization of a Mortgage Investment.

"Schedule A" means the schedule, as amended from time to time, of Partners'
names, addresses and Capital Contributions, which schedule, in its initial
form, is attached to and made a part of this Agreement.

"Tax Matters Partner" means the Partner designated as the Tax Matters Partner
of the Partnership by the General Partner pursuant to Section 9.04.

ARTICLE III

NAME, PLACE OF BUSINESS, PURPOSE
AND TERM

Section 3.01. Name. The Partners have caused the formation a limited
partnership pursuant to the Act under the name of "America First Tax Exempt
Investors, L.P." The Partners and BUC Holders have entered into this
Agreement in order to set forth their respective rights and liabilities as
such, subject to the provisions of the Act unless otherwise provided herein.

Section 3.02. Principal Office and Name and Address of Resident Agent. The
address of the principal office and place of business of the Partnership,
unless hereafter changed by the General Partner, shall be Suite 400, 1004
Farnam Street, Omaha, Nebraska 68102. Notification of any change in the
Partnership's principal office and place of business shall be promptly given
by the General Partner to the Limited Partners and BUC Holders. The name and
address of the initial resident agent of the Partnership in the State of
Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware 19801. The resident agent may be changed by the General Partner.

Section 3.03. Purpose. The purpose of the Partnership is to acquire, hold,
sell and otherwise deal with tax-exempt mortgage bonds and other tax-exempt
instruments backed by multifamily residential properties. The Partnership
will pursue its purpose in order (i) to preserve and protect the Partnership's
capital, (ii) to provide regular cash distribution to the BUC Holders and
(iii) to provide a potential for an enhanced federally tax-exempt yield from
Contingent Interest payable from the net cash flow from the Properties and
from the net proceeds of a sale or refinancing of the Properties. The
Partnership is authorized to hold Mortgage Investments, to foreclose on
Properties secured by Mortgage Investments, to sell all or a portion of its
interest in a Mortgage Investment and to reinvest the proceeds therefrom in
additional Mortgage Investments on such terms and conditions as the General
Partner shall determine in its sole discretion and to engage in any and all
acts necessary, appropriate, advisable or incidental to its purpose and to the
conduct of its business.

Section 3.04. Term. The Partnership began on the date of the filing of the
Certificate and shall continue in full force and effect until December 31,
2018 or until sooner dissolved pursuant to the provisions of this Agreement.

ARTICLE IV

PARTNERS AND CAPITAL

Section 4.01. General Partner.

(a) The name, address and Capital Contribution of the General Partner (which
shall be measured by its capital account in the Prior Partnership on the
Merger Date) are set forth in Schedule A. The General Partner, as such, shall
not be required to make any additional Capital Contribution to the
Partnership, except as provided in paragraph (b) of this Section 3.01.

(b) Upon the dissolution and termination of the Partnership, the General
Partner will contribute to the Partnership an amount equal to the lesser of
(i) any deficit balance in its Capital Account or (ii) the excess of (A) 1.01%
of the Capital Contributions of the Limited Partners to the Partnership
(including the Capital Contribution of the Initial Limited Partner made on
behalf of the BUC Holders) over (B) the amount of previous Capital
Contributions made by the General Partner to the Partnership.

Section 4.02. Limited Partner. The name, address and Capital Contribution of
the Limited Partner (which shall be measured by its capital account in the
Prior Partnership on the Merger Date) are as set forth in Schedule A. The
Capital Contribution made by the Initial Limited Partner shall be deemed to
have been made on behalf of, and as trustee for, the BUC Holders. Neither the
Initial Limited Partner nor the BUC Holders shall be required to make any
additional Capital Contribution to the Partnership. Other than to serve as
Initial Limited Partner, the Initial Limited Partner shall have no other
business purpose and shall not engage in any other activity or incur any
debts. The Initial Limited Partner agrees not to amend its articles of
incorporation with respect to the incurrence of debt without the written
Consent of a majority in interest of the BUC Holders.

Section 4.03. Partnership Capital.

(a) No Partner or BUC Holder shall be paid interest on any Capital
Contribution.

(b) Except as specifically provided in Section 6.03, the Partnership shall not
be required to redeem or repurchase any Partnership Interest or BUC and no
Partner or BUC Holder shall have the right to withdraw, or receive any return
of, his Capital Contribution. Under circumstances requiring a return of any
Capital Contribution, no Limited Partner or BUC Holder will have the right to
receive property other than cash.

(c) No Limited Partner or BUC Holder shall have any priority over any other
Limited Partner or BUC Holder as to the return of his Capital Contribution or
as to distributions.

(d) The General Partner shall have no liability for the repayment of the
Capital Contributions.

Section 4.04. Liability of Partners and BUC Holders. No Limited Partner or
BUC Holder shall be required to lend any funds to the Partnership or, after
his Capital Contribution has been paid, to make any further Capital
Contribution to the Partnership. The liability of any Limited Partner or BUC
Holder for the losses, debts, liabilities and obligations of the Partnership
shall, so long as the Limited Partner or BUC Holder complies with Section
5.01(b), be limited to his Capital Contribution and his share of any
undistributed Income of the Partnership. Notwithstanding the foregoing, it is
possible that, under applicable law, a Limited Partner or BUC Holder may be
liable to the Partnership to the extent of previous distributions made to such
Limited Partner or BUC Holder if such distributions have caused the
liabilities of the Partnership to exceed the fair value of its assets. To the
extent that the Initial Limited Partner is required by law to return any
distributions or repay any amount, each BUC Holder who has received any
portion of such distributions agrees, by virtue of accepting such
distribution, to pay his proportionate share of such amount to the Initial
Limited Partner immediately upon Notice by the Initial Limited Partner to such
BUC Holder. In lieu of requiring return of such distributions from BUC
Holders, the General Partner may withhold future distributions of Net Interest
Income, Net Residual Proceeds or Liquidation Proceeds until the amount so
withheld equals the amount of the distributions the Initial Limited Partner is
required to repay or return regardless of whether the BUC Holders entitled to
receive such distribution were the same BUC Holders who actually received the
distribution required to be returned. In the event that the Initial Limited
Partner is determined to have unlimited liability for losses, debts,
liabilities and obligations of the Partnership, nothing set forth in this
Section shall be construed to require BUC Holders to assume any portion of
such liability.

ARTICLE V

DISTRIBUTIONS OF CASH;
ALLOCATIONS OF INCOME AND LOSS

Section 5.01. Distributions of Net Interest Income.

(a) On each Distribution Date, all Net Interest Income (Tier 1 and Tier 3)
with respect to the related Distribution Period will be distributed 99% to the
Limited Partners and BUC Holders as a class and 1% to the General Partner.

(b) On each Distribution Date, all Net Interest Income (Tier 2) will be
allocated 75% to the Limited Partners and BUC Holders as a class and 25% to
the General Partner.

Section 5.02. Distributions of Net Residual Proceeds and of Liquidation
Proceeds.

(a) On each Distribution Date, all amounts representing Net Residual Proceeds
(Tier 1 and Tier 3) will be distributed 100% to the Limited Partners and BUC
Holders as a class.

(b) On each Distribution Date, all distributions of Net Residual Proceeds
(Tier 2) will be allocated 75% to the Limited Partners and BUC Holders as a
class and 25% to the General Partner.

(i) to the payment of the amounts and the establishment of the reserves
provided for in Section 8.02(b);

(ii) to the Partners and BUC Holders in accordance with the positive balances
in their respective Capital Accounts until such accounts are reduced to zero;
and

(iii) then to the Partners and BUC Holders giving effect to the provisions of
Section 4.02(a) as if such Liquidation Proceeds constituted Net Residual
Proceeds for purposes of such Section.

Section 5.03. Allocation of Income and Loss From Operations.

(a) Income and Loss shall be determined in accordance with the accounting
methods followed by the Partnership for federal income tax purposes and
otherwise in accordance with generally accepted accounting principles. For
purposes of determining the Income, Loss, tax credits or any other items
allocable to any period, Income, Loss, tax credits and any such other items
shall be determined on a daily, monthly or other basis, as determined by the
General Partner using any permissible method under Section 706 of the Code and
the Regulations thereunder. An allocation to a Partner of a share of Income
or Loss under this Section 4.03 shall be treated as an allocation to such
Partner of the same share of each item of income, gain, loss, deduction and
credit that is taken into account in computing such Income and Loss.

(b) Subject to the provisions of Sections 4.03(c) and (d) and 5.04(m), Income
and Loss for each Distribution Period not arising from the sale or other
disposition of a Mortgage Investment or the liquidation of the Partnership
shall be allocated 1% to the General Partner and 99% to the Limited Partners
and the BUC Holders as a class.

(c) Notwithstanding any provision hereof to the contrary, if a Partner has a
deficit Capital Account balance as of the last day of any fiscal year, then
all items of Income for such fiscal year shall be first allocated to such
Partner in the amount and in the manner necessary to eliminate such deficit
Capital Account balance.

(d) Notwithstanding any other provision of this Agreement, all allocations of
Income and Loss shall be subject to and interpreted in accordance with Section
704 of the Code to the extent applicable. The foregoing allocations are
intended to comply with Section 704 of the Code and the Regulations thereunder
and shall be interpreted consistently therewith.

Section 5.04. Allocation of Income and Loss Arising From a Repayment, Sale or
Liquidation.

(a) Subject to Section 4.03(c), Income arising from a Repayment or a sale or
other disposition of a Mortgage Investment or from the liquidation of the
Partnership assets shall be allocated (i) first, to the General Partner in an
amount equal to the Net Residual Proceeds distributed to the General Partner
from the transaction pursuant to Section 4.02 and (ii) second, the balance to
the Limited Partners and the BUC Holders as a class.

(b) Loss arising from a Repayment or a sale or other disposition of a Mortgage
Investment or from the liquidation of Partnership assets shall be allocated
among the Partners (including the Initial Limited Partner on behalf of the BUC
Holders) in the same manner as Net Residual Proceeds or Liquidation Proceeds
are allocated among the Partners pursuant to Section 4.02.

Section 5.05. Determination of Allocations and Distributions Among Limited
Partners and BUC Holders.

(a) As of each Monthly Record Date during the term of the Partnership, a
determination shall be made of the amount of Income and Loss which, under the
Partnership's method of accounting, is properly attributable to the month to
which such Monthly Record Date relates and which was allocable to the Limited
Partners and BUC Holders as a class in accordance with Sections 4.04 and 4.05.

(b) As of the last day of each Distribution Period during the term of the
Partnership, a determination shall be made of the amount of Net Interest
Income and Net Residual Proceeds available to the Partnership during such
Distribution Period which was allocated for distribution to the Limited
Partners and BUC Holders in accordance with Sections 4.01 and 4.02; provided,
however, that the General Partner may elect to make the determination under
this Section 4.05(b) as of each Monthly Record Date.

(c) All allocations to the Limited Partners and the BUC Holders as a class
pursuant to Section 4.03 shall be made on a monthly basis among the Limited
Partners or BUC Holders who held of record a Limited Partnership Interest or
BUC as of the Monthly Record Date in the ratio that (i) the number of Limited
Partnership Interests or BUCs held of record by each such Limited Partner or
BUC Holder as of the Monthly Record Date bears to (ii) the aggregate number of
Limited Partnership Interests and BUCs outstanding on each such Monthly Record
Date.

(d) All allocations to the Limited Partners and the BUC Holders as a class
pursuant to Section 4.04 shall be made among the Limited Partners or BUC
Holders of record on the Monthly Record Date for the month during which the
Income or Expense arose from a Repayment, sale or other liquidation of a
Mortgage Investment or liquidation of the Partnership, in the ratio that (i)
the number of Limited Partnership Interests or BUCs held of record by each
such Limited Partner or BUC Holder on such Monthly Record Date bears to (ii)
the number of Limited Partnership Interests or BUCs outstanding on such
Monthly Record Date.

(e) Net Interest Income and Net Residual Proceeds will be allocated to the
Limited Partners or BUC Holders of record on the last day of the Distribution
Period (or, if the General Partner so elects, on each Monthly Record Date
during such Distribution Period) in the ratio that (i) the number of Limited
Partnership Interests or BUCs owned of record by each such Limited Partner or
BUC Holder on each such date bears to (ii) the number of Limited Partnership
Interests or BUCs outstanding on such date.

Section 5.06. Capital Accounts. A separate Capital Account shall be
maintained and adjusted for each Partner in accordance with the Code and the
Regulations. There shall be credited to each Partner's Capital Account the
amount of such Partner's Capital Contribution (equal to the amount of its
capital account on the books and records of the Prior Partnership as of the
Merger Date) and such Partner's share of Income; and there shall be charged
against each Partner's Capital Account the amount of such Partner's share of
Loss and cash distributions. The Initial Limited Partner's Capital Account
shall be subdivided into separate Capital Accounts to reflect the interest of
each BUC Holder. Any items credited or charged to the BUC Holders shall be
reflected in the Capital Account of the Initial Limited Partner and in the
subaccounts reflecting the interest of each BUC Holder. Any person who
acquires a Limited Partnership Interest or a BUC from a Limited Partner or BUC
Holder shall have a Capital Account equal to the Capital Account of the
Limited Partner or BUC Holder from which such Limited Partnership Interest or
BUC was acquired.

Section 5.07. Rights to Distributions. Each holder of Partnership Interests
and BUCs shall look solely to the assets of the Partnership for all
distributions with respect to the Partnership, his Capital Contributions and
his share of Net Interest Income, Net Residual Proceeds and Liquidation
Proceeds and, except as provided in Section 3.01(b), shall have no recourse
therefor, upon dissolution or otherwise, against the General Partner or the
Initial Limited Partner. No Partner or BUC Holder shall have any right to
demand or receive property other than cash upon dissolution and termination of
the Partnership. All distributions pursuant to this Article IV are subject to
the provisions of Section 3.04.

ARTICLE VI

RIGHTS, OBLIGATIONS AND POWERS
OF THE GENERAL PARTNER

Section 6.01. Management of the Partnership.

