UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 13G

                    Under the Securities Exchange Act of 1934
                               (Amendment No. 1)*

                     AFFORDABLE RESIDENTIAL COMMUNITIES INC
                                (Name of Issuer)

                     Common Stock, par value $0.01 per share
                         (Title of Class of Securities)

                                    008273104
                                 (CUSIP Number)

                                December 31, 2006
                      (Date of Event which Requires Filing
                               of this Statement)

Check the appropriate box to designate the rule pursuant to which this Schedule
is filed:

                               [X]     Rule 13d-1(b)
                               [ ]     Rule 13d-1(c)
                               [ ]     Rule 13d-1(d)

*The  remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for any  subsequent  amendment  containing  information  which  would  alter the
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 ("Act") or otherwise  subject to the liabilities of that section of the Act
but  shall be  subject  to all other  provisions  of the Act  (however,  see the
Notes).

                          Continued on following pages
                               Page 1 of 10 Pages
                              Exhibit Index: Page 8





                                 SCHEDULE 13G/A

CUSIP NO. 008273104                                           Page 2 of 10 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only)

                  PERRY CORP.

2        Check the Appropriate Box If a Member of a Group (See Instructions)
                                           a.    [  ]
                                           b.    [  ]

3        SEC Use Only

4        Citizenship or Place of Organization

                  NEW YORK

                            5             Sole Voting Power
        Number of                                  4,091,246
          Shares
       Beneficially         6             Shared Voting Power
         Owned By                                  0
           Each
        Reporting           7             Sole Dispositive Power
          Person                                   4,091,246
           With
                            8             Shared Dispositive Power
                                                   0

9        Aggregate Amount Beneficially Owned by Each Reporting Person

                                    4,091,246

10       Check Box If the Aggregate Amount in Row (9) Excludes Certain
         Shares (See Instructions)

                                    [  ]

11       Percent of Class Represented By Amount in Row (9)

                                    9.90%

12       Type of Reporting Person (See Instructions)

                                    IA, CO



                                 SCHEDULE 13G/A

CUSIP NO. 008273104                                           Page 3 of 10 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only)

                  RICHARD C. PERRY

2        Check the Appropriate Box If a Member of a Group (See Instructions)
                                           a.    [  ]
                                           b.    [  ]

3        SEC Use Only

4        Citizenship or Place of Organization

                  UNITED STATES

                            5             Sole Voting Power
        Number of                                  4,091,246
          Shares
       Beneficially         6             Shared Voting Power
         Owned By                                  0
           Each
        Reporting           7             Sole Dispositive Power
          Person                                   4,091,246
           With
                            8             Shared Dispositive Power
                                                   0

9        Aggregate Amount Beneficially Owned by Each Reporting Person

                                    4,091,246

10       Check Box If the Aggregate Amount in Row (9) Excludes Certain
         Shares (See Instructions)

                                    [  ]

11       Percent of Class Represented By Amount in Row (9)

                                    9.90%

12       Type of Reporting Person (See Instructions)

                                    IN, HC






                                 SCHEDULE 13G/A

CUSIP NO. 008273104                                           Page 4 of 10 Pages


Item 1(a)   Name of Issuer:

            Affordable Residential Communities Inc. (the "Issuer").

Item 1(b)   Address of the Issuer's Principal Executive Offices:

            7887 E. Belleview Avenue, Suite 200
            Englewood, CO 80111

Item 2(a)   Name of Person Filing:

            This  statement is filed on behalf of each of the following  persons
(collectively, the "Reporting Persons"):

            i)  Perry Corp.; and

            ii) Richard C. Perry, in his capacities as the President
                and sole stockholder of Perry Corp. ("Mr. Perry").

            This  statement  relates to Shares (as defined  herein) held for the
accounts of two or more private  investment  funds for which Perry Corp. acts as
general partner and/or managing member of the general partner and/or  investment
adviser.

