THIRD AMENDMENT TO CREDIT AGREEMENT

Exhibit 10.21C

Execution Version

THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of the 18th day of February, 2009, by and among MHI HOSPITALITY CORPORATION, MHI HOSPITALITY, L.P., MHI HOSPITALITY TRS HOLDING, INC., MHI HOSPITALITY TRS, LLC, MHI GP LLC, PHILADELPHIA HOTEL ASSOCIATES LP, BROWNESTONE PARTNERS, LLC, LOUISVILLE HOTEL ASSOCIATES, LLC, TAMPA HOTEL ASSOCIATES LLC and BRANCH BANKING AND TRUST COMPANY, as Administrative Agent, as Issuing Bank and as a Lender, KEYBANK NATIONAL ASSOCIATION and MANUFACTURERS AND TRADERS TRUST COMPANY (collectively referred to herein as the “Lenders”).

R E C I T A L S:

The Borrowers, the Guarantors, the Administrative Agent and the Lenders have entered into a certain Credit Agreement dated as of May 8, 2006, as amended by a certain First Amendment to Credit Agreement dated August 1, 2007, a certain Second Amendment to Credit Agreement dated April 15, 2008, and a certain Amendment to Second Amendment to Credit Agreement dated August 15, 2008 (referred to herein, as so amended, as the “Credit Agreement”). Capitalized terms used in this Amendment which are not otherwise defined in this Amendment shall have the respective meanings assigned to them in the Credit Agreement.

Among other things, the Borrowers and Guarantors have requested the Administrative Agent and the Lenders to amend the Credit Agreement to (i) change the definition of “Asset Value”, “Base Rate”, “Eligible Property Value”, “NOI”, “Stabilization Period” and “Total Value”, (ii) add the definition of “Debt Yield”, “Liquidity”, “Renovation Stabilized Eligible Property”, “Renovation Stabilized Hotel Property”, “Renovation Stabilization Period” and “Savannah Property”, and (iii) amend Sections 2.06(a), 5.01, 5.06(a), 5.07 and 5.28 of the Credit Agreement as set forth herein.

The Lenders, the Administrative Agent, the Guarantors and the Borrowers desire to amend the Credit Agreement upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the Recitals and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrowers, the Guarantors, the Administrative Agent and the Lenders, intending to be legally bound hereby, agree as follows:

SECTION 1. Recitals . The Recitals are incorporated herein by reference and shall be deemed to be a part of this Amendment.

SECTION 2. Calculation of Total Liabilities . The Borrowers and the Guarantors expressly agree that, for the purposes of the calculation of “Total Liabilities,” the term “trade accounts payable less than 90 days past due” within subsection (2) of the definition of Total Liabilities shall in no event include all cash dividends payable by the Company or the Operating Partnership, including without limitation any cash distributions payable to the shareholders or other equity owners of the Company or the Operating Partnership (as a result, all such cash dividends payable shall be included within the term Total Liabilities).

SECTION 3. Amendments . The Credit Agreement is hereby amended as set forth in this Section 3 .

SECTION 3.01. Amendment to Section 1.01 . The definition of “Asset Value” set forth in Section 1.01 of the Credit Agreement is amended and restated to read in its entirety in appropriate order as follows:

“Asset Value” shall be determined as of the end of each Fiscal Quarter and shall mean with respect to: (I) any Eligible Property other than the Savannah Property: (A) a Stabilized Eligible Property or Stabilized Hotel Property, (1) the NOI of such Property for the Fiscal Quarter then ending and the immediately preceding three Fiscal Quarters divided by (2) 8.5%; (B) a Newly Acquired Hotel Property, the Net Book Value of such Newly Acquired Hotel Property, plus accumulated depreciation; and (C) a Renovation Stabilized Eligible Property, the lesser of (1) the NOI of such property for the four Fiscal Quarters ending immediately prior to the commencement date of renovations with respect to such property divided by 8.5% or (2) the Appraised Value of such Renovation Stabilized Eligible Property (determined prior to the commencement of the renovation of such Eligible Property); and (II) the Savannah Property during the Renovation Stabilization Period, $33,500,000.

