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Item 1	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Partners’ Capital and Comprehensive Income (Loss)	3
	Condensed Statement of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4	Controls and Procedures	39

This report (including, but not limited to, the information contained in “Management's Discussion and Analysis of Financial Condition and Results of Operations”) contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. When used, statements which are not historical in nature, including those containing words such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions, are intended to identify forward-looking statements. We have based forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. This report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this report and, accordingly, we cannot guarantee their accuracy or completeness.

Other risks, uncertainties and factors could cause our actual results to differ materially from those projected in any forward-looking statements we make. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the headings “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and in Item 1A of Part II of this report.



	March 31, 2011			December 31, 2010
Assets
Cash and cash equivalents	$	13,326,885		$	13,277,048
Restricted cash	22,347,932			25,252,756
Interest receivable	5,894,028			4,670,182
Tax-exempt mortgage revenue bonds held in trust, at fair value (Notes 4 & 7)	87,010,688			73,451,479
Tax-exempt mortgage revenue bonds, at fair value (Note 4)	20,916,876			27,115,164
Real estate assets: (Note 5)
Land	14,634,778			12,946,831
Buildings and improvements	111,894,984			91,802,694
Real estate assets before accumulated depreciation	126,529,762			104,749,525
Accumulated depreciation	(24,530,439		)	(23,467,105		)
Net real estate assets	101,999,323			81,282,420
Other assets (Note 6)	17,160,881			16,558,200
Total Assets	$	268,656,613		$	241,607,249

Liabilities
Accounts payable, accrued expenses and other liabilities	2,813,153			3,528,303
Distribution payable	3,803,399			3,803,399
Debt financing (Note 7)	105,494,584			95,608,000
Mortgages payable (Note 8)	28,100,519			10,645,982
Total Liabilities	140,211,655			113,585,684

Commitments and Contingencies (Note 12)

Partners' Capital
General Partner (Note 2)	(275,414		)	(280,629		)
Beneficial Unit Certificate holders	161,905,435			161,389,189
Unallocated deficit of Consolidated VIEs	(33,225,798		)	(32,945,669		)
Total Partners' Capital	128,404,223			128,162,891
Noncontrolling interest (Note 5)	40,735			(141,326		)
Total Capital	128,444,958			128,021,565
Total Liabilities and Partners' Capital	$	268,656,613		$	241,607,249



	For the Three Months Ended
	March 31, 2011			March 31, 2010
Revenues:
Property revenues	$	3,830,573		$	3,521,493
Mortgage revenue bond investment income	2,220,913			1,480,571
Other income	251,361			96,932
Total Revenues	6,302,847			5,098,996
Expenses:
Real estate operating (exclusive of items shown below)	2,238,727			2,055,774
Depreciation and amortization	1,225,565			1,197,017
Interest	825,725			992,120
General and administrative	641,595			508,235
Total Expenses	4,931,612			4,753,146
Net income	1,371,235			345,850
Less: net (income) loss attributable to noncontrolling interest	(182,061		)	1,542
Net income - America First Tax Exempt Investors, L.P.	$	1,189,174		$	347,392

Net income (loss) allocated to:
General Partner	$	14,693		$	10,386
Limited Partners - Unitholders	1,454,610			1,028,168
Unallocated loss of Consolidated Property VIEs	(280,129		)	(691,162		)
Noncontrolling interest	182,061			(1,542		)
	$	1,371,235		$	345,850
Unitholders' interest in net income per unit (basic and diluted):
Net income, basic and diluted, per unit	$	0.05		$	0.05
Weighted average number of units outstanding, basic and diluted	30,122,928			21,842,928



	General Partner			# of Units	Beneficial Unit Certificate Holders			Unallocated Deficit of Consolidated VIEs			Non- controlling Interest			Total			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2011	$	(280,629	)	30,122,928	$	161,389,189		$	(32,945,669	)	$	(141,326	)	$	128,021,565		$	(9,692,233	)
Distributions paid or accrued	(38,034		)		(3,765,366		)							(3,803,400		)
Comprehensive income:
Net Income (loss)	14,693			—	1,454,610			(280,129		)	182,061			1,371,235			—
Unrealized gain on securities	28,556			—	2,827,002			—			—			2,855,558			2,855,558
Comprehensive income														4,226,793
Comprehensive income attributable to noncontolling interest	—			—	—			—			—			182,061			—
Comprehensive income attributable to Partnership	—			—	—			—			—			4,408,854			—
Balance at March 31, 2011	$	(275,414	)	30,122,928	$	161,905,435		$	(33,225,798	)	$	40,735		$	128,444,958		$	(6,836,675	)

	General Partner			# of Units	Beneficial Unit Certificate Holders			Unallocated Deficit of Consolidated VIEs			Non- controlling Interest			Total			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2010	$	271,051		21,842,928	$	130,482,881		$	(32,215,697	)	$	62,505		$	98,600,740		$	(11,009,231	)
Deconsolidation of VIEs - (Note 3)	15,881			—	1,572,185			1,736,388			—			3,324,454			1,588,066
Consolidation of VIEs - (Note 3)	27,523			—	2,724,760			—			—			2,752,283			2,752,283
Distributions paid or accrued	(29,298		)	—	(2,730,366		)	—			—			(2,759,644		)	—
Comprehensive income:
Net Income (loss)	10,386			—	1,028,168			(691,162		)	(1,542		)	345,850			—
Unrealized gain on securities	9,002			—	891,214			—			—			900,216			900,216
Comprehensive income														1,246,066
Comprehensive loss attributable to noncontolling interest	—			—	—			—			—			(1,542		)	—
Comprehensive income attributable to Partnership	—			—	—			—			—			1,247,608			—
Balance at March 31, 2010	$	304,545		21,842,928	$	133,968,842		$	(31,170,471	)	$	60,963		$	103,163,879		$	(5,768,666	)



