Edgar Filing: AMERICAN MORTGAGE ACCEPTANCE CO

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934

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AMERICAN MORTGAGE ACCEPTANCE COMPANY
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AMERICAN MORTGAGE
ACCEPTANCE COMPANY

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
on
June 8, 2005

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April 20, 2005

To the Shareholders of American Mortgage Acceptance Company:

NOTICE IS HEREBY GIVEN THAT the 2005 annual meeting of the holders of the
common shares of beneficial interest of American Mortgage Acceptance Company
(our "Company") will be held on Wednesday, June 8, 2005 at 10:00 A.M. (local
time), at the law offices of Paul, Hastings, Janofsky & Walker LLP, 75 East 55th
Street, New York, New York for the following purposes:

(1) The election of five (5) trustees for a term of one year to expire at
the 2006 annual meeting;

(2) The approval of an amendment and restatement of our Company's Second
Amended and Restated Declaration of Trust which reflects the following
significant amendments:

2a. the transfer of provisions with respect to our investment
policy from our declaration of trust to our bylaws;

2b. the transfer of provisions with respect to our operating
procedures from our declaration of trust to our bylaws; and

2c. the reduction in the vote required to approve a conversion
transaction or a roll-up from 80% to a majority vote.

(3) The adjournment or postponement of the annual meeting if necessary to
permit further solicitation of proxies if there are not sufficient
votes at the time of the annual meeting to approve the proposals;

(4) The transaction of such other business as may properly come before the
meeting.

Our board of trustees recommends a vote "FOR" each of the proposals. The
accompanying proxy statement contains additional information and should be
carefully reviewed by shareholders.

Our board of trustees has fixed the close of business on April 1, 2005 as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting and any adjournment or postponement thereof.

By Order of the Board of Trustees

/s/ Stuart J. Boesky

Stuart J. Boesky
President and Chief Executive Officer

IT IS MOST IMPORTANT THAT YOU SUBMIT YOUR PROXY EITHER BY MAIL OR ON THE
INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD. IF YOU DECIDE TO DO SO
BY MAIL, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED STAMPED,
SELF-ADDRESSED PROXY CARD.

YOUR FAILURE TO PROMPTLY RETURN THE PROXY INCREASES THE OPERATING COSTS OF YOUR
INVESTMENT.

YOU ARE CORDIALLY INVITED TO PERSONALLY ATTEND THE MEETING, BUT YOU SHOULD VOTE
BY INTERNET OR MAIL WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.

AMERICAN MORTGAGE ACCEPTANCE COMPANY
625 MADISON AVENUE
NEW YORK, NEW YORK 10022

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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS

INTRODUCTION

The accompanying form of proxy is solicited on behalf of the board of
trustees of American Mortgage Acceptance Company (which we refer to as our
"Company," "we," "our" or "us") for use at the annual meeting of shareholders to
be held Wednesday, June 8, 2005 at 10:00 A.M. (local time), at the law offices
of Paul, Hastings, Janofsky & Walker LLP, 75 East 55th Street, New York, New
York, and at any adjournment or postponement thereof. On or about April 20,
2005, we first mailed these proxy materials to holders of record of our common
shares at the close of business on April 1, 2005. Our executive offices are
located at 625 Madison Avenue, New York, New York 10022 (telephone: (212)
317-5700).

Common shares represented by properly executed proxy cards received by us
at or prior to the annual meeting will be voted according to the instructions
you indicate on the proxy card. If you do not give any instructions, the persons
named on your signed proxy card intend to vote your common shares so represented
"FOR" each of the proposals.

You may revoke your proxy and reclaim your right to vote by (i) delivering
to our secretary a written notice of revocation bearing a later date than the
date of the proxy at or prior to the annual meeting, (ii) delivering to our
secretary a duly executed, subsequently dated proxy with respect to the same
common shares at or prior to the annual meeting, or (iii) attending the annual
meeting and voting in person, although attendance at the annual meeting will
not, by itself, constitute revocation. Any written notice revoking a proxy
should be delivered at or prior to the annual meeting to the attention of the
Secretary, American Mortgage Acceptance Company, 625 Madison Avenue, New York,
New York 10022.

Our board of trustees recommends a vote "FOR" each of the proposals.

As of April 1, 2005, approximately 8,336,803 common shares were
outstanding, with each common share entitled to one vote on all matters that may
come before the annual meeting.

QUESTIONS AND ANSWERS

Q: Why am I receiving these proxy materials?

A: You are receiving these proxy materials because you are a shareholder in
our Company. Our board of trustees is asking for the right to vote your shares
as your proxy or agent at the annual meeting of our shareholders. Your shares
will be voted as you instruct on your proxy card at the annual meeting. This
proxy statement discusses the issues to be voted on. Each share you own is
entitled to one vote on each matter being voted on at the annual meeting.

Q: What am I being asked to vote on?

A: You are being asked to consider and vote upon the following proposals:

(1) The election of five (5) trustees for a term of one year to expire in
2006;

(2) The approval of an amendment and restatement of our Company's Second
Amended and Restated Declaration of Trust which reflects the following
significant amendments:

a. the transfer of provisions with respect to our investment policy
from our declaration of trust to our bylaws;

b. the transfer of provisions with respect to our operating procedures
from our declaration of trust to our bylaws; and

c. the reduction in the vote required to approve a conversion
transaction or a roll-up from 80% to a majority vote.

Q: Who is being nominated for election as a trustee?

A: The nominating committee of our board of trustees has nominated Stuart J.
Boesky, Alan P. Hirmes, Scott M. Mannes, Stanley R. Perla and Richard M. Rosan
for election as trustees at the annual meeting. Additional information about
each of the nominees is included under the heading "Proposal #1: Election of
Trustees."

Q: Why are we amending and restating the declaration of trust?

A: When our Company was originally formed, it was our intention to operate as
a closed-end, finite-life company to acquire government insured mortgage loans,
utilizing only the proceeds from our initial capital raised and no indebtedness.
When our Company was restructured to an infinite-life real estate investment
trust (a "REIT") in 1999, our shareholders voted to amend our declaration of
trust in order to accommodate our new business plan. These amendments included,
among other changes, expanding the types of investments we could make and
utilizing a defined amount of indebtedness to acquire higher yielding mezzanine
and bridge loans and other real estate related investments. However, at the time
of the restructuring, there were certain restrictions with respect to our
operating procedures that were left in our declaration of trust that we now
believe, after five years of operations as a public company, may no longer be
applicable to our Company and in any event should be left to the discretion of
our board of trustees. For these reasons, we are asking you to approve an
amendment and restatement of our declaration of trust which will give our
trustees powers substantially similar to those granted to directors of most
public companies and allow our board to amend, without the need to solicit
shareholder consent, the provisions that will be moved into the bylaws as deemed
necessary and appropriate to effectively manage our business.

Although we recommend that you adopt all of the proposed amendments to our
declaration of trust, we have divided the various amendments into three separate
proposals, as more fully discussed in the next question.

Q: What are the three (3) separate proposals to the declaration of trust that
I am being asked to vote on?

A: You are being asked to approve amending and restating our declaration of
trust by voting on the following three proposals:

a. The transfer of provisions with respect to our investment policy
from our declaration of trust to our bylaws. The first declaration of
trust proposal, "Proposal #2a - The transfer of provisions with
respect to our investment policy from our declaration of trust to our
bylaws," is asking you to approve amending the declaration of trust to
move Article VII - Investment Policy of the declaration of trust to
our bylaws. This amendment would permit our board of trustees to have
discretion over any change to the Company's investment policy. We feel
that transferring our investment policy to our bylaws will afford our
Company needed flexibility in our continued operations and expanding
business and also enable us to operate in a more efficient and
economical manner by allowing our board of trustees to react quickly
to changes in the competitive and regulatory conditions in which we
operate.

b. The transfer of provisions with respect to our operating procedures
from our declaration of trust to our bylaws. The second declaration of
trust proposal, "Proposal #2b - The transfer of provisions with
respect to our operating procedures from our declaration of trust to
our bylaws," is asking you to approve amending the declaration of
trust to transfer certain provisions related to our operating
procedures from the declaration of trust to our bylaws. These include,
for example, provisions regarding meetings of shareholders, including
quorum and voting mechanics; authority of our trustees, including
resignation and removal procedures; appointments of our officers; the
setting of record dates and voting procedures. It also includes
references to the North American Securities Administrators Association
("NASAA") guidelines, which are no longer applicable to our Company.
In light of our continuing growth and the manner in which our Company
has changed since our declaration of trust was created, such an
amendment would allow our board of trustees to exercise greater
discretion and control over the operation of our Company and provide
needed flexibility. Approving this proposal will give our board of
trustees powers substantially similar to those granted to boards of
most public companies and also allow our board to amend, without the
need to solicit shareholders consent, these operating procedures as
deemed necessary and appropriate to effectively manage our business.

c. Reduction in the vote required to approve a conversion transaction
or a roll-up from eighty percent (80%) to a majority vote. The third
declaration of trust proposal, "Proposal #2c - Reduction in the vote
required to approve a conversion transaction or a roll-up from eighty
(80%) to a majority vote," is asking you to approve amending the
declaration of trust to change the shareholder voting requirements for
approval of certain exchange offers, mergers, consolidations,
conversions, roll-ups or other similar transactions (collectively,
"Conversion or Roll-Up Transactions") from eighty percent (80%) to a
majority of the outstanding shares of our Company held by our
shareholders. We believe the eighty percent (80%) approval requirement
has the potential to unduly limit our ability to obtain approval of a
Conversion or Roll-Up Transaction which may be in the best interest of
the majority of our shareholders. If approved, this amendment would
continue to permit our shareholders to exercise discretion over such
transactions. However, undertaking a Conversion or Roll-Up Transaction
will be less costly and our Company will have the ability to obtain
such approval in a timely manner.

Q: What is the effect of Proposals #2a and #2b which transfer provisions to
the bylaws?

Two proposals, Proposal #2a and #2b, seek shareholder approval to transfer
provisions which are currently set forth in our declaration of trust into our
bylaws. The principal effect of this change will be to give our board of
trustees the ability to amend, without the need to solicit shareholder consent,
the transferred provisions as deemed necessary and appropriate to effectively
manage our business. As a result, shareholders will no longer have a vote on
whether or not certain investment policies and operating procedures can be
changed, including various restrictions which currently limit the discretion of
management and the board of trustees.

Q: Has management discussed revising or eliminating the provisions relating to
Proposals #2a and #2b after they are moved to the bylaws?

While management has discussed with the board from time to time the
elimination or revision of certain of these restrictions, neither management nor
the board of trustees has a present intention to do so (other than the NASAA
guidelines) , although, as noted above, the proposals would permit our board of
trustees to take actions on its own that

would previously have required shareholder approval if the board felt such
changes were in the best interest of our shareholders and us.

Q: What vote is required to approve the proposals?

A. The affirmative vote of the holders of a majority of the issued and
outstanding common shares entitled to vote at the annual meeting at which a
quorum is present is required to approve each of the amendments to our
declaration of trust, other than proposal #2c, which requires approval of 80% of
our common shares outstanding.

The affirmative vote of a plurality of the votes actually cast by
shareholders, in person or by proxy, and entitled to vote at the annual meeting
at which a quorum is present is required for the election of each of the trustee
nominees. The affirmative vote of the holders of a majority of the common shares
voting either in person or by proxy at the annual meeting is required to
approve, if necessary, the extension of the solicitation period and the
adjournment of the annual meeting.

Abstentions and broker non-votes will have no effect on the vote for
Proposals #1 and #3 because the vote required is a plurality and majority,
respectively, of the votes actually cast (assuming the presence of a quorum).
Abstentions and broker non-votes will be counted as votes against Proposals #2a,
#2b and #2c.

Q: Who is entitled to vote?

A: Shareholders of record as of the close of business on April 1, 2005 are
entitled to vote at the annual meeting.

Q: Does holding my stock in a brokerage account affect my entitlement to vote?

A: While your broker may vote your shares with respect to proposals #1 and
#3 even if you do not instruct your broker how to vote, your broker may only
vote your shares with respect to proposals #2a, #2b and #2c if you provide
instructions to your broker on how to vote. You should contact your broker and
ask what directions your broker will need from you. If your shares are held in
the name of a broker, and you intend to attend the annual meeting and vote your
shares in person, you must obtain a legal proxy, executed in your favor, from
your broker to be able to vote at the annual meeting.

Q: What if there are not enough votes to establish a quorum?

A: If there are not enough votes to establish a quorum or to meet the
voting requirement at the annual meeting, we may propose an adjournment or
postponement of the annual meeting for the purpose of soliciting additional
proxies. Therefore, please note that, by delivering a proxy to vote at the
annual meeting, you are also granting a proxy that can be voted in favor of any
adjournments or postponements of the annual meeting.

Q. What do I need to do now?

A: After reading this proxy statement, complete, sign and mail the enclosed
proxy card in the enclosed return envelope as soon as possible. In the
alternative, you may also submit a proxy on the Internet by following the
instructions on the enclosed proxy card. To submit a proxy on the Internet, log
on to the Internet and go to http://www.eproxyvote.com/amc, enter your
authentication number which can be found in the grey shaded box on the proxy
card and follow the directions outlined on the secure website. Even if you plan
to attend the annual meeting in person, we urge you to return your proxy card to
assure the representation of your shares at the annual meeting.

Q: Can I change my vote after I have mailed my signed proxy card?

A: Yes. You can change your vote at any time before your proxy is voted at
the annual meeting. You may do this in one of three ways. First, you can send us
a written notice stating that you revoke your proxy. Second, you can complete
and submit a new proxy card, dated a later date than the first proxy card.
Third, you can attend the annual meeting and vote in person. Your attendance at
the annual meeting will not, however, by itself revoke your proxy. If you hold
your shares in "street name" and have instructed your broker to vote your
shares, you must follow directions received from your broker to change those
instructions.

Q: Do I have dissenters' rights?

A: No dissenters' rights apply to any matter to be acted upon at this
annual meeting.

Q: How does the board of trustees recommend that I vote?

A: Our board of trustees unanimously recommends that you vote:

"FOR" The election of five (5) trustees for a term of one year to
expire in 2006; and

"FOR" The approval of an amendment and restatement of our Company's
Second Amended and Restated Declaration of Trust which reflects the
following significant amendments:

a. the transfer of provisions with respect to our investment
policy from our declaration of trust to our bylaws;

b. the transfer of provisions with respect to our operating
procedures from our declaration of trust to our bylaws; and

c. the reduction in the vote required to approve a conversion
transaction or a roll-up from 80% to a majority vote.

"FOR" The adjournment or postponement of the annual meeting if
necessary to permit further solicitation of proxies if there are
not sufficient votes at the time of the annual meeting to
approve the proposals.

Q: Who can help answer my questions?

A: If you would like additional copies of this proxy statement, or if you
would like to ask any additional questions, you should contact:

The Altman Group
1200 Wall Street West
Lyndhurst, NJ 07071
Attn: Fred Bonnell
(201) 806-7319
or
American Mortgage Acceptance Company
625 Madison Avenue
New York, New York 10022
Attn: Brenda Abuaf
(212) 317-5700

PROPOSALS BEFORE THE MEETING

Proposal #1: Election of Trustees

At the annual meeting, five trustees are to be elected for one-year terms
expiring in 2006. All of the nominees are currently trustees of our Company.
Trustees are elected by a plurality of the votes cast (assuming the presence of
a quorum consisting of a majority of holders of our common shares, whether
present in person or by proxy).

Unless holders of our common shares otherwise specify, the common shares
represented by duly executed proxies will be voted "FOR" the indicated nominees
for election as trustees. Our board of trustees has no reason to believe that
any of the nominees will be unable or unwilling to continue to serve as a
trustee if elected. However, in the event that any nominee should be unable or
unwilling to serve, the common shares represented by proxies received will be
voted for another nominee selected by our board of trustees. Our board of
trustees recommends a vote "FOR" each of the listed nominees.

The following table sets forth information with respect to each nominee
nominated to serve as a trustee for a term to expire in 2006.

Name of
Trustee/
Nominee for
Election Age Principal Occupation
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Stuart J. 48 Mr. Boesky is Chairman, President and Chief Executive
Boesky Officer of our Company and is a Director and the
President of Related AMI Associates, Inc. (our
"Advisor"). Mr. Boesky is also the Chief Executive
Officer and a Managing Trustee of CharterMac (AMEX:CHC),
Chairman of CharterMac Mortgage Capital Corporation
("CharterMac Mortgage Capital") and Managing Director of
Related Capital Company LLC ("RCC"), two of CharterMac's
subsidiaries. Mr. Boesky is responsible for our
strategic planning and new business development. He
oversees all of CharterMac's and our Company's debt
products, including CharterMac's portfolio investing and
mortgage banking operations, capital markets, strategic
planning and new product development. Mr. Boesky
practiced real estate and tax law with the law firm of
Shipley & Rothstein from 1984-1986, when he joined RCC.
From 1983-1984, he practiced law with the Boston office
of Kaye, Fialkow, Richman and Rothstein. Previously, Mr.
Boesky was a consultant at the accounting firm of
Laventhol & Horwath. Mr. Boesky graduated with high
honors from Michigan State University with a Bachelor of
Arts degree and from Wayne State School of Law with a
Juris Doctor degree. He then received a Master of Laws
degree in Taxation from Boston University School of Law.
Mr. Boesky is a regular speaker at industry conferences
and on television. Mr. Boesky is also a member of the
board of directors of the National Association of
Affordable Housing Lenders and the Investment Program
Association.

Alan P. 50 Mr. Hirmes is a managing trustee and Chief Financial
Hirmes Officer of our Company and is a Director and the Chief
Financial Officer and a Senior Vice President of our
Advisor. Mr. Hirmes is also a Managing Trustee, the
Chief Operating Officer and Chief Financial Officer of
CharterMac, the President of RCC and a Board member of
CharterMac Mortgage Capital. Mr. Hirmes is responsible
for managing the overall administration of CharterMac,
RCC and the Company, as well as any new initiatives or
special projects. In addition, Mr. Hirmes oversees RCC's
finance and accounting, human resources, information
technology and investor services departments and the
joint venture development program. Mr. Hirmes has been a
Certified Public Accountant in New York since 1978. Mr.
Hirmes currently serves as Chairman Emeritus of the
Affordable Housing Tax Credit Coalition, a national
organization dealing with issues relating to the Tax
Credit Program. He is also a member of the Advisory
Board of the Low Income Housing Tax Credit Monthly
Report and of the National Housing Conference, and he
serves on the Executive Board of the National Multi
Housing Council. Prior to joining RCC in October 1983,
Mr. Hirmes was employed by Weiner & Co., certified
public accountants, where he specialized in real estate
and partnership taxation. Mr. Hirmes graduated from
Hofstra University with a Bachelor of Arts degree.

Scott M. 45 Mr. Mannes is an independent trustee of our Company. Mr.
Mannes Mannes is a Managing Director of the Norseman Group,
LLC, which is a credit focused mezzanine lender to
single tenant property owners. Prior to Norseman, Mr.
Mannes was a principal of Drawbridge Capital, LLC, a
company providing consulting services to specialty and
consumer finance companies. Prior to Drawbridge, Mr.
Mannes was a key participant in the development and
evolution of the investment banking and merchant

banking operations during his nine-year tenure at
ContiFinancial Corporation, most notably as Co-President
of ContiFinancial Services Corporation. Prior to joining
ContiFinancial in 1990, Mr. Mannes spent seven years
with Financial Guaranty Insurance Company, developing
the first financial guaranties applied to sub-prime
mortgage loan securitizations. Mr. Mannes is a graduate
of State University of New York at Albany and received a
Master of Public Administration degree from the
Rockefeller School of Public Affairs and Policy at SUNY
Albany. Mr. Mannes is a member of the audit committee,
the chairman of the nominating and governance committee
and a member of the compensation committee.

Stanley R. 61 Mr. Perla is an independent trustee of our Company. Mr.
Perla Perla, a licensed Certified Public Accountant, was with
the firm of Ernst & Young LLP for 35 years, the last 25
of which he was a partner. His area of expertise for the
past 40 years was real estate, and he was also
responsible for the auditing of public and private
companies. Mr. Perla served as Ernst & Young's National
Director of Real Estate Accounting, as well as on Ernst
& Young's National Accounting and Auditing Committee. He
is an active member of the National Association of Real
Estate Investment Trusts and the National Association of
Real Estate Companies. Mr. Perla also served on the real
estate committees of the New York State Society of
Certified Public Accountants and the American Institute
of Certified Public Accountants. In addition, Mr. Perla
has been a frequent speaker on real estate accounting
issues at numerous real estate conferences. He is
currently on the Board of Trustees and Chairman of the
Audit Committee of Lexington Corporate Properties Trust
(NYSE:LXP) and is a Vice President and the Director of
Internal Audit of Vornado Realty Trust. Mr. Perla is the
chairman of the audit committee and is a member of the
nominating and governance committee.

Richard M. 63 Mr. Rosan is an independent trustee of our Company and
Rosan is the President of the Urban Land Institute ("ULI"), a
post he has held since 1992. ULI, a globally focused
organization with an international membership of over
20,000 real estate professionals, is considered the
preeminent "think tank" in land use development. In
addition to the duties of leading ULI, Mr. Rosan is also
the President of the ULI Foundation, the philanthropic
arm of ULI. Mr. Rosan is an architect and Fellow of the
American Institute of Architects. Prior to his service
at ULI, Mr. Rosan spent 22 years in New York City in
several capacities, including 12 years with the City of
New York, ending as its Economic Development Director,
six years as President of the Real Estate Board of New
York, and five years in the private development business
working as Project Director on several large New York
City development projects. Mr. Rosan holds a B.A. from
Williams College and a Masters of Architecture from The
School of Architecture at the University of
Pennsylvania. He completed Post Graduate work in Urban
Planning at the University of Cambridge, England. Mr.
Rosan is a member of the audit committee and the
chairman of the compensation committee.

Proposal #2: Amending and Restating our Declaration of Trust

Introduction

Our board of trustees has approved, and recommends that you authorize them
to adopt and execute, an amended and restated declaration of trust of our
Company pursuant to proposals #2a through #2c, below. The amended and restated
declaration of trust, which will be in the form attached to this proxy statement
as Appendix A, has been marked to show changes from our existing declaration of
trust.

The changes reflected in the amendment and restatement will, among other
matters:

o transfer provisions with respect to our investment policy to our bylaws;

o transfer provisions with respect to our operating procedures to our
bylaws; and

o lower the shareholder approval percentage (from 80% to a majority) for
approval of certain exchange offers, mergers, consolidations,
conversions, roll-ups or other similar transactions.

Overview of Reasons for Proposed Changes

When our Company was originally formed in 1993, it was our intention to
operate as a closed-end, finite-life real estate investment trust ("REIT") that
would acquire government insured mortgage loans, utilizing only the proceeds
from our initial capital raise and no indebtedness. When we were restructured to
an infinite-life company in 1999, our shareholders voted to amend our
declaration of trust in order to accommodate our new business plan, which
included,

among other changes, expanding the types of investments we could make and
utilizing a defined amount of indebtedness to acquire higher yielding mezzanine
and bridge loans and other real estate related investments. However, at the time
of the restructuring, there were certain restrictions with respect to our
operating procedures that were left in our declaration of trust that we now
believe, after five years of operations as a public company, may no longer be
applicable to our Company and in any event should be left to the discretion of
our board of trustees.

Many of these restrictions do not reflect the nature of our current
business plan and are based upon the guidelines of the North American Securities
Administrators Association ("NASAA"), which were applicable when we were a
non-listed entity. We are no longer required by law to be encumbered by those
restrictions.

For these reasons, we are asking you to approve an amendment and
restatement of our declaration of trust. By doing so, our trustees will be given
powers substantially similar to those granted to directors of most public
companies. It will also allow our board of trustees to amend, without the need
to solicit shareholder consent, the provisions that will be moved into the
bylaws as deemed necessary and appropriate to effectively manage our business.
We feel this will enable us to operate in a more efficient and economical manner
by allowing our board of trustees to react quickly to changes in the competitive
and regulatory environment in which we operate. If the various proposals
included in the amendment and restatement of our declaration of trust are not
approved, we may be at a competitive disadvantage if business opportunities
arise in the future which would otherwise require us to obtain shareholder
approval prior to consummating such a transaction.

Recommendation

Our board of trustees recommends that you authorize them to adopt and
execute an amended and restated declaration of trust of our company by voting
"FOR" Proposals #2a, #2b, and #2c set forth below. Each of these proposals
requires the approval of a majority of our common shares outstanding, other than
proposal #2c which requires approval of 80% of our common shares outstanding.

Principal Effects and Risks of the Proposals

The following discusses the principal effects and risks of the proposals:

Loss of Shareholder Approval. Two of the proposals, Proposals #2a and #2b,
seek shareholder approval to transfer provisions which are currently set forth
in our declaration of trust into our bylaws. The principal effect of this change
will be to give our board of trustees the ability to amend, without the need to
solicit shareholder consent, the transferred provisions as deemed necessary and
appropriate to effectively manage our business. As a result, shareholders will
no longer have a vote on whether or not certain investment policies and
operating procedures can be changed, including various restrictions which
currently limit the discretion of management and the board of trustees. While
management has discussed with the board from time to time the elimination or
revision of certain of these restrictions, neither management nor the board of
trustees has a present intention to do so, although, as noted above, the
proposals would permit our board of trustees to take actions on its own that
would previously have required shareholder approval if the board felt such
changes were in the best interest of our shareholders and us.

