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 September 30, 1999

                                       OR

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

                         Commission File Number 1-13237

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                  ---------------------------------------------
         (Exact name of Registrant as specified in its Trust Agreement)

         Delaware                                                13-3949418
-------------------------------                              ------------------
(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) 421-5333

      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 |_|
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                           =============    =============
                                                           September 30,     December 31,
                                                               1999             1998
                                                           -------------    -------------
<S>                                                        <C>              <C>
ASSETS
First mortgage bonds-at fair value                         $ 569,487,941    $ 458,662,600
Other bond related investments-at fair value                     560,000                0
Temporary investments                                         30,711,000                0
Cash and cash equivalents                                      8,411,954       13,093,023
Cash and cash equivalents-restricted                             870,154                0
Interest receivable, net                                       2,041,532        1,512,562
Promissory notes receivable                                    7,772,767        7,628,920
Deferred costs, net                                           13,034,886        7,005,965
Goodwill, net                                                  2,761,637        4,671,236
Other assets                                                     302,999           11,500
                                                           -------------    -------------
Total assets                                               $ 635,954,870    $ 492,585,806
                                                           =============    =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
   Secured borrowings                                      $  52,807,000    $           0
   Accounts payable, accrued expenses and
     other liabilities                                         1,501,579        8,993,174
   Due to Manager and affiliates                               1,369,886        1,159,358
   Distributions payable to preferred shareholders
     of subsidiary                                             1,523,750                0
   Distributions payable to shareholders                       5,042,342        4,939,068
                                                           -------------    -------------
Total liabilities                                             62,244,557       15,091,600
                                                           -------------    -------------

Minority interest in subsidiary
   (subject to mandatory redemption)                         157,000,000      150,000,000
                                                           -------------    -------------
Preferred shares of subsidiary (subject to mandatory
   repurchase)                                                90,000,000                0
                                                           -------------    -------------
Commitments and contingencies

Shareholders' equity:
   Beneficial owner's equity-manager                             398,205          230,259
   Beneficial owners' equity-other shareholders
     (50,000,000 shares authorized; 20,589,375 issued
     and 20,580,975 outstanding and 20,587,837
     shares issued and 20,579,437 outstanding in
     1999 and 1998, respectively)                            313,930,454      312,307,115
   Treasury shares of beneficial interest (8,400 shares)        (103,359)        (103,359)
   Accumulated other comprehensive income                     12,485,013       15,060,191
                                                           -------------    -------------
Total shareholders' equity                                   326,710,313      327,494,206
                                                           -------------    -------------

Total liabilities and shareholders' equity                 $ 635,954,870    $ 492,585,806
                                                           =============    =============
</TABLE>

          See accompanying notes to consolidated financial statements


                                       2
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                      ============================    ============================
                                           Three Months Ended              Nine Months Ended
                                              September 30,                  September 30,
                                      ----------------------------    ----------------------------
                                          1999            1998            1999            1998
                                      ------------    ------------    ------------    ------------
<S>                                   <C>             <C>             <C>             <C>
Revenues:

   Interest income:
     First mortgage bonds             $ 10,155,870    $  7,128,239    $ 26,742,542    $ 19,580,311
     Other bond related
       investments                         154,877               0         177,255               0
     Temporary investments                 556,614          57,655         814,611         162,049
     Promissory notes                      164,792         148,551         496,605         438,981
                                      ------------    ------------    ------------    ------------
     Total revenues                     11,032,153       7,334,445      28,231,013      20,181,341
                                      ------------    ------------    ------------    ------------

Expenses:

   Interest expense                        558,758         305,326         932,236         978,971
   Loan servicing and asset
     management fees                       352,300         255,200         947,156         706,778
   General and administrative              754,255         610,091       2,125,893       1,177,972
   Amortization                            216,051         123,802         546,105         244,792
                                      ------------    ------------    ------------    ------------
     Total expenses                      1,881,364       1,294,419       4,551,390       3,108,513
                                      ------------    ------------    ------------    ------------

Income  before minority interests        9,150,789       6,040,026      23,679,623      17,072,828

   Income allocated to preferred
     shareholders of subsidiary         (1,490,625)              0      (1,523,750)              0
   Minority interest in income of
     subsidiary                         (1,388,095)       (534,442)     (3,926,045)       (791,199)
                                      ------------    ------------    ------------    ------------
Net income                               6,272,069       5,505,584      18,229,828      16,281,629

Special allocation of net income to
   the Manager                            (597,491)       (434,027)     (1,602,367)     (1,212,381)
                                      ------------    ------------    ------------    ------------

Net income applicable to
   shareholders                       $  5,674,578    $  5,071,557    $ 16,627,461    $ 15,069,248
                                      ============    ============    ============    ============

Net income per share (basic and
   diluted)                           $        .28    $        .25    $        .81    $        .73
                                      ============    ============    ============    ============

Weighted average shares
   outstanding (basic and
   diluted)                             20,580,975      20,587,837      20,580,682      20,587,627
                                      ============    ============    ============    ============
</TABLE>

           See accompanying notes to consolidated financial statements


                                       3
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CHANGES IN
                              SHAREHOLDERS' EQUITY
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                         Beneficial                                    Accumulated
                                           Beneficial      Owners'        Treasury                        Other
                                            Owner's        Equity-        Shares of                      Compre-
                                            Equity -        Other         Beneficial    Comprehensive    hensive
                                            Manager      Shareholders      Interest        Income         Income       Total
                                            -------      ------------      --------        ------         ------       -----
<S>                                       <C>            <C>             <C>            <C>            <C>            <C>
Balance at January 1, 1999                $    230,259   $ 312,307,115   $   (103,359)                 $  15,060,191  $ 327,494,206
Comprehensive income:
Net income                                   1,602,367      16,627,461              0   $  18,229,828              0     18,229,828
                                                                                        -------------
Other comprehensive loss:
  Net unrealized loss on first mortgage
    bonds and bond related investments:
  Net unrealized holding loss arising
    during the period                                                                      (2,600,671)
  Add: Reclassification adjustment for
    losses included in net income                                                              25,493
                                                                                        -------------
Other comprehensive loss                                                                   (2,575,178)    (2,575,178)    (2,575,178)
                                                                                        -------------
Comprehensive income                                                                    $  15,654,650
                                                                                        =============
Issuance of shares of beneficial interest            0          20,000              0                              0         20,000
Distributions                               (1,434,421)    (15,024,122)             0                              0    (16,458,543)
                                          ------------   -------------   ------------                  -------------  -------------

Balance at September 30, 1999             $    398,205   $ 313,930,454   $   (103,359)                 $  12,485,013  $ 326,710,313
                                          ============   =============   ============                  =============  =============
</TABLE>

           See accompanying notes to consolidated financial statements


                                       4
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      ==============================
                                                             Nine Months Ended
                                                              September 30,
                                                      ------------------------------
                                                           1999             1998
                                                      ------------------------------
<S>                                                   <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                         $  18,229,828    $  16,281,629
                                                      -------------    -------------
   Adjustments to reconcile net income to net cash
     provided by operating activities:
   Loss on repayment of first mortgage bond                  25,493                0
   Amortization                                             546,105          244,792
   Amortization of goodwill                                 210,613                0
   Accretion of excess of acquired net
     assets over cost                                             0         (248,559)
   Accretion of deferred income                             (49,659)         (49,659)
   Income allocated to preferred shareholders
     of subsidiary                                        1,523,750                0
   Changes in operating assets and liabilities:
     Interest receivable                                   (528,970)        (304,346)
     Other assets                                           (39,999)         (16,975)
     Accounts payable, accrued expenses and
       other liabilities                                 (5,762,791)         350,463
     Due to Manager and
       affiliates                                           107,986          556,375
                                                      -------------    -------------
   Total adjustments                                     (3,967,472)         532,091
                                                      -------------    -------------
Net cash provided by operating activities                14,262,356       16,813,720
                                                      -------------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from repayment of first mortgage bond         5,100,000                0
   Purchase of first mortgage bonds                    (118,400,500)     (77,604,600)
   Purchase of other bond related investments              (540,178)               0
   Increase in deferred bond selection costs             (2,735,509)      (1,658,160)
   Net purchase of temporary investments                (30,711,000)        (450,000)
   Increase in cash and cash equivalents-restricted        (870,154)               0
   Increase in other assets                                (251,500)               0
   Loans made to property                                  (307,185)        (529,972)
   Principal payments received from loans made to
     properties                                             163,338          138,639
                                                      -------------    -------------
Net cash used in investing activities                  (148,552,688)     (80,104,093)
                                                      -------------    -------------
</TABLE>

                                                                     (continued)

           See accompanying notes to consolidated financial statements


                                       5
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      ==============================
                                                             Nine Months Ended
                                                              September 30,
                                                      ------------------------------
                                                           1999             1998
                                                      ------------------------------
<S>                                                   <C>              <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions paid to Manager and shareholders       (16,232,727)     (15,213,392)
   Proceeds from note payable                                     0       77,583,230
   Repayments of note payable                                     0      (55,588,241)
   Proceeds from secured borrowings                      52,807,000                0
   Increase in minority interest                          7,000,000       58,000,000
   Increase in deferred costs relating to the
     Private Label Tender Option Program                   (360,132)      (1,717,930)
   Issuance of preferred stock of subsidiary             90,000,000                0
   Deferred costs relating to the issuance of
     preferred stock of subsidiary                       (3,604,878)               0
   Consolidation costs                                            0          (14,628)
                                                      -------------    -------------
Net cash provided by financing activities               129,609,263       63,049,039
                                                      -------------    -------------

Net decrease in cash and
   cash equivalents                                      (4,681,069)        (241,334)
Cash and cash equivalents at the
   beginning of the period                               13,093,023        2,296,899
                                                      -------------    -------------
Cash and cash equivalents at the
   end of the period                                  $   8,411,954    $   2,055,565
                                                      =============    =============

SUPPLEMENTAL INFORMATION:
   Interest paid                                      $     746,839    $     982,508
                                                      =============    =============
</TABLE>

                                                                     (continued)

           See accompanying notes to consolidated financial statements


                                       6
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      ==============================
                                                             Nine Months Ended
                                                              September 30,
                                                      ------------------------------
                                                           1999             1998
                                                      ------------------------------
<S>                                                   <C>              <C>
SUPPLEMENTAL DISCLOSURE OF NONCASH
   INVESTING AND FINANCING ACTIVITIES:

Issuance of shares of beneficial
   interest for trustee fees                          $      20,000    $       5,000
                                                      =============    =============

Adjustment to goodwill due to the Discounted
  Cash Settlement:

   Decrease in goodwill                               $   1,698,986    $           0
   Decrease in accounts payable, accrued
      expenses and other liabilities                     (1,698,986)               0
                                                      -------------    -------------

                                                      $           0    $           0
                                                      =============    =============

Distributions to Manager and shareholders
   of the Company                                     $ (16,458,543)   $ (15,265,696)
Increase in special distribution payable
   to the Manager                                           122,542           52,219
Increase in distributions payable to shareholders
   of the Company                                           103,274               85
                                                      -------------    -------------

Distributions paid to Manager and shareholders        $ (16,232,727)   $ (15,213,392)
                                                      =============    =============
</TABLE>

           See accompanying notes to consolidated financial statements


                                       7
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

NOTE 1 - General

Charter Municipal Mortgage Acceptance Company (the "Company") is a Delaware
business trust which is engaged in the acquisition and ownership (either
directly or indirectly) of tax-exempt participating and non-participating First
Mortgage Bonds ("FMBs") issued by various state or local governments or other
agencies or authorities and secured by participating and non-participating
mortgage loans on the underlying properties ("Underlying Properties"). As of
September 30, 1999 the Company owned a portfolio of 66 FMBs. The Company is
organized and managed as a single business segment.

