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

                                    FORM 10-Q


(Mark One)


[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934


                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006


                                       OR


[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934


                         Commission File Number 0-23972

                      AMERICAN MORTGAGE ACCEPTANCE COMPANY
             (Exact name of Registrant as specified in its charter)


          MASSACHUSETTS                                          13-6972380
(State or other jurisdiction of                             (I.R.S. Employer
  incorporation or organization)                             Identification No.)


 625 MADISON AVENUE, NEW YORK, NEW YORK                            10022
(Address of principal executive offices)                         (Zip Code)


Registrant's telephone number, including area code (212) 317-5700


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer or a  non-accelerated  filer (as defined in Rule 12b-2 of the
Exchange Act). Large Accelerated filer [ ] Accelerated filer [X] Non-accelerated
filer [ ]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of July 31,  2006,  there were  8,305,878  outstanding  common  shares of the
registrant's shares of beneficial interest, $0.10 par value.


<PAGE>



                                TABLE OF CONTENTS

                      AMERICAN MORTGAGE ACCEPTANCE COMPANY

                                    FORM 10-Q

<TABLE>
<CAPTION>

                                                                                                       PAGE
<S>              <C>            <C>                                                                     <C>
PART I
                 Item 1.        Condensed Consolidated Financial Statements                              3
                 Item 2.        Management's Discussion and Analysis of Financial Condition and
                                    Results of Operations                                               16
                 Item 3.        Quantitative and Qualitative Disclosures about Market Risk              23
                 Item 4.        Controls and Procedures                                                 23

PART II
                 Item 1.        Legal Proceedings                                                       24
                 Item 1A.       Risk Factors                                                            24
                 Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds             24
                 Item 3.        Defaults Upon Senior Securities                                         24
                 Item 4.        Submission of Matters to a Vote of Security Holders                     24
                 Item 5.        Other Information                                                       24
                 Item 6.        Exhibits                                                                24

SIGNATURES                                                                                              25

</TABLE>


                                       2
<PAGE>



                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets
                    (In thousands, except per share amounts)


                                     ASSETS

<TABLE>
<CAPTION>

                                                                                June 30,   December 31,
                                                                                 2006          2005
                                                                              -----------  -----------
                                                                              (Unaudited)
<S>                                                                            <C>          <C>
Cash and cash equivalents                                                      $   3,692    $  11,214
 Investments
   Debt securities at fair value                                                 194,286      222,723
   Mortgage loans receivable, net                                                199,762       51,981
   Notes receivable, net                                                          13,725       13,725
   Revenue bonds                                                                   6,489        6,626
   ARCap                                                                          22,278       20,678
   Real estate owned - held and used, net                                         67,500       68,793
Accounts receivable                                                                2,920        3,079
Other assets                                                                       6,498        1,904
                                                                               ---------    ---------

Total assets                                                                   $ 517,150    $ 400,723
                                                                               =========    =========

                                        LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Repurchase facilities payable                                                $ 184,253    $ 209,101
  CDO repurchase facility                                                        127,644           --
  Line of credit - related party                                                  27,042           --
  Warehouse facility payable                                                        --          4,070
  Mortgages payable on real estate owned                                          40,220       40,487
  Preferred shares of subsidiary (subject to mandatory repurchase)                25,000       25,000
  Accounts payable and accrued expenses                                            2,613        1,599
  Due to Advisor and affiliates                                                    1,891        2,961
  Distributions payable                                                            3,322        3,322
                                                                               ---------    ---------

Total liabilities                                                                411,985      286,540
                                                                               ---------    ---------

Commitments and contingencies

Shareholders' equity:
  Shares of beneficial interest; $.10 par value; 25,000 shares authorized;
   8,719 issued and 8,304 outstanding in 2006 and 2005                               871          871
  Treasury shares of beneficial interest at par; 415 shares in 2006 and 2005         (42)         (42)
  Additional paid-in capital                                                     126,427      126,357
  Share-based compensation                                                            --          (20)
  Accumulated deficit                                                            (17,027)     (17,766)
  Accumulated other comprehensive (loss) income                                   (5,064)       4,783
                                                                               ---------    ---------

Total shareholders' equity                                                       105,165      114,183
                                                                               ---------    ---------

Total liabilities and shareholders' equity                                     $ 517,150    $ 400,723
                                                                               =========    =========

</TABLE>

            See accompanying notes to condensed financial statements.

                                       3
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                   Condensed Consolidated Statements of Income
                    (In thousands, except per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                     Three Months Ended      Six Months Ended
                                                          June 30,               June 30,
                                                    --------------------   --------------------
                                                      2006        2005       2006        2005
                                                    --------    --------   --------    --------
<S>                                                 <C>         <C>        <C>         <C>
Revenues:
   Interest income:
     Debt securities                                $  2,996    $  3,339   $  6,215    $  6,371
     Mortgage loans                                    3,687       1,148      5,675       1,763
     Notes receivable                                    216         378        449         857
     Revenue bonds                                       141         146        284         293
     Temporary investments                                52          67        135          84
   Rental income of real estate owned -
    held and used                                      2,338       2,283      4,731       4,467
   Other revenues                                        157         499        162         728
                                                    --------    --------   --------    --------
     Total revenues                                    9,587       7,860     17,651      14,563
                                                    --------    --------   --------    --------

Expenses:
   Interest                                            4,227       1,735      6,586       2,917
   Interest - distributions to preferred
    shareholders of subsidiary (subject to
    mandatory repurchase)                                556         432      1,074         500
  Mortgage interest for real estate owned
    - held and used                                      595         603      1,192       1,208
   Property operations of real estate owned
    - held and used                                    1,185       1,046      2,650       1,966
   General and administrative                            490         468        978         905
   Fees to Advisor                                       977         680      1,803       1,374
   Depreciation                                          450         336        900         702
   Amortization and other                                 15          91         30         224
                                                    --------    --------   --------    --------
     Total expenses                                    8,495       5,391     15,213       9,796
                                                    --------    --------   --------    --------

Other income:
   Equity in earnings of ARCap                         2,397         600      3,076       1,200
   Loss on repayment of debt securities                 (153)         --       (153)        (71)
   Change in fair value of derivative instruments      1,879          --      2,023          --
                                                    --------    --------   --------    --------
     Total other income                                4,123         600      4,946       1,129
                                                    --------    --------   --------    --------

   Net income                                       $  5,215    $  3,069   $  7,384    $  5,896
                                                    ========    ========   ========    ========

   Net income per share (basic and diluted) $           0.63    $   0.37   $   0.89    $   0.71
                                                    ========    ========   ========    ========

   Dividends per share                              $   0.40    $   0.40   $   0.80    $   0.80
                                                    ========    ========   ========    ========

   Weighted average shares outstanding:
     Basic                                             8,304       8,311      8,304       8,324
                                                    ========    ========   ========    ========
     Diluted                                           8,304       8,311      8,305       8,327
                                                    ========    ========   ========    ========

</TABLE>

            See accompanying notes to condensed financial statements.

                                       4
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                       Six Months Ended
                                                                           June 30,
                                                                    ----------------------
                                                                      2006         2005
                                                                    ---------    ---------
<S>                                                                 <C>          <C>
Cash flows from operating activities:
   Net income                                                       $   7,384    $   5,896

   Adjustments  to  reconcile  net  income  to net cash  provided
     by  operating activities:
     Depreciation expense                                                 900          702
     Change in fair value of derivative instruments                    (2,023)          --
     Equity in earnings of ARCap                                       (3,076)      (1,200)
     Net loss on sale or repayment of assets                              153           71
     Amortization and accretion                                          (144)         176
     Other non-cash expense                                                89           20
     Distributions received from equity investee                        1,716        1,200
     Changes in operating assets and liabilities:
       Accounts receivable                                                159         (461)
       Other assets                                                       223         (250)
       Due to Advisor and affiliates                                   (1,070)         462
       Accounts payable and accrued expenses                              921          (41)
                                                                    ---------    ---------
Net cash provided by operating activities                               5,232        6,575
                                                                    ---------    ---------