(a) The General Partner, within the authority granted to it under this
Agreement, shall have full, complete and exclusive discretion to manage and
control the business of the Partnership and to carry out the purposes of the
Partnership. In so doing, the General Partner shall use its best efforts to
take all actions necessary or appropriate to protect the interests of the
Limited Partners and the BUC Holders. All decisions made for and on behalf of
the Partnership by the General Partner shall be binding upon the Partnership.
Except as otherwise provided in this Agreement, the General Partner shall have
all the rights and powers and shall be subject to all the restrictions and
liabilities of a partner in a partnership without limited partners.

(b) No Limited Partner or BUC Holder shall take part in the management or
control of the business of the Partnership or transact any business in the
name of the Partnership. No Limited Partner or BUC Holder shall have the
power or authority to bind the Partnership or to sign any agreement or
document in the name of the Partnership. No Limited Partner or BUC Holder
shall have any power or authority with respect to the Partnership except
insofar as the vote or Consent of the Limited Partners or BUC Holders shall be
expressly required or permitted by this Agreement.

Section 6.02. Authority of the General Partner.

(a) Subject to Sections 5.03 and 5.04, but otherwise without in any way
limiting the power and authority conferred on the General Partner by Section
5.01(a), the General Partner, for and in the name and on behalf of the
Partnership, is hereby authorized, without limitation:

(i) to acquire, hold, refund, reissue, remarket, securitize, transfer,
foreclose upon, sell or otherwise deal with the Mortgage Investments and to
negotiate, enter into, and deliver any and all agreements, documents and
instruments of any nature whatsoever with respect thereto on such terms, and
subject to such conditions, as it determines in its sole discretion;

(ii) to acquire by purchase, lease, exchange or otherwise any real or personal
property to be used in connection with the business of the Partnership;
provided, however, that no property may be acquired from the General Partner
or its Affiliates except for goods and services provided subject to the
restrictions of Section 5.03;

(iii) to borrow money and issue evidences of indebtedness and to secure the
same by a pledge, lien, mortgage or other encumbrance on any assets of the
Partnership and to apply to proceeds of such borrowing to the acquisition of
Mortgage Investments or such other proper Partnership purpose as the General
Partner shall determine in its sole discretion;

(iv) to employ agents, accountants, attorneys, consultants and other Persons
that are necessary or appropriate to carry out the business and operations of
the Partnership and to pay fees, expenses and other compensation to such
Persons; provided, that if such Persons are Affiliates of the General Partner,
the terms of such employment shall be subject to the restrictions of Section
5.03;

(v) to pay, extend, renew, modify, adjust, submit to arbitration, prosecute,
defend or compromise, upon such terms as it may determine and upon such
evidence as it may deem sufficient, any obligation, suit, liability, cause of
action or claim, including taxes, either in favor of or against the
Partnership;

(vi) except as otherwise expressly provided herein, to determine the
appropriate accounting method or methods to be used by the Partnership;

(vii) except as prohibited by this Agreement, to cause the Partnership to make
or revoke any of the elections referred to in the Code or any similar
provisions enacted in lieu thereof, including, but not limited to, those
elections provided for in Code Sections 108, 709 and 1017;

(viii) to amend the Certificate or this Agreement to reflect the addition or
substitution of Partners and to amend this Agreement as provided in Section
12.03;

(ix) to deal with, or otherwise engage in business with, or provide services
to and receive compensation therefor from, any Person who has provided or may
in the future provide any services to, lend money to, sell property to or
purchase property from the General Partner or any of its Affiliates;

(x) to obtain loans from the General Partner or its Affiliates, provided that
the requirements of Section 5.03(d)(iii) are met;

(xi) to establish and maintain the Reserve in such amounts as it deems
appropriate from time to time and to increase, reduce or eliminate the Reserve
as it deems appropriate from time to time;

(xii) to invest all funds not immediately needed in the operation of the
business including, but not limited to, (A) Capital Contributions, (B) the
Reserves or (C) Net Interest Income and Net Residual Proceeds prior to their
distribution to the Partners and BUC Holders or their reinvestment in Mortgage
Investments;

(xiii) to acquire BUCs for the account of the Partnership in the secondary
trading market, provided that the BUCs are listed on The Nasdaq Stock Market
or a national securities exchange and to cause such BUCs to be cancelled; and

(xiv) to engage in any kind of activity and to enter into, perform and carry
out contracts of any kind necessary or incidental to, or in connection with,
the accomplishment of the purposes of the Partnership.

(b) With respect to all of its obligations, powers and responsibilities under
this Agreement, the General Partner is authorized to execute and deliver, for
and on behalf of the Partnership, such notes and other evidences of
indebtedness, contracts, trust instruments, agreements, assignments, deeds,
loan agreements, mortgages, deeds of trust, leases and such other documents as
it deems proper, all on such terms and conditions as it deems proper.

(c) No Person dealing with the General Partner shall be required to determine
the General Partner's authority to enter into any contract, agreement or
undertaking on behalf of the Partnership or to determine any facts or
circumstances bearing upon the existence of such authority. Any Person
dealing with the Partnership or the General Partner may rely upon a
certificate signed by the General Partner as to:

(i) the identity of the General Partner or any BUC Holder or Limited Partner;

(ii) the existence or nonexistence of any fact or facts which constitute a
condition precedent to acts by the General Partner or are in any other manner
germane to the affairs of the Partnership;

(iii) the Persons who are authorized to execute and deliver any instrument or
document by or on behalf of the Partnership; or

(iv) any act or failure to act by the Partnership or as to any other matter
whatsoever involving the Partnership or any Partner.

Section 6.03. Authority of General Partner and Its Affiliates To Deal With
Partnership.

(a) The General Partner and its Affiliates may, and shall have the right to,
provide goods and services to the Partnership (including the right to act as
property manager of a Property or servicer of any Mortgage Investment),
subject to the conditions set forth in Section 5.03(b).

(b) The General Partner and its Affiliates shall not have the right to
contract or otherwise deal with the Partnership for the provision of goods and
services, except for those dealings, contracts or provisions of services
described in this Agreement. The provision of any goods and services by the
General Partner or its Affiliates shall be part of its or their ordinary and
ongoing business in which it or they have previously engaged, independent of
the activities of the Partnership and such goods and services being provided
shall be reasonable for and necessary to the Partnership, shall actually
furnished to the Partnership and (except as provided in Section 5.05(f)
hereof) shall be provided at the lower of the actual cost of such goods or
services or the competitive price charged for such goods or services by
independent parties for comparable goods and services in the same geographic
location and the provision of such goods and services in all other respects
meets the requirements of Section 5.03(c) and (d). The costs of verifying
that the amounts paid to the General Partner or its Affiliates for such goods
and services meet the foregoing standard may be reimbursed to the General
Partner or its Affiliates only to the extent that, when added to the costs of
such goods and services rendered, such sum does not exceed the competitive
rate for such goods and services.

(c) All goods and services provided by the General Partner or any Affiliates
pursuant to Section 5.03(b) shall be rendered pursuant to this Agreement or a
written contract, which contract precisely describes the services to be
rendered and all compensation to be paid and shall contain a clause allowing
termination without penalty on 60 days' Notice to the General Partner by the
vote of the majority in interest of the Limited Partners and the BUC Holders
(the Initial Limited Partner acting according to direction of the BUC
Holders). Any payment made to the General Partner or any Affiliate for such
goods and services shall be fully disclosed to all Limited Partners and BUC
Holders in the reports required under this Agreement. Neither the General
Partner nor any Affiliate shall, by the making of lump sum payments to any
other Person for disbursement by such other Person, circumvent the provisions
of Section 5.03(b), (c) or (d).

(d) The General Partner is prohibited from entering into any agreements,
contracts or arrangements on behalf of the Partnership with the General
Partner or any Affiliate of the General Partner under which:

(i) the General Partner or any Affiliate shall be given an exclusive right to
sell, or exclusive employment to sell, a Property;

(ii) the Partnership lends money to the General Partner or any Affiliate of
the General Partner; or

(iii) the General Partner or any Affiliate of the General Partner makes a loan
to the Partnership which provides for a prepayment penalty or provides for an
interest rate or other finance charges and fees which are in excess of the
lesser of (A) amounts charged by unrelated banks on comparable loans to the
Partnership or (B) the same rate as the General Partner or such Affiliate paid
to obtain the funds to make the loan to the Partnership.

(e) Notwithstanding any provisions of this Section 5.03, neither the General
Partner nor any of its Affiliates shall:

(i) receive any rebate or give-up, or participate in any reciprocal
arrangement, which would circumvent the provisions of this Section 5.03; or

(ii) receive any compensation for providing insurance brokerage services to
the Partnership; or

(iii) charge the Partnership for, or take from any other Person, any program
management, real estate brokerage or mortgage servicing fee with respect to
Partnership property or assets.

(f) Nothing in this Section 5.03 shall prevent an Affiliate of the General
Partner from acquiring and holding debt securities or other interests secured
by a Property, provided that the Mortgage Investment held by the Partnership
that is secured by the same Property may not be junior or subordinate to the
interest held by such Affiliate.

Section 6.04. General Restrictions on Authority of the General Partner. In
exercising management authority and control of the Partnership, the General
Partner, on behalf of the Partnership and in furtherance of the business of
the Partnership, shall have the authority to perform all acts which the
Partnership is authorized to perform. However, the General Partner shall not
have any authority to:

(a) perform any act in violation of this Agreement or any applicable law or
regulation thereunder;

(b) do any act required to be approved or ratified by the Limited Partners
under the Act without Consent of the Limited Partners or the BUC Holders,
unless the right to do so is expressly otherwise given in this Agreement;

(c) sell or otherwise dispose of all or substantially all of the assets of the
Partnership in a single transaction without the Consent of a majority in
interest of the Limited Partners (including the Initial Limited Partner acting
on behalf of the BUC Holders) as provided in Section 10.02(a)(ii); provided,
however, that this subsection (c) shall not apply to (i) the transfer of
Mortgage Investments to a trust in connection with the securitization thereof
or to the sale of any interest in such trust, or (ii) the sale of Partnership
assets in connection with the liquidation thereof after the dissolution of the
Partnership;

(d) borrow money from the Partnership;

(e) dissolve the Partnership without the Consent of a majority in interest of
the Limited Partners (including the Initial Limited Partner acting on behalf
of the BUC Holders) as provided in Section 10.02(a)(iii);

(f) possess Partnership property, or assign the Partnership's rights in
specific Partnership property, for other than a Partnership purpose;

(g) admit a Person as a General Partner, except as provided in this Agreement;

(h) admit a Person as a Limited Partner, except as provided in this Agreement;

(i) sell, lease or lend Partnership assets to the General Partner or any
Affiliate of the General Partner or purchase or lease property from the
General Partner or its Affiliates, except as permitted by Section 5.02(a)(i);

(j) underwrite the securities of other issuers;

(k) do any act which would make it impossible to carry on the ordinary
business of the Partnership;

(l) knowingly perform any act that would subject any Limited Partner or BUC
Holder to liability as a general partner in any jurisdiction;

(m) allocate any Income or Loss (or any item thereof) to any Partner or BUC
Holder if, and only to the extent that, such allocation will cause the
determinations and allocations of Income or Loss (or any item thereof)
provided for in Article IV hereof not to be permitted by Section 704(b) of the
Code and the Regulations promulgated thereunder;

(n) confess a judgment against the Partnership;

(o) issue additional BUCs or other equity securities with rights and
privileges senior to those of the BUCs;

(p) make loans to the Partnership or accept loans on behalf of the Partnership
from the General Partner or any Affiliates of the General Partner, except as
provided in Section 5.03(d)(iii);

(q) amend this Agreement, except to the extent the right to amend this
Agreement is expressly provided for in other provisions of this Agreement; or

(r) invest Partnership funds in (i) securities of other issuers, except for
Mortgage Investments and temporary investments pursuant to Section
5.02(a)(xii), (ii) land contracts, or (iii) unimproved real estate not
associated with a Property.

Section 6.05. Compensation and Fees.

(a) Except as provided in this Agreement, the General Partner will receive no
compensation from the Partnership.

(b) Subject to Section 5.05(c), the Partnership will reimburse the General
Partner or its Affiliates on a monthly basis for the actual out-of-pocket
costs of direct telephone and travel expenses incurred by them on Partnership
business, direct out-of-pocket fees, expenses and charges paid by them to
third parties for rendering legal, auditing, accounting, bookkeeping,
computer, printing and public relations services, expenses of preparing and
distributing reports to Limited Partners and BUC Holders, an allocable portion
of the salaries and fringe benefits of employees of AFCA or its Affiliates,
insurance premiums (including premiums for liability insurance which will
cover the Partnership, the General Partner and its general partner), the cost
of compliance with all state and federal regulatory requirements and stock
exchange or NASDAQ listing fees and charges and other payments to third
parties for services rendered to the Partnership.

(c) The Partnership will not reimburse the General Partner or its Affiliates
for the travel expenses of the president of the general partner of the General
Partner or for any items of general overhead, including, but not limited to,
rent, utilities or the use of computers, office equipment or other capital
items owned by the General Partner or its Affiliates. The Partnership will
not reimburse the General Partner or its general partner for any salaries or
fringe benefits of any partner of the General Partner or of the officers or
board of managers of its general partner regardless of whether such persons
provide services to the Partnership.

(d) The Accountants will verify on the basis of generally accepted auditing
standards that any amounts reimbursed by the Partnership pursuant to Section
5.05(c) were incurred by the General Partner or its Affiliates in connection
with the conduct of the business and affairs of the Partnership or the
acquisition and management of its assets and were permissible reimbursements
pursuant to Section 5.05(c).

