<PAGE>

                            ARTICLES SUPPLEMENTARY

                                      OF

         10 3/8% NONCUMULATIVE EXCHANGEABLE PREFERRED STOCK, SERIES A

                                      OF

                   CHEVY CHASE PREFERRED CAPITAL CORPORATION

                       Pursuant to Section 2-208 of the
                       Maryland General Corporation Law

     CHEVY CHASE PREFERRED CAPITAL CORPORATION, a corporation organized and
existing under the laws of the State of Maryland (the "Corporation"), HEREBY
CERTIFIES that the following resolution was duly adopted by the Board of
Directors of the Corporation pursuant to authority conferred upon the Board of
Directors by the provisions of the First Amended and Restated Articles of
Incorporation of the Corporation, which authorize the issuance and
classification of up to 10,000,000 shares of preferred stock, $5.00 par value
per share (the "Preferred Stock"):

          RESOLVED, that the issuance and classification of 4,000,000 shares of
     10 3/8% Noncumulative Exchangeable Preferred Stock, Series A, $5.00 par
     value per share, of the Corporation is hereby authorized, and the
     designation, preferences, conversion or other rights, voting powers,
     restrictions, limitations as to dividends, qualifications, and terms and
     conditions of all 4,000,000 shares of this Series, in addition to those set
     forth in the Corporation's First Amended and Restated Articles of
     Incorporation, as the same may be amended or restated from time to time,
     are hereby fixed as follows:

          1.  Designation.  The designation of this Series shall be 10 3/8%
              -----------
     Noncumulative Exchangeable Preferred Stock, Series A (hereinafter referred
     to as the "Series A Preferred Shares" or the "Series"), and the number of
     Series A Preferred Shares constituting this Series shall be 4,000,000.  The
     Series A Preferred Shares shall have a liquidation preference of $50.00 per
     share.  The number of authorized Series A Preferred Shares may be reduced
     by further resolution duly adopted by the Board of Directors of the
     Corporation and by the filing of articles pursuant to the provisions of the
     Maryland General Corporation Law stating that such reduction has been so
     authorized.  The number of authorized shares of this Series shall not be
     increased.

          2.  Dividends.  (a)  Dividends on the Series A Preferred Shares shall
              ---------
     be payable at a rate of 10 3/8% per annum of the liquidation preference,
     if, when and as declared by the Board of Directors of the Corporation out
     of assets of the Corporation legally available therefor.  If declared,
     dividends on the Series A Preferred Shares shall be payable quarterly in
     arrears on
<PAGE>

     January 15, April 15, July 15 and October 15 of each year (a "Dividend
     Period"), commencing on January 15, 1997.  Dividends will accrue from the
     first day of each Dividend Period, whether or not declared or paid for the
     prior Dividend Period.  Each declared dividend shall be payable to holders
     of record of the Series A Preferred Shares as they appear at the close of
     business on the stock register of the Corporation on such record date, not
     exceeding 45 days preceding the payment date thereof, as shall be fixed by
     the Board of Directors of the Corporation.

          (b)  Dividends shall be noncumulative.  If the Board of Directors of
     the Corporation fails to declare a dividend on the Series A Preferred
     Shares for a Dividend Period, then holders of the Series A Preferred Shares
     will have no right to receive a dividend for that Dividend Period, and the
     Corporation will have no obligation to pay a dividend for that Dividend
     Period, whether or not dividends are declared and paid for any future
     Dividend Period with respect to either the Series A Preferred Shares or the
     common stock, par value $1.00 per share, of the Corporation (the "Common
     Stock").