	For the periods ended,
	March 31, 2011			March 31, 2010
Cash flows from operating activities:
Net income	$	1,371,235		$	345,850
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization expense	1,225,565			1,197,017
Non-cash loss on derivatives	232,554			115,030
Bond discount amortization	(116,858		)	—
Gain on asset sold	(21,103		)	—
Gain on early extinquishment of debt	(104,988		)
Changes in operating assets and liabilities, net of effect of acquisitions
Increase in interest receivable	(1,223,846		)	(1,056,569		)
(Increase) decrease in other assets	(1,056,661		)	(1,030,635		)
Decrease in accounts payable, accrued expenses and other liabilities	(529,422		)	(386,872		)
Net cash used by operating activities	(223,524		)	(816,179		)
Cash flows from investing activities:
Acquisition of tax-exempt mortgage revenue bonds	(4,492,500		)	—
Acquisition of partnerships, net of cash acquired	(20,758,476		)	—
Capital expenditures	(930,797		)	(170,374		)
Proceeds from assets sold	36,500
Increase in restricted cash	(125,259		)	(1,625,158		)
Restricted cash - debt collateral (paid) released	732,403			(4,675,919		)
Cash released upon foreclosure	2,047,161			—
Transfer of cash to unconsolidated VIE upon unconsolidation	—			(88,949		)
Transfer of cash from consolidated VIE upon consolidation	—			1,977
Principal payments received on tax-exempt mortgage revenue bonds	101,349			25,000
Net cash used by investing activities	(23,389,619		)	(6,533,423		)
Cash flows from financing activities:
Distributions paid	(3,803,399		)	(2,757,945		)
Increase in liabilities related to restricted cash	125,259			1,625,158
Proceeds from debt financing	27,500,584			—
Principal payments on debt financing and mortgages payable	(159,464		)	(199,025		)
Net cash provided (used) by financing activities	23,662,980			(1,331,812		)
Net increase (decrease) in cash and cash equivalents	49,837			(8,681,414		)
Cash and cash equivalents at beginning of period	13,277,048			17,280,535
Cash and cash equivalents at end of period	$	13,326,885		$	8,599,121

Cash paid during the period for interest	$	816,171		$	751,303
Distributions declared but not paid	$	3,803,399		$	2,759,664
Capital expenditures financed through accounts payable	9,601			—

America First Tax Exempt Investors, L.P. (the “Partnership”) was formed on April 2, 1998 under the Delaware Revised Uniform Limited Partnership Act for the primary purpose of acquiring, holding, selling and otherwise dealing with a portfolio of federally tax-exempt mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential properties. Interest on these bonds is excludable from gross income for federal income tax purposes. As a result, most of the income earned by the Partnership is exempt from federal income taxes. The Partnership may also invest in other types of tax-exempt securities that may or may not be secured by real estate and may make taxable mortgage loans secured by multifamily properties which are financed by tax-exempt mortgage revenue bonds held by the Partnership. The Partnership generally does not seek to acquire direct interests in real property as long term or permanent investments. The Partnership may, however, acquire real estate securing its tax-exempt mortgage revenue bonds or taxable mortgage loans through foreclosure in the event of a default. In addition, the Partnership may acquire interests in multifamily apartment properties (“MF Properties”) in order to position itself for future investments in tax-exempt bonds issued to finance these properties.

The consolidated financial statements of the “Company” reported in this Form 10-Q include the assets, liabilities and results of operations of the Partnership, its Consolidated Subsidiaries and four other consolidated entities in which the Partnership does not hold an ownership interest but which own multifamily apartment properties financed with tax-exempt bonds held by the Partnership and which are treated as variable interest entities ("VIEs") of which the Partnership has been determined to be the primary beneficiary (“Consolidated VIEs”). The Consolidated Subsidiaries of the Partnership consist of:

Stand alone financial information of the Partnership reported in this Form 10-Q includes only the assets and results of operations of the Partnership and its Consolidated Subsidiaries (hereafter the “Partnership”) without the Consolidated VIEs. In the Company’s consolidated financial statements, all transactions and accounts between the Partnership, the Consolidated Subsidiaries and the Consolidated VIEs have been eliminated in consolidation. The Partnership does not believe that the consolidation of VIEs for reporting under accounting principles generally accepted in the United States of America (“GAAP”) affects the Partnership’s status as a partnership for federal income tax purposes or the status of unitholders as partners of the Partnership, the treatment of the tax-exempt bonds on the properties owned by Consolidated VIEs as debt, the tax exempt nature of the interest payments received on bonds secured by the properties owned by Consolidated VIEs or the manner in which the Partnership’s income is reported to unitholders on IRS Form K-1.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying interim unaudited condensed consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted according to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. These condensed consolidated financial statements and notes have been prepared consistently with the 2010 Form 10-K. In the opinion of management, all adjustments (consisting of normal and recurring accruals) necessary to present fairly the financial position as of March 31, 2011, and the results of operations for the interim periods presented have been made. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year.

The Agreement of Limited Partnership of the Partnership contains provisions for the distribution of Net Interest Income, Net Residual Proceeds and Liquidation Proceeds, for the allocation of income or loss from operations and for the allocation of income and loss arising from a repayment, sale or liquidation of investments. Income and losses will be allocated to each unitholder on a periodic basis, as determined by the General Partner, based on the number of BUCs held by each unitholder as of the last day of the period for which such allocation is to be made. Distributions of Net Interest Income and Net Residual Proceeds will be made to each unitholder of record on the last day of each distribution period based on the number of BUCs held by each unitholder as of such date. For purposes of the Agreement of Limited Partnership, cash distributions, if any, received by the Partnership from its indirect interest in MF Properties (Note 5) will be included in the Partnership’s Interest Income and cash distributions received by the Partnership from the sale of such properties will be included in the Partnership Residual Proceeds.

Cash distributions are currently made on a quarterly basis but may be made on a monthly or semiannual basis at the election of AFCA 2. On each distribution date, Net Interest Income is distributed 99% to the unitholders and 1% to AFCA 2 and Net Residual Proceeds are distributed 100% to unitholders except that Net Interest Income and Net Residual Proceeds representing contingent interest in an amount equal to 0.9% per annum of the principal amount of the mortgage bonds on a cumulative basis (defined as Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2), respectively) are distributed 75% to the unitholders and 25% to AFCA 2.

In June 2010, the Company completed a sales transaction whereby four of the MF Properties, Crescent Village, Post Woods (I and II) and Willow Bend apartments in Ohio (the “Ohio Properties”), were sold to three new ownership entities controlled by an unaffiliated not-for-profit entity. The Company acquired 100% of the $18.3 million tax-exempt mortgage revenue bonds issued by the Ohio Housing Finance Agency as part of a plan of financing for the acquisition and rehabilitation of the Ohio Properties. The tax-exempt mortgage bonds secured by the Ohio Properties were acquired by the Company at par and consisted of two series. The Series A bond has a par value of $14.7 million and bears interest at an annual rate of 7.0%. The Series B bond has a par value of $3.6 million and bears interest at an annual interest rate of 10.0%. Both series of bonds mature in June 2050. The Company had previously acquired a 99% interest in the Ohio Properties as part of its strategy of acquiring existing multifamily apartment properties that it expects will be partially financed with new tax-exempt mortgage bonds at the time the properties become eligible for the issuance of additional low-income housing tax credits. In addition to the new tax-exempt bonds acquired by the Company, the plan of financing for the acquisition included other subordinated debt issued by the Company. The new owners ultimately plan to sell limited partnership interests in the properties and syndicate LIHTCs as part of the overall plan of finance. The new owners have not contributed any capital to the transaction and the Company has effectively provided 100% of the capital structure to the new owners as part of the sale transaction. Pursuant to the guidance on property, plant, and equipment for real estate sales, the sale and restructure does not meet the criteria for derecognition of the properties or full accrual accounting for the gain. treatment as a sale. The guidance requires sufficient equity capital as part of a sales transaction to indicate a commitment from

