EXHIBIT 4.12

                          FIFTH SUPPLEMENTAL INDENTURE

      FIFTH  SUPPLEMENTAL  INDENTURE  dated as of August 27,  2001  among  Delta
Financial  Corporation,  a Delaware  corporation (the "Company"),  each of Delta
Funding Corporation, a New York corporation,  DF Special Holdings Corporation, a
Delaware  corporation,  Fidelity  Mortgage  Inc.,  a Delaware  corporation,  DFC
Financial Corporation, a Delaware corporation,  DFC Financial of Canada Limited,
an  Ontario,  Canada  corporation,  DFC Funding of Canada  Limited,  an Ontario,
Canada   corporation,   Continental   Property  Management  Corp.,  a  New  York
corporation,  Delta Funding Residual Holding Trust 2000-1, a Delaware trust, and
Delta Funding Residual Holding Trust 2000-2, a Delaware trust (collectively, the
"Subsidiary Guarantors"),  and U.S. Bank Trust National Association,  as trustee
(the "Trustee"), under the Indenture (defined below).

      WHEREAS,  the  Company,  the  Subsidiary  Guarantors  and the Trustee have
previously  entered into an Indenture  dated as of December 21, 2000, as amended
(the  "Indenture"),  relating to the  Company's 9 1/2% Senior  Secured Notes Due
2004 (the "Notes");

      WHEREAS,  pursuant to an  exchange  offer and  consent  solicitation,  the
holders  of a  majority  in  principal  amount  of the  outstanding  Notes  (the
"Consenting  Noteholders") have consented to this Fifth Supplemental  Indenture;
and
      WHEREAS,  all acts and things  prescribed  by law and by the Company's and
the Subsidiary  Guarantors'  certificates of incorporation and by-laws (or other
constitutive documents, as applicable) (each as now in effect) necessary to make
this Fifth  Supplemental  Indenture a valid  instrument  legally  binding on the
Company and the Subsidiary  Guarantors  for the purposes  herein  expressed,  in
accordance with its terms, have been duly done and performed.

      NOW THEREFORE,  in  consideration  of the foregoing and for other good and
valuable  consideration,  the  receipt  of which  is  hereby  acknowledged,  the
Company, the Subsidiary  Guarantors and the Trustee hereby agree for the benefit
of each other and the equal and  ratable  benefit of the holders of the Notes as
follows:

      1. AMENDMENTS TO THE PREAMBLE AND ARTICLES 4, 5, 6, 10 AND 12.

      (a)   The Preamble of the Indenture is hereby deleted in its entirety and
      replaced with the following:

            "The  Company has duly  authorized  the  creation of an issue of the
      Senior Notes (as defined) and the Subsidiary Guarantees (as defined), and,
      to provide  therefor,  the Company has duly  authorized  the execution and
      delivery of this Indenture. The Senior Notes will be jointly and severally
      guaranteed, on an unconditional senior basis, by the Subsidiary Guarantors
      (as defined).  All things  necessary to make the Senior  Notes,  when duly
      issued and  executed  by the  Company,  and  authenticated  and  delivered
      hereunder,  the  valid  obligations  of the  Company  and  the  Subsidiary
      Guarantors and to make this Indenture a valid and binding agreement of the
      Company and the Subsidiary Guarantors, have been done."

            For  the  avoidance  of  doubt,  the  amendment  set  forth  in this
      paragraph  1(a)  shall not amend  the  first and third  paragraphs  of the
      Indenture immediately preceeding Article One of the Indenture.

      (b) Each Section of Article 4, except for Section 4.01,  is hereby deleted
      in its entirety.

      (c) Section  5.01 of  Article 5 is hereby  deleted  in its  entirety;  the
      phrases  "in  accordance  with  Section 5.01" and "except in the case of a
      sale of all of the Company's  assets that meet the requirements of Section
      5.01 hereof" are hereby deleted from Section 5.02.

      (d) Sub-clauses  (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m) and
      (n) of Section 6.01 of Article 6 are hereby deleted in their entirety.

