EXHIBIT 10.128

                      SEVENTH AMENDMENT TO LOAN AGREEMENT

         This Seventh Amendment to Loan Agreement is effective as of January 1,
2005, by and between DIVERSICARE ASSISTED LIVING SERVICES NC II, LLC, a Delaware
limited liability company (together with its successors and assigns, the
"Borrower"), and GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation
(together with its successors and assigns, the "Lender").

                                   RECITALS:

         A. Borrower and the Lender entered that certain Loan Agreement dated
June 4, 1999, as amended by that certain First Amendment to Loan Agreement dated
as of July 1, 2002, as amended by that certain Second Amendment to Loan
Agreement dated as of October 1, 2002, as amended by that certain Third
Amendment to Loan Agreement dated as of January 1, 2003, as amended by that
certain Fourth Amendment to Loan Agreement dated as of June 18, 2003, as amended
by that Fifth Amendment to Loan Agreement dated July 1, 2003, and as further
amended by that certain Sixth Amendment to Loan Agreement dated as of June 30,
2004 (the "Agreement"). Unless otherwise defined in this Seventh Amendment,
capitalized terms shall have the meaning given to them in the Agreement.

         B. The Borrower and the Lender desire to amend the Agreement and have
agreed to execute this Seventh Amendment to evidence such modification.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above Recitals, the Borrower
and the Lender hereby amend the Agreement as follows:

         1. Paragraph 1.1, "Maturity Date", is hereby amended by changing the
date to "April 1, 2005".

         Except as expressly amended hereby, the Agreement shall remain in
full force and effect in accordance with its terms.



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         IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Seventh Amendment to be properly executed by their respective duly authorized
officers as of the date first above written.


                                             DIVERSICARE ASSISTED LIVING
                                             SERVICES NC II, LLC, a Delaware
                                             limited liability company

                                             By:  Diversicare Assisted Living
                                                  Services NC, LLC
                                             Its: Sole Member

                                             By:  /s/ Glynn Riddle
                                                --------------------------------
                                                Glynn Riddle, Vice President and
                                                Chief Financial Officer


                                             GMAC COMMERCIAL MORTGAGE
                                             CORPORATION, a California
                                             corporation

                                             By:  /s/ Laura Y. McDonald
                                                --------------------------------
                                             Its: Senior Vice President
                                                 -------------------------------



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