Cash flows from investing activities:
   Funding and purchase of mortgage loans                            (153,759)     (21,178)
   Principal repayments of mortgage loans                               5,450           --
   Investment in debt securities                                           --      (40,443)
   Principal repayments of debt securities                             17,945        6,313
   Purchase of mortgage loans on real estate owned                         --      (17,150)
   Proceeds from sale of real estate owned                                 --        7,474
   Principal repayment on real estate owned                                --          480
   Funding of notes receivable                                             --         (472)
   Repayment of notes receivable                                           --        8,177
   Principal repayment of revenue bonds                                    90          104
   Additions to real estate owned                                          --          (14)
                                                                    ---------    ---------
Net cash used in investing activities                                (130,274)     (56,709)
                                                                    ---------    ---------

</TABLE>

                                    continued

                                       5
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                            Six Months Ended
                                                                June 30,
                                                         ----------------------
                                                           2006         2005
                                                         ---------    ---------
<S>                                                      <C>          <C>
Cash flows from financing activities:
   Proceeds from CDO repurchase facility                   127,644           --
   Proceeds from repurchase facilities                       7,368       63,548
   Repayments of repurchase facilities                     (32,216)     (20,041)
   Proceeds from warehouse facility                             --          243
   Repayments of warehouse facility                         (4,070)          --
   Proceeds from line of credit - related party             67,542       14,761
   Repayments of line of credit - related party            (40,500)     (19,361)
   Deferred financing costs                                 (1,604)        (802)
   Distributions paid to shareholders                       (6,644)      (6,671)
   Treasury stock purchases                                     --         (368)
   Issuance of preferred shares of subsidiary                   --       25,000
                                                         ---------    ---------

Net cash provided by financing activities                  117,520       56,309
                                                         ---------    ---------

Net (decrease) increase in cash and cash equivalents        (7,522)       6,175

Cash and cash equivalents at the beginning of the year      11,214        2,674
                                                         ---------    ---------

Cash and cash equivalents at the end of the period       $   3,692    $   8,849
                                                         =========    =========

</TABLE>

            See accompanying notes to condensed financial statements.

                                       6
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)



NOTE 1 - BASIS OF PRESENTATION

The condensed consolidated financial statements include the accounts of American
Mortgage Acceptance Company and its wholly owned subsidiaries.  All intercompany
accounts  and  transactions  have  been  eliminated  in  consolidation.   Unless
otherwise indicated, we herein refer to American Mortgage Acceptance Company and
its  subsidiaries  as "AMAC",  "we",  "us",  "our",  and "our  Company".  We are
externally  managed by CharterMac  AMI  Associates,  Inc.,  (the  "Advisor"),  a
subsidiary of CharterMac,  a publicly traded company. We operate in one business
segment, which focuses on investing in mortgage loans secured by multifamily and
commercial property throughout the United States.

Effective  April  2006,  we  dissolved  one  subsidiary  that was formed for the
purposes of managing a repurchase facility, which expired in March 2004.

In March  2006,  we formed  AMAC CDO  Funding  I ("AMAC  CDO"),  a wholly  owned
subsidiary,   for  the  purposes  of  managing  our  first  Collateralized  Debt
Obligation ("CDO") Securitization (see Note 5).

The condensed  consolidated  financial  statements  have been  prepared  without
audit.  In the  opinion of  management,  the  financial  statements  contain all
adjustments  (consisting  of only normal  recurring  adjustments)  necessary  to
present  fairly our financial  position as of June 30, 2006,  and the results of
our operations and our cash flows.  However,  the operating  results for interim
periods may not be indicative of the results for the full year.

Certain  information  and  footnote  disclosures  normally  included  in  annual
consolidated   financial  statements  prepared  in  accordance  with  accounting
principles generally accepted in the United States of America ("GAAP") have been
condensed or omitted. It is suggested that these financial  statements should be
read in conjunction with the consolidated financial statements and notes thereto
included in our Form 10-K for the year ended December 31, 2005.

Our annual report on Form 10-K for the year ended December 31, 2005,  contains a
summary of our  significant  accounting  policies.  There have been no  material
changes to these  items since  December  31,  2005,  except as noted  below.  As
previously  disclosed,  we converted a portion of our  preferred  investment  in
ARCap Investors, LLC ("ARCap") to common units. While we continue to account for
this investment under the equity method, a portion of the equity income recorded
is  based  on  the  preferred  dividend,  while  the  balance  is  based  on our
proportionate share of common units outstanding.

The preparation of the condensed consolidated financial statements in conformity
with GAAP requires us to make estimates and assumptions that affect the reported
amounts of assets and  liabilities  and the disclosure of contingent  assets and
liabilities  as of the date of the financial  statements as well as the reported
amounts of revenues and expenses  during the reporting  period.  Actual  results
could differ from those estimates.

Certain prior year amounts,  in particular  the  reclassification  of results of
operations  of our  real  estate  owned - held  and used  portfolio,  have  been
reclassified to conform to the current year presentation.

NEW ACCOUNTING PRONOUNCEMENTS

During the first quarter of 2006, we adopted  Statement of Financial  Accounting
Standards No. 123(R),  SHARE-BASED  PAYMENT  ("SFAS No.  123(R)") which replaces
SFAS No. 123,  ACCOUNTING FOR STOCK-BASED  COMPENSATION  ("SFAS No. 123"). Among
other things,  SFAS No. 123(R) requires that companies record the value of stock
option grants as compensation expense,  while SFAS No. 123 allowed disclosure of
the impact  instead of recording  the  expense.  As we had been  accounting  for
share-based  payments as an expense  following the fair value provisions of SFAS
No. 123, the impact of adopting  this  standard was not material to us. See also
Note 8.

In November  2005,  the FASB issued Staff Position 115 / 124 - 1, THE MEANING OF
OTHER-THAN-TEMPORARY  IMPAIRMENT AND ITS APPLICATION TO CERTAIN INVESTMENTS. The
Staff Position clarified,  among other matters,  the determination as to when an


                                       7
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)



unrealized loss on debt securities  should be reflected in the income  statement
as opposed to accumulated other comprehensive income and was effective as of the
first quarter of 2006.  Application of the Staff Position had no material impact
on our results of operations.

NOTE 2 - INVESTMENTS IN DEBT SECURITIES - AVAILABLE FOR SALE

Information regarding our investments in debt securities is as follows:

<TABLE>
<CAPTION>

(In thousands)
                                           June 30,         December 31,
                                            2006               2005
                                          ---------         -----------
<S>                                       <C>                <C>
Amortized cost                            $ 200,698          $ 218,891
                                          ---------          ---------
Unrealized gains                              1,988              5,707
Unrealized losses                            (8,400)            (1,875)
                                          ---------          ---------
Net unrealized (loss) gain                   (6,412)             3,832
                                          ---------          ---------
Fair value                                $ 194,286          $ 222,723
                                          =========          =========

</TABLE>

The fair value and gross unrealized losses of our debt securities  aggregated by
length of time that these  individual  debt securities have been in a continuous
unrealized  loss position at June 30, 2006, and December 31, 2005, is summarized
in the table below:

<TABLE>
<CAPTION>

(Dollars in thousands)
                                 June 30, 2006                     December 31, 2005
                       ---------------------------------   ---------------------------------
                       Less than    12 Months              Less than    12 Months
                       12 Months     or More     Total     12 Months     or More      Total
                       ---------    ---------   --------   ---------    ---------   --------
<S>                     <C>          <C>        <C>          <C>        <C>         <C>
Number of securities          29           5          34           8          16          24
Fair value              $137,697    $ 10,900    $148,597    $ 25,905    $ 56,281    $ 82,186
Gross unrealized
loss                    $  6,936    $  1,464    $  8,400    $    197    $  1,678    $  1,875

</TABLE>

These  unrealized  losses  are  as a  result  of  increases  in  interest  rates
subsequent to the acquisition of the securities.  All of the debt securities are
performing according to their terms. Furthermore, we have the intent and ability
to hold these  securities to maturity,  or at least until  interest rates change
such that the fair value is no longer less than book value. Accordingly, we have
concluded  that these  declines in value are  temporary.  As such, no impairment
charges have been recorded.

At June 30, 2006, all of our debt  securities  were pledged as collateral  under
our repurchase  facilities.  At June 30, 2006, we had no  availability to borrow
against these debt securities.

During April 2006, we sold a debt security and a related mortgage loan (see Note
3).