      (e) Section  6.02 of  Article  6 is hereby  deleted  in its  entirety  and
      replaced with the following:

      "If any Event of Default  occurs  and is  continuing,  the  Trustee or the
      Holders of at least 25% in principal amount of the then outstanding Senior
      Notes may declare all the Senior Notes to be due and payable  immediately.
      Upon any such  declaration,  the Senior Notes shall become due and payable
      immediately."

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      (f) Each Section of Article 10 is hereby deleted in its entirety.

      (g) Each  Section  of  Article  12,  except  for  Section 12.03, is hereby
      deleted in its entirety.

      (h) Each  cross-reference  in  the  Indenture  to  a  Section,  Clause  or
      Sub-clause  deleted  pursuant  to(a) through (g) above  is  hereby deleted
      from the Indenture.

     2. EFFECTIVENESS.  This Fifth Supplemental  Indenture shall be effective as
of the date hereof.

     3. CONSTRUCTION.   For all purposes of this Fifth  Supplemental  Indenture,
except as otherwise  herein expressly  provided or unless the context  otherwise
requires: (i) the terms and expressions used herein shall have the same meanings
as corresponding terms and expressions used in the Indenture; and (ii) the words
"herein,"  "hereof" and "hereby" and other words of similar  import used in this
Fifth  Supplemental  Indenture refer to this Fifth  Supplemental  Indenture as a
whole and not to any particular Section hereof.

     4. TRUSTEE  ACCEPTANCE.  The Trustee accepts the amendment of the Indenture
effected by this Fifth  Supplemental  Indenture  and agrees to execute the trust
created  by the  Indenture,  as  hereby  amended,  but only  upon the  terms and
conditions set forth in the Indenture,  as hereby  amended,  including the terms
and provisions defining and limiting the liabilities and responsibilities of the
Trustee,  which terms and  provisions  shall in like manner define and limit its
liabilities and  responsibilities in the performance of the trust created by the
Indenture, as hereby amended.  Without limiting the generality of the foregoing,
the Trustee has no  responsibility  for the  correctness of the recitals of fact
herein contained which shall be taken as the statements of the Company and makes
no representations as to the validity,  enforceability  against the Company,  or
sufficiency of this Fifth Supplemental Indenture.

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     5. INDEMNIFICATION  OF TRUSTEE.   The Company  shall  indemnify the Trustee
against any and all losses, liabilities or expenses, including taxes (other than
taxes  based  upon,  measured  by or  determined  by the income of the  Trustee)
incurred by the Trustee  arising out of or resulting  from the execution of this
Fifth Supplemental Indenture, including the costs and expenses of enforcing this
Fifth Supplemental  Indenture against the Company (including this Section 5) and
defending  itself  against  any claim  (whether  asserted  by the Company or any
Holder or any other  person) or  liability  in  connection  with the exercise or
performance of any of its powers or duties  hereunder,  except to the extent any
such loss, liability or expense may be attributable to the Trustee's negligence,
bad faith or willful misconduct.

     6. OWNER TRUSTEE. It is expressly understood and agreed by the parties that
(a) this Fifth  Supplemental  Indenture is executed and  delivered by Wilmington
Trust Company,  not individually or personally,  but solely as Owner Trustee, in
the exercise of the powers and authority conferred and vested in it, pursuant to
the 2000-1  Trust  Agreement  and the 2000-2  Trust  Agreement,  (b) each of the
representations,  undertakings  and  agreements  herein  made on the part of the
Trusts is made and intended not as personal  representations,  undertakings  and
agreements by Wilmington  Trust Company but is made and intended for the purpose
for binding only the Trusts,  (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company,  individually or personally,
to perform any covenant either expressed or implied contained  herein,  all such
liability,  if any,  being  expressly  waived by the  parties  hereto and by any
person  claiming  by,  through  or under the  parties  hereto,  and (d) under no
circumstances  shall  Wilmington  Trust  Company  be  personally  liable for the
payment  of any  indebtedness  or  expenses  of the  Trusts or be liable for the
breach or failure of any obligation,  representation,  warranty or covenant made
or undertaken by the Trusts under this Fifth Supplemental Indenture or any other
related documents.