SECTION 3.02. Amendment to Section 1.01 . The definition of “Base Rate” set forth in Section 1.01 of the Credit Agreement is amended and restated to read in its entirety in appropriate order as follows:

“Base Rate” means for any Base Rate Advance for any day, the rate per annum equal to the greater of (i) the Prime Rate, (ii) the Federal Funds Rate, plus  ¹ / 2 of 1%; and (iii) the LIBOR Rate, plus 1%. For the purposes of determining the Base Rate, “LIBOR Rate” means the rate per annum equal to the London interbank offered rate for deposits in U.S. dollars for a one-month period, which appears on the display designated as Reuters Screen LIBOR01 Page (or such other successor page as may replace Reuters Screen LIBOR01 Page or such other service or services as may be nominated by the British Banker’s Association for the purpose of displaying London InterBank Offered Rates for U.S. dollar deposits) determined as of 11:00 a.m. London, England time. For the purposes of determining the Base Rate for any day, changes in the Prime Rate, the Federal Funds Rate and the LIBOR Rate shall be effective on the date of each such change.

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SECTION 3.03. Amendment to Section 1.01 . The definition of “Borrowing Base Certification Report” set forth in Section 1.01 of the Credit Agreement is amended and restated to read in its entirety in appropriate order as follows:

“Borrowing Base Certification Report” means a report in the form attached hereto as Exhibit N, and otherwise satisfactory to the Administrative Agent, certified by the chief financial officer or other authorized officer of the Borrowers setting forth the calculations required to establish the Eligible Property Value for each Borrowing Base Asset and the Eligible Property Value for all Borrowing Base Assets as of a specified date, all in form and detail satisfactory to the Administrative Agent. The Borrowing Base Certification Report shall include calculations of (i) NOI for each Eligible Property, (ii) any changes to the Net Book Value of each Newly Acquired Hotel Property or Renovation Stabilized Eligible Property from the preceding month and (iii) the amount of Total Unused Revolver Commitments.

SECTION 3.04. Amendment to Section 1.01 . The definition of “Debt Yield” shall be added to Section 1.01 of the Credit Agreement in appropriate alphabetical order as follows:

“Debt Yield” means at any time the ratio of (i) Consolidated EBITDA to (ii) Total Liabilities.

SECTION 3.05. Amendment to Section 1.01 . The definition of “Eligible Property Value” set forth in Section 1.01 of the Credit Agreement is amended and restated to read in its entirety in appropriate order as follows:

“Eligible Property Value” means, with respect to any Eligible Property included in the Borrowing Base for any date of determination an amount equal to: (A) prior to April 1, 2010, .70, and on and after April 1, 2010, .65, multiplied by (B): (1) in the case of a Stabilized Eligible Property or a Renovation Stabilized Eligible Property, the Asset Value of such Stabilized Eligible Property or Renovation Stabilized Eligible Property; and (2) in the case of a Newly Acquired Eligible Property, an amount equal to the lesser of (a) the Borrowing Base Acquisition Cost of such Eligible Property; or (b) 80% of the Appraised Value of such Eligible Property (determined at the time such Eligible Property is acquired by the Eligible Property Owner or such subsequent time as the Administrative Agent or the Required Lenders may reasonably request). Notwithstanding anything to the contrary in the Credit Agreement, the Eligible Property Value for any Eligible Property shall in no event be greater than the amount secured by the Mortgage applicable to such Eligible Property.

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SECTION 3.06. Amendment to Section 1.01 . The definition of “Liquidity” shall be added to Section 1.01 of the Credit Agreement in appropriate alphabetical order as follows:

“Liquidity” means at any time the sum of: (a) the amount of Unrestricted Cash of the Borrowers, plus (b) the amount by which the Borrowing Base exceeds the Total Unused Revolver Commitments up to a maximum of Five Million Dollars ($5,000,000).