NOTE 3 - MORTGAGE LOANS

During April 2006, AMAC CDO purchased a first mortgage loan from CharterMac, the
parent of our Advisor, at approximately its $26.0 million face value. This note,
along with an existing $5.0 million subordinated participation we already owned,
were  assigned to AMAC CDO and pledged as  collateral  under the CDO  repurchase
facility, in exchange for $29.2 million in funds.


                                       8
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)



Including the first  mortgage loan purchased  from  CharterMac,  we partially or
fully  funded  ten  first  mortgage  loans  and  subordinated  notes,   totaling
approximately  $151.7  million,  for  the CDO  securitization.  The  loans  bear
interest at a weighted average interest rate of 6.37%.

During April 2006, we sold a debt security and a mortgage loan,  both pertaining
to one property,  for approximately  $15.5 million. We received $14.6 million of
the sale  proceeds,  of which $14.2 was used to repay funds we had borrowed from
our  repurchase  facilities.  During July 2006, we received the final payment of
sale  proceeds.  As a result of the sale, we recognized a loss of  approximately
$138,000 due to the write-off of an unamortized premium on the debt security. We
also  recognized  income  of  approximately  $131,000  due  to  the  accelerated
amortization of a loan  origination fee on the mezzanine loan, which is included
in other  revenues on our  condensed  consolidated  statements of income for the
three and six month period ended June 30, 2006.

NOTE 4 - REAL ESTATE OWNED

Real estate owned consisted of the following:

<TABLE>
<CAPTION>

(Dollars in thousands)
                                                                                   Carrying    Carrying
                                                                                    Value        Value
                                                                                    as of        as of
                                                   Number of                       June 30,   December 31,
                                                     Units          Location         2006        2005
                                                   ---------    ---------------   ---------   -----------
<S>                                                    <C>      <C>               <C>          <C>
Real Estate Owned - Held and Used, net

Concord Portfolio                                        852        Houston, TX   $  53,127    $  53,407
   Less: accumulated depreciation                                                    (3,735)      (3,062)
                                                                                  ---------    ---------
Subtotal                                                                             49,392       50,345
                                                                                  ---------    ---------

Reserve at Autumn Creek                                  212    Friendswood, TX      19,349       19,462
                                                   ---------
   Less: accumulated depreciation                                                    (1,241)      (1,014)
                                                                                  ---------    ---------
Subtotal                                                                             18,108       18,448
                                                                                  ---------    ---------

Total Real Estate Owned - Held and Used, net           1,064                      $  67,500    $  68,793
                                                   =========                      =========    =========

Mortgages Payable on Real Estate Owned

Concord Portfolio                                                                 $  40,220    $  40,487
                                                                                  =========    =========

</TABLE>

NOTE 5 - CDO REPURCHASE FACILITY

In addition to our existing repurchase facilities,  we executed a new repurchase
agreement  during March 2006 with Bank of America  ("BOA").  The purpose of this
facility is to fund up to $250.0  million of  investments  that are to be placed
into our first CDO  securitization.  Advance rates on the  borrowings  from this
facility,  ranging from 50% to 95% of collateral  value, will be determined on a
loan-by-loan  basis.  Interest  on the  borrowings,  which range from LIBOR plus
0.50% to LIBOR plus 2.25%,  are also  determined on a  loan-by-loan  basis.  The
repurchase  facility  expires upon inception of the CDO  securitization,  or six
months after the inception of the repurchase facility, whichever comes first. At
June 30, 2006, we had  approximately  $127.6  million of borrowings  outstanding
under this facility, at a weighted average interest rate of 6.27%. In connection
with the CDO securitization,  we have prepaid approximately $1.5 million of a 1%
fee  due  in  full  when  the  CDO  is  securitized.   These  fees,   which  are
non-refundable,  have been  deferred and will be amortized  over the life of the
CDO securitization.


                                       9
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)



NOTE 6 - DERIVATIVE INSTRUMENTS

CASH FLOW HEDGE OF DEBT

As of June 30,  2006,  we had one interest  rate swap with a notional  amount of
$30.0  million,  which is  designated  as a cash flow hedge with the hedged item
being the interest payments on our  variable-rate  repurchase  facilities.  This
swap  is  recorded  at fair  value,  with  changes  in fair  value  recorded  in
accumulated other  comprehensive  income to the extent the hedge is effective in
achieving  offsetting cash flows.  There was no  ineffectiveness  in the hedging
relationship   during  the  periods  reported.   Amounts  in  accumulated  other
comprehensive  income  will be  reclassified  into  earnings  in the same period
during which the hedged forecasted  transaction  affects earnings.  Since we are
hedging  the  interest  payments  on  our  variable-rate  debt,  the  forecasted
transactions are the interest payments.

We expect that the swap will be highly effective in achieving offsetting changes
in cash flows throughout its term.

FREE STANDING DERIVATIVES RELATED TO INVESTMENTS

We also have sixteen  interest rate swaps with an aggregate  notional  amount of
$185.0  million  that  are  hedging   changes  in  the  fair  value  of  certain
investments.  We did not  elect to apply  hedge  accounting  to these  swaps and
therefore,  the  changes in the fair value of these  swaps are  included  in net
income.


FINACIAL STATEMENT IMPACT

Interest rate swaps for which we were in a net settlement liability position are
recorded in accounts  payable,  accrued expenses and other liabilities and those
for  which we are in a net  settlement  asset  position  are  recorded  in other
assets. The amounts recorded at June 30 were as follows:

<TABLE>
<CAPTION>

(In thousands)                                  2006         2005
                                               ------       ------
<S>                                            <C>          <C>
Net asset position                             $3,920       $  366
Net liability position                         $  131       $   --

</TABLE>

 Interest expense included the following related to our swaps:

<TABLE>
<CAPTION>

                                   Three months ended          Six months ended
                                        June 30,                   June 30,
                                  --------------------       --------------------
                                   2006          2005         2006          2005
                                  ------        ------       ------        ------
<S>                               <C>           <C>          <C>           <C>
Interest income                   $(127)        $  --        $(202)        $  --
Interest expense                     61            36           66           107
                                  -----         -----        -----         -----

Net                               $ (66)        $  36        $(136)        $ 107
                                  =====         =====        =====         =====

</TABLE>

The change in the fair value of our free standing derivatives for the six months
ended June 30, 2006 was $2.0  million  and is  recorded  in other  income on our
condensed consolidated statements of income.

We estimate that  approximately  $267,000 of the net unrealized gain included in
accumulated other  comprehensive  income will reduce interest expense within the
next twelve months.


                                       10
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)



NOTE 7 - SHAREHOLDERS' EQUITY

Comprehensive  income for the six months  ended June 30,  2006 and 2005,  was as
follows:

<TABLE>
<CAPTION>

(In thousands)                                               Six months ended
                                                                 June 30,
                                                          ----------------------
                                                            2006          2005
                                                          --------      --------
<S>                                                       <C>           <C>
Net income                                                $  7,384      $  5,896
Net unrealized gain on derivative instruments                  205           237
Net unrealized holding (loss) gain on investments          (10,293)        1,824
Comprehensive income of equity investments                     240            --
                                                          --------      --------
Comprehensive (loss) income                               $ (2,464)     $  7,957
                                                          ========      ========

</TABLE>

NOTE 8 - SHARE-BASED COMPENSATION

In  accordance  with our Amended and Restated  Incentive  Share Option Plan (the
"Plan"), our board of trustees can award share options to trustees, officers and
employees of AMAC and  employees of our Advisor and its  affiliates.  As of June
30, 2006, a maximum of 643,536 options can be granted,  with annual limits based
upon formulas  specified in the Plan. Option terms and vesting  requirements are
determined  at the time of grant,  provided  that the term is no longer than ten
years.

On January 1, 2006,  we adopted SFAS No.  123(R) under the modified  prospective
method.  Since we  previously  accounted  for our  share-based  compensation  as
expense  under the fair value  provisions  of SFAS No. 123, our adoption did not
significantly impact our financial position or our results of operations.

In accordance  with SFAS No. 123(R),  we accrue  compensation  cost based on the
estimated  fair value of the options  issued and  amortize  those costs over the
vesting period.  Because the grant  recipients are not our employees and vesting
of the options is contingent upon the recipient  continuing to provide  services
to us, we estimate  the fair value of the options at each  period-end  up to the
vesting date and adjust recorded amounts accordingly.