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     7. INDENTURE RATIFIED. Except as expressly amended hereby, the Indenture is
in all  respects  ratified  and  confirmed  and all the  terms,  conditions  and
provisions thereof shall remain in full force and effect.

     8. HOLDERS BOUND.  This Fifth  Supplemental  Indenture shall form a part of
the  Indenture  for all  purposes,  and every Holder of the Notes  heretofore or
hereafter authenticated and delivered shall be bound hereby.

     9.  SUCCESSORS  AND ASSIGNS.  This Fifth  Supplemental  Indenture  shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

     10. COUNTERPARTS.  This Fifth Supplemental Indenture may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original,  and all of such  counterparts  shall together  constitute one and the
same instrument.

     11.  GOVERNING  LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE  THIS FIFTH  SUPPLEMENTAL  INDENTURE  WITHOUT  REGARD TO
PRINCIPLES OF CONFLICTS OF LAW THEREOF.

     IN WITNESS WHEREOF, the Company, the Subsidiary  Guarantors and the Trustee
have caused this Fifth  Supplemental  Indenture  to be signed and executed as of
the day and year first above written.

                                   DELTA FINANCIAL CORPORATION


                                   By:__________________________________________
                                      Name: Marc E. Miller
                                      Title: Secretary and Senior Vice President

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                                   DELTA FUNDING CORPORATION

                                   By:/S/ MARC E. MILLER
                                      ---------------------------------
                                      Name: Marc E. Miller
                                      Title: Secretary and Senior Vice President


                                   DF SPECIAL HOLDINGS CORPORATION

                                   By:/S/ MARC E. MILLER
                                      ---------------------------------
                                      Name: Marc E. Miller
                                      Title: Secretary and Senior Vice President


                                   FIDELITY MORTGAGE INC.

                                   By:/S/ MARC E. MILLER
                                      ---------------------------------
                                      Name: Marc E. Miller
                                      Title: Secretary and Senior Vice President


                                   DFC FINANCIAL CORPORATION

                                   By:/S/ MARC E. MILLER
                                      ---------------------------------
                                      Name: Marc E. Miller
                                      Title: Secretary and Senior Vice President


                                   DFC FINANCIAL OF CANADA LIMITED

                                   By:/S/ MARC E. MILLER
                                      ---------------------------------
                                      Name: Marc E. Miller
                                      Title: Secretary and Senior Vice President


                                   DFC FUNDING OF CANADA LIMITED

                                   By:/S/ MARC E. MILLER
                                      ---------------------------------
                                      Name: Marc E. Miller
                                      Title: Secretary and Senior Vice President

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                                   CONTINENTAL PROPERTY MANAGEMENT CORP.

                                   By:/S/ MARC E. MILLER
                                      ---------------------------------
                                      Name: Marc E. Miller
                                      Title: Secretary and Senior Vice President


                                   DELTA FUNDING RESIDUAL HOLDING TRUST 2000-1

                                   By:  WILMINGTON TRUST COMPANY,  not  in   its
                                   individual   capacity  but  solely  as  Owner
                                   Trustee

                                   By:/S/ CHARISSE L. RODGERS
                                      ---------------------------------
                                      Name: Charisse L. Rodgers
                                      Title: Assistant Vice President


                                   DELTA FUNDING RESIDUAL HOLDING TRUST 2000-2

                                   By:  WILMINGTON TRUST COMPANY,  not  in   its
                                   individual    capacity   but  solely as Owner
                                   Trustee


                                   By:/S/ CHARISSE L. RODGERS
                                      ---------------------------------
                                      Name: Charisse L. Rodgers
                                      Title: Assistant Vice President


                                   U.S.    BANK    TRUST  NATIONAL  ASSOCIATION,
                                   Indenture Trustee


                                   By:/S/ PATRICIA J. KAPSCH
                                      --------------------------------
                                      Name: Patricia J. Kapsch
                                      Title: Trust Officer



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