FREQUENTLY ASKED QUESTIONS

Who should invest in America First Tax Exempt Investors, L.P. (NASDAQ:ATAX)?
Any investor who desires stable tax-exempt income is a potential investor. Our fund has a long history of consistent distributions. Please consult your investment and/or tax advisor to discuss fully the appropriateness of ATAX as an investment.

How is the Fund structured?
America First Tax Exempt Investors, L.P. owns the underlying debt on several multi-family properties and one student housing property. The interest paid on the debt by the properties is passed through to the investors. This is why the income is federally tax-exempt.

Who can I call with questions regarding the Fund?
The toll-free number found throughout the website will dial directly to knowledgeable Fund personnel. If they cannot answer your question, they will get you in touch with someone who can-guaranteed.

Is the income from the Fund subject to Alternative Minimum Tax (AMT)?
The distributions to investors may be subject to AMT depending on the type of investments within the Fund. For further clarification, please consult your tax accountant regarding distributions and other items that may be impacted by AMT regulations.

Why did you change transfer agents?
Our previous transfer agent went through two buyouts which ultimately resulted in our customer calls being outsourced. In an effort to continue to provide stellar customer service, we believed that our transfer agent services needed to be re-centralized. After a diligent search, we chose American Stock Transfer and Trust Company and know they will provide you with excellent service.

Do I pay state tax on my distributions?
If you do not live in a state that issued any of the portfolio bonds you may be subject to state taxes. However it is important to note that because the Fund is structured as a partnership, the taxes are based on the pass-through items identified on your K-1. For further clarification, please speak with your tax accountant.

Does the subprime crisis impact the Fund?
Not directly. ATAX invests in federally tax-exempt multifamily mortgage revenue bonds. The Fund is not in the business of making mortgage loans on single family residences or investing in securities backed by such mortgages. As a result, the assets of the Fund have not been compromised by the large number of foreclosures in the “subprime” single family residential mortgage market and the resulting loss in value of mortgage-backed securities based on these types of mortgages. On the contrary, we expect that difficulties occurring in the single family mortgage market will make it more difficult for potential home buyers to obtain mortgage loans for home purchases and this could increase demand for affordable rental housing which could have a positive economic impact on multifamily apartment properties financed by the Fund.

Please explain Sarbanes-Oxley.
The Sarbanes-Oxley Act of 2002 mandates a comprehensive accounting framework for all public companies doing business in the US. Companies will be required to disclose all pertinent financial performance information publicly in a uniform, transparent manner. Any hint of subjective or creative interpretations of financial performance by companies is to be eliminated. All financial performance results must have substantiating data readily identified and easily available for follow-up audits.

What impact did FIN46R have on the fund?
The Fund’s financial results have been affected as of January 2004 by the implementation of FIN46R, which required the consolidation of certain “variable interest entities”. Management determined that the Fund was required to consolidate ten of the underlying multi-family properties. Although FIN46R decreased consolidated net income for the Fund’s 2004 accounting year, for purposes of allocating net income to the BUC holders, the impact is eliminated. Additionally, it is important to note that CAD was not adversely impacted, which is a key metric used by management to measure the Fund’s liquidity and operational performance. For further clarification, please speak with your tax accountant.

For a complete description of FIN46R, please refer to the 2004 10-K.