As of June 30, 2006,  all of our share options were fully  amortized,  and there
was  no  unrecognized   compensation  cost  related  to  non-vested  share-based
compensation grants.

The following  table  summarizes  share option  activity in the Plan for the six
months ended June 30, 2006:

<TABLE>
<CAPTION>
                                                                          Weighted
                                                                           Average
                                                             Weighted     Remaining
                                                              Average    Contractual    Aggregate
                                                             Exercise     Term (in      Intrinsic
                                                Options        Price        years)        Value
                                             -----------------------------------------------------

<S>                                            <C>            <C>            <C>            <C>
Outstanding at beginning of year                187,052       $15.78         4.91           --

Granted                                              --           --           --           --
Forfeited/expired                                    --           --           --           --
Exercised                                            --           --           --           --
                                             -----------------------------------------------------
Outstanding at end of period                    187,052       $15.78         4.66           --
                                             =====================================================

Exercisable at end of period                    187,052       $15.78         4.66           --
                                             =====================================================

Compensation cost recorded                     $ 59,000
                                             =============

</TABLE>


                                       11
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)



The  options  outstanding  had no  intrinsic  value  at June  30,  2006,  as the
Company's  closing stock price on the last trading day of the second quarter was
less than the exercise prices.  This amount will change based on the fair market
value of the Company's stock.

NOTE 9 - EARNINGS PER SHARE

Diluted net income per share is calculated  using the weighted average number of
shares  outstanding  during the period plus the  additional  dilutive  effect of
common share  equivalents.  The dilutive effect of outstanding  share options is
calculated using the treasury stock method.

(In thousands, except per share amounts)

<TABLE>
<CAPTION>

Three Months Ended June 30, 2006:              Income       Shares     Per Share
                                               ------       ------     ---------
<S>                                            <C>           <C>         <C>
   Basic EPS                                   $5,215        8,304       $0.63
   Effect of dilutive securities                   --           --          --
                                               ------       ------       -----
   Diluted EPS                                 $5,215        8,304       $0.63
                                               ======       ======       =====

Three Months Ended June 30, 2005:

   Basic EPS                                   $3,069        8,311       $0.37
   Effect of dilutive securities                   --           --          --
                                               ------       ------       -----
   Diluted EPS                                 $3,069        8,311       $0.37
                                               ======       ======       =====

Six Months Ended June 30, 2006:

   Basic EPS                                   $7,384        8,304       $0.89
   Effect of dilutive securities                   --            1          --
                                               ------       ------       -----
   Diluted EPS                                 $7,384        8,305       $0.89
                                               ======       ======       =====

Six Months Ended June 30, 2005:

   Basic EPS                                   $5,896        8,324       $0.71
   Effect of dilutive securities                   --            3          --
                                               ------       ------       -----
   Diluted EPS                                 $5,896        8,327       $0.71
                                               ======       ======       =====

</TABLE>


                                       12
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)



NOTE 10 - RELATED PARTY TRANSACTIONS

The costs paid or payable to our Advisor were as follows:

<TABLE>
<CAPTION>

(In thousands)
                                                 Three Months Ended   Six Months Ended
                                                      June 30,            June 30,
                                                 ------------------   ----------------
                                                   2006      2005      2006      2005
                                                 --------  --------   ------    ------
<S>                                               <C>       <C>       <C>       <C>
Shared services expenses                          $  497    $  210    $  699    $  456
Asset management fees                                480       382       916       710
Incentive management fee (1)                        --          88       188       208
                                                  ------    ------    ------    ------

                                                  $  977    $  680    $1,803    $1,374
                                                  ======    ======    ======    ======

Interest paid on related party line of credit$       745    $   --    $  745    $   11
                                                  ======    ======    ======    ======

</TABLE>

(1)  Accrual based on proportion of actual earnings as compared to our estimates
     of  full-year  results.  Due to an  amendment  to our Amended and  Restated
     Advisory  Services  Agreement,  the  calculation  of the  annual  incentive
     management  fee  payable  to our  Advisor  excludes  any  gains  or  losses
     resulting from the change in fair value of our derivative  instruments.  As
     such, no accrual was recorded for the three months ended June 30, 2006.

During April 2006, we purchased a first  mortgage loan from  CharterMac  for the
CDO  securitization  (see Note 3).  Including  this loan,  we partially or fully
funded ten first mortgage loans and subordinated notes,  totaling  approximately
$151.7 million,  for the CDO securitization.  All of these loans were originated
by  CharterMac  Mortgage  Capital  ("CMC"),  an affiliate  of our  Advisor.  CMC
received  approximately  $608,000  in loan  origination  fees  related  to these
originations, all of which were paid by the borrowers.

During April 2006, we amended our loan agreement with CharterMac to increase our
borrowing capacity to $50.0 million and extend the maturity date of the facility
to June 2007.

During April 2006, we funded a $27.0  million first  mortgage loan to a property
developed by a company controlled by the chairman of CharterMac.  In the opinion
of  management,  the  terms of the  transaction  are  consistent  with  those of
transactions with independent third parties.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

a) Legal

On October 27, 2003,  prior to taking  possession of the real estate  collateral
supporting a loan investment, we were named in a lawsuit, Concord Gulfgate, Ltd.
vs. Robert  Parker,  Sunrise  Housing  Ltd.,  and American  Mortgage  Acceptance
Company,  Cause No.  2003-59290 in the 133rd  Judicial  District Court of Harris
County,  Texas.  The suit  alleges  that the loan  transaction  was not properly
authorized by the borrower and was not for a legitimate  borrower  purpose.  The
suit claims,  among other causes of action  against the  respective  defendants,
wrongful foreclosure of the real estate collateral,  tortious  interference with
contract  and civil  conspiracy.  The suit seeks,  among other  relief,  actual,
consequential,  and exemplary damages, and a declaration that the loan documents
are  unenforceable and constitute a cloud on title. The basic claim of this suit
is for the amount of $1.5  million.  The  discovery  phase of this suit has been
completed. A motion for summary judgment was filed by us, but was denied on July
25,  2005.  It is  expected  that the case will be called to trial in  September
2006. No reserve has been made at June 30, 2006.


                                       13
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)



We filed a countersuit on November 25, 2003, against Concord Gulfgate,  Ltd., as
guarantor,  seeking a  deficiency  on the loan and  recovery of unpaid taxes and
certain  property  receipts.  We are currently  unable to determine the possible
outcome of the litigation.

b)   Guarantees

Prior to 2000,  we entered into a loan  program with Fannie Mae,  under which we
agreed to guarantee a  first-loss  position on certain  loans,  which could have
potentially  resulted  in an  aggregate  exposure of $7.5  million.  In June and
October  of 2000,  we  originated  two loans  totaling  $3.3  million  under the
program.  In September  2003, we transferred and assigned all of our obligations
with  respect to these two loans to CMC, a  subsidiary  of  CharterMac,  both of
which  are  affiliates  of the  Advisor.  Pursuant  to the  agreement  with CMC,
CharterMac guaranteed CMC's obligations, and we agreed to indemnify both CMC and
CharterMac  for any losses  incurred in exchange for retaining all fees which we
were  otherwise  entitled  to receive  from  Fannie Mae under the  program.  The
maximum exposure at June 30, 2006, was $3.2 million,  although we expect that we
will not be called upon to fund these guarantees.

In the first quarter of 2003, we  discontinued  our loan program with Fannie Mae
and will issue no further guarantees pursuant to such program.

For these  guarantees,  we monitor the status of the  underlying  properties and
evaluate our exposure under the  guarantees.  To date, we have concluded that no
accrual  for  probable  losses is  required  under  SFAS No. 5,  ACCOUNTING  FOR
CONTINGENCIES.