the buyer (typically a minimum of 3 to 5% investment by the new owners). As the buyer has no equity capital in this transaction and the property operations are the current support for the debt service, the Company, in substance, remains the owner for accounting purposes. As such, the Company will continue to consolidate the Ohio Properties as if the sale was not completed. Under the sales agreement, the Ohio properties were sold for a total purchase price of $16.2 million. Cash received by the selling limited partnerships as part of the sale transaction represents a gain on the sale transaction of approximately $1.8 million. The properties will continue to be presented as MF Properties and no gain will be recognized until such time as the transaction meets the criteria for derecognition of the properties and gain recognition can be accounted for as a sale.

The Partnership invests in federally tax-exempt mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential apartments. The Partnership owns 100% of these bonds and each bond is secured by a first mortgage on the property. The Partnership has also made taxable loans to the property owners in certain cases which are secured by second mortgages on these properties. Although each multifamily property financed with tax-exempt mortgage bonds held by the Partnership is owned by a separate entity in which the Partnership has no equity ownership interest, the debt financing provided by the Partnership creates a variable interest in these ownership entities that may require the Partnership to report the assets, liabilities and results of operations of these entities on a consolidated basis under GAAP.

The Partnership does not hold an equity interest in these VIEs and, therefore, the assets of the VIEs cannot be used to settle the general commitments of the Partnership and the Partnership is not responsible for the commitments and liabilities of the VIEs. The primary risks to the Partnership associated with these VIEs relate to the entities ability to meet debt service obligations to the Partnership and the valuation of the underlying multifamily apartment property which serves as bond collateral.

In January 2011 the Partnership determined it was the primary beneficiary of the the following properties: Bent Tree, Fairmont Oaks, Iona Lakes, Lake Forest, DeCordova and Weatherford and reported these as Consolidated VIEs. Once the foreclosure noted above was completed, only four properties meet the primary beneficiary criteria, Bent Tree, Fairmont Oaks, Iona Lakes, and Lake Forest. The capital structure of each of these VIEs consists of senior debt, subordinated debt and equity capital. The senior debt is in the form of a tax-exempt multifamily housing mortgage revenue bond and accounts for the majority of the VIEs' total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents. The equity ownership of three of these entities, Bent Tree, Fairmont Oaks, and Lake Forest, is ultimately held by corporations which are owned by four individuals, three of which are related parties.

The Iona Lakes Consolidated VIE has entered into a merger agreement with Agape Iona Lakes Inc ("AIL"), a Florida not-for-profit affiliated with American Agape Foundation ("AAF"), whereby Iona Lakes will be merged into AIL and AIL will be the surviving entity. This transaction is pending and is subject to a contingency to the merger under which AIL and AAF must obtain a tax abatement by July 31, 2011. If the tax abatement is not obtained the merger will not be completed. The Partnership will monitor and re-evaluate this pending transaction as circumstances change. Should the merger be completed the Partnership will re-evaluate the this entity pursuant to the applicable consolidation guidance.

In determining the primary beneficiary of these VIEs, the Partnership considered the activities of the VIE which most significantly impact the VIEs economic performance, who has the power to control such activities, the risks which the entities were designed to create, the variability associated with those risks and the interests which absorb such variability. The Partnership also considered the related party relationship of the entities involved in the VIEs. It was determined that the Partnership, as part of the related party group, met both of the primary beneficiary criteria and was the most closely associated with the VIEs and, therefore, was determined to be the primary beneficiary.

As a result of adopting the new accounting guidance in 2010, we deconsolidated two entities, the Ashley Square and Cross Creek VIEs. In determining the primary beneficiary of these VIEs, the Partnership considered the activities of each VIE which most significantly impact the VIEs' economic performance, who has the power to control such activities, the risks which the entities were designed to create, the variability associated with those risks and the interests which absorb such variability. The significant activities of the VIE that impact the economic performance of the entity include leasing and maintaining apartments, determining if the property is to be sold, decisions relating to debt refinancing, the selection of or replacement of the property manager and the approval of the operating and capital budgets. As discussed below, while the capital structures of these VIEs resulted in the Partnership holding a majority of the variable interests in these VIEs, the Partnership determined it does not have the power to direct the activities of these VIEs that most significantly impact the VIEs’ economic performance and, as a result, is not the primary beneficiary of these VIEs.

Ashley Square – Ashley Square Housing Cooperative acquired the ownership of the Ashley Square apartments in December 2008 from Ashley Square LLC through a warranty deed of transfer and an assumption of debt. This transfer of ownership constitutes a reconsideration event as outlined in the consolidation guidance which triggers a re-evaluation of the holders of variable interests to determine the primary beneficiary of the VIE. The capital structure of the VIE consists of senior debt, subordinated loans and equity capital. The senior debt is in the form of tax-exempt mortgage revenue bonds that are 100% owned by the Partnership and account for the majority of the VIE’s total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents. The VIE is organized as a housing cooperative and the 99% equity owner of this VIE is The Foundation for Affordable Housing (“FAH”), an unaffiliated Nebraska non-profit organization. Additionally, this property is managed by Properties Management.

Cross Creek – Cross Creek Apartments Holdings LLC is the owner of the Cross Creek Apartments. On January 1, 2010, Cross Creek Apartment Holdings LLC entered into a new operating agreement and admitted three new members. These new members committed approximately $2.2 million of capital payable in three installments including $563,000 on January 1, 2010. The new operating agreement and admission of new owner members constitutes a reconsideration event as outlined in the consolidation guidance which triggers a re-evaluation of the holders of variable interests to determine the primary beneficiary of the VIE. The capital structure of the VIE consists of senior debt, subordinated loans and equity capital at risk. The senior debt is in the form of tax-exempt mortgage revenue bonds that are 100% owned by the Partnership and account for the majority of the VIE’s total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents. The three newly admitted members of this VIE are each unaffiliated with the Partnership and have contributed significant equity capital to the VIE. These members collectively control a 99% interest in the VIE. The other 1% member of this VIE is FAH, which is also unaffiliated with the Partnership. Additionally, this property is managed by Properties Management.

