THIRD AMENDMENT, dated as of March 25, 2002 (the "Third
Amendment"), to the Investment Advisory Agreement (the "Agreement"), dated
as of March 27, 1998 between Anthracite Capital, Inc., a Maryland
corporation (the "Company"), and BlackRock Financial Management, Inc., a
Delaware corporation (the "Manager"), as amended by that certain (i) First
Amendment, dated as of January 1, 1999 between the Company and the Manager
and (ii) Second Amendment, dated as of July 1, 2001, and as extended by
that certain (i) letter agreement dated May 5, 2000 between the Company and
the Manager and (ii) letter agreement dated the date hereof between the
Company and the Manager.


                              R E C I T A L S

            Section 12 of the Agreement provides, among other things, that
the Company and the Manager may amend the Agreement, if, but only if, such
amendment is in writing and is signed by the parties thereto.

            The Company and the Manager, intending to be legally bound,
hereby enter into this Third Amendment pursuant to Section 12 of the
Agreement, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.

            All things necessary to make this Third Amendment a valid
agreement between the Company and the Manager in accordance with its terms
have been done.

            In the event that any term or provision contained herein shall
conflict or be inconsistent with any provision contained in the Agreement,
the terms and provisions of this Third Amendment shall govern.

            All terms used in this Third Amendment which are defined in the
Agreement have the meanings assigned to such terms in the Agreement.


                                 ARTICLE I

                                 AMENDMENTS

            Section 1.1 Amendment of Section 5(a) of the Agreement. Section
5(a)(ii)(A)(1)(a) of the Agreement is hereby amended by deleting the words
"Funds From Operations" and substituting therefor the words "net income
(determined in accordance with GAAP)", and Section 5(a)(ii)(A)(1)(b) of the
Agreement is hereby deleted.

            Section 1.2 Amendment of Section 7 of the Agreement.

            (a) The second sentence of the first paragraph of Section 7 of
the Agreement is hereby amended by deleting the words "two years" and
substituting therefor the words "one year".

            (b) The second sentence of the second paragraph of Section 7 of
the Agreement is hereby amended by deleting the words "for a period of four
years following the date of termination".

                                ARTICLE II

                               MISCELLANEOUS

            Section 2.1 Governing Law. This Third Amendment shall be
construed in accordance with the laws of the State of New York for
contracts to be performed entirely therein without reference to choice of
law principles thereof.

            Section 2.2 Severability. The invalidity or unenforceability of
any provision of this Third Amendment shall not affect the validity of any
other provision, and all other provisions shall remain in full force and
effect.

            Section 2.3 Counterparts. This Third Amendment may be signed by
the parties in counterparts which together shall constitute one and the
same agreement among the parties.

            Section 2.4 Ratification of the Agreement. As amended by this
Third Amendment, the Agreement is in all respects ratified and confirmed
and the Agreement as so amended by this Third Amendment shall be read,
taken and construed as one and the same instrument.



<PAGE>


                                 SIGNATURES

            IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to be duly executed all as of the date first written above.


                                    ANTHRACITE CAPITAL, INC.


                                    By: /s/ Hugh R. Frater
                                        ----------------------------------------
                                    Name:  Hugh R. Frater
                                    Title: President and Chief Executive Officer


                                    BLACKROCK FINANCIAL MANAGEMENT, INC.


                                    By:/s/ Laurence D. Fink
                                       -----------------------------------------
                                    Name:  Laurence D. Fink
                                    Title: Chairman and Chief Executive Officer