          (c)  If full dividends on the Series A Preferred Shares for any
     Dividend Period shall not have been declared and paid, or declared and a
     sum sufficient for the payment thereof shall not have been set apart for
     such payments, no dividends shall be declared or paid or set aside for
     payment and no other distribution (including any balancing distribution
     authorized by the Corporation's First Amended and Restated Articles of
     Incorporation, as the same may be amended or restated from time to time)
     shall be declared or made or set aside for payment upon the Common Stock or
     any other capital stock of the Corporation ranking junior to or on a parity
     with the Series A Preferred Shares as to dividends or amounts upon
     liquidation, nor shall any Common Stock or any other capital stock of the
     Corporation ranking junior to or on a parity with the Series A Preferred
     Shares as to dividends or amounts upon liquidation be redeemed, purchased
     or otherwise acquired for any consideration (or any monies to be paid to or
     made available for a sinking fund for the redemption of any such stock) by
     the Corporation (except by conversion into or exchange for other capital
     stock of the Corporation ranking junior to the Series A Preferred Shares as
     to dividends and amounts upon liquidation), until such time as dividends on
     all outstanding Series A Preferred Shares have been (i) declared and paid
     for three consecutive Dividend Periods and (ii) declared and paid or
     declared and a sum sufficient for the payment thereof has been set apart
     for payment for the fourth consecutive Dividend Period.  Notwithstanding
     the above, nothing in this paragraph (c) shall prevent the Corporation from
     treating an amount consented to by the holders of the Common Stock under
     the provisions of Section 565 of the Internal Revenue Code of 1986, as
     amended (the "Code"), as a dividend for purposes of the dividends paid
     deduction under Section 561 of the Code.

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<PAGE>

          (d)  When dividends are not paid in full (or a sum sufficient for such
     full payment is not set apart) upon the Series A Preferred Shares and the
     shares of any other series of capital stock ranking on a parity as to
     dividends with the Series A Preferred Shares, all dividends declared upon
     the Series A Preferred Shares and any other series of capital stock ranking
     on a parity as to dividends with the Series A Preferred Shares shall be
     declared pro rata so that the amount of dividends declared per share on the
     Series A Preferred Shares and such other series of capital stock shall in
     all cases bear to each other the same ratio that full dividends, for the
     then-current Dividend Period, per share on the Series A Preferred Shares
     (which shall not include any accumulation in respect of unpaid dividends
     for prior Dividend Periods) and full dividends, including required or
     permitted accumulations, if any, on such other series of capital stock bear
     to each other.

          (e)  Holders of the Series A Preferred Shares shall not be entitled to
     any dividend, whether payable in cash, property or stock, in excess of full
     dividends, as herein provided, on the Series A Preferred Shares.  No
     interest, or sum of money in lieu of interest, shall be payable in respect
     of any dividend payment or payments on the Series A Preferred Shares which
     may be in arrears.

          3.  Redemption.  (a)  The Series A Preferred Shares are not redeemable
              ----------
     prior to January 15, 2007, except upon the occurrence of a Tax Event (as
     defined in paragraph (b) of this Section 3).  Subject to the terms and
     conditions of this Section 3, the Corporation, at its option, may redeem
     the Series A Preferred Shares, in whole or in part, at any time or from
     time to time, on or after January 15, 2007, at the following redemption
     prices (expressed as a percentage of the $50.00 per share liquidation
     preference), if redeemed during the 12-month period beginning January 15 of
     the years indicated below, plus the quarterly accrued and unpaid dividend
     thereon to the date fixed for redemption:

               YEAR                                          REDEMPTION
               ----                                          ----------
                                                             PRICE
                                                             -----

               2007 . . . . . . . . . . . . . . . . . . . .  105.187%
               2008 . . . . . . . . . . . . . . . . . . . .  104.150%
               2009 . . . . . . . . . . . . . . . . . . . .  103.112%
               2010 . . . . . . . . . . . . . . . . . . . .  102.075%
               2011 . . . . . . . . . . . . . . . . . . . .  101.037%

     and thereafter at a redemption price of $50.00 per share, plus the
     quarterly accrued and unpaid dividend thereon to the date fixed for
     redemption.