The Company was formed on October 1, 1997 as the result of the consolidation
(the "Consolidation") of three publicly registered limited partnerships, Summit
Tax Exempt Bond Fund, L.P., Summit Tax Exempt L.P. II and Summit Tax Exempt L.P.
III (the "Partnerships", and each individually a "Partnership"). One of the
general partners of the Partnerships was an affiliate of Related Capital Company
("Related"). Pursuant to the Consolidation, the Company issued shares of
beneficial interest (the "Shares") to all partners in each of the Partnerships
in exchange for their interests in the Partnerships based upon each partner's
proportionate interest in the Shares issued to their Partnership.

The Company is governed by a board of trustees comprised of two independent
managing trustees and three managing trustees who are affiliated with Related.
The Company has engaged Related Charter LP (the "Manager"), an affiliate of
Related, to manage its day-to-day affairs.

As part of the settlement of class action litigation relating to the
Partnerships, counsel ("Class Counsel") for the partners of the Partnerships had
the right to petition the United States District Court for the Southern District
of New York (the "Court") for additional attorneys' fees ("Counsel's Fee
Shares") in an amount to be determined in the Court's sole discretion. The
Counsel's Fee Shares were based upon a percentage (which Class Counsel proposed
to be 25%) of the increase in value of the Company, ("the Added Value") if any,
as of October 1, 1998 based upon the difference between (i) the trading prices
of the Company's shares of beneficial interest during the six month period ended
October 1, 1998 and (ii) the trading prices of the limited partnership units and
the asset values of the Partnerships prior to October 1, 1997. As of October 1,
1998, 25% of the Added Value amounted to $7,788,536 and, in accordance with an
Order and Stipulation of Settlement by the Court on February 18, 1999 (the
"Order"), Class Counsel was entitled to receive 608,955 shares of beneficial
interest in the Company. On April 15, 1999, the Company successfully negotiated
a discounted cash settlement (the "Discounted Cash Settlement") of $6,089,550
with Class Counsel in lieu of the issuance of shares. On April 26, 1999, the
Discounted Cash Settlement was approved by the Board of Trustees and it was paid
on May 3, 1999.

The Company had previously recorded an accrual of $7,788,536 as its liability to
issue Counsel Fee Shares under the Order and adjusted the goodwill recorded in
the Consolidation accordingly. The Discounted Cash Settlement results in a
decrease of $1,698,986 in this liability and in goodwill in 1999.


                                       8
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

The consolidated financial statements at September 30, 1999 include the accounts
of the Company and four business trusts it controls: CM Holding Trust, Charter
Mac Equity Issuer Trust, Charter Mac Origination Trust I and Charter Mac Owner
Trust I (see Notes 6 and 7). All intercompany accounts and transactions have
been eliminated in consolidation.

The accompanying 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
the financial position of the Company as of September 30, 1999, the results of
its operations for the three and nine months ended September 30, 1999 and 1998
and its cash flows for the nine months ended September 30, 1999 and 1998.
However, the operating results for the interim periods may not be indicative of
the results for the full year.

Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles ("GAAP") have been condensed or omitted. It is suggested that these
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Form 10-K for the year ended
December 31, 1998.

The preparation of financial statements in conformity with GAAP requires the
Manager to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at 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.

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities". This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It is effective for the Company
beginning with the first quarter of 2001. Because the Company does not currently
utilize derivatives or engage in hedging activities, management does not
anticipate that implementation of this statement will have a material effect on
the Company's financial statements.

Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 presentation.


                                       9
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

NOTE 2 - First Mortgage Bonds ("FMBs")

As of September 30, 1999, the Company and its consolidated subsidiaries owned 66
FMBs (28 participating FMBs and 38 non-participating FMBs). Two of the FMBs are
taxable FMBs acquired in connection with the purchase of tax-exempt FMBs. The
taxable FMBs are secured by the same Underlying Properties which secure the
associated tax-exempt FMBs. The following table provides certain information
with respect to each of the FMBs.

<TABLE>
<CAPTION>
                                                                      Stated
                                                         Closing     Interest                                Face Amount
Property                            Location               Date        Rate      Call Date   Maturity Date      of FMB
--------                            --------             --------    --------    ---------   -------------  -------------
<S>                                 <C>                  <C>          <C>        <C>           <C>          <C>
Tax-Exempt First Mortgage Bonds

Owned by the Company (not including its consolidated subsidiaries)

Greenbriar (M)(P)                   Concord, CA          5/6/99       6.875      May 2017      May 2036     $   9,585,000
Highpointe Club (K)(N)              Harrisburg, PA       7/29/86      8.50       June 1998     June 2006        8,900,000
                                                                                                            -------------
                                                                                                               18,485,000
                                                                                                            -------------
Owned by Charter Mac Equity Issuer Trust (H)
Casa Ramon (P)                      Orange County, CA    6/8/99       7.50%      Oct. 2015     Sep. 2035           50,000(Q)
Chapel Ridge of Little Rock         Little Rock, AR      8/12/99      7.125      Aug. 2015     Aug. 2039        5,600,000
   (O)(S)
Chapel Ridge of Texarkana           Texarkana, AR        9/29/99      7.375      Oct. 2016     Sept. 2041       5,800,000
   (O)(S)
Del Monte Pines (R)(P)              Fresno, CA           5/6/99       6.80       May 2017      May 2036        11,000,000
Douglas Pointe(O)(S)                Miami, FL            9/28/99      7.00       Oct. 2026     Sept. 2041       7,100,000
Forest Hills (R)(P)                 Garner, NC           12/15/98     7.125      June 2016     June 2034        5,930,000
Franciscan Riviera (P)              Antioch, CA          8/24/99      7.125      Apr. 2016     Aug. 2036        6,587,500
Garfield Park (P)                   Washington, DC       8/31/99      7.25       Aug. 2017     Aug. 2031        3,260,000
Hamilton Gardens (R)(P)             Hamilton, NJ         3/26/99      (U)        Apr. 2015     Mar. 2035        6,400,000
Lake Jackson (R)(O)(S)              Lake Jackson, TX     12/22/98     7.00       Jan. 2018     Jan. 2041       10,934,000
Lake Park (P)                       Turlock, CA          6/8/99 (T)   7.25       Oct. 2015     Sep. 2035        3,638,000
Lakes Edge At Walden (P)            Miami, FL            7/1/99       6.90       June 2016     May 2035        14,850,000
Lennox Park (O)(S)                  Gainesville, GA      7/29/99      6.80       Aug. 2021     July 2041       13,000,000
Lewis Place (O)(S)                  Gainsville, FL       6/22/99      (I)        June 2016     June 2041        4,000,000
Mountain Ranch (R)(O)               Austin, TX           12/23/98     7.125      Jan. 2018     Jan. 2041        9,128,000
Players Club (M)(K)                 Ft. Myers, FL        8/14/87      8.00       Aug. 1999     Aug. 2007        9,700,000
Standiford (P)                      Modesto, CA          9/20/99      7.125      Apr. 2016     Aug. 2036        9,520,000
Sunset Creek (M)(K)(N)              Lancaster, CA        3/25/88      8.50       Mar. 2000     Mar. 2008        8,275,000
Sunset Village (M)(K)(N)            Lancaster, CA        3/25/88      8.50       Mar. 2000     Mar. 2008       11,375,000
Suntree (M)(K)                      Ft. Myers, FL        7/31/87      8.00       Jul. 1999     Jul. 2007        7,500,000
Sycamore Woods (R)(P)               Antioch, CA          5/6/99       6.875      May 2017      May 2036         9,415,000
Tallwood (O)(S)                     Virginia Beach, VA   9/30/99      7.25       Nov. 2017     Oct. 2041        6,205,000
                                                                                                            -------------
                                                                                                              169,267,500
                                                                                                            -------------

<CAPTION>
                                                     Fair Value
                                                    at September
Property                                            30, 1999 (A)
--------                                            ------------
<S>                                                 <C>
Tax-Exempt First Mortgage Bonds

Owned by the Company (not including its consolidated subsidiaries)

Greenbriar (M)(P)                                   $  9,585,000
Highpointe Club (K)(N)                                 5,888,000
                                                    ------------
                                                      15,473,000
                                                    ------------
Owned by Charter Mac Equity Issuer Trust (H)
Casa Ramon (P)                                            50,000
Chapel Ridge of Little Rock                            5,600,000
   (O)(S)
Chapel Ridge of Texarkana                              5,800,000
   (O)(S)
Del Monte Pines (R)(P)                                11,000,000
Douglas Pointe(O)(S)                                   7,100,000
Forest Hills (R)(P)                                    5,930,000
Franciscan Riviera (P)                                 6,587,500
Garfield Park (P)                                      3,260,000
Hamilton Gardens (R)(P)                                6,400,000
Lake Jackson (R)(O)(S)                                10,934,000
Lake Park (P)                                          3,638,000
Lakes Edge At Walden (P)                              14,850,000
Lennox Park (O)(S)                                    13,000,000
Lewis Place (O)(S)                                     4,000,000
Mountain Ranch (R)(O)                                  9,128,000
Players Club (M)(K)                                    8,704,000
Standiford (P)                                         9,520,000
Sunset Creek (M)(K)(N)                                 6,381,000
Sunset Village (M)(K)(N)                               8,771,000
Suntree (M)(K)                                         7,586,000
Sycamore Woods (R)(P)                                  9,415,000
Tallwood (O)(S)                                        6,205,000
                                                   -------------
                                                     163,859,500
                                                   -------------
</TABLE>


                                       10
<PAGE>

                   CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                     NOTES CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

NOTE 2 - First Mortgage Bonds ("FMBs") (continued)

<TABLE>
<CAPTION>
                                                                      Stated
                                                         Closing     Interest                                Face Amount
Property                            Location               Date        Rate      Call Date   Maturity Date      of FMB
--------                            --------             --------    --------    ---------   -------------  -------------
<S>                                 <C>                  <C>          <C>        <C>           <C>          <C>
Owned by Charter Mac Origination Trust I (H)(L)

Bay Club (K)                        Mt. Pleasant, SC     9/11/86      8.25       Sep. 2000     Sep. 2006        6,400,000
Cedar Creek (K)(N)                  McKinney, TX         12/29/86     8.50       Dec. 1998     Dec. 2006        8,100,000
Clarendon Hills (K)                 Hayward, CA          12/08/86     5.52       Dec. 2003     Dec. 2003       17,600,000
Cypress Run (K)(N)                  Tampa, FL            8/14/86      8.50       Aug. 1998     Aug. 2006       15,402,428
East Ridge (K)                      Mt. Pleasant, SC     5/20/86      8.25       Mar. 2000     May 2010         8,700,000
Greenway Manor (K)(N)               St. Louis, MO        10/09/86     8.50       Oct. 1998     Sept. 2006      12,850,000
The Lakes (K)                       Kansas City, MO      12/30/86     4.87       Dec. 2006     Dec. 2006       13,650,000
Loveridge (K)(N)                    Contra Costa, CA     11/13/86     8.00       Nov. 1998     Nov. 2006        8,550,000
The Mansion                         Independence, MO     5/13/86      7.25       Jan. 2011     April 2025      19,450,000
Martin's Creek (K)                  Summerville, SC      5/20/86      8.25       Mar. 2000     May 2010         7,300,000
Pelican Cove (K)(N)                 St Louis, MO         2/27/87      8.00       Feb. 1999     Feb. 2007       18,000,000
Sunset Downs (K)(N)                 Lancaster, CA        2/11/87      8.00       May 1999      May 2007        15,000,000
Sunset Terrace (K)(N)               Lancaster, CA        2/12/87      8.00       Feb. 1999     May 2007        10,350,000
                                                                                                             ------------
                                                                                                              161,352,428
                                                                                                             ------------

<CAPTION>
                                      Fair Value
                                     at September
Property                             30, 1999 (A)
--------                             ------------
<S>                                  <C>
Owned by Charter Mac Origination Trust I (H)(L)

Bay Club (K)                            7,422,841
Cedar Creek (K)(N)                      9,653,000
Clarendon Hills (K)                    13,880,000
Cypress Run (K)(N)                     13,067,000
East Ridge (K)                         10,063,000
Greenway Manor (K)(N)                  15,313,000
The Lakes (K)                          10,024,000
Loveridge (K)(N)                        6,593,000
The Mansion                            20,084,000
Martin's Creek (K)                      8,443,000
Pelican Cove (K)(N)                    20,189,000
Sunset Downs (K)(N)                    11,566,000
Sunset Terrace (K)(N)                   7,981,000
                                    -------------
                                      154,278,841
                                    -------------
</TABLE>


