AMENDMENT NO. 3 TO MASTER REIMBURSEMENT AGREEMENT

THIS AMENDMENT NO. 3 TO MASTER REIMBURSEMENT AGREEMENT (this Amendment No. 3) amends that certain Master Reimbursement Agreement made and entered into as of June 1, 2001, by and among Fannie Mae, Mid-America Apartments, L.P. and Fairways-Columbia, L.P. (as amended, the Master Reimbursement Agreement) and is made and entered into as of March 2, 2004 by and among Fannie Mae, Mid-America Apartments, L.P. Mid-America Apartment Communities, Inc. and Mid-America Apartments of Texas, L.P. All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Master Reimbursement Agreement.

RECITALS

WHEREAS, Fannie Mae, Mid-America Apartments, L.P. and Mid-America Apartment Communities, Inc. are parties to the Master Reimbursement Agreement;

WHEREAS, Mid-America Apartments, L.P. and Mid-America Apartment Communities, Inc. have requested and Fannie Mae has agreed to add three Additional Mortgaged Properties to the Collateral Pool;

WHEREAS, Fannie Mae, Mid-America Apartments, L.P. and Mid-America Apartment Communities, Inc. desire to amend the Master Reimbursement Agreement to add certain provisions and to add the following Additional Mortgaged Properties to the Collateral Pool: (a) Park at Hermitage Apartments in Davidson County, Tennessee, (b) Travis Station Apartments Project in Austin, Travis County, Texas, and (c) Stassney Woods Apartments in Austin, Travis County, Texas (the 2004 Additional Mortgaged Properties);

WHEREAS, Mid-America Apartments of Texas, L.P. owns the Mortgaged Properties known as Stassney Woods Apartments and Travis Station Apartments;

WHEREAS, Mid-America Apartments, L.P., Mid-America Apartment Communities, Inc. and Mid-America Apartments of Texas, L.P. (individually and collectively, Borrower) have each determined that being co-Borrowers under the Master Reimbursement Agreement is in each of their economic interests and each has received reasonable consideration for cross-collateralizing and cross-defaulting the Mortgaged Properties which are part of the Collateral Pool;

WHEREAS, Mid-America Apartments, L.P. and Mid-America Apartment Communities, Inc. have entered into a Contribution Agreement dated October 24, 2002, as amended, and the Borrower has entered into an amended and restated Contribution Agreement dated as of even date herewith;

Amendment No. 3 to

Master Reimbursement Agreement

Mid-America Apartments

WHEREAS, Prudential Multifamily Mortgage, Inc., a Delaware corporation (the Lender) has agreed to make a loan in the amount of $11,720,000 to Borrower pursuant to that certain Master Credit Facility Agreement dated as of the date hereof (the Credit Agreement) between Borrower and Lender, and Borrower has secured its obligations under the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement) by, among other things, granting in favor of Lender an interest in the second priority Reimbursement Mortgages on each of the 2004 Additional Mortgaged Properties known as Travis Station and Stassney Woods and a third priority Conventional Mortgage on the Additional Mortgaged Property known as Park at Hermitage;

WHEREAS, simultaneously with the closing of the issuance of the Bonds for the benefit of the 2004 Additional Mortgaged Properties, Fannie Mae has agreed to receive an assignment of Lenders rights under the Credit Agreement and its interests under the related Reimbursement Mortgages, and to purchase a 100% participation interest in each loan made by Lender to Borrower under the Credit Agreement;

WHEREAS, the obligations of Borrower to Fannie Mae under the Credit Agreement and the related Loan Documents, the Master Reimbursement Agreement and the Reimbursement Security Documents shall be cross-defaulted and cross-collateralized;

WHEREAS, Fannie Mae and Borrower intend these Recitals to be a material part of this Amendment No. 3.

NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00), the mutual covenants and agreements set forth herein, and other good and valuable consideration, all of which each party agrees constitutes sufficient consideration received at and before the execution hereof, the parties agree as follows:

AGREEMENTS

Amortization Period means the period of 30 years.

Conventional Mortgage means the third priority Security Instrument (including all riders thereto) executed by Mid-America Apartments, L.P. in favor of Lender on the Mortgaged Property known as The Park at Hermitage and any other third party Security Instrument that may be executed in the future securing the obligations of the Borrower under the Credit Agreement and the Facility Note.

Credit Agreement means the Master Credit Facility Agreement dated as of March 2, 2004 between Borrower and Lender, as the same may be amended, modified, supplemented or restated from time to time.

DMBS Loan means a Loan (as such term is defined in the Credit Agreement).

2

Amendment No. 3 to

Master Reimbursement Agreement

Mid-America Apartments

Facility Debt Service means, as of any specified date, the amount of interest and principal amortization, during the 12 month period immediately succeeding the specified date, with respect to the DMBS Loans Outstanding on the specified date, except that, for these purposes, each DMBS Loan shall be deemed to require level monthly payments of principal and interest (at the Coupon Rate for the DMBS Loan) in an amount necessary to fully amortize the original principal amount of the DMBS Loan over the Amortization Period, with such amortization deemed to commence on the first day of the 12 month period;

Facility Note means the DMBS Discount Multifamily Note in the principal amount of $11,720,000 delivered by Borrower to Lender pursuant to the Credit Agreement.

Lender shall have the meaning given that term in the Credit Agreement.

Loan Documents shall have the meaning given that term in the Credit Agreement.

2004 Additional Mortgaged Properties means: (a) Park at Hermitage Apartments in Hermitage, Tennessee, (b) Travis Station Apartments Project in Austin, Texas, and (c) Stassney Woods Apartments in Austin, Texas.

2.          Section 1.2 is hereby amended by deleting the definition of Aggregate Debt Service in its entirety and replacing such definition with the following definition:

Aggregate Debt Service means, at any time, the sum of (i) the aggregate scheduled debt service for all the Loans for the applicable period, assuming that the scheduled debt service on each Loan is equal to interest at the applicable Underwriting Rate plus principal payments required to be made to the applicable principal reserve fund relating to such Loan and (ii) the Facility Debt Service for all DMBS Loans for the applicable period; provided, however, if the interest rate on any Note has been converted to a Fixed Rate, then the assumed scheduled debt service for such Loan shall be equal to interest at such actual Fixed Rate with respect to such Loan plus the Fee Component plus principal payments and all payments required to be made to each of the principal reserve funds relating to such Loan.

3.          Section 1.2 is hereby amended by deleting the definition of Aggregate Loan to Value Ratio in its entirety and replacing such definition with the following definition:

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