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<PAGE>

          (b)  The Corporation will have the right, at any time upon the
     occurrence of a Tax Event and with the prior written approval of the Office
     of Thrift Supervision (the "OTS"), to redeem the Series A Preferred Shares,
     in whole, but not in part, at a redemption price of $50.00 per share, plus
     the quarterly accrued and unpaid dividend thereon to the date fixed for
     redemption.  "Tax Event" means the receipt by the Corporation of an opinion
     of a nationally recognized law firm experienced in such matters to the
     effect that, as a result of (i) any amendment to, clarification of, or
     change (including any announced prospective change) in, the laws or
     treaties (or any regulations thereunder) of the United States or any
     political subdivision or taxing authority thereof or therein affecting
     taxation, (ii) any judicial decision, official administrative
     pronouncement, published or private ruling, regulatory procedure, notice or
     announcement (including any notice or announcement of intent to adopt such
     procedures or regulations) ("Administrative Action") or (iii) any amendment
     to, clarification of, or change in the official position or the
     interpretation of such Administrative Action or any interpretation or
     pronouncement that provides for a position with respect to such
     Administrative Action that differs from the theretofore generally accepted
     position, in each case, by any legislative body, court, governmental
     authority or regulatory body, irrespective of the manner in which such
     amendment, clarification or change is made known, which amendment,
     clarification or change is effective or such pronouncement or decision is
     announced on or after the date of issuance of the Series A Preferred
     Shares, there is more than an insubstantial risk that (a) dividends paid or
     to be paid by the Corporation with respect to the capital stock of the
     Corporation are not, or will not be, fully deductible by the Corporation
     for United States federal income tax purposes or (b) the Corporation is, or
     will be, subject to more than a de minimis amount of other taxes, duties or
     other governmental charges.

          (c)  In the event that fewer than all the outstanding Series A
     Preferred Shares are to be redeemed, the number of Series A Preferred
     Shares to be redeemed shall be determined by the Board of Directors of the
     Corporation, and the shares to be redeemed shall be determined by lot or
     pro rata as may be determined by the Board of Directors or by any other
     method as may be determined by the Board of Directors in its sole
     discretion to be equitable, provided that such method satisfies any
     applicable requirements of any securities exchange on which the Series A
     Preferred Shares are listed.

          (d)  In the event the Corporation shall redeem any of the Series A
     Preferred Shares, notice of such redemption shall be given by first-class
     mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
     to the redemption date, to each holder of record of the Series A Preferred
     Shares to be redeemed, at such holder's address as the same appears on the
     stock register of the Corporation.  Each such notice shall state:  (i) the
     redemption

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<PAGE>

     date; (ii) the number of Series A Preferred Shares to be redeemed and, if
     fewer than all the Series A Preferred Shares held by such holder are to be
     redeemed, the number of such shares to be redeemed from such holder; (iii)
     the redemption price; and (iv) the place or places where certificates for
     such shares are to be surrendered for payment of the redemption price.

          (e)  Notice having been mailed as aforesaid, from and after the
     redemption date (unless default shall be made by the Corporation in
     providing money for the payment of the redemption price), said Series A
     Preferred Shares shall no longer be deemed to be outstanding, and all
     rights of the holders thereof as stockholders of the Corporation (except
     the right to receive from the Corporation the redemption price) shall
     cease.  Upon surrender in accordance with said notices of the certificates
     for any Series A Preferred Shares so redeemed (properly endorsed or
     assigned for transfer, if the Board of Directors of the Corporation shall
     so require and the notice shall so state), such shares shall be redeemed by
     the Corporation at the redemption price aforesaid.  In case fewer than all
     of the Series A Preferred Shares represented by any such certificate are
     redeemed, a new certificate shall be issued representing the unredeemed
     Series A Preferred Shares without cost to the holder thereof.

          (f)  Any Series A Preferred Shares, which shall at any time have been
     redeemed, shall, after such redemption, have the status of authorized but
     unissued shares of Preferred Stock, without designation as to series until
     such shares are once more designated as part of a particular series by the
     Board of Directors of the Corporation.