The tax exempt mortgage revenue bonds are classified on the balance sheet as available for sale investments and are carried at fair value while property loans are presented on the balance sheet as other assets and are carried at the unpaid principal and interest less any loan loss reserves. See Footnote 4 for additional information regarding the bonds and Footnote 6 for additional information regarding the property loans. The maximum exposure to loss for the bonds is equal to the unpaid principal balance as of March 31, 2011. The difference between the carrying value and the maximum exposure to loss is a function of the fair value of the bond. The maximum exposure to loss for the property loans is equal to the unpaid principal and interest. The difference between the carrying value and the maximum exposure is the value of loss reserves that have been previously recorded against the outstanding loan balances.



	Partnership as of March 31, 2011			Consolidated VIEs as of March 31, 2011			Consolidation -Elimination as of March 31, 2011			Total as of March 31, 2011
Assets
Cash and cash equivalents	$	13,236,407		$	90,478		$	—		$	13,326,885
Restricted cash	20,352,717			1,995,215			—			22,347,932
Interest receivable	11,747,200			—			(5,853,172		)	5,894,028
Tax-exempt mortgage revenue bonds held in trust, at fair value	109,655,763			—			(22,645,075		)	87,010,688
Tax-exempt mortgage revenue bonds, at fair value	36,085,633						(15,168,757		)	20,916,876
Real estate assets:
Land	9,484,734			5,150,044			—			14,634,778
Buildings and improvements	63,076,701			48,818,283			—			111,894,984
Real estate assets before accumulated depreciation	72,561,435			53,968,327			—			126,529,762
Accumulated depreciation	(5,941,838		)	(18,588,601		)	—			(24,530,439		)
Net real estate assets	66,619,597			35,379,726			—			101,999,323
Other assets	33,006,234			1,267,446			(17,112,799		)	17,160,881
Total Assets	$	290,703,551		$	38,732,865		$	(60,779,803	)	$	268,656,613

Liabilities
Accounts payable, accrued expenses and other liabilities	$	1,492,512		$	37,515,773		$	(36,195,132	)	$	2,813,153
Distribution payable	3,803,399			—			—			3,803,399
Debt financing	105,494,584			—			—			105,494,584
Mortgage payable	28,100,519			40,475,000			(40,475,000		)	28,100,519
Total Liabilities	138,891,014			77,990,773			(76,670,132		)	140,211,655
Partners' Capital
General Partner	(275,414		)	—			—			(275,414		)
Beneficial Unit Certificate holders	152,047,216			—			9,858,219			161,905,435
Unallocated deficit of Consolidated VIEs	—			(39,257,908		)	6,032,110			(33,225,798		)
Total Partners' Capital	151,771,802			(39,257,908		)	15,890,329			128,404,223
Noncontrolling interest	40,735			—			—			40,735
Total Capital	151,812,537			(39,257,908		)	15,890,329			128,444,958
Total Liabilities and Partners' Capital	$	290,703,551		$	38,732,865		$	(60,779,803	)	$	268,656,613



	Partnership as of December 31, 2010			Consolidated VIEs as of December 31, 2010			Consolidation -Elimination as of December 31, 2010			Total as of December 31, 2010
Assets
Cash and cash equivalents	$	13,095,306		$	181,742		$	—		$	13,277,048
Restricted cash	21,259,931			3,992,825			—			25,252,756
Interest receivable	10,154,676			—			(5,484,494		)	4,670,182
Tax-exempt mortgage revenue bonds held in trust, at fair value	95,400,690			—			(21,949,211		)	73,451,479
Tax-exempt mortgage revenue bonds, at fair value	47,956,608			—			(20,841,444		)	27,115,164
Real estate assets:
Land	6,736,351			6,210,480			—			12,946,831
Buildings and improvements	37,780,446			54,022,248			—			91,802,694
Real estate assets before accumulated depreciation	44,516,797			60,232,728			—			104,749,525
Accumulated depreciation	(5,229,598		)	(18,237,507		)	—			(23,467,105		)
Net real estate assets	39,287,199			41,995,221			—			81,282,420
Other assets	33,078,415			1,334,439			(17,854,654		)	16,558,200
Total Assets	$	260,232,825		$	47,504,227		$	(66,129,803	)	$	241,607,249

Liabilities
Accounts payable, accrued expenses and other	1,580,642			39,069,063			(37,121,402		)	3,528,303
Distribution payable	3,803,399			—			—			3,803,399
Debt financing	95,608,000			—			—			95,608,000
Mortgage payable	10,645,982			50,071,000			(50,071,000		)	10,645,982
Total Liabilities	111,638,023			89,140,063			(87,192,402		)	113,585,684
Partners' Capital
General Partner	(280,629		)	—			—			(280,629		)
Beneficial Unit Certificate holders	149,016,757			—			12,372,432			161,389,189
Unallocated deficit of Consolidated VIEs	—			(41,635,836		)	8,690,167			(32,945,669		)
Total Partners' Capital	148,736,128			(41,635,836		)	21,062,599			128,162,891
Noncontrolling interest	(141,326		)	—			—			(141,326		)
Total Capital	148,594,802			(41,635,836		)	21,062,599			128,021,565
Total Liabilities and Partners' Capital	$	260,232,825		$	47,504,227		$	(66,129,803	)	$	241,607,249



	Partnership For the Three Months Ended March 31, 2011			Consolidated VIEs For the Three Months Ended March 31, 2011		Consolidation -Elimination For the Three Months Ended March 31, 2011			Total For the Three Months Ended March 31, 2011
Revenues:
Property revenues	$	1,944,335		$	1,886,238	$	—		$	3,830,573
Mortgage revenue bond investment income	2,904,674			—		(683,761		)	2,220,913
Other income	146,373			3,416,838		(3,311,850		)	251,361
Total Revenues	4,995,382			5,303,076		(3,995,611		)	6,302,847
Expenses:
Real estate operating (exclusive of items shown below)	1,182,603			1,056,124		—			2,238,727
Depreciation and amortization	694,095			544,726		(13,256		)	1,225,565
Interest	825,725			1,324,298		(1,324,298		)	825,725
General and administrative	641,595			—		—			641,595
Total Expenses	3,344,018			2,925,148		(1,337,554		)	4,931,612
Net income (loss)	1,651,364			2,377,928		(2,658,057		)	1,371,235
Less: net gain attributable to noncontrolling interest	(182,061		)	—		—			(182,061		)
Net income (loss) - America First Tax Exempt Investors, L. P.	$	1,469,303		$	2,377,928	$	(2,658,057	)	$	1,189,174