(e) In the event the Partnership becomes the equity owner of a Property, due
to the foreclosure of a Mortgage Investment or otherwise, the Partnership will
pay the General Partner an administrative fee of 0.45% of the principal amount
of the Mortgage Investment relating to such Property and may pay the General
Partner or an Affiliate a reasonable property management fee in the event the
General Partner deems it to be in the best interest of the Partnership that it
take over active management of the Property. Notwithstanding anything in
Section 5.03, the General Partner may charge a property management fee not to
exceed the lesser of (i) the competitive price charged for multifamily
property management services by independent parties in the same geographic
area as the managed Property or (ii) 5% of the gross revenues of the managed
Property, irrespective of the General Partner's or such Affiliates cost for
providing such services.

Section 6.06. Duties and Obligations of the General Partner.

(a) The General Partner shall devote to the affairs of the Partnership such
time as it deems necessary for the proper performance of its duties under this
Agreement, but neither the General Partner, its general partner nor any
officer or manager of its general partners shall be expected to devote full
time to the performance of such duties.

(b) The General Partner shall take such action as may be necessary or
appropriate for the classification of the Partnership as a partnership for
federal income tax purposes and for the continuation of the Partnership's
valid existence under the laws of the State of Delaware and in order to
qualify the Partnership under the laws of any jurisdiction in which the
Partnership is doing business or in which such qualification is necessary or
appropriate to protect the limited liability of the Limited Partners and BUC
Holders or in order to continue in effect such qualification. The General
Partner shall file or cause to be filed for recordation in the office of the
appropriate authorities of the State of Delaware, and in the proper office or
offices in each other jurisdiction in which the Partnership is qualified, such
certificates, including limited partnership and fictitious name certificates,
and other documents as are required by the applicable statutes, rules or
regulations of any such jurisdiction.

(c) The General Partner shall prepare or cause to be prepared and shall file
on or before the due date (or any extension thereof) any federal, state or
local tax returns required to be filed by the Partnership. The General
Partner shall cause the Partnership to pay any taxes payable by the
Partnership.

(d) The General Partner shall have fiduciary responsibility for the
safekeeping and use of all funds and assets of the Partnership, whether or not
in the General Partner's possession or control. The General Partner shall not
employ, or permit another to employ, such funds or assets in any manner except
for the exclusive benefit of the Partnership. The General Partner shall take
all steps necessary to insure that the funds of the Partnership are not
commingled with the funds of any other entity. The General Partner owes the
same fiduciary duty to the BUC Holders as the General Partner owes to the
Limited Partners.

Section 6.07. Delegation of Authority. Subject to the provisions of this
Article V, the General Partner may delegate all or any of its powers, rights
and obligations under this Agreement and may appoint, employ, contract or
otherwise deal with any Person for the transaction of the business of the
Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve. Notwithstanding any such delegation, the General Partner shall
remain liable for any acts or omissions by such Person under the standards of
responsibility for the General Partner set forth herein.

Section 6.08. Other Activities. The General Partner and its Affiliates may
engage in or possess interests in other business ventures of every kind and
description for their own accounts, including, without limitation, serving as
general partner of other partnerships which own, either directly or through
interests in other partnerships, investments similar in nature to the Mortgage
Investments. Neither the Partnership nor the Partners or BUC Holders shall
have any rights by virtue of this Agreement in or to such other business
ventures or to the income or profits derived therefrom, and the pursuit of
such ventures, even if competitive with the business of the Partnership, shall
not be deemed wrongful, improper or a breach of fiduciary duty.

Section 6.09. Limitation on Liability of the General Partner and Initial
Limited Partner; Indemnification.

(a) Neither the General Partner, the Initial Limited Partner nor their
Affiliates (including the officers, managers and members of the general
partner of AFCA) shall be liable, responsible or accountable in damages or
otherwise to the Partnership or to any of the Limited Partners or BUC Holders
for any act or omission performed or omitted by such General Partner or
Initial Limited Partner in good faith and in a manner reasonably believed by
it to be within the scope of the authority granted to it by this Agreement and
in the best interests of the Partnership, provided that such General Partner's
or Initial Limited Partner's conduct did not constitute Cause. The
Partnership shall indemnify and hold harmless the General Partner, the Initial
Limited Partner and their Affiliates (including the officers, managers and
members of the general partner of AFCA) against and for any loss, liability or
damage incurred by any of them or the Partnership by reason of any act
performed or omitted to be performed by them in connection with the business
of the Partnership, including all judgments, costs and attorneys' fees (which
attorneys' fees may be paid as incurred, except as provided in 5.09(b)) and
any amounts expended in settlement of any claims of liability, loss or damage,
provided that the indemnified Person's conduct did not constitute Cause. The
satisfaction of any indemnification obligation shall be from and limited to
Partnership assets, and no Limited Partner or BUC Holder shall have any
personal liability on account thereof. The termination of any action, suit or
proceeding, by judgment or settlement, shall not, of itself, create a
presumption that the indemnified Person did not act in good faith and in a
manner which is reasonably believed to be in or not opposed to the best
interest of the Partnership. Any indemnification under this subsection,
unless ordered by a court, shall be made by the Partnership only upon a
determination by independent legal counsel in a written opinion that
indemnification of the indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in this
Agreement. Notwithstanding any provision of this subsection to the contrary,
the General Partner shall be presumed to be personally liable to creditors for
the debts of the Partnership.

(b) Notwithstanding the provisions of Section 5.09(a), neither the General
Partner, the Initial Limited Partner nor any officer, director, manager,
partner, member, employee, agent, Affiliate, subsidiary or assign of the
General Partner, the Initial Limited Partner or the Partnership shall be
indemnified with regard to any liability, loss or damage incurred by them in
connection with any claim or settlement involving allegations that the
Securities Act of 1933, as amended, or any state securities laws were violated
by the General Partner or by any such other Person unless: (i)(A) the General
Partner or other Persons seeking indemnification are successful in defending
such action on the merits of each count involving such violation, (B) such
claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction or (C) a court of competent jurisdiction approves a
settlement of such claims; and (ii) such indemnification is specifically
approved by a court of law which shall have been advised as to the then
current position of the Securities and Exchange Commission regarding
indemnification for violations of securities laws.

Section 6.10. Special Amendments to the Agreement.

(a) Any provision to the contrary herein notwithstanding, the General Partner
may, without the Consent of the Limited Partners or BUC Holders, amend
Sections 4.03, 4.04 and 4.05 of this Agreement on the advice of Counsel or the
Accountants and upon Notice to the Limited Partners and BUC Holders mailed 10
days prior to the proposed effectiveness of such amendment (unless earlier
effectiveness is required by law) to the extent necessary to ensure compliance
with the Code and Regulations then in effect, provided that such amendments do
not materially adversely affect the interests of the Limited Partners and BUC
Holders in the sole determination of the General Partner.

(b) New allocations made by the General Partner in reliance upon the advice of
Counsel or the Accountants pursuant to Section 5.10(a) shall be deemed to be
made pursuant to the fiduciary obligation of the General Partner to the
Partnership, the Limited Partners and the BUC Holders, and no such new
allocation shall give rise to any claim or cause of action by any Limited
Partner or BUC Holder.

(c) The General Partner may take such action as it deems necessary or
appropriate, including action with respect to the manner in which BUCs are
being or may be transferred or traded, in order to preserve the status of the
Partnership as a partnership rather than an association taxable as a
corporation for federal income tax purposes or to insure that BUC Holders will
be treated as limited partners for federal income tax purposes.

ARTICLE VII

CHANGES IN GENERAL PARTNERS

Section 7.01. Withdrawal of General Partner. The General Partner shall not be
entitled to voluntarily withdraw from the Partnership or to sell, transfer or
assign all or a portion of its Partnership Interest as General Partner unless
a substitute General Partner has been admitted in accordance with the
conditions of Section 6.02.

Section 7.02. Admission of a Successor or Additional General Partner. The
General Partner may at any time designate additional Persons to be General
Partners, whose Partnership Interest in the Partnership shall be such as shall
be agreed upon by the General Partner and such additional General Partners,
provided that the Partnership Interests of the Limited Partners and the BUC
Holders shall not be reduced thereby. A Person shall be admitted as a General
Partner of the Partnership only if each of the following conditions is
satisfied:

(a) The admission of such Person shall have been Consented to by a majority in
interest of the Limited Partners (including the Initial Limited Partner voting
on behalf of the BUC Holders) as a class;

(b) such Person shall have accepted and agreed to be bound by the terms and
provisions of this Agreement by executing a counterpart hereof, and such
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner shall have been filed for
recording, and all other actions required by law in connection with such
admission shall have been performed;

(c) if such Person is a corporation, it shall have provided the Partnership
evidence satisfactory to Counsel of its authority to become a General Partner
and to be bound by the terms and provisions of this Agreement; and

(d) the Partnership shall have received an opinion of Counsel that the
admission of such Person is in conformity with the Act and that none of the
actions taken in connection with the admission of such Person is in violation
of the Act.

Section 7.03. Removal of a General Partner.

(a) Subject to Section 10.02, a majority in interest of the Limited Partners
(including the Initial Limited Partner voting on behalf of the BUC Holders)
acting together as a class, without the Consent or other action by the General
Partner to be removed, may remove any General Partner and, subject to the
provisions of Sections 6.02 and 8.01(a), may elect a replacement therefor.
After the Limited Partners vote to remove a General Partner pursuant to this
Section 6.03, they shall provide the removed General Partner with Notice
thereof, which Notice shall set forth the date upon which such removal is to
become effective, which date shall be no earlier than the date upon which the
General Partner receives such Notice.

Section 7.04. Effect of Incapacity of a General Partner.

(a) Upon the Incapacity of a General Partner, such General Partner shall
immediately cease to be a General Partner. If the Incapacitated General
Partner is not the sole General Partner, the business of the Partnership shall
be continued by the remaining General Partner who shall immediately (i) give
Notice to the Limited Partners and BUC Holders of such Incapacity and (ii)
prepare such amendments to this Agreement and execute and file for recording
such amendments or documents or other instruments necessary to reflect the
assignment, transfer, termination or conversion (as the case may be) of the
Partnership Interest of the Incapacitated General Partner. If the
Incapacitated General Partner is the sole General Partner, the provisions of
Section 8.01(a)(i) shall be applicable.

(b) Nothing in this Section 6.04 shall affect any rights, including the rights
to the payment of any fees under this Agreement, of the Incapacitated General
Partner which matured or were earned prior to the Incapacity of such General
Partner. Such Incapacitated General Partner shall remain liable for all
obligations and liabilities incurred by it as General Partner before such
Incapacity shall have become effective, but shall be free from any obligations
or liability as General Partner incurred on account of the activities of the
Partnership from and after the time such Incapacity shall have become
effective.

(c) The Partnership Interest of an Incapacitated General Partner shall be
converted into that of a Limited Partner with the same rights under Article IV
as such Incapacitated General Partner has prior to its Incapacity to share in
Income, Loss, Net Interest Income, Net Residual Proceeds and Liquidation
Proceeds. However, any Incapacitated General Partner which becomes a Limited
Partner pursuant to this paragraph (c) shall not have the right to participate
in the management of the affairs of the Partnership or to vote on any matter
requiring the Consent of the Limited Partners and shall not be entitled to any
portion of the Income, Loss, Net Interest Income, Net Residual Proceeds or
Liquidation Proceeds payable to the class comprised of Limited Partners and
BUC Holders. Notwithstanding the conversion of a Incapacitated General
Partner's Partnership Interest, a successor or remaining General Partner shall
have the right, but not the obligation, to acquire the Partnership Interest of
the Incapacitated General Partner at the then fair market value of such
Partnership Interest The fair market value of the Incapacitated General
Partner's Partnership Interest shall be the sum of (i) the present value of
future administrative fees and Net Interest Income which would be paid to the
Incapacitated General Partner if the Incapacity had not occurred and (ii) the
amount the Incapacitated General Partner would receive upon dissolution and
termination of the Partnership, assuming that such dissolution or termination
occurred on the date of the event causing the Incapacity and the assets of the
Partnership were sold for their then fair market value without any compulsion
on the part of the Partnership to sell such assets. The fair market value of
such Partnership Interest shall be determined by agreement of the
Incapacitated General Partner and the successor or remaining General Partner
or, if they cannot agree, by arbitration in accordance with the then current
rules of the American Arbitration Association. The expense of arbitration
shall be borne equally by the Incapacitated General Partner and the successor
or remaining General Partner.

(d) All parties hereto hereby agree to take all actions and to execute all
documents necessary or appropriate to effect the foregoing provisions of this
Section 6.04.

ARTICLE VIII

TRANSFERABILITY OF BUCS AND LIMITED PARTNERS' INTERESTS
Section 8.01. Free Transferability of BUCs.

(a) BUCs shall be issued in registered form only and shall be freely
transferable (subject to compliance with federal or state securities law and
Section 7.02 or 11.04 of this Agreement); provided, however, nothing in this
Agreement shall impose any obligation on the General Partner, the Partnership
or any transfer agent to restrict or place conditions on the transfer of BUCs.

(b) BUCs may be transferred only on the books and records of the Partnership.

(c) A Person shall be recognized as a BUC Holder for all purposes on the books
and records of the Partnership as of the day on which the General Partner (or
other transfer agent appointed by the General Partner) receives evidence of
the transfer of a BUC to such Person which is satisfactory to the General
Partner. All BUC Holder rights, including voting rights, rights to receive
distributions and rights to receive reports, and all allocations in respect of
BUC Holders, including allocations of Income and Loss, will vest in, and be
allocable to, each BUC Holder as of the close of business on such day.

(d) In order to record a transfer of a BUC on the Partnership's books and
records, the General Partner may require such evidence of transfer or
assignment and authority of the transferor or assignor, including signature
guarantees, and such additional documentation as the General Partner may
determine.

(e) The General Partner is hereby authorized to do all things necessary in
order to register the BUCs under the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended, pursuant to the rules and
regulations of the Securities and Exchange Commission, to qualify the BUCs
with state securities regulatory authorities or to perfect exemptions from
qualification, to cause the BUCs to be listed on The NASDAQ Stock Market or a
national stock exchange and to any other actions necessary to allow the resale
of BUCs by the BUC Holders.

Section 8.02. Restrictions on Transfers of BUCs and of Interests of Limited
Partners Other Than the Initial Limited Partner.