If the proposals are approved, some of the more significant restrictions
which will be moved into our bylaws and, therefore, will no longer require
shareholder approval to change include the following:

o Debt Limitation. Our declaration of trust currently restricts our ability
to incur indebtedness in excess of a set limitation. The present debt
limitation is set at (i) 100% of our total market value with respect to
total indebtedness and (ii) 50% of our total market value with respect to
indebtedness other than working capital indebtedness, trade payables and
subordinated advisor fees. We have no present intention to revise this
limitation as it has provided us with significant flexibility to
implement our business plan as currently formulated.

o Specified Investments. Our declaration of trust currently provides that
40% of our new investments be of the type we originally invested in prior
to our restructuring in 1999. We expect to continue to maintain
approximately 40% of our investments in government insured or guaranteed
investments, primarily through the acquisition of Government National
Mortgage Association ("GNMA" or "Ginnie Mae") and Federal National
Mortgage Association ("FNMA" or "Fannie Mae") mortgage-backed securities
and pass-through certificates.

o NASAA Guideline Limitations. Our declaration of trust currently provides
that our Advisor's compensation is determined in accordance with the
NASAA guidelines. Furthermore, unless approved by our independent
trustees, our total operating expenses may not exceed the greater of (i)
2% of our average invested assets and (ii) 25% of our net income. We have
never exceeded the foregoing limitations.

In addition to the provisions which contain various restrictions that would
be moved to the bylaws, the proposals also contemplate that the more mundane
provisions that are typically found in the bylaws of public companies would be
moved

from the declaration of trust to the bylaws. These include, for example,
provisions regarding meetings of shareholders, including quorum and voting
mechanics; authority of our trustees, including resignation and removal
procedures; appointments of our officers; the setting of record dates and voting
procedures.

Increased Financing Risk. If our Investment Policy is moved into our bylaws
and our board determines to increase our financing, the following risks of
leverage already present will be increased:

o we could lose our interests in assets given as collateral for secured
borrowings or leverage if the required repayments are not made when due;

o our cash flow from operations may not be sufficient to retire these
obligations as they mature, making it necessary for us to either
refinance these obligations prior to maturity or to raise additional debt
and/or equity or dispose of some of our assets to retire the obligations
which could have an adverse effect on the amount of cash available for
distribution to our shareholders; and

o there can be no assurance as to the availability, or the terms and
conditions, of any financing needed by us to refinance borrowings.

Less Control by Minority Shareholders. Proposal #2c seeks shareholder
approval to lower the required percentage (from 80% to a majority) for approval
of certain exchange offers, mergers, consolidations, conversions, roll-ups or
other similar transactions ("Conversion or Roll-Up Transactions"). The principal
effect of this change would be a reduction in the voting requirement for us to
seek approval for a Conversion or Rollup Transaction which would have a direct
impact on the ability of a minority shareholder to block such a transaction. As
a result, even though our shareholders would exercise discretion over such
transactions, it will no longer be as difficult for us to obtain the vote to
pursue a Conversion or Roll-up Transaction.

Proposal #2a: Investment Policy

Our board of trustees has approved, and recommends that you authorize them
to adopt and execute, an amended and restated declaration of trust of our
Company, which would, among other things, move Article VII - Investment Policy
of the declaration of trust to our bylaws. Presently, any amendment to our
declaration of trust and, therefore, changes to our investment policy requires
the approval of our shareholders. Obtaining shareholder approval for such
amendments is often costly and time-consuming. We have also surveyed other
public REITs and determined that most public companies and similarly situated
REITs provide for director discretion with respect to investment policy. We feel
that moving our investment policy into our bylaws would enable us to operate in
a more efficient and economical manner by allowing our board of trustees to
react quickly to changes in the competitive and regulatory environment in which
we operate.

For example, in recent years, we have expanded our business plan and
undertaken a growing variety of investments in real estate including
diversifying outside of multifamily residential to include commercial
opportunities. While such investments are currently permitted by our declaration
of trust, we wish to move the provision to our bylaws so that if necessary, our
board can alter the provision in order to take full advantage of investment
opportunities that are within our core competency as soon as such opportunities
are presented.

By transferring our investment policy to our bylaws, we would be giving our
board the needed flexibility in our continued operations and expanding business.
It would also enable us to operate in a more efficient and economical manner by
allowing our board of trustees to react quickly to changes in the competitive
and regulatory conditions in which we operate.

For these reasons, we are asking you to approve shifting the investment
policy of our Company into our bylaws. A copy of our Amended and Restated Bylaws
has been attached to this proxy as Appendix B.

Proposal #2b: Transfer Provisions with Respect to our Operating Procedures
to our Bylaws

Our board of trustees has approved, and recommends that you authorize them
to adopt and execute, an amended and restated declaration of trust of our
Company, which would, among other things, transfer certain provisions related to
our operating procedures from our declaration of trust to our bylaws. These
include, for example, provisions regarding meetings of shareholders, including
quorum and voting mechanics; authority of our trustees, including resignation
and removal procedures; appointments of our officers; the setting of record
dates and voting procedures. It also includes references to the NASAA
guidelines, which were only applicable when we were a non-listed company.

In light of our continuing growth and the manner in which our Company has
changed since our declaration of trust was created, such an amendment would
allow our board of trustees to exercise greater discretion and control over the
operation of our Company and provide needed flexibility. For example, our
declaration of trust currently contains restrictions as set by the NASAA
guidelines which limits the amount we may compensate our advisor. It also
contains

restrictions, also set by the NASAA guidelines, which does not permit our total
operating expense to exceed the greater of (i) 2% of our average invested assets
and (ii) 25% of our net income. While we have never exceeded the foregoing
limitations, we are no longer required by law to be encumbered with the NASAA
restrictions and feel that moving these to our bylaws would put our board of
trustees in a position to amend, should it in the future determine it is in our
best interest and without the need to solicit shareholders consent, these
operating procedures as deemed necessary and appropriate to effectively manage
our business.

For these reasons, we are asking you to approve an amendment to our
declaration of trust that would transfer certain provisions related to our
operations to our bylaws. A copy of our Amended and Restated Bylaws has been
attached to this proxy as Appendix B.

Proposal #2c: Amendment to the Shareholder Voting Requirements for Approval
of Conversion Transactions or Roll-Ups

Presently, Conversion or Roll-Up Transactions require the approval of the
holders of eighty percent (80%) of the outstanding shares of our Company. We
propose to reduce this eighty percent (80%) approval requirement to a majority
of the outstanding shares of our Company held by our shareholders in order to
authorize a Conversion or Roll-Up Transaction.

The eighty percent (80%) approval requirement currently provided for in our
declaration of trust has the potential to unduly limit our Company's ability to
obtain approval of a Conversion or Roll-Up Transaction, as our Company has a
broad and diverse shareholder base with many shareholders owning small amounts
of our shares. In addition, the current declaration of trust provides for the
approval of the holders of a majority of the shares outstanding for all other
major decisions with respect to our Company. If approved, this amendment would
continue to permit our shareholders to exercise discretion over such
transactions; however, undertaking a Conversion or Roll-Up Transaction would be
less costly and our Company would have the ability to obtain such approval in a
timely manner.

For these reasons, we are asking you to approve the amendment of the voting
requirements for approval of Conversion or Roll-Up Transactions as described
above.

Comparison of Provisions of Our Existing Declaration of Trust to the
Proposed Amended and Restated Declaration of Trust

Set forth below is a comparison of our existing declaration of trust to
the proposed amended and restated declaration of trust showing the provisions
that will be modified if proposals #2a, #2b, and #2c are approved by our
shareholders. The comparison (and the discussion above) are summaries and you
should not assume they are complete. You should read the form of Third Amended
and Restated Declaration of Trust which is attached to this proxy as Appendix A
for a complete description of the proposed changes.

Topic Existing Declaration of Trust Amended Declaration of Trust
-------------------------- ----------------------------------------------- -------------------------------------------

Annual Meetings of o Annual meeting of shareholders for o Unchanged, however mechanics
Shareholders the election of trustees and for other moved to the bylaws.
business not less than 30 days after
delivery of the annual report, but not
later than June 30 of each year.

Other Meetings of the o Meetings of shareholders for any o Unchanged, however mechanics
Shareholders purpose held at such time and place as moved to the bylaws.
shall be stated in the notice of the
meeting.

Shareholder Voting o Each shareholder entitled to vote in o Unchanged, however mechanics
accordance with the declaration of trust moved to the bylaws.
shall be entitled to one vote for each
share (i) at a meeting, in person, by
written

Topic Existing Declaration of Trust Amended Declaration of Trust
-------------------------- ----------------------------------------------- -------------------------------------------

proxy or by a signed writing or consent or (ii)
without a meeting, by a signed writing or
consent.

o All elections for trustees decided o No change.
by plurality vote provided that at least a
majority of the outstanding shares cast a vote
in such election.

o All other questions decided by a o No change.
majority of votes cast at a meeting at which a
quorum is present or a majority of outstanding
shares cast, without a meeting.

o None of the Advisor, the trustees o No change.
nor their affiliates may vote any shares
held by them on matters submitted to the
shareholders regarding (a) the removal of
the Advisor, the trustees or their
affiliates; or (b) any transaction between
the Company and the Advisor, the trustees
or their affiliates.

Inspection of Elections o Procedures for the inspection of o Moved to bylaws.
elections and duties of the inspector.

Access to Records o Procedures for the inspection of o Unchanged, however mechanics
records of the Company. moved to the bylaws.

List of Shareholders o Procedures for maintaining a list of o Moved to bylaws.
shareholders and for making such list
available to shareholders.

Quorum o The presence, in person or by proxy, o Moved to bylaws.
of Shareholders of shareholders holding a majority of the
outstanding shares of the Company entitled to
vote, shall constitute a quorum.

o Procedures for adjourning meetings o Moved to bylaws.
in the event a quorum is not present
and conducting business in such adjourned
meeting.

Special Meetings of the o Procedures for calling for a special o Moved to bylaws.
Shareholders meeting of the shareholders.

Topic Existing Declaration of Trust Amended Declaration of Trust
-------------------------- ----------------------------------------------- -------------------------------------------

Notice of Shareholder o Provisions regarding the procedures o Moved to bylaws.
Meetings for providing notice to shareholders of an
annual or special meeting of the
shareholders.

Business Transacted at o No business other than that stated o Moved to bylaws.
Shareholder Meetings in the notice shall be transacted at any
meeting without the unanimous consent of
all the shareholders entitled to vote
thereat.

Number of Trustees o The number of trustees shall be not o No change.
less than three nor more than nine and a
majority of trustees shall at all times be
independent trustees.

Nomination, Election and o Trustees shall be elected at the o No change.
Term of Trustees annual meeting of the shareholders

o Each trustee shall serve a term of o No change.
one year.

o Provisions regarding the qualification of o Moved to bylaws.
trustees and the board of trustees.

o Provisions regarding the nomination o Moved to bylaws.
of trustees by the board of trustees and
shareholders.

Authority and o Provisions regarding general o No change.
Responsibility of responsibility and authority of the
Trustees trustees.

o Provisions regarding specific and o Moved to bylaws.
special authority of the board of
trustees.

o Provisions regarding limitations and o Moved to bylaws.
suitability of available business
opportunities to the trustees.

Resignation and Removal o Provisions regarding the resignation o Moved to bylaws.
of Trustees of trustees.

o Trustees may be removed for cause, o Moved to bylaws.
by action of the majority of the board of
trustees.

Topic Existing Declaration of Trust Amended Declaration of Trust
-------------------------- ----------------------------------------------- -------------------------------------------

o Trustees may be removed, with or o No change.
without cause, by a vote of the holders of
a majority of outstanding shares entitled
to vote.

Vacancies o Newly created trusteeships or o Unchanged, however mechanics
vacancies occurring in the board of relating to trustees filling vacancies
trustees for any reason except the removal moved to the bylaws.
of trustees by shareholders filled by vote
of a majority of the trustees, although
less than a quorum exists.

o Vacancies as a result of the removal o No change.
of trustees by shareholders shall be
filled by shareholders.

o Provisions regarding the vesting of o Moved to bylaws.
the right, title and interest of the
trustees in and to the assets of the
Company in successor and additional
trustees.

Action by the Trustees o Provisions regarding the ability of o Moved to bylaws.
the trustees to take action at a meeting.

o Provisions regarding the ability of o Moved to bylaws.
the trustees to take action without a
meeting.

Compensation of o Provisions regarding the o Moved to bylaws.
Trustees compensation of the Trustees.

Meetings of o Trustees may participate in meetings o Moved to bylaws.
Trustees/Action by means of conference telephone or similar
without Meeting communications equipment and may take
action by written consent.

Appointment of o Provisions regarding the board of o Moved to bylaws.
Executive Committee trustees' ability to appoint an Executive
Committee and delegate certain duties
thereto.

Officers o Provisions regarding the election, o Moved to bylaws.
appointment and duties of the officers of
the Company.

Advisor o Provisions with respect to appointment of o No change.

Topic Existing Declaration of Trust Amended Declaration of Trust
-------------------------- ----------------------------------------------- -------------------------------------------

an Advisor of the Company.

o All provisions with respect to o Moved to bylaws.
Advisor compensation and contract renewal.

Exculpation and o All provisions with respect to the o No change.
Indemnification exculpation and indemnification of the
trustees and officers.

Investment Policy o All provisions with respect to the types of o Moved to bylaws.
investments entered into by the Company and
limitations on such investments.

Debt Limitation o The Company is authorized to incur o Moved to bylaws.
indebtedness up to (i) 100% of its total
market value, with respect to total
indebtedness and (ii) 50% of its total
market value, with respect to indebtedness
other than working capital indebtedness,
trade payables and subordinated advisor
fees.

Shares o Certificates evidencing shares; o Moved to bylaws.
share ledger; procedure for transferring
shares.

o All other share provisions. o No change.

Miscellaneous o Description and use of the Company seal. o Moved to bylaws.

o The fiscal year of the Company shall o Moved to bylaws.
be determined by resolution of the Board
of Trustees.

o All checks, drafts or other orders o Moved to bylaws.
for the payment of money, etc. shall be
signed by such officer(s), or agent(s) of
the Company, and in such manner, as
determined by resolution of the board of
trustees.

o Provisions with respect to delivery o Moved to bylaws.
of notices and waivers of notice.

o The declaration of trust shall be o No change.
binding upon all successors and assigns of
the

Topic Existing Declaration of Trust Amended Declaration of Trust
-------------------------- ----------------------------------------------- -------------------------------------------

trustees and the shareholders.

o Inspection of books and records of o No change.
the Company shall be permitted to the
extent permitted by applicable law, unless
broader rights are granted under the
bylaws.

o Provision regarding severability and o No change.
applicable law.

Duration, Amendment and o All provisions regarding the o No change - Except as noted
Termination duration, amendment or termination of the below.
Company.

o Amendment to provisions regarding o Amendment to provisions
the approval of certain conversion regarding the approval of certain
transactions requires the vote of 80% of conversion transactions requires the
the holders of the outstanding shares. vote of a majority of the holders of
the outstanding shares.

Excess Shares o All provisions regarding Excess o No change.
Shares (as defined in the declaration of
trust).

Conversion o The approval of the holders of 80% o The approval of the holders of a
Transactions of the shares and the unanimous approval majority of the shares and the
of the independent trustees shall be unanimous approval of the independent
required for certain exchange offers, trustees shall be required for certain
mergers, consolidations or similar exchange offers, mergers,
transactions. consolidations or similar transactions.

Roll-Up Transactions o All provisions relating to Roll-Ups o No change - Except as noted
(as defined in the declaration of trust). below.

o The Company shall not participate in any o No change except to add reference to
Roll-Up that results in the Shareholders the Bylaws.
having rights to receive reports that are less
than those provided in the declaration of
trust.

o The Company shall not participate in any o No change except to add reference to
Roll-Up that results in the investors of the the Bylaws.
Roll-Up entity having rights of access to
records of the Roll-Up entity that are less
than those provided in the declaration of
trust.

MANAGEMENT

Our board of trustees directs the management of the business of our Company
but retains our Advisor to manage our day-to-day affairs. Our Advisor is
indirectly owned by CharterMac. Our board of trustees delegates to our Advisor
responsibilities with respect to, among other things, overseeing our portfolio
of assets and acquiring and disposing of investments.

Meetings and Attendance

During 2004, our board of trustees held twelve meetings, the audit
committee held five meetings, the compensation committee held two meetings and
the nominating and governance committee held two meetings. The average
attendance in the aggregate of the total number of board of trustees and
committee meetings was 91%, and no trustee attended fewer than 75% of the
aggregate of all meetings of the board of trustees and applicable committee
meetings.

Our Company does not have a formal policy requiring trustees to be present
at annual meetings, although we do encourage their attendance. All of our
trustees attended the 2004 annual meeting.

Trustees and Executive Officers

The trustees and executive officers of our Company are as follows:

Year First Became
Name Age Office Held Officer/Trustee Term Expires
----------------------------------------------------------------------------------------------------------------------------

Stuart J. Boesky 48 Chairman of the Board, Chief Executive Officer and President 1991 2005
Alan P. Hirmes 50 Managing Trustee and 1991 2005
Chief Financial Officer
Scott M. Mannes 45 Managing Trustee (Independent) 2001 2005
Stanley R. Perla 61 Managing Trustee (Independent) 2004 2005
Richard M. Rosan 63 Managing Trustee (Independent) 2004 2005
John A. Garth 47 Chief Operating Officer and Senior Vice President 2004 --
Denise L. Kiley(1) 45 Senior Vice President 1999 --
Marc D. Schnitzer 44 Senior Vice President 1999 --
(1) On March 23, 2005, we announced Ms. Kiley's intention to retire in 2005

Biographical information with respect to Messrs. Boesky, Hirmes, Mannes,
Perla and Rosan is set forth under "PROPOSALS BEFORE THE MEETING; Proposal #1:
Election of Trustees" above.

JOHN A. GARTH is Chief Operating Officer and a Senior Vice President of our
Company. Mr. Garth joined our Company with over 20 years of professional
experience, including approximately 19 years in varied management positions in
the real estate industry. Prior to joining our Company, Mr. Garth was Senior
Vice President and Production Manager at GMAC Commercial Mortgage Corporation
("GMAC"), a commercial real estate financial services firm. Mr. Garth joined
GMAC in 1997 as Vice President and Senior Underwriter and managed a 20-person
team that originated, underwrote, and closed $3 billion in loans in two years.
He was promoted to Senior Vice President in 1999 and was responsible for
originating or co-originating and closing over $3 billion in 150 transactions.
Prior to his tenure with GMAC, Mr. Garth spent nearly 12 years in various
positions with The Prudential Insurance Company of America, including Vice
President of the company's Assets, Structured Finance, and Realty Groups. Mr.
Garth graduated from Tulane University with a Bachelor of Science degree in
Civil Engineering and subsequently received a Master of Science degree in Civil
Engineering. Mr. Garth also received his Masters in Business Administration from
The Wharton School at The University of Pennsylvania.

DENISE L. KILEY is a Senior Vice President of our Company and a Vice
President of our Advisor. Ms. Kiley is a Managing Trustee and the Chief Credit
Officer of CharterMac, the Chief Operating Officer of RCC and a member of the
board of directors of CharterMac Mortgage Capital. Ms. Kiley is the Director of
the Asset Management and Underwriting Divisions, where she is responsible for
overseeing the due diligence and asset management of all multifamily residential

properties invested in by CharterMac, our Company and RCC. Prior to joining RCC
in 1990, Ms. Kiley was a First Vice President with Resources Funding
Corporation, where she was responsible for acquiring, financing, and asset
managing multifamily residential properties. From 1981-1985 she was an auditor
with Price Waterhouse. Ms. Kiley is a Member of the Advisory Committee for the
Joint Center for Housing at Harvard University; she is on the Multifamily
Leadership Board for the National Association of Home Builders; and she is a
member of the National Housing & Rehabilitation Association. Ms. Kiley received
a Bachelor of Science degree in accounting from The Carroll School of Management
at Boston College. As noted above, Ms. Kiley is retiring from the Company.

MARC D. SCHNITZER is a Senior Vice President of our Company and a Vice
President of our Advisor. Mr. Schnitzer is a Managing Trustee and President of
CharterMac, the Chief Executive Officer of RCC and a member of the board of
directors of CharterMac Mortgage Capital. Mr. Schnitzer directs RCC's Tax Credit
Group, which has invested in excess of $4.5 billion in affordable housing tax
credit properties since 1987. Mr. Schnitzer is also responsible for structuring
and marketing RCC's institutional tax credit offerings. Mr. Schnitzer is a
member of the executive committee of the board of directors of the National
Multi Housing Council and a Vice President and member of the Executive Committee
of the Affordable Housing Tax Credit Coalition. He is a frequent speaker at
industry conferences sponsored by the National Council of State Housing Agencies
and the National Housing and Rehabilitation Association. Mr. Schnitzer joined
RCC in 1988 after receiving a Master of Business Administration degree from The
Wharton School of The University of Pennsylvania in December 1987. From
1983-1986, Mr. Schnitzer was a Financial Analyst in the Fixed Income Research
Department of The First Boston Corporation, an international investment bank.
Mr. Schnitzer received a Bachelor of Science degree, summa cum laude, in
Business Administration from the School of Management at Boston University in
1983.

Other Officers of Our Company

Other officers of our Company are as follows:

JOHN J. SOREL, 44, is an Executive Vice President of CharterMac and the
Chief Credit Officer of CharterMac Mortgage Capital. Mr. Sorel directs the
portfolio risk management group overseeing a portfolio of construction and
forward commitment assets for CharterMac and CharterMac Mortgage Capital valued
at over $2.5 billion. As Chief Credit Officer for CharterMac Mortgage Capital,
Mr. Sorel is responsible for creating and overseeing overall credit policy and
risk management for all market rate investments and serves on several investment
committees within CharterMac and CharterMac Mortgage Capital. In 2004, Mr. Sorel
directed the consolidation of the CharterMac servicing and risk management
groups with that of its mortgage banking unit, resulting in a combined servicing
platform in excess of 1,100 loans valued at $5.9 billion. Mr. Sorel joined
CharterMac in 1999 as a Vice President, initially to focus on the construction
lending and risk management of its bond portfolio and was promoted in 2001 to
Senior Vice President and Director of Portfolio Management. Prior to joining
CharterMac, Mr. Sorel was a commercial banker for 13 years. As a Vice President
in the commercial real estate division of BankBoston he originated a variety of
construction loans for affordable and market rate property as well as various
corporate lending relationships with the affordable housing business. Mr. Sorel
holds a Bachelors Degree in Economics from Syracuse University.

ROBERT LEVY, 39, is a Senior Vice President of Capital Markets of our
Company and is a Senior Vice President of capital markets for RCC. Mr. Levy
joined RCC in November of 2001. From 1998 through 2001, Mr. Levy was a Vice
President in the Real Estate Equity Research and Investment Banking Departments
at Robertson Stephens, an investment banking firm in San Francisco. Prior to
1998, Mr. Levy was employed by Prudential Securities in the Real Estate Equity
Research Group and at the Prudential Realty Group, the real estate investment
arm of the Prudential Insurance Company. He received his Bachelor of Arts from
Northwestern University and a Masters in Business Administration from New York
University.

JOHN J. KELLY, 40, is the Chief Accounting Officer of our Company and a
Senior Vice President of RCC. Prior to joining RCC in 2004, Mr. Kelly was
employed by Vertis Holdings, Inc. and Chancery Lane Capital from 1997 to 2002.
Mr. Kelly held prior positions with Pfizer, Inc., Melville Corporation and KPMG.
Mr. Kelly holds a Bachelors of Business Administration degree in Accounting from
Old Dominion University and is a Certified Public Accountant in New York.

Committees of the Board of Trustees

Our board of trustees has standing audit, compensation and nominating and
governance committees. The functions of each committee are detailed in the
respective committee charters, which are available on our website at
http://www.americanmortgageco.com in the "Investor Relations" section. Please
note that the information on our website is not incorporated by reference in
this Proxy Statement.

Audit Committee

The audit committee's duties include the periodic review of our financial
statements and meetings with our independent auditors. The audit committee must
have three members and be comprised solely of independent trustees. The audit
committee held five meetings during the year ended December 31, 2004 and is
currently comprised of Messrs. Mannes, Perla and Rosan, each of whom the board
of trustees has determined is independent within the meaning of Securities and
Exchange Commission ("SEC") regulations and the listing standards of the
American Stock Exchange. In addition, our board of trustees has determined that
Mr. Perla is qualified as an audit committee financial expert within the meaning
of SEC regulations and the listing standards of the American Stock Exchange. On
March 9, 2005, our board of trustees approved minor changes to our audit
committee charter, which included the delegation to the audit committee of the
responsibility of overseeing compliance with our Company's Code of Conduct. Our
amended audit committee charter, which is posted on our website at
http://www.americanmortgageco.com in the "Investor Relations" section, is also
attached to this proxy statement as Appendix C.

Compensation Committee

The compensation committee's duties include the determination of
compensation, if any, of our executive officers and of our Advisor and the
administration of our Incentive Share Option Plan (our "Share Option Plan"). The
compensation committee must have at least two members and be comprised solely of
independent trustees. The compensation committee held two meetings during the
year ended December 31, 2004 and is currently comprised of Messrs. Mannes and
Rosan, each of whom the board of trustees has determined is independent within
the meaning of SEC regulations and the listing standards of the American Stock
Exchange.

Nominating and Governance Committee

Duties/Composition. The nominating and governance committee's duties
include recommending to the Board, for its approval, the trustee nominees for
election at any annual or special meeting of our shareholders and overseeing our
compliance with legal and regulatory requirements pertaining to corporate
governance, including the corporate governance listing requirements of the
American Stock Exchange. The nominating and governance committee must have at
least two members and be comprised solely of independent trustees. The
nominating and governance committee held two meetings during the year ended
December 31, 2004. The nominating and governance committee is currently
comprised of Messrs. Mannes and Perla, each of whom the board of trustees has
determined is independent within the meaning of SEC regulations and the listing
standards of the American Stock Exchange. Mr. Mannes is the chairman of the
nominating and governance committee.

Criteria for Nomination. The following requirements, which are currently
set forth in our declaration of trust (but will be moved to our bylaws if
Proposal #2b is approved), help our nominating and governance committee identify
trustee nominees:

o a majority of trustees must at all times be independent trustees;

o a trustee must be an individual at least 21 years of age who is not
under legal disability;

o a trustee must have at least three years of relevant experience
demonstrating the knowledge and experience required to successfully
acquire and manage mortgage investments; and

o at least one independent trustee must have at least three years of
relevant real estate experience.