                                       11
<PAGE>

                   CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                     NOTES CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

NOTE 2 - First Mortgage Bonds ("FMBs") (continued)

<TABLE>
<CAPTION>
                                                                      Stated
                                                         Closing     Interest                                Face Amount
Property                            Location               Date        Rate      Call Date   Maturity Date      of FMB
--------                            --------             --------    --------    ---------   -------------  -------------
<S>                                 <C>                  <C>          <C>        <C>           <C>          <C>
Owned by Charter Mac Owner Trust I (J) (H)

Bedford Square (P)                  Clovis, CA           8/25/98      (D)        Sep. 2017     Aug. 2040        3,850,000
Bristol Village                     Bloomington, MN      7/31/87      7.50       Jan. 2010     Dec. 2027       17,000,000
Carrington Pointe (O)(S)            Los Banos, CA        9/24/98      6.375      Oct. 2017     Sep. 2040        3,375,000
Cedarbrook                          Hanford, CA          4/28/98      7.125      May 2017      May 2040         2,840,000
Cedar Pointe (K)                    Nashville, TN        4/22/87      7.00       Apr. 2006     Apr. 2017        9,500,000
College Park (O)(S)                 Naples, FL           7/15/98      (C)        Jul. 2025     Jul. 2040       10,100,000
Crowne Pointe (K)                   Olympia, WA          12/31/86     7.25       Dec. 1998     Aug. 2029        5,075,000
Falcon Creek (O)(S)                 Indianapolis, IN     9/14/98      (F)        Sep. 2016     Aug. 2038        6,144,600
Gulfstream (P)                      Dania, FL            7/22/98      7.25       Apr. 2016     Jul. 2038        3,500,000
Highland Ridge (K)                  St. Paul, MN         2/02/87      7.25       June 2010     June 2018       15,000,000
Jubilee Courtyards (O)(S)           Florida City, FL     9/15/98      (G)        Oct. 2025     Sep. 2040        4,150,000
Lakepoint (K)                       Dekalb City, GA      11/18/87     6.00       Jul. 2005     June 2017       15,100,000
Madalyn Landing (O)(S)              Palm Bay, FL         11/13/98     7.00       Dec. 2017     Nov. 2040       14,000,000
Marsh Landings (P)(S)               Portsmouth, VA       5/20/98      7.25       Jul. 2017     Jul. 2030        6,050,000
Newport Village (K)                 Tacoma, WA           2/11/87      7.25       Jan. 1999     Aug. 2029       13,000,000
North Glen (K)                      Atlanta, GA          9/30/86      7.00       Jul. 2005     June 2017       12,400,000
Northpointe Village (P)             Fresno, CA           8/25/98      (E)        Sep. 2017     Aug. 2040       13,250,000
Ocean Air (P)(S)                    Norfolk, VA          4/20/98      7.25       Jan. 2016     Nov. 2030       10,000,000
Orchard Hills (K)                   Tacoma, WA           12/31/86     7.25       Dec. 1998     Aug. 2029        5,650,000
Orchard Mill (K)                    Atlanta, GA          12/31/86     7.50       Jul. 2005     June 2017       10,500,000
Phoenix (O)(S)                      Stockton, CA         4/28/98      7.125      Nov. 2016     Oct. 2029        3,250,000
River Run (K)                       Miami, FL            8/7/87       8.00       Aug. 1999     Aug. 2007        7,200,000
Shannon Lake (K)                    Atlanta, GA          6/26/87      (B)        Jul. 2005     June 2017       12,000,000
Silvercrest                         Clovis, CA           9/24/98      7.125      Oct. 2017     Sep. 2040        2,275,000
Stone Creek (O)(S)                  Watsonville, CA      4/28/98      7.125      May 2017      Apr. 2040        8,820,000
Thomas Lake                         Eagan, MN            9/02/86      7.50       Jan. 2010     Dec. 2027       12,975,000
Willow Creek (K)                    Ames, IA             2/27/87      7.25       Jan. 2010    June  2022        6,100,000
                                                                                                            -------------
                                                                                                              233,104,600
                                                                                                            -------------
Subtotal - Tax-Exempt First Mortgage Bonds                                                                    582,209,528
                                                                                                            -------------

<CAPTION>
                                                Fair Value
                                               at September
Property                                       30, 1999 (A)
--------                                       ------------
<S>                                            <C>
Owned by Charter Mac
Owner Trust I (J) (H)

Bedford Square (P)                                3,850,000
Bristol Village                                  17,875,000
Carrington Pointe (O)(S)                          3,375,000
Cedarbrook                                        2,840,000
Cedar Pointe (K)                                  9,323,000
College Park (O)(S)                              10,100,000
Crowne Pointe (K)                                 5,158,000
Falcon Creek (O)(S)                               6,144,600
Gulfstream (P)                                    3,500,000
Highland Ridge (K)                               15,247,000
Jubilee Courtyards (O)(S)                         4,150,000
Lakepoint (K)                                    12,702,000
Madalyn Landing (O)(S)                           14,000,000
Marsh Landings (P)(S)                             6,050,000
Newport Village (K)                              13,214,000
North Glen (K)                                   12,914,000
Northpointe Village (P)                          13,250,000
Ocean Air (P)(S)                                 10,000,000
Orchard Hills (K)                                 5,743,000
Orchard Mill (K)                                 10,252,000
Phoenix (O)(S)                                    3,250,000
River Run (K)                                     8,075,000
Shannon Lake (K)                                 11,536,000
Silvercrest                                       2,275,000
Stone Creek (O)(S)                                8,820,000
Thomas Lake                                      13,643,000
Willow Creek (K)                                  6,200,000
                                              -------------
                                                233,486,600
                                              -------------
Subtotal - Tax-Exempt First Mortgage Bonds      567,097,941
                                              -------------
</TABLE>


                                       12
<PAGE>

                   CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                     NOTES CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

NOTE 2 - First Mortgage Bonds ("FMBs") (continued)

<TABLE>
<CAPTION>
                                                                      Stated
                                                         Closing     Interest                                Face Amount
Property                            Location               Date        Rate      Call Date   Maturity Date      of FMB
--------                            --------             --------    --------    ---------   -------------  -------------
<S>                                 <C>                  <C>          <C>        <C>           <C>          <C>
Taxable First Mortgage Bonds

Owned by the Company (not including its consolidated subsidiaries)

Greenbriar (P)                      Concord, CA          5/6/99       9.00%      May 2017      May 2036         2,015,000
Lake Park (P)                       Turlock, CA          7/15/99      9.00       Oct. 2015     Sep. 2035          375,000
                                                                                                            -------------

Subtotal - Taxable First Mortgage Bonds                                                                         2,390,000
                                                                                                            -------------
  Total First Mortgage Bonds                                                                                $ 584,599,528
                                                                                                            =============

<CAPTION>
                                                Fair Value
                                               at September
Property                                       30, 1999 (A)
--------                                       ------------
<S>                                            <C>
Taxable First Mortgage Bonds

Owned by the Company (not
including its consolidated
subsidiaries)

Greenbriar (P)                                     2,015,000
Lake Park (P)                                        375,000
                                               -------------

Subtotal - Taxable First Mortgage Bonds            2,390,000
                                               -------------

  Total First Mortgage Bonds                   $ 569,487,941
                                               =============
</TABLE>

(A)   The FMBs are deemed to be available-for-sale debt securities and,
      accordingly, are carried at their estimated fair values at September 30,
      1999.
(B)   Pursuant to a bond modification as of October 1, 1997, the base interest
      rate was lowered to 6% through July 31, 2000 and 7% thereafter.
(C)   The interest rates for College Park are 7% during the construction period
      and 7.25% thereafter.
(D)   The interest rates for Bedford Square are 7% during the construction
      period and 6.375% thereafter.
(E)   The interest rates for Northpointe Village are 7.965% through September
      23, 1998, 8.125% during the remainder of the construction period and 7.5%
      thereafter.
(F)   The interest rates for Falcon Creek are 7% through August 31, 2000 and
      7.25% thereafter.
(G)   The interest rates for Jubilee Courtyards are 7% through September 30,
      2000 and 7.125% thereafter.
(H)   This entity is a consolidated subsidiary of the Company (see Notes 6 and
      7).
(I)   The interest rates for Lewis Place are 6.75% through May 31, 2001 and
      7.00% thereafter.
(J)   These FMBs have been transferred to Charter Mac Owner Trust I in
      connection with the Company's Private Label Tender Option Program (TOP)
      (see Note 6).
(K)   These FMBs are participating FMBs which contain additional interest
      features contingent on available cash flow.
(L)   The FMBs are held as collateral in connection with the TOP (see Note 6).
(M)   These FMBs were pledged as collateral at June 30, 1999 in connection with
      the Merrill Lynch RITES/P-FLOATS Program (see Note 3).
(N)   The original owners of the Underlying Properties and the obligors of these
      FMBs have been replaced with affiliates of the Manager.
(O)   The Underlying Property is under construction. In the event construction
      is not completed in a timely manner, the owner of the FMB may "put" the
      FMB to the construction lender at par.
(P)   The Underlying Property is undergoing substantial rehabilitation. In the
      event rehabilitation is not completed in a timely manner, the owner of the
      FMB may "put" the FMB to the construction lender at par.
(Q)   Initial advance on an FMB which will have a face amount of $4,744,000 when
      it is fully funded. The balance of $4,694,000 is expected to be funded in
      January 2000.
(R)   Held by Merrill Lynch as collateral for secured borrowings (see Note 3).
(S)   All of the "puts" (see (O) and (P) above) are secured by a letter of
      credit issued by the construction lender to the Company.
(T)   Initial advance in the amount of $50,000 was funded on June 8, 1999. The
      balance was funded on July 15, 1999.
(U)   The interest rates for Hamilton Gardens are 7.625% during the construction
      period and 7.125% thereafter.


                                       13
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

NOTE 2 - First Mortgage Bonds ("FMBs") (continued)

The weighted average interest rates recognized on the face amount of the
portfolio of FMBs for the three and nine months ended September 30, 1999 and
1998 were 7.39% and 7.04% and 7.04% and 6.91%, respectively, based on weighted
average face amounts of approximately $549,704,072 and $404,990,777 and
$506,636,405 and $377,983,629, respectively.

The Company accounts for its investments in the FMBs as available-for-sale debt
securities under the provisions of Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities"
("SFAS 115"). Accordingly, the FMBs are carried at their estimated fair values,
with unrealized gains and losses reported in other comprehensive income.

Because the FMBs are not readily marketable, the Company estimates fair value
for each bond as the present value of its expected cash flows using a discount
rate for comparable tax-exempt investments. This process is based upon
projections of future economic events affecting the real estate collateralizing
the bonds, such as property occupancy rates, rental rates, operating cost
inflation, market capitalization rates and upon determination of an appropriate
market rate of interest, all of which are based on good faith estimates and
assumptions developed by the Manager. Changes in market conditions and
circumstances may occur which would cause these estimates and assumptions to
change; therefore, actual results may vary from the estimates and the variance
may be material.

The original obligors and owners of the Underlying Properties of the Cedar
Creek, Cypress Run, Highpointe, Greenway Manor, Sunset Terrace, Pelican Cove,
Loveridge, Sunset Downs, Sunset Creek and Sunset Village FMBs have been replaced
with affiliates of the Manager who have not made equity investments. These
entities have assumed the day-to-day responsibilities and obligations of the
Underlying Properties. Buyers are being sought who would make equity investments
in the Underlying Properties and assume the nonrecourse obligations for the FMB.
These properties are generally paying as interest an amount equal to the net
cash flow generated by operations, which in some cases is less than the stated
rate of the FMB. The Company has no present intention of declaring a default on
these FMBs. The aggregate carrying value of these 10 FMBs at September 30, 1999
and December 31, 1998 was approximately $105,402,000 and the income earned from
them for the three and nine months ended September 30, 1999 and 1998 was
approximately $1,884,000 and $1,896,000 and $5,528,000 and $5,421,000,
respectively.