Future Funding Commitments
--------------------------

We are committed to additionally  fund the following  bridge and mezzanine loans
at June 30, 2006:

<TABLE>
<CAPTION>

                                                                                (In thousands)
                                                                          MAXIMUM AMOUNT OF COMMITMENT
                                                                     ------------------------------------
                                                         NO. OF APT.              LESS THAN 1
ISSUE DATE    PROJECT                 LOCATION              UNITS       TOTAL        YEAR       1-3 YEARS
---------------------------------------------------------------------------------------------------------
<S>           <C>                     <C>                  <C>         <C>         <C>           <C>
Jun-04        Woods of Mandarin       Jacksonville, FL       401       $  428      $  428        $   --
Apr-05        Atlantic Hearthstone    Hillsborough, NJ       198        1,847       1,847            --
May-05        Pasadena                Pasadena, FL           198          198         198            --
Jul-05        222 Pearson             Chicago, IL            219          217         217            --
Jul-05        Bayfront Villas         Gulfport, FL           120          142         142            --
Sep-05        Marbella                Clearwater, FL          --          154         154            --
                                                        -------------------------------------------------

TOTAL FUTURE FUNDING COMMITMENTS                           1,136       $2,986      $2,986        $   --
                                                        =================================================

</TABLE>

NOTE 12 - SUBSEQUENT EVENTS

In June 2006, CharterMac,  an affiliate of our Advisor,  announced its intent to
acquire all of the membership  interests of ARCap,  including those that we own.
The  board  of  trustees  of  AMAC  formed  a  special  committee  of the  board
(consisting only of our independent trustees) to evaluate the offer. During July
2006,  we received a purchase  agreement  from ARCap  pursuant to which  ARCap's
investors,  including  AMAC,  would  receive  a price of  approximately  $35 per
membership  unit,   which  amounts  to  approximately   $28.0  million  for  our
investment.  The special  committee  has  recommended,  and our entire board has
approved,  our entering  into the  agreement to sell our  membership  interests.
Should the transaction occur, prior to closing we will also receive from ARCap a
special  distribution which we expect to amount to approximately  $12.0 million.
In total, these transactions would yield incremental net income of approximately
$13.5 million,  after  accounting for incentive  management  fees payable to our
Advisor.  Assuming  the  transaction  closes and we receive the amounts  assumed
above,  we  expect  that we  will  make a  special  distribution  to our  common
shareholders  during  2006 in the range of $1.40 to $1.50 per share,  subject to
board approval and an ability to achieve our business plan before the end of the
year.  We  expect  the  transaction  to  close in  August  2006.  Following  the
completion  of the  transaction,  we may  also  receive  an  additional  special


                                       14
<PAGE>



              AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)



distribution  should ARCap's working capital at the acquisition date exceed that
required by the purchase agreement. There can be no assurance,  however, that we
will receive any additional amount.

In  addition  to  approving  the sale of our ARCap  investment,  our board  also
approved  changes to the number of  trustees on the board,  appointments  to the
board and other management changes,  contingent upon the transactions  described
above. Such changes will be disclosed upon the closing of the transactions.


                                       15
<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Forward-Looking Statements
--------------------------

Certain   statements  made  in  this  report  may  constitute   "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities and Exchange Act of 1934, as amended.
Such forward-looking  statements include statements regarding the intent, belief
or current  expectations  of us and our management  (which includes our Advisor)
and involve known and unknown risks,  uncertainties  and other factors which may
cause the actual results, performance or achievements to be materially different
from any future  results,  performance or  achievements  expressed or implied by
such forward-looking statements.  These factors, which are outlined in detail in
our annual report on Form 10-K for the year ended December 31, 2005, include the
following:

     o    Risks of investing  in uninsured  and  non-investment  grade  mortgage
          assets  and   subordinated   Commercial   Mortgage-Backed   Securities
          ("CMBS");

     o    Competition in acquiring desirable investments;

     o    Interest rate fluctuations;

     o    Risks associated with hedging transactions,  which can limit gains and
          increase exposure to loss;

     o    Risks  associated  with  investments in real estate  generally and the
          properties which secure many of our investments;

     o    General economic conditions,  particularly as they affect the value of
          our assets and the credit status of our borrowers;

     o    Dependence on our external Advisor for all services  necessary for our
          operations;

     o    Conflicts which may arise among us and other entities  affiliated with
          our Advisor which have similar investment policies to ours;

     o    Risks associated with the repurchase  agreements we utilize to finance
          our investments and the availability of financing generally; and

     o    Risks  associated  with  our  contemplated  CDO  transactions,   which
          include, but are not limited to:

          o    The inability to acquire eligible investments for a CDO issuance;

          o    The  inability  to  find  suitable  replacement   investments  in
               collateralized debt obligations with reinvestment periods; and

          o    The negative impact on our cash flow that may result from the use
               of  CDO  financings  with   over-collateralization  and  interest
               coverage requirements.

Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements, which speak only as of the date of this quarterly report.

Factors Affecting Comparability
-------------------------------

During March 2005, we issued $25.0 million of Floating-Rate Preferred Securities
through  a  subsidiary.  Due  to  the  mandatory  redemption  feature  of  these
securities,  the payments or accruals of dividends  and other amounts to be paid
to the holders of these  securities are reported as interest costs. As a result,
these  interest costs are  classified as Interest -  Distributions  to Preferred
Shareholders  of Subsidiary  (Subject to Mandatory  Repurchase) in our condensed
consolidated  statements  of income.  During  the first six  months of 2006,  we
recorded a full period of these  costs,  as compared to costs  relating to three
and a half months in the comparable 2005 period.


                                       16
<PAGE>



Results of Operations
---------------------

The following is a summary of our  operations for the three and six months ended
June 30, 2006 and 2005:

(In thousands)

<TABLE>
<CAPTION>

                      Three Months Ended June 30,      Six Months Ended June 30,
                      ---------------------------    ----------------------------
                        2006       2005    Change      2006       2005     Change
                      -------    -------   ------    -------    -------    ------
<S>                   <C>        <C>        <C>      <C>        <C>         <C>
Total revenues        $ 9,587    $ 7,860     22.0%   $17,651    $14,563      21.2%
Total expenses          8,495      5,391     57.6     15,213      9,796      55.3
Total other income      4,123        600    587.2      4,946      1,129     338.1
                      -------    -------    -----    -------    -------     -----
Net income            $ 5,215    $ 3,069     69.9%   $ 7,384    $ 5,896      25.2%
                      =======    =======    =====    =======    =======     =====

</TABLE>

In both the three and six month period  ended June 30, 2006,  as compared to the
same periods in 2005,  revenues  increased  mainly due to the funding of several
new first  mortgage  loans and  subordinated  notes during the second quarter of
2006.  Expenses have also  increased  for these periods due to higher  financing
costs  (particularly  due to increased  borrowings  used to finance an increased
level of investing and higher  interest  rates) and higher Advisory costs due to
increased  allocations of overhead  costs and  management  fees due to increased
levels of  acquisition.  For the six months ended June 30, 2006,  expenses  also
increased due to the recognition of certain property level costs for real estate
owned.  Other  income  increased  due to the  conversion  of ARCap  shares  from
preferred to common,  earning higher equity income,  and from an increase in the
fair value of interest rate swaps used to economically  hedge the changes in the
fair value of certain investments.

REVENUES

<TABLE>
<CAPTION>
                                           Three Months                        Six Months
                                       Ended June 30, 2006                 Ended June 30, 2006
                              -----------------------------------  ---------------------------------
                               % Change    % of 2006    % of 2005   % Change   % of 2006   % of 2005
                              from prior     Total        Total    from Prior    Total       Total
                                Period      Revenues    Revenues     Period     Revenues    Revenues
                              ----------------------------------------------------------------------
<S>                             <C>          <C>         <C>         <C>         <C>        <C>
Interest income:
   Debt securities              (10.3)%       31.3%       42.5%       (2.4)%      35.2 %     43.7%
   Mortgage loans               221.2         38.4        14.6       221.9        32.2       12.1
   Notes receivable             (42.9)         2.3         4.8       (47.6)        2.5        5.9
   Revenue bonds                 (3.4)         1.5         1.9        (3.1)        1.6        2.0
   Temporary investments        (22.4)         0.5         0.9        60.7         0.8        0.6
Other revenues                  (68.5)         1.6         6.3       (77.7)        0.9        5.0
                                -----        -----       -----       -----       -----      -----
  Subtotal                       30.0         75.6        71.0        28.0        73.2       69.3

Rental income                     2.4         24.4        29.0         5.9        26.8       30.7
                                -----        -----       -----       -----       -----      -----


Total revenues                   22.0 %      100.0%      100.0%       21.2 %     100.0 %    100.0%
                                =====        =====       =====       =====       =====      =====

</TABLE>


                                       17
<PAGE>



Revenues were generated by the following  investments  (exclusive of Real Estate
Owned and ARCap):

<TABLE>
<CAPTION>

(In thousands)
                                      As of                                  As of
                                  June 30, 2006                          June 30, 2005
                      -------------------------------------   -------------------------------------
                                                 Weighted                                Weighted
                      Carrying         % of       Average     Carrying        % of       Average
                       Amount         Total    InterestRate    Amount         Total   Interest Rate
                      -----------------------------------------------------------------------------
<S>                   <C>             <C>         <C>         <C>             <C>         <C>
Debt securities       $194,286         46.9%       6.17%      $230,308         78.1%       6.32%
Mortgage loans         199,762         48.2        8.67         42,458         14.4       12.90
Notes receivable        13,725          3.3       10.63         15,424          5.2        9.45
Revenue bonds            6,489          1.6        8.68          6,656          2.3        8.69
                      --------       ------       -----       --------       ------       -----
                      $414,262        100.0%       7.54%      $294,846        100.0%       7.71%
                      ========       ======       =====       ========       ======       =====

</TABLE>

Interest  income from debt securities  decreased  primarily due to the payoff of
four debt security  certificates during 2006 and the second half of 2005, offset
by the funding of four lower yielding debt security certificates in 2006.

