October 31, 2006

EXHIBIT 10.20

October 31, 2006

NNN Apartment REIT Holdings, L.P.
0000 Xxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: J. Xxx Xxxxxxx

Re: Credit Agreement dated as of October 31, 2006 among NNN Apartments REIT Holdings, L.P. (“Borrower”), Wachovia Bank, National Association, as Agent, and the lenders from time to time a party thereto (the “Credit Agreement”)

Gentlemen:

     Terms used herein but not otherwise defined herein shall have the meanings set forth in the Credit Agreement. Borrower desires to obtain an advance of proceeds of the Revolving Loan and the Mezzanine Loan to acquire property commonly known as Xxxxxx Ranch. Following such acquisition, Borrower would not be able to comply with the covenants set forth in Section 9.1(a) (the Debt to Total Asset Value Ratio), Section 9.1(b) (the Fixed Charge Coverage Ratio) and Section 9.1(c) (the Implied Debt Service Coverage Ratio) (collectively, the “Financial Covenants”). Borrower has requested that the Lenders provide a temporary waiver of the Financial Covenants.

     Based upon the foregoing and subject to the execution and delivery of this letter by Borrower, Guarantors, Agent and the Lenders, this letter shall confirm that the Lenders shall waive compliance with the Financial Covenants through the period ending December 31, 2006. Until such time as the Borrower is able to comply with the Financial Covenants, Borrower shall, except as otherwise provided in the Mezzanine Loan Agreement, cause the net proceeds of any Equity Issuance (gross proceeds less reasonable and customary costs of sale and issuance paid to Persons not Affiliates of any Obligor) to be paid to the Agent under the Mezzanine Loan Agreement for the account of the applicable lenders thereunder within three days of receipt of such proceeds as a prepayment of the Mezzanine Loans.

     By execution hereof Borrower and Guarantors certify that each such Person is and will be in compliance with all covenants under the Loan Documents after the execution and delivery of this letter, and that no Default or Event of Default has occurred and is continuing.

     Except as hereinabove set forth, all terms, covenants and provisions of the Credit Agreement and the other Loan Documents remain unaltered and in full force and effect and the parties hereto do hereby expressly ratify and confirm the Credit Agreement and the other Loan Documents. Nothing in this letter shall be deemed or construed to constitute, and there has not otherwise occurred, a novation, cancellation, satisfaction, release, extinguishment, or substitution of the indebtedness evidenced by the Notes or the other obligations of Borrower and Guarantors under the Loan Documents. By execution hereof, Borrower and Guarantors acknowledge that the Agent and the Lenders have made no agreement, and are in no way obligated, to grant any future extension, waiver, indulgence or consent. This letter shall constitute a Loan Document. This letter may be executed in any number of counterparts which shall together constitute but one and the same agreement.

NNN Apartment REIT Holdings, L.P.
October 31, 2006
Page 2

		LENDERS:
		WACHOVIA BANK, NATIONAL ASSOCIATION, individually and as Agent
		By:		/s/ Xxxxx X. Xxxxx
		Name: Xxxxx X. Xxxxx
		Title: Managing Director

		BORROWER:
		NNN APARTMENT REIT HOLDINGS, L.P.,a Virginia limited partnership
		By:		NNN Apartment REIT, Inc., a Maryland corporation, its General Partner
				By:		/s/ Xxxxxxx K S Xxxxxxx
				Name: Xxxxxxx K S Xxxxxxx
				Title: Chief Financial Officer

[SIGNATURES CONTINUED ON NEXT PAGE]

NNN Apartment REIT Holdings, L.P.
October 31, 2006
Page 3

GUARANTORS:

NNN APARTMENT REIT, INC., a Maryland corporation

By:

/s/ Xxxxxxx K S Xxxxxxx

Name: Xxxxxxx K S Xxxxxxx

Title: Chief Financial Officer

APARTMENT REIT XXXXXX RANCH, LP, a Texas limited partnership

By:

Apartment REIT Xxxxxx Ranch GP, LLC, a Delaware limited liability company, its General Partner

By:

NNN Apartment REIT Holdings, L.P., a Virginia limited partnership, its Manager

By:

NNN Apartment REIT, Inc., a Maryland corporation, its General Partner

By:

/s/ Xxxxxxx K S Xxxxxxx

Name: Xxxxxxx K S Xxxxxxx

Title: Chief Financial Officer

APARTMENT REIT XXXXXX RANCH, GP, LLC,

a Delaware limited liability company

By:

NNN Apartment REIT Holdings, L.P., a Virginia limited partnership, its Manager

By:

NNN Apartment REIT, Inc., a Maryland corporation, its General Partner

By:

/s/ Xxxxxxx K S Xxxxxxx

Name: Xxxxxxx K S Xxxxxxx

Title: Chief Financial Officer