SECTION 3.07. Amendment to Section 1.01 . The definition of “NOI” set forth in Section 1.01 of the Credit Agreement is amended and restated to read in its entirety in appropriate order as follows:

“NOI” shall be determined as of the end of each Fiscal Quarter and shall mean, as to any Stabilized Eligible Property, Non-Core Investment, Stabilized Hotel Property or Renovation Stabilized Eligible Property, as the case may be, the consolidated net operating income with respect to such Stabilized Eligible Property, Non-Core Investment or Stabilized Hotel Property, as the case may be, for the Fiscal Quarter then ending and the immediately preceding three Fiscal Quarters, and, with respect to a Renovation Stabilized Eligible Property, for the four Fiscal Quarters ending immediately prior to the commencement of renovations with respect to such Renovation Stabilized Eligible Property, in each case as determined in accordance with GAAP, except that (i) for purposes of determining expenses for management fees, there shall be included the greater of: (A) the actual management expenses incurred or (B) a minimum management fee equal to three percent (3%) of gross room rental revenues, and (ii) for purposes of determining capital improvements expense, there shall be included four percent (4%) of gross room rental revenue.

SECTION 3.08. Amendment to Section 1.01 . The definition of “Renovation Stabilized Eligible Property” shall be added to Section 1.01 of the Credit Agreement in appropriate alphabetical order as follows:

“Renovation Stabilized Eligible Property” means an Eligible Property during the Renovation Stabilization Period for such Eligible Property. Only one (1) Renovation Stabilized Eligible Property may exist at any time. The initial Renovation Stabilized Eligible Property is the Savannah Property.

SECTION 3.09. Amendment to Section 1.01 . The definition of “Renovation Stabilized Hotel Property” shall be added to Section 1.01 of the Credit Agreement in appropriate alphabetical order as follows:

“Renovation Stabilized Hotel Property” means a Hotel Property during the Renovation Stabilization Period for such Hotel Property. Only one (1) Renovation Stabilized Hotel Property may exist at any time. The initial Renovation Stabilized Hotel Property is the Savannah Property.

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SECTION 3.10. Amendment to Section 1.01 . The definition of “Renovation Stabilization Period” shall be added to Section 1.01 of the Credit Agreement in appropriate alphabetical order as follows:

“Renovation Stabilization Period” means for the Savannah Property or the Hotel Property owned by Brownestone Partners LLC located in Raleigh, North Carolina, as the case may be, the period of time commencing on the date upon which the renovation of such Hotel Property commences and ending on the date twelve (12) months after the date the renovation of such Hotel Property is substantially complete. Notwithstanding the foregoing, the Renovation Stabilization Period for the Savannah Property shall conclude no later than April 1, 2010.

SECTION 3.11. Amendment to Section 1.01 . The definition of “Savannah Property” shall be added to Section 1.01 of the Credit Agreement in appropriate alphabetical order as follows:

“Savannah Property” means the Hotel Property owned by Savannah Hotel Associates, L.L.C. located in Savannah, Georgia.

SECTION 3.12. Amendment to Section 1.01 . The definition of “Stabilization Period” set forth in Section 1.01 of the Credit Agreement is amended and restated to read in its entirety in appropriate order as follows:

“Stabilization Period” means for each Eligible Property or Hotel Property, as the case may be, the period of time commencing on the date such Eligible Property or Hotel Property, as the case may be, is acquired by a Loan Party or Affiliate of a Loan Party and ending on the later of: (1) April 1, 2010 or (2) the earlier of the date (a) twelve (12) months after the date the renovation of such Eligible Property or Hotel Property, as the case may be, is substantially complete, or (b) thirty (30) months after the date such Eligible Property or Hotel Property, as the case may be, is acquired by a Loan Party or an Affiliate of a Loan Party.

SECTION 3.13. Amendment to Section 1.01 . The definition of “Total Value” set forth in Section 1.01 of the Credit Agreement is amended and restated to read in its entirety in appropriate order as follows:

“Total Value” shall be determined as of the end of each Fiscal Quarter and shall mean the sum of (a) cash and cash equivalents (including funds restricted for property capital improvements) of the Borrowers and their

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Subsidiaries, determined on a consolidated basis, (b) the Asset Values of the Stabilized Hotel Properties; (c) the Asset Values of Newly Acquired Hotel Properties; (d) the Asset Values of Renovation Stabilized Hotel Properties; and (e) the Non-Core Investment Value.

SECTION 3.14. Amendment to Section 1.01 . The definition of “Unrestricted Cash” shall be added to Section 1.01 of the Credit Agreement in appropriate alphabetical order as follows:

“Unrestricted Cash” shall mean, as of any date of determination, the sum of the aggregate amount of cash not subject to or encumbered by any escrow, reserve, Lien or claim of any kind in favor of any Person.