          (g)  Notwithstanding the foregoing provisions of this Section 3,
     unless full dividends on the Series A Preferred Shares have been or
     contemporaneously are declared and paid or declared and a sum sufficient
     for the payment thereof has been set apart for payment for the then-current
     Dividend Period, no Series A Preferred Shares shall be redeemed unless all
     outstanding Series A Preferred Shares are redeemed and the Corporation
     shall not purchase or otherwise acquire any Series A Preferred Shares;
     provided, however, that the Corporation may purchase or acquire Series A
     Preferred Shares pursuant to a purchase or exchange offer made on the same
     terms to holders of all outstanding Series A Preferred Shares.

          4.  Automatic Exchange.  (a)  Subject to the terms and conditions of
              ------------------
     this Section 4, each Series A Preferred Share will be exchanged
     automatically (the "Automatic Exchange") for one share of 10 3/8%
     Noncumulative Preferred Stock, Series B, $5.00 par value per share (a "Bank
     Preferred Share"), of Chevy Chase Bank, F.S.B. (the "Bank").  The issuance
     of the Bank Preferred Shares has been duly authorized by the board of
     directors of the Bank.  Prior to or contemporaneously with

                                       5
<PAGE>

     the filing of these Articles Supplementary with the Maryland State
     Department of Assessments and Taxation, the Bank shall file with the OTS a
     Certificate of Designation establishing the Bank Preferred Shares.  The
     preferences, conversion or other rights, voting powers, restrictions,
     limitations as to dividends, qualifications, and terms and conditions of
     the Bank Preferred Shares shall be substantially identical to the
     preferences, conversion or other rights, voting powers, restrictions,
     limitations as to dividends, qualifications, and terms and conditions of
     the Series A Preferred Shares established by these Articles Supplementary.

          (b)  The Automatic Exchange will occur only if the appropriate federal
     regulatory agency directs in writing (a "Directive") an exchange of the
     Series A Preferred Shares for Bank Preferred Shares because (i) the Bank
     becomes "undercapitalized" under prompt corrective action regulations
     established pursuant to the Federal Deposit Insurance Corporation
     Improvement Act of 1991, as amended, (ii) the Bank is placed into
     conservatorship or receivership or (iii) the appropriate federal regulatory
     agency, in its sole discretion and even if the Bank is not
     "undercapitalized," anticipates the Bank becoming "undercapitalized" in the
     near term (the "Exchange Event").

          (c)  Upon the Exchange Event, each holder of Series A Preferred Shares
     shall be unconditionally obligated to surrender to the Bank the
     certificates representing each Series A Preferred Share of such holder, and
     the Bank shall be unconditionally obligated to issue to such holder in
     exchange for each such Series A Preferred Share a certificate representing
     one Bank Preferred Share.

          (d)  The Automatic Exchange shall occur as of  8:00 a.m. Eastern Time
     on the date for such exchange set forth in the Directive, or, if such date
     is not set forth in the Directive, as of 8:00 a.m. on the earliest possible
     date such exchange could occur consistent with the Directive (the "Time of
     Exchange"), as evidenced by the issuance by the Bank of a press release
     prior to such time.  As of the Time of Exchange, all of the Series A
     Preferred Shares will be deemed cancelled without any further action by the
     Corporation, all rights of the holders of the Series A Preferred Shares as
     stockholders of the Corporation shall cease, and such persons shall
     thereupon and thereafter be deemed to be and shall be for all purposes the
     holders of Bank Preferred Shares.  Notice of the occurrence of the Exchange
     Event shall be given by first-class mail, postage prepaid, mailed within 30
     days of such event, to each holder of record of the Series A Preferred
     Shares, at such holder's address as the same appears on the stock register
     of the Corporation. Each such notice shall indicate the place or places
     where certificates for the Series A Preferred Shares are to be surrendered
     by the holders thereof, and the Bank shall deliver to each such holder
     certificates for Bank Preferred Shares upon surrender of certificates for
     the Series A Preferred Shares.  Until such

                                       6
<PAGE>

     replacement stock certificates are delivered (or in the event such
     replacement certificates are not delivered), certificates previously
     representing the Series A Preferred Shares shall be deemed for all purposes
     to represent Bank Preferred Shares.

