1059142--3/6/2007--AMERICA_FIRST_TAX_EXEMPT_INVESTORS

related topics

{loan, real, estate}

{tax, income, asset}

{investment, property, distribution}

{loss, insurance, financial}

{interest, director, officer}

{stock, price, share}

{operation, natural, condition}

The value of the properties is the only source of repayment of our tax-exempt mortgage revenue bonds. There is additional credit risk when we make a taxable loan on a property. The properties financed by our tax-exempt bonds are not completely insured against damages from hurricanes and other major storms. We may suffer adverse consequences from changing interest rates. There are risks associated with our participation in the P-Float program. Our tax-exempt mortgage revenue bonds are illiquid assets and their value may decrease. We could be adversely affected if counterparties are unable to fulfill their obligations under our derivative agreements. The rent restrictions and occupant income limitations imposed on properties financed by tax-exempt mortgage revenue bonds may limit the revenues of the properties financed by our tax-exempt mortgage revenue bonds. The properties securing our revenue bonds may be subject to liability for environmental contamination and thereby increase the risk of default on such bonds. If we acquire direct ownership of apartment properties we will be subject to all of the risks normally associated with the ownership of commercial real estate. Any future issuances of additional BUCs could cause their market value to decline. The Company is not registered under the Investment Company Act. The Company engages in transactions with related parties. Shareholders may incur tax liability if any of the interest on our tax-exempt mortgage revenue bonds is determined to be taxable.

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1059142--3/6/2007--AMERICA_FIRST_TAX_EXEMPT_INVESTORS_LP