Shareholder Nominations. Any shareholder entitled to vote at the annual
meeting may submit a nomination for a trustee. However, any shareholder entitled
to vote at the annual meeting generally may nominate one or more persons for
election as trustees at a meeting only if written notice of such shareholder's
intent to make such nomination or nominations has been given, either by personal
delivery or by United States mail, postage prepaid, to our Secretary not later
than (i) with respect to an election to be held at an annual meeting of
shareholders, 90 days prior to the anniversary date of the immediately preceding
annual meeting, and (ii) with respect to an election to be held at a special
meeting of shareholders for the election of trustees, the close of business on
the tenth day following the date on which notice of such meeting is first given
to shareholders. Each such notice shall set forth: (a) the name and address of
the shareholder who intends to make the nomination and of the person or persons
to be nominated; (b) a representation that the shareholder is a holder of record
of our shares entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; (d) such other information regarding each nominee proposed by
such shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of

the SEC, had the nominee been nominated, or intended to be nominated by the
board of trustees; and (e) the consent of each nominee to serve as a Trustee of
the Trust, if so elected. The presiding officer of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.

Communication with Trustees

You may communicate directly with the board of trustees of our Company by
sending correspondence to our Company's Secretary at: Secretary, American
Mortgage Acceptance Company, 625 Madison Avenue, New York, New York 10022. The
sender should indicate in the address whether it is intended for the entire
board, the independent trustees as a group, or to an individual trustee. Each
communication intended for the board or independent trustees received by the
Secretary will be promptly forwarded to the intended recipients in accordance
with the sender's instructions.

Other Corporate Governance Initiatives

We have adopted a Code of Business Conduct and Ethics that applies to our
trustees and executive officers, including our Chief Financial Officer, as well
as all employees of our Advisor.

We regularly monitor developments in the area of corporate governance and
continue to enhance our corporate governance structure based upon a review of
new developments and recommended best practices. Our corporate governance
materials, including our Corporate Governance Guidelines, Code of Business
Conduct and Ethics, Whistle Blower Policy (which is incorporated in our Code of
Business Conduct and Ethics) and standing committee charters may be found on our
website at http://www.americanmortgageco.com in the "Investor Relations"
section. Copies of these materials are also available to shareholders upon
written request to our Secretary at: Secretary, American Mortgage Acceptance
Company, 625 Madison Avenue, New York, New York 10022.

Our Advisor

The officers of our Advisor provide services to our Company. All of the
voting shares of our Advisor are indirectly owned by CharterMac.

The directors and officers of our Advisor are set forth below.

Related AMI Associates, Inc.

Year First Became
Name Age Offices Held Officer/Director
----------------------------------------------------------------------------------------------------------------------------

Stuart J. Boesky 48 Director/President/Senior Vice President 1991
Alan P. Hirmes 50 Director/Chief Financial Officer/ Senior Vice President 1991
Denise L. Kiley 45 Vice President 1999
Marc D. Schnitzer 44 Vice President 2000

Biographical information with respect to Ms. Kiley and Mr. Schnitzer is set
forth under "Trustees and Executive Officers." Biographical information with
respect to Messrs. Hirmes and Boesky is set forth under "PROPOSALS BEFORE THE
MEETING -- Proposal #1: Election of Trustees" above.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our executive officers and trustees, and persons who own more than ten percent
of a registered class of our equity securities, to file reports of ownership and
changes in ownership with the SEC. These persons are required by regulation of
the SEC to furnish us with copies of all Section 16(a) forms they file.

During the fiscal year ended December 31, 2004, all of our trustees,
executive officers and greater than ten percent beneficial owners complied with
all applicable Section 16(a) filing requirements.

EXECUTIVE COMPENSATION

Trustees and Management

We currently have five executive officers (one of whom, Ms. Kiley, has
announced her retirement) and five trustees (three of whom are independent
trustees). We do not pay or accrue any fees, salaries or other forms of
compensation to our officers other than options which may be received under our
Share Option Plan. Independent trustees receive compensation for serving as
independent trustees at the rate of $20,000 per year payable one-half in cash
and one-half in common shares (or all in common shares at the trustee's
discretion) in addition to an expense reimbursement for attending meetings of
our board of trustees. The chairman of the audit committee receives an
additional $5,000 in cash for serving on the audit committee.

Our Advisor, at its expense, provides all personnel necessary to conduct
our regular business. Our Advisor receives various fees and reimbursements for
advisory and other services performed under our Advisory Agreement, as further
described in the "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS -- Advisory
Agreement" section of this Proxy Statement. An affiliate of our Advisor pays all
salaries, bonuses and other compensation (other than options which may be
received under our Share Option Plan) to the officers of our Advisor (including
such officers who also serve as officers of our Company). Certain officers of
our Advisor and certain officers of our Company receive compensation from our
Advisor and its affiliates for services performed for various affiliated
entities, which may include services performed for us. Such compensation may be
based in part on our performance; however, our Advisor believes that any such
compensation attributable to services performed for us is immaterial.

Share Option Plan

We have adopted a Share Option Plan, the purpose of which is (i) to attract
and retain qualified persons as trustees and officers and (ii) to incentivize
and more closely align the financial interests of our Advisor and its employees
and officers with the interests of the holders of our common shares by providing
our Advisor with a substantial financial interest in our success. The
compensation committee, which is comprised of Messrs. Mannes and Rosan,
administers our Share Option Plan. Pursuant to our Share Option Plan, if our
distributions per common share in the immediately preceding calendar year exceed
$1.45 per common share, the compensation committee has the authority to issue
options to purchase, in the aggregate, that number of common shares which is
equal to 10% of the aggregate number of common shares outstanding as of December
31 of the immediately preceding calendar year (subject to any limitations
imposed by the national securities exchange or national quotation system upon
which the Company is listed). This is the "life maximum" for our Share Option
Plan.

All options granted by the compensation committee will have an exercise
price equal to or greater than the fair market value of the common shares on the
date of the grant. The maximum option term is ten years from the date of grant.
All common share options granted pursuant to our Share Option Plan may vest
immediately upon issuance or in accordance with the determination of the
compensation committee. No options were granted for the years ended December 31,
1999, December 31, 2000, and December 31, 2001. In 2002, we distributed $1.51
per common share. Therefore, the compensation committee was authorized to issue
options for the year ended December 31, 2002. On April 11, 2003, the
compensation committee granted 190,000 options to 25 employees of RCC and to our
Advisor. In 2003, we distributed $1.60 per common share, however, there were not
any options issued. For the year ended December 31, 2004, we distributed $1.60
per common share and therefore, the compensation committee is authorized to
issue options for the year ended December 31, 2004. On March 23, 2005, we
granted 65,052 options for common shares to Mr. Garth pursuant to our Share
Option Plan. The options have an effective date of January 3, 2005. All share
options will vest over a three year period, with one third vesting on the first
anniversary of the effective date.

Report of the Compensation Committee

The compensation committee of our board of trustees is comprised of two
independent trustees (Messrs. Mannes and Rosan). The role of the compensation
committee is to administer the policies governing our Share Option Plan. Because
we do not pay salaries and bonuses to our officers or our Advisor, the
compensation committee does not determine executives' salary levels. Subject to
the restrictions contained in our Share Option Plan, option compensation is
intended to be set at a level competitive with the amounts paid to the
management of similarly sized companies in similar industries. The compensation
committee also evaluates the performance of management when determining the
number of options to be issued.

Our grants of share options are structured to link the compensation of our
officers and the officers and employees of our Advisor with our performance.
Through the establishment of our Share Option Plan, we have aligned the
financial

interests of our executives (and the executives and employees of our Advisor)
with the results of our performance, which is intended to enhance shareholder
value. The compensation committee may only grant options if certain performance
levels are met and is limited in the number of options which may be granted each
year (See "Share Option Plan" above). The amount of options which may be granted
will be set at levels that the compensation committee believes to be consistent
with others in our industry, with such compensation contingent upon our level of
annual and long-term performance.

Section 162(m) was added to the Internal Revenue Code (the "Code") as part
of the Omnibus Budget Reconciliation Act of 1993. Section 162(m) limits the
deduction for compensation paid to the chief executive officer and the other
executive officers to the extent that compensation of a particular executive
exceeds $1,000,000 (less the amount of any "excess parachute payments" as
defined in Section 280G of the Code) in any one year. However, under Section
162(m), the deduction limit does not apply to certain "performance-based"
compensation established by an independent compensation committee which conforms
to certain restrictive conditions stated under the Code and related regulations.
It is our goal to have compensation paid to our executive officers qualify as
performance-based compensation deductible for federal income tax purposes under
Section 162(m). Given the fact that we are currently externally managed by our
Advisor and the only compensation that currently may be paid to our executive
officers are options pursuant to our Share Option Plan, it is unlikely that
Section 162(m) will present any concerns.

During the fiscal year ended December 31, 2004, the compensation committee
consisted of Messrs. Rosan and Mannes. No compensation committee member had any
interlocking relationships requiring disclosure under applicable rules and
regulations. No compensation committee member was employed by the Company as an
officer or employee during 2004. No executive officer of the Company serves as a
member of the board of directors or compensation committee of any other company
that has one or more executive officers serving as a member of our board of
trustees or the compensation committee.

COMPENSATION COMMITTEE

Richard M Rosan -- Chairman
Scott M. Mannes

Stock Performance Graph

The following stock performance graph compares our performance to the S&P
500 and the NAREIT Mortgage REIT Index. The graph assumes a $100 investment on
December 31, 1999. All stock price performance figures include the reinvestment
of dividends.

[GRAPHIC OMITTED]

Cumulative Total Return

12/99 12/00 12/01 12/02 12/03 12/04
------------------------------------------------------------------------------------

AMAC $100.00 $ 89.44 $163.94 $158.76 $183.66 $193.80
S & P 500 100.00 90.89 80.09 62.39 80.29 89.02
NAREIT MORTGAGE 100.00 115.96 205.64 269.55 424.24 502.44

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of April 1, 2005, no one was known by us to be the beneficial owner of
more than five percent of the outstanding common shares of our Company.

As of April 1, 2005, trustees and executive officers of our Company and
directors and executive officers of our Advisor own, directly or beneficially,
common shares as follows :

Amount and Nature of Percent of
Name Title Beneficial Ownership Class
----------------------------------------------------------------------------------------------------------------------------

Chairman, President and Chief Executive Officer of our
Stuart J. Boesky Company and Director and President of our Advisor 115,971 Common Shares(1) 1.39%
----------------------------------------------------------------------------------------------------------------------------

Trustee and Chief Financial Officer of our Company,
Alan P. Hirmes Director and Senior Vice President of our Advisor 106,471 Common Shares(1) 1.28%
----------------------------------------------------------------------------------------------------------------------------

Stanley R. Perla Trustee of our Company 1,311 Common Shares *
----------------------------------------------------------------------------------------------------------------------------

Richard M. Rosan Trustee of our Company 656 Common Shares *
----------------------------------------------------------------------------------------------------------------------------

Scott M. Mannes Trustee of our Company 656 Common Shares *
----------------------------------------------------------------------------------------------------------------------------

Senior Vice President of our Company, Vice President of
Denise L. Kiley(2) our Advisor 94,471 Common Shares(1) 1.13%
----------------------------------------------------------------------------------------------------------------------------

Senior Vice President of our Company and Vice President
Marc D. Schnitzer of our Advisor 94,471 Common Shares(1) 1.13%
----------------------------------------------------------------------------------------------------------------------------

Chief Operating Officer and Senior Vice President of
John A. Garth our Company 2,500 Common Shares *
----------------------------------------------------------------------------------------------------------------------------
All Executive Officers and trustees and directors of our Company and our 140,433 Common Shares(1) 1.68%
Advisor as a group (8 persons)

----------

1 92,858 of these common shares are owned by RelCap Holdings, LLC, of which
Messrs. Hirmes, Boesky and Schnitzer and Ms. Kiley are equity owners.

2 On March 23, 2005, we announced Ms. Kiley's intention to retire in 2005.

* Less than 1% of the common shares outstanding.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have and will continue to have certain relationships with our Advisor
and its affiliates. However, there have been no direct financial transactions
between us and our trustees and officers or the directors and officers of our
Advisor.

Advisory Agreement

Our Company and our Advisor entered into an Advisory Agreement pursuant to
which our Advisor is obligated to use its best efforts to seek out and present
to us, whether through its own efforts or those of third parties retained by it,
suitable and a sufficient number of investment opportunities which are
consistent with our investment policies and objectives and consistent with
investment programs our board of trustees may adopt from time to time in
conformity with our declaration of trust.

Although our board of trustees has continuing exclusive authority over our
management, the conduct of our affairs, and the management and disposition of
our assets, our board of trustees has delegated to our Advisor, subject to the
supervision and review of our board of trustees and consistent with the
provisions of our declaration of trust, the power and duty to: (i) obtain,
furnish and/or supervise the services necessary to perform any ministerial
functions in connection with the management of our day-to-day operations; (ii)
seek out and present to us, whether through its own efforts or those of third
parties retained by it, suitable and a sufficient number of investment
opportunities which are consistent with our investment objectives and policies
as adopted by our trustees from time to time; (iii) exercise absolute
discretion, subject to our trustees' review, in decisions to originate, acquire,
retain, sell or negotiate for the prepayment or restructuring of mortgages and
our other investments; (iv) recommend investment opportunities consistent with
our investment objectives and policies and negotiate on our behalf with respect
to potential investments or the disposition thereof; (v) upon request, cause an
affiliate to serve as the mortgagee of record for our mortgages if such
affiliate is qualified to do so and in that capacity to hold escrows on behalf
of mortgagors in connection with the servicing of mortgages, which it may
deposit with various banks including banks with which it may be affiliated; (vi)
obtain for us such other services as may be required in acquiring or disposing
of investments, disbursing and collecting our funds, paying our debts and
fulfilling our obligations, and handling, prosecuting and settling any of our
claims, including foreclosing and otherwise enforcing mortgages and other liens
securing investments; (vii) obtain for us such services as may be required for
property management, mortgage brokerage and servicing, and other activities
relating to our investment portfolio; (viii) evaluate, structure and negotiate
potential prepayments or sales of mortgages and other investments and, if
applicable, coordinate with government agencies and Fannie Mae and Freddie Mac
in connection therewith; (ix) monitor annual participating interest payments,
monitor operations and expenses of the developments, and verify computations of
annual participating interest payments; (x) from time to time, or as requested
by our board of trustees, make reports to us as to its performance of the
foregoing services; and (xi) do all things necessary to assure its ability to
render the services contemplated herein.

Our Advisory Agreement is renewable annually by us, subject to an
evaluation of the performance of our Advisor by our board of trustees. Our
Advisory Agreement may be terminated (i) without cause by our Advisor or (ii)
for cause by a majority of the independent trustees, each without penalty, and
each upon 60 days' prior written notice to the non-terminating party.

Pursuant to the terms of our Advisory Agreement, our Advisor is entitled to
receive the fees and other compensation set forth below:

Fees/Compensation/Points* Amount
--------------------------------------------------------------------------------
Asset Management Fee Equal to .625% on existing Original Mortgage
Investments; .355% on new Original Mortgage
Investments; .355% on investment grade
Additional Mortgage Investments; .750% on
non-investment grade Additional Mortgage
Investments; and 1.000% on unrated Additional
Mortgage Investments.**

Annual Incentive Fee Subject to (1) a minimum annual Distributions
being made to Shareholders from cash available
for distribution of $1.45 per common share and
(2) the Company achieving at least annual
Adjusted Funds From Operations per share of
$1.60 (net of the Annual Incentive Fee), the
Advisor shall be entitled to receive incentive
compensation for each fiscal year in an amount
equal to the product of: (A) 25% of the dollar
amount by which (1) Adjusted Funds From
Operations of the Company (before the Annual
Incentive Fee) per common share (based on the
weighted average number of common shares
outstanding exceed (2) an amount equal to the
greater of: (a) (i) the weighted average of (x)
$20 (the price per common share of

the initial public offering) and (y) the prices
per common share of any secondary offerings by
the Company multiplied by (ii) the Ten-Year
U.S. Treasury Rate plus 2% per annum; and (b)
$1.45 multiplied by (B) the weighted average
number of common shares outstanding during such
year.

Origination Points Our Advisor receives, with respect to each
mortgage investment originated by us, a portion
of the origination points paid by borrowers
equal to up to 1% of the principal amount and
we receive the portion of the origination
points paid by borrowers in excess of 1% of the
principal amount of such mortgage investment.

Fees/Compensation/Points* Amount
--------------------------------------------------------------------------------
Operating Expense For direct expenses incurred by our Advisor.
Reimbursement

Incentive Share Options Our Advisor may receive options to acquire
additional common shares pursuant to our Share
Option Plan only if our distributions in any
year exceed $1.45 per common share and the
compensation committee of our board of trustees
determines to grant such options.

----------

* Our Advisor is also permitted to earn miscellaneous compensation, which may
include, without limitation, construction fees, escrow interest, property
management fees, leasing commissions and insurance brokerage fees. The
payment of any such compensation is generally limited to the competitive
rate for the services being performed.

** "Original Mortgage Investments" means investments authorized under our
original investment policy, which include originated Mortgages, acquired
Mortgages and additional loans (and within such terms are also included
REMICS, CMOs, GNMA, FHA and FHLMC Pass-Through Certificates). "Additional
Mortgage Investments" shall mean uninsured mortgage loans, construction
loans, bridge loans, mezzanine loans, mortgage derivatives, and commercial
mortgage-backed securities ("CMBS") subordinated interests (including
subordinated interests in CMBS).

Our Advisor may engage in other business activities related to real estate,
mortgage investments or other investments whether similar or dissimilar to ours,
or act as Advisor to any other person or entity having investment policies
whether similar or dissimilar to ours. Before our Advisor, the officers and
directors of our Advisor and all persons controlled by our Advisor and its
officers and directors may take advantage of an opportunity for their own
account or present or recommend it to others, they are obligated to present such
investment opportunity to us if (i) such opportunity is of a character which
could be taken by us, (ii) such opportunity is compatible with our investment
objectives and policies and (iii) we have the financial resources to take
advantage of such opportunity.

The declaration of trust and Advisory Agreement provide that we will
indemnify our Advisor and its affiliates under certain circumstances.

Our Advisor is entitled to subcontract its obligations under our Advisory
Agreement to an affiliate. In accordance with the foregoing, our Advisor has
assigned its rights and obligations to RCC.

Pursuant to our Advisory Agreement, our Advisor is entitled to receive as
compensation a number of shares equal to 1% of all common shares issued by us.
No common shares were issued to our Advisor in 2004 in connection with any
follow-on offerings.

Affiliated Transactions

In June 2004, we entered into a revolving credit facility (the "Revolving
Facility") with CharterMac. The Revolving Facility, which is unsecured, will
provide up to $20.0 million in borrowings to be used to purchase new
investments, and bears interest at 30-day LIBOR plus 300 basis points. The
Revolving Facility is for a term of one year with a one-year optional extension
and contains customary restrictions/covenants that are similar to our mortgage
warehouse line of credit with Bank of America. In the opinion of our management,
the terms of this facility are consistent with those of transactions with
independent third parties. As of December 31, 2004, we had approximately $4.6
million in borrowings outstanding on the Revolving Facility at an interest rate
of 5.42%.

ACCOUNTING AND AUDIT INFORMATION

Audit Committee Report

The audit committee of our board of trustees has issued the following
report for the fiscal year ended December 31, 2004:

o The audit committee assists the board in fulfilling its oversight
responsibilities with respect to the integrity of the Company's financial
statements;

o The audit committee met periodically with the independent auditors, with
and without management present, to discuss the results of their
examinations of the financial statements and internal controls;

o The audit committee has reviewed and discussed with our management our
fiscal 2004 audited financial statements;

o The audit committee also reviewed management's report on its assessment of
the effectiveness of internal control over financial reporting as of
December 31, 2004;

o The audit committee has discussed with Deloitte & Touche LLP (our
independent auditors) the matters required to be discussed by Statements on
Auditing Standards No. 61 as amended by Statements on Auditing Standards
No. 90; and

o The audit committee has received the written disclosures and letter from
the independent auditors required by Independence Standards Board Standard
No. 1 (which related to the auditors' independence from our Company and its
related entities) and has discussed with the auditors their independence
from us.

Based on the review and discussions referred to above, the audit
committee recommended to our board of trustees that the audited financial
statements be included in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2004.

Submitted by the audit committee of our board of trustees:

Stanley R. Perla - Chairman
Scott M. Mannes
Richard M. Rosan

Independent Auditors

Deloitte & Touche LLP have been and are presently our independent auditors.
Representatives of Deloitte & Touche LLP are expected to be present at the
annual meeting and to be available to respond to appropriate questions from
holders of our common shares. In addition, such representatives will have the
opportunity to make a statement if they desire to do so.

The following table presents fees for professional audit services rendered
by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and
their respective affiliates (collectively, "Deloitte & Touche") for the audit of
our financial statements for the fiscal years ended December 31, 2004 and
December 31, 2003, and fees for other services rendered by Deloitte & Touche
during those periods.

2004 2003
-----------------------------------------------
Audit Fees (a) $248,922 $196,500
Audit-Related Fees (b) -- --
Tax Fees (c) 49,500 42,000
All Other Fees (d) -- --
Total $298,422 $238,500

----------

(a) Fees for audit services billed in 2004 and 2003 consisted of the audit of
the Company's annual financial statements, reviews of the Company's
quarterly financial statements, comfort letters, consents and other
services related to SEC matters. 2004 includes an allocation from
CharterMac for the review of internal controls pursuant to Section 404 of
the Sarbanes-Oxley Act of 2002.

(b) No audit-related services were rendered by Deloitte & Touche in 2004 or
2003.

(c) Fees for tax services billed in 2004 and 2003 consisted of tax compliance
services. Tax compliance services are services rendered based upon facts
already in existence or transactions that have already occurred to
document, compute, and obtain government approval for amounts to be
included in tax filings and consisted of Federal, state and local income
tax return assistance and REIT compliance testing.

(d) No other services were rendered by Deloitte & Touche during 2004 or 2003.

All audit-related services, tax services and other services were
pre-approved by the audit committee, which concluded that the provision of those
services by Deloitte & Touche was compatible with the maintenance of Deloitte &
Touche's independence in the conduct of its auditing functions.

Policy on Pre-Approval of Independent Auditor Services

The audit committee is responsible for appointing, setting compensation and
overseeing the work of the independent auditors. The audit committee has
established a policy regarding pre-approval of all audit and non-audit services
provided by our Company's independent auditors.

On an on-going basis, management communicates specific projects and
categories of service for which the advance approval of the audit committee is
requested. The audit committee reviews these requests and advises management if
the audit committee approves the engagement of the independent auditors. The
audit committee may also delegate the ability to pre-approve audit and permitted
non-audit services to one or more of its members, provided that any
pre-approvals are reported to the audit committee at its next regularly
scheduled meeting.

EXPENSES OF SOLICITATION

We will bear the costs of the solicitation of proxies in connection with
the annual meeting, including the costs of preparing, assembling and mailing
proxy materials and the handling and tabulation of proxies received. In addition
to the solicitation of proxies by mail, proxies may be solicited by trustees of
our Company, for no additional compensation, by telephone, telegram, personal
interviews or otherwise. Arrangements have also been made with brokerage firms,
custodians, nominees and fiduciaries to forward solicitation materials to
beneficial owners of common shares held of record by these persons or firms with
their nominees, and in connection therewith, these firms will be reimbursed for
their reasonable out-of-pocket expenses in forwarding these materials.

Additionally, we have retained The Altman Group, a proxy solicitation firm,
to assist in the solicitation of proxies. We anticipate that the cost of this
proxy solicitation firm in the aggregate will not exceed $55,000, plus expenses.
The telephone number of The Altman Group is (201) 806-7300. Other than as set
forth above, neither we nor any other person acting on our behalf has retained
any other person to make solicitations or recommendations to shareholders with
respect to the approval of the acquisition transaction or any other proposal
submitted to the shareholders for consideration at the annual meeting.

VOTING PROCEDURES

General

EquiServe Trust Company, N.A. (the "Inspector") has been appointed the
inspector of elections. The Inspector will count all votes cast, in person or by
submission of a properly executed proxy, received at or prior to the annual
meeting. Abstentions and "broker non-votes" (nominees holding common shares for
beneficial owners who have not voted on a specific matter) will be treated as
present for purposes of determining whether a quorum is present at the annual
meeting. However, abstentions and broker non-votes will have no effect on the
vote for Proposals #1 and #3 because the vote required is a plurality and
majority, respectively, of the votes actually cast (assuming the presence of a
quorum). Abstentions and broker non-votes will be counted as votes against
Proposal #2.

Voting

You may vote by completing, signing and mailing the enclosed proxy card in
the enclosed return envelope. In the alternative, you may also submit a proxy on
the Internet by following the instructions on the enclosed proxy card. To submit
a proxy on the Internet, log on to the Internet and go to
http://www.eproxyvote.com/amc, enter your authentication number which can be
found in the grey shaded box on the proxy card, and follow the directions
outlined on the secure website. Even if you plan to attend the annual meeting in
person, we urge you to return your proxy card to assure the representation of
your shares at the annual meeting.

Record Date

Only holders of our common shares of record at the close of business on
April 1, 2005 are entitled to receive notice of, and to vote at, the annual
meeting, or any postponements or adjournments thereof. As of that date, there
were approximately 8,335,639 common shares issued and outstanding. Each common
share entitles the record holder thereof to one vote, exercisable in person or
by properly executed proxy, on all matters which properly come before the annual
meeting (or any postponement or adjournment thereof).