Interest income from mortgage loans increased for the three and six months ended
June 30,  2006,  as  compared to 2005,  primarily  due to the funding of ten CDO
first mortgage loans and  subordinated  notes and the partial funding of several
existing  mezzanine  loans  during 2006.  The  decrease in the weighted  average
interest  rates on mortgage  loans as of June 30, 2006,  as compared to June 30,
2005, was primarily due to the funding of a greater  amount of fixed-rate  first
mortgage loans for our CDO  initiative,  as opposed to  variable-rate  mezzanine
loans, as we have done in the past.

Interest  income from notes  receivable  decreased  for the three and six months
ended June 30, 2006,  as compared to 2005,  primarily  due to the payoff of four
notes during 2005.

Interest income from temporary  investments decreased for the three months ended
June 30, 2006, as compared to 2005,  primarily  due to the  investment of excess
cash on hand  resulting  from the payoff of several loans and GNMA  certificates
that  occurred  during 2005.  We had less cash on hand in the second  quarter of
2006, due to an increase in our first  mortgage loan  investment  activity.  The
balances  increased  for the six months ended June 30, 2006, as compared to 2005
due to the higher  repayment  activity and less investing  activity in the first
quarter of 2006 as compared to 2005.

Other  revenues  decreased  for the three and six months  ended  June 30,  2006,
primarily due to the 2005  recognition of income from a commitment fee for which
the  commitment had expired  unused.  There were no comparable  transactions  in
2006.


                                       18
<PAGE>



<TABLE>
<CAPTION>

EXPENSES

                                     Three Months Ended              Six Months Ended
                                        June 30, 2006                  June 30, 2006
                              ------------------------------- -------------------------------
                               % Change  % of 2006  % of 2005  % Change  % of 2006  % of 2005
                              from prior    Total     Total   from Prior   Total      Total
                                Period    Revenues  Revenues    Period   Revenues   Revenues
                              ---------------------------------------------------------------
<S>                             <C>        <C>       <C>       <C>        <C>        <C>
Interest                        143.6 %    44.1 %    22.1 %    125.8 %    37.3 %     20.0%
Distributions to preferred
  shareholders                   28.7       5.8       5.5      114.8       6.1        3.5
General and administrative        4.7       5.1       5.9        8.1       5.5        6.2
Fees to Advisor                  43.7      10.2       8.6       31.2      10.2        9.4
Amortization and other          (83.5)      0.1       1.2      (86.6)      0.2        1.6
                                -----     -----     -----      -----     -----      -----
  Subtotal                       83.9      65.3      43.3       76.9      59.3       40.7

Property operations              13.3      12.4      13.3       34.8      15.0       13.5
Depreciation                     33.9       4.7       4.3       28.2       5.1        4.8
Mortgage interest for real
  estate owned - held and
  used                           (1.3)      6.2       7.7       (1.3)      6.8        8.3
                                -----     -----     -----      -----     -----      -----

Total expenses                   57.6 %    88.6 %    68.6 %     55.3 %    86.2 %     67.3%
                                =====     =====     =====      =====     =====      =====

</TABLE>

At June 30, 2006,  excluding the non-recourse  mortgage on real estate owned, we
had total debt of approximately  $363.9 million with a weighted average interest
rate of 5.95% per year, including the effect of our swap agreement.  At June 30,
2005,  we had a  comparable  balance  of  approximately  $230.2  million  with a
weighted  average  interest rate of 3.73% per year. The increase in the weighted
average interest rate is due to steady increases in market interest rates during
2005 and 2006.

Interest expense  increased for the three and six months ended June 30, 2006, as
compared to 2005,  primarily due to the increased borrowings made during 2006 to
fund CDO loan  originations  and the increase in interest  rates during 2005 and
2006.

Due to specific accounting  requirements,  we classify distributions made on our
preferred shares as interest  expense.  Distributions to preferred  shareholders
increased  for the three and six months ended June 30, 2006, as compared to 2005
due to the issuance of trust preferred securities in March 2005. The 2006 period
included  six months  preferred  distributions  compared to the three  months in
2005. The increase is also due to the increase in interest rates during 2005 and
2006, as the distributions are payable at a variable rate of interest,  based on
LIBOR.

General and administrative expenses increased for the three and six months ended
June 30, 2006, as compared to 2005,  primarily due to increased accounting fees,
excise  taxes,  insurance  and stock  option  costs (the last  factor due to the
accelerated  vesting of certain options in 2006). These increases were offset by
decreased   legal  expenses  (from  a  high  level  of  costs   associated  with
foreclosures in 2005) and decreased  investor services expenses (due to costs in
2005 related to changes in our trust  agreement for which we needed  shareholder
approval), as compared to 2005.

Fees to Advisor  increased  for the three and six months ended June 30, 2006, as
compared to 2005,  due to higher  overhead  costs  because of  expansion  of our
business and higher  management fees. While our management fees are now based on
equity  instead of  assets,  fees for the first  quarter  of 2006 were  incurred
following the asset-based  formula.  As our asset base is  significantly  higher
this year,  fees incurred during the first quarter of 2006 are higher than those
incurred in the comparable 2005 period.

Amortization  and other costs  decreased for the three and six months ended June
30,  2006,  as  compared  to 2005,  due to the costs  related  to our  warehouse
facility being fully amortized in August 2005.


                                       19
<PAGE>



Property  operations  represent all non-interest  costs at the property level on
all of our Real Estate  Owned - Held and Used  properties.  The increase for the
three and six months ended June 30, 2006, as compared to 2005, was mainly due to
higher property tax costs.

Depreciation expense increased for the three and six months ended June 30, 2006,
as compared to 2005,  due to a higher base of  depreciable  real estate owned in
2006 as compared to the 2005 period.  In February 2005, we sold the Plaza at San
Jacinto property and, in 2006, included  depreciation on the larger Autumn Creek
property.

OTHER INCOME

Other income  increased  for the three and six months  ended June 30,  2006,  as
compared  to  2005,  due to the  conversion  of  315,000  of our  800,000  ARCap
membership  units from  preferred to common at the end of 2005.  Following  this
conversion, we are earning a higher level of equity income from the common share
portion of the  investment,  which included our  proportionate  share of a large
resecuritization gain in 2006.

During 2006,  we expect to receive a special  distribution,  and we plan to sell
our membership  units to CharterMac,  both of which would generate a significant
amount of income in the current year (see Note 12). No assurances can be made at
this time on the closing of the sale of our ARCap shares.

In  addition,  other  income  includes  the changes in the fair value of certain
interest rate swaps in 2006 for which we do not apply hedge accounting.  At June
30, 2006, we had sixteen  interest rate swaps with an aggregate  notional amount
of $185.0 million. There were no fair value swaps in place at June 30, 2005.