(a) If any sale, assignment, pledge or transfer of a Limited Partnership
Interest, other than by the Initial Limited Partner, or of a BUC, when
considered with all other sales, assignments, pledges or transfers of
Partnership Interests and BUCs within the previous 12-month period, may result
in the transfer (within the meaning of Section 708 of the Code and Regulations
promulgated thereunder) of more than 45% of the Partnership Interest and BUCs,
then the sale, assignment, pledge or transfer of a Limited Partnership
Interest or a BUC may be suspended or deferred by the General Partner;
provided, however, that the General Partner will have no obligation to suspend
or defer any such sale, assignment, pledge or transfer. The seller, assignor,
pledgor or transferor shall be notified of such deferral, and any transaction
deferred pursuant to this provision shall be effected (in chronological order
to the extent practicable) as of the first day of the next succeeding period
as of which such transaction can be effected without either termination of the
Partnership for tax purposes or any material adverse effects from such
termination. In the event transactions are suspended, the General Partner
shall give written Notice of such suspension to all Limited Partners and BUC
Holders as soon as practicable.

(b) A Limited Partner (other than the Initial Limited Partner) may assign his
Limited Partnership Interests only by a duly executed written instrument of
assignment, the terms of which are not in contravention of any of the
provisions of this Agreement. Within 30 days after an assignment of Limited
Partnership Interests (other than by the Initial Limited Partner) which occurs
without a transfer of record ownership of such Limited Partnership Interests,
the assignor shall give Notice of such assignment to the General Partner.

(c) The provisions of this Section 7.02 and of Section 7.03 shall not apply to
the transfer and assignment by the Initial Limited Partner of Limited
Partnership Interests to BUC Holders in accordance with Section 11.01(a).

Section 8.03. Assignees of Limited Partners Other Than the Initial Limited
Partner.

(a) If a Limited Partner other than the Initial Limited Partner dies, his
executor, administrator or trustee, or, if he is adjudicated incompetent, his
committee, guardian or conservator, or, if he becomes Bankrupt, the trustee or
receiver of his estate, shall have all the rights of a Limited Partner for the
purpose of settling or managing his estate and such power as the deceased or
incompetent Limited Partner possessed to assign all or any part of his Limited
Partnership Interests and to join with the assignee thereof in satisfying any
conditions precedent to such assignee becoming a Limited Partner. The
Incapacity of a Limited Partner shall not dissolve the Partnership.

(b) The Partnership need not recognize for any purpose any assignment of all
or any fraction of the Limited Partnership Interests of a Limited Partner
other than the Initial Limited Partner unless there shall have been filed with
the Partnership and recorded on the Partnership's books a duly executed and
acknowledged counterpart of the instrument effecting such assignment, and
unless such instrument evidences the written acceptance by the assignee of all
of the terms and provisions of this Agreement, contains a representation that
such assignment was made in accordance with all applicable laws and
regulations (including any investor suitability requirements) and in all other
respects is satisfactory in form and substance to the General Partner.

(c) Any Limited Partner other than the Initial Limited Partner who shall
assign all of his Limited Partnership Interests shall cease to be a Limited
Partner of the Partnership, except that unless and until a Limited Partner is
admitted in his place, such assigning Limited Partner shall retain the
statutory rights and liabilities of an assignor of a limited partnership
interest under the Act.

(d) An assignee of Limited Partnership Interests (other than a BUC Holder) may
become a Limited Partner only if each of the following conditions is satisfied:

(i) the instrument of assignment sets forth the intentions of the assignor
that the assignee succeed to the assignor's Limited Partnership Interest in
his place;

(ii) the assignee shall have fulfilled the requirements of Sections 7.03(b)
and 12.03(b);

(iii) the assignee shall have paid all reasonable legal fees and filing costs
incurred by the Partnership in connection with his substitution as a Limited
Partner; and

(iv) the assignee shall have received the Consent of the General Partner,
which Consent the General Partner may withhold in its sole discretion.

(e) This Agreement and the Certificate shall be amended as necessary to
recognize the admission of any Limited Partners and shall be submitted in a
timely manner for filing with the Delaware Secretary of State. Assignees of
Limited Partnership Interests (other than a BUC Holder) shall be recognized as
such, to the extent set forth in Section 7.03(b) or 7.03(d), as of the day on
which the Partnership has received the instrument of assignment and all of the
other conditions to the assignment are satisfied.

(f) An assignee of Limited Partnership Interests (other than a BUC Holder) who
does not become a Limited Partner and who desires to make a further assignment
of his Limited Partnership Interests shall be subject to all of the provisions
of this Article VII to the same extent and in the same manner as a Limited
Partner desiring to make an assignment of Limited Partnership Interests.

Section 8.04. Joint Ownership of Interests. Subject to the other provisions
of this Agreement, a Limited Partnership Interest or BUC may be acquired by
two or more Persons, who shall, at the time they acquire such Limited
Partnership Interest or BUC, indicate to the Partnership whether the Limited
Partnership Interest or BUC is being held by them as joint tenants with the
right of survivorship, as tenants-in-common or as community property. In the
absence of any such designation, joint owners shall be presumed to hold such
Limited Partnership Interest or BUC as tenants-in-common. The Consent of such
joint Limited Partners or BUC Holders shall not require the action or vote of
all owners of any such jointly held Limited Partnership Interest or BUC.

ARTICLE IX

DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP
Section 9.01. Events Causing Dissolution.

(a) The Partnership shall dissolve upon the happening of any of the following
events:

(i) ninety days following the Incapacity of a General Partner who is at that
time the sole General Partner, unless all of the remaining Partners (it being
understood that, notwithstanding any other provision herein to the contrary,
for purposes of this provision the Initial Limited Partner shall act solely in
accordance with the direction of a majority in interest of the BUC Holders)
agree in writing to continue the business of the Partnership and a successor
General Partner satisfying the standards set forth in Section 6.02 is
designated within 90 days of the occurrence of such an Incapacity;

(ii) the passage of 180 days after the repayment, sale or other disposition of
all of the Mortgage Investments and substantially all other assets, if any,
held by the Partnership;

(iii) the election by a majority in interest of the Limited Partners
(including the Initial Limited Partner voting on behalf of the BUC Holders)
pursuant to Section 10.02(a)(iii) or the election by the General Partner to
dissolve the Partnership pursuant to Section 5.04(e) with the Consent of a
majority in interest of the Limited Partners thereto;

(iv) the expiration of the term of the Partnership specified in Section 2.04;
or

(v) any other event causing the dissolution of the Partnership under the laws
of the State of Delaware.

(b) Dissolution of the Partnership shall be effective on the day on which the
event occurs giving rise to the dissolution, but the Partnership shall not
terminate until a certificate of cancellation is filed with the Delaware
Secretary of State and the assets of the Partnership are distributed as
provided in Section 8.02. Notwithstanding the dissolution of the Partnership,
prior to the termination of the Partnership, the business of the Partnership
and the affairs of the Partners shall continue to be governed by this
Agreement.

(c) The obligations imposed on the General Partner by Article IX of the
Agreement will cease upon the termination of the Partnership.

Section 9.02. Liquidation.

(a) Upon dissolution of the Partnership, unless all of the Partners elect to
reform the Partnership (it being understood that, notwithstanding any other
provision herein to the contrary, for purposes of this provision the Initial
Limited Partner shall act solely in accordance with the direction of a
majority in interest of the BUC Holders), the General Partner shall liquidate
the assets of the Partnership and shall apply and distribute the proceeds
thereof as contemplated by this Section 8.02 and Article IV and cause the
cancellation of the Certificate in accordance with the Act. If there is no
General Partner, a majority in interest of the Limited Partners (including the
Initial Limited Partner voting on behalf of the BUC Holders) may elect a
liquidator to liquidate the assets of the Partnership and perform the
functions of the General Partner set forth in this Section 8.02.

(b) After payment of the expenses of the liquidation and of liabilities owing
to creditors of the Partnership (including the repayment of any loans from the
General Partner or its Affiliates), the General Partner may set aside as a
reserve such amount as it deems reasonably necessary for any contingent or
unforeseen liabilities or obligations of the Partnership which may be paid
over by the General Partner to a bank, to be held in escrow for the purpose of
paying any such contingent or unforeseen liabilities or obligations, and, at
the expiration of such period as the General Partner may deem advisable, the
amount in such reserve shall be distributed in the manner set forth in Section
4.02(b) among the Partners and BUC Holders who would have been entitled to
receive such amounts had such amounts not been placed in such reserves.

(c) Notwithstanding the foregoing, if the General Partner or liquidator shall
determine that an immediate sale of part or all of the Partnership's assets
would cause undue loss to the Partners or the BUC Holders, the General Partner
or liquidator may, after giving Notice to the Limited Partners and BUC
Holders, and to the extent not then prohibited by any applicable law of any
jurisdiction in which the Partnership is then formed or qualified, defer
liquidation and withhold from distribution for a reasonable time any assets of
the Partnership, except those assets necessary to satisfy the Partnership's
debts and obligations.

ARTICLE X

BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS

Section 10.01. Books and Records. The Partnership shall maintain its books
and records at its principal office. The Partnership's books and records
shall be available during ordinary business hours for examination and copying
there at the reasonable request, and at the expense, of any Partner or BUC
Holder or his duly authorized representative, or copies of such books and
records may be requested in writing by any Partner or BUC Holder or his duly
authorized representative, provided that the reasonable costs of fulfilling
such request, including copying expenses, shall be paid by the Partner or BUC
Holder making such request. The Partnership's books and records shall include
the following:

(a) a current list of the full name, last known home or business address and
Partnership Interest of each Partner and BUC Holder set forth in alphabetical
order;

(b) a copy of this Agreement and the Certificate, together with executed
copies of any powers of attorney pursuant to which such Certificate, and any
amendments thereto, have been executed;

(c) copies of the Partnership's federal, state and local income tax returns
and reports, if any, for the three most recent years; and

(d) copies of all financial statements of the Partnership for the three most
recent years.

Section 10.02. Accounting Basis and Fiscal Year. The books and records of the
Partnership initially shall be kept on the accrual method. The Partnership
will use a fiscal year identical to its taxable year. Unless permission is
granted by the Internal Revenue Service to use a taxable year other than the
calendar year, the Partnership will use a calendar year taxable year. The
Partnership shall not make an election under Section 754 of the Code.

Section 10.03. Reports.

(a) Within 60 days after the end of each of the first three quarters of each
fiscal year, the General Partner shall send to each Person who was a Limited
Partner or a BUC Holder during such quarter a balance sheet and statements of
income, changes in Partners' capital and cash flow of the Partnership (all
prepared in accordance with generally accepted accounting principles but none
of which need be audited) and a statement showing distributions of Net
Interest Income and Net Residual Proceeds during such quarter, which need not
be audited, together with a report of the activities of the Partnership during
such quarter.

(b) Within 75 days after the end of each fiscal year, the General Partner
shall send to each Person who was a Limited Partner or a BUC Holder at any
time during the year then ended such tax information relating to the
Partnership as shall be necessary for the preparation by such Limited Partner
or BUC Holder of his federal income tax return and required state income and
other tax returns.

(c) Within 120 days after the end of each fiscal year, the General Partner
shall send to each Person who was a Limited Partner or BUC Holder at any time
during the year then ended a report including (i) the balance sheet of the
Partnership as of the end of such year and statements of income, changes in
Partners' capital and cash flow of the Partnership for such year, all of which
shall be prepared in accordance with generally accepted accounting principles
and accompanied by a report of the Accountants containing an opinion of the
Accountants, (ii) a report of the activities of the Partnership during such
year and (iii) a statement (which need not be audited) showing cash
distributions per Limited Partnership Interest and per BUC during such year in
respect of such year, which statement shall identify distributions of (a) Net
Interest Income and Net Residual Proceeds received by the Partnership during
such year, (b) Net Interest Income and Net Residual Proceeds received during
prior years which had been held in the Reserve and (c) cash placed in Reserves
during such year. The Partnership's annual report will include a detailed
statement of (i) the amount of the fees, if any, paid to the General Partner
pursuant to Section 5.05(e) hereof and (ii) the amounts actually reimbursed to
the General Partner and its Affiliates pursuant to Section 5.05(b) hereof.
The Accountants will certify that the amounts actually reimbursed to the
General Partner pursuant to Section 5.05(b) were costs incurred by the General
Partner in connection with the conduct of the business and affairs of the
Partnership or the acquisition and management of its assets and were
permissible reimbursements under this Agreement. The methods of verification
used by the Accountants will be in accordance with generally accepted auditing
standards and include such tests of the accounting records and other auditing
procedures which the Accountants consider appropriate.

Section 10.04. Designation of Tax Matters Partner. The General Partner is
hereby authorized to designate itself or any other General Partner as Tax
Matters Partner of the Partnership, as provided in Section 6231 of the Code
and the Regulations promulgated thereunder. Each Partner, by execution of
this Agreement, and each BUC Holder, by acceptance of his BUCs, consents to
such designation of the General Partner as the Tax Matters Partner and agrees
to execute, certify, acknowledge, deliver, swear to, file and record at the
appropriate public offices such documents as may be necessary or appropriate
to evidence the appointment of the General Partner as such.

Section 10.05. Expenses of Tax Matters Partner. The Partnership shall
reimburse the Tax Matters Partner for all expenses, including legal and
accounting fees, and shall indemnify him for claims, liabilities, losses and
damages incurred in connection with any administrative or judicial proceeding
with respect to the tax liability of the Partners and BUC Holders. The
payment of all such expenses and indemnification shall be made before any
distributions are made from Net Interest Income, Net Residual Proceeds or
Liquidation Proceeds. Neither the General Partner, nor any Affiliate, nor any
other Person shall have any obligation to provide funds for such purpose. The
taking of any action and the incurring of any expense by the Tax Matters
Partner in connection with any such proceeding, except to the extent required
by law, is a matter in the sole discretion of the Tax Matters Partner, and the
provisions on limitations of liability of the General Partner and
indemnification set forth in Section 5.09 of this Agreement shall be fully
applicable to the Tax Matters Partner in its capacity as such.