          (e)  Any Series A Preferred Shares purchased or redeemed by the
     Corporation in accordance with Section 3 hereof prior to the Time of
     Exchange shall not be deemed outstanding and shall not be subject to the
     Automatic Exchange.  In the event of the Automatic Exchange, any accrued
     and unpaid dividends on the Series A Preferred Shares as of the Time of
     Exchange would be deemed to be accrued and unpaid dividends on the Bank
     Preferred Shares.

          5.  Conversion.  The holders of Series A Preferred Shares shall not
              ----------
     have any rights to convert such shares into shares of any other class or
     series of capital stock of the Corporation.

          6.  Liquidation Rights.  (a)  Upon the voluntary or involuntary
              ------------------
     liquidation, dissolution or winding up of the Corporation, the holders of
     the Series A Preferred Shares shall be entitled to receive and to be paid
     out of assets of the Corporation available for distribution to its
     stockholders, before any payment or distribution shall be made on the
     Common Stock or on any other class of stock ranking junior to the Series A
     Preferred Shares upon liquidation, the amount of $50.00 per share, plus the
     quarterly accrued and unpaid dividend thereon to the date of liquidation.

          (b)  After payment to the holders of the Series A Preferred Shares of
     the full preferential amounts provided for in this Section 6, the holders
     of the Series A Preferred Shares shall have no right or claim to any of the
     remaining assets of the Corporation.

          (c)  If, upon any voluntary or involuntary liquidation, dissolution or
     winding up of the Corporation, the amounts payable with respect to the
     stated value of the Series A Preferred Shares and any other shares of stock
     of the Corporation ranking as to any such distribution on a parity with the
     Series A Preferred Shares are not paid in full, the holders of the Series A
     Preferred Shares and of such other shares will share ratably in any such
     distribution of assets of the Corporation in proportion to the full
     respective liquidating distributions to which they are entitled.

          (d)  Neither the sale of all or substantially all the property or
     business of the Corporation, nor the merger or consolidation of the
     Corporation into or with any other corporation or the merger or
     consolidation of any other corporation into or with the Corporation shall
     be deemed to be a liquidation,

                                       7
<PAGE>

     dissolution or winding up, voluntary or involuntary, of the Corporation for
     purposes of this Section 6.

          (e)  Upon the liquidation, dissolution or winding up of the
     Corporation, the holders of the Series A Preferred Shares then outstanding
     shall be entitled to be paid out of the assets of the Corporation available
     for distribution to its stockholders all amounts to which such holders are
     entitled pursuant to paragraph (a) of this Section 6 before any payment
     shall be made to the holder of any class of capital stock of the
     Corporation ranking junior to the Series A Preferred Shares upon
     liquidation.

          7.  Ranking.  For purposes of this resolution, any stock of any class
              -------
     or classes of the Corporation shall be deemed to rank:

          (a)  Prior to the Series A Preferred Shares, either as to dividends or
     upon liquidation, if the holders of such class or classes shall be entitled
     to the receipt of dividends or of amounts distributable upon liquidation,
     dissolution or winding up of the Corporation, as the case may be, in
     preference or priority to the holders of the Series A Preferred Shares;

          (b)  On a parity with the Series A Preferred Shares, either as to
     dividends or upon liquidation, whether or not the dividend rates, dividend
     payment dates or redemption or liquidation prices per share or sinking fund
     provisions, if any, be different from those of the Series A Preferred
     Shares, if the holders of such stock shall be entitled to the receipt of
     dividends or of amounts distributable upon liquidation, dissolution or
     winding up of the Corporation, as the case may be, without preference or
     priority, one over the other, as between the holders of such stock and the
     holders of the Series A Preferred Shares; and

          (c)  Junior to the Series A Preferred Shares, either as to dividends
     or upon liquidation, if such class shall be Common Stock or if the holders
     of the Series A Preferred Shares shall be entitled to receipt of dividends
     or of amounts distributable upon liquidation, dissolution or winding up of
     the Corporation, as the case may be, in preference or priority to the
     holders of shares of such class or classes.