	Partnership For the Three Months Ended March 31, 2010		Consolidated VIEs For the Three Months Ended March 31, 2010			Consolidation -Elimination For the Three Months Ended March 31, 2010			Total For the Three Months Ended March 31, 2010
Revenues:
Property revenues	$	1,753,591	$	1,767,902		$	—		$	3,521,493
Mortgage revenue bond investment income	2,296,285		—			(815,714		)	1,480,571
Oher income	96,932		—			—			96,932
Total Revenues	4,146,808		1,767,902			(815,714		)	5,098,996
Expenses:
Real estate operating (exclusive of items shown below)	959,702		1,096,072			—			2,055,774
Depreciation and amortization	668,858		541,415			(13,256		)	1,197,017
Interest	973,002		1,364,637			(1,345,519		)	992,120
General and administrative	508,235		—			—			508,235
Total Expenses	3,109,797		3,002,124			(1,358,775		)	4,753,146
Net income (loss)	1,037,011		(1,234,222		)	543,061			345,850
Less: net loss attributable to noncontrolling interest	1,542		—			—			1,542
Net income (loss) - America First Tax Exempt Investors, L. P.	$	1,038,553	$	(1,234,222	)	$	543,061		$	347,392



	March 31, 2011
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Ashley Square ⁽¹⁾	$	5,344,000	$	—	$	(209,558	)	$	5,134,442
Autumn Pines ⁽²⁾	12,344,647		—		(793,382		)	11,551,265
Bella Vista ⁽¹⁾	6,695,000		—		(931,810		)	5,763,190
Bridle Ridge ⁽¹⁾	7,840,000		—		(994,818		)	6,845,182
Brookstone ⁽¹⁾	7,423,421		494,537		—			7,917,958
Cross Creek ⁽¹⁾	5,926,132		1,434,029		—			7,360,161
Lost Creek ⁽¹⁾	15,959,317		805,383		—			16,764,700
Runnymede ⁽¹⁾	10,755,000		—		(1,360,507		)	9,394,493
Southpark ⁽¹⁾	11,960,464		494,442		—			12,454,906
Woodlynn Village ⁽¹⁾	4,522,000		—		(697,609		)	3,824,391
Tax-exempt mortgage revenue bonds held in trust	$	88,769,981	$	3,228,391	$	(4,987,684	)	$	87,010,688

	March 31, 2011
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gain		Unrealized Loss			Estimated Fair Value

Briarwood Manor	4,495,141		149,508		—			4,644,649
Clarkson College	5,811,667		—		(747,793		)	5,063,874
Woodland Park	15,662,000		—		(4,453,647		)	11,208,353
Tax-exempt mortgage revenue bonds	$	25,968,808	$	149,508	$	(5,201,440	)	$	20,916,876

	December 31, 2010
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gains		Unrealized Loss			Estimated Fair Value
Ashley Square ⁽¹⁾	$	5,356,000	$	—	$	(643,813	)	$	4,712,187
Bella Vista ⁽¹⁾	6,695,000		—		(1,044,554		)	5,650,446
Bridle Ridge ⁽¹⁾	7,865,000		—		(1,342,509		)	6,522,491
Brookstone ⁽¹⁾	7,418,019		287,507		—			7,705,526
Cross Creek ⁽¹⁾	5,913,776		1,337,352		—			7,251,128
Lost Creek ⁽¹⁾	15,928,741		516,094		—			16,444,835
Runnymede ⁽¹⁾	10,755,000		—		(1,545,327		)	9,209,673
Southpark ⁽¹⁾	11,940,458		264,143		—			12,204,601
Woodlynn Village ⁽¹⁾	4,522,000		—		(771,408		)	3,750,592
Tax-exempt mortgage revenue bonds held in trust	$	76,393,994	$	2,405,096	$	(5,347,611	)	$	73,451,479

	December 31, 2010
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gain		Unrealized Loss			Estimated Fair Value

Autumn Pines	$	12,334,247	$	—	$	(1,244,227	)	$	11,090,020
Clarkson College	5,836,667		—		(821,753		)	5,014,914
Woodland Park	15,662,000		—		(4,651,770		)	11,010,230
Tax-exempt mortgage revenue bonds	$	33,832,914	$	—	$	(6,717,750	)	$	27,115,164

Valuation - As all of the Company’s investments in tax-exempt mortgage revenue bonds are classified as available-for-sale securities, they are carried on the balance sheet at their estimated fair values. Due to the limited market for the tax-exempt bonds, these estimates of fair value do not necessarily represent what the Company would actually receive in a sale of the bonds. There is no active trading market for the bonds and price quotes for the bonds are not generally available. As of March 31, 2011, all of the Company’s tax-exempt mortgage revenue bonds were valued using discounted cash flow and yield to maturity analyses performed by management. Management’s valuation encompasses judgment in its application. The key assumption in management’s yield to maturity analysis is the range of effective yields on the individual bonds. At March 31, 2011, the range of effective yields on the individual bonds was 6.7% to 8.6%. Additionally, the Company calculated the sensitivity of the key assumption used in calculating the fair values of these bonds. Assuming an immediate 10 percent adverse change in the key assumption, the effective yields on the individual bonds would increase to a range of 7.3% to 9.4% and would result in additional unrealized losses on the bond portfolio of approximately $8.8 million. This sensitivity analysis is hypothetical and is as of a specific point in time. The results of the sensitivity analysis may not be indicative of actual changes in fair value and should be used with caution. If available, the general partner may also consider price quotes on similar bonds or other information from external sources, such as pricing services. Pricing services, broker quotes and management’s analyses provide indicative pricing only.

Unrealized gains or losses on these tax-exempt bonds are recorded in accumulated other comprehensive income (loss) to reflect changes in their estimated fair values resulting from market conditions and fluctuations in the present value of the expected cash flows from the underlying properties. As of March 31, 2011, all of the current bond investments except the Ashley Square, Briarwood Manor, Brookstone, Cross Creek, Lost Creek, and South Park investments have been in an unrealized loss position for greater than twelve months. The Company has reviewed each of its mortgage revenue bonds for impairment. Based upon this evaluation, the current unrealized losses on the bonds are considered to be temporary. Valuations have improved during the first quarter of 2011. If the credit and capital markets would deteriorate, the Company experiences deterioration in the values of its investment portfolio or if the Company’s intent and ability to hold certain bonds changes, the Company may incur impairments to its investment portfolio which could negatively impact the Company’s financial condition, cash flows, and reported earnings.