Item 2(b)   Address of Principal Business Office or, if None, Residence:

            The  address  of  the  principal  business  office  of  each  of the
Reporting Persons is 767 Fifth Avenue, New York, New York 10153.

Item 2(c)   Citizenship:

            1)  Perry Corp. is a New York corporation; and

            2)  Mr. Perry is a citizen of the United States.

Item 2(d)   Title of Class of Securities:

            Common Stock, $0.01 par value per share (the "Shares").

Item 2(e)   CUSIP Number:

            008273104

Item 3.     If this statement is filed pursuant to Rule 13d-1(b), or 13d-2(b) or
            (c), check whether the person filing is a:

            i)  Perry Corp. is an investment adviser registered under
                Section 203 of the Investment Advisers Act of 1940.

            ii) Mr. Perry is a control person of Perry Corp.




                                 SCHEDULE 13G/A

CUSIP NO. 008273104                                           Page 5 of 10 Pages


Item 4.     Ownership:

Item 4(a)   Amount Beneficially Owned:

            As of the Date of Event, each of the Reporting Persons may be deemed
to be the beneficial owner of 4,091,246 Shares.

Item 4(b)   Percent of Class:

            As of the  November 3, 2006,  the number of Shares  outstanding  was
41,318,618  according to the Issuer's Form 10-Q filed on November 6, 2006. As of
the  Date of  Event,  each of the  Reporting  Persons  may be  deemed  to be the
beneficial  owner  of  approximately   9.90%  of  the  total  number  of  Shares
outstanding.

Item 4(c)   Number of shares as to which such person has:




            Perry Corp.
            ----------
                                                                            
            (i)      Sole power to vote or direct the vote                      4,091,246

            (ii)     Shared power to vote or to direct the vote                         0

            (iii)    Sole power to dispose or to direct the disposition of      4,091,246

            (iv)     Shared power to dispose or to direct the disposition of            0

            Mr. Perry
            ---------
            (i)      Sole power to vote or direct the vote                      4,091,246

            (ii)     Shared power to vote or to direct the vote                         0

            (iii)    Sole power to dispose or to direct the disposition of      4,091,246

            (iv)     Shared power to dispose or to direct the disposition of            0



Item 5.     Ownership of Five Percent or Less of a Class:

            This Item 5 is not applicable.

Item 6.     Ownership of More than Five Percent on Behalf of Another Person:

            The  limited  partners  of (or  investors  in)  each of the  private
investment  funds for which Perry Corp.  acts as general partner and/or managing
member  of the  general  partner  and/or  investment  adviser  have the right to
participate in the receipt of dividends  from, or proceeds from the sale of, the
securities  held for the accounts of their  respective  funds in accordance with
their respective  limited  partnership  interest (or investment  percentages) in
their respective funds.

 Item 7.    Identification and Classification of the Subsidiary Which Acquired
            the Security Being Reported on by the Parent Holding Company:

            Perry  Corp.  is the  relevant  entity  for which  Mr.  Perry may be
considered a control person.

            Perry Corp. is an investment adviser registered under the Investment
Advisers Act of 1940.




                                 SCHEDULE 13G/A

CUSIP NO. 008273104                                           Page 6 of 10 Pages


Item 8.     Identification and Classification of Members of the Group:

            This Item 8 is not applicable.

Item 9.     Notice of Dissolution of Group:

            This Item 9 is not applicable.

Item 10.    Certification:

            By signing below each of the Reporting  Persons  certifies  that, to
the best of such person's knowledge and belief, the securities referred to above
were  acquired  and are held in the  ordinary  course of  business  and were not
acquired  and are not held for the  purpose of or with the effect of changing or
influencing  the control of the Issuer of such  securities and were not acquired
and are not  held in  connection  with or as a  participant  in any  transaction
having such purpose or effect.





