MASTER CREDIT FACILITY AGREEMENT

THIS MASTER CREDIT FACILITY AGREEMENT (this Agreement) is made as of the 2nd day of March, 2004 by and among (i) Mid-America Apartments, L.P., a Tennessee limited partnership, Mid-America Apartment Communities, Inc., a Tennessee corporation and Mid-America Apartments of Texas, L.P., a Texas limited partnership (individually and collectively, Borrower), and (ii) Prudential Multifamily Mortgage, Inc., a Delaware corporation (Lender).

RECITALS

A.           Borrower owns one or more Multifamily Residential Properties (unless otherwise defined or the context clearly indicates otherwise, capitalized terms shall have the meanings ascribed to such terms in Appendix I of this Agreement) as more particularly described in Exhibit A to this Agreement.

B.           Borrower has requested that Lender make a $11,720,000 loan in favor of Borrower.

C.           To secure the obligations of Borrower under this Agreement and the other Loan Documents issued in connection with the Initial Loan, Borrower shall create a Collateral Pool in favor of Lender. The Collateral Pool shall be comprised of (i) second or third priority Security Instruments on the Multifamily Residential Properties listed on Exhibit A and (ii) any other Security Documents executed by Borrower pursuant to this Agreement or any other Loan Documents.

D.           Each Security Document shall be cross-defaulted (i.e., a default under any Security Document, or under this Agreement, shall constitute a default under each other Security Document, and this Agreement) and cross-collateralized (i.e., each Security Instrument shall secure all of Borrowers obligations under this Agreement and the other Loan Documents) and it is the intent of the parties to this Agreement that, in the exercise of its rights and remedies under the Loan Documents, Lender may, except as provided in this Agreement, exercise and perfect any and all of its rights in and under the Loan Documents with regard to any Mortgaged Property without needing to exercise and perfect its rights and remedies with respect to any other Mortgaged Property and that any such exercise shall be without regard to the Allocable Facility Amount assigned to such Mortgaged Property and that Lender may recover an amount equal to the full amount outstanding in respect of the Note in connection with such exercise and any such amount shall be applied as determined by Lender in its sole and absolute discretion.

E.            Subject to the terms, conditions and limitations of this Agreement, Lender has agreed to make the Initial Loan to Borrower.

NOW, THEREFORE, Borrower and Lender, in consideration of the mutual promises and agreements contained in this Agreement, hereby agree as follows:

Master Credit Facility Agreement

Mid-America Additions

ARTICLE I

THE LOANS

SECTION 1.01 The Loans. Subject to the terms, conditions and limitations of this Agreement, Lender agrees to make a Loan (Initial Loan) to the Borrower in an amount not exceeding $11,720,000 on the Initial Closing Date. After the Initial Closing Date, Lender may agree, in its sole discretion from time to time, to make one or more additional Loans to the Borrower subject to such terms and conditions as Lender may require in its sole discretion. The Initial Loan and any such additional Loan (a Future Loan) shall be evidenced by the Note.

Section 1.02 Loan Periods. The term of each Loan shall be divided into periods as follows:

(a)         Partial Month Period. If the Closing Date of a Loan is not the first day of a calendar month, the period from the Closing Date to the end of that calendar month is the Partial Month Period. For example, if the Loan is made on August 16, the end of the Partial Month Period is August 31.

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