Quorum; Adjournments

For purposes of the annual meeting, the presence, in person or by proxy, of
shareholders entitled to cast a majority of all votes entitled to be cast at the
annual meeting will constitute a quorum. If a quorum is not obtained or, as to
any one or more of the proposals, if fewer common shares are voted in favor of
the proposal than the number of shares required for approval, the annual meeting
may be adjourned for the purpose of obtaining additional proxies or votes or for
any other purpose and, at any subsequent reconvening of the annual meeting, all
proxies will be voted in the same manner as such proxies would have been voted
at the original convening of the annual meeting, except for any proxies which
have theretofore effectively been revoked or withdrawn, notwithstanding that
they may have been effectively voted on the same day for any other matter at a
previous meeting.

Vote Required

The affirmative vote of the holders of a majority of the issued and
outstanding common shares entitled to vote at the annual meeting at which a
quorum is present is required to approve each of the amendments to our
declaration of trust, other than proposal #2c, which requires approval of 80% of
our common shares outstanding. The affirmative vote of a plurality of the votes
actually cast by the holders of our common shares either in person or by proxy
at the annual meeting is required for the election of each of the Trustee
nominees. The affirmative vote of the holders of a majority of the common shares
voting either in person or by proxy at the annual meeting is required to
approve, if necessary, the extension of the solicitation period and the
adjournment of the annual meeting.

SHAREHOLDER PROPOSALS

Any shareholder proposal intended to be presented at the 2006 Annual
Meeting of Shareholders must be received by us at our principal executive office
not later than January 6, 2006, for inclusion in the proxy statement and form of
proxy

relating to that meeting. Any such proposal must also comply with other
requirements of the proxy solicitation rules of the SEC. No business other than
that stated in the proxy statement and form of proxy shall be transacted at any
meeting without the unanimous consent of all the shareholders entitled to vote
thereat.

ANNUAL REPORT ON FORM 10-K

Upon written request by any shareholder entitled to vote at the meeting, we
will furnish that person without charge a copy of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2004, which is filed with the SEC,
including the financial statements and schedules thereto. Requests should be
addressed to Brenda Abuaf at American Mortgage Acceptance Company, 625 Madison
Avenue, New York, New York 10022.

OTHER BUSINESS

Our board of trustees does not know of any other matters to be brought
before the annual meeting except those set forth in the notice thereof. If other
business is properly presented for consideration at the annual meeting, it is
intended that the proxies will be voted by the persons named therein in
accordance with their judgment on such matters.

It is important that your common shares be represented at the annual
meeting. If you are unable to be present in person, please complete, date, sign
and return the enclosed stamped, self-addressed proxy card or submit a proxy on
the Internet at http://www.eproxyvote.com/amc. Your failure to do so will
increase the costs of operating our Company and decrease the return on your
investment.

By Order of the Board of Trustees

/s/ Stuart J. Boesky

Stuart J. Boesky
Chairman, President and Chief Executive Officer

April 20, 2005

APPENDIX A

THIRD
AMENDED AND RESTATED DECLARATION OF TRUST
OF
AMERICAN MORTGAGE ACCEPTANCE COMPANY

WHEREAS the Declaration of Trust of American Mortgage
Acceptance Company (f/k/a American Mortgage Investors Trust) was declared,
executed and acknowledged in Boston, Massachusetts on June 11, 1991 by Carmela
Laurella (the "Initial Trustee") and was thereafter filed in the offices of the
Secretary of the Commonwealth of Massachusetts (the "Original Declaration of
Trust");

WHEREAS the Original Declaration of Trust was amended and
restated by the Amended and Restated Trust Agreement dated as of March 29, 1993
filed in the offices of the Secretary of State of the Commonwealth of
Massachusetts (the "First Amended and Restated Declaration of Trust");

WHEREAS the First Amended and Restated Declaration of Trust
was amended and restated by the Second Amended and Restated Trust Agreement,
dated as of April 6, 1999, filed in the offices of the Secretary of State of the
Commonwealth of Massachusetts (the "Second Amended and Restated Declaration of
Trust");

WHEREAS the undersigned, being all of the presently incumbent
Trustees, desire to amend and restate the Second Amended and Restated
Declaration of Trust to read in its entirety as set forth herein;

WHEREAS the Trustees have unanimously approved amending the
Second Amended and Restated Declaration of Trust pursuant to the proposals (the
"Proposals") as more fully described in the Proxy Statement dated April 20, 2005
(the "Proxy") and distributed to all Shareholders of record as of April 1, 2005;
and

WHEREAS the Proposals require the approval of Shareholder and
the requisite approval was obtained.

DECLARATION

NOW, THEREFORE, Stuart J. Boesky, Alan P. Hirmes, Scott M.
Mannes, Stanley Perla, and Richard M. Rosan (such persons and any successor to
such persons and additional persons, so long as they shall continue in or be
admitted to office in accordance with the terms of this Declaration of Trust,
are hereinafter together called the "Trustees"), hereby declare that they will
hold all property of every type and description which they may acquire as such
trustees, together with the proceeds thereof, in trust, to manage, hold and
dispose of the same for the benefit of the holders of record from time to time
of the Shares being issued and to be issued hereunder and in the manner and
subject to the provisions of this Declaration of Trust:

ARTICLE I

THE TRUST

SECTION 1.1. NAME. The name of the Trust created by this
Declaration of Trust shall be "AMERICAN MORTGAGE ACCEPTANCE COMPANY"
(hereinafter called the "Trust") and so far as may be practicable the Trustees
shall conduct the Trust's activities, execute all documents and sue or be sued
under that name, which name (and the word "Trust" whenever used in this
Declaration of Trust, except where the context otherwise requires) shall refer
to the Trustees in their capacity of Trustees, and not individually or
personally, and shall not refer to the officers or Shareholders of the Trust or
to the agents or employees of the Trust or of such Trustees. Should the Trustees
determine that the use of such name is not practicable, legal or convenient,
they may use such other designation or they may adopt such other name for the
Trust as they deem proper and the Trust may hold property and conduct its
activities under such designation or name, subject, however, to the limitations
contained in the next succeeding paragraph.

SECTION 1.2. LOCATION. The Trust shall maintain an office of
record in Boston, Massachusetts, at [84 State Street, care of The Prentice Hall
Corporation System, Inc.] (the Trust's resident agent), in the City of Boston,
in the County of Suffolk, in the Commonwealth of Massachusetts and the Trust may
have such other offices or places of business as the Trustees may from time to
time determine as necessary or expedient.

SECTION 1.3. NATURE OF TRUST. The Trust shall be of the type
commonly termed a Massachusetts business trust; this Declaration of Trust and
all amendments hereto and restatements hereof shall be filed in all appropriate
state and local offices in the Commonwealth of Massachusetts in order to
effectuate such intent. The Trust is not intended to be, shall not be deemed to
be, and shall not be treated as, a general partnership, limited partnership,
joint venture, corporation or joint stock company. The Shareholders shall be
beneficiaries and their relationship to the Trustees shall be solely in that
capacity in accordance with the rights conferred upon them hereunder. The Trust
is intended to have the status of a "real estate investment trust" as that term
is defined in the REIT Provisions of the Internal Revenue Code and this
Declaration of Trust and all actions of the Trustees hereunder shall be
construed in accordance with such intent, unless and until the Trustees,
including a majority of the Independent Trustees, may determine that the
maintenance of that status is no longer in the best interests of the
Shareholders or practicable.

SECTION 1.4. PURPOSE. The purposes of the Trust shall be, as
determined from time to time by the Board of Trustees, to engage in any lawful
business or activity in which an "Association" (within the meaning of
Massachusetts General Laws, Chapter 182, Section 1) may engage, including,
without limitation, those businesses and activities in which a corporation
subject to the Massachusetts Business Corporation Act may engage.

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ARTICLE II

DEFINITIONS

SECTION 2.1. DEFINITIONS. Whenever used in this Declaration of
Trust, unless the context otherwise requires, the terms defined in this Article
II shall have the following respective meanings:

(a) Advisor. "Advisor" shall mean the Person(s) responsible
for directing or performing the day-to-day business affairs of the Trust,
including a person or entity to which an Advisor subcontracts substantially all
such functions. The Advisor shall be Related AMI or anyone who succeeds it in
such capacity.

(b) Advisory Agreement. "Advisory Agreement" shall mean the
agreement between the Trust and the Advisor pursuant to which the Advisor will
act as the investment advisor and administrator of the Trust.

(c) Affiliate. "Affiliate" shall mean (i) any Person directly
or indirectly controlling, controlled by or under common control with another
Person, (ii) any Person owning or controlling 10% or more of the outstanding
voting Securities or beneficial interests of such other Person, (iii) any
officer, director, trustee or general partner of such Person and (iv) if such
other Person is an officer, director, trustee or partner of another entity, then
the entity for which that Person acts in any such capacity.

(d) Bylaws. "Bylaws" shall mean the Bylaws of the Trust, as
adopted and amended from time to time by the Board of Trustees.

(e) Common Shares. "Common Shares" shall mean any Shares
classified or reclassified as such by the Trustees.

(f) Excess Shares. "Excess Shares" shall have the meaning
ascribed to such term in Article X, Section 10.1.

(g) Independent Expert. "Independent Expert" shall mean a
person with no current or prior business or personal relationship with the
Advisor or the Trustees and who is engaged, to a substantial extent, in the
business of rendering opinions regarding the value of assets of the type held by
the Trust.

(h) Independent Trustees. "Independent Trustees" shall mean
the Trustees who (i) are not affiliated, directly or indirectly, with the
Advisor, whether by ownership of, ownership interest in, employment by, any
material business or professional relationship with, or service as an officer or
director of the Advisor, or its Affiliates, (ii) do not serve as a director or
trustee for more than three other REITs organized by the Sponsor, and (iii)
perform no other services for the Trust except as Trustees. For this purpose, an
indirect relationship shall include circumstances in which a member of the
immediate family of a Trustee has one of the foregoing relationships with the
Advisor or the Trust; provided, however, that if Nasdaq, or the national
securities exchange on which any Shares are listed, adopts rules which mandate a
different definition of "independence", such definition shall apply in place of
the foregoing.

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(i) Initial Investment. "Initial Investment" shall mean the
$200,000 investment in Shares which the Advisor has made pursuant to Article VI,
Section 6.7 hereof.

(j) Net Assets. "Net Assets" shall mean the Total Assets of
the Trust (other than intangibles) at cost before deducting depreciation or
other non-cash reserves less total liabilities of the Trust, calculated at least
quarterly on a basis consistently applied.

(k) Person. "Person" shall mean and include individuals,
corporations, limited partnerships, general partnerships, limited liability
companies, joint stock companies or associations, joint ventures, companies,
trusts, banks, trust companies, land trusts, business trusts or other entities
and governments and agencies and political subdivisions thereof.

(l) Preferred Shares. "Preferred Shares" shall mean any Shares
classified or reclassified as such by the Trustees.

(m) Proposals. "Proposals" shall have the meaning ascribed to
such term in the Recitals.

(n) Real Estate Investment Trust ("REIT") Provisions of the
Internal Revenue Code. "Real Estate Investment Trust Provisions of the Internal
Revenue Code" shall mean part II, subchapter M, chapter 1 of the Code, as now
enacted or hereafter amended, or successor statutes, other sections of the Code
specifically applicable to REITs and regulations and rulings promulgated
thereunder.

(o) REIT. "REIT" shall mean a corporation or trust which
qualifies as a real estate investment trust as defined in Sections 856 to 860 of
the Code.

(p) Related AMI. "Related AMI" shall mean Related AMI
Associates, Inc., a Delaware corporation.

(q) Roll-Up. "Roll-Up" shall mean a transaction involving the
acquisition, merger, conversion or consolidation either directly or indirectly
of the Trust and the issuance of Securities of a Roll-Up Entity. Such term does
not include:

(i) a transaction involving Securities of the Trust that
have been for at least 12 months listed on a national securities
exchange or traded through the National Association of Securities
Dealers Automated Quotation National Market System; or

(ii) a transaction involving the conversion to corporate
or association form of only the Trust if, as a consequence of the
transaction, there will be no significant adverse change in any of
the following:

(a) Shareholders' voting rights;

(b) the term and existence of the Trust;

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(d) the Trust's investment objectives.

(r) Roll-Up Entity. "Roll-Up Entity" shall mean a partnership,
real estate investment trust, corporation, trust or other entity that would be
created or would survive after the successful completion of a proposed Roll-Up
transaction.

(s) Securities. "Securities" shall mean any instruments
commonly known as "securities," including stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or any
certificates of interest, shares or participations, or warrants, options or
rights to subscribe to, purchase or acquire any of the foregoing.

(t) Shareholders. "Shareholders" shall mean holders of the
Shares.

(u) Shares. "Shares" shall mean the beneficial interests of a
Shareholder in the Trust representing undivided beneficial interests in the
assets of the Trust, which may be evidenced by certificates, including, without
limitation, Common Shares and Preferred Shares.

(v) Sponsor. "Sponsor" shall mean any Person directly or
indirectly instrumental in organizing, wholly or in part, the Trust or any
Person who will manage or participate in the management of the Trust and any
Affiliate of any such Person, but does not include (i) any person whose only
relationship with the Trust is that of an independent asset manager and whose
only compensation from the Trust is as such, and (ii) wholly independent third
parties such as attorneys, accountants and underwriters whose only compensation
from the Trust is for professional services.

(w) Total Assets of the Trust. "Total Assets of the Trust"
shall mean the value of all assets of the Trust as shown on the books of the
Trust.

(x) Trust. "Trust" shall mean the Massachusetts business trust
created pursuant to this Declaration of Trust.

(y) Trustees. "Trustees" shall have the meaning ascribed to
such term in the heading of this Declaration of Trust and who collectively shall
constitute the Board of Trustees of the Trust.

ARTICLE III

MEETING OF SHAREHOLDERS

SECTION 3.1. ANNUAL MEETINGS. Annual meetings of Shareholders
for the election of Trustees and for such other business as may be stated in the
notice of the meeting shall be held at such place and at such time and date as
shall be determined by or in the manner prescribed by the Bylaws. At each annual
meeting, the Shareholders entitled to vote shall elect a Board of Trustees and
may transact such other Trust business as shall be stated in the notice of the
meeting.

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SECTION 3.2. OTHER MEETINGS. Meetings of Shareholders for any
purpose other than the election of Trustees may be held at such time and place
as shall be determined by or in the manner prescribed in the Bylaws.

SECTION 3.3. VOTING. Each Shareholder entitled to vote in
accordance with the terms and provisions of this Declaration of Trust shall be
entitled to one vote for each Share held by such Shareholder in the manner
provided for in the Bylaws. All elections for Trustees shall be decided by
plurality vote (at a meeting or without a meeting, provided that at least a
majority of the outstanding Shares shall cast a vote in such election). Unless
otherwise provided by this Declaration of Trust, all other questions shall be
decided by a majority of the votes cast at a meeting at which a quorum is
present or a majority of outstanding Shares cast, without a meeting.
Notwithstanding the foregoing, none of the Advisor, the Trustees nor their
Affiliates may vote any Shares held by them, or consent, on matters submitted to
the Shareholders regarding:

(a) the removal of the Advisor, the Trustees or their
Affiliates; or

(b) any transaction between the Trust and the Advisor, the
Trustees or their Affiliates.

Shares held by the Advisor, the Trustees and their Affiliates
shall not be included in determining the number of outstanding Shares entitled
to vote on the matters discussed in (a) and (b) above, nor in the Shares
actually voted thereon.

SECTION 3.4. ACCESS TO RECORDS. Any Shareholder and any
designated representative thereof shall be permitted access to all records of
the Trust to the extent required by law or set forth in the Bylaws.

ARTICLE IV

TRUSTEES

SECTION 4.1. NUMBER, TERM AND QUALIFICATIONS. The number of
Trustees shall be not less than three (3) nor more than nine (9), as fixed from
time to time by the Board of Trustees or as provided for in the Bylaws, a
majority of whom shall at all times be Independent Trustees (except that in the
event of death, resignation or removal of an Independent Trustee, the
requirement for such majority shall not be applicable for a period of sixty (60)
days). The Trustees shall be elected at the annual meeting of Shareholders. Each
Trustee shall serve a term of one year subject to his successor being elected
and qualified.

SECTION 4.2. AUTHORITY OF TRUSTEES. Consistent with the duties
and obligations of, and limitations on, the Trustees as set forth herein, and
under the laws of the Commonwealth of Massachusetts, the Trustees are
accountable to the Shareholders as fiduciaries and are required to perform their
duties in good faith and in a manner each Trustee believes to be in the best
interest of the Trust and its Shareholders, with such care, including reasonable
inquiry, as a prudent person in a like position would use under similar
circumstances. In addition, the Trustees shall have a fiduciary duty to the
Shareholders to review the relationship of the Trust with the Advisor.

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The Trustees shall have full, absolute and exclusive power,
control, management and authority over the Trust's assets and over the business
and affairs of the Trust to the same extent as if the Trustees were the sole
owners thereof in their own right. The enumeration of any specific power or
authority herein shall not be construed as limiting the aforesaid power or
authority or any specific power or authority. The Trustees shall have the power
to enter into commitments to make any investment, purchase or acquisition, or to
exercise any power authorized by this Declaration of Trust or the Bylaws.

The Trustees may establish written policies on investments and
borrowings and shall monitor the administrative procedures, investment
operations and performance of the Trust and the Advisor to assure that such
policies are carried out.

SECTION 4.3. REMOVAL OF TRUSTEES. Any one or more of the
Trustees may be removed as provided for in the Bylaws or, with or without cause,
by the affirmative vote of the holders of a majority of the outstanding Shares
entitled to vote, subject to the provisions of Article III, Section 3.3 hereof.

SECTION 4.4. NEWLY CREATED TRUSTEESHIPS AND VACANCIES. Newly
created trusteeships resulting from an increase in the number of Trustees or
vacancies occurring in the Board of Trustees for any reason except the removal
of Trustees by Shareholders shall be filled in the manner provided for in the
Bylaws. Vacancies occurring as a result of the removal of Trustees by
Shareholders shall be filled by the Shareholders.

ARTICLE V

OFFICERS

SECTION 5.1. OFFICERS. The Board of Trustees may appoint
Officers of the Trust in accordance with the terms of the Bylaws.

ARTICLE VI

ADVISOR

SECTION 6.1. EMPLOYMENT OF ADVISOR. The Board of Trustees is
responsible for the general policies of the Trust and for such general
supervision and management of the business of the Trust as may be necessary to
insure that such business conforms to the provisions of this Declaration of
Trust and the Bylaws. However, the Board of Trustees and officers shall not be
required personally to conduct all the business of the Trust and consistent with
their ultimate responsibility as stated above and the Bylaws, the Board of
Trustees shall have the power to appoint, employ or contract with any Person
(including one or more of the directors or officers or any corporation,
partnership, or trust in which one or more of the Trustees or officers may be
directors, officers, stockholders, partners or trustees) as the Board of
Trustees may deem necessary or proper for the transaction of the business of the
Trust. The Board of Trustees, upon approval by a majority of the Trustees
(including a majority of the Independent Trustees), shall initially employ
Related AMI (herein referred to as the "Advisor") to advise the Trust, in
respect of the acquisition and disposition of investments by the Trust, and to
supervise other aspects of the business of the Trust, and the Trust may grant or
delegate such

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authority to the Advisor as the Board of Trustees may in its sole discretion
deem necessary or desirable without regard to whether such authority is normally
granted or delegated by the Board of Trustees, including, without limitation,
the power to delegate to the Advisor the authority (i) to cause the Trust to
enter into, or dispose of, investments (not involving Affiliates of the Advisor,
a Trustee, the Sponsor or Affiliates thereof unless expressly permitted by the
Board of Trustees) and (ii) to defer any fees due to it under the Advisory
Agreement, without the approval of the Board of Trustees. The Board of Trustees
may, upon approval by a majority of the Trustees (including a majority of the
Independent Trustees), employ, or contract with any other Person to serve as the
Advisor, with the same rights, powers and limitations described herein in
substitution of Related AMI.

The Board of Trustees (subject to the provisions of the
Bylaws) shall have the power to determine the terms of any agreement with, and
compensation of, the Advisor or any other Person whom they may employ or with
whom they may contract; provided, however, that any decision to employ or
contract with any Trustee or any Person of which a Trustee is an Affiliate,
shall be valid only if made, approved, or ratified by a majority of the Trustees
(including a majority of Independent Trustees) not otherwise interested in such
transaction as being fair and reasonable to the Trust and on terms and
conditions not less favorable to the Trust than those available from
unaffiliated third parties. The Board of Trustees may exercise broad discretion
in allowing the Advisor to administer and regulate the operations of the Trust,
to act as agent for the Trust, to execute documents on behalf of the Board of
Trustees, and to make executive decisions which conform to the general policies
and general principles previously established by the Board of Trustees.

SECTION 6.2. OTHER ACTIVITIES OF ADVISOR. The Advisor shall
not be required to administer the investment activities of the Trust as its sole
and exclusive function. The Advisor may have other business interests and may
engage in other activities similar or in addition to those relating to the
Trust, including the rendering of services and advice to other Persons
(including REITS) and the management of other investments (including investments
of the Advisor and its Affiliates). The Board of Trustees may request the
Advisor to engage in other activities which complement the Trust's investments
and to provide services requested by the borrowers or prospective borrowers from
the Trust, and the Advisor may receive compensation or commissions therefor from
the Trust or other Persons.

The Advisor shall seek out and present to the Trust whether
through its own efforts, or those of third parties retained by it, investment
opportunities consistent with the investment policies and objectives of the
Trust and such investment policies as the Trustees may adopt from time to time.
The Advisor shall be obligated to present an investment opportunity to the Trust
if (i) such opportunity is of a character which could be taken by the Trust,
(ii) such opportunity is compatible with the Trust's investment objectives and
policies and (iii) the Trust has the financial resources to take advantage of
such opportunity before the Advisor may take advantage of such opportunity for
its own account or present or recommend it to others. Subject to the limitations
contained in this Paragraph, the Advisor shall be protected in taking for its
own account or recommending to others any such particular investment
opportunity.

SECTION 6.3. INITIAL INVESTMENT BY AFFILIATES OF THE ADVISOR.
Prior to the initial public offering of Shares pursuant to the Prospectus, the
Advisor

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made an Initial Investment of $200,000 in the Trust by acquiring 10,000 Common
Shares. The Advisor may only sell Common Shares represented by this Initial
Investment through the market on which the Common Shares are normally traded.

ARTICLE VII

THE SHARES AND SHAREHOLDERS

SECTION 7.1. SHARES.

(a) Authorization of Shares. The Trust is authorized to sell
and issue as many Shares (including fractional shares) as the Trustees shall
determine in their sole discretion. A majority of the Trustees, including a
majority of the Independent Trustees, are authorized to determine from time to
time the number of such authorized Shares that will be sold and issued to the
public or others.

The Shares may be issued for such consideration as the
Trustees shall determine, including upon the conversion of convertible debt, or
by way of share dividend or share split in the discretion of the Trustees.
Except as otherwise provided herein, all Shares shall have equal voting,
dividend, distribution, liquidation, redemption and other rights. Shares
reacquired by the Trust may be canceled by action of the Trustees. All Shares
shall be fully paid and non-assessable by or on behalf of the Trust upon receipt
of full consideration for which they have been issued or without additional
consideration if issued by way of share dividend, share split, or upon the
conversion of convertible debt. Unless otherwise permitted by the Trustees, the
Shares shall not entitle the holder to preference, preemptive, appraisal,
conversion, or exchange rights of any kind.

(b) Common Shares. Each Common Share shall entitle the holder
thereof to one vote. The Trustees may reclassify any unissued Common Shares from
time to time in one or more classes or series of beneficial interests.

(c) Preferred Shares. Preferred Shares shall not entitle the
holder thereof to vote unless the Trustees, in their sole discretion, determine
to grant voting rights to holders of Preferred Shares. The Trustees may classify
any unissued Preferred Shares and reclassify any previously classified but
unissued Preferred Shares of any series from time to time, in one or more series
of beneficial interests in the Trust.

(d) Classified or Reclassified Shares. Prior to issuance of
classified or reclassified Shares of any class or series, the Trustees by
resolution shall: (a) designate that class or series to distinguish it from all
other classes and series of Shares of the Trust; (b) specify the number of
Shares to be included in the class or series; and (c) set or change, subject to
the express terms of any class or series of Shares of the Trust outstanding at
the time, the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
and terms and conditions of redemption for each class or series.

(e) Trust Agreement and Bylaws. All Persons who shall acquire
Shares in the Trust shall acquire the same subject to the provisions of this
Declaration of Trust and the Bylaws and shall be bound by the terms and
provisions of this Declaration of Trust and the Bylaws.

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SECTION 7.2. SHAREHOLDERS' DISCLOSURES; REDEMPTION OF SHARES.
The Shareholders shall upon demand disclose to the Trust in writing such
information with respect to direct and indirect ownership of the Shares as the
Board of Trustees deems necessary to comply with the provisions of the Code and
the regulations thereunder or to comply with the requirements of any other
taxing authority, including the provisions relating to qualification of the
Trust as a REIT. If the Board of Trustees shall at any time be of the opinion
that direct or indirect ownership of Shares of the Trust has or may become
concentrated to an extent which would prevent the Trust from qualifying as a
REIT under the Real Estate Investment Trust Provisions of the Code, and whether
or not any Shares are or may become Excess Shares under Article X, the Board of
Trustees shall have the power by lot or other means deemed equitable by them to
prevent the transfer of Shares of the Trust and/or call for redemption a number
of such Shares sufficient in the opinion of the Board of Trustees to maintain or
bring the direct or indirect ownership of Shares of the Trust into conformity
with the requirements for REITs. The redemption price shall be (i) the last
reported sale price of the Shares on the last business day prior to the
redemption date on the principal national securities exchange on which the
Shares are listed or admitted to trading, or (ii) if the Shares are not so
listed or admitted to trading, the average of the highest bid and lowest asked
prices on such last business day as reported by the National Quotation Bureau
Incorporated, the NASDAQ National Quotation System or a similar organization
selected by the Trust for such purpose, or (iii) if not determinable as
aforesaid, as determined in good faith by the Board of Trustees. From and after
the date fixed for redemption by the Board of Trustees, the holder of any Shares
so called for redemption shall cease to be entitled to dividends, distributions,
voting rights and other benefits with respect to such Shares, except for the
right to payment of the redemption price fixed as aforesaid. For the purpose of
this Section 7.2, the term "ownership" of Shares shall be determined as provided
in Section 544 of the Code or any successor provision.