                                 SCHEDULE 13G/A

CUSIP NO. 008273104                                           Page 7 of 10 Pages


                                   SIGNATURES


            After reasonable inquiry and to the best of my knowledge and belief,
the  undersigned  certifies that the  information set forth in this statement is
true, complete and correct.

Date:    February 12, 2007          PERRY CORP.


                                    Name:  /s/ Michael Neus*
                                           -------------------------------------
                                    By:    Richard C. Perry
                                    Title: President


Date:    February 12, 2007          RICHARD C. PERRY

                                    By:    /s/ Michael Neus*
                                           -------------------------------------

*By Michael Neus, attorney-in-fact





                                 SCHEDULE 13G/A

CUSIP NO. 008273104                                           Page 8 of 10 Pages



                                  EXHIBIT INDEX
                                                                     Page No.

A.  Joint Filing Agreement, dated as of February 12, 2007, by and
    among the Reporting Persons......................................   9

B.  Power of Attorney, dated June 21, 2005...........................  10






                                 SCHEDULE 13G/A

CUSIP NO. 008273104                                           Page 9 of 10 Pages


                                    EXHIBIT A

                             JOINT FILING AGREEMENT

            The undersigned hereby agree that the statement on Schedule 13G with
respect  to  the  Common  Stock,  par  value  $0.01  per  share,  of  Affordable
Residential  Communities  Inc.  dated  as of  February  12,  2007,  is,  and any
amendments thereto (including  amendments on Schedule 13D) signed by each of the
undersigned  shall  be,  filed  on  behalf  of  each  of us  pursuant  to and in
accordance  with the provisions of Rule 13d-1(k)  under the Securities  Exchange
Act of 1934.

Date:    February 12, 2007          PERRY CORP.


                                    Name:  /s/ Michael Neus*
                                           -------------------------------------
                                    By:    Richard C. Perry
                                    Title: President


Date:    February 12, 2007          RICHARD C. PERRY

                                    By:    /s/ Michael Neus*
                                           -------------------------------------

*By Michael Neus, attorney-in-fact




                                 SCHEDULE 13G/A

CUSIP NO. 008273104                                          Page 10 of 10 Pages


                                    EXHIBIT B

                                POWER OF ATTORNEY

            KNOW ALL MEN BY THESE PRESENT,  that I, RICHARD Perry,  hereby make,
constitute  and appoint each of PAUL LEFF and MICHAEL NEUS acting  individually,
as my agent and attorney-in-fact for the purpose of executing in my name, (a) in
my personal  capacity or (b) in my capacity as an officer of,  shareholder of or
in other  capacities  with Perry Corp.  ("Perry") and each of its  affiliates or
entities  advised  by me or Perry,  all  documents,  certificates,  instruments,
statements,  filings and agreements  ("documents") to be filed with or delivered
to any  foreign or  domestic  governmental  or  regulatory  body or  required or
requested  by any other  person or entity  pursuant  to any legal or  regulatory
requirement relating to the acquisition, ownership, management or disposition of
securities,  futures  contracts or other  investments,  and any other  documents
relating or  ancillary  thereto,  including  without  limitation  all  documents
relating to filings with the Commodity  Futures Trading  Commission and National
Futures  Association,  the United States Securities and Exchange Commission (the
"SEC") pursuant to the Securities Act of 1933 or the Securities  Exchange Act of
1934 (the "Act") and the rules and regulations promulgated thereunder, including
all documents relating to the beneficial  ownership of securities required to be
filed with the SEC pursuant to Section 13(d) or Section 16(a) of the Act and any
information statements on Form 13F required to be filed with the SEC pursuant to
Section 13(f) of the Act.

            All  past  acts of these  attorneys-in-fact  in  furtherance  of the
foregoing are hereby ratified and confirmed.

            This power of  attorney  shall be valid from the date  hereof  until
revoked by me.

            IN WITNESS  WHEREOF,  I have executed this instrument as of the 21st
day of June 2005.

                                           /s/ Richard Perry
                                           -------------------------------------
                                           Richard Perry