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

                              --------------------

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                                       on
                                  June 8, 2005

                              --------------------

                                                                  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

                              --------------------

                                 PROXY STATEMENT
                              --------------------

                         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.

     (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.


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
--------------------------------------------------------------------------------
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

     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, amend the shareholder voting
requirements for approval of certain Conversion or Roll-Up Transactions.

     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.


                                      -2-



                                   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.


                                      -3-



                  (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;

                  (c) Sponsor or Advisor compensation;


                                      -4-



                  (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.  


                                      -5-



                  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.


                                      -6-



                  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 


                                      -7-



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 


                                      -8-



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.


                                      -9-



                  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  


                                      -10-



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


                                      -11-



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  


                                      -12-



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, 


                                      -13-



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.


                                      -14-



                                   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  


                                      -15-



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.

                  (c) For the  purpose  of  determination  to be made under this
Article,

                      (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


                                      -16-



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

                  (c) assume an orderly liquidation of the Trust's assets over a
12-month period.

                  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:


                                      -17-



                  (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


                                      -18-



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.


                                      -19-



                  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.


                                      __________________________________________

                                      __________________________________________

                                      __________________________________________

                                      __________________________________________

                                      __________________________________________


                                      -20-




                                                                      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.


                                       2



         (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


                                       3



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.


                                       4



         (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


                                       5



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


                                       6



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


                                       7



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


                                       8



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


                                       9



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


                                       10



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.


                                       11



                                  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


                                       12



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


                                       13



         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.


                                       14



                  (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


                                       15



         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


                                       16



                  (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


                                       17



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,


                                       18



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


                                       19



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.


                                       20



                                   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


                                       21



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.


                                       22



         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.


                                       23



         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;


                                       24



         (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.


                                       25



                                   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;

         (c) the rates charged to other REITs and to investors  other than REITs
by advisors performing similar services;

         (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;


                                       26



         (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 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


                                       27



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


                                       28



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.


                                       29



         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.


                                       30



                                   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.



                                                                               1




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 



                                                                               2




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.



                                                                               3




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.




                                                                               4




                                   [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:___________