SECTION 3.15. Amendment to Section 2.06(a) . Section 2.06(a) of the Credit Agreement is amended and restated to read in its entirety as follows:

(a) “Applicable Margin” shall be determined quarterly based upon the Total Leverage Ratio (calculated as of the last day of each Fiscal Quarter), as follows:

The Applicable Margin shall be determined effective as of the date (herein, the “Rate Determination Date”) which is 50 days after the last day of the Fiscal Quarter as of the end of which the foregoing ratio is being determined, based on the quarterly financial statements for such Fiscal Quarter, and the Applicable Margin so determined shall remain effective from such Rate Determination Date until the date which is 50 days after the last day of the Fiscal Quarter in which such Rate Determination Date falls (which latter date shall be a new Rate Determination Date); provided that (i) for the period from and including August 1, 2007, to but excluding the Rate Determination Date next following August 1, 2007, the Applicable Margin shall be (A) 0% for Base Rate Advances, and (B) 2.125% for Euro-Dollar Advances and Letter of Credit Advances, (ii) in the case of any Applicable Margin determined for the fourth and final Fiscal Quarter of a Fiscal Year, the Rate Determination Date shall be the date which is 95 days after the last day of such final Fiscal Quarter and such Applicable Margin shall be determined based upon the annual audited financial statements for the Fiscal Year ended on the last day of such final Fiscal Quarter, and (iii) if on any Rate Determination Date the

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Borrower shall have failed to deliver to the Lenders the financial statements required to be delivered pursuant to Section 5.01(a) or Section 5.01(b) with respect to the Fiscal Year or Fiscal Quarter, as the case may be, most recently ended prior to such Rate Determination Date, then for the period beginning on such Rate Determination Date and ending on the earlier of (A) the date on which the Borrowers shall deliver to the Lenders the financial statements to be delivered pursuant to Section 5.01(b) with respect to such Fiscal Quarter or any subsequent Fiscal Quarter, or (B) the date on which the Borrowers shall deliver to the Lenders annual financial statements required to be delivered pursuant to Section 5.01(a) with respect to the Fiscal Year which includes such Fiscal Quarter or any subsequent Fiscal Year, the Applicable Margin shall be determined as if the Total Leverage Ratio was more than 0.45 at all times during such period; provided that at the election of the Required Lenders, the principal amount of the Advances shall bear interest at the Default Rate. Any change in the Applicable Margin on any Rate Determination Date shall result in a corresponding change, effective on and as of such Rate Determination Date, in the interest rate applicable to each Advance and in the fees applicable to each Letter of Credit on such Rate Determination Date; provided, that no Applicable Margin shall be decreased pursuant to this Section 2.06 if a Default is in existence on the Rate Determination Date.

SECTION 3.16. Amendment to Section 5.01(c) . Section 5.01(c) of the Credit Agreement is amended and restated to read in its entirety as follows:

(c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate, substantially in the form of Exhibit M and with compliance calculations in form and content satisfactory to the Administrative Agent (a “Compliance Certificate”), of the chief financial officer of the Company (i) setting forth in reasonable detail on attached backup schedules the calculations required to establish whether the Loan Parties were in compliance with the requirements of Sections 5.03 through 5.11, inclusive, 5.14, 5.15, 5.19(a), 5.28, 5.35, 5.37 and 5.40 on the date of such financial statements, (ii) setting forth the identities of the respective Eligible Property Owners and Subsidiaries on the date of such financial statements, and (iii) stating whether any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which the Loan Parties are taking or propose to take with respect thereto;

SECTION 3.17. Amendment to Section 5.01 . The following subsection is hereby added to Section 5.01 in appropriate order as follows:

(n) as soon as available and in any event within ten (10) days of the end of each month, the monthly calculation of the following for each

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Hotel Property (including a comparison with the same month from the prior year): (i) room occupancy rates, (ii) average daily revenue per occupied room (as generally recognized in the hotel industry as “ADR”), (iii) revenue per available room and (iv) NOI;

SECTION 3.18. Amendment to Section 5.06(a) . Section 5.06(a) of the Credit Agreement is amended and restated to read in its en