ARTICLE XI

MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS
AND BUC HOLDERS

Section 11.01. Meetings.

(a) The General Partner may call a meeting of the Limited Partners and BUC
Holders for any purpose or call for a vote of the Limited Partners and BUC
Holders without a meeting or otherwise solicit the consent of the Limited
Partners and BUC Holders at any time and the General Partner shall call for
such a meeting or vote without a meeting or solicit the consents of the
Limited Partners and BUC Holders upon receipt of a written request for such a
meeting, vote or solicitation signed by 10% or more in interest of the Limited
Partners (it being understood that the Initial Limited Partner will act in
accordance with the directions of the BUC Holders). Any such meeting shall be
held not less than 15 days nor more than 60 days after the receipt of such
request. Any such request shall state the purpose of the proposed meeting and
the matters proposed to be acted upon at such meeting, and no matter may be
acted upon at the meeting other than as set forth in such request or as
otherwise permitted by the General Partner. Meetings shall be held at the
principal office of the Partnership or at such other place as may be
designated by the General Partner or, if the meeting is called upon the
request of the Limited Partners (including the Initial Limited Partner acting
on behalf of the BUC Holders), as designated by such Limited Partners
(including the Initial Limited Partner acting on behalf of the BUC Holders).

(b) Notice of any meeting to be held pursuant to Section 10.01(a) shall be
given (in person or by certified mail) within 10 days of the receipt by the
General Partner of the request for such meeting to each Limited Partner at his
record address, or at such other address which he may have furnished in
writing to the General Partner and to the BUC Holders at the address shown on
the Partnership's books and records kept in accordance with Section 9.01.
Such Notice shall state the place, date and hour of the meeting and shall
indicate that the Notice is being issued at the direction of, or by, the
Partner(s) calling the meeting. The Notice shall state the record date
established in Section 10.01(c) and state the purpose of the meeting. If a
meeting is adjourned to another time or place, and if an announcement of the
adjournment of time or place is made at the meeting, it shall not be necessary
to give Notice of the adjourned meeting. The presence in person or by proxy
of a majority in interest of the Limited Partners (including the Initial
Limited Partner acting for and at the direction of the BUC Holders) considered
as a class shall constitute a quorum at all meetings of the Partners and BUC
Holders; provided, however, that if no such quorum is present, holders of a
majority in interest of the Limited Partners considered as a class (it being
understood that the Initial Limited Partner shall be present at the direction
of the BUC Holders and only to the extent of such direction) so present or so
represented may adjourn the meeting from time to time without further Notice,
until a quorum shall have been obtained. No Notice of the time, place or
purpose of any meeting of Limited Partners and BUC Holders need be given (i)
to any Limited Partner or BUC Holder who attends in person or is represented
by proxy, except for a Partner attending a meeting for the express purpose of
objecting at the beginning of the meeting to the transaction of any business
on the ground that the meeting is not lawfully called or convened, or (ii) to
any Limited Partner or BUC Holder entitled to such Notice who, in writing,
executed and filed with the records of the meeting, either before or after the
time thereof, waives such Notice.

(c) For the purpose of determining the Limited Partners entitled to vote at
any meeting of the Limited Partners and BUC Holders, and the BUC Holders
entitled to receive Notice of and direct the voting of the Initial Limited
Partner at any such meeting, or any adjournment thereof, or to act by written
Consent without a meeting, the General Partner or the Limited Partners or the
BUC Holders requesting such meeting or vote pursuant to Section 11.03(a) may
fix, in advance, a date as the record date of any such determination of
Limited Partners and BUC Holders. Such date shall not be more than 60 days
nor less than 15 days before any such meeting or not more than 60 days prior
to the initial solicitation of Consents from the Limited Partners and BUC
Holders.

(d) At each meeting of Limited Partners and BUC Holders, the Limited Partners
and BUC Holders present or represented by proxy shall elect such officers and
adopt such rules for the conduct of such meeting as they shall deem
appropriate.

Section 11.02. Voting Rights of Limited Partners and BUC Holders.

(a) Subject to Section 10.03, a majority in interest of the Limited Partners
(it being understood that the Initial Limited Partner shall act at the
direction of the BUC Holders), without the concurrence of the General Partner,
may: (i) amend this Agreement, provided that the concurrence of the General
Partner shall be required for any amendment to this Agreement which modifies
the compensation or distributions to which the General Partner is entitled or
which affects the duties of the General Partner; (ii) approve or disapprove
the sale or other disposition of all or substantially all of the Partnership's
assets in a single transaction in the circumstances provided by Section
5.04(c); (iii) dissolve the Partnership; and (iv) remove any General Partner
and elect a successor therefor, which successor shall become a General Partner
only in accordance with Section 6.02. Amendments to this Agreement may be
proposed at any time by a writing signed by 10% or more in interest of the
Limited Partners (it being understood that the Initial Limited Partner will
act in accordance with the direction of the BUC Holders).

(b) A Limited Partner shall be entitled to cast one vote for each Limited
Partnership Interest which he owns, and a BUC Holder shall be entitled to
direct the Initial Limited Partner to cast one vote for each BUC which he owns
(it being understood that the Initial Limited Partner will act at the
direction of the BUC Holders) at a meeting, in person, by written proxy or by
a signed writing directing the manner in which he desires that his vote be
cast, which writing must be received by the General Partner prior to the
adjournment sine die of such meeting. In the alternative, BUC Holders may
Consent to actions without a meeting, by a signed writing identifying the
action taken or proposed to be taken. Every proxy must be signed by the
Limited Partner or BUC Holder or his attorney-in-fact. No proxy shall be
valid after the expiration of 12 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
Limited Partner or the BUC Holder executing it by Notice to the Person to whom
the proxy was given. Written Consents may be irrevocable if stated in a
writing delivered to BUC Holders at the time at which their Consent is
solicited. Only the votes or Consents of Limited Partners or BUC Holders of
record on the record date established pursuant to Section 10.01(c), whether at
a meeting or otherwise, shall be counted. The General Partner shall not be
entitled to vote in its capacity as General Partner. The laws of the State of
Delaware pertaining to the validity and use of corporate proxies shall govern
the validity and use of proxies given by the Limited Partners and BUC Holders,
except to the extent such laws are inconsistent with this Agreement. The BUC
Holders may give proxies only to the Initial Limited Partner. The Initial
Limited Partner will vote in accordance with the directions of the BUC Holders
so that each BUC will be voted separately.

(c) Reference in this Agreement to a specified percentage in interest of the
Limited Partners and BUC Holders means the Limited Partners and BUC Holders
whose combined Capital Contributions (it being understood that the BUC
Holders' Capital Contributions were made by the Initial Limited Partner)
represent the specified percentage of the Capital Contributions of all Limited
Partners and BUC Holders.

Section 11.03. Opinion Regarding Effect of Action by Limited Partners and BUC
Holders. Prior to any vote or Consent by Limited Partners or BUC Holders that
might (i) materially affect the tax status of the Partnership, (ii) impair the
limited liability of the Limited Partners or BUC Holders, or (iii) result in
the dissolution or termination of the Partnership, the Partnership will
provide Limited Partners and BUC Holders written advice from Counsel as to the
possible and most likely consequences of such vote or Consent with respect
thereto.

Section 11.04. Other Activities. The Limited Partners and BUC Holders may
engage in or possess interests in other business ventures of every kind and
description for their own accounts, including without limitation serving as
general or limited partners of other partnerships which own, either directly
or through interests in other partnerships, investments similar in nature to
the Mortgage Investments. Neither the Partnership nor any of the Partners or
BUC Holders shall have any rights by virtue of this Agreement in or to such
business ventures or to the income or profits derived therefrom.

ARTICLE XII

ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS TO
BUC HOLDERS AND RIGHTS OF BUC HOLDERS

Section 12.01. Assignment of Limited Partnership Interests to BUC Holders.

(a) Except as otherwise provided herein, the Initial Limited Partner, by the
execution of this Agreement, irrevocably assigns to the Persons who are BUC
Holders of the Prior Partnership as of the record date established therefor by
the General Partner, all of the Initial Limited Partner's rights and interest
in its Partnership Interests. The rights and interest so transferred and
assigned shall include, without limitation, the following:

(i) all rights to receive distributions of Net Interest Income pursuant to
Section 4.01;

(ii) all rights to receive Net Residual Proceeds and Liquidation Proceeds
pursuant to Section 4.02;

(iii) all rights in respect of allocations of Income and Loss pursuant to
Sections 4.03 and 4.04;

(iv) all rights in respect of determinations of allocations and distributions
pursuant to Section 4.05;

(v) all rights to inspect records and to receive reports pursuant to Article
IX;

(vi) all rights to vote on Partnership matters pursuant to Article X; and

(vii) all rights which Limited Partners have, or may have in the future, under
the Act, except as otherwise provided herein.

All Persons becoming BUC Holders shall be bound by the terms and conditions
of, and shall be entitled to all rights of, Limited Partners under this
Agreement.

(b) The Initial Limited Partner shall remain as Initial Limited Partner on the
books and records of the Partnership notwithstanding the assignment of all of
its Limited Partnership Interest until such time as the Initial Limited
Partner transfers its position as Initial Limited Partner to another Person
with the Consent of the General Partner. Other than pursuant to Section
11.01(a), the Initial Limited Partner may not transfer or assign a Limited
Partnership Interest without the prior written Consent of the General Partner.

(c) The General Partner, by the execution of this Agreement, irrevocably
Consents to and acknowledges on behalf of itself and the Partnership that (i)
the foregoing assignment pursuant to Section 11.01(a) by the Initial Limited
Partner to the BUC Holders of the Initial Limited Partner's rights and
interest in the Limited Partnership Interests is valid and binding on the
Partnership and the General Partner, and (ii) the BUC Holders are intended to
be third-party beneficiaries of all rights and privileges of the Initial
Limited Partner in respect of the Limited Partnership Interests. The General
Partner covenants and agrees that, in accordance with the foregoing transfer
and assignment, all the Initial Limited Partner's rights and privileges in
respect of the Limited Partnership Interests assigned to the BUC Holders may
be exercised by the BUC Holders, including, without limitation, those listed
in Section 11.01(a).

Section 12.02. Rights of BUC Holders.

(a) Limited Partners (including the Initial Limited Partner but only with
respect to its own Limited Partnership Interests) and BUC Holders shall share
pari passu on the basis of one Limited Partnership Interest for one BUC, and
shall be considered as a single class with respect to all rights to receive
distributions of Net Interest Income, Net Residual Proceeds and Liquidation
Proceeds, allocations of Income and Loss, and other determinations of
allocations and distributions pursuant to this Agreement.

(b) Limited Partners (including the Initial Limited Partner voting on behalf
of the BUC Holders) shall vote on all matters in respect of which they are
entitled to vote (either in person, by proxy or by written Consent), as a
single class with each entitled to one vote.

(c) A BUC Holder is entitled to the same duty (including any fiduciary duty
created by law) from the General Partner as the General Partner owes to a
Limited Partner and may sue the General Partner to enforce the same. A BUC
Holder may bring a derivative action against any Person (including the General
Partner) to enforce any right of the Partnership to recover a judgment to the
same extent as a Limited Partner has such a right under the Act.

(d) A BUC Holder is not a Limited Partner and has no right to be admitted to
the Partnership as such.

Section 12.03. Voting by the Initial Limited Partner on Behalf of BUC Holders.

(a) Subject to Section 8.01(a)(i), the Initial Limited Partner hereby agrees
that, with respect to any matter on which a vote of the Limited Partners is
taken, the Consent of the Limited Partners is required or any other action of
the Limited Partners is required or permitted, it will not vote its Limited
Partnership Interest or grant such Consent or take such action (other than
solely administrative actions as to which the Initial Limited Partner has no
discretion) except for the sole benefit of, and in accordance with the written
instructions of, the BUC Holders with respect to their BUCs. The Initial
Limited Partner (or the Partnership on behalf of the Initial Limited Partner)
will provide Notice to the BUC Holders containing information regarding any
matters to be voted upon or as to which any Consent or other action is
requested or proposed. The Partnership and the General Partner hereby agree
to permit BUC Holders to attend any meetings of Partners and the Initial
Limited Partner shall, upon the written request of BUC Holders owning BUCs
which represent in the aggregate 10% or more of all of the outstanding BUCs,
request the General Partner to call a meeting of Partners pursuant to Section
10.01 or to submit a matter to the Initial Limited Partner without a meeting
pursuant to this Agreement. The General Partner shall give the BUC Holders
Notice of any meeting to be held pursuant to Section 10.01(a) at the same time
and manner as such Notice is required to be given to the Initial Limited
Partner pursuant to Section 10.01(b).

(b) The Initial Limited Partner will exercise its right to vote or Consent to
any action under this Agreement in accordance with the written instructions of
holders of BUCs outstanding as of the relevant record date. In addition,
holders of a majority of the BUCs outstanding may instruct the Initial Limited
Partner to take, and upon receipt of such instruction, the Initial Limited
Partner shall take, the actions permitted by Section 10.02.

(c) The Initial Limited Partner will mail to any BUC Holder (at the address
shown on the Partnership's records kept in accordance with Section 9.01(a))
any report, financial statement or other communication received from the
Partnership or the General Partner with respect to the Limited Partnership
Interests held by the Initial Limited Partner (including, without limitation,
any financial statement or report or tax information provided pursuant to
Section 9.03). In lieu of mailing of any such document by the Initial Limited
Partner, the Initial Limited Partner may, at its option, request the General
Partner to mail any such communications directly to the BUC Holders, and the
Initial Limited Partner shall be deemed to have satisfied its obligations
under this Section 11.03(b) upon its receipt of written notification from the
General Partner that any such communication has been mailed, postage prepaid,
to all of the BUC Holders at the addresses shown on the Partnership's records.