In February 2011, the Partnership acquired the tax-exempt mortgage revenue bond for a 100 unit multifamily apartment complex located in Montclair, California known as Briarwood Manor Apartments for approximately $4.5 million which represented 100% of the bond issuance. The bond's approximate outstanding par value is $5.5 million and earns interest at an annual rate of 5.3% with a monthly interest and principal payment and stated maturity date of June 1, 2038. Based on the purchase price discount, the bond will yield approximately 7.0% to the Partnership. The bond does not provide for contingent interest. The Company has determined that the entity which owns Briarwood Manor does not meet the definition of a VIE and, accordingly, its financial statements are not consolidated into the consolidated financial statements of the Company.

The Partnership previously identified three tax-exempt mortgage revenue bonds for which certain actions may be necessary to protect the Partnership’s position as a secured bondholder and lender. These bonds are Woodland Park, DeCordova and Weatherford. The Partnership foreclosed on the bonds secured by DeCordova and Weatherford in February 2011 and one of the Partnership's subsidiaries took full ownership of these two properties. These properties are now classified and presented as MF Properties of the Company as discussed in Note 5. The following is a discussion of the circumstances related to the Woodland Park property.

Woodland Park. Woodland Park was completed in November 2008, but remains in its initial lease-up phase and has not yet reached stabilization which is defined in the bond documents as the generation of a 1.15:1 debt service coverage ratio for six straight months. Additionally, there were insufficient funds on deposit with the bond trustee to make the debt service payment of approximately $452,000 on the bonds which was due on May 3, 2010 and the property owner did not provide additional capital to fund the shortfall. As a result, a payment default on the bonds has occurred. In order to protect its investment, the Partnership has issued a formal notice of default through the bond trustee and has started the foreclosure process. The foreclosure process is expected to take several months to complete. The Partnership would expect to remove and replace the general and limited partners of the property owner through foreclosure. This action would allow a new property owner to re-syndicate the LIHTCs associated with this property. If these LIHTCs can be successfully re-syndicated, it will provide additional capital to the project which can be used to support debt service payments on the tax-exempt mortgage revenue bonds until property operations improve to the point that sufficient cash is generated to pay any past due amounts on the bonds as well as ongoing debt service. If the re-syndication of LIHTCs is not successful, the Partnership may pursue other options including making additional taxable loans to the property or completing the foreclosure process and taking direct ownership of the property. The Partnership believes that the most significant issue in the slow lease-up of the property and its failure to achieve stabilization has been the 100% set aside of the rental units for tenants that make less than 60% of the area median income. At the request of the Partnership, in April 2010, the property owner reduced the number of units set aside for affordable tenants to 75% and began leasing 59 units to market rate tenants. Additionally, the property owner has agreed that, if needed to stabilize the property, it would further reduce the units set aside for affordable tenants to 60% thereby making an additional 35 units available to market rate tenants. As of December 31, 2010, the property had 190 units leased out of total available units of 236, or 81% physical occupancy. As of March 31, 2011, occupancy has increased

In June 2010, the Company completed a sales transaction whereby four of the MF Properties, Ohio Properties, were sold to three new ownership entities controlled by an unaffiliated not-for-profit entity. The Company acquired 100% of the $18.3 million tax-exempt mortgage revenue bonds issued by the Ohio Housing Finance Agency as part of a plan of financing for the acquisition and rehabilitation of the Ohio Properties. The tax-exempt mortgage bonds secured by the Ohio Properties were acquired by the Company at par and consisted of two series. The Series A bond has a par value of $14.7 million and bears interest at an annual rate of 7.0%. The Series B bond has a par value of $3.6 million and bears interest at an annual interest rate of 10.0%. Both series of bonds mature in June 2050. The guidance requires sufficient equity capital as part of a sales transaction to indicate a commitment from the buyer (typically a minimum of 3 to 5% investment by the new owners). As the buyer has no equity capital in this transaction and the property operations are the current support for the debt service, the Company, in substance, remains the owner for accounting purposes. As such, the Company will continue to consolidate the Ohio Properties as if the sale was not completed and the bonds are eliminated upon consolidation. (Note 2).

To facilitate its investment strategy of acquiring additional tax-exempt mortgage bonds secured by MF Properties, the Company has acquired through its various subsidiaries 99% limited partner positions in five limited partnerships and 100% member positions in three limited liability companies that own the MF Properties. The financial statements of these properties are consolidated with those of the Company. The general partners of these partnerships are unaffiliated parties and their 1% ownership interest in these limited partnerships is reflected in the Company’s consolidated financial statements as non-controlling interests. The Company expects each of these MF Properties to eventually be sold either to a not-for-profit entity or in connection with a syndication of LIHTCs. The Company expects to purchase tax-exempt mortgage revenue bonds issued by the new property owners as part of the restructuring.

On March 31, 2011 the Partnership purchased The Arboretum on Farnam Drive ("Arboretum"), a 145 unit independent senior living facility located in Omaha, Nebraska, for approximately $20.0 million plus transaction expenses of approximately $449,000. The purchase price was funded through a conventional mortgage of $17.5 million and cash on hand. The mortgage payable is with Omaha State Bank, carries a 5.25% fixed rate and matures on March 31, 2014. The Partnership intends to restructure the property operations by shifting from an entrance fee rental income model utilized by the prior ownership to a current market rent model. Upon lease-up and stabilization of the property, projected to occur within the next 12 months, the Partnership expects to sell the property to a 501(c)3 not-for-profit entity and acquire tax-exempt mortgage revenue bonds collateralized by the property.

Residences at DeCordova. This property is a senior (55+) affordable housing project located in Granbury, Texas in the Dallas-Fort Worth area. As of March 31, 2011, the property had 70 units leased out of total available units of 76, or approximately 92% physical occupancy. As of December 31, 2010, the property had 65 units leased out of total available units of 76, or 86% physical occupancy. At this time the Partnership expects to operate the property as a market rate rental property for the next 12 months when it will evaluate its options in order to recoup its investment.

Residences at Weatherford. Residences at Weatherford are currently under construction and will contain 76 units upon completion. This property is a senior (55+) affordable housing project located in Weatherford, Texas in the Dallas-Fort Worth area. The vertical construction of this property has begun and on March 31, 2011 was approximately 30% complete. The expected completion date is January, 2012. The Partnership intends to fund the construction and stabilization of the property. Further, the Partnership expects to operate the property as a market rate property and will evaluate its options in order to recoup its investment.