SECTION 7.3. RIGHT TO REFUSE TO TRANSFER SHARES. Whenever it
is deemed by them to be reasonably necessary to protect the tax status of the
Trust, the Board of Trustees may require a statement or affidavit from each
Shareholder or proposed transferee of Shares setting forth the number of Shares
already owned by him and any related person specified in the form prescribed by
the Board of Trustees for that purpose. If, in the opinion of the Board of
Trustees, which shall be conclusive, any proposed transfer would jeopardize the
status of the Trust as a REIT under the Real Estate Investment Trust Provisions
of the Internal Revenue Code, whether or not any Shares are or may become Excess
Shares under Article X, the Trustees may refuse to permit such transfer. Any
attempted transfer for which the Trustees have refused their permission shall be
void and of no effect to transfer any legal or beneficial interest in the
Shares. All contracts for the sale or other transfer of Shares shall be subject
to this provision.

SECTION 7.4. LEGAL OWNERSHIP OF ASSETS OF THE TRUST. The legal
ownership of the assets of the Trust and the right to conduct the business of
the Trust are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than beneficial interest in the Trust conferred
by their Shares issued hereunder and they shall have no right to compel any
partition, division, dividend or distribution of the Trust or any of the assets
of the Trust.

SECTION 7.5. SHARES DEEMED PERSONAL PROPERTY. The Shares shall
be personal property and shall confer upon the holders thereof only the interest
and rights

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specifically set forth in this Declaration of Trust. The death, insolvency or
incapacity of a Shareholder shall not dissolve or terminate the Trust or affect
its continuity nor give his legal representative any rights whatsoever, whether
against or in respect of other Shareholders, the Trustees or the assets of the
Trust or otherwise.

SECTION 7.6. SHAREHOLDERS RECORD DATE. In order that the Trust
may determine the Shareholders entitled to notice of or to vote at any meeting
of Shareholders or any adjournment thereof, or to express consent to Trust
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Trustees may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting or other action. A determination of
Shareholders of record entitled to notice of or to vote at a meeting of
Shareholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Trustees may fix a new record date for the adjourned meeting.

SECTION 7.7. DIVIDENDS. Subject to the provisions of this
Declaration of Trust, the Board of Trustees may, out of funds legally available
therefor, declare dividends, including deficiency dividends, if necessary, upon
the Shares of the Trust as and when it deems expedient. Before declaring any
dividends there may be set apart out of any funds of the Trust available for
dividends, such sum or sums as the Board of Trustees, from time to time in its
discretion, deems proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Trustees shall deem conducive to the interests of the Trust. The Board of
Trustees may declare a consent dividend as long as the form of the actual and
consent dividends for the taxable year do not constitute a preferential
distribution.

ARTICLE VIII

DURATION, AMENDMENT
AND TERMINATION PROCEDURE

SECTION 8.1. DURATION OF TRUST. Until the Trust terminates or
is terminated as provided in Section 8.3 below, the Trust shall continue in such
manner that the Trustees shall have all the powers and discretion, express and
implied, conferred upon them by law or by this Declaration of Trust.

SECTION 8.2. AMENDMENT PROCEDURE. This Declaration of Trust
may be amended by a majority of the Trustees, including a majority of the
Independent Trustees, with the approval of the holders of a majority of the
outstanding Shares entitled to vote. Notwithstanding the foregoing, a majority
of the Trustees, including a majority of the Independent Trustees, are
authorized to alter or repeal any provision of this Declaration of Trust,
without the consent of the Shareholders, (i) to the minimum extent necessary,
based on an opinion of counsel, to comply with the requirements of the
provisions of the Internal Revenue Code applicable to REITS, the regulations
issued thereunder, and any ruling on or interpretation of the Internal Revenue
Code or the regulations thereunder, (ii) to delete or add any provision of this
Declaration of Trust required to be so deleted or added by the staff of the
Securities and

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Exchange Commission or a state "blue sky" commissioner or such similar official,
which addition or deletion is deemed by such commissioner or official to be for
the benefit or protection of Shareholders, or (iii) to clarify any ambiguities
or correct any inconsistencies.

SECTION 8.3. TERMINATION OF TRUST. (a) The Trust shall
continue perpetually, unless earlier terminated at any time by the affirmative
vote of holders of a majority of the outstanding Shares entitled to vote thereon
and the affirmative vote of a majority of the Trustees. Upon the termination of
the Trust:

(i) The Trust shall carry on no business except for the
purpose of winding up its affairs.

(ii) The Trustees shall proceed to wind up the affairs of
the Trust and all of the powers of the Trustees under this
Declaration of Trust shall continue until the affairs of the Trust
shall have been wound up, including the power to fulfill or discharge
the contracts of the Trust, collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all or any part of the
remaining assets of the Trust to one or more Persons at public or
private sale for consideration which may consist in whole or in part
of cash, Securities or other property of any kind, discharge or pay
its liabilities, and do all other acts appropriate to liquidate its
business.

(iii) After paying or adequately providing for the payment
of all liabilities, and upon receipt of such releases, indemnities,
and refunding agreements as they deem necessary for their protection,
the Trustees shall convert, to the extent possible, the remaining
assets of the Trust to cash, and shall distribute such cash among the
Shareholders according to their respective rights.

(b) After termination of the Trust and distribution to the
Shareholders as herein provided, the Trustees shall execute and lodge among the
records of the Trust an instrument in writing setting forth the facts of such
termination, and the Trustees shall thereupon be discharged from all further
liabilities and duties hereunder, and the rights and interests of all
Shareholders shall thereupon cease.

ARTICLE IX

EXCULPATION AND
INDEMNIFICATION AND OTHER MATTERS

SECTION 9.1. LIMITATION OF LIABILITY OF SHAREHOLDERS, TRUSTEES
AND OFFICERS WHO ARE PERFORMING SERVICES ON BEHALF OF THE TRUST. The Trustees
and officers, in incurring any debts, liabilities or obligations, or in taking
or omitting any other actions for or in connection with the Trust are, and shall
be deemed to be, acting as Trustees or officers of the Trust and not in their
own individual capacities. No Trustee or officer shall, nor shall any
Shareholders, be liable for any debt, claim, demand, judgment, decree, liability
or obligation of any kind of, against or with respect to the Trust, arising out
of any action taken or omitted for or on behalf of the Trust and the Trust shall
be solely liable therefor and resort shall be had solely to the assets of the
Trust for the payment or performance thereof. The Shareholders shall not be
personally liable on account of any contractual obligation

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undertaken by the Trust. Each Shareholder shall be entitled to pro rata
indemnity from the Trust estate if, contrary to the provision hereof, such
Shareholder shall be held to any such personal liability. All contracts to which
the Trust is a party shall include a provision that the Shareholders shall not
be personally liable on such contract.

SECTION 9.2. INDEMNIFICATION. (a) Subject to any limitations
contained herein, the Trust shall indemnify and hold harmless the Trustees, the
Advisor, and their Affiliates who are performing services on behalf of the Trust
(all of the foregoing being referred to as "Indemnified Parties" and each being
referred to as an "Indemnified Party") against any and all losses, claims,
demands, costs, damages, liabilities, joint and several, expenses of any nature
(including attorneys' fees and disbursements), and other amounts paid and
reasonably incurred by them in connection with or by reason of any act performed
or omitted to be performed by them in connection with the operation or business
of the Trust, provided, that, (i) the Trustee or Advisor has determined, in good
faith, that the course of conduct which caused the loss or liability was in the
best interests of the Trust, (ii) such liability or loss was not the result of
negligence or misconduct on the part of the Indemnified Party and (iii) such
indemnification or agreement to be held harmless is recoverable only out of the
assets of the Trust and not from the Shareholders.

The Trust shall not indemnify the Indemnified Parties for any
liability imposed by judgment, and costs associated therewith, including
attorneys' fees, arising from or out of a violation of state or federal
securities laws. Notwithstanding anything to the contrary in the preceding
paragraph, the Trust may indemnify the Indemnified Parties for settlements and
related expenses of lawsuits alleging securities law violations, and for
expenses incurred in successfully defending such lawsuits, only if: (a) a court
either (i) approves the settlement and finds that indemnification of the
settlement and related costs should be made, or (ii) approves indemnification of
litigation costs if there has been a successful defense, or (b) there has been a
dismissal with prejudice on the merits (without a settlement). Any person
seeking indemnification shall apprise the court of the published position of the
Securities and Exchange Commission, the Missouri Securities Division and the
Tennessee Securities Division with respect to indemnification for securities law
violations, before seeking court approval for indemnification.

(b) The indemnification provided by the provisions of this
Article IX shall continue for the period of time of service or for any matter
arising out of the term of service as to an Indemnified Party and shall inure to
the benefit of the heirs, executors and administrators of such a person.

(c) The Trust shall have the power to purchase and maintain
insurance on behalf of any person who is or was an Indemnified Party who
performs services on behalf of the Trust or is or was serving at the request of
the Trust as a director, trustee, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise in which the
Trust has an interest against any liability asserted against him or it and
incurred by him or it in any such capacity, or arising out of his or its status
as such; provided, however, that the Trust shall not incur the cost of any
liability insurance which insures an Indemnified Party who performs services on
behalf of the Trust or is or was serving at the request of the Trust as a
director, trustee, officer, employee or agent of another corporation,
partnership, joint venture,

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trust or other enterprise in which the Trust has an interest against liability
for which he or it could not be indemnified under this Article IX.

(d) In the event a particular state holds a Shareholder
personally liable for claims against the Trust (such as tort claims, contract
claims where the underlying agreement does not specifically exclude Shareholder
liability, claims for taxes and certain statutory liability), the Shareholder
will, upon payment of any such liability, and in the absence of willful
misconduct on his part, be entitled to reimbursement from the general assets of
the Trust, to the extent such assets are sufficient to satisfy the claim.

(e) The provision of advances from the Trust to the
Indemnified Parties for legal expenses and other costs incurred as a result of a
legal action is permissible only if the following three conditions are
satisfied:

(i) the legal action relates to the performance of duties
or services by the Indemnified Party on behalf of the Trust;

(ii) the legal action is initiated by a third party who is
not a Shareholder; and

(iii) the Indemnified Party undertakes to repay the
advanced funds to the Trust in cases in which such Indemnified Party
would not be entitled to indemnification hereunder.

SECTION 9.3. RIGHT OF TRUSTEES AND OFFICERS TO OWN SHARES OR
OTHER PROPERTY AND TO ENGAGE IN OTHER BUSINESS. Except as provided for in this
Declaration Trust and the Bylaws, any Trustee or officer may acquire, own, hold
and dispose of Shares in the Trust, for his individual account, and may exercise
all rights of a Shareholder to the same extent and in the same manner as if he
were not a Trustee or officer. Subject to the provisions of the Bylaws, any
Trustee or officer may have personal business interests and may engage in
personal business activities, which interests and activities may include the
acquisition, syndication, holding, management, operation or disposition, for his
own account or for the account of others, of interests in real property or
Persons engaged in the real estate business, even if the same directly compete
with the actual business being conducted by the Trust; provided such interests
or activities do not have a material adverse effect on the business of the
Trust. Subject to the provisions of the Bylaws, any Trustee or officer may be
interested as trustee, officer, director, stockholder, partner, member, advisor
or employee, or otherwise have a direct or indirect interest in any Person who
may be engaged to render advice or services to the Trust, and may receive
compensation from such Person as well as compensation as Trustee, officer or
otherwise hereunder and no such activities shall be deemed to conflict with his
duties and powers as Trustee or officer. Notwithstanding anything to the
contrary contained in this Section 9.3, Independent Trustees shall at all times
limit their activities so that they at all times satisfy the definition of
Independent Trustees as set forth in Article II, Section 2.1 hereof.

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ARTICLE X

EXCESS SHARES

SECTION 10.1. EXCESS SHARES. (a)If, at any time, a Person (as
defined in (c) below only for purposes of this Article X) shall be or become an
Owner (as defined in (c) below) of Shares of the Trust in excess of 9.8% of the
outstanding Shares entitled to vote (the "Limit"), those Shares of the Trust
most recently acquired by such Person which are in excess of the Limit,
including for this purpose Shares deemed owned through attribution, shall
constitute "Excess Shares." Excess Shares shall have the following
characteristics:

(i) holders of Excess Shares shall not be entitled to
exercise any voting rights with respect to such Excess Shares;

(ii) Excess Shares shall not be deemed to be outstanding
for the purpose of determining a quorum at the annual meeting or any
special meeting of Shareholders or for determining the number of
outstanding Shares for purposes of determining a "majority of the
outstanding Shares" in connection with a Shareholders' vote without a
meeting;

(iii) any dividends or other distributions with respect to
Excess Shares which would have been payable in respect of Shares had
they not constituted "Excess Shares" shall be accumulated by the
Trust and deposited in a savings account in a New York bank (which
may be the Trust's dividend disbursing agent) for the benefit of, and
be payable to, the holder or holders of such Shares at such time as
such Excess Shares shall cease to be Excess Shares; and

(iv) Excess Shares shall be deemed to have been offered
for sale to the Trust or its designee at their fair market value for
a period of one hundred twenty (120) days from the date of (A) the
transfer of Shares which made the Shares Excess Shares if the Trust
has actual knowledge that such transfer creates Excess Shares or (B)
if such transfer is not actually known to the Trust, the
determination by the Trustees in good faith by resolution duly
adopted that a transfer creating Excess Shares has taken place (the
"Offer Period"). Fair market value shall be determined as of the date
of (A) or (B) above, and shall be the price as determined in good
faith by the Trustees, provided, however, (1) if the Shares are
listed on a national stock exchange, the fair market value shall be
the closing price on that national stock exchange, or (2) if the
Shares are not listed on a national stock exchange but publicly
quoted on the National Quotation Bureau Incorporated's "pink sheets"
or the NASDAQ National Quotation System, then the fair market value
shall be the closing bid price on the applicable system.

The Trust may accept the deemed offer for Excess Shares by
mailing by registered mail (return receipt requested) a written notice to the
record holder of Excess Shares at the address appearing on the Trust's stock
transfer records stating the Trust's acceptance of the offer within the Offer
Period. Payment for Excess Shares shall be made by the Trust by check, subject
to collection, within 30 days after acknowledgment of receipt of the
above-described

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notice. After notice has been sent, Excess Shares shall have no further rights
beyond the right to receive payment pursuant to this Paragraph.

(b) Each Person who becomes the Owner of Excess Shares is
obliged immediately to give or cause to be given written notice thereof to the
Trust and to give to the Trust such other information as the Trust may
reasonably require of such Person (i) with respect to identifying all Owners and
amount of Ownership of its outstanding Shares held directly or by attribution by
such Person, and (ii) such other information as may be necessary to determine
the Trust's status under the Code.

(i) A Person shall be considered to "Own," be the "Owner"
or have "Ownership" of Shares if he is treated as owner of such
Shares for purposes of part 11, subchapter M of the Code, including
the attribution of ownership provisions of Sections 542 and 544 of
the Code, or if such Person would have beneficial ownership of such
Shares as defined under Rule 13d-3 of the Securities Exchange Act of
1934, as amended (the "Act") (all as in effect on the date of the
formation of the Trust);

(ii) "Person" includes an individual, corporation,
partnership, estate, trust, association, joint stock company or other
entity and also includes a group as that term is used for purposes of
Section 13(d)(3) of the Act (as in effect on the date of the
formation of the Trust); and

(iii) In the case of an ambiguity in the application of
any of the provisions of (i) and (ii) above, the Trustees shall have
the power to determine for the purposes of this Article X on the
basis of information known to them (A) whether any person owns
Shares, (B) whether any two or more individuals, corporations,
partnerships, estates, trusts, associations or joint stock companies
or other entities constitute a Person, and (C) whether any of the
entities of (B) above constitute a group.

(d) If any provision of this Article X or any application of
any such provision is determined to be invalid by any federal or state court
having jurisdiction over the issues, the validity of the remaining provisions
shall not be affected.

(e) Nothing contained in this Article X shall limit the
authority of the Trustees to take such other action as they deem necessary or
advisable to protect the Trust and the interests of its Shareholders by
preservation of the Trust's status as a REIT under the Code, including, without
limitation, those provided in Sections 7.4 and 7.5 of Article VII.

(f) All references in this Declaration of Trust to the vote of
Shares shall be deemed to include all Shares other than Excess Shares.

(g) Excess Shares shall be deemed to be of a class separate
from the class of Shares of beneficial interest provided in Article VII, Section
7.1 hereof, and upon any such Share of beneficial interest becoming an Excess
Share, it shall be deemed to have been automatically converted into a Share of
such class of Excess Shares; and upon a share ceasing to be held by a person in
whose hands it is no longer deemed to be an Excess Share, such share shall be
deemed

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to have been automatically converted into a share of class of Shares of
beneficial interest described in Article VII, Section 7.1 hereof.

ARTICLE XI

CONVERSION TRANSACTIONS

SECTION 11.1. APPROVAL OF CONVERSION TRANSACTIONS.
Notwithstanding any provision to the contrary in this Declaration of Trust, and
subject to the restrictions on Roll-Ups described in Article XII, Section 12.3
below, the approval of the holders of a majority of the Shares and the unanimous
approval of the Independent Trustees shall be required for any exchange offer,
merger, consolidation or similar transaction involving the Trust in which the
Shareholders receive Securities in a surviving entity having substantially
longer duration, materially different investment objectives and policies, or a
management compensation structure that is anticipated to provide significantly
greater management compensation, from that described in the Consent Statement,
except for any such transaction affected because of changes in applicable law,
or to preserve tax advantages for a majority in interest of the Shareholders.

ARTICLE XII

ROLL-UPS

SECTION 12.1. APPRAISALS. An appraisal of all the Trust's
assets shall be obtained from a competent Independent Expert in connection with
a proposed Roll-Up.

If the appraisal will be included in a prospectus used to
offer the Securities of a Roll-Up Entity, the appraisal shall be filed with the
Securities and Exchange Commission and the states as an exhibit to the
registration statement for the offering of the Roll-Up Entity's Shares. The
issuer of the Roll-Up Entity's Shares shall be subject to liability for
violation of Section 11 of the Securities Act of 1933 and comparable provisions
under state laws for any material misrepresentations or material omissions in
the appraisal.

The Trust's assets shall be appraised on a consistent basis.
The appraisal shall:

(a) be based on an evaluation of all relevant information;

(b) indicate the value of the Trust's assets as of a date
immediately prior to the announcement of the proposed Roll-Up; and

The terms of the engagement of the Independent Expert shall
clearly state that the engagement is for the benefit of the Trust and its
Shareholders. A summary of the appraisal shall be included in a report to the
Shareholders in connection with the proposed Roll-Up.

SECTION 12.2. SHAREHOLDER OPTIONS. The person sponsoring the
Roll-Up shall offer to Shareholders who vote "no" on the proposed Roll-Up the
choice of:

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(a) accepting the Securities of the Roll-Up Entity offered in
the proposed Roll-Up; or

(b) one of the following choices:

(i) remaining as Shareholders of the Trust and preserving
their interests therein on the same terms and conditions as existed
previously; or

(ii) receiving cash in an amount equal to the
Shareholders' pro rata share of the appraised value of the Net Assets
of the Trust.

SECTION 12.3. RESTRICTIONS. The Trust shall not participate in
any proposed Roll-Up which would:

(a) result in Shareholders having voting rights that are less
than those provided in this Declaration of Trust;

(b) result in the Shareholders having rights to receive
reports that are less than those provided in the Declaration of Trust or the
Bylaws;

(c) include provisions which would operate to materially
impede or frustrate the accumulation of shares by any purchaser of the
Securities of the Roll-Up Entity (except to the minimum extent necessary to
preserve the tax status of the Roll-Up Entity);

(d) limit the ability of an investor to exercise the voting
rights of its Securities in the Roll-Up Entity on the basis of the number of the
Trust's Shares held by that investor;

(e) result in investors in the Roll-Up Entity having rights of
access to the records of the Roll-Up Entity that are less than those provided in
the Bylaws; or

(f) place the cost of the transaction on the Trust if the
Roll-Up is not approved by the Shareholders; provided, however, that nothing
shall be construed to prevent participation in any proposed Roll-Up which would
result in Shareholders having rights and restrictions comparable to those
contained herein.

ARTICLE XIII

MISCELLANEOUS

SECTION 13.1. SUCCESSORS IN INTEREST. This Declaration of
Trust shall be binding upon and inure to the benefit of the undersigned Trustees
and their successors, assigns, heirs, distributees and legal representatives,
and every Shareholder and his successors, assigns, heirs, distributees and legal
representatives.

SECTION 13.2. INSPECTION OF RECORDS. Inspection of books and
records shall be permitted to the same extent as permitted under law applicable
to shareholders of a corporation organized in the Commonwealth of Massachusetts,
unless broader inspection

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rights have been granted to the Shareholders pursuant to the terms of the
Bylaws, in which event the Shareholders shall be entitled to such broader
inspection rights.

SECTION 13.3. SEVERABILITY. If any provision of this
Declaration of Trust shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such jurisdiction and
shall not in any manner affect or render invalid or unenforceable such provision
in any other jurisdiction or any other provision of this Declaration of Trust in
any jurisdiction.

SECTION 13.4. APPLICABLE LAW. This Declaration of Trust has
been executed, acknowledged and delivered by the Trustees with reference to the
statutes and laws of the Commonwealth of Massachusetts, and the rights of all
parties and the construction and effect of every provision hereof shall be
subject to and construed according to the statutes and laws of said Commonwealth
of Massachusetts.

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IN WITNESS WHEREOF, the undersigned Trustees of AMERICAN
MORTGAGE ACCEPTANCE COMPANY, have signed this Third Amended and Restated
Declaration of Trust as Trustees as of __________ __, 2005, which date is the
effective date of this Third Amended and Restated Declaration of Trust.

__________________________________________

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APPENDIX B

AMERICAN MORTGAGE ACCEPTANCE COMPANY
------------------------------------

AMENDED AND RESTATED BYLAWS

ARTICLE I

DEFINITIONS

SECTION 1.1. Whenever used in these Bylaws, unless the context
otherwise requires, the terms defined in this Article I shall have the following
respective meanings:

(a) Acquired Guaranteed Mortgage Certificate. "Acquired Guaranteed
Mortgage Certificate" shall mean any mortgage-backed security guaranteed by
Fannie Mae or Freddie Mac which is backed by a conventional mortgage or
mortgages and acquired by or on behalf of the Trust other than in connection
with the origination of the underlying Mortgage or Mortgages.

(b) Acquired Insured Mortgage. "Acquired Insured Mortgage" shall mean
any Mortgage which is a fully funded mortgage loan insured by FHA and acquired
by or on behalf of the Trust as a whole loan or a beneficial interest or a
participating interest therein or by a purchase of mortgage-backed Securities or
pass-through certificates backed by indebtedness secured by FHA insured mortgage
loans. Acquired Insured Mortgage shall not include Ginnie Mae mortgage-backed
Securities or pass-through certificates backed by indebtedness secured by an
Originated Insured Mortgage.

(c) Acquired Mortgage. "Acquired Mortgage" shall mean either an
Acquired Insured Mortgage or an Acquired Guaranteed Mortgage Certificate.

(d) Acquisition Fees. "Acquisition Fees" shall mean the total of all
fees and commissions, however designated, paid by any party in connection with
the origination or acquisition of Mortgages and other Mortgage Investments by
the Trust. Included in the computation of such fees or commissions shall be any
real estate commission, selection fee, development fee, nonrecurring management
fee, or any fee of a similar nature, however designated.

(e) Additional Loan. "Additional Loan" shall mean the non-interest
bearing loan made to the developer or a sponsor of a Development (or the general
partners or other principals of the owner of the Development) in connection with
a Mortgage Loan.

(f) Additional Mortgage Investments. "Additional Mortgage Investments"
shall mean all direct and indirect investments in real estate equity and debt,
which investments shall include, without limitation, Uninsured Mortgage Loans,

Construction Loans, Bridge Loans, Mezzanine Loans, Mortgage Derivatives and
Subordinated Interests in CMBS.

(g) Advisor. "Advisor" shall mean the person(s) or entity responsible
for directing or performing the day-to-day business affairs of the Trust,
including a person or entity to which an Advisor subcontracts substantially all
such functions.

(h) Advisory Agreement. "Advisory Agreement" shall mean the agreement
between the Trust and the Advisor pursuant to which the Advisor will act as the
investment advisor and administrator of the Trust.

(i) Affiliate. "Affiliate" shall mean (i) any Person directly or
indirectly controlling, controlled by or under common control with another
Person, (ii) any Person owning or controlling 10% or more of the outstanding
voting Securities or beneficial interests of such other Person, (iii) any
officer, director, trustee or general partner of such Person and (iv) if such
other Person is an officer, director, trustee or partner of another entity, then
the entity for which that Person acts in any such capacity.

(j) Affiliated Programs. "Affiliated Programs" shall mean Aegis Realty,
Inc., Capital Mortgage Plus L.P., any similar programs organized by the Sponsor,
any successors to such programs or a combination of such programs.

(k) Asset Management Fee. "Asset Management Fee" shall mean the Asset
Management Fee payable to the Advisor under the provisions of the Advisory
Agreement.

(l) Average Invested Assets. "Average Invested Assets" shall mean the
average of the aggregate Book Value of the assets of the Trust for any period
invested, directly or indirectly, in Mortgage Investments, before reserves for
depreciation or bad debts or other similar non-cash reserves computed by taking
the average of such values at the end of each month during such period.

