GUARANTY

THIS GUARANTY dated as of September 1, 2009 (this “Guaranty”), executed and delivered by each of the undersigned and the other Persons from time to time party hereto pursuant to the execution and delivery of an Accession Agreement in the form of Annex I hereto (all of the undersigned, together with such other Persons each a “Guarantor” and collectively, the “Guarantors”) in favor of Manufacturers and Traders Trust Company, as Administrative Agent (the “Agent”) for the Lenders (as defined below) under that certain Credit Agreement dated as of September 1, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined herein shall have their respective defined meanings given them in the Credit Agreement), by and among Home Properties, L.P. (the “Borrower”), Home Properties, Inc. (the “Company”), the lenders party thereto and their assignees under Section 9.04. thereof (the “Lenders”), the Agent and the other parties thereto, for the benefit of the Agent, the Lenders and the Issuing Bank (the Agent, the Lenders and the Issuing Bank, together with their respective successors and assigns, each individually a “Guarantied Party” and collectively the “Guarantied Parties”).

WHEREAS, pursuant to the Credit Agreement, the Agent, the Lenders and the Issuing Bank have agreed to make available to the Borrower certain financial accommodations on the terms and conditions set forth in the Credit Agreement;

WHEREAS, the Borrower and each of the Guarantors, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing from the Agent, the Lenders and the Issuing Bank through their collective efforts;

WHEREAS, each Guarantor acknowledges that it will receive direct and indirect benefits from the Agent, the Lenders and the Issuing Bank’s making such financial accommodations available to the Borrower under the Credit Agreement and, accordingly, each Guarantor is willing to guarantee the Borrower’s obligations to the Agent, the Lenders and the Issuing Bank on the terms and conditions contained herein; and

WHEREAS, each Guarantor’s execution and delivery of this Guaranty is a condition to the Agent, the Lenders and the Issuing Bank’s making, and continuing to make, such financial accommodations to the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor agrees as follows:

1.            Guaranty .  (a)  Each Guarantor hereby absolutely, unconditionally and irrevocably guarantees, and each Guarantor hereby agrees to be liable for, the full, indefeasible, prompt and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all of the following (all of which are collectively referred to herein as the “Guaranteed Obligations”): (i) all obligations, liabilities and indebtedness of any kind, nature and description of the Borrower to any Guarantied Party arising at any time under the Credit Agreement or under any other Loan Document whether now existing or hereafter arising including, without limitation, principal, interest, late charges, other charges, fees, reimbursement obligations, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising after the commencement of any case with respect to the Borrower under the Bankruptcy Code or any similar statute (including, without limitation, the payment of interest and other amounts, which would accrue and become due but for the commencement of such case and including loans, interest, fees, charges and expenses related thereto and all other obligations under the Loan Documents of the Borrower or its successors to any Guarantied Party arising after the commencement of such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, (ii) all expenses (including, without limitation, reasonable attorneys’ fees and legal expenses) incurred by the Agent and/or any other Guarantied Party in connection with the preparation, execution, delivery, recording, administration, collection, liquidation, enforcement and defense of the Borrower’s and/or any Guarantor’s obligations, liabilities and indebtedness as aforesaid to the Guarantied Parties, and the rights of the Guarantied Parties in collateral, if any, under any of the Loan Documents or in any way involving claims by or against the Agent or any other Guarantied Party directly or indirectly arising out of or related to the relationships between the Borrower, the Guarantors and the Guarantied Parties under the Loan Documents, whenever such expenses are incurred, including after the commencement of any case with respect to the Borrower or the Guarantor under the Bankruptcy Code or any similar statute, except for such expenses to the extent resulting from the gross negligence of the Agent or any other Guarantied Party proven by clear and convincing evidence (and not merely a preponderance of the evidence) or willful misconduct of the Agent or any other Guarantied Party, and (iii) all other Obligations.