Section 12.04. Preservation of Tax Status. With the Consent of each BUC
Holder so affected, the General Partner may at any time cause such BUC Holder
to become a Limited Partner and may take such other action with respect to the
manner in which BUCs are being or may be transferred or traded as it may deem
necessary or appropriate, in order to preserve the status of the Partnership
as a partnership rather than an association taxable as a corporation for
federal income tax purposes or to insure that BUC Holders will be treated as
limited partners for federal income tax purposes.

ARTICLE XIII

MISCELLANEOUS PROVISIONS

Section 13.01. Appointment of the General Partner as Attorney-in-Fact.

(a) Each Limited Partner by the execution of this Agreement irrevocably
constitutes and appoints, with full power of substitution, the General Partner
as his true and lawful attorney-in-fact with full power and authority in his
name, place and stead to execute, certify, acknowledge, deliver, swear to,
file and record at the appropriate public offices such documents as may be
necessary or appropriate to carry out the provisions of this Agreement,
including, but not limited to:

(i) the Certificate and amendments thereto, and all certificates and other
instruments (including counterparts of this Agreement), and any amendments
thereof, which any such Person deems appropriate to form, qualify or continue
the Partnership as a limited partnership (or a partnership in which the
Limited Partners will have limited liability comparable to that provided by
the Act on the date thereof) in a jurisdiction in which the Partnership may
conduct business or in which such formation, qualification or continuation is,
in the opinion of any such Person, necessary to protect the limited liability
of the Limited Partners and BUC Holders;

(ii) any other instrument or document which may be required to be filed by the
Partnership under federal law or under the laws of any state in which any such
Person deems it advisable to file;

(iii) all amendments to this Agreement adopted in accordance with the terms
hereof and all instruments which any such Person deems appropriate to reflect
a change or modification of the Partnership in accordance with the terms of
this Agreement; and

(iv) any instrument or document, including amendments to this Agreement, which
may be required to effect the continuation of the Partnership, the admission
of a Limited Partner or an additional or successor General Partner or the
dissolution and termination of the Partnership (provided such continuation,
admission or dissolution and termination are in accordance with the terms of
this Agreement) or to reflect any reductions in amount of Capital Accounts.

(b) The appointment by each Limited Partner of each of such Persons as his
attorney-in-fact is irrevocable and shall be deemed to be a power coupled with
an interest, in recognition of the fact that each of the Partners under this
Agreement will be relying upon the power of such Persons to act as
contemplated by this Agreement in any filing and other action by them on
behalf of the Partnership, and such power shall survive the Incapacity of any
Person hereby giving such power and the transfer or assignment of all or any
part of the Limited Partnership Interests of such Person; provided, however,
that in the event of a transfer by a Limited Partner of all or any part of his
Limited Partnership Interests, the foregoing power of attorney shall survive
such transfer only until such time as the transferee is admitted to the
Partnership as a Limited Partner and all required documents and instruments
are duly executed, filed and recorded to effect such substitution.

Section 13.02. Signatures. Each Limited Partner and any additional or
successor General Partner shall become a signatory hereto by signing such
number of counterpart signature pages to this Agreement and such other
instrument or instruments in such manner and at such time as the General
Partner shall determine. By so signing, each Limited Partner, successor
General Partner or additional General Partner, as the case may be, shall be
deemed to have adopted, and to have agreed to be bound by, all the provisions
of this Agreement, as amended from time to time; provided, however, that no
such counterpart shall be binding unless and until it has been accepted by the
General Partner.

Section 13.03. Amendments.

(a) In addition to any amendments otherwise authorized herein, amendments may
be made to this Agreement or the Certificate from time to time by the General
Partner, without the Consent of the Limited Partners or the BUC Holders, (i)
to add to the representations, duties or obligations of the General Partner or
surrender any right or power granted to the General Partner in this Agreement;
(ii) to cure any ambiguity or correct or supplement any provision in this
Agreement which may be inconsistent with the manifest intent of this
Agreement, if such amendment is not materially adverse to the interests of
Limited Partners and BUC Holders in the sole judgment of the General Partner;
(iii) to delete or add to any provision of this Agreement required to be
deleted or added to based upon comments by the staff of the Securities and
Exchange Commission or other federal agency or by a state securities
commissioner; (iv) to delete, add or revise any provision of this Agreement
that may be necessary or appropriate, in the General Partner's judgment, to
insure that the Partnership will be treated as a partnership, and that each
BUC Holder and each Limited Partner will be treated as a limited partner, for
federal income tax purposes; (v) to reflect the withdrawal, removal or
admission of Partners; and (vi) to reflect a change in the name or address of
the Partnership's registered agent in the State of Delaware; provided,
however, that no amendment shall be adopted pursuant to this Section 12.03(a)
unless the adoption thereof (A) is consistent with Section 5.01 and is not
prohibited by Section 5.04; (B) does not affect the distribution of Net
Interest Income, Net Residual Proceeds or Liquidation Proceeds or the
allocation of Income or Loss (except as provided in Section 5.10); (C) does
not, in the sole judgment of the General Partner after consultation with
Counsel, affect the limited liability of the Limited Partners or the BUC
Holders or cause the Partnership not to be treated as a partnership for
federal income tax purposes; and (D) does not amend this Section 12.03(a).

(b) If this Agreement shall be amended as a result of substituting a Limited
Partner, the amendment to this Agreement shall be signed by the General
Partner, the Person to be substituted and the assigning Limited Partner. If
this Agreement shall be amended to reflect the designation of an additional
General Partner, such amendment shall be signed by the other General Partners
and by such additional General Partner. If this Agreement shall be amended to
reflect the withdrawal of a General Partner when the business of the
Partnership is being continued, such amendment shall be signed by the
withdrawing General Partner and by the remaining or successor General
Partner. In the event the withdrawing General Partner or the assigning
Limited Partner does not sign such an amendment within 30 days following its
withdrawal or substitution, the remaining or successor General Partners are
hereby appointed by the withdrawing General Partner or the assigning Limited
Partner as its attorney-in-fact for purposes of signing such amendment.

(c) In making any amendments, there shall be prepared and filed by the General
Partner for recording such documents and certificates as shall be required to
be prepared and filed under the Act and in any other jurisdictions under the
laws of which the Partnership is then qualified.

Section 13.04. Binding Provisions. The covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the heirs,
executors, administrators, personal representatives, successors and assigns of
the respective parties hereto.

Section 13.05. Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware.

Section 13.06. Separability of Provisions. Each provision of this Agreement
shall be considered separable and if for any reason any provision or
provisions hereof are determined to be invalid and contrary to any law, such
invalidity shall not impair the operation of or affect those portions of this
Agreement which are valid.

Section 13.07. Captions. Article and Section titles are for descriptive
purposes only and shall not control or alter the meaning of this Agreement as
set forth in the text.

Section 13.08. Entire Agreement. This Agreement, together with Schedule A
hereto, sets forth all, and is intended by all parties to be an integration of
all, of the promises, agreements and understandings among the parties hereto
with respect to the Partnership, the Partnership business and the property of
the Partnership, and there are no promises, agreements, or understandings,
oral or written, express or implied, among them other than as set forth,
incorporated or contemplated in this Agreement.

IN WITNESS WHEREOF, the parties have signed this Agreement as of the [ ]
day of [ ], 1998.

GENERAL PARTNER:

AMERICA FIRST CAPITAL ASSOCIATES
LIMITED PARTNERSHIP TWO
By America First Companies L.L.C.,
General Partner

By
--------------------------------
Michael B. Yanney, President

INITIAL LIMITED PARTNER:

AMERICA FIRST FIDUCIARY
CORPORATION NUMBER FIVE

By
--------------------------------
Michael B. Yanney, President

SCHEDULE A

GENERAL PARTNER:

America First Capital $[ ]
Associates Limited
Partnership Two
Suite 400
1004 Farnam Street
Omaha, NE 68102

INITIAL LIMITED PARTNER:

America First Fiduciary $[ ]
Corporation Number Five
Suite 400
1004 Farnam Street
Omaha, NE 68102

APPENDIX B
AGREEMENT OF MERGER

THIS AGREEMENT OF MERGER (this "Agreement") is entered into as of April 10,
1998 by and between AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED
PARTNERSHIP, a Delaware limited partnership (the "the Existing Fund") whose
principal office is located at Suite 400, 1004 Farnam Street, Omaha, Nebraska
68102 and AMERICA FIRST TAX EXEMPT INVESTORS L.P., a Delaware limited
partnership (the New Fund") whose principal office is located at Suite 400,
1004 Farnam Street, Omaha, Nebraska 68102.

WHEREAS, the Existing Fund is a limited partnership duly formed and existing
under the laws of the State of Delaware, having been formed on November 11,
1985, whose sole general partner is America First Capital Associates Limited
Partnership Two ("AFCA 2") and whose sole limited partner is America First
Fiduciary Corporation Number Five ("AFFC 5"); and

WHEREAS, the New Fund is a limited partnership duly formed and existing under
the laws of the State of Delaware, having been formed on April 2, 1998, whose
sole general partner is AFCA 2 and whose sole limited partner is AFFC 5; and

WHEREAS, upon the terms and conditions set forth herein, the Existing Fund and
the New Fund agree to merge, with the New Fund as the surviving limited
partnership;

NOW, THEREFORE, in consideration of the premises and the mutual covenants,
representations, warranties and undertakings of the parties set forth below,
the parties agree as follows:

Section 1. The Merger. At the effective time, the separate existence of the
Existing Fund shall cease and the Existing Fund shall be merged with and into
the New Fund, which shall continue its existence and be the limited
partnership surviving the merger (the "Merger"). Consummation of the Merger
shall be effected by the filing of a Certificate of Merger (the "Merger
Certificate") in the State of Delaware, in substantially the form attached
hereto as Exhibit A.

Section 2. Governing Laws. The laws that shall govern the New Fund as the
surviving limited partnership are the laws of the State of Delaware.

Section 3. Certificate of Limited Partnership and Agreement of Limited
Partnership.

(a) The certificate of limited partnership of the New Fund at the effective
time of the Merger shall become and continue to be the certificate of limited
partnership of the New Fund as the surviving limited partnership until changed
as provided therein and by law.

(b) The agreement of limited partnership of the New Fund at the effective time
of the Merger (the "Partnership Agreement") shall become and continue to be
the agreement of limited partnership of the New Fund as the surviving limited
partnership until altered or amended in accordance with the provisions thereof.

Section 4. Partners. AFCA 2 and AFFC 5 shall continue to be the general
partner and initial limited partner, respectively, of the New Fund at the
effective time of the Merger.

Section 5. Terms of Conversion of BUCs. Upon the effective time of the
Merger, by virtue of the Merger and without any action on the part of the
parties, each beneficial unit certificate representing an assignment of a
beneficial interest in a limited partnership interest in the Existing Fund
("the Existing Fund BUCs") outstanding immediately prior to the effective time
of the Merger shall be cancelled and extinguished and the Existing Fund shall
be merged with and into the New Fund. Holders of the Existing Fund BUCs shall
each receive one beneficial unit certificate representing an assignment of a
beneficial interest in a limited partnership interest in the New Fund ("the
New Fund BUCs") for each Existing Fund BUC they own as of the applicable
record date.

Section 6. Rights and Liabilities. At the effective time of the merger, the
New Fund shall succeed to, without other transfer, and shall possess and
enjoy, all the rights, privileges, powers and franchises both of a public and
a private nature and be subject to all the restrictions, disabilities and
duties of the Existing Fund; and all rights, privileges, powers and franchises
of the Existing Fund and all property, real, personal and mixed, and all debts
due to said the Existing Fund on whatever account, for the Existing Fund BUC
subscriptions as well as for all other things in action or belonging to said
limited partnership, shall be vested in the New Fund; and all property,
rights, privileges, powers, franchises and interests shall be thereafter as
effectively the property of the New Fund as they were of the Existing Fund,
and the title to any real estate vested by deed or otherwise in said the
Existing Fund shall not revert or be in any way impaired by reason of the
Merger; provided, however, that all rights of creditors and all liens upon any
property of said the Existing Fund shall be preserved unimpaired, and all
debts, liabilities and duties of said the Existing Fund shall thenceforth
attach to the New Fund and may be enforced against it to the same extent as if
said debts, liabilities and duties had been incurred or contracted by the New
Fund.

Section 7. Conditions to Merger. The obligation of the Existing Fund and of
the New Fund to consummate the transactions contemplated hereby shall be
subject to the satisfaction or written waiver by the Existing Fund and the New
Fund on or prior to the effective date of the Merger of each of the following
conditions:

(a) The holders of at least a majority of the outstanding Existing Fund BUCs
consent to the Merger by the date established by AFCA 2 as the date upon which
such consent must be received and which shall be no earlier than 60 days after
the effective date of the registration statement referred to in (b) below or
such later date as AFCA 2 may subsequently establish in its sole discretion;

(b) A registration statement on Form S-4 filed under the Securities Act of
1933, as amended (the "Act"), relating to the distribution of the the New Fund
BUCs pursuant to the Merger has been declared effective under the Act by the
Securities and Exchange Commission;

(c) Appropriate clearance of the distribution of the the New Fund BUCs
pursuant to the Merger has been obtained from each applicable state securities
commission or administrator;

(d) AFCA 2 shall have received, in form and substance acceptable to it, an
opinion to the effect that for federal income tax purposes that holders of the
Existing Fund BUCs as of the record date will not recognize any income, gain
or loss as a result of the Merger; and

(e) The New Fund BUCs have been approved for listing on The NASDAQ Stock
Market (NASDAQ National Market System).

Section 8. Signatures. This Agreement shall be signed on behalf of the
Existing Fund and the New Fund by a duly authorized officer of the general
partner of AFCA 2 and attested by the secretary of the general partner of AFCA
2.

Section 9. Termination. This Agreement may be terminated by the action of the
board of managers of the general partner of AFCA 2 acting in its capacity as
the general partner of the general partner of the Existing Fund and of the New
Fund before or after the date that holders of a majority in interest of the
Existing Fund BUCs consent to the Merger.