From time to time, the Company enters into forbearance agreements and/or
permanent modifications with certain borrowers. The determination as to whether
it is in the best interest of the Company to enter into permanent modifications
or forbearance agreements on the FMBs, advance second mortgages, or
alternatively, to pursue its remedies under the loan documents, including
foreclosure, is based upon several factors. These factors include, but are not
limited to, Underlying Property performance, owner cooperation and projected
costs of foreclosure and litigation. Payments under each of the existing
forbearance agreements are current as of September 30, 1999.

Effective September 8, 1999, the Crowne Pointe, Orchard Hills and Newport
Village FMBs were modified to reflect: (i) a change in stated interest rate
(from 8.0% to 7.25%); (ii) allow for a por-


                                       14
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

tion of deferred base (Newport) and other accrued interest through August 1999
to be paid at maturity or upon a sale or refinancing; and (iii) extend the
maturity (to 2029) mandatory redemption (to 2011) and prepayment lock-out dates
(to 2006). The contingent interest feature of the bonds was also modified.
Although these modifications reduced the estimated fair value of the FMBs by
approximately $2,495,000 each FMB's estimated fair value continues to exceed its
amortized cost basis. The Company currently anticipates that it will modify
other FMBs from time to time to generally reflect similar terms as those
modified previously, where and as appropriate.

Certain of the Company's other FMBs have been previously modified. These
modifications have generally encompassed an extension of the maturity together
with a prepayment lock out feature and/or prepayment penalties together with an
extension of the mandatory redemption feature (5-10 years from modification).
Stated interest rates have also been adjusted together with a change in the
participation and contingent interest features. Base interest rates, contingent
interest, prepayment lock-outs, mandatory redemption and maturity features vary
dependent on the facts of a particular FMB, the developer, the Underlying
Property's performance and requirements of bond counsel and local issuers.

In addition to the stated base rates of interest, 28 of the FMBs provide for
"contingent interest". During the nine months ended September 30, 1999 and 1998,
five and six FMBs paid contingent interest amounting to approximately $595,000
and $541,000, respectively.

With respect to the FMBs which are subject to forbearance agreements with the
respective obligors, the difference between the stated interest rates and the
rates paid (whether deferred and payable out of available future cash flow or,
ultimately, from sale or refinancing proceeds) on FMBs is not accrued for
financial statement purposes. The accrual of interest at the stated interest
rate will resume once an Underlying Property's ability to pay the stated rate
has been adequately demonstrated. Unrecorded contractual interest income was
approximately $1,859,000 and $2,333,000 for the nine months ended September 30,
1999 and 1998, respectively.

From time to time the Company has advanced funds to owners of certain Underlying
Properties in order to preserve the underlying asset including completion of
construction and/or when Underlying Properties have experienced operating
difficulties including past due real estate taxes and/or deferred maintenance
items. Such advances typically are secured by promissory notes and/or second
mortgages. As of September 30, 1999, the face amount of such advances was
$12,963,651, and their carrying value was $7,772,767, which is net of purchase
accounting adjustments, and a reserve for collectibility of $138,000.

On January 4, 1999, the obligor of the Countryside North FMB (the "Countryside
North Obligor") completed a refinancing with an unaffiliated third party. The
Countryside North Obligor then fully repaid its outstanding debt due to the
Company totaling $5,135,417 including the FMB in the amount of $5,000,000, a
$100,000 prepayment penalty and accrued interest due through the repayment date
of $35,417 resulting in a loss on the repayment (including the prepayment
penalty and the write off of bond selection fees and expenses) in the amount of
$25,493 which is included in general and administrative expenses.


                                       15
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

The amortized cost basis of the Company's portfolio of 66 FMBs at September 30,
1999 and 49 FMBs at December 31, 1998 was $557,022,750 and $443,602,409,
respectively. The net unrealized gain on FMBs in the amount of $12,465,191 at
September 30, 1999 consisted of gross unrealized gains and losses of $19,661,064
and $7,195,873, respectively. The net unrealized gain on FMBs in the amount of
$15,060,191 at December 31, 1998 consisted of gross unrealized gains and losses
of $22,256,064 and $7,195,873, respectively.

NOTE 3 - Securitization Transactions

To raise additional capital to acquire additional FMBs, the Company has
securitized certain FMBs through the Merrill Lynch Pierce Fenner & Smith
Incorporated ("Merrill Lynch") P-FLOATS/RITES program. Under this program, the
Company transfers certain FMBs to Merrill Lynch. Merrill Lynch then deposits
each FMB into an individual special purpose trust created to hold such asset,
together with a Credit Enhancement Guarantee ("Guarantee"). Two types of
securities are then issued by each trust, evidencing ownership in the FMBs and
the Guarantee: (1) Puttable Floating Option Tax-Exempt Receipts ("P-FLOATS"), a
short-term senior security which bears interest at a floating rate that is reset
weekly by the Remarketing Agent, Merrill Lynch, to result in the sale of the
P-FLOAT security at par (up to 99% of the underlying face amount of the FMB);
and (2) Residual Interest Tax Exempt Securities ("RITES), a subordinate security
which receives the residual interest payment after payment of P-FLOAT interest
and ongoing transaction fees. The P-FLOATS are sold to qualified third party,
tax-exempt investors and the RITES are sold back to the Company. The Company has
the right, with 14 days notice to the trustee, to purchase the outstanding
P-FLOATS and withdraw the underlying FMBs from the trust. When the FMBs are
deposited into the P-FLOAT Trust, the Company receives the proceeds from the
sale of the P-FLOATS less certain transaction costs. In certain other cases,
Merrill Lynch may directly buy the FMBs from local issuers, deposit them in the
trust, sell the P-FLOAT security to qualified investors and then the RITES to
the Company.

For financial reporting purposes, due to the repurchase right, the Company
accounts for the net proceeds received upon the transfer of its FMBs to Merrill
Lynch through the P-FLOATS/RITES program as secured borrowings and, accordingly,
continues to account for the FMBs as its assets in the accompanying consolidated
balance sheets. When Merrill Lynch purchases FMBs directly and sells the RITES
to the Company, such RITES are classified as other bond related investments in
the accompanying consolidated balance sheets (See Note 4).

In order to facilitate the securitization, the Company has pledged certain
additional FMBs, cash and cash equivalents and temporary investments as
collateral for the benefit of the credit enhancer or liquidity provider. At
September 30, 1999, the total carrying amount of such additional FMBs, cash and
cash equivalents and temporary investments pledged as collateral was
$41,027,000, $870,154 and $29,211,000, respectively.

During May and June 1999, the Company transferred six FMBs with an aggregate
face amount of $52,807,000 to Merrill Lynch through the Merrill Lynch
P-FLOATS/RITES program and received proceeds of $52,807,000.

During June 1999, Merrill Lynch purchased three FMBs with an aggregate face
amount of $22,430,000. The FMBs were placed into a trust by Merrill Lynch
whereby P-FLOATS and


                                       16
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

RITES were sold. The Company purchased the related RITES interests with an
aggregate face amount of $15,000 for an aggregate purchase price of $540,178
which includes bond selection fees and other transaction costs.

NOTE 4 - Other Bond Related Investments

The Company's other bond related investments consist of investment in RITES (see
Note 3). The Company accounts for its investments in RITES as available-for-sale
debt securities under the provisions of SFAS 115. Accordingly, the RITES are
carried at their estimated fair values, with unrealized gains and losses
reported in other comprehensive income, while other than temporary impairments
are recorded in operations. Interest income is recognized as it accrues. The
fair value of the RITES, which have a limited market, is estimated by
management, utilizing quotes from external sources, such as brokers, for these
or similar investments, as necessary. The following table provides certain
information with respect to each of the RITES.

<TABLE>
<CAPTION>
                                                           Face
                                                           Amount       Amortized        Fair
                                                          of RITES    Cost Basis at    Value at
FMB                          Date       Face Amount       Interest      September     September
Description/Location       Purchased       of FMB        Purchased       30, 1999      30, 1999
--------------------       ---------   ------------      ---------    -------------   ---------
<S>                        <C>         <C>                <C>           <C>           <C>
Owned by the Company (not including its consolidated subsidiaries)

RITES-Avalon Court/
  Oakley, CA               6/17/99     $  8,240,000       $ 5,000       $197,616      $200,000
RITES-Meadowview Park/
  Santa Rosa, CA           6/17/99        6,250,000         5,000        151,846       160,000
RITES-The Courtyards/
  Santa Rosa, CA           6/17/99        7,940,000         5,000        190,716       200,000
                                       ------------       -------       --------      --------
                                       $ 22,430,000       $15,000       $540,178      $560,000
                                       ============       =======       ========      ========
</TABLE>


                                       17
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

NOTE 5 - Deferred Costs

The components of deferred costs are as follows:

<TABLE>
<CAPTION>
                                                       September 30,    December 31,
                                                           1999             1998
                                                       -------------    ------------
<S>                                                    <C>              <C>
Deferred bond selection costs                          $   8,957,115    $  6,355,252
Deferred costs relating to the Private Label Tender
  Option Program                                           3,415,127       3,054,995
Deferred costs relating to the issuance of preferred
  shares of subsidiary                                     3,604,878               0
                                                       -------------    ------------
                                                          15,977,120       9,410,247

Less:  Accumulated amortization                           (2,942,234)     (2,404,282)
                                                       -------------    ------------

                                                       $  13,034,886    $  7,005,965
                                                       =============    ============
</TABLE>

NOTE 6 - Minority Interest In Subsidiary

On May 21, 1998, the Company closed on its Private Label Tender Option Program
("TOP") in order to raise additional capital to acquire additional FMBs. As of
March 31, 1999, the maximum amount of capital which could be raised under the
TOP ($150,000,000) had been raised. In April 1999, the Company successfully
negotiated an increase in its TOP to $200,000,000. As of September 30, 1999, the
Company has contributed 40 issues of FMBs in the aggregate principal amount of
approximately $394,457,000 to Charter Mac Origination Trust I (the "Origination
Trust"), a wholly-owned, indirect subsidiary of the Company, which has
contributed 27 of those FMBs, with an aggregate principal amount of
approximately $233,105,000, to Charter Mac Owner Trust I (the "Owner Trust").
The Owner Trust has issued two equity certificates: (i) a Senior Certificate,
with an outstanding face amount of $157,000,000 at September 30, 1999, which has
been deposited into another Delaware business trust (the "Certificate Trust")
which issued and sold Floater Certificates representing proportional interests
in the Senior Certificate to new investors and (ii) a Residual Certificate
representing the remaining beneficial ownership interest in the Owner Trust,
which has been issued to the Origination Trust. The FMBs remaining in the
Origination Trust (aggregate principal amount of approximately $161,352,000) are
a collateral pool for the Owner Trust's obligations under the Senior
Certificate. In addition, the Owner Trust obtained a municipal bond insurance
policy from MBIA to credit enhance Certificate distributions for the benefit of
the holders of the Floater Certificates and has also arranged for a liquidity
facility, issued by a consortium of highly rated European banks, with respect to
the Floater Certificates.

The effect of the TOP structure is that a portion of the interest received by
the Owner Trust on the FMBs it holds is distributed through the Senior
Certificate to the holders of the Floater Certificates in an amount determined
each week by the remarketing agent, Goldman Sachs & Co., at the distribution
amount that is required to enable the remarketing agent to sell the Floater
Certificates at par on any weekly determination date, with the residual interest
remitted to the Origination Trust via the Residual Certificate.


                                       18
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

For financial accounting and reporting purposes, the equity in the Owner Trust
represented by the Senior Certificate is classified as "minority interest in
subsidiary (subject to mandatory redemption)" in the accompanying consolidated
balance sheets. Income earned by the Owner Trust is allocated to the minority
interest in an amount equal to the distributions through the Senior Certificate
to the holders of the Floater Certificates. Such allocation of income is
classified as "minority interest in income of subsidiary" in the accompanying
consolidated statements of income. Deferred costs relating to the TOP are being
amortized using the straight line method over 10 years, which approximates the
average remaining term to maturity of the FMBs contributed to the Owner Trust.