(b)           This Guaranty is and shall be construed to be an absolute, unconditional, irrevocable, present and continuing guaranty of payment of the Guaranteed Obligations and not of collection and the liability of each Guarantor is the liability of a surety and, is in no way conditioned or contingent upon any attempt to collect any Guaranteed Obligations from the Borrower, any other Guarantor or any other Person, to realize upon collateral, if any, or upon any other condition or contingency; and, accordingly, in the event that any of the Guaranteed Obligations shall not be paid in full when the same becomes due and payable whether by maturity, acceleration or otherwise, or at any time thereafter, the Agent, for its benefit and the benefit of the other Guarantied Parties, shall have the right to proceed against any Guarantor.  Notwithstanding the above, in the event of the commencement of any case with respect to the Borrower under the Bankruptcy Code or any similar statute (a “Bankruptcy Action”), or the Agent, for its benefit and the benefit of the other Guarantied Parties, is otherwise prohibited or delayed from taking or continuing action against the Borrower, the Agent, for its benefit and the benefit of the other Guarantied Parties, shall have the right to proceed against each Guarantor immediately without taking any action or proceeding of any kind against the Borrower, any other Guarantor or any other Person to enforce the Guarantied Parties’ rights under the Loan Documents.  This Guaranty shall continue in full force and effect until (i) the Commitments shall have terminated and (ii) all the Guaranteed Obligations have been indefeasibly paid and satisfied in full. Nothing shall discharge or satisfy the liability of the Guarantors hereunder or limit the same except the termination of the Commitments and the full and indefeasible payment and satisfaction of all Guaranteed Obligations.  At any time that the amounts received by the Agent in respect of the Guaranteed Obligations are insufficient to pay fully all of Guarantied Obligations, the Agent shall apply the amounts received in accordance with Section 2.16(b) of the Credit Agreement.

(c)           Any payment by any Guarantor shall be made to the Agent at 255 East Avenue, Rochester, New York, 14604, Attention: Ms. Lisa Plescia, Vice President (the “Payment Office”). Each Guarantor shall make all payments to the Agent on the Guaranteed Obligations free and clear of, and without deduction or withholding for or on account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions, withholding, restrictions, or conditions of any kind.

2.            Waivers .  (a)  Each Guarantor hereby waives: (i) notice of acceptance of this Guaranty, notice of the making of Loans to the Borrower, notice of the issuance of Letters of Credit at the request of the Borrower and presentment, demand, dishonor, protest, notice of protest, promptness, diligence, notice of nonpayment or default, notice of any change in Borrower’s financial condition, notice of any change in the payment terms of the Guaranteed Obligations or any part thereof, notice of any modification to the Credit Agreement or to any other Loan Document, and all other notices of any nature or kind to which the Borrower or such Guarantor might otherwise be entitled; (ii) any requirement that the Agent or any other Guarantied Party protect, secure, perfect or insure any security interest in or other lien on any assets of the Borrower or exhaust any right or action against the Borrower or any other Person or any collateral in connection with the Credit Agreement, the other Loan Documents and the transactions contemplated thereby; (iii) the filing of any claim with a court in the event of receivership of bankruptcy of the Borrower; (iv) the benefit of any statute of limitations; and (v) all demands whatsoever (and any requirement that same be made on the Borrower as a condition precedent to such Guarantor’s obligations hereunder).

(b)           Each Guarantor agrees that notwithstanding the foregoing and without limiting the generality of the foregoing if, after the occurrence and during the continuance of an Event of Default, the Guarantied Parties or any one of them is prevented by applicable law from exercising the rights of the Guarantied Parties to accelerate the maturity of the Guaranteed Obligations, to collect interest on the Guaranteed Obligations, or to enforce or exercise any other right or remedy with respect to the Guaranteed Obligations by reason of any automatic stay or otherwise, each Guarantor shall pay to the Agent, for its benefit and the benefit of the other Guarantied Parties, upon demand therefor, the amount that would otherwise have been due and payable had such rights and remedies been permitted to be exercised by the Guarantied Parties.