In June 2010, the Company completed a sales transaction whereby four of the MF Properties were sold to three new ownership entities controlled by an unaffiliated not-for-profit entity. As the buyer has no equity capital in this transaction and the property operations are the current support for the debt service, the Company, in substance, remains the owner for accounting purposes. As such, the Company will continue to consolidate the Ohio Properties as if the sale was not completed. The properties will



MF Properties
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at March 31, 2011
Arboretum	Omaha, NE	145	$	1,696,344	$	18,334,706	$	20,031,050
Eagle Ridge	Erlanger, KY	64	290,763		2,462,918		2,753,681
Meadowview	Highland Heights, KY	118	688,539		5,019,530		5,708,069
Churchland	Chesapeake, VA	124	1,171,146		6,366,175		7,537,321
Glynn Place	Brunswick, GA	128	743,996		4,644,574		5,388,570
Greens of Pine Glen	Durham, NC	168	1,744,760		5,223,796		6,968,556
Residences of DeCordova	Granbury, TX	76	527,436		4,821,912		5,349,348
Residences of Weatherford	Weatherford, TX	76	533,000		1,412,797		1,945,797
							55,682,392
Less accumulated depreciation (depreciation expense of approximately $400,000 in 2011)							(3,646,088		)
Balance at March 31, 2011							$	52,036,304

MF Properties Subject to Sales Agreement
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at March 31, 2011
Crescent Village	Cincinnati, OH	90	$	353,117	$	4,732,086	$	5,085,203
Willow Bend	Hilliard, OH	92	580,130		3,135,709		3,715,839
Postwoods	Reynoldsburg, OH	180	1,148,504		6,929,497		8,078,001
							16,879,043
Less accumulated depreciation (depreciation expense of approximately $200,000 in 2011)							(2,295,750		)
Balance at March 31, 2011							$	14,583,293



MF Properties
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at December 31, 2010
Eagle Ridge	Erlanger, KY	64	$	290,763	$	2,459,077	$	2,749,840
Meadowview	Highland Heights, KY	118	703,936		5,010,028		5,713,964
Churchland	Chesapeake, VA	124	1,171,146		6,358,531		7,529,677
Glynn Place	Brunswick, GA	128	743,996		4,636,281		5,380,277
Greens of Pine Glen	Durham, NC	168	1,744,760		5,211,465		6,956,225
							28,329,983
Less accumulated depreciation (depreciation expense of approximately $1.3 million in 2010)							(3,100,512		)
Balance at December 31, 2010							$	25,229,471

MF Properties Subject to Sales Agreement
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at December 31, 2010
Crescent Village	Cincinnati, OH	90	353,117		4,395,937		$	4,749,054
Willow Bend	Hilliard, OH	92	580,130		3,070,386		3,650,516
Postwoods	Reynoldsburg, OH	180	1,148,504		6,638,740		7,787,244
							16,186,814
Less accumulated depreciation (depreciation expense of approximately $600,000 in 2010)							(2,129,086		)
Balance at December 31, 2010							$	14,057,728

In addition to the MF Properties, the Company consolidates the assets, liabilities and results of operations of the Consolidated VIEs in accordance with the accounting guidance on consolidations. Although the assets of these VIEs are consolidated, the Company has no ownership interest in the VIEs other than to the extent they serve as collateral for the tax-exempt mortgage revenue bonds owned by the Partnership. The results of operations of those properties are recorded by the Company in consolidation but any net income or loss from these properties does not accrue to the unitholders or the general partner, but is instead included in "Unallocated deficit of Consolidated VIEs.”



Consolidated VIEs
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at March 31, 2011
Bent Tree Apartments	Columbia, SC	232	$	986,000	$	11,615,957	$	12,601,957
Fairmont Oaks Apartments	Gainsville, FL	178	850,400		8,486,299		9,336,699
Iona Lakes Apartments	Ft. Myers, FL	350	1,900,000		17,587,223		19,487,223
Lake Forest Apartments	Daytona Beach, FL	240	1,396,800		11,145,648		12,542,448
							53,968,327
Less accumulated depreciation (depreciation expense of approximately $533,000 in 2011)							(18,588,601		)
							$	35,379,726
Consolidated VIEs
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at December 31, 2010
Bent Tree Apartments	Columbia, SC	232	$	986,000	$	11,598,081	$	12,584,081
Fairmont Oaks Apartments	Gainsville, FL	178	850,400		8,431,601		9,282,001
Residences at DeCordova	Granbury, TX	76	527,436		4,761,552		5,288,988
Residences at Weatherford	Weatherford, TX	76	533,000		602,996		1,135,996
Iona Lakes Apartments	Ft. Myers, FL	350	1,900,000		17,508,844		19,408,844
Lake Forest Apartments	Daytona Beach, FL	240	1,396,800		11,136,018		12,532,818
							60,232,728
Less accumulated depreciation (depreciation expense of approximately $2.2 million in 2010)							(18,237,507		)
							$	41,995,221

In addition to the tax-exempt mortgage revenue bonds held by the Company, taxable property loans have been made to the owners of the properties which secure the bonds and are reported as Other Assets, net of allowance. The Company periodically, or as changes in circumstances or operations dictate, evaluates such taxable loans for impairment. The value of the underlying property assets is ultimately the most relevant measure of value to support the taxable loan values. The Company utilizes a discounted cash flow model in estimating a property fair value. A number of different discounted cash flow models containing varying assumptions are considered. The various models may assume multiple revenue and expense scenarios, various capitalization rates and multiple discount rates. Other information, such as independent appraisals, may be considered in estimating a property fair value. If the estimated fair value of the property after deducting the amortized cost basis of any senior tax-exempt mortgage revenue bond exceeds the principal balance of the property loan then no potential loss is indicated and no allowance for property loans is needed. If the estimated fair value of the property after deducting the amortized cost basis of any senior tax-exempt mortgage revenue bond exceeds the principle balance of the property loan then no potential loss is indicated and no allowance for loan loss is needed. In estimating the property valuation, the most significant assumptions utilized in the discounted cash flow model remained the same as discussed in the Form 10-K. There have been no changes during the first quarter 2011 that would require changes to the assumptions.