Funds from Operations

Funds  from  operations  ("FFO"),  represents  net income or loss  (computed  in
accordance  with  GAAP),  excluding  gains or  losses  from  sales of  property,
excluding  depreciation and amortization  related to real property and including
funds from operations for unconsolidated  joint ventures  calculated on the same
basis.  FFO is calculated in accordance  with the National  Association  of Real
Estate  Investment  Trusts  ("NAREIT")  definition.  FFO does not represent cash
generated  from  operating  activities  in  accordance  with  GAAP  and  is  not
necessarily  indicative of cash available to fund cash needs.  FFO should not be
considered  as an  alternative  to net income as an indicator  of the  Company's
operating  performance  or as an  alternative  to cash  flows  as a  measure  of
liquidity.  Our  management  considers FFO a  supplemental  measure of operating
performance,  and,  along with cash flows from operating  activities,  financing
activities,  and investing activities,  it provides investors with an indication
of our ability to incur and service debt,  make capital  expenditures,  and fund
other cash needs.

The following  table  reconciles  net income to FFO for the three and six months
ended June 30, 2006 and 2005:

<TABLE>
<CAPTION>

(In thousands)

                                               Three Months Ended             Six Months Ended
                                                    June 30,                      June 30,
                                            ------------------------      ------------------------
                                              2006           2005           2006            2005
                                            ---------      ---------      ---------      ---------
<S>                                         <C>            <C>            <C>            <C>
Net income                                  $   5,215      $   3,069      $   7,384      $   5,896

Add back: depreciation of real property     $     450      $     336      $     900      $     702
                                            ---------      ---------      ---------      ---------

FFO                                         $   5,665      $   3,405      $   8,284      $   6,598
                                            =========      =========      =========      =========

Cash flows from:
Operating activities                        $   3,578      $   2,843      $   5,232      $   6,575
                                            =========      =========      =========      =========
Investing activities                        $(130,507)     $ (23,261)     $(130,274)     $ (56,709)
                                            =========      =========      =========      =========
Financing activities                        $ 129,943      $  19,139      $ 117,520      $  56,309
                                            =========      =========      =========      =========

Weighted average shares outstanding:
Basic                                           8,304          8,311          8,304          8,324
                                            =========      =========      =========      =========
Diluted                                         8,304          8,311          8,305          8,327
                                            =========      =========      =========      =========

</TABLE>


                                       20
<PAGE>



Since not all companies  calculate  FFO in a similar  fashion,  our  calculation
presented above may not be comparable to similarly  titled measures  reported by
other companies.

Liquidity and Capital Resources
-------------------------------

SOURCES OF FUNDS

We expect that cash  generated  from our  investments,  as well as our borrowing
capacity, will meet our needs for short-term liquidity and will be sufficient to
pay all expenses and distributions to our shareholders in amounts  sufficient to
retain our Real  Estate  Investment  Trust  ("REIT")  status in the  foreseeable
future.  In order to  qualify  as a REIT under the  Internal  Revenue  Code (the
"Code"), as amended, we must, among other things, distribute at least 90% of our
taxable  income  and  100%  of any  capital  gain.  We  believe  that  we are in
compliance with the REIT-related provisions of the Code.

We finance our  investing  activity  primarily  through  borrowing  from various
facilities at short-term  rates. At June 30, 2006, we had  approximately  $145.4
million available to borrow,  contractually,  under our debt facilities  without
exceeding  limits imposed by debt covenants and our by-laws.  Subsequent to June
30, 2006, we borrowed $33.6 million through our debt facilities.

From time to time,  we may also  issue  common  shares  or other  equity to fund
investing  activity.  During  2005,  our  subsidiary  issued  $25.0  million  of
variable-rate preferred securities.  The proceeds received were used to purchase
debt securities.

We plan to sell our 800,000  preferred and common shares of ARCap to CharterMac,
however,  there are no  assurances  that this sale will close.  The planned sale
would generate approximately $28.0 million in proceeds in 2006 (see Note 12).

We have capacity to raise  approximately  $170.0 million of additional  funds by
issuing  either  common or  preferred  shares  pursuant to a shelf  registration
statement filed with the SEC. If market conditions warrant, we may seek to raise
additional funds for investment through further  offerings,  although the timing
and amount of such offerings cannot be determined at this time.

We are  expecting  to  utilize  CDOs as a  financing  tool to lower  our cost of
capital  and thereby  enhance our  investment  capabilities  and  opportunities.
Tapping these securitization markets should enable us to compete in debt markets
in which we have not  competed  effectively  in the past and to originate a wide
variety of debt  products,  including  floating-  or  fixed-rate  assets,  first
mortgages,   subordinate  participations  in  first  mortgages,   bridge  loans,
mezzanine  loans,  etc. We intend for the assets to be aggregated on our balance
sheet and later  securitized.  We have  originated  and purchased  approximately
$156.7 million in first mortgage loans and  subordinated  notes through June 30,
2006, that we expect to be used for our first CDO securitization.  Subsequently,
we originated  approximately  $32.5 million in additional first  mortgages.  Our
goal is to complete our first CDO  securitization  by the end of 2006,  although
there are no assurances that we will proceed with such a program.

SUMMARY OF CASH FLOWS

During the six months ended June 30,  2006,  as compared to the six months ended
June  30,  2005,  the net  change  in cash  and cash  equivalents  decreased  by
approximately $13.7 million.  Despite higher net earnings,  operating cash flows
decreased  by  approximately  $1.3  million  primarily  due to the timing of the
receipt  of our equity  earnings,  as well as the  timing of  collection  of our
receivables and payments of our liabilities.

An  increase  in net cash  used in  investing  activities  (approximately  $73.6
million) was due to the increase in  investments  made during the second quarter
of 2006, as compared to 2005.  This was due to shifting our focus to originating
loans for our first CDO  securitization.  There was also an increase in net cash
provided by  financing  activities  (approximately  $61.2  million)  that can be
attributed  to the higher  level of investing  activity  during the 2006 period,
offset by partial  repayments  made to the  repurchase  facilities  and the full
repayment of the warehouse facility.


                                       21
<PAGE>



LIQUIDITY REQUIREMENTS AFTER JUNE 30, 2006

During July 2006, we closed approximately $32.0 million of first mortgage loans.
We plan to securitize  these loans in our first CDO. In addition to these loans,
we  anticipate   approximately   another   $150.0-200.0  million  in  additional
acquisition  volume for the CDO  securitization to close during 2006.  Financing
for the anticipated  acquisitions is expected to be made through our CDO related
repurchase facility with BOA (see Note 5 to our condensed consolidated financial
statements).

During  August 2006,  distributions  of  approximately  $3.3 million  ($0.40 per
share), which were declared in June 2006, will be paid to common shareholders.

We are not aware of any trends or events,  commitments or  uncertainties,  which
have not otherwise been disclosed that will or are likely to impact liquidity in
a material way.

Dividends

The following table outlines our total dividends and return of capital  amounts,
determined in accordance with GAAP, for the six months ended June 30:

<TABLE>
<CAPTION>

(In thousands)
                                               2006          2005
                                              ------        ------
<S>                                           <C>           <C>
Total dividends                               $6,644        $6,671
Return of capital:
  Amount                                          --        $  773
  Per share                                       --        $ 0.09
  Percent of total dividends                      --         11.60%

</TABLE>

Commitments, Contingencies and Off-Balance Sheet Arrangements
-------------------------------------------------------------

See Note 11 to our condensed  consolidated financial statements for a summary of
our guarantees and commitments and contingencies.

We  have no  unconsolidated  subsidiaries,  special  purpose  off-balance  sheet
financing entities, or other off-balance sheet arrangements.

CONTRACTUAL OBLIGATIONS

In conducting business, we enter into various contractual  obligations.  Details
of these obligations, including expected settlement periods as of June 30, 2006,
are contained below.