The Company's cost of funds relating to the TOP (calculated as income allocated
to the minority interest plus current fees as a percentage of the weighted
average amount of the outstanding Senior Certificate) was approximately 4.3% for
the period January 1, 1999 through September 30, 1999.

NOTE 7 - Preferred Shares of Subsidiary

On June 29, 1999 a subsidiary of the Company completed a $90 million tax exempt
preferred equity offering (the "Preferred Offering") comprising 45 shares
("Series A Cumulative Preferred Shares") which were purchased by Merrill Lynch,
Legg Mason Wood Walker, Inc. and McDonald Investments, Inc. (the "Initial
Purchasers"). The Initial Purchasers then sold the Series A Cumulative Preferred
Shares to qualified institutional investors.

In connection with this transaction, the Company caused 100% of the ownership of
the Origination Trust to be transferred to Charter Mac Equity Issuer Trust (the
"Issuer"), a newly formed Delaware business trust and an indirectly owned
subsidiary in which the Company owns 100% of the common equity. The Issuer then
issued the Series A Cumulative Preferred Shares. As a result of such
transaction, the Issuer became the direct and indirect owner of the entire
outstanding issue of 40 FMBs held by the Origination Trust and Owner Trust, its
two directly and indirectly-owned subsidiaries (see Note 6). In addition to
contributing the ownership of the Origination Trust, the Company also
contributed eight FMBs to the Issuer. As of the closing, the aggregate par value
of FMBs held directly or indirectly by the Issuer or its subsidiaries was
$463,699,028. Net proceeds of approximately $86,400,000 from the Preferred
Offering have been and are being used to acquire and originate additional tax
exempt assets for the Issuer. In the future, other FMBs, RITES or other directly
or indirectly owned investments of the Company or its subsidiaries may be
contributed to the Issuer.

The Series A Cumulative Preferred Shares have an annual preferred dividend rate
of 6 5/8% through June 30, 2009, payable quarterly in arrears on January 31,
April 30, July 31 and October 31 of each year, commencing October 31, 1999 and
payable upon declaration thereof by the Issuer's Board of Trustees, but only to
the extent of the Issuer's tax-exempt income (net of expenses) for the
particular quarter ("Quarterly Net Income"). The Series A Cumulative Preferred
Shares are subject to mandatory tender by the holders thereof for remarketing
and purchase on June 30, 2009 and each remarketing date thereafter at a price
equal to the $2,000,000 per share plus, to the extent of the Issuer's Quarterly
Net Income, an amount equal to all distributions accrued but unpaid on the
Series A Cumulative Preferred Shares.


                                       19
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

Holders of the Series A Cumulative Preferred Shares may elect to retain their
shares upon a remarketing, with a distribution rate to be determined immediately
prior to the remarketing date by the remarketing agent. Each holder of the
Series A Cumulative Preferred Shares will be required to tender its shares to
the Issuer for mandatory repurchase on June 30, 2049, unless the Issuer decides
to remarket the shares on such date. The Issuer may not redeem the Series A
Cumulative Preferred Shares before June 30, 2009. After that date, all or a
portion of the shares may be redeemed, subject to certain conditions. The Series
A Cumulative Preferred Shares are not convertible into common Shares of the
Issuer or the Company.

The Series A Cumulative Preferred Shares rank, with respect to payment of
distributions and amounts upon liquidation, dissolution or winding-up of the
Issuer, senior to all classes or series of common shares of the Issuer and
therefore, of the Company.

For financial accounting and reporting purposes, the Series A Cumulative
Preferred Shares are classified as "Preferred shares of subsidiary (subject to
mandatory repurchase)" in the accompanying consolidated balance sheets. Net
income earned by the Issuer and its two subsidiaries is allocated to the holders
of the Series A Cumulative Preferred Shares in an amount equal to the
distributions to such holders. Such allocation of income is classified as
"Income allocated to preferred shareholders of subsidiary" in the accompanying
consolidated statements of income. Deferred costs relating to the issuance of
the Series A Cumulative Preferred Shares are included in "Deferred Costs" (see
Note 5) and are being amortized using the straight line method over 50 years
which is the term to the mandatory repurchase in 2049.

NOTE 8 - Capital Shares

Each independent trustee is entitled to receive annual compensation for serving
as a trustee in the aggregate amount of $15,000 payable in cash (maximum of
$5,000 per year) and/or Shares valued based on the fair market value at the date
of issuance. As of September 30, 1999 and December 31, 1998, 955 and 186 Shares,
respectively, having an aggregate value of $12,500 and $2,500, respectively,
have been issued to each independent trustee as compensation for their services.

NOTE 9 - Related Party Transactions

Pursuant to the Management Agreement, the Manager receives (inclusive of fees
paid directly to the Manager by subsidiaries of the Company) (i) bond selection
fees equal to 2% of the principal amount of each FMB or other instrument
acquired or originated by the Company; (ii) special distributions equal to .375%
of the total invested assets of the Company; (iii) loan servicing fees equal to
 .25% of the outstanding principal amount of FMBs held by the Company (not
including its consolidated subsidiaries) and .15% of the outstanding principal
amount of FMBs held by the consolidated subsidiaries of the Company; (iv)
management fees equal to .10% of the total invested assets of the consolidated
subsidiaries of the Company; (v) a liquidation fee based on the gross sales
price of assets sold by the Company in connection with a liquidation of the
Company's assets; and (vi) reimbursement of certain administrative costs
incurred by the Manager and its affiliates on behalf of the Company. Fees
payable to the Manager which are based on FMBs or assets of the Company include
such FMBs or assets which are either held directly by the Company or held by
other entities to whom the Company has trans-


                                       20
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

ferred such FMBs or assets to facilitate financing. In addition, the Manager
receives bond placement fees from the borrower in an amount equal to 1% to 1.5%
of the principal amount of each FMB or other instrument acquired or originated
by the Company, and affiliates of the Manager are part of a joint venture which
has a development services agreement with the obligors of five FMBs.

The costs, expenses and the special distributions incurred to the Manager and
its affiliates for the three and nine months ended September 30, 1999 and 1998
were as follows:

                                 Three Months Ended         Nine Months Ended
                                     September 30,             September 30,
                               -----------------------   -----------------------
                                  1999         1998         1999         1998
                               ----------   ----------   ----------   ----------

Bond selection fees            $1,518,710   $  932,892   $2,817,610   $1,552,092
Expense reimbursement              92,823       94,000      260,873      256,734
Loan servicing fees               218,938      218,746      618,225      654,079
Management fees                   133,362       36,454      328,931       52,699
Special distribution              540,172      382,799    1,434,413    1,060,166
                               ----------   ----------   ----------   ----------
                               $2,504,005   $1,664,891   $5,460,052   $3,575,770
                               ==========   ==========   ==========   ==========

General

The obligors of the Suntree, Players Club, River Run, Ocean Air, Phoenix, Stone
Creek, Cedarbrook, Marsh Landings, Gulfstream, Bedford Square, Northpointe
Village, Falcon Creek, Jubilee Courtyards, Silvercrest, Carrington Pointe,
Madalyn Landing, Forest Hills, Lake Jackson, Mountain Ranch, Hamilton Garden,
Del Monte Pines, Greenbriar, Sycamore Woods, Avalon Court, The Courtyards,
Meadowview Park, Casa Ramon, Lake Park, Lewis Place, Lennox Park, Chapel Ridge
of Little Rock, Franciscan Riviera, Standiford, Douglas Pointe, Chapel Ridge of
Texarkana and Tallwood FMBs are local partnerships in which investment
partnerships, whose general partners are affiliates of the Manager, own a
controlling partnership interest. With respect to three of the above FMBs, the
Company owns the RITES (see Note 4).

As of September 30, 1999, the original owners of the Underlying Properties and
obligors of the Cedar Creek, Cypress Run, Highpointe, Greenway Manor, Sunset
Terrace, Pelican Cove, Loveridge, Sunset Downs, Sunset Creek and Sunset Village
FMBs had been replaced with affiliates of the Manager who have not made equity
investments. These entities have assumed the day-to-day responsibilities and
obligations of the Underlying Properties. Buyers are being sought who would make
equity investments in the Underlying Properties and assume the nonrecourse
obligations for the FMB or otherwise buy the property and payoff all or most of
the FMB obligation.

NOTE 10 - Earnings Per Share

Basic net income per Share in the amount of $.28 and $.25 and $.81 and $.73 for
the three and nine months ended September 30, 1999 and 1998, respectively,
equals net income for the periods ($6,272,069 and $5,505,584 and $18,229,828 and
$16,281,629, respectively), less the special allocations to the Manager
($597,491 and $434,027 and $1,602,367 and $1,212,381, respectively),


                                       21
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

divided by the weighted average number of Shares outstanding for the periods
(20,580,975 and 20,587,837 and 20,580,682 and 20,587,627, respectively).

As the Company had no contingently-issuable Shares or potentially dilutive
securities outstanding at September 30, 1999 and 1998, diluted net income per
share is the same as basic net income per share.

NOTE 11 - Commitments and Contingencies

On November 2, 1999, the Company and American Tax Exempt Bond Trust ("ATEBT"),
whose manager is an affiliate of the Manager of the Company, entered into a
merger agreement pursuant to which ATEBT would merge with and into CM Holding
Trust, a wholly-owned subsidiary of the Company. Following the merger, CM
Holding Trust would continue to be a wholly-owned subsidiary of the Company.

ATEBT is a Delaware business trust which owns four tax-exempt first mortgage
bonds and had total assets of approximately $27,572,000 and net assets of
approximately $26,721,000 at September 30, 1999. The four tax-exempt first
mortgage bonds have an aggregate outstanding loan balance of $23,775,000 at
September 30, 1999, have interest rates of 9% and have underlying properties
located in four different states.

Under the terms of the merger agreement, each share of beneficial ownership in
ATEBT outstanding on the effective date of the proposed merger (1,466,770 shares
at September 30, 1999) will be converted into the right to receive 1.43112
Shares of the Company. In addition, the manager of ATEBT (which owns a 1%
interest in ATEBT not currently represented by ATEBT shares) will receive 21,156
shares of the Company. Following the merger, current ATEBT shareholders will own
approximately 9.3% of the outstanding Shares of the Company.

Consummation of the merger is subject to several conditions, including, without
limitation, approval by ATEBT shareholders. In addition, either entity has the
ability to opt out of the transaction if the 30-day average trading price of the
Company's Shares preceding the closing of the transaction is outside of the
Company's historical trading range of $11.13 to $14.50. Subject to ATEBT
shareholder approval, the Company and ATEBT expect that this transaction will
close during the first quarter of 2000.

The obligor of the Suntree and Players Club FMBs has entered into a contract to
sell the underlying properties to an independent third party. Such sale is
anticipated to occur prior to year end and will result in the redemption of the
FMBs and repayment of mortgage loans securing the bonds. Net proceeds from the
bond redemptions are currently being negotiated but are not anticipated to be
less than the carrying amounts of the FMBs. This sale will also extinguish
promissory note obligations for Players Club and Suntree of approximately
$472,000 and $130,000, respectively.