(m) Book Value. "Book Value" shall mean the value of an asset or assets
of the Trust on the books of the Trust before provision for amortization or
depreciation, and before deducting any indebtedness or other liability in
respect thereto, except that no asset shall be valued at more than its fair
value as determined by the Board of Trustees.

(n) Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended, or corresponding provisions of subsequent revenue laws.

(o) CMOs. "CMOs" shall mean collateralized mortgage obligations.

(p) Common Shares. "Common Shares" shall mean any Shares classified or
reclassified as such by the Trustees.

(q) Competitive Commission. "Competitive Commission" shall have the
meaning ascribed to such term in Article VI, Section 6.6.

(r) Consent Statement. "Consent Statement" shall mean the Consent
Statement sent to Shareholders dated February 11, 1999.

(s) Debt Limitation. "Debt Limitation" shall mean (i) 100% of Total
Market Value (calculated at the time debt is incurred) with respect to Total
Trust Indebtedness and (ii) 50% of Total Market Value (calculated at the time
debt is incurred) with respect to Permanent Trust Indebtedness.

(t) Declaration of Trust. "Declaration of Trust" shall mean the Third
Amended and Restated Declaration of Trust of the Trust.

(u) Development. "Development" shall mean a multi-family, primarily
residential, rental project or health care facility.

(v) Electronic Transmission. "Electronic Transmission" shall have the
meaning ascribed to such term in Section 2.3 hereof.

(w) Excess Shares. "Excess Shares" shall have the meaning ascribed to
such term in the Declaration of Trust.

(x) Fannie Mae. "Fannie Mae" shall mean the Federal National Mortgage
Association.

(y) FHA. "FHA" shall mean the Federal Housing Administration.

(z) Freddie Mac. "Freddie Mac" shall mean the Federal Home Loan
Mortgage Corporation.

(aa) Ginnie Mae. "Ginnie Mae" shall mean the Government National
Mortgage Association.

(bb) HUD. "HUD" shall mean the United States Department of Housing and
Urban Development.

(cc) Independent Expert. "Independent Expert" shall mean a person with
no current or prior business or personal relationship with the Advisor or the
Trustees and who is engaged, to a substantial extent, in the business of
rendering opinions regarding the value of assets of the type held by the Trust.

(dd) Independent Trustees. "Independent Trustees" shall mean the
Trustees who (i) are not affiliated, directly or indirectly, with the Advisor,
whether by ownership of, ownership interest in, employment by, any material
business or professional relationship with, or service as an officer or director
of the Advisor, or its

Affiliates, (ii) do not serve as a director or trustee for more than three other
REITs organized by the Sponsor, and (iii) perform no other services for the
Trust except as Trustees. For this purpose, an indirect relationship shall
include circumstances in which a member of the immediate family of a Trustee has
one of the foregoing relationships with the Advisor or the Trust.

(ee) Initial Investment. "Initial Investment" shall mean the $200,000
investment in Shares which the Advisor has made pursuant to Article VI, Section
6.7 of this Declaration of Trust.

(ff) IRS. "IRS" shall mean the Internal Revenue Service of the United
States of America.

(gg) Mortgages. "Mortgages" shall mean, in a broad sense, beneficial
interests or participation interests in whole mortgages, mortgage certificates,
mortgage-backed Securities, participation certificates backed by either a single
mortgage or a pool of mortgages or interests in pass-through entities which,
under the REIT Provisions of the Internal Revenue Code, would be considered to
be qualifying real estate assets for purposes of the Trust's qualification as a
REIT (e.g., REMICs).

(hh) Mortgage Investments. "Mortgage Investments" shall mean,
collectively, Original Mortgage Investments and Additional Mortgage Investments.

(ii) Mortgage Loan. "Mortgage Loan" shall mean the mortgage loan made
to the entity which owns a Development.

(jj) Mortgage Prepayments, Sales or Insurance. "Mortgage Prepayments,
Sales or Insurance" shall mean any Trust transaction (other than the receipt of
base interest, Participating Interest Payments which were calculated on net cash
flow or other measure of the net rentals or revenues from a Development,
principal payments when due on a Mortgage or other Mortgage Investments, the
issuance of Shares, and payments by a borrower to the Advisor or an Affiliate in
respect of the Asset Management Fee in connection with a negotiated prepayment)
including, without limitation, Participating Interest Payments calculated on the
profits or proceeds realized upon the refinancing, sale or other disposition of
a Development, prepayments, sales, exchanges, foreclosures, or other
dispositions of Mortgages and other Mortgage Investments held by the Trust or
the receipt of insurance proceeds from the FHA or of guarantee proceeds from
Ginnie Mae, Fannie Mae or Freddie Mac or otherwise with respect to any Mortgage,
or any other disposition of Trust assets.

(kk) Net Assets or Net Asset Value. "Net Assets" or "Net Asset Value"
shall mean the Total Assets of the Trust (other than intangibles) at cost before
deducting depreciation or other non-cash reserves less total liabilities of the
Trust, calculated at least quarterly on a basis consistently applied.

(ll) Net Income. "Net Income" shall mean, for any period, total
revenues applicable to such period, less the expenses applicable to such period
other than additions to allowances or reserves for depreciation, amortization or
bad debts or other similar non-cash reserves; provided, however, that Net Income
shall not include the gain from Mortgage Prepayments, Sales or Insurance.

(mm) Originated Guaranteed Mortgage Certificate. "Originated Guaranteed
Mortgage Certificate" shall mean any mortgage-backed security guaranteed by
Fannie Mae or Freddie Mac which is backed by a conventional mortgage or
mortgages originated by or on behalf of the Trust.

(nn) Originated Insured Mortgage. "Originated Insured Mortgage" shall
mean a Mortgage originated by or on behalf of the Trust or by another lender and
sold to the Trust prior to the time it has been fully funded, the principal of
which (excluding Participating Interest Payments and any Additional Loan) is
eligible for insurance by FHA and others under programs administered by HUD and
shall also include Ginnie Mae mortgage-backed Securities and Ginnie Mae
pass-through certificates backed by indebtedness secured by an Originated
Insured Mortgage.

(oo) Originated Mortgage. "Originated Mortgage" shall mean either an
Originated Insured Mortgage or an Originated Guaranteed Mortgage Certificate.

(pp) Original Mortgage Investments. "Original Mortgage Investments"
shall mean the permanent investments of the Trust as described in the
Prospectus, including investments in (i) Acquired Mortgages, (ii) Originated
Mortgages, (iii) other types of Mortgages (including interests in pass-through
entities such as regular interests in REMICs which, under the REIT Provisions of
the Code, are considered to be qualifying real estate assets for purposes of the
Trust's qualification as a REIT), (iv) Additional Loans and (v) subject to
restrictions imposed by certain provisions of the Code, CMOs collateralized by
mortgages insured by FHA or mortgage certificates guaranteed by Ginnie Mae,
Fannie Mae or Freddie Mac.

(qq) Participating Interest Payments. "Participating Interest Payments"
shall mean interest payments to be paid in connection with Originated Mortgages
or Acquired Mortgages which payments are in addition to the base rate of
interest on an Originated Mortgage or Acquired Mortgage and are calculated as a
percentage of the cash flow, rentals, revenues and/or appreciation of the
underlying project.

(rr) Permanent Indebtedness. "Permanent Indebtedness" shall mean all
indebtedness of the Trust other than Working Capital Indebtedness, trade
payables and subordinated Advisor fees.

(ss) Person. "Person" shall mean and include individuals, corporations,
limited partnerships, general partnerships, limited liability companies, joint
stock companies or associations, joint ventures, companies, trusts, banks, trust
companies, land

trusts, business trusts or other entities and governments and agencies and
political subdivisions thereof.

(tt) Preferred Shares. "Preferred Shares" shall mean any Shares
classified or reclassified as such by the Trustees.

(uu) Prospectus. "Prospectus" shall mean the final prospectus of the
Trust in connection with the initial registration of Shares filed with the
Securities and Exchange Commission on Form S-11, as amended.

(vv) Real Estate Investment Trust ("REIT") Provisions of the Internal
Revenue Code. "Real Estate Investment Trust Provisions of the Internal Revenue
Code" shall mean part II, subchapter M, chapter 1 of the Code, as now enacted or
hereafter amended, or successor statutes, other sections of the Code
specifically applicable to REITs and regulations and rulings promulgated
thereunder.

(ww) Reinvestment Plan. "Reinvestment Plan" shall mean the Trust's
dividend reinvestment plan pursuant to which Shareholders can elect to have
their distributions reinvested in additional shares.

(xx) REIT. "REIT" shall mean a corporation or trust which qualifies as
a real estate investment trust as defined in Sections 856 to 860 of the Code.

(yy) REMIC. "REMIC" shall mean a real estate mortgage investment
conduit described in sections 860A through 860G of the Code.

(zz) Securities. "Securities" shall mean any instruments commonly known
as "securities," including stock, shares, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or any certificates of interest, shares
or participations, or warrants, options or rights to subscribe to, purchase or
acquire any of the foregoing.

(aaa) Shareholder List. "Shareholder List" shall have the meaning
ascribed to such term in Section 2.5 hereof.

(bbb) Shareholders. "Shareholders" shall mean holders of the Shares.

(ccc) Shares. "Shares" shall mean the beneficial interests of a
Shareholder in the Trust representing undivided beneficial interests in the
assets of the Trust, which may be evidenced by certificates, including, without
limitation, Common Shares and Preferred Shares.

(ddd) Sponsor. "Sponsor" shall mean any Person directly or indirectly
instrumental in organizing, wholly or in part, the Trust or any Person who will
manage or participate in the management of the Trust and any Affiliate of any
such Person, but does

not include (i) any person whose only relationship with the Trust is that of an
independent asset manager and whose only compensation from the Trust is as such,
and (ii) wholly independent third parties such as attorneys, accountants and
underwriters whose only compensation from the Trust is for professional
services.

(eee) Total Assets of the Trust. "Total Assets of the Trust" shall mean
the value of all assets of the Trust as shown on the books of the Trust.

(fff) Total Invested Assets. "Total Invested Assets" shall mean the
aggregate original amount invested in Mortgage Investments reduced, upon the
receipt of sales proceeds, FHA or other insurance or guarantee proceeds or
prepayments, by the original amount invested in the Mortgage Investment which is
not reinvested, except that in the case of a partial payment, Total Invested
Assets shall be reduced on a pro rata basis to the extent not reinvested.

(ggg) Total Market Value. "Total Market Value" shall mean the greater
of (i) the sum of (x) the aggregate market value of the Trust's outstanding
Shares and (y) the Total Trust Indebtedness excluding unconsolidated
subsidiaries and (ii) the aggregate value of the Trust's assets as determined by
the Advisor based upon third-party or management appraisals and other criteria
as the Board of Trustees shall determine in its sole discretion.

(hhh) Total Operating Expenses. "Total Operating Expenses" shall mean
all operating, general and administrative expenses of the Trust as determined by
generally accepted accounting principles, exclusive of the expenses of raising
capital, interest payments, taxes, non-cash expenditures (i.e., depreciation,
amortization, bad debt reserve), costs related directly to a specific Mortgage
Investment by the Trust, such as expenses for originating, acquiring, servicing
or disposing of a Mortgage.

(iii) Total Trust Indebtedness. "Total Trust Indebtedness" shall mean,
collectively, Permanent Indebtedness and Working Capital Indebtedness.

(jjj) Trust. "Trust" shall mean American Mortgage Acceptance Company.

(kkk) Unimproved Real Property. "Unimproved Real Property" shall mean
property which has the following three characteristics: (1) the property was not
acquired for the purpose of producing rental or other operating income, (2)
there is no development or construction in process on such land, and (3) no
development or construction on such land is planned in good faith to commence on
such land within one year.

(lll) Working Capital Indebtedness. "Working Capital Indebtedness"
shall mean indebtedness (i) which has a term of no longer than five years and is
utilized by the Trust to acquire and originate Mortgage Investments which are
intended to be

pooled as part of an issuance of CMOs or pass-through certificates sponsored by
the Trust or its subsidiaries, the proceeds of which will be used to repay such
indebtedness, or (ii) used to pay distributions to Shareholders and operating
expenses, including without limitation, fees to the Advisor.

ARTICLE II

MEETING OF SHAREHOLDERS

SECTION 2.1. ANNUAL MEETINGS. Annual meetings of Shareholders for the
election of Trustees and for such other business as may be stated in the notice
of the meeting shall be held at such place, either within or without the
Commonwealth of Massachusetts, and at such time and date not less than thirty
(30) days after delivery of the annual report, but in no event later than June
30 of each such year as the Board of Trustees, by resolution, shall determine.

SECTION 2.2. OTHER MEETINGS. Meetings of Shareholders for any purpose
other than the election of Trustees may be held at such time and place, within
or without the Commonwealth of Massachusetts, as shall be stated in the notice
of the meeting.

SECTION 2.3. VOTING. Each Shareholder entitled to vote in accordance
with the terms and provisions of the Declaration of Trust shall be entitled to
one vote for each Share held by such Shareholder (i) at a meeting, in person, by
written proxy or by a signed writing or consent directing the manner in which he
desires that his vote be cast, which writing must be received by the Trustees
prior to such meeting or (ii) without a meeting, by a signed writing or consent
directing the manner in which he desires his vote to be cast, which writing must
be received by the Trustees prior to the date upon which the votes of the
Shareholders are to be counted. In connection with the foregoing, no proxy shall
be voted after six months from its date unless such proxy is coupled with an
interest sufficient in law to support an irrevocable power and provides for a
longer period and except that the Board of Trustees may prohibit the holders of
Excess Shares from voting the Excess Shares. Upon the demand of any Shareholder,
the vote for Trustees and upon any question before a meeting, the vote shall be
by ballot.

Any Shareholder's proxy or other writing or consent to vote at a
meeting of Shareholders may be transmitted by facsimile or other electronic
means (including, without limitation, by telephone, email and internet)
(collectively, "Electronic Transmission"), provided that such Electronic
Transmission must either be set forth, be submitted with, or provide for,
information from which the Trust or its agents can determine with reasonable
certainty that the Electronic Transmission was authorized by the Shareholder.

SECTION 2.4. INSPECTORS OF ELECTION. The Board of Trustees, in advance
of any Shareholders' meeting or other Shareholder vote, may

appoint one or more inspectors to act at the meeting, any adjournment thereof or
in connection with any other Shareholder vote. If inspectors are not so
appointed, the person presiding at a Shareholders' meeting or the Chairman of
the Board where there is no meeting, may, and on the request of any Shareholder
entitled to vote in connection with a particular question, shall, appoint two
inspectors. In case any person appointed fails to appear or act, the vacancy may
be filled by appointment made by the Board of Trustees in the case of a meeting,
in advance of the meeting or at that meeting by the person presiding thereat or,
in the case of a vote without a meeting, in advance of counting the vote. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector with strict impartiality
and according to the best of his ability.

The inspectors shall determine the number of Shares outstanding and the
voting power of each, the Shares represented at the meeting, if applicable, the
existence of a quorum, if applicable, and the validity and effect of proxies,
and shall receive votes, ballots or consents, hear and determine all challenges
and questions arising in connection with the right to vote, count and tabulate
all votes, ballots or consents, determine the result, and do such acts as are
proper to conduct the election or vote with fairness to all Shareholders. On
request of the person presiding at the meeting, if applicable, or any
Shareholder entitled to vote thereat or in connection with a particular
solicitation, the inspectors shall make a report in writing of any challenge,
question or matter determined by them and execute a certificate of any fact
found by them. Any report or certificate made by them shall be prima facie
evidence of the facts stated and of the vote as certified by them.

SECTION 2.5. ACCESS TO RECORDS. Any Shareholder and any designated
representative thereof shall be permitted access to all records of the Trust at
all reasonable times, and may inspect and copy any of them. Inspection of the
Trust books and records by a state securities administrator shall be provided
upon reasonable notice and during normal business hours. In addition, with
respect to access to the list of Shareholders:

(a) An alphabetical list of the names, addresses, and business
telephone numbers of the Shareholders of the Trust along with the number of
shares held by each of them (the "Shareholder List") shall be maintained as a
part of the books and records of the Trust and shall be available for inspection
by any Shareholder or the Shareholder's designated agent at the home office of
the Trust at 625 Madison Avenue, New York, New York, 10022, or such other
address as may be designated by the Trust, upon the request of the Shareholder;

(b) The Shareholder List shall be updated at least quarterly to reflect
changes in the information contained therein;

(c) A copy of the Shareholder List shall be mailed to any Shareholder
requesting the Shareholder List within ten days of the request. The copy of the

Shareholder List shall be printed in alphabetical order, on white paper, and in
a readily readable type size (in no event smaller than 10-point type). A
reasonable charge for copy work may be charged by the Trust;

(d) The purposes for which a Shareholder may request a copy of the
Shareholder List include, without limitation, matters relating to Shareholders'
voting rights under the Declaration of Trust, and the exercise of Shareholders'
rights under federal proxy laws; and

(e) If the Advisor or the officers or Trustees of the Trust neglect or
refuse to exhibit, produce, or mail a copy of the Shareholder List as requested,
the Sponsor shall be liable to any Shareholder requesting the list for the
costs, including attorney's fees, incurred by that Shareholder for compelling
the production of the Shareholder List, and for actual damages suffered by any
Shareholder by reason of such refusal or neglect. It shall be a defense that the
actual purpose and reason for the requests for inspection or for a copy of the
Shareholder List is to secure such list of Shareholders or other information for
the purpose of selling such list or copies thereof, or of using the same for a
commercial purpose other than in the interest of the applicant as a Shareholder
relative to the affairs of the Trust. The Trust may require the Shareholder
requesting the Shareholder List to represent that the list is not requested for
a commercial purpose unrelated to the Shareholder's interest in the Trust. The
remedies provided hereunder to Shareholders requesting copies of the Shareholder
List are in addition to, and shall not in any way limit, other remedies
available to Shareholders under federal law, or the laws of any state.

Subject to the foregoing, with respect to certain solicitations made by
the Trust, the Trust may, with the consent of the Shareholder, mail
communications on behalf of any Shareholder at his expense who so requests in
writing and is entitled to vote on the same subject matter as the Trust's
solicitation.

SECTION 2.6. QUORUM. Except as otherwise required by law or by the
Declaration of Trust, the presence, in person or by proxy, of Shareholders
holding a majority of the outstanding Shares of the Trust entitled to vote,
shall constitute a quorum at all meetings of the Shareholders. In case a quorum
shall not be present at any meeting, a majority in interest of the Shareholders
entitled to vote thereat, present in person or by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until the requisite amount of Shares entitled to vote shall be
present. At any such adjourned meeting at which the requisite amount of Shares
entitled to vote shall be presented, any business may be transacted which might
have been transacted at the meeting as originally noticed; but only those
Shareholders entitled to vote at the meeting as originally noticed shall be
entitled to vote at any adjournment or adjournments thereof.

SECTION 2.7. SPECIAL MEETINGS. Special meetings of the Shareholders may
be called by the Chairman of the Board, by the President, by a majority

of the Trustees or by a majority of the Independent Trustees, and shall be
called by any officer of the Trust upon written request of Shareholders holding
in the aggregate not less than 10% of the outstanding Shares of the Trust
entitled to vote at such meeting. The call of a special meeting shall state the
nature of the business to be transacted and that no other business shall be
considered at such meeting.

Upon receipt of a written request either in person or by registered
mail stating the purpose(s) of the meeting requested by Shareholders, the Trust
shall provide all Shareholders, within ten (10) business days after receipt of
said request, written notice (either in person or by mail) of a meeting and the
purpose of such meeting to be held on a date not less than twenty (20) nor more
than sixty (60) days after receipt of said request (or as soon thereafter as the
applicable proxy rules may reasonably be complied with) for such meeting, at a
time and place convenient to the Shareholders.

The place, date and time of, as well as the record date for determining
the persons entitled to notice of and to vote at, any special meeting, including
any special meeting to be called at the request of the holders of 10% or more of
the Shares outstanding, shall be determined by the Board of Trustees; provided,
however, in the case of a special meeting to be called at the request of the
holders of 10% or more of the Shares outstanding, if the Board of Trustees
declines or fails to make any such determination within ten business days of
such request, then the officer calling such special meeting shall at the time of
such call designate the place, date and time of such special meeting as well as
the record date for determining persons entitled to notice of and to vote at
such meeting.

SECTION 2.8. NOTICE OF ANNUAL AND SPECIAL MEETINGS CALLED BY CERTAIN OR
ALL OF THE TRUSTEES AND SOLICITATION OF CONSENT WITHOUT MEETING. Written notice,
stating the place, date and time of the annual meeting or a special meeting not
called at the request of the Shareholders, and the general nature of the
business to be considered in the case of an annual meeting, or the specific
nature of the business to be considered in the case of a special meeting, shall
be given to each Shareholder entitled to vote thereat at his address as it
appears on the records of the Trust, not less than twenty (20) nor more than
sixty (60) days before the date of such meeting. In the case of a Shareholder
vote without a meeting, the date for responding to such solicitation and the
counting of the votes in connection therewith must occur no later than sixty
(60) days and no sooner than twenty (20) days after notice of such requested
vote is given.

SECTION 2.9. BUSINESS TRANSACTED. No business other than that stated in
the notice shall be transacted at any meeting without the unanimous consent of
all the Shareholders entitled to vote thereat.

ARTICLE III

TRUSTEES

SECTION 3.1. NUMBER, TERM AND QUALIFICATIONS. The number of Trustees
shall be as set forth in the Declaration of Trust. Unless otherwise fixed by the
Board of Trustees or the Shareholders, the number of Trustees constituting the
entire Board of Trustees shall be five (5).

A Trustee shall be an individual at least 21 years of age who is not
under legal disability. A Trustee shall not be required to devote his full
business time and effort to the Trust. A Trustee shall qualify as such when he
has either signed the Declaration of Trust or agreed in writing to be bound by
it. No bond shall be required to secure the performance of a Trustee unless the
Trustees so provide or as required by law.

A Trustee must have at least three (3) years of relevant experience
demonstrating the knowledge and experience required to successfully acquire and
manage Mortgage Investments. At least one Independent Trustee must have at least
three (3) years of relevant real estate experience.

Nominations for the election of Trustees may be made by the Board of
Trustees or a committee appointed by the Board of Trustees or by any Shareholder
entitled to vote in the election of Trustees generally. However, any Shareholder
entitled to vote in the election of Trustees generally may nominate one or more
persons for election as Trustees at a meeting only if written notice of such
Shareholder's intent to make such nomination or nominations has been given,
either by personal delivery or by United States mail, postage prepaid, to the
Secretary of the Trust not later than (i) with respect to an election to be held
at an annual meeting of Shareholders, ninety days prior to the anniversary date
of the immediately preceding annual meeting, and (ii) with respect to an
election to be held at a special meeting of Shareholders for the election of
Trustees, the close of business on the tenth day following the date on which
notice of such meeting is first given to Shareholders. Each such notice shall
set forth: (a) the name and address of the Shareholder who intends to make the
nomination and of the person or persons to be nominated; (b) a representation
that the Shareholder is a holder of record of Shares of the Trust entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice; (c) a description of
all arrangements or understandings between the Shareholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the Shareholder; (d) such other
information regarding each nominee proposed by such Shareholder as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission, had the nominee been nominated, or
intended to be nominated, by the Board of Trustees; and (e) the consent of each
nominee to serve as a Trustee of the

Trust if so elected. The presiding officer of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.

SECTION 3.2. AUTHORITY OF TRUSTEES. The Trustees shall have the
responsibilities and authority set forth in the Declaration of Trust.

(a) Specific Powers. Subject only to the express limitations contained
in the Declaration of Trust and in addition to any powers and authorities
conferred by the Declaration of Trust or which the Trustees may have by virtue
of any present or future statute or rule of law, the Trustees without any action
or consent by the Shareholders shall have and may exercise at any time and from
time to time the following powers and authorities which may or may not be
exercised by them in their sole judgment and discretion and in such manner and
upon such terms and conditions as they may from time to time deem proper:

(i) To retain, invest and reinvest the capital or other funds
of the Trust (including, without limitation, repayments and disposition
proceeds from sales of the Trust's Mortgage Investments) in Mortgages
and other Mortgage Investments without regard to whether any such
Mortgages and other Mortgage Investments may mature before the possible
termination of the Trust, and to possess and exercise all the rights,
powers and privileges appertaining to the ownership of the Trust
assets.

(ii) For such consideration as they deem proper to invest in,
purchase or otherwise acquire for cash or other property and hold for
investment Mortgages secured by real property located in the United
States, and, in connection with any such investment in Mortgages,
acquire (i) the entire or any participating interest in rents, lease
payments or other income from, or the entire or any participating
interest in the profits from, or the entire or any participating
interest in the equity or ownership of, real property; and (ii) such
investments, either directly or, subject to Article V, Section 5.1,
through joint ventures, partnerships, or other lawful combinations or
associations.

(iii) To sell, exchange, release, partition, assign, mortgage,
pledge, hypothecate, grant security interests in, encumber, negotiate,
convey, transfer or otherwise dispose of any and all of the assets of
the Trust by deeds, trust deeds, assignments, bills of sale, transfers,
leases, mortgages, financing statements, security agreements and other
instruments for any of such purposes executed and delivered for and on
behalf of the Trust or the Trustees by one or more of the Trustees or
by a duly authorized officer, employee, agent or any nominee of the
Trust.

(iv) To issue authorized Shares or other Securities, all
without the vote of or other action by the Shareholders, to such
Persons for such cash, property or other consideration (including
Securities issued or created by, or

interests in any Person) at such time or times and on such terms as the
Trustees may deem advisable and to purchase or otherwise acquire, hold,
cancel, reissue, sell and transfer the Shares or any of such
Securities.

(v) To enter into contracts, obligations, and other agreements
for a term extending beyond the term of office of the Trustees and
beyond the possible termination of the Trust or for a lesser term.