Section 10. Further Assurances. The Existing Fund agrees that from time to
time, as and when requested by the New Fund or by its successors or assigns,
it will execute and deliver, or cause to be executed and delivered, all such
deeds and other instruments, and will take or cause to be taken such further
or other action, as the New Fund may deem necessary or desirable in order to
more fully vest in and confirm to the New Fund title to and possession of all
said property, rights, privileges, powers and franchises and otherwise to
carry out the intent and purposes of this Agreement.

IN WITNESS WHEREOF, this Agreement has been duly authorized, executed and
delivered by the parties on the date first set forth above.

AMERICA FIRST TAX EXEMPT MORTGAGE FUND
LIMITED PARTNERSHIP, a Delaware limited
partnership

By America First Capital Associates Limited
Partnership Two, General Partner

By America First Companies L.L.C., General
Partner
By /s/ Michael Yanney
----------------------------------------
Michael Yanney, President

Attest:

/s/ Michael Thesing
- ------------------------------
Michael Thesing, Secretary

AMERICA FIRST TAX EXEMPT INVESTORS L.P.,a
Delaware limited partnership

By America First Capital Associates Limited
Partnership Two, General Partner

By America First Companies L.L.C., General
Partner

By /s/ Michael Yanney
----------------------------------------
Michael Yanney, President

Attest:

/s/ Michael Thesing
- ------------------------------
Michael Thesing, Secretary

EXHIBIT A

Certificate of Merger
of
America First Tax Exempt Mortgage Fund Limited Partnership,
a Delaware Limited partnership
with and into
America First Tax Exempt Investors L.P.,
a Delaware Limited partnership

This certificate is prepared pursuant to Section 17-211 of the Revised Uniform
Limited Partnership Act of the State of Delaware.

It is hereby certified that:

1. The constituent limited partnerships participating in the merger herein
certified are: (i) America First Tax Exempt Mortgage Fund Limited Partnership,
which is formed under the laws of the State of Delaware ("the Existing Fund"),
and (ii) America First Tax Exempt Investors L.P., which is formed under the
laws of the State of Delaware ("the New Fund").

2. In accordance with Section 17-211 of the Revised Uniform Limited
Partnership Act of the State of Delaware, an agreement of merger (the "Merger
Agreement") has been duly approved and executed by the Existing Fund and the
New Fund.

3. The name of the surviving limited partnership in the merger herein
certified is America First Tax Exempt Investors L.P., which will continue its
existence as said surviving limited partnership upon the effective time of
said merger.

4. The merger herein certified shall be effective upon the filing of this
Certificate with the Secretary of State of the State of Delaware.

5. The executed Merger Agreement between the aforesaid constituent limited
partnerships is on file at the principal place of business of the aforesaid
surviving limited partnership, the address of which is Suite 400, 1004 Farnam
Street, Omaha, Nebraska 68102.

6. A copy of the Merger Agreement will be furnished by the the New Fund, on
request and without cost, to any partner of the Existing Fund or the New Fund
or any person holding a beneficial unit certificate of the Existing Fund at
the effective time of the merger.

Dated: [ ], 1998.

AMERICA FIRST TAX EXEMPT
MORTGAGE FUND LIMITED
PARTNERSHIP, a Delaware limited
partnership

By America First Capital Associates Limited
Partnership Two, General Partner

By America First Companies L.L.C., General
Partner

By
----------------------------------------
Michael Yanney, President

Attest:

- -----------------------------
Michael Thesing, Secretary

AMERICA FIRST TAX EXEMPT
INVESTORS L.P., a Delaware limited
partnership

By America First Capital Associates Limited
Partnership Two, General Partner

By America First Companies L.L.C., General
Partner

By
----------------------------------------
Michael Yanney, President

Attest:

- ----------------------------
Michael Thesing, Secretary

STATE OF NEBRASKA )
) SS.
COUNTY OF DOUGLAS )

Before me this [ ] day of [ ], 1998, Michael Yanney,
personally known to me to be the President of America First Companies L.L.C.,
a Delaware limited liability company in its capacity as the general partner of
America First Capital Associates Limited Partnership Two which is the general
partner of both the constituent parties to the subject merger, appeared and,
being first duly sworn, did acknowledge the execution of the foregoing
instrument on behalf of such companies.

-------------------------------------------
Notary Public

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 21. Exhibits and Financial Statements Schedules

(a) Exhibits

4.1 Form of Beneficial Unit Certificate

4.2 Form of Agreement of Limited Partnership of the Registrant (included as
Appendix A to Consent Solicitation Statement/Prospectus contained in Part I
hereof)

4.3 Agreement of Merger, dated April 10, between the Registrant and America
First Tax Exempt Mortgage Fund Limited Partnership (included as Appendix B to
Consent Solicitation Statement/Prospectus contained in Part I hereof)

5.1 Opinion of Kutak Rock as to the legality of securities

8.1 Opinion of Kutak Rock as to certain tax matters

23.1 Consent of Coopers & Lybrand L.L.P.

23.2 Consent of Kutak Rock (included in Exhibits 5.1 and 8.1)

24.1 Powers of Attorney

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Omaha, State of
Nebraska, on the 15th day of April, 1998.

AMERICA FIRST TAX EXEMPT
INVESTORS, L.P.

By America First Capital Associates Limited
Partnership Two, Its General Partner

By America First Companies L.L.C., Its
General Partner

By /s/ Michael Yanney
----------------------------------------
Michael Yanney, President and Chief
Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on dates indicated opposite their names.

Signature Date Title

/s/ Michael Yanney April 15, 1998 Chairman of the Board, President
- ------------------------ And Chief Executive Officer
Michael Yanney

/s/ Michael Thesing* April 15, 1998 Secretary and Chief Financial
- ------------------------ Officer
Michael Thesing

/s/ William S. Carter* April 15, 1998 Manager
- ------------------------
William S. Carter

/s/ George Kubat* April 15, 1998 Manager
- ------------------------
George Kubat

/s/ Martin Massengale* April 15, 1998 Manager
- ------------------------
Martin Massengale

/s/ Alan Baer* April 15, 1998 Manager
- ------------------------
Alan Baer

/s/ Gail Walling Yanney* April 15, 1998 Manager
- ------------------------
Gail Walling Yanney

/s/ Mariann Byerwalter* April 15, 1998 Manager
- ------------------------
Mariann Byerwalter

*By Michael Yanney
Attorney-in-fact

/s/ Michael Yanney
- ------------------------
Michael Yanney

EXHIBIT 4.1
Certificate No. CUSIP 02364V 10 7

AMERICA FIRST TAX EXEMPT INVESTORS, L.P.

BENEFICIAL UNIT CERTIFICATE

THIS CERTIFICATES THAT
is the registered owner of Beneficial Unit
Certificates evidencing an assignment of a portion of the limited partner
interest held by America First Fiduciary Corporation Number Five (the "Initial
Limited Partner") in America First Tax Exempt Investors, L.P., a Delaware
limited partnership (the "Partnership"), and holds the same subject to the
terms of an Agreement of Limited Partnership, dated , 1998,
by and between America First Capital Associates Limited Partnership Two (the
"General Partner") and the Initial Limited Partner, as it may be amended from
time to time (the "Partnership Agreement"). Such Beneficial Unit Certificates
are transferable on the books of the Partnership, subject to the limitations
in the Partnership Agreement, by the holder hereof in person or by duly
authorized attorney, on surrender of this certificate properly endorsed. All
capitalized terms not otherwise defined herein have the meaning set forth in
the Partnership Agreement.

IN WITNESS WHEREOF, the Initial Limited Partner has caused this instrument to
be duly executed.

Dated: , 1998

AMERICA FIRST FIDUCIARY
CORPORATION NUMBER FIVE,
Initial Limited Partner

By
-----------------------------
Michael Yanney, President

By
-----------------------------
Michael Thesing, Secretary

SERVICE DATA CORPORATION,
Transfer Agent

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM- as tenants in common UNIF GIFT MIN ACT- Custodian
TEN ENT- as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as Act
tenants in common (State)

Additional abbreviations may also be used though not in the above list.

For Value Received, hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

- ------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

- ------------------------------------------------------------------------------

- --------------------------------------------- the Beneficial Unit Certificates
evidenced hereby in America First Tax Exempt Investors, L.P., and do hereby
irrevocably constitute and appoint

- ------------------------------------------------------------------------------

to transfer the said Beneficial Unit Certificates on the books of the
Partnership with full power of substitution in the premises.

NOTICE: The signature(s) to
this assignment must correspond
with the name as written upon
the face of the Certificate in
every particular, without
alteration or enlargement or
any change whatever. In the presence of:

X Dated:
------------------------------- ----------------------- -------------
Witness

EXHIBIT 5.1
April 16, 1998

America First Capital Associates
Limited Partnership Two
Suite 400
1004 Farnam Street
Omaha, NE 68102

Re: America First Tax Exempt Investors, L.P.

Ladies and Gentlemen:

We have acted as counsel to America First Capital Associates Limited
Partnership Two (the "General Partner"), the general partner of America First
Tax Exempt Investors, L.P., a Delaware limited partnership (the
"Partnership"), in connection with the filing of a Registration Statement on
Form S-4 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), with respect to the registration of beneficial unit
certificates (the "BUCs") representing assigned limited partnership interests
in the Partnership that will be issued in connection with the merger (the
"Merger") of America First Tax Exempt Mortgage Fund Limited Partnership, a
Delaware limited partnership (the "Tax Exempt Partnership"), and the
Partnership pursuant to which (i) the separate existence of the Tax Exempt
Partnership will cease and the Partnership will be the surviving partnership
and will succeed to all of the assets and liabilities of the Tax Exempt
Partnership and (ii) persons holding BUCs in the Tax Exempt Partnership will
become BUC holders of the Partnership.

We are of the opinion that upon execution of the Agreement of Limited
Partnership of the Partnership (the "Partnership Agreement"), the BUCs of the
Partnership will be duly and validly authorized for issuance and, when issued
in connection with the Merger, will be validly issued, fully paid and
nonassessable (subject to possible liability of BUC holders to the Partnership
under Delaware law with respect to certain distributions). In arriving at the
foregoing opinion, we have relied upon our examination of, among other things,
the form of the Partnership Agreement, the limited partnership agreement of
the General Partner and the corporate records of America First Companies
L.L.C. and certificates of various public officials.

We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the heading
"LEGAL MATTERS" therein. In giving such consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section
7 of the Act or the rules and regulations of the Securities and Exchange
Commission promulgated pursuant thereto.

Sincerely,

/s/ Kutak Rock

EXHIBIT 8.1
April 16, 1998

America First Capital Associates
Limited Partnership Two
Suite 400
1004 Farnam Street
Omaha, NE 68102

Re: America First Tax Exempt Investors, L.P.

Ladies and Gentlemen:

We have acted as special tax counsel to America First Capital Associates
Limited Partnership Two (the "General Partner"), a Delaware limited
partnership which is the general partner of America First Tax Exempt
Investors, L.P., a Delaware limited partnership (the "Partnership"), in
connection with the merger (the "Merger") of America First Tax Exempt Mortgage
Fund Limited Partnership, a Delaware limited partnership (the "Tax Exempt
Partnership"), with and into the Partnership pursuant to the Agreement of
Merger, dated April 10, 1998, by and between the Partnership and the Tax
Exempt Partnership (the "Merger Agreement") under which (i) the separate
existence of the Tax Exempt Partnership will cease, and the Partnership will
be the surviving partnership and will succeed to all of the assets and
liabilities of the Tax Exempt Partnership and (ii) persons holding Beneficial
Unit Certificates representing assigned limited partnership interests ("BUCs")
in the Tax Exempt Partnership will become BUC holders of the Partnership. As
a result thereof, the General Partner and limited partner of the Tax Exempt
Partnership will acquire the same interests in the Partnership as they had in
the Tax Exempt Partnership, and the persons holding BUCs in the Tax Exempt
Partnership will acquire one BUC in the Partnership for each BUC they held in
the Tax Exempt Partnership as of the effective date of the Merger. In
connection therewith, we have been asked by the General Partner to render an
opinion regarding the status of the Partnership for United States federal
income tax purposes and certain federal income tax considerations relevant to
the Merger. Any terms used in this letter but not herein defined will have
the meanings ascribed to them in the Registration Statement on Form S-4 (the
"Registration Statement") filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, in connection with the issuance
of BUCs of the Partnership and the solicitation of the consent of the BUC
holders of the Tax Exempt Partnership to the Merger.

In rendering our opinion, we have examined certain documents, including:

1. the Registration Statement, including the Consent Solicitation
Statement/Prospectus contained therein (the "Prospectus");

2. the form of Agreement of Limited Partnership of the Partnership (the
"Partnership Agreement");

3. the Certificate of Limited Partnership of the Partnership, as filed with
the Secretary of State of the State of Delaware on April 2, 1998, and

4. the Merger Agreement.

As to various questions of fact which are material to the opinion set forth in
this letter, we have relied upon certain representations, statements and
information set forth in the foregoing documents. In addition, we have made
such other investigations as we deemed necessary in connection with our
opinion.

As to matters of federal income tax law, we have based our opinion upon the
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the
legislative history of the Code, the Treasury Department Income Tax
Regulations promulgated and proposed under the Code (the "Regulations") and
the interpretations of the Code and the Regulations by the Internal Revenue
Service (the "Service") and by the courts as of the date of this letter. The
provisions of the Code or of the Regulations may be amended or the
interpretations of the Service or of the courts may change in a manner which
would affect our opinions, and any such changes may have retroactive effect.

Discussion of Partnership Status

The Partnership was formed as a limited partnership under the Delaware
Revised Uniform Limited Partnership Act on April 2, 1998. We have been
advised by the General Partner that it has not filed, and will not file, an
election with the Service for the Partnership to be treated as an association
taxable as a corporation. Accordingly, we are of the opinion that the
Partnership will be treated as a partnership for federal income tax purposes
and that the holders of BUCs of the Partnership will be recognized as partners
for federal income tax purposes.