                                       22
<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (Unaudited)

NOTE 12 - Subsequent Events

During the period October 1, 1999 through November 12, 1999 the Company acquired
two FMBs for a purchase price of $7,655,000, not including bond selection fees
and expenses of approximately $167,000. One of the FMBs is a taxable FMB
acquired in connection with the purchase of a tax-exempt FMB. The taxable FMB is
secured by the same Underlying Property which secures the associated tax-exempt
FMB. Further information regarding the FMBs is as follows:

                                     Stated                      Face     No. of
                        Closing     Interest     Call Date/     Amount    Rental
Property/Location         Date        Rate     Maturity Date    of FMB    Units
-----------------         ----        ----     -------------    ------    -----

Tax-Exempt First Mortgage Bonds

Owned by Charter Mac Equity Issuer Trust

Country Lake            11/10/99      6.0%         7/1/00     $6,255,000   192
  /West Palm Beach, FL                             7/1/00

Taxable First Mortgage Bonds

Owned by the Company (not including its consolidated subsidiaries)

Lakes Edge at Walden    10/7/99      11.0%         6/1/00     $1,400,000   400
  /Miami, FL                                       8/1/10

On November 10, 1999, the Company made a taxable loan in the amount of
$2,540,000 to the obligor of the Country Lake tax-exempt FMB. The taxable loan
is secured by the same Underlying Property which secures the associated
tax-exempt FMB. The loan bears interest at 13.0% and has a call date and
maturity date of July 1, 2000 and June 1, 2027, respectively.


                                       23
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

Liquidity and Capital Resources

Charter Municipal Mortgage Acceptance Company (the "Company") is a Delaware
business trust which is engaged in the acquisition and ownership (either
directly or indirectly) of tax-exempt participating and non-participating First
Mortgage Bonds ("FMBs") issued by various state or local governments or other
agencies or authorities and secured by participating and non-participating
mortgage loans on the underlying properties ("Underlying Properties"). As of
September 30, 1999, the Company owned 66 FMBs and had net assets of
approximately $326,710,000.

The Company was formed by the consolidation (the "Consolidation"), on October 1,
1997, of Summit Tax Exempt Bond Fund, L.P. ("Tax Exempt I"), Summit Tax Exempt
L.P. II ("Tax Exempt II") and Summit Tax Exempt L.P. III ("Tax Exempt III"),
three publicly registered limited partnerships (the "Partnerships"). One of the
general partners of the Partnerships was an affiliate of Related Capital Company
("Related").

In order to generate increased tax exempt income and, as a result, enhance the
value of the Company's Shares, the Company intends to originate and acquire
additional tax-exempt bonds secured by multifamily properties. The Company
believes that it can earn above market rates of interest on its bond
acquisitions by focusing its efforts primarily on affordable housing. The
Manager estimates that nearly 50% of all new multifamily development contains an
affordable component which produces tax credits pursuant to Section 42 of the
Internal Revenue Code. The Company has designed a Direct Purchase Program
specifically designed to appeal to developers of such properties. In general,
these properties are smaller than traditional multifamily housing properties,
averaging 150 units. The traditional method of financing tax-exempt properties
requires the involvement of credit enhancement, rating agencies and investment
bankers. Therefore, the up-front cost of such financing is generally much higher
than traditional multifamily financing. Through its Direct Purchase Program, the
Company will originate and acquire tax-exempt bonds without the cost associated
with credit enhancement, rating agencies and investment bankers. The Company
believes that the up-front cost savings to the developer will translate into a
higher than market interest rate on the bonds acquired by the Company.

The Company is positioned to market its Direct Purchase Program as a result of
the Manager's affiliation with Related. Related and its predecessor companies
have specialized in offering debt and equity products to mid-market multifamily
owners and developers for over 25 years. Related has provided debt and equity
financing to properties valued at over $7.8 billion. In addition, since 1987
Related has been one of the nation's leading providers of equity to developers
of multifamily housing which benefit from tax credits. The Manager's affiliation
with Related has allowed it to become one of the dominant lenders to developers
and owners of affordable housing financed with tax-exempt bonds.

The Company does not operate as a mortgage REIT, which generally utilize high
levels of leverage and acquire subordinated interests in commercial and/or
residential mortgage-backed securities. Rather, the Company utilizes low levels
of leverage and generally originates and acquires long-term, fixed-rate,
tax-exempt FMBs. As a result, the Company did not experience the ill effects
associated with the volatile interest rate environment during 1998.

Pursuant to its Trust Agreement, the Company is only able to incur leverage or
other financing up to 50% of the Company's Total Market Value (as defined in the
Trust Agreement) as of the


                                       24
<PAGE>

date incurred. Mortgage REITs typically incur leverage at ratios ranging from
between 3:1 to 10:1.

Due to the Company's low level of leverage, the Company has not been affected by
the recent lack of liquidity that recently impaired mortgage REITs and its
portfolio does not contain assets that are especially vulnerable to volatility
during periods of interest rate fluctuations. In general, the FMBs that the
Company either originates or acquires call for ten-year restrictions from
prepayments, eliminating the Company's susceptibility to significant levels of
repayment risk as a result of interest rate reductions. Consistent with the
foregoing, the Company focuses on providing investors with a stable level of
distributions, even through unstable markets.

On May 21, 1998, the Company closed on its Private Label Tender Option Program
("TOP") in order to raise additional capital to acquire additional FMBs. As of
March 31, 1999, the maximum amount of capital which could be raised under the
TOP ($150,000,000) had been raised. In April 1999, the Company successfully
negotiated an increase in its TOP to $200,000,000. As of September 30, 1999, the
Company has contributed 40 issues of FMBs in the aggregate principal amount of
approximately $394,457,000 to Charter Mac Origination Trust I (the "Origination
Trust"), a wholly-owned, indirect subsidiary of the Company, which has
contributed 27 of those FMBs, with an aggregate principal amount of
approximately $233,105,000, to Charter Mac Owner Trust I (the "Owner Trust").
The Owner Trust has issued two equity certificates: (i) a Senior Certificate,
with an outstanding face amount of $157,000,000 at September 30, 1999, which has
been deposited into another Delaware business trust (the "Certificate Trust")
which issued and sold Floater Certificates representing proportional interests
in the Senior Certificate to new investors and (ii) a Residual Certificate
representing the remaining beneficial ownership interest in the Owner Trust,
which has been issued to the Origination Trust. The FMBs remaining in the
Origination Trust (aggregate principal amount of approximately $161,352,000) are
a collateral pool for the Owner Trust's obligations under the Senior
Certificate. In addition, the Owner Trust obtained a municipal bond insurance
policy from MBIA to credit enhance Certificate distributions for the benefit of
the holders of the Floater Certificates and has also arranged for a liquidity
facility, issued by a consortium of highly rated European banks, with respect to
the Floater Certificates.

The effect of the TOP structure is that a portion of the interest received by
the Owner Trust on the FMBs it holds is distributed through the Senior
Certificate to the holders of the Floater Certificates in an amount determined
each week by the remarketing agent, Goldman Sachs & Co., at the distribution
amount that is required to enable the remarketing agent to sell the Floater
Certificates at par on any weekly determination date, with the residual interest
remitted to the Origination Trust via the Residual Certificate.

The Company's cost of funds relating to the TOP (calculated as income allocated
to the minority interest plus current fees as a percentage of the weighted
average amount of the outstanding Senior Certificate) was approximately 4.3% for
the period January 1, 1999 through September 30, 1999.

On June 29, 1999 a subsidiary of the Company completed a $90 million tax exempt
preferred equity offering (the "Preferred Offering") comprising 45 shares
("Series A Cumulative Preferred Shares") which were purchased by Merrill Lynch,
Legg Mason Wood Walker, Inc. and McDonald Investments, Inc. (the "Initial
Purchasers"). The Initial Purchasers then sold the Series A Cumulative Preferred
Shares to qualified institutional investors.

In connection with this transaction, the Company caused 100% of the ownership of
the Origination Trust to be transferred to Charter Mac Equity Issuer Trust (the
"Issuer"), a newly formed


                                       25
<PAGE>

Delaware business trust and an indirectly owned subsidiary in which the Company
owns 100% of the common equity. The Issuer then issued the Series A Cumulative
Preferred Shares. As a result of such transaction, the Issuer became the direct
and indirect owner of the entire outstanding issue of 40 FMBs held by the
Origination Trust and Owner Trust, its two directly and indirectly-owned
subsidiaries (see Note 6). In addition to contributing the ownership of the
Origination Trust, the Company also contributed eight FMBs to the Issuer. As of
the closing, the aggregate par value of FMBs held directly or indirectly by the
Issuer or its subsidiaries was $463,699,028. Net proceeds of approximately
$86,400,000 from the Preferred Offering have been and are being used to acquire
and originate additional tax exempt assets for the Issuer. In the future, other
FMBs, RITES or other directly or indirectly owned investments of the Company or
its subsidiaries may be contributed to the Issuer.

The Series A Cumulative Preferred Shares have an annual preferred dividend rate
of 6 5/8% through June 30, 2009, payable quarterly in arrears on January 31,
April 30, July 31 and October 31 of each year, commencing October 31, 1999 and
payable upon declaration thereof by the Issuer's Board of Trustees, but only to
the extent of the Issuer's tax-exempt income (net of expenses) for the
particular quarter ("Quarterly Net Income"). The Series A Cumulative Preferred
Shares are subject to mandatory tender by the holders thereof for remarketing
and purchase on June 30, 2009 and each remarketing date thereafter at a price
equal to the $2,000,000 per share plus, to the extent of the Issuer's Quarterly
Net Income, an amount equal to all distributions accrued but unpaid on the
Series A Cumulative Preferred Shares.

Holders of the Series A Cumulative Preferred Shares may elect to retain their
shares upon a remarketing, with a distribution rate to be determined immediately
prior to the remarketing date by the remarketing agent. Each holder of the
Series A Cumulative Preferred Shares will be required to tender its shares to
the Issuer for mandatory repurchase on June 30, 2049, unless the Issuer decides
to remarket the shares on such date. The Issuer may not redeem the Series A
Cumulative Preferred Shares before June 30, 2009. After that date, all or a
portion of the shares may be redeemed, subject to certain conditions. The Series
A Cumulative Preferred Shares are not convertible into common Shares of the
Issuer or the Company.

The Series A Cumulative Preferred Shares rank, with respect to payment of
distributions and amounts upon liquidation, dissolution or winding-up of the
Issuer, senior to all classes or series of common shares of the Issuer and
therefore, of the Company.

During the period January 1, 1999 through November 12, 1999 the Company acquired
20 FMBs for an aggregate purchase price of approximately $126,056,000, not
including bond selection fees and expenses of approximately $2,642,000. The
purchases were financed by the TOP and the Preferred Offering.

To raise additional capital to acquire additional FMBs, the Company has
securitized certain FMBs through the Merrill Lynch Pierce Fenner & Smith
Incorporated ("Merrill Lynch") P-FLOATS/RITES program. Under this program, the
Company transfers certain FMBs to Merrill Lynch. Merrill Lynch then deposits
each FMB into an individual special purpose trust created to hold such asset,
together with a Credit Enhancement Guarantee ("Guarantee"). Two types of
securities are then issued by each trust, evidencing ownership in the FMBs and
the Guarantee: (1) Puttable Floating Option Tax-Exempt Receipts ("P-FLOATS"), a
short-term senior security which bears interest at a floating rate that is reset
weekly by the Remarketing Agent, Merrill Lynch, to result in the sale of the
P-FLOAT security at par (up to 99% of the underlying face amount of the FMB);
and (2) Residual Interest Tax Exempt Securities ("RITES), a subordinate security
which receives the residual interest payment after payment of P-FLOAT interest
and ongoing transaction fees. The P-FLOATS are sold to qualified third party,
tax-exempt investors


                                       26
<PAGE>

and the RITES are sold back to the Company. The Company has the right, with 14
days notice to the trustee, to purchase the outstanding P-FLOATS and withdraw
the underlying FMBs from the trust. When the FMBs are deposited into the P-FLOAT
Trust, the Company receives the proceeds from the sale of the P-FLOATS less
certain transaction costs. In certain other cases, Merrill Lynch may directly
buy the FMBs from local issuers, deposit them in the trust, sell the P-FLOAT
security to qualified investors and then the RITES to the Company.

In order to facilitate the securitization, the Company has pledged certain
additional FMBs, cash and cash equivalents and temporary investments as
collateral for the benefit of the credit enhancer or liquidity provider. At
September 30, 1999, the total carrying amount of such additional FMBs, cash and
cash equivalents and temporary investments pledged as collateral was
$41,027,000, $870,154 and $29,211,000, respectively.