(vi) To, subject to Article V, Section 5.9, borrow money and
give negotiable or non-negotiable instruments therefor; to enter into
other obligations on behalf of the Trust; and to assign, convey,
transfer, mortgage, subordinate, pledge, grant security interests in,
encumber or hypothecate the assets of the Trust to secure any of the
foregoing.

(vii) To lend money, whether secured or unsecured.

(viii) To create reserve funds for any purpose.

(ix) To incur and pay out of the Trust assets any charges or
expenses, and disburse any funds of the Trust, which charges, expenses
or disbursements are, in the opinion of the Trustees, necessary for or
incidental to or desirable for, and are incurred in connection with,
the carrying out of any of the purposes of the Trust or the conducting
of the business of the Trust, including without limitation taxes and
other governmental levies, charges and assessments of whatever kind or
nature, imposed upon or against the Trustees in connection with the
Trust or upon or against the Trust assets or any part thereof, and for
any of the purposes herein.

(x) To deposit funds or Securities held by the Trust in banks,
trust companies, savings and loan associations and other depositories,
whether or not such deposits will draw interest, the same to be subject
to withdrawal on such terms and in such manner and by such Person or
Persons (including any one or more Trustees, officers, agents or
representatives) as the Trustees may determine.

(xi) To possess and exercise all the rights, powers and
privileges appertaining to the ownership of all or any interests in, or
mortgages or Securities issued or created by, any Person, forming part
of the assets of the Trust, to the same extent that an individual
might, and, without limiting the generality of the foregoing, to vote
or give any consent, request or notice, or waive any notice, either in
person or by proxy or power of attorney, with or without power of
substitution, to one or more Persons, which proxies and powers of
attorney may be for meetings or action generally or for any particular
meeting or action, and may include the exercise of discretionary
powers.

(xii) To enter into joint ventures, general or limited
partnerships and any other lawful combinations or associations with
independent third parties or, subject to Article V, Section 5.1, with
Affiliated Programs.

(xiii) To elect, appoint, engage or employ such officers for
the Trust as the Trustees may determine, who may be removed or
discharged at the discretion of the Trustees, such officers to have
such powers and duties, and to serve such terms and at such
compensation, as may be prescribed by the Trustees; to engage or employ
any Persons as agents, representatives, employees, or independent
contractors (including, without limitation, real estate advisors,
investment advisors, transfer agents, registrars, underwriters,
accountants, attorneys at law, real estate agents, managers,
appraisers, brokers, architects, engineers, construction managers,
general contractors or otherwise) in one or more capacities, and to pay
compensation from the Trust for services in as many capacities as such
Person may be so engaged or employed; and, except as prohibited by law
and subject to the supervision of the Trustees, to delegate any of the
powers and duties of the Trustees to the Advisor.

(xiv) To determine the proper accounting treatment for Trust
income, loss and capital.

(xv) To determine from time to time the value of all or any
part of the Trust assets and of any Securities, assets, or other
consideration to be furnished to or acquired by the Trust, and from
time to time to revalue all or any part of the Trust assets in
accordance with such appraisals or other information as are, in the
Trustees' sole judgment, necessary and/or satisfactory.

(xvi) To collect, sue for, and receive all sums of money or
other assets coming due to the Trust, and to engage in, intervene in,
prosecute, join, defend, compound, compromise, abandon or adjust, by
arbitration or otherwise, any actions, suits, proceedings, disputes,
claims, controversies, demands or other litigation relating to the
Trust, the assets of the Trust or the Trust's affairs, to enter into
agreements therefor, whether or not any suit is commenced or claim
accrued or asserted and, in advance of any controversy, to enter into
agreements regarding arbitration, adjudication or settlement thereof.

(xvii) To renew, modify, release, compromise, extend,
consolidate, or cancel, in whole or in part, any obligation to or of
the Trust.

(xviii) To purchase and pay for out of the Trust assets
insurance contracts and policies insuring the Trust assets against any
and all risks and insuring the Trust and/or any or all of the Trustees,
the Shareholders, officers, employees, agents, investment advisors or
independent contractors of the Trust against any and all claims and
liabilities of every nature asserted by any Person arising by reason of
any action alleged to have been taken or omitted by the Trust

or by any such person as Trustee, Shareholder, officer, employee,
agent, investment advisor or independent contractor; provided, however,
that the Trustees may purchase and pay for out of Trust assets
insurance contracts and policies insuring independent contractors or
agents, only if such policies are customarily provided to independent
contractors or agents providing the services being rendered in the
locality where such services are being rendered; provided, further,
that limitations on the acquisition of insurance contracts or policies
shall not apply to the Advisor, unless otherwise restricted in the
Declaration of Trust.

(xix) To adopt a fiscal year for the Trust, and from time to
time to change such fiscal year.

(xx) To adopt and use a seal (but the use of a seal shall not
be required for the execution of instruments or obligations of the
Trust).

(xxi) To make, perform, and carry out, or cancel and rescind,
contracts of every kind for any lawful purpose without limit as to
amount, with any Person, firm, trust, association, corporation,
municipality, county, parish, state, territory, government or other
municipal or governmental subdivisions. These contracts shall be for
such duration and upon such terms as the Trustees in their sole
discretion shall determine.

(xxii) To renew, modify, extend, consolidate or cancel, in
whole or in part, the Reinvestment Plan.

(xxiii) To acquire real property (or an interest therein) in
the event of a Mortgage foreclosure and perform all acts incidental to
the ownership of real property including, without limitation, entering
into leases for space located therein.

(xxiv) To cause the Trust to repurchase Shares from time to
time out of surplus funds of the Trust, if any, to further the business
of the Trust;

(xxv) To list the Shares on the American Stock Exchange or any
other exchange or market;

(xxvi) To, in connection with the leveraging of the Trust's
assets, cause the Trust to form and invest in subsidiaries and other
investment vehicles and transfer any or all of the Trust's assets to
such entities; provided, however, that such entities shall be operated
in a manner which is consistent with the provisions of this Trust
Agreement;

(xxvii) To adopt, implement and from time to time amend these
Bylaws in manner consistent with the provisions of the Declaration of
Trust; and

(xxviii) To do all other such acts and things as are incident
to the foregoing, and to exercise all powers which are necessary or
useful to carry on the business of the Trust, to promote any of the
purposes for which the Trust is formed, and to carry out the provisions
of the Declaration of Trust and these Bylaws.

(b) Additional Powers. The Trustees shall additionally have and
exercise all the powers conferred by the laws of Massachusetts upon business
trusts or real estate investment trusts formed under such laws, insofar as such
laws are not in conflict with the provisions of the Declaration of Trust or
these Bylaws.

(c) Business Opportunities With Affiliated Programs. The Trustees
(including the Independent Trustees) shall periodically monitor the allocation
of Mortgage Investments among the Trust and the Affiliated Programs to insure
that the allocation method described in the Prospectus is being applied fairly
to the Trust.

(d) Suitable Investment Opportunities. Before any Trustee, including
any Independent Trustee, may take advantage of an investment opportunity that is
suitable for the Trust for their own account or present or recommend it to
others, they shall present such investment opportunity to the Trust if (i) such
opportunity is within the Trust's investment objectives and policies, (ii) such
opportunity is of a character which could be taken by the Trust, and (iii) the
Trust has the financial resources to take advantage of such opportunity.

SECTION 3.3. RESIGNATIONS. Any Trustee or other officer may resign at
any time. Such resignation shall be made in writing, and shall take effect at
the time specified therein, and if no time is specified, at the time of its
receipt by the Chairman of the Board or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.

SECTION 3.4. REMOVAL OF TRUSTEES. Any one or more of the Trustees may
be removed, but only for cause, by action of a majority of the Board of Trustees
or as set forth in the Declaration of Trust. A special meeting of the
Shareholders for the purpose of removing a Trustee shall be called by an officer
of the Trust in accordance with the provisions of Article III, Section 3.7.

SECTION 3.5. NEWLY CREATED TRUSTEESHIPS AND VACANCIES. Newly created
trusteeships resulting from an increase in the number of Trustees or vacancies
occurring in the Board of Trustees for any reason except the removal of Trustees
by Shareholders may be filled by vote of a majority of the Trustees then in
office, although less than a quorum exists. Vacancies occurring as a result of
the removal of Trustees by Shareholders shall be filled as set forth in the
Declaration of Trust. A Trustee elected to fill a vacancy shall be elected to
hold office for the unexpired term of his predecessor. The Independent Trustees
shall nominate replacements for vacancies among the Independent Trustees'
positions. Upon the resignation or removal

of any Trustee, or his otherwise ceasing to be a Trustee, he shall execute and
deliver such documents as the remaining Trustees shall require for the
conveyance of any Trust property held in his name, shall account to the
remaining Trustee or Trustees as they require for all property which he holds as
Trustee and shall thereupon be discharged as Trustee. Upon the incapacity or
death of any Trustee, his legal representative shall perform the acts set forth
in the preceding sentence and the discharge mentioned therein shall run to such
legal representative and to the incapacitated Trustee, or the estate of the
deceased Trustee, as the case may be. Notwithstanding anything to the contrary
contained in this Article III, Section 3.5, the filling of vacancies or newly
created trusteeships on the Board of Trustees shall be subject to compliance
with the requirements of Section 3.1 of this Article III and the Declaration of
Trust.

SECTION 3.6. SUCCESSOR AND ADDITIONAL TRUSTEES. The right, title and
interest of the Trustees in and to the assets of the Trust shall also vest in
successor and additional Trustees upon their qualification, and they shall
thereupon have all the rights and obligations of Trustees hereunder. Such right,
title and interest shall vest in the Trustees whether or not conveyancing
documents have been executed and delivered pursuant to Section 3.5 of this
Article III or otherwise.

SECTION 3.7. ACTIONS BY TRUSTEES. The Trustees may act with or without
a meeting. A quorum for all meetings of the Trustees shall be a majority of the
number of incumbent Trustees, provided that at least a majority of such number
are Independent Trustees. Unless specifically provided otherwise in the
Declaration of Trust or these Bylaws, any action of the Trustees may be taken at
a meeting by vote of a majority of the Trustees present at such meeting if a
quorum is present. Any agreement, deed, mortgage, lease or other instrument or
writing executed by any one or more of the Trustees or by any one or more
authorized persons shall be valid and binding upon the Trustees and upon the
Trust when authorized by action of the Trustees.

SECTION 3.8. ACTION WITHOUT MEETING. Any action required or permitted
to be taken at any meeting of the Board of Trustees may be taken without a
meeting, provided prior to such action a written consent thereto is signed by a
majority of the Board of Trustees, and provided, further, at least a majority of
the consenting Trustees are Independent Trustees. Any such written consent shall
be filed with the minutes of proceedings of the Trustees.

SECTION 3.9. COMPENSATION. Independent Trustees may receive fixed sums,
Common Shares in the Trust or other compensation per year and/or per meeting
and/or for any service or activity they perform or engage in as Trustees, as
determined by resolution of the Board of Trustees. Additionally, Independent
Trustees shall be reimbursed for travel expenses and other out-of-pocket
disbursements incurred in connection with attending any meetings.
Non-Independent Trustees shall not receive any compensation from the Trust.
Nothing herein contained shall be construed to preclude any non-Independent
Trustee from serving the Trust in any other capacity as an officer,

agent or otherwise, and receiving compensation therefor. Independent Trustees
shall not perform any services for the Trust except as Trustees.

SECTION 3.10. TELEPHONIC MEETING. All or any one or more Trustees may
participate in a meeting of the Trustees or any committee thereof by means of
conference telephone or similar communications equipment by means of which all
participants can hear each other and participation in a meeting pursuant to such
communication shall constitute presence in person at such meeting.

SECTION 3.11. EXECUTIVE COMMITTEE. The Trustees may appoint an
executive committee from among their number consisting of three or more members,
a majority of whom shall be Independent Trustees, which shall have such powers,
duties and obligations as the Trustees may deem necessary and appropriate,
including, without limitation, the power to conduct the business and affairs of
the Trust during periods between meetings of the Trustees. The Executive
Committee shall report its activities periodically to the Trustees.

ARTICLE IV

OFFICERS

SECTION 4.1. OFFICERS. The officers of the Trust may consist of a
Chairman of the Board, a President, a Treasurer and a Secretary, and shall be
elected by the Board of Trustees and shall hold office until their successors
are elected and qualified. In addition, the Board of Trustees may elect one or
more Vice-Presidents and such Assistant Secretaries and Assistant Treasurers as
it may deem proper. None of the officers of the Trust need be Trustees. The
officers shall be elected at the first meeting of the Board of Trustees after
each annual meeting. More than one office may be held by the same person.

SECTION 4.2. OTHER OFFICERS AND AGENTS. The Board of Trustees may
appoint such officers and agents as it may deem advisable, who shall hold their
offices for such terms and shall exercise such power and perform such duties as
shall be determined from time to time by the Board of Trustees.

SECTION 4.3. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Trustees, if one is elected, shall be the chief executive officer of the Trust
and shall preside at all meetings of the Board of Trustees. He shall have and
perform such other duties as from time to time may be assigned to him by the
Board of Trustees.

SECTION 4.4. PRESIDENT. The President shall be the chief operating
officer of the Trust and shall have the general powers and duties of supervision
and management usually vested in the office of President of a corporation. He
shall preside at all meetings of the Shareholders if present thereat, and in the
absence or non-election of the Chairman of the Board, at all meetings of the
Board of Trustees, and shall

have general supervision, direction and control of the business of the Trust.
Unless the Board of Trustees shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages, and other contracts on behalf of the
Trust, and shall cause the seal to be affixed to any instrument requiring it and
when so affixed the seal shall be attested by the signature of the Secretary or
the Treasurer or an Assistant Secretary or an Assistant Treasurer.

SECTION 4.5. VICE-PRESIDENT. Each Vice-President shall have such powers
and shall perform such duties as shall be assigned to him by the Board of
Trustees.

SECTION 4.6. TREASURER. The Treasurer shall have custody of the funds
and Securities of the Trust and shall keep a full and accurate account of
receipts and disbursements in books belonging to the Trust. He shall deposit all
moneys and other valuables In the name and to the credit of the Trust in such
depositories as may be designated by the Board of Trustees.

The Treasurer shall disburse the funds of the Trust as may be ordered
by the Board of Trustees, the Chairman of the Board or the President, taking
proper vouchers for such disbursements. He shall render to the President or
Board of Trustees at the regular meetings of the Board of Trustees, or whenever
they may request it, an account of all his transactions as Treasurer and of the
financial condition of the Trust. If required by the Board of Trustees, he shall
give the Trust a bond, at the Trust's expense, for the faithful discharge of his
duties in such amount and with such surety as the Board of Trustees shall
prescribe.

SECTION 4.7. SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of Shareholders and Trustees; and all other notices
required by law, these Bylaws or the Declaration of Trust, and in case of his
absence or refusal or neglect to do so, any such notice may be given by any
person thereunto directed by the Chairman of the Board, the President, or by the
Trustees or Shareholders, upon whose requisition the meeting is called as
provided in the Declaration of Trust and these Bylaws. He shall record all the
proceedings of the meetings of the Trust and of Trustees in a book to be kept
for that purpose. He shall keep in safe custody the seal of the Trust, and when
authorized by the Board of Trustees, affix the same to any instrument requiring
it, and when so affixed, it shall be attested by his signature or by the
signature of any assistant secretary.

SECTION 4.8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the Board of Trustees.

ARTICLE V

INVESTMENT POLICY

SECTION 5.1. GENERAL STATEMENT OF POLICY. The Trust intends to invest
in Mortgage Investments including: (i) Original Mortgage Investments and (ii)
Additional Mortgage Investments. Additional Mortgage Investments (other than
uninsured Mortgage Loans originated with the intent of later securitizing such
Mortgage Loans) may not comprise, in the aggregate, more than 60% of the
Mortgage Investments made by the Trust after the date the Proposals are adopted.
The Trust will seek to obtain Originated Mortgages with Participating Interest
Payments and, to a lesser extent, Acquired Mortgages with Participating Interest
Payments. The Trust shall have the right to acquire or originate Mortgages
without first obtaining a real property appraisal, unless a majority of the
Independent Trustees determine that such an appraisal is necessary; if obtained,
any real property appraisals will be maintained in the Trust's books and records
for at least five years. The foregoing investments are intended to be structured
to comply with the Real Estate Investment Trust Provisions of the Code. In
addition to the investments referred to above, the Trust may, in the discretion
of the Board of Trustees or the Advisor, make the investments described in
Section 5.2 below or such other investments that the Board of Trustees or the
Advisor deem in good faith to be consistent with the investment objectives and
policies of the Trust as set forth in the Consent Statement.

The Trust may make commitments to make investments consistent with the
foregoing policies. The Trust may also participate in joint ventures in
Mortgages with Affiliated Programs (subject to the terms of this Section 5.1)
and in investments with other unaffiliated investors, including unaffiliated
investors having investment policies similar to those of the Trust, on the same
or different terms. The Advisor may act as advisor to other investors, including
investors who have the same investment policies as the Trust.

The Independent Trustees shall review the investment policies of the
Trust with sufficient frequency and at least annually to determine that the
policies being followed by the Trust are in the best interests of its
Shareholders. Such determination by the Independent Trustees and the basis
therefor shall be recorded in the minutes of the meeting of Trustees.

The Trust may not enter into transactions with a Sponsor, the Advisor,
a Trustee or an Affiliate thereof, except as (i) specified below or (ii)
otherwise permitted by Sections 5.7 and 5.8 of this Article V.

The Trust may invest in a joint venture with an Affiliated Program
provided (i) the Affiliated Program has similar investment objectives to those
of the Trust, (ii) such joint venture is approved by a majority of the Trustees,
including a majority of the Independent Trustees, not otherwise interested in
such transaction, as

being fair and reasonable to the Trust and (iii) the Trust's participation in
such joint venture is on substantially the same terms and conditions as those
received by the other joint venturers. In the case of participation with
Affiliated Programs, the cost of generating such investments will be shared
ratably by the participating Affiliated Program and the Trust.

The Advisor or an Affiliate may purchase Mortgages or interests therein
in its own name or in the name of a nominee, a trust or a corporate "nominee" or
otherwise and hold title thereto for the purpose of facilitating the acquisition
of such Mortgages by the Trust or any other purpose related to the business of
the Trust; provided that in the event of the acquisition of such a Mortgage by
the Trust from the Advisor or its Affiliates, (i) the purchase price paid by the
Trust may not exceed the purchase price paid by the Advisor or its Affiliates,
including expenses of acquisition, appropriately reduced (a) to reflect the
results of any interest rate hedges placed by the Advisor or its Affiliates on
such Mortgages up to the date of acquisition by the Trust, (b) by any mortgage
payments received or accrued to the date of acquisition by the Trust to the
extent not paid over to the Trust and (c) by all closing costs and Acquisition
Fees paid by the Trust and (ii) no compensation or other benefit may accrue to
the Advisor or its Affiliates except as otherwise permitted herein and except
that they may be reimbursed for the costs incurred to carry the Mortgage (which
could include the transactional costs associated with interest rate hedges on
such Mortgages including, but not limited to, commodity brokerage commissions,
exchange fees, etc.). If the Advisor or an Affiliate has borrowed the funds to
make or acquire such Mortgage, the carrying costs payable by the Trust shall
include the lesser of interest at the rate charged or the rate which would have
been charged for a comparable loan by an unrelated lending institution; if the
Advisor or such Affiliate has used its own funds to finance the Mortgage, the
carrying costs payable by the Trust shall include interest at a rate not in
excess of that which would have been charged by an unrelated lending institution
to the Advisor or such Affiliate for short-term borrowings. The Advisor or an
Affiliate may purchase other Mortgage Investments upon similar terms and
conditions.

The general purpose of the Trust is to acquire assets and to seek
income which qualifies under the Real Estate Investment Trust ("REIT")
Provisions of the Code. The Board of Trustees shall endeavor to make Mortgage
Investments (including investments yielding "qualified temporary investment
income" within the meaning of Section 856(c)(6)(D) of the Code) in such a manner
as to comply with the requirements of the REIT Provisions of the Code with
respect to the composition of the Trust's investments and the derivation of its
income; provided, however, that for a period of time during which the portfolio
of investments is being developed, the Trust's assets may be invested in
investments with income which does not qualify under the REIT Provisions of the
Code; and provided further, however, that up to seven percent of the Trust's
assets may be invested in Additional Loans, which are unsecured loans and which
therefore do not qualify as real estate assets under the REIT provisions of the
Code.

The investment objectives of the Trust are to: (i) preserve and protect
the Trust's invested capital, by investing principally in Mortgage Investments
(ii) provide quarterly distributions which may be increased over time as a
result of Participating Interest Payments, when obtainable, on Originated
Mortgages, based on the cash flow or revenues of the underlying Development; and
(iii) provide appreciation by investing in Acquired Mortgages which present the
possibility of early disposition or prepayment and investing in Originated
Mortgages and, to a lesser extent, Acquired Mortgages which may generate
Participating Interest Payments, when obtainable, based on the increased value
of the underlying Development upon its refinancing, sale or other disposition.

SECTION 5.2. SPECIFIC INVESTMENTS. In addition to Mortgage Investments,
the Trust may invest (through a cash management account maintained at a trust
company or otherwise) its assets in investments such as: (a) Securities issued,
insured or guaranteed by the United States government or government agencies,
(b) savings accounts, (c) certificates of deposit, (d) bank money market
accounts, (e) bankers' acceptances or commercial paper rated A-1 or better by
Moody's Investors Service, Inc., (f) money market funds (including money market
funds sponsored by the Sponsor or its Affiliates) having assets in excess of $50
million, (g) other short-term highly liquid investments with banks having a net
worth of at least $50 million, (h) investments which yield "qualified temporary
investment income" within the meaning of Section 856(c)(6)(D) of the Code, and
(i) any combination of the foregoing investments.

SECTION 5.3. REAL PROPERTY. To the extent the Trust invests in real
property, a majority of the Trustees shall determine the consideration paid for
such real property, based on the fair market value of the property. If a
majority of the Independent Trustees determine, or if the real property is
acquired from the Advisor, a Trustee, the Sponsors, or Affiliates thereof, such
fair market value shall be determined by a qualified independent real estate
appraiser selected by the Independent Trustees.

SECTION 5.4. RESERVES. The Trust may retain, as a permanent reserve,
any amounts which the Board of Trustees deems reasonable, in cash and in the
types of investments described above in Section 5.2 of this Article.

SECTION 5.5. CHANGES IN INVESTMENT POLICIES AND OBJECTIVES. Subject to
the investment restrictions in Section 5.6 and 5.7 of this Article, a majority
of the Independent Trustees may alter any or all the above-described investment
policies if they determine such change to be in the best interests of the Trust.
Subject to the preceding terms, the Board of Trustees shall endeavor to invest
the Trust's assets in accordance with the investment policies set forth in this
Article.

SECTION 5.6. UNINVESTED ASSETS. To the extent that the Trust has assets
not otherwise invested in accordance with Section 5.1 of this Article, the Board
of Trustees may invest such assets in the types of investments in which the
Trust is permitted to invest pursuant to Section 5.2 of this Article.

SECTION 5.7. RESTRICTIONS. The Board of Trustees shall not:

(a) invest in any foreign currency or bullion;

(b) invest in commodities or commodities futures contracts other than
interest rate futures, when used solely for hedging purposes;

(c) invest in real estate contracts of sale, unless such contracts of
sale are in recordable form and are appropriately recorded in the chain of title
and unless such investment is held as security for Mortgages made or acquired by
the Trust;

(d) engage in any short sale;

(e) invest in any security in any entity holding investments or
engaging in activities prohibited by the Declaration of Trust and these Bylaws;

(f) issue "redeemable equity securities" (as defined in Section
2(a)(32) of the Investment Company Act of 1940), "face amount certificates of
the installment type" as defined in Section 2(a)(15) thereof, or "periodic
payment plan certificates" as defined in Section 2(a)(27) thereof;

(g) invest more than 10% of its total assets in Unimproved Real
Property or mortgage loans on Unimproved Real Property;

(h) issue options or warrants to purchase its Shares to any Person
unless (i) the exercise price equals or exceeds the fair market value of the
Shares on the date of grant and (ii) the consideration received (which may
include services), in the judgment of the Independent Trustees, has a market
value equal or exceeding the value of such options or warrants on the date of
grant;

(i) issue options or warrants to purchase its Shares to the Advisor, a
Trustee, a Sponsor or an Affiliate thereof, unless such options or warrants (i)
are issued on the same terms as such options or warrants are sold to the general
public, (ii) do not exceed an amount equal to 10% of the outstanding Shares of
the Trust on the date of grant or (iii) issued pursuant to a plan approved by
the Shareholders;

(j) commingle the Trust funds with those of any other person or entity,
except that the use of a zero balance or clearing account shall not constitute a
commingling of Trust funds and that funds of the Trust and funds of other
entities sponsored by a Sponsor or its Affiliates may be held in an account or
accounts established and maintained for the purpose of making computerized
disbursements and/or short-term investments provided the Trust funds are
protected from claims of such other entities and creditors of such other
entities;

(k) except for investments permitted by the Consent Statement, invest
in the equity Securities of any non-governmental issuer, including other REITs
or limited partnerships for a period in excess of 18 months; and provided,
further, that all joint ventures with affiliates of the Advisor, a Trustee, a
Sponsor or Affiliate thereof must comply with the provisions of Section 5.1 of
this Article V;

(l) make or invest in any mortgage loans that are subordinate to any
mortgage or equity interest of the Advisor, Sponsor, a Trustee or Affiliates
thereof; provided, however, that the foregoing shall not prohibit loans to
subsidiaries of the Trust; or

(m) sell property to the Sponsor, the Advisor, a Trustee or Affiliate
thereof, except in connection with a joint venture with an Affiliated Program
permitted under Article V, Section 5.1 if the Trust is required to grant the
Affiliated Program a right of first refusal.