Additional Federal Income Tax Considerations

In addition to the foregoing opinion, we are of the opinion that the
information in the Prospectus under the heading "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE TRANSACTION," to the extent that such information
constitutes matters of federal income tax law, summaries of legal matters or
legal conclusions, is correct in all material respects.

We are rendering no opinions regarding federal income tax or other matters
except for those expressly set forth in this letter. This letter is being
furnished to you solely for your benefit in connection with the Merger, and it
may not be used, circulated, relied upon, filed or quoted by or to any other
person, or used for any other purpose, without our prior written consent.

We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the heading
"LEGAL MATTERS" therein. In giving such consent, we do not hereby admit that
we come within the category of persons whose consent is required under Section
7 of the Act or the rules and regulations of the Securities and Exchange
Commission promulgated pursuant thereto.

Sincerely,

/s/ Kutak Rock

EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the Registration Statement on
Form S-4 (File No. 333- ) of America First Tax Exempt Investors, L.P.
of our reports dated January 27, 1998, on our audits of the financial
statements and financial statement schedules of America First Tax Exempt
Mortgage Fund Limited Partnership (the "Partnership") as of December 31, 1997
and 1996, and for the years ended December 31, 1997, 1996 and 1995, which
report is included in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1997. We also consent to the reference to our firm
under the caption "Experts."

COOPERS & LYBRAND L.L.P.

Omaha, Nebraska
April 16, 1998 /s/ Coopers & Lybrand L.L.P.

EXHIBIT 24.1
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned, a manager, officer or
both, of America First Companies L.L.C., a Delaware limited liability company
(the "Company") which acts as the general partner of America First Capital
Associates Limited Partnership Two, a Delaware limited partnership (the
"General Partner") which, in turn, acts as the general partner of America
First Tax Exempt Investors, L.P., a Delaware limited partnership (the
"Registrant"), hereby appoints Michael Thesing as my true and lawful
attorney-in-fact to act for me and in my name and on my behalf, individually
and as an officer or manager or both of the Company, to sign a Registration
Statement on Form S-4 under the Securities Act of 1933, as amended, and any
amendment (including any post-effective amendments) and supplements thereto
with respect to the registration of assigned limited partnership interests of
the Registrant and generally to do and perform all things necessary to be done
in connection with the foregoing as fully in all respects as I could do
personally.

IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of April, 1998.

/s/ Michael Yanney
-------------------------------------------
Signature

Michael Yanney
-------------------------------------------
Name (Please Print)

STATE OF NEBRASKA )
) SS.
COUNTY OF DOUGLAS )

The undersigned, being a notary public for and in the above county and state,
does hereby state that before me appeared Michael Yanney, being personally
known to me to be a manager and/or officer of America First Companies L.L.C.
and who, being first duly sworn, did acknowledge that the foregoing power of
attorney was executed by him or her and that such execution was his or her
free act and deed.

Dated: April 8, 1998 /s/ Janet Pacula Roos
-------------------------------------------
Notary Public

My Commission Expires:

11/2/00
- -----------------------------

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned, a manager, officer or
both, of America First Companies L.L.C., a Delaware limited liability company
(the "Company") which acts as the general partner of America First Capital
Associates Limited Partnership Two, a Delaware limited partnership (the
"General Partner") which, in turn, acts as the general partner of America
First Tax Exempt Investors, L.P., a Delaware limited partnership (the
"Registrant"), hereby appoints Michael Yanney as my true and lawful
attorney-in-fact to act for me and in my name and on my behalf, individually
and as an officer or manager or both of the Company, to sign a Registration
Statement on Form S-4 under the Securities Act of 1933, as amended, and any
amendment (including any post-effective amendments) and supplements thereto
with respect to the registration of assigned limited partnership interests of
the Registrant and generally to do and perform all things necessary to be done
in connection with the foregoing as fully in all respects as I could do
personally.

IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of April, 1998.

/s/ Michael Thesing
-------------------------------------------
Signature

Michael Thesing
-------------------------------------------
Name (Please Print)

STATE OF NEBRASKA )
) SS.
COUNTY OF DOUGLAS )

The undersigned, being a notary public for and in the above county and state,
does hereby state that before me appeared Michael Thesing, being personally
known to me to be a manager and/or officer of America First Companies L.L.C.
and who, being first duly sworn, did acknowledge that the foregoing power of
attorney was executed by him or her and that such execution was his or her
free act and deed.

Dated: April 8, 1998 /s/ Nancy R. Targy
-------------------------------------------
Notary Public

My Commission Expires:

8/4/99
- -----------------------------

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned, a manager, officer or
both, of America First Companies L.L.C., a Delaware limited liability company
(the "Company") which acts as the general partner of America First Capital
Associates Limited Partnership Two, a Delaware limited partnership (the
"General Partner") which, in turn, acts as the general partner of America
First Tax Exempt Investors, L.P., a Delaware limited partnership (the
"Registrant"), hereby appoints Michael Yanney and Michael Thesing, and each of
them individually, as my true and lawful attorney-in-fact to act for me and in
my name and on my behalf, individually and as an officer or manager or both of
the Company, to sign a Registration Statement on Form S-4 under the Securities
Act of 1933, as amended, and any amendment (including any post-effective
amendments) and supplements thereto with respect to the registration of
assigned limited partnership interests of the Registrant and generally to do
and perform all things necessary to be done in connection with the foregoing
as fully in all respects as I could do personally.

IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of April, 1998.

/s/ Gail Walling Yanney
-------------------------------------------
Signature

Gail Walling Yanney
-------------------------------------------
Name (Please Print)

STATE OF NEBRASKA )
) SS.
COUNTY OF DOUGLAS )

The undersigned, being a notary public for and in the above county and state,
does hereby state that before me appeared Gail Walling Yanney, being
personally known to me to be a manager and/or officer of America First
Companies L.L.C. and who, being first duly sworn, did acknowledge that the
foregoing power of attorney was executed by him or her and that such execution
was his or her free act and deed.

Dated: April 13, 1998 /s/ Janet Pacula Roos
-------------------------------------------
Notary Public

My Commission Expires:

11/2/00
- -----------------------------

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned, a manager, officer or
both, of America First Companies L.L.C., a Delaware limited liability company
(the "Company") which acts as the general partner of America First Capital
Associates Limited Partnership Two, a Delaware limited partnership (the
"General Partner") which, in turn, acts as the general partner of America
First Tax Exempt Investors, L.P., a Delaware limited partnership (the
"Registrant"), hereby appoints Michael Yanney and Michael Thesing, and each of
them individually, as my true and lawful attorney-in-fact to act for me and in
my name and on my behalf, individually and as an officer or manager or both of
the Company, to sign a Registration Statement on Form S-4 under the Securities
Act of 1933, as amended, and any amendment (including any post-effective
amendments) and supplements thereto with respect to the registration of
assigned limited partnership interests of the Registrant and generally to do
and perform all things necessary to be done in connection with the foregoing
as fully in all respects as I could do personally.

IN WITNESS WHEREOF, I have hereunto set my hand this 7th day of April, 1998.

/s/ George Kubat
-------------------------------------------
Signature

George Kubat
-------------------------------------------
Name (Please Print)

STATE OF NEBRASKA )
) SS.
COUNTY OF DOUGLAS )

The undersigned, being a notary public for and in the above county and state,
does hereby state that before me appeared George Kubat, being personally
known to me to be a manager and/or officer of America First Companies L.L.C.
and who, being first duly sworn, did acknowledge that the foregoing power of
attorney was executed by him or her and that such execution was his or her
free act and deed.

Dated: April 7, 1998 /s/ Barb Steinhaus
-------------------------------------------
Notary Public

My Commission Expires:

3/25/02
- -----------------------------

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned, a manager, officer or
both, of America First Companies L.L.C., a Delaware limited liability company
(the "Company") which acts as the general partner of America First Capital
Associates Limited Partnership Two, a Delaware limited partnership (the
"General Partner") which, in turn, acts as the general partner of America
First Tax Exempt Investors, L.P., a Delaware limited partnership (the
"Registrant"), hereby appoints Michael Yanney and Michael Thesing, and each of
them individually, as my true and lawful attorney-in-fact to act for me and in
my name and on my behalf, individually and as an officer or manager or both of
the Company, to sign a Registration Statement on Form S-4 under the Securities
Act of 1933, as amended, and any amendment (including any post-effective
amendments) and supplements thereto with respect to the registration of
assigned limited partnership interests of the Registrant and generally to do
and perform all things necessary to be done in connection with the foregoing
as fully in all respects as I could do personally.

IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of April, 1998.

/s/ Martin A. Massengale
-------------------------------------------
Signature

Martin A. Massengale
-------------------------------------------
Name (Please Print)

STATE OF NEBRASKA )
) SS.
COUNTY OF DOUGLAS )

The undersigned, being a notary public for and in the above county and state,
does hereby state that before me appeared Martin A. Massengale, being
personally known to me to be a manager and/or officer of America First
Companies L.L.C. and who, being first duly sworn, did acknowledge that the
foregoing power of attorney was executed by him or her and that such execution
was his or her free act and deed.

Dated: April 8, 1998 /s/ Leslie J. Brooks
-------------------------------------------
Notary Public

My Commission Expires:

2/6/99
- -----------------------------

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned, a manager, officer or
both, of America First Companies L.L.C., a Delaware limited liability company
(the "Company") which acts as the general partner of America First Capital
Associates Limited Partnership Two, a Delaware limited partnership (the
"General Partner") which, in turn, acts as the general partner of America
First Tax Exempt Investors, L.P., a Delaware limited partnership (the
"Registrant"), hereby appoints Michael Yanney and Michael Thesing, and each of
them individually, as my true and lawful attorney-in-fact to act for me and in
my name and on my behalf, individually and as an officer or manager or both of
the Company, to sign a Registration Statement on Form S-4 under the Securities
Act of 1933, as amended, and any amendment (including any post-effective
amendments) and supplements thereto with respect to the registration of
assigned limited partnership interests of the Registrant and generally to do
and perform all things necessary to be done in connection with the foregoing
as fully in all respects as I could do personally.

IN WITNESS WHEREOF, I have hereunto set my hand this 7th day of April, 1998.

/s/ Alan Baer
-------------------------------------------
Signature

Alan Baer
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Name (Please Print)

STATE OF NEBRASKA )
) SS.
COUNTY OF DOUGLAS )

The undersigned, being a notary public for and in the above county and state,
does hereby state that before me appeared Alan Baer, being personally
known to me to be a manager and/or officer of America First Companies L.L.C.
and who, being first duly sworn, did acknowledge that the foregoing power of
attorney was executed by him or her and that such execution was his or her
free act and deed.

Dated: April 7, 1998 /s/ Terry L. Tegeder
-------------------------------------------
Notary Public

My Commission Expires:

9/5/98
- -----------------------------

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned, a manager, officer or
both, of America First Companies L.L.C., a Delaware limited liability company
(the "Company") which acts as the general partner of America First Capital
Associates Limited Partnership Two, a Delaware limited partnership (the
"General Partner") which, in turn, acts as the general partner of America
First Tax Exempt Investors, L.P., a Delaware limited partnership (the
"Registrant"), hereby appoints Michael Yanney and Michael Thesing, and each of
them individually, as my true and lawful attorney-in-fact to act for me and in
my name and on my behalf, individually and as an officer or manager or both of
the Company, to sign a Registration Statement on Form S-4 under the Securities
Act of 1933, as amended, and any amendment (including any post-effective
amendments) and supplements thereto with respect to the registration of
assigned limited partnership interests of the Registrant and generally to do
and perform all things necessary to be done in connection with the foregoing
as fully in all respects as I could do personally.

IN WITNESS WHEREOF, I have hereunto set my hand this 7th day of April, 1998.

/s/ Mariann Byerwatter
-------------------------------------------
Signature

Mariann Byerwatter
-------------------------------------------
Name (Please Print)

STATE OF NEBRASKA )
) SS.
COUNTY OF DOUGLAS )

The undersigned, being a notary public for and in the above county and state,
does hereby state that before me appeared Mariann Byerwalter, being personally
known to me to be a manager and/or officer of America First Companies L.L.C.
and who, being first duly sworn, did acknowledge that the foregoing power of
attorney was executed by him or her and that such execution was his or her
free act and deed.

Dated: April 7, 1998 /s/ Steven P. Amen
-------------------------------------------
Notary Public

My Commission Expires:

9/15/99
- -----------------------------

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned, a manager, officer or
both, of America First Companies L.L.C., a Delaware limited liability company
(the "Company") which acts as the general partner of America First Capital
Associates Limited Partnership Two, a Delaware limited partnership (the
"General Partner") which, in turn, acts as the general partner of America
First Tax Exempt Investors, L.P., a Delaware limited partnership (the
"Registrant"), hereby appoints Michael Yanney and Michael Thesing, and each of
them individually, as my true and lawful attorney-in-fact to act for me and in
my name and on my behalf, individually and as an officer or manager or both of
the Company, to sign a Registration Statement on Form S-4 under the Securities
Act of 1933, as amended, and any amendment (including any post-effective
amendments) and supplements thereto with respect to the registration of
assigned limited partnership interests of the Registrant and generally to do
and perform all things necessary to be done in connection with the foregoing
as fully in all respects as I could do personally.

IN WITNESS WHEREOF, I have hereunto set my hand this 7th day of April, 1998.

/s/ William S. Carter
-------------------------------------------
Signature

William S. Carter
-------------------------------------------
Name (Please Print)

STATE OF CALIFORNIA )
) SS.
COUNTY OF RIVERSIDE )

The undersigned, being a notary public for and in the above county and state,
does hereby state that before me appeared William S. Carter, being personally
known to me to be a manager and/or officer of America First Companies L.L.C.
and who, being first duly sworn, did acknowledge that the foregoing power of
attorney was executed by him or her and that such execution was his or her
free act and deed.

Dated: April 7, 1998 /s/ Wayne A. Walter
-------------------------------------------
Notary Public

My Commission Expires:

9/10/01
- -----------------------------