During May and June 1999, the Company transferred six FMBs with an aggregate
face amount of $52,807,000 to Merrill Lynch through the Merrill Lynch
P-FLOATS/RITES program and received proceeds of $52,807,000.

During June 1999, Merrill Lynch purchased three FMBs with an aggregate face
amount of $22,430,000. The FMBs were placed into a trust by Merrill Lynch
whereby P-FLOATS and RITES were sold. The Company purchased the related RITES
interests with an aggregate face amount of $15,000 for an aggregate purchase
price of $540,178 which includes bond selection fees and other transaction
costs.

On January 4, 1999, the obligor of the Countryside North FMB (the "Countryside
North Obligor") completed a refinancing with an unaffiliated third party. The
Countryside North Obligor then fully repaid its outstanding debt due to the
Company totaling $5,135,417 including the FMB in the amount of $5,000,000, a
$100,000 prepayment penalty and accrued interest due through the repayment date
of $35,417 resulting in a loss on the repayment (including the prepayment
penalty and the write off of bond selection fees and expenses) in the amount of
$25,493 which is included in general and administrative expenses.

During the nine months ended September 30, 1999 cash and cash equivalents of the
Company and its consolidated subsidiaries decreased approximately $4,681,000.
The decrease was primarily due to the purchase of FMBs ($118,401,000), purchase
of other bond related investments ($540,000), increase in deferred bond
selection costs ($2,736,000), the net purchase of temporary investments
($30,711,000), an increase in restricted cash and cash equivalents ($870,000),
an increase in other assets relating to investing activities ($252,000), loans
made to property ($307,000), distributions paid, ($16,233,000), an increase in
deferred costs relating to the Private Label Tender Option Program ($360,000)
and deferred costs relating to the issuance of preferred stock of subsidiary
($3,605,000) which exceeded cash provided by operating activities ($14,262,000),
proceeds from repayment of an FMB ($5,100,000), an increase in minority interest
($7,000,000), proceeds from secured borrowings ($52,807,000), principal payments
received from loans made to properties ($163,000) and the issuance of preferred
stock of subsidiary ($90,000,000). Included in the adjustments to reconcile the
net income to cash provided by operating activities is a loss on repayment of an
FMB ($25,000) and net amortization ($707,000).

The Company's growth will be financed by the TOP or similar programs, the
Preferred Offering, funds generated from operations in excess of distributions
and by placements of equity. The Company has entered into forbearance agreements
on several FMBs and may be required to extend these agreements or enter into new
agreements in the future. Such agreements may adversely impact liquidity;
however, interest payments from FMBs and RITES are anticipated


                                       27
<PAGE>

to provide sufficient liquidity to fund the Company's operating expenditures,
debt service and distributions in future years.

Effective September 8, 1999, the Crowne Pointe, Orchard Hills and Newport
Village FMBs were modified to reflect: (i) a change in stated interest rate
(from 8.0% to 7.25%); (ii) allow for a portion of deferred base (Newport) and
other accrued interest through August 1999 to be paid at maturity or upon a sale
or refinancing; and (iii) extend the maturity (to 2029) mandatory redemption (to
2011) and prepayment lock-out dates (to 2006). The contingent interest feature
of the bonds was also modified. Although these modifications reduced the
estimated fair value of the FMBs by approximately $2,495,000 each FMB's
estimated fair value continues to exceed its amortized cost basis. The Company
currently anticipates that it will modify other FMBs from time to time to
generally reflect similar terms as those modified previously, where and as
appropriate.

As part of the settlement of class action litigation relating to the
Partnerships, counsel ("Class Counsel") for the partners of the Partnerships had
the right to petition the United States District Court for the Southern District
of New York (the "Court") for additional attorneys' fees ("Counsel's Fee
Shares") in an amount to be determined in the Court's sole discretion. The
Counsel's Fee Shares were based upon a percentage (which Class Counsel proposed
to be 25%) of the increase in value of the Company, ("the Added Value") if any,
as of October 1, 1998 based upon the difference between (i) the trading prices
of the Company's shares of beneficial interest during the six month period ended
October 1, 1998 and (ii) the trading prices of the limited partnership units and
the asset values of the Partnerships prior to October 1, 1997. As of October 1,
1998, 25% of the Added Value amounted to $7,788,536 and, in accordance with an
Order and Stipulation of Settlement by the Court on February 18, 1999 (the
"Order"), Class Counsel was entitled to receive 608,955 shares of beneficial
interest in the Company. On April 15, 1999, the Company successfully negotiated
a discounted cash settlement (the "Discounted Cash Settlement") of $6,089,550
with Class Counsel in lieu of the issuance of shares. On April 26, 1999, the
Discounted Cash Settlement was approved by the Board of Trustees and it was paid
on May 3, 1999.

In November 1999, distributions of $1,523,750 ($33,861.11 per share) and
$5,042,342 ($.245 per share), which were declared in September 1999, were paid
to the preferred shareholders of subsidiary and shareholders of the Company,
respectively, from cash flow from operations for the quarter ended September 30,
1999.

On November 2, 1999, the Company and American Tax Exempt Bond Trust ("ATEBT"),
whose manager is an affiliate of the Manager of the Company, entered into a
merger agreement pursuant to which ATEBT would merge with and into CM Holding
Trust, a wholly-owned subsidiary of the Company. Following the merger, CM
Holding Trust would continue to be a wholly-owned subsidiary of the Company.

ATEBT is a Delaware business trust which owns four tax-exempt first mortgage
bonds and had total assets of approximately $27,572,000 and net assets of
approximately $26,721,000 at September 30, 1999. The four tax-exempt first
mortgage bonds have an aggregate outstanding loan balance of $23,775,000 at
September 30, 1999, have interest rates of 9% and have underlying properties
located in four different states.

Under the terms of the merger agreement, each share of beneficial ownership in
ATEBT outstanding on the effective date of the proposed merger (1,466,770 shares
at September 30, 1999) will be converted into the right to receive 1.43112
Shares of the Company. In addition, the manager of ATEBT (which owns a 1%
interest in ATEBT not currently represented by ATEBT


                                       28
<PAGE>

shares) will receive 21,156 shares of the Company. Following the merger, current
ATEBT shareholders will own approximately 9.3% of the outstanding Shares of the
Company.

Consummation of the merger is subject to several conditions, including, without
limitation, approval by ATEBT shareholders. In addition, either entity has the
ability to opt out of the transaction if the 30-day average trading price of the
Company's Shares preceding the closing of the transaction is outside of the
Company's historical trading range of $11.13 to $14.50. Subject to ATEBT
shareholder approval, the Company and ATEBT expect that this transaction will
close during the first quarter of 2000.

The obligor of the Suntree and Players Club FMBs has entered into a contract to
sell the underlying properties to an independent third party. Such sale is
anticipated to occur prior to year end and will result in the redemption of the
FMBs and repayment of mortgage loans securing the bonds. Net proceeds from the
bond redemptions are currently being negotiated but are not anticipated to be
less than the carrying amounts of the FMBs. This sale will also extinguish
promissory note obligations for Players Club and Suntree of approximately
$472,000 and $130,000, respectively.

Management is 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.

Results of Operations

For the three and nine months ended September 30, 1999 as compared to 1998,
total revenues, total expenses and net income increased due to the net result of
the acquisition of 35 FMBs during 1999 and 1998, the acquisition of three RITES
during 1999 and the repayment of one FMB during 1999. The Company's results of
operations for the three and nine months ended September 30, 1999 consisted
primarily of the results of the Company's investment in 66 FMBs and three RITES.
The Company's results of operations for the three and nine months ended
September 30, 1998 consisted primarily of the results of the Company's
investment in 45 FMBs.

Interest income from FMBs increased approximately $3,028,000 and $7,162,000 for
the three and nine months ended September 30, 1999 as compared to 1998.
Increases of $2,557,000 and $6,880,000 were due to the acquisition of 35 FMBs
during 1999 and 1998 (the "1999 and 1998 Acquisitions"), decreases of $94,000
and $277,000 were due to the repayment of one FMB during 1999 (the "1999
Repayment") and decreases of $170,000 and $459,000 were due to the amortization
of goodwill in 1999 and the accretion of excess of acquired net assets over cost
in 1998, both relating to the Consolidation (see Note 1 to the consolidated
financial statements). Excluding the above increases and decreases, interest
income from FMBs increased approximately 12% and 6% for the three and nine
months ended September 30, 1999 as compared to 1998. The increase for the three
months was primarily due to the receipt of deferred base interest relating to
prior periods with respect to three FMBs.


                                       29
<PAGE>

Interest income from other bond related investments was recorded for the three
and nine months ended September 30, 1999 relating to three RITES purchased in
June 1999.

Interest income from temporary investments increased approximately $499,000 and
$653,000 for the three and nine months ended September 30, 1999 as compared to
1998 primarily due to higher invested cash balances in 1999.

Interest income from promissory notes increased approximately $16,000 and
$58,000 for the three and nine months ended September 30, 1999 as compared to
1998 primarily due to loans made to the obligors of the Lakepoint and Shannon
Lake FMBs since September 30, 1998.

Interest expense increased approximately $253,000 and decreased approximately
$47,000 for the three and nine months ended September 30, 1999 as compared to
1998. The increase during the three months was primarily due to secured
borrowings in 1999 which offset the decrease during the nine months which was
primarily due to the repayment of the Interim Credit Facility in December 1998.

Loan servicing and asset management fees increased approximately $97,000 and
$240,000 for the three and nine months ended September 30, 1999 as compared to
1998 due to increases of $100,000 and $249,000, respectively, and decreases of
$3,000 and $9,000, respectively, relating to the 1999 and 1998 Acquisitions
and the 1999 Repayment.

General and administrative expenses increased approximately $144,000 and
$948,000 for the three and nine months ended September 30, 1999 as compared to
1998. These increases were primarily due to current fees relating to the TOP and
an increase in audit/tax fees due to the 1999 and 1998 Acquisitions.

Amortization increased approximately $92,000 and $301,000 for the three and nine
months ended September 30, 1999 as compared to 1998 primarily due to
amortization of deferred bond selection costs relating to the 1999 and 1998
Acquisitions and amortization of deferred costs relating to the TOP.

Minority interest in income of subsidiary increased approximately $854,000 and
$3,135,000 for the three and nine months ended September 30 1999 as compared to
1998 primarily due to a higher outstanding balance of the TOP during the three
and nine months ended September 30, 1999.

Income allocated to preferred shareholders of subsidiary during the three and
nine months ended September 30, 1999 relates to the Preferred Offering executed
on June 29, 1999.

General

The determination as to whether it is in the best interest of the Company to
enter into forbearance agreements on the FMBs or, alternatively, to pursue its
remedies under the loan documents, including foreclosure, is based upon several
factors including, but not limited to, Underlying Property performance, owner
cooperation and projected legal costs.

The difference between the stated interest rates and the rates paid by FMBs is
not accrued as interest income for financial reporting purposes. The accrual of
interest at the stated interest rate will resume once an Underlying Property's
ability to pay the stated rate has been adequately demonstrated. Interest income
of approximately $1,859,000 and $2,333,000 was not recognized for the nine
months ended September 30, 1999 and 1998, respectively.


                                       30
<PAGE>

Cash Available for Distribution

The Company uses cash available for distribution ("CAD") as the primary measure
of its dividend paying ability. The difference between CAD and net income
results from variations between generally accepted accounting principles
("GAAP") and cash received. One difference between CAD and GAAP is the
amortization of loan origination costs, costs relating to the TOP, costs
relating to the issuance of preferred stock of subsidiary and other intangible
assets. These amounts have been excluded from CAD due to their noncash nature.
Another difference is the noncash gain or loss associated with bond impairments,
repayments and sales for GAAP purposes, which are not included in the
calculation of CAD. During the nine months ended September 30, 1999, there was a
loss on the repayment of one FMB which is included in general and administrative
expenses. CAD should not be considered an alternative to net income as a measure
of the Company's financial performance or to cash flow from operating activities
(computed in accordance with GAAP) as a measure of the Company's liquidity, nor
is it necessarily indicative of sufficient cash flow to fund all of the
Company's needs.