SECTION 5.8. TRANSACTIONS BETWEEN THE TRUST AND AFFILIATED PERSONS.
Except for joint ventures with Affiliated Programs as provided for in Article V,
Section 5.1, or advisory arrangements with the Advisor as provided for in
Article VI of the Declaration of Trust, any transaction between the Trust and a
Sponsor, the Advisor, a Trustee or Affiliates thereof shall require approval by
a majority of the Trustees, including a majority of the Independent Trustees,
not otherwise interested in such transaction, as being fair and reasonable to
the Trust and on terms and conditions not less favorable to the Trust than those
available from unaffiliated third parties.

In the absence of fraud, no contract, act or other transaction between
the Trust and any other Person, or in which the Trust is interested, that is
described in the preceding paragraph, shall be invalid, void or voidable even
though (a) one or more of the Trustees or officers are directly or indirectly
interested in, or connected with, or are trustees, partners, directors, officers
or retired officers of such other Person, or (b) one or more of the Trustees or
officers of the Trust, individually or jointly with others, is a party or are
parties to or directly or indirectly interested in, or connected with, such
contract, act or transaction.

SECTION 5.9. TRUST'S RIGHT TO BORROW FUNDS. The Trust is authorized to
incur indebtedness up to the Debt Limitation.

The Trust shall not borrow funds from the Sponsor, the Advisor, a
Trustee or Affiliate thereof unless a majority of the Trustees, including a
majority of the Independent Trustees, not otherwise interested in such
transaction approve the transaction as being fair and reasonable and no less
favorable to the Trust than loans between unaffiliated lenders and borrowers
under the same circumstances.

ARTICLE VI

ADVISOR

SECTION 6.1. EMPLOYMENT. The Board of Trustees may retain an Advisor in
accordance with the provisions of the Declaration of Trust and these Bylaws.

SECTION 6.2. TERM. The Board of Trustees shall not enter into any
Advisory Agreement with the Advisor unless such contract has a term of no more
than one year. It shall be the duty of the Board of Trustees to evaluate the
performance of the Advisor before entering into or renewing any Advisory
Agreement with the Advisor. The criteria used by the Board of Trustees in its
evaluation of the Advisor shall be reflected in the minutes of the meeting of
Trustees. The Advisory Agreement with the Advisor shall be terminable (i)
without cause by the Advisor or (ii) with or without cause by a majority of the
Independent Trustees, each without penalty, and each upon 60 days' prior written
notice to the non-terminating party. In the event of the termination of the
Advisory Agreement with the Advisor, the Advisor will cooperate with the Trust
and take all reasonable steps requested to assist the Board of Trustees in
making an orderly transition of the advisory function. The Trustees shall
determine that any successor Advisor possesses sufficient qualifications (a) to
perform the advisory function for the Trust and (b) to justify the compensation
provided for in its Advisory Agreement.

SECTION 6.3. COMPENSATION. The Independent Trustees shall determine
from time to time but at least annually that the compensation which the Trust
contracts to pay to the Advisor is reasonable in relation to the nature and
quality of the services performed and that such compensation is within the
limits prescribed by the NASAA Statement of Policy regarding Real Estate
Investment Trusts in effect on the effective date of the Prospectus. Each
determination made by the Independent Trustees concerning the reasonableness of
the compensation paid to the Advisor shall be recorded in the minutes of the
meeting of Trustees and shall be based on the factors set forth below and such
other factors as the Independent Trustees deem relevant:

(a) the size of the advisory fee in relation to the size, composition
and profitability of the portfolio of the Trust;

(b) the success of the Advisor in generating opportunities that meet
the investment objectives of the Trust;

(d) additional revenues realized by the Advisor and its Affiliates
through their relationship with the Trust, including loan administration,
underwriting or broker commissions, servicing, engineering, inspection and other
fees, whether paid by the Trust or by others with whom the Trust does business;

(e) the quality and extent of service and advice furnished by the
Advisor;

(f) the performance of the investment portfolio of the Trust, including
income, conservation or appreciation of capital, frequency of problem
investments and competence in dealing with distress situations; and

(g) the quality of the portfolio of the Trust in relationship to the
investments generated by the Advisor for its own account.

The Independent Trustees shall review the performance of the Advisor
and the compensation paid to it by the Trust to determine that the provisions of
the contract with the Advisor are being carried out. The compensation that any
Advisor employed by the Trust shall be entitled to receive for serving as
investment advisor shall consist of the Asset Management Fee, payable as set
forth in the Advisory Agreement. The Advisor shall also be entitled to receive
reimbursement for all operating expenses described in Section 6.5 of this
Article. The Advisor shall also receive from the Trust, for services rendered to
the Trust, the additional compensation set forth in the Advisory Agreement,
which compensation shall include, but shall not be limited to, acquisition fees,
property management fees, mortgage servicing fees, incentive fees and Shares.

In the case of multiple Advisors, incentive fees paid to such Advisors
and Affiliates thereof shall be distributed by a proportional method reasonably
designed to reflect the value added to the Trust's assets by each respective
Advisor or Affiliate.

The Independent Trustees shall determine from time to time but at least
annually that the total fees and expenses of the Trust are reasonable in light
of the investment experience of the Trust, its Net Asset Value, its Net Income,
and the fees and expenses of other comparable advisors in real estate. Each such
determination shall be recorded in the minutes of the meeting of Trustees.

SECTION 6.4. OTHER ACTIVITIES OF ADVISOR. The Advisor shall not be
required to administer the investment activities of the Trust as its sole and
exclusive function. The Advisor may have other business interests and may engage
in other activities similar or in addition to those relating to the Trust,
including the rendering of services and advice to other Persons (including
REITS) and the management of other investments (including investments of the
Advisor and its Affiliates). The Board of Trustees may request the Advisor to
engage in other activities which complement the Trust's investments and to
provide services requested by the borrowers or prospective borrowers from the
Trust, and the Advisor may receive compensation or commissions therefor from the
Trust or other Persons.

the Trustees may adopt from time to time. Except for the allocation of
investment opportunities between the Trust and the Affiliated Programs as set
forth in the Prospectus, the Advisor shall be obligated to present an investment
opportunity to the Trust if (i) such opportunity is of a character which could
be taken by the Trust, (ii) such opportunity is compatible with the Trust's
investment objectives and policies and (iii) the Trust has the financial
resources to take advantage of such opportunity before the Advisor may take
advantage of such opportunity for its own account or present or recommend it to
others. Subject to the limitations contained in this Paragraph, the Advisor
shall be protected in taking for its own account or recommending to others any
such particular investment opportunity.

SECTION 6.5. LIMITATION ON TOTAL OPERATING EXPENSES. The annual Total
Operating Expenses of the Trust may not exceed the greater of: (i) 2% of the
Average Invested Assets of the Trust or (ii) 25% of the Trust's Net Income. The
Independent Trustees have the fiduciary responsibility of limiting the Trust's
annual Total Operating Expenses to amounts that do not exceed the limitations
described above. The Independent Trustees may, however, determine that a higher
level of Total Operating Expenses is justified for such period because of
unusual or non-recurring expenses. Any such finding by the Independent Trustees
and the reasons in support thereof shall be recorded in the minutes of the
meeting of Trustees. Within 60 days after the end of any fiscal quarter of the
Trust for which Total Operating Expenses (for the 12 months then ended) exceed
2% of the Average Invested Assets of the Trust or 25% of the Trust's Net Income,
whichever is greater, the Trust will send to Shareholders a written disclosure
of such fact. If the Independent Trustees determine that such higher Total
Operating Expenses are justified, such disclosure will also contain an
explanation of the Independent Trustees' conclusion. In the event the
Independent Trustees do not determine that such excess expenses are justified,
the Advisor will reimburse the Trust for the excess amount within 60 days after
the end of such period.

SECTION 6.6. LIMITATION ON REAL ESTATE COMMISSIONS. If the Trust
forecloses on a property servicing a Mortgage and sells such property, the Trust
may pay real estate brokerage fees which are reasonable, customary and
competitive, taking into consideration the size, type and location of the
property ("Competitive Commission"), which shall not in the aggregate exceed the
lesser of the Competitive Commission or an amount equal to 6% of the gross sales
price of the property. The amount of such fees payable to the Advisor, a
Trustee, a Sponsor or an Affiliate thereof shall not exceed the lesser of (i)
one-half of the Competitive Commission or (ii) three percent of the gross sales
price of a property and shall be paid only if such person provides a substantial
amount of services in the sales effort.

SECTION 6.7. INITIAL INVESTMENT BY AFFILIATES OF THE ADVISOR. Prior to
the initial public offering of Shares pursuant to the Prospectus, the Advisor
made an Initial Investment of $200,000 in the Trust by acquiring 10,000

Common Shares. The Advisor may only sell Common Shares represented by this
Initial Investment through the market on which the Common Shares are normally
traded.

ARTICLE VII

SHARES AND SHAREHOLDERS

SECTION 7.1. CERTIFICATES; SHARE LEDGER. The ownership of Shares shall
be recorded on the books of the Trust or of a transfer or similar agent for the
Trust. Certificates evidencing the Shares shall be issued to Shareholders within
a reasonable time after a written request for such certificate is received by
the Trust. The Trustees may make such rules as they consider appropriate for the
issuance of Share certificates, including requiring the Shareholder requesting
such issuance to pay the reasonable expenses incurred in connection therewith,
the use of facsimile signatures, the transfer of Shares and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar agent
shall be conclusive as to who are the Shareholders and as to the number of
Shares of the Trust held from time to time by each such Shareholder.

No certificates for Shares shall be issued in place of any certificate
alleged to have been lost, destroyed or wrongfully taken, except, if and to the
extent required by the Board of Trustees, upon:

(i) production of evidence of loss, destruction or wrongful
taking;

(ii) delivery of a bond indemnifying the Trust and its agents
against any claim that may be made against it or them on account of the
alleged loss, destruction or wrongful taking of the replaced
certificate or the issuance of the new certificate;

(iii) payment of the expenses of the Trust and its agents
incurred in connection with the issuance of the new certificate; and

(iv) compliance with such other reasonable requirements as may
be imposed.

SECTION 7.2. TRANSFERS OF SHARES. Except as otherwise provided in the
Declaration of Trust, Shares shall be transferable on the records of the Trust
upon presentment to the Trust or a transfer agent of such evidence of the
payment of transfer taxes and compliance with other provisions of law as the
Trust or its transfer agent may require.

SECTION 7.3. DISTRIBUTION REINVESTMENT PLAN. The Trustees may adopt a
distribution reinvestment plan on such terms and conditions they shall approve,
which plan may be amended from time to time by the Trustees, provided, however,
that such plan shall, at a minimum, provide for the following:

(a) All material information regarding the distribution to the
Shareholder and the effect of reinvesting such distribution, including the tax
consequences thereof, shall be provided to the Shareholder at least annually;
and

(b) Each Shareholder participating in the Reinvestment Plan shall have
a reasonable opportunity to withdraw from the Reinvestment Plan at least
annually after receipt of the information required in subparagraph (a) above.

SECTION 7.4. REPORTS. The Trust will mail or deliver, within 120 days
after the end of each fiscal year, to Shareholders as of a record date after the
end of the Trust's fiscal year and each other Person who becomes a Shareholder
between such record date and the date of mailing or delivery, an annual report
of the affairs of the Trust, including annual financial statements of the Trust
(balance sheet, statement of income or loss, statement of Shareholders' equity,
and statement of cash flows) accompanied by a report containing an opinion of
independent certified public accountants. Such information will be prepared on
an accrual basis in accordance with generally accepted accounting principles.
The Trust shall also include in its annual report (i) the ratio of the costs of
raising capital during the period to the capital raised, (ii) full disclosure of
all material terms, factors and circumstances describing any and all
transactions with the Advisor, a Trustee, a Sponsor or Affiliates thereof and of
fees, commissions, compensation and other benefits paid or accrued to the
Advisor, a Trustee, a Sponsor or Affiliates thereof for the fiscal year
completed, showing the aggregate amount paid or accrued to each recipient and
the services performed for such year (including fees or charges paid or accrued
to the Advisor, a Trustee, the Sponsor or Affiliates thereof by third parties
doing business with the Trust) and (iii) a statement on distributions to the
Shareholders and their sources. The Independent Trustees shall have the duty to
examine and comment in the annual report on the fairness of any such
transactions with the Advisor, a Trustee, the Sponsor or Affiliates thereof. The
Trustees, including the Independent Trustees, shall take reasonable steps to
insure that the requirements of this Section 5.9 are satisfied on a timely
basis.

ARTICLE VIII

AMENDMENT OF BYLAWS

The Board of Trustees shall have the exclusive power to adopt, alter or
repeal any provision of these Bylaws and to make new Bylaws.

ARTICLE IX

MISCELLANEOUS

SECTION 9.1. SEAL. The trust seal shall be circular in form and shall
contain the name of the Trust, the year of its creation and the words "TRUST
SEAL MASSACHUSETTS." Said seal may be used by causing it or a facsimile thereof
to be impressed or affixed or otherwise reproduced.

SECTION 9.2. FISCAL YEAR. The fiscal year of the Trust shall be
determined by resolution of the Board of Trustees.

SECTION 9.3. CHECKS. All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
Trust shall be signed by such officer or officers, or agent or agents of the
Trust, and in such manner, as shall be determined from time to time by
resolution of the Board of Trustees.

SECTION 9.4. NOTICE AND WAIVER OF NOTICE. Whenever any notice is
required by the Declaration of Trust or these Bylaws to be given, except as
otherwise set forth herein or the Declaration of Trust, personal notice is not
meant unless expressly stated, and any notice so required shall be deemed to be
sufficient if given by depositing the same in the United States mail, postage
prepaid, addressed to the person entitled thereto at his address as it appears
on the records of the Trust, and such notice shall be deemed to have been given
on the day of such mailing. Shareholders not entitled to vote shall not be
entitled to receive notice of any meetings or solicitation of Shareholder
consent without a meeting except as otherwise provided by statute.

Whenever any notice is required to be given under the provisions of any
law, or under the provisions of the Declaration of Trust or these Bylaws, a
waiver thereon in writing signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed proper
notice.

SECTION 9.5. SUCCESSORS IN INTEREST. These Bylaws shall be binding upon
and inure to the benefit of the undersigned Trustees and their successors,
assigns, heirs, distributees and legal representatives, and every Shareholder
and his successors, assigns, heirs, distributees and legal representatives.

SECTION 9.6. SEVERABILITY. If any provision of these Bylaws shall be
held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such jurisdiction and shall not in any
manner affect or render invalid or unenforceable such provision in any other
jurisdiction or any other provision of these Bylaws in any jurisdiction.

APPENDIX C

AMERICAN MORTGAGE ACCEPTANCE COMPANY
------------------------------------

Charter of the Audit Committee of the Board of Trustees

I. PURPOSE

The Audit Committee is established by and amongst the Board of Trustees for the
primary purpose of assisting the board in:

o overseeing the integrity of the Company's financial statements,
o overseeing the Company's compliance with legal and regulatory
requirements,
o overseeing the independent auditor's qualifications and independence,
o overseeing the performance of the company's independent auditor, and
o overseeing the Company's system of disclosure controls and system of
internal controls regarding finance, accounting, legal compliance, and
ethics that management and the Board have established.

Consistent with this function, the Audit Committee should encourage continuous
improvement of, and should foster adherence to, the Company's policies,
procedures and practices at all levels. The Audit Committee should also provide
an open avenue of communication among the independent auditors, financial and
senior management, and the Board of Trustees.

The Audit Committee has the authority to obtain advice and assistance from
outside legal, accounting, or other advisors as deemed appropriate to perform
its duties and responsibilities.

The Company shall provide appropriate funding, as determined by the Audit
Committee, for compensation to the independent auditor and to any advisers that
the audit committee chooses to engage.

The Audit Committee will primarily fulfill its responsibilities by carrying out
the activities enumerated in Section III of this Charter. The Audit Committee
will report regularly to the Board of Trustees regarding the execution of its
duties and responsibilities.

II. COMPOSITION AND MEETINGS

The Audit Committee shall be comprised of three or more trustees as determined
by the Board, each of whom shall be independent trustees (as defined by all
applicable rules and regulations), and free from any relationship (including
disallowed compensatory arrangements) that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Committee. Each trustee shall be free of any relationship that, in the
opinion of the Board, would interfere with his or her individual exercise of
independent judgment, and shall meet the director independence requirements for
serving on the Committee as set forth in the corporate governance standards of
the American Stock Exchange. All members of the Committee shall have a working
familiarity with basic finance and accounting practices. The board shall
determine whether at least one member of the Committee qualifies as an "audit
committee financial expert" in compliance with the criteria established by the
SEC and other relevant regulations. The Company will disclose, in periodic
filings as required by the SEC, (i) the name of the "audit committee financial
expert" and whether or not he or she is independent, or (ii) the reason for the
absence of a current "audit committee financial expert". Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Company or an outside consultant. The
Board has determined that simultaneous service on more than one Audit Committee
would not impair the ability of any trustee to effectively serve on the
Company's audit committee.

The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.

The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. Each regularly scheduled meeting shall conclude with an
executive session of the Committee absent members of management and on such
terms and conditions as the Committee may elect. As part of its job to foster
open communication, the Committee should meet periodically with management and
the independent auditors in separate executive sessions to discuss any matters
that the Committee or each of these groups believe should be discussed
privately. In addition, the Committee should meet quarterly with the independent
auditors and management to discuss the annual audited financial statements and
quarterly financial statements, including the Company's disclosure under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations".

III. RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties the Audit Committee shall:

Documents/Reports/Accounting Information Review

1. Review this Charter periodically, at least annually, and recommend to the
Board of Trustees any necessary amendments as conditions dictate.

2. Review and discuss with management the Company's annual financial statements,
quarterly financial statements, and all internal controls reports (or summaries
thereof). Review other relevant reports or financial information submitted by
the Company to any governmental body, or the public, including management
certifications as required by the Sarbanes-Oxley Act of 2002 (Sections 302, 404
and 906) and relevant reports rendered by the independent auditors (or summaries
thereof).

3. Recommend to the Board whether the financial statements should be included in
the Annual Report on Form 10-K. Review with financial management and the
independent auditors the 10-Q prior to its filing (or prior to the release of
earnings).

4. Review earnings press releases with management, including review of
"pro-forma" or "adjusted" non-GAAP information.

5. Discuss with management financial information and earnings guidance provided
to analysts and rating agencies. Such discussions may be on general terms (i.e.,
discussion of the types of information to be disclosed and the type of
presentation to be made).

6. Oversee compliance with the Company's Code of Conduct and oversee and review
such code and recommend changes as necessary.

Independent Auditors

7. Appoint (subject to shareholder ratification, if applicable), compensate, and
oversee the work performed by the independent auditor for the purpose of
preparing or issuing an audit report or related work. Review the performance of
the independent auditors and remove the independent auditors if circumstances
warrant. The independent auditors shall report directly to the audit committee
and the audit committee shall oversee the resolution of disagreements between
management and the independent auditors in the event that they arise. The
committee will review the experience and qualifications of senior members of the
independent

audit team annually and ensure that all partner rotation requirements, as
promulgated by applicable rules and regulations, are executed. The committee
will also consider whether the auditor's performance of permissible nonaudit
services is compatible with the auditor's independence.

8. Review with the independent auditor any problems or difficulties and
management's response; review the independent auditor's attestation and report
on management's internal control report; and hold timely discussions with the
independent auditors regarding the following:

o all critical accounting policies and practices;
o all alternative treatments of financial information within generally
accepted accounting principles that have been discussed with management,
ramifications of the use of such alternative disclosures and treatments,
and the treatment preferred by the independent auditor;
o other material written communications between the independent auditor
and management including, but not limited to, the management letter and
schedule of unadjusted differences; and
o an analysis of the auditor's judgment as to the quality of the Company's
accounting principles, setting forth significant reporting issues and
judgments made in connection with the preparation of the financial
statements.

9. At least annually, obtain and review a report by the independent auditor
describing:

o the firm's internal quality control procedures;
o any material issues raised by the most recent internal quality-control
review, peer review, or by any inquiry or investigation by governmental
or professional authorities, within the preceding five years, respecting
one or more independent audits carried out by the firm, and any steps
taken to deal with any such issues; and
o (to assess the auditor's independence) all relationships between the
independent auditor and the Company.

10. Review and preapprove both audit and nonaudit services to be provided by the
independent auditor (other than with respect to de minimis exceptions permitted
by the Sarbanes-Oxley Act of 2002). This duty may be delegated to one or more
designated members of the audit committee with any such preapproval reported to
the audit committee at its next regularly scheduled meeting. Approval of
nonaudit services shall be disclosed to investors in periodic reports required
by Section 13(a) of the Securities Exchange Act of 1934.

11. Set clear hiring policies, compliant with governing laws or regulations, for
employees or former employees of the independent auditor.

Financial Reporting Processes and Accounting Policies

12. In consultation with the independent auditors, review the integrity of the
organization's financial reporting processes (both internal and external), and
the internal control structure (including disclosure controls).

13. Review with management major issues regarding accounting principles and
financial statement presentations, including any significant changes in the
Company's selection or application of accounting principles, and major issues as
to the adequacy of the Company's internal controls and any special audit steps
adopted in light of material control deficiencies.

14. Review analyses prepared by management (and the independent auditor as noted
in item 7 above) setting forth significant financial reporting issues and
judgments made in connection with the preparation of the financial statements,
including analyses of the effects of alternative GAAP methods on the financial
statements.

15. Review with management the effect of regulatory and accounting initiatives,
as well as off-balance sheet structures, on the financial statements of the
Company.

16. Establish and maintain procedures for the receipt, retention, and treatment
of complaints regarding accounting, internal accounting, or auditing matters.

17. Establish and maintain procedures for the confidential, anonymous submission
by Company employees regarding questionable accounting or auditing matters.

Legal Compliance and Risk Management

18. Review, with the organization's counsel, any legal matter that could have a
significant impact on the organization's financial statements.

19. Discuss policies with respect to risk assessment and risk management. Such
discussions should include the Company's major financial and accounting risk
exposures and the steps management has undertaken to control them.

Other Responsibilities

20. Review with the independent auditors and management the extent to which
changes or improvements in financial or accounting practices, as approved by the
Audit Committee, have been implemented. (This review should be conducted at an
appropriate time subsequent to implementation of changes or improvements, as
decided by the Committee.)

21. Prepare the report that the SEC requires be included in the Company's annual
proxy statement.

22. Annually, perform a self-assessment relative to the Audit Committee's
purpose, duties and responsibilities outlined herein.

23. Perform any other activities consistent with this Charter, the Company's
by-laws and governing law, as the Committee or the Board deems necessary or
appropriate.

[AMAC Logo]

Dear Shareholder:

Please take note of the important information enclosed with this proxy. There
are a number of issues related to the operation of AMAC that require your
immediate attention.

Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.

You can vote your shares by Internet. Follow the instructions on the reverse
side of the proxy card if you wish to do so.

If you choose to vote by mail, please mark the boxes on the proxy card to
indicate how your shares will be voted. Then sign the card, detach it, and
return your proxy in the enclosed postage-paid envelope.

Thank you in advance for your prompt consideration of these matters.

Sincerely,

American Mortgage Acceptance Company

--------------------------------------------------------------------------------
Proxy

AMERICAN MORTGAGE ACCEPTANCE COMPANY

625 Madison Avenue
New York, New York 10022

SOLICITED BY THE BOARD OF TRUSTEES
FOR THE ANNUAL MEETING OF SHAREHOLDERS

The undersigned hereby appoints Stuart J. Boesky and Alan P. Hirmes, each with
the power to appoint his substitute, and hereby authorizes them to represent and
to vote, as designated on the reverse side, all common shares of American
Mortgage Acceptance Company ("AMAC") held of record by the undersigned on April
1, 2005, at the Annual Meeting of Shareholders to be held on June 8, 2005, and
any adjournments thereof.

THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS INSTRUCTED. IF
THIS PROXY IS EXECUTED BUT NO INSTRUCTION IS GIVEN, THE VOTES ENTITLED TO BE
CAST BY THE UNDERSIGNED WILL BE CAST "FOR" THE PROPOSALS AS DESCRIBED IN THE
PROXY STATEMENT AND IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER
THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF.

PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.

[SEE REVERSE SIDE] [SEE REVERSE SIDE]

CONTINUED AND TO BE SIGNED ON REVERSE SIDE

Your vote is important. Please vote immediately.
Vote-by-Internet
Log on to the Internet and go to
http://www.eproxyvote.com/amc

If you vote over the Internet, please do not mail your card.
--------------------------------------------------------------------------------

DETACH HERE

[X] Please mark votes as in this example.

THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS

1. Election of Trustees. 3. Approval of any postponements or adjournments of
the annual meeting if necessary to permit further
solicitation of proxies if there are not sufficient
Nominees: Stuart J. Boesky, Alan P. Hirmes votes at the time of the annual meeting to approve
Scott M. Mannes, Stanley Perla, and Richard M. Rosan proposals 1 & 2.

FOR ALL WITHHOLD ALL
[ ] [ ]
FOR AGAINST ABSTAIN
[ ]_________________________________ [ ] [ ] [ ]
FOR ALL nominees EXCEPT as noted above

2. The approval of an amendment and restatement of our 4. In their discretion, the proxies are authorized
Company's Second Amended and Restated Declaration to vote upon any other business that may
of Trust which reflects the following significant properly come before the meeting.
amendments:
MARK BOX AT RIGHT FOR ADDRESS
CHANGE AND NOTE AT LEFT [ ]

Please sign exactly as name appears
2a. The transfer of provisions with respect to our investment hereon. Joint owners should each sign.
policy from our declaration of trust to our bylaws: Executors, administrators, trustees and
guardians or other fiduciaries should
FOR AGAINST ABSTAIN give full title as such. If signing for a
[ ] [ ] [ ] corporation, please sign in full
corporate name by a duly authorized
2b. The transfer of provisions with respect to our operating officer.
procedures from our declaration of trust to our bylaws:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2c. The reduction in the vote required to approve a conversion transaction
or a roll-up from 80% to a majority vote:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

Signature:____________________ Date:____ Signature:________________________ Date:___________