          8.  Voting Rights.  The Series A Preferred Shares shall not have any
              -------------
     voting powers, either general or special, except that:

          (a)  If at the time of any annual meeting of the Corporation's
     stockholders for the election of directors there is a default in preference
     dividends on the Preferred Stock, including the Series A Preferred Shares,
     the number of directors then constituting the Board of Directors of the
     Corporation

                                       8
<PAGE>

     shall be increased by two (if not already increased by two due to a default
     in preference dividends), and the holders of the Series A Preferred Shares,
     voting together with the holders of all other series of Preferred Stock as
     a single class without regard to series (whether or not the holders of such
     series of Preferred Stock would be entitled to vote for the election of
     directors if such default in preference dividends did not exist), shall
     have the right at such meeting to the exclusion of the holders of Common
     Stock, to elect two additional directors of the Corporation to fill such
     newly created directorships. Each director elected by the holders of shares
     of the Preferred Stock (a "Preferred Director") shall continue to serve as
     such director until the later of (i) the full term for which he or she
     shall have been elected or (ii) the payment of four quarterly dividends on
     the Preferred Stock, including the Series A Preferred Shares. Any Preferred
     Director may be removed by, and shall be not removed except by, the vote of
     the holders of record of all the outstanding shares of Preferred Stock,
     voting together as a single class without regard to series, at a meeting of
     the Corporation's stockholders, or of the holders of shares of Preferred
     Stock, called for that purpose.  As long as a default in any preference
     dividends on the Preferred Stock shall exist (i) any vacancy in the office
     of a Preferred Director may be filled (except as provided in the following
     clause (ii)) by an instrument in writing signed by the remaining Preferred
     Director and filed with the Corporation, and (ii) in the case of the
     removal of any Preferred Director, the vacancy may be filled by the vote of
     the holders of all the outstanding shares of Preferred Stock, voting
     together as a single class without regard to series, at the same meeting at
     which such removal shall be voted.  Each director appointed as aforesaid by
     the remaining Preferred Director shall be deemed, for all purposes hereof,
     to be a Preferred Director. Whenever the term of office of the Preferred
     Directors shall end and a default in preference dividends shall no longer
     exist, the number of directors constituting the Board of Directors shall be
     reduced by two.  For purposes hereof, a "default in preference dividends"
     on the Preferred Stock shall be deemed to have occurred whenever the
     Corporation has failed to declare and set aside for payment a quarterly
     dividend during any of the four preceding quarterly dividend periods on any
     series of Preferred Stock of the Corporation, including the Series A
     Preferred Shares.

          (b)  Without the consent of the holders of shares entitled to cast at
     least 67% of the votes entitled to be cast by the holders of the total
     number of shares of Preferred Stock then outstanding, voting together as a
     single class without regard to series, the holders of the Series A
     Preferred Shares being entitled to cast one vote per share thereon, the
     Corporation may not:  (i) create any class or series of stock which shall
     as to dividends or distribution of assets rank prior to or on a parity with
     any outstanding series of Preferred Stock other than a series which shall
     not have any right to object to such creation or (ii) alter or change the
     provisions of the Corporation's First Amended and

                                       9
<PAGE>

     Restated Articles of Incorporation of the Corporation, as the same may be
     amended or restated from time to time, so as to adversely affect the voting
     powers preferences or special rights of the holders of a series of
     Preferred Stock; provided, however, that if such creation, alteration or
     change would adversely affect the voting power, preferences or special
     rights of one or more, but not all, series of Preferred Stock at the time
     outstanding, consent of the holders of shares entitled to cast at least 67%
     of the votes entitled to be cast by the holders of all of the shares of all
     such series so affected, voting together as a single class, shall be
     required in lieu of the consent of the holders of shares entitled to cast
     at least 67% of the votes entitled to be cast by the holders of the total
     number of shares of Preferred Stock at the time outstanding.

