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AMERICA FIRST TAX EXEMPT MORTGAGE FUND ANNOUNCES FORMATION OF REAL ESTATE INVESTMENT TRUST

 OMAHA, Neb., May 7 /PRNewswire/ -- America First Tax Exempt Mortgage Fund Limited Partnership (NASDAQ-NMS: AFTXZ) announced today that it has formed a subsidiary company, America First REIT Inc. (AMEX: AFR), a real estate investment trust and will transfer seven of its properties into the REIT. The Partnership will retain seven tax-exempt mortgages in its portfolio. Investors of record will own 100 percent of the America First Tax Exempt Mortgage Fund beneficial unit certificates (BUCs) and 100 percent of the REIT shares.
 Michael Yanney, chairman of the America First Companies, said that in this instance, "the value of the two parts is greater than the whole." According to Yanney, "By utilizing the REIT format, investors will have the possibility of achieving greater returns than if the acquired properties remained in the limited partnership which was structured to manage tax-exempt mortgages. Unlike the limited partnership, the REIT will have the ability to grow through future public stock offerings and the use of a limited amount of leverage to purchase additional properties. By separating the original portfolio into two entities, we can operate the America First Tax Exempt Mortgage Fund as a tax-exempt investment as originally intended and, at the same time, offer our investors an opportunity to increase their overall return through participation in the equity REIT."
 On or about May 31, 1993, investors in the Tax Exempt Mortgage Fund will automatically be issued one share of REIT stock for every four beneficial unit certificates they hold as of the record date -- May 21, 1993. Investors will continue to own the same assets, and the combined book value of the BUCs and the REIT shares will approximate the value of the BUCs before the assets were separated. The partnership BUCs will continue to trade on the NASDAQ National Market System and cash distributions will continue on a monthly basis at the rate of 54 cents per BUC annualized. The REIT shares have been approved for listing on the American Stock Exchange under the symbol AFR. The REIT expects to pay quarterly dividends of approximately 90 percent of the REIT's funds from operations (anticipated to be approximately $1.50 per share during the first year).
 "We believe that the long-term outlook for multifamily housing is brighter than it has been since the mid-1980s. Due to a lack of funds available for construction financing, multifamily housing starts have dropped dramatically while the population of renters has continued to grow. The supply-demand imbalance is being resolved in favor of existing multifamily properties. The strengthening rental market and America First's ongoing commitment in managing the seven properties being transferred to the REIT have resulted in an average occupancy at the properties of 92 percent as of December 31, 1992." Yanney added, "Combining its ability to acquire properties at attractive prices with today's low interest rates, the REIT will be in a position to grow and increase its value."
 It is expected that the REIT will pay quarterly dividends commencing on Oct. 31, 1993, to holders of record as of Sept. 30, 1993. Cash distributions on the Tax Exempt Mortgage Fund will continue to be paid on a monthly basis.
 -0- 5/7/93
 /CONTACT: Maurice Cox of America First, 402-444-1630/
 (AFTXZ AFR)


CO: America First Tax Exempt Mortgage Fund Limited Partnership; America
 First REIT inc. ST: Nebraska IN: FIN SU:


MC -- DV002 -- 5875 05/07/93 10:53 EDT
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Publication:PR Newswire
Date:May 7, 1993
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