(c)           Each Guarantor hereby assumes responsibility for continuously keeping itself informed of the financial condition of the Borrower, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations or any part thereof that diligent inquiry would reveal. Each Guarantor hereby agrees that neither the Agent nor any other Guarantied Party shall have any duty to advise such Guarantor of information known to the Agent or any other Guarantied Party regarding Borrower’s financial or other condition or any other circumstance. In the event that the Agent or any other Guarantied Party in its sole discretion undertakes at any time or from time to time to provide any such information to the Guarantors, neither the Agent nor such other Guarantied Party shall be under any obligation to (i) undertake any investigation not a part of its regular business routine, (ii) disclose any information which, pursuant to accepted or reasonable banking or commercial finance practice, the Agent or such Guarantied Party wishes to maintain confidential or (iii) make any other or future disclosure of such information or any other information to the Guarantors.

(d)           Each Guarantor consents and agrees that neither the Agent nor any other Guarantied party shall be under any obligation to marshal any assets in favor of such Guarantor or otherwise in connection with obtaining payment of any or all of the Guaranteed Obligations from such Guarantor or from any other Person or source.

3.            Guaranty Absolute .  (a)  Each Guarantor guaranties that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Credit Agreement and the other Loan Documents, regardless of any law, regulation or order now or hereinafter in effect in any jurisdiction affecting any of such terms or the rights of the Guarantied Parties with respect thereto. The amount of the Guaranteed Obligations shall not be diminished by, and the liability of each Guarantor under this Guaranty shall be absolute and unconditional irrespective of:

(i)           Any amendment, modification, supplement, extension, renewal, restatement or waiver of all or any part of the Credit Agreement,  any of the other Loan Documents or any other document or instrument evidencing or relating to any Guaranteed Obligations, including, without limitation, extensions or any other change of time, manner or place of payment of or increase or decrease in the amount of any of the Guaranteed Obligations, and this Guaranty shall apply to the Credit Agreement and the other Loan Documents and the Guaranteed Obligations as so amended, modified, supplemented, renewed, rested or extended, increased or decreased;

(ii)           The taking, exchange, surrender and releasing of collateral, if any, or guarantees now or at any time held by or available to the Guarantied Parties for the obligations of the Borrower or any other party at any time liable on or in respect of the Guaranteed Obligations; any failure or delay by the Agent or any other Guarantied Party to protect, secure, insure, perfect or realize upon, or any negligence by the Agent or any other Guarantied Party with respect to, or any substitution or release, in whole or in part, of security, if any, for the Loan Documents or this Guaranty, hereunder or otherwise which may be held at any time by any of the Guarantied Parties or any of their respective successors or assigns;

(iii)           The exercise of, or refraining from the exercise of, except as required in this Guaranty, any rights, powers or remedies (A) against the Borrower, any Guarantor or any other Person or any assets of any of them of (B) under, or in respect of the Loan Documents or any security held by the Agent or the other Guarantied Parties, if any, with respect thereto;

(iv)           The settlement, compromise or release of, or the waiver of any default with respect to, any of the Guaranteed Obligations, any security therefor, or any liability of any other party with respect to the Guaranteed Obligations, or any subordination of the payment of the Guaranteed Obligations to the payment of any other liability of the Borrower or any other Guarantor;

(v)           Any bankruptcy, insolvency, reorganization, arrangement, adjustment, composition, liquidation, or other like proceeding relating to any Guarantor, the Borrower, any affiliate of the Guarantors or any other Person, or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding;

(vi)           Any limitation of the Borrower’s liability under the Loan Documents or any limitation of the Borrower’s liability which may now or hereafter be imposed by any statute, regulation or rule of law, or any illegality, irregularity, invalidity or unenforceability, in whole or in part, of the Loan Documents or any term thereof;

(vii)           Any sale, lease or transfer of any or all of the assets of the Borrower to any other Person;

(viii)           Any invalidity, illegality, irregularity or unenforceability of all or any part of the Credit Agreement, the Loan Documents or the Guaranteed Obligations or any other circumstance which might otherwise constitute a defense available to or legal or equitable discharge of the Borrower in respect of any of the Credit Agreement, the Loan Documents or the Guaranteed Obligations, or any Guarantor in respect of this Guaranty;

(ix)