<TABLE>
<CAPTION>

                                                               Payments Due by Period
                                                                   (In thousands)
                                        ----------------------------------------------------------------------
                                                       Less than                                    More than
                                           Total        1 Year       1 - 3 Years   3 - 5 Years      5 Years
                                        ----------    -----------    -----------   -----------     -----------
<S>                                     <C>           <C>            <C>           <C>             <C>
Debt:
  Repurchase facilities                 $  184,253    $   184,253    $       --    $        --     $        --
  CDO repurchase facility                  127,644        127,644            --             --              --
  Line of credit-related party              27,042         27,042            --             --              --
  Mortgage loan on real estate owned
  (1)                                       40,220            512         1,218          1,370          37,120
  Preferred shares of subsidiary
    (subject to mandatory repurchase)       25,000             --            --             --          25,000
Funding Commitments:
  Standby and forward loan commitments       2,986          2,986            --             --              --
                                        ----------    -----------    ----------    -----------     -----------

Total                                   $  407,145    $   342,437    $    1,218    $     1,370     $    62,120
                                        ==========    ===========    ==========    ===========     ===========

</TABLE>

(1) Represents a first  mortgage on  properties we report as Real Estate Owned -
    Held and Used (Concord  Portfolio) as a sale of the  properties did not meet
    the  criteria  for sale  recognition  in  accordance  with  GAAP.  The first
    mortgage loan is non-recourse with respect to AMAC, the debt service is paid
    from  the cash  flows of the  properties,  and we will  not be  required  to
    satisfy the obligation.


                                       22
<PAGE>



Inflation
---------

Inflation  did not  have a  material  effect  on our  results  for  the  periods
presented.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the exposure to loss resulting from changes in interest rates and
equity  prices.  The  primary  market  risk to which the  Company  is exposed is
interest  rate  risk,  which is  highly  sensitive  to many  factors,  including
governmental monetary and tax policies,  domestic and international economic and
political considerations and other factors beyond the control of our Company.

INTEREST RATE RISK

Interest  rate  fluctuations  can  adversely  affect our income in many ways and
present a variety of risks,  including the risk of mismatch between asset yields
and borrowing rates.

Our operating  results  depend in large part on  differences  between the income
from our assets (net of credit losses) and our borrowing costs. Although we have
originated  variable rate loans,  most of our assets  generate fixed returns and
have terms in excess of five years. We fund the origination and acquisition of a
significant  portion of our assets with borrowings which have variable  interest
rates that reset relatively rapidly, such as weekly,  monthly, or quarterly.  In
most cases,  the income from assets will  respond  more slowly to interest  rate
fluctuations  than the cost of  borrowings,  creating a mismatch  between  asset
yields  and  borrowing   rates.   Consequently,   changes  in  interest   rates,
particularly  short-term  interest  rates,  may  influence  our net income.  Our
borrowings under repurchase and our trust preferred  securities bear interest at
rates that fluctuate with LIBOR.

Various  financial  vehicles  exist which would allow our management to mitigate
the impact of interest  rate  fluctuations  on our cash flows and  earnings.  We
enter into certain  hedging  transactions to protect our positions from interest
rate  fluctuations and other changes in market  conditions.  These  transactions
include  interest  rate swaps and fair value  hedges.  Interest  rates swaps are
entered  into in order to  hedge  against  increases  in  floating  rates on our
repurchase  facilities.  Fair  value  hedges  are  entered  into for some of our
investments  to hedge our risk that interest  rates may affect the fair value of
these investments, prior to securitization.

Based on the $206.3 million unhedged portion of the $363.9 million of borrowings
outstanding  at June 30,  2006, a 1% change in LIBOR would impact our annual net
income and cash flows by approximately  $2.1 million.  However,  as the interest
income from some of our loans is also based on LIBOR, a 1% change in LIBOR would
impact our  annual  net  income and cash flows from such loans by  approximately
$351,000.  The net effect of a 1% change in LIBOR  would  therefore  result in a
change of our annual net income by approximately  $1.7 million.  In addition,  a
change  in  LIBOR  could  also  impede  the   collections  of  interest  on  our
variable-rate  loans,  as  there  might  not  be  sufficient  cash  flow  at the
properties  to pay the  increased  debt  service.  Because the value of our debt
securities  fluctuates with changes in interest rates,  rate  fluctuations  will
also affect the market value of our net assets.

ITEM 4.  CONTROLS AND PROCEDURES

(a)  EVALUATION  OF  DISCLOSURE  CONTROLS AND  PROCEDURES.  Our Chief  Executive
     Officer and Chief Financial Officer have evaluated the effectiveness of our
     disclosure  controls and  procedures  (as defined in Rule 13a-15(e) or Rule
     15a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act")) as of the end of the period covered by this quarterly report.  Based
     on such  evaluation,  such  officers  have  concluded  that our  disclosure
     controls  and  procedures  as of the  end of the  period  covered  by  this
     quarterly report were effective to ensure that  information  required to be
     disclosed by the Company in the reports  that the Company  files or submits
     under the  Exchange  Act is recorded,  processed,  summarized  and reported
     within the time periods specified in the SEC rules and forms, and to ensure
     that such  information is  accumulated  and  communicated  to the Company's
     management,  including  the Chief  Executive  Officer  and Chief  Financial
     Officer,  as  appropriate,  to allow timely  decisions  regarding  required
     disclosure.

(b)  INTERNAL  CONTROL  OVER  FINANCIAL  REPORTING.  There  have  not  been  any
     significant changes in our internal control over financial reporting during
     the fiscal  quarter  to which  this  report  relates  that have  materially
     affected,  or are  reasonably  likely to  materially  affect,  our internal
     control over financial reporting.


                                       23
<PAGE>



                           PART II. OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

          On October 27,  2003,  prior to taking  possession  of the real estate
          collateral  supporting a loan investment,  we were named in a lawsuit,
          Concord  Gulfgate,  Ltd. vs. Robert Parker,  Sunrise Housing Ltd., and
          American  Mortgage  Acceptance  Company,  Cause No.  2003-59290 in the
          133rd  Judicial  District  Court of  Harris  County,  Texas.  The suit
          alleges that the loan  transaction was not properly  authorized by the
          borrower  and was not for a  legitimate  borrower  purpose.  The  suit
          claims,   among  other  causes  of  action   against  the   respective
          defendants,  wrongful  foreclosure  of  the  real  estate  collateral,
          tortious  interference  with contract and civil  conspiracy.  The suit
          seeks,  among  other  relief,  actual,  consequential,  and  exemplary
          damages,  and a declaration that the loan documents are  unenforceable
          and  constitute a cloud on title.  The basic claim of this suit is for
          the amount of $1.5 million.  The discovery phase of this suit has been
          completed.  A motion  for  summary  judgment  was filed by us, but was
          denied on July 25, 2005.  It is expected  that the case will be called
          to trial in September 2006. No reserve has been made at June 30, 2006.

          We filed a countersuit on November 25, 2003, against Concord Gulfgate,
          Ltd., as  guarantor,  seeking a deficiency on the loan and recovery of
          unpaid taxes and certain property receipts. We are currently unable to
          determine the possible outcome of the litigation.

ITEM 1A.  RISK FACTORS

          There have been no material  changes to the risk  factors as disclosed
          in our filing on form 10-K for the year ended December 31, 2005.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS - None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES - None

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          The company held its annual meeting of  shareholders on June 14, 2006.
          The shareholders elected Jeff T. Blau, Alan P. Hirmes, Scott M. Manes,
          Stanley R. Perla,  and Richard M. Rosan as trustees for one-year terms
          which will expire in 2007.  Common shares of beneficial  interest were
          voted as follows:

<TABLE>
<CAPTION>

                 Trustee nominee             For              Abstain/withheld
              ----------------------    -------------       --------------------
              <S>                         <C>                     <C>
              Jeff T. Blau                7,845,879               158,400
              Alan P. Hirmes              7,835,343               168,936
              Scott M. Mannes             7,904,863                99,416
              Stanley R. Perla            7,907,545                96,734
              Richard M. Rosan            7,917,503                86,776

</TABLE>

          There were no votes "against" any of the nominees.

ITEM 5.   OTHER INFORMATION - None

ITEM 6.   EXHIBITS

          31.1 Chief Executive Officer certification  pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002.*

          31.2 Chief Financial Officer certification  pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002.*

          32.1 Certification  pursuant to Section 906 of the  Sarbanes-Oxley Act
               of 2002.*

          *    Filed herewith.


                                       24
<PAGE>



                                   SIGNATURES



Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                      AMERICAN MORTGAGE ACCEPTANCE COMPANY
                                  (Registrant)



Date: August 8, 2006            By: /s/ Jeff T. Blau
                                    ----------------
                                    Jeff T. Blau
                                    Chairman of the Board of Trustees
                                    and Chief Executive Officer


Date: August 8, 2006            By: /s/ Alan P. Hirmes
                                    ------------------
                                    Alan P. Hirmes
                                    Managing Trustee and Chief Financial Officer


                                       25