	March 31, 2011
	Outstanding Balance		Accrued Interest		Allowance			Net Taxable Loans
Foundation for Affordable Housing	$	4,450,147	$	517,170	$	—		$	4,967,317
Ashley Square	4,786,342		1,112,964		(4,709,306		)	1,190,000
Woodland Park	914,116		75,816		(989,932		)	—
Cross Creek	6,502,227		1,309,570		(4,514,043		)	3,297,754
	$	16,652,832	$	3,015,520	$	(10,213,281	)	$	9,455,071

	December 31, 2010
	Outstanding Balance		Accrued Interest		Allowance			Net Taxable Loans
Foundation for Affordable Housing	$	4,377,275	$	397,110	$	—		$	4,774,385
Ashley Square	4,786,342		1,018,634		(4,614,976		)	1,190,000
Woodland Park	914,116		46,983		(961,099		)	—
Cross Creek	6,388,227		1,119,201		(4,323,674		)	3,183,754
	$	16,465,960	$	2,581,928	$	(9,899,749	)	$	9,148,139

In March 2011, the Partnership entered into a sale and repurchase transaction with Deutsche Bank related to the Autumn Pines tax-exempt mortgage revenue bond. The transaction is structured such that Deutsche Bank purchased the Autumn Pines bond for $10.0 million plus accrued interest on March 31, 2011 and the Partnership will repurchase the Autumn Pines bond on June 30, 2011 for $10.0 million plus accrued interest. This transaction is a secured financing arrangement and is reflected as such in the financial statements. The proceeds of this structured financing were utilized to enable the Partnership to complete the recent investments in the Briarwood Manor tax-exempt bond and the Arboretum MF Property.

The Class A TEBS Certificates were issued in an initial principal amount of $95.8 million and were sold through a placement agent to unaffiliated investors. The holders of the Class A TEBS Certificates are entitled to receive regular payments of interest from Freddie Mac at a variable rate which resets periodically based on the weekly Securities Industry and Financial Markets Association (“SIFMA”) floating index rate plus certain credit, facility, remarketing and servicing fees (the “Facility Fees”). As of closing, the SIFMA rate was equal to 0.25% and the total Facility Fees were 1.9%, resulting in a total initial cost of borrowing of 2.15%. As of March 31, 2011 and December 31, 2010, the SIFMA rate was equal to 0.25% and 0.34%, respectively, resulting in a total cost of borrowing of 2.15% and 2.24%, respectively.

The general partner of the Partnership, AFCA 2, is entitled to receive an administrative fee from the Partnership equal to 0.45% per annum of the outstanding principal balance of any of its tax-exempt mortgage revenue bonds, taxable loans collateralized by real property, and other tax-exempt investments for which the owner of the financed property or other third party is not obligated to pay such administrative fee directly to AFCA 2. For the quarters ended March 31, 2011 and 2010, the Partnership paid administrative fees to AFCA 2 of approximately $201,000 and $94,500, respectively. In addition to the administrative fees paid directly by the Partnership, AFCA 2 receives administrative fees directly from the owners of properties financed by certain of the tax-exempt mortgage revenue bonds held by the Partnership. These administrative fees also equal 0.45% per annum of the outstanding principal balance of these tax-exempt mortgage revenue bonds and totaled approximately $46,000 and $67,800 for the quarters ended March 31, 2011 and 2010, respectively.

An affiliate of AFCA 2, America First Properties Management Company, LLC (“Properties Management”), provides property management services for Ashley Square Apartments, Iona Lakes Apartments, Bent Tree Apartments, Lake Forest Apartments, Fairmont Oaks Apartments, Cross Creek, Clarkson College, Woodland Park, Residences at DeCordova, Eagle Ridge, Crescent Village, Meadowview, Willow Bend, Postwoods, Churchland, Glynn Place and Greens of Pine Glen. Properties Management earned management fees of approximately $255,500 and $238,600 for the quarters ended March 31, 2011 and 2010, respectively, for the management of these properties. These property management fees are not Partnership expenses, but are paid in each case by the owner of the multifamily apartment property. However, for properties owned by entities treated as Consolidated VIEs and for MF Properties, the property management fees are reflected as real estate operating expenses on the Company’s consolidated financial statements. The property management fees are paid out of the revenues generated by all properties financed by tax-exempt bonds and taxable mortgages prior to the payment of debt service on the Partnership’s tax-exempt revenue bonds and taxable loans.



Delaware	47-0810385
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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



Large accelerated filer £	Accelerated filer Q	Non- accelerated filer £	Smaller reporting company £
		(do not check if a smaller reporting company)



	Balance Sheet Classification	Carrying Value		Maximum Exposure to Loss
Ashley Square Apartments
Tax Exempt Mortgage Revenue Bond	Bond Investment	$	5,134,442	$	5,344,000
Property Loan	Other Asset	1,190,000		5,899,306
		$	6,324,442	$	11,243,306
Cross Creek Apartments
Tax Exempt Mortgage Revenue Bond	Bond Investment	$	7,360,161	$	5,926,132
Property Loans	Other Asset	3,297,754		3,297,754
		$	10,657,915	$	9,223,886



	March 31, 2011			December 31, 2010
Property loans receivable	$	16,652,832		$	16,465,960
Less: Allowance for property loans	(10,213,281		)	(9,899,749		)
Judgment receivable	710,690			710,690
Less: Allowance for judgment receivable	(700,000		)	(700,000		)
Deferred financing costs - net	4,106,300			4,040,735
Fair value of derivative contracts	3,174,237			3,406,791
Other assets	3,430,103			2,533,773
Total Other Assets	$	17,160,881		$	16,558,200



2011	$	10,561,584
2012	945,000
2013	1,009,000
2014	1,083,000
Thereafter	91,896,000
Total	$	105,494,584


•	defaults on the mortgage loans securing our tax-exempt mortgage revenue bonds;


•	risks associated with investing in multifamily apartments, including changes in business conditions and the general economy;


•	current negative economic and credit market conditions; and


•	changes in government regulations affecting our business.


•	ATAX TEBS I, LLC, a special purpose entity owned and controlled by the Partnership, created to facilitate the Tax Exempt Bond Securitization (“TEBS”) Financing with Freddie Mac and


•	Eight multifamily apartments ("MF Properties") are owned by various Partnership subsidiaries. Such subsidiaries hold a 99% limited partner interest in five limited partnerships and 100% member positions in three limited liability companies. Three apartment properties which are subject to a sales agreement and are also reported as MF Properties – Note 2.



2011	$	4,444,857
2012	126,220
2013	6,029,442
2014	17,500,000
Thereafter	—
Total	$	28,100,519



Date Purchased	Notional Amount		Effective Capped Rate		Maturity Date	Purchase Price		Counterparty
Date Purchased	Notional Amount		Effective Capped Rate		Maturity Date	Purchase Price		Counterparty

September 2, 2010	$	31,936,667	3.00	%	September 1, 2017	$	921,000	Bank of New York Mellon

September 2, 2010	$	31,936,667	3.00	%	September 1, 2017	$	845,600	Barclays Bank PLC

September 2, 2010	$	31,936,667	3.00	%	September 1, 2017	$	928,000	Royal Bank of Canada

October 29, 2008	$	4,480,000	6.00	%	November 1, 2011