          9.  Approval of Independent Directors.  (a)  As long as any Series A
              ---------------------------------
     Preferred Shares are outstanding, the Corporation may not take the
     following actions without first obtaining the approval of a majority of the
     Independent Directors. "Independent Director" means any director of the
     Corporation who is either (i) not a current officer or employee of the
     Corporation or a current director, officer or employee of the Bank or any
     affiliate of the Bank, or (ii) a Preferred Director.  The actions which
     require the prior approval of a majority of the Independent Directors
     include (i) the issuance of additional Preferred Stock ranking on a parity
     with the Series A Preferred Shares, (ii) the incurrence of debt for
     borrowed money in excess of 25% of the Corporation's total stockholders'
     equity, (iii) the modification of the general distribution policy of the
     Corporation or the declaration of any distribution in respect of Common
     Stock for any year if, after taking into account any such proposed
     distribution, total distributions on the Series A Preferred Shares and the
     Common Stock would exceed an amount equal to the sum of 105% of the
     Corporation's "REIT taxable income" (excluding capital gains) for such year
     plus net capital gains of the Corporation for that year, (iv) the
     acquisition of real estate assets other than mortgage loans or mortgage
     securities representing interests in or obligations backed by pools of
     mortgage loans, (v) the redemption of any shares of Common Stock, (vi) the
     termination or modification of, or the election not to renew, that certain
     Advisory Agreement to be entered into by and between the Corporation and
     the Bank in connection with the formation of the Corporation or that
     certain Servicing Agreement to be entered into by and between the
     Corporation and the Bank in connection with the formation of the
     Corporation, or the subcontracting of any duties under said Servicing
     Agreement to third parties unaffiliated with the Bank, (vii) any
     dissolution, liquidation or termination of the Corporation prior to January
     15, 2027, (viii) any material amendment to or modification of any
     agreements pursuant to which the Corporation purchases its real estate
     mortgage assets, and (ix) the determination to revoke the Corporation's
     status as a real estate investment trust.

          (b)  In assessing the benefits to the Corporation of any proposed
     action requiring their consent, the Independent Directors shall take into
     account the

                                       10
<PAGE>

     interests of holders of shares of both the Common Stock and the Preferred
     Stock, including, without limitation, the holders of the Series A Preferred
     Shares.  In considering the interests of the holders of the Preferred
     Stock, including, without limitation, holders of the Series A Preferred
     Shares, the Independent Directors shall owe the same duties that the
     Independent Directors owe to holders of shares of Common Stock.

          10.  Maintenance of Status as Reporting Company.  As long as any
               ------------------------------------------
     Series A Preferred Shares are outstanding, the Corporation shall maintain
     its status as a reporting company under the Securities Exchange Act of
     1934, as amended.



                         [SIGNATURES ON FOLLOWING PAGE]

                                       11
<PAGE>

        IN WITNESS WHEREOF, CHEVY CHASE PREFERRED CAPITAL CORPORATION has caused
these Articles Supplementary to be signed and acknowledged in its name and on
its behalf by its Senior Vice President and Controller and attested to by its
Secretary on this 29th day of November, 1996.

                    CHEVY CHASE PREFERRED CAPITAL CORPORATION


                    By: Joel A.Friedman
                    Name:  Joel A. Friedman
                    Title: Senior Vice President and Controller
ATTEST:

Mary Lou Hayes
--------------
Mary Lou Hayes
Secretary


     THE UNDERSIGNED,  Senior Vice President and Controller of CHEVY CHASE
PREFERRED CAPITAL CORPORATION, who executed on behalf of said corporation the
foregoing Articles Supplementary to its Articles of Amendment and Restatement,
of which this certificate is made a part, hereby acknowledges, in the name and
on behalf of said corporation, and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects under the
penalties of perjury.



Dated:    November 29, 1996         Joel A. Friedman
                                    ----------------
                                    Joel A. Friedman
                                    Senior Vice President and Controller

                                       12