                                       31
<PAGE>

Cash available for distribution ("CAD") for the three and nine months ended
September 30, 1999 and 1998 is summarized in the following table:

<TABLE>
<CAPTION>
                                             Three Months Ended                    Nine Months Ended
                                                September 30,                         September 30,
                                       -------------------------------     -------------------------------
                                           1999              1998              1999              1998
                                       -------------------------------     -------------------------------
<S>                                    <C>               <C>               <C>               <C>
Sources of Cash
Interest income:
First mortgage bonds                   $  10,155,870     $   7,128,239     $  26,742,542     $  19,580,311
Other bond related investments               154,877                 0           177,255                 0
Temporary investments                        556,614            57,655           814,611           162,049
Promissory notes                             164,792           148,551           496,605           438,981
Net amortization (accretion)
 included in income                           70,457           (99,406)          160,953          (298,218)
                                       -------------     -------------     -------------     -------------

Total sources of cash                  $  11,102,610         7,235,039        28,391,966        19,883,123
                                       -------------     -------------     -------------     -------------

Uses of Cash
Total expenses, minority interest
   and income allocated to preferred
   shareholders of subsidiary              4,760,084         1,828,861        10,001,185         3,899,712
Less: Amortization included in
   expenses                                 (216,051)         (123,802)         (546,105)         (244,792)
   Loss on repayment  of the
     Countryside North FMB                         0                 0           (25,493)                0
                                       -------------     -------------     -------------     -------------

Total uses of cash                         4,544,033         1,705,059         9,429,587         3,654,920
                                       -------------     -------------     -------------     -------------

Cash available for distribution            6,558,577         5,529,980        18,962,379        16,228,203

Less: distributions to the Manager          (540,175)         (382,802)       (1,434,421)       (1,060,174)
                                       -------------     -------------     -------------     -------------

Cash available for distribution to
   shareholders                        $   6,018,402     $   5,147,178     $  17,527,958     $  15,168,029
                                       =============     =============     =============     =============

Distributions to shareholders $            5,042,349     $   4,735,203     $  15,024,122     $  14,205,522
                                       =============     =============     =============     =============

Payout ratio                                    83.8%             92.0%             85.7%             93.7%
                                       =============     =============     =============     =============

Cash flows from:
   Operating activities                $   8,294,642     $   5,767,914     $  14,262,356     $  16,813,720
                                       =============     =============     =============     =============

   Investing activities                $ (56,731,770)    $ (43,315,584)    $(148,552,688)    $ (80,104,093)
                                       =============     =============     =============     =============

   Financing activities                $  (5,734,784)    $  38,206,717     $ 129,609,263     $  63,049,039
                                       =============     =============     =============     =============
</TABLE>

Recently Issued Accounting Standards

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities". This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It is effective for the Company
beginning with the first quarter of 2001. Because the Company does


                                       32
<PAGE>

not currently utilize derivatives or engage in hedging activities, management
does not anticipate that implementation of this statement will have a material
effect on the Company's financial statements.

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 Exchange Act of 1934, as amended. Such
forward-looking statements include statements regarding the intent, belief or
current expectations of the Company and its management and involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things, the
following: general economic and business conditions, which will, among other
things, affect the availability and creditworthiness of prospective tenants,
lease rents and the terms and availability of financing; adverse changes in the
real estate markets including, among other things, competition with other
companies; risks of real estate development and acquisition; governmental
actions and initiatives; and environment/safety requirements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances occurring after the date hereof or to reflect the occurrence of
unanticipated events.

Year 2000 Compliance

The year 2000 compliance issue concerns the potential inability of certain
computerized systems to accurately record dates after 1999. The Company utilizes
the computer services of an affiliate of the Manager. The affiliate of the
Manager has upgraded its computer information systems to be year 2000 compliant
and beyond. The affiliate of the Manager recently underwent a conversion of its
financial systems applications and upgraded all of its non-compliant, in-house
software and hardware inventory. The work stations which experienced problems
during the testing process were corrected with an upgrade patch. The costs
incurred by the Manager are not being charged to the Company. The most likely
worst case scenario that the Company faces is that computer operations will be
suspended for a few days to a week at January 1, 2000. The Company's contingency
plan is to have a complete backup done on December 31, 1999 and to have both
electronic and printed reports generated for all critical data up to and
including December 31, 1999.

With regard to third parties, the Company's Manager is in the process of
evaluating the potential adverse impact that could result from the failure of
material service providers to be year 2000 compliant. A detailed survey and
assessment was sent to material third parties in the fourth quarter of 1998. The
Company has received assurances from a majority of the third parties with which
it interacts that these third parties have addressed the year 2000 issues and is
evaluating these assurances for their adequacy and accuracy. In cases where the
Company has not received assurances from third parties, it is initiating further
mail and/or phone inquiries. The Company relies heavily on third parties and is
vulnerable to the failures of third parties to address their year 2000 issues.
There can be no assurance given that the third parties will adequately address
their issues.

Inflation

Inflation did not have a material effect on the Company's results for the
periods presented.


                                       33
<PAGE>

Quantitative and Qualitative Disclosures About Market Risk

The nature of the Company's investments and the instruments used to raise
capital for their acquisition expose the Company to gains and losses due to
fluctuations in market interest rates. Market interest rates are highly
sensitive to many factors, including governmental policies, domestic and
international political considerations and other factors beyond the control of
the Company.

The FMBs generally bear interest at fixed rates, or pay interest according to
the cash flows of the Underlying Properties, which do not fluctuate with changes
in market interest rates. In contrast, payments required under the TOP program
and on the secured borrowings under the P-FLOAT program vary based on market
interest rates, primarily Bond Market Association ("BMA") and are re-set weekly.
Thus, an increase in market interest rates would result in increased payments
under these financing programs, without a corresponding increase in cash flows
from the investments in FMBs. For example, based on the $209,807,000 outstanding
under these financing programs at September 30, 1999, the Company estimates that
an increase of 0.5% in the BMA rate would decrease the Company's annual net
income by approximately $1,049,000; a 1.0% increase in BMA would decrease annual
net income by approximately $2,098,000. For the same reasons, a decrease in
market interest rates would generally benefit the Company, as a result of
decreased allocations to the minority interest and interest expense without
corresponding decreases in interest received on the FMBs, in the same amounts as
described above. During June of 1999, the Company completed a $90 million
Preferred Offering. These preferred shares carry a fixed dividend rate of 6 5/8%
through June 30, 2009, and so are not impacted by changes in market interest
rates.

Various financial vehicles exist which would allow Company management to
mitigate the impact of interest rate fluctuations on the Company's cash flows
and earnings. Although management has not engaged in any of these hedging
strategies in the past, it may do so in the future, depending on management's
analysis of the interest rate environment and the costs and risks of such
strategies.

Changes in market interest rates would also impact the estimated fair value of
the Company's portfolio of FMBs and RITES. The Company estimates the fair value
for each FMB or RITE as the present value of its expected cash flows, using a
discount rate for comparable tax-exempt investments. Therefore, as market
interest rates for tax-exempt investments increase, the estimated fair value of
the company's FMBs or RITES will generally decline, and a decline in interest
rates would be expected to result in an increase in the estimated fair values.
For example, the Company projects that a 1% increase in market rates for
tax-exempt investments would decrease the estimated fair value of its portfolio
of FMBs and RITES from its September 30, 1999 value of $569,487,941 to
approximately $496,607,000. A 1% decline in interest rates would increase the
value of the September 30, 1999 portfolio to approximately $666,309,000. Changes
in the estimated fair value of the FMBs and RITES do not impact the Company's
reported net income, earnings per share, distributions or cash flows, but are
reported as components of other comprehensive income and affect reported
shareholders' equity.


                                       34
<PAGE>

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings -

      The Company is not a party to any material pending legal proceedings.

Item 2. Changes in Securities and Use of Proceeds

      See Note 7 of the financial statements regarding the sale by a subsidiary
      of the Company of 45 shares of Series A Cumulative Preferred Shares for
      gross proceeds of $90 million.

Item 3. Defaults Upon Senior Securities - None

Item 4. Submission of Matters to a Vote of Security Holders

      A proxy and proxy statement soliciting the vote of the Company's
shareholders for the Company's annual meeting of shareholders was sent to
shareholders on or about April 30, 1999. Such meeting was held on June 16, 1999.
Alan P. Hirmes was reelected as trustee for a three-year term expiring in 2002.
The proxy statement incorrectly noted that Stuart J. Boesky's term had expired
and his name was, therefore, listed on the proxy for reelection. Although Mr.
Boseky received sufficient votes for reelection, he will continue to be treated
as a trustee whose term expires in 2000, at which time he will again be eligible
for reelection to a new three-year term. A proposal to amend the Trust Agreement
to permit aggregate financing or leverage in excess of the 50% limit was not
approved.

Item 5. Other Information - None

Item 6. Exhibits and Reports on Form 8-K

      (a)  Exhibits:

           3.1(f)       Agreement dated as of April 15, 1999 between Charter
                        Municipal Mortgage Acceptance Company and Melvyn I.
                        Weiss, Esq. and Lawrence A. Sucharow, Esq., as Class
                        Counsel co-chairmen (incorporated by reference to the
                        Company's current report on Form 8-K filed with the
                        Commission on April 29, 1999

           10(aaaar)    First Mortgage Bond dated as of March 26, 1999, with
                        respect to the Hamilton Garden Apartments Project, in
                        the principal amount of $6,400,000 (incorporated by
                        reference to Exhibit 10 (aaaar) in the Company's March
                        31, 1999 Quarterly Report on Form 10-Q)

           10(aaaas)    First Mortgage Bond dated as of May 6, 1999, with
                        respect to the Del Monte Pines Apartments Project, in
                        the principal amount of $11,000,000 (incorporated by
                        reference to Exhibit 10 (aaaas) in the Company's June
                        30, 1999 Quarterly Report on Form 10-Q)


                                       35
<PAGE>

           10(aaaat)    First Mortgage Bond dated as of May 6, 1999, with
                        respect to the Greenbriar Apartments Project, in the
                        principal amount of $9,585,000 (incorporated by
                        reference to Exhibit 10 (aaaat) in the Company's June
                        30, 1999 Quarterly Report on Form 10-Q)

           10(aaaau)    Taxable First Mortgage Bond dated as of May 6, 1999,
                        with respect to the Greenbriar Apartments Project, in
                        the principal amount of $2,015,000 (incorporated by
                        reference to Exhibit 10 (aaaau) in the Company's June
                        30, 1999 Quarterly Report on Form 10-Q)

           10(aaaav)    First Mortgage Bond dated as of May 6, 1999, with
                        respect to the Sycamore Woods Apartments Project, in the
                        principal amount of $9,415,000 (incorporated by
                        reference to Exhibit 10 (aaaav) in the Company's June
                        30, 1999 Quarterly Report on Form 10-Q)

           10(aaaaw)    First Mortgage Bond dated as of June 8, 1999, with
                        respect to the Lake Park Apartments Project, in the
                        principal amount of $3,638,000 (incorporated by
                        reference to Exhibit 10 (aaaaw) in the Company's June
                        30, 1999 Quarterly Report on Form 10-Q)

           10(aaaax)    First Mortgage Bond dated as of June 8, 1999, with
                        respect to the Casa Ramon Apartments Project, in the
                        principal amount of $4,744,000 (incorporated by
                        reference to Exhibit 10 (aaaax) in the Company's June
                        30, 1999 Quarterly Report on Form 10-Q)

           10(aaaay)    First Mortgage Bond dated as of June 22, 1999, with
                        respect to the Lewis Place at Ironwood Project, in the
                        principal amount of $4,000,000 (incorporated by
                        reference to Exhibit 10 (aaaay) in the Company's June
                        30, 1999 Quarterly Report on Form 10-Q)

           10(aaaaz)    Charter Mac Equity Issuer Trust, 6 5/8% Series A
                        Cumulative Preferred Shares, Purchase Agreement, dated
                        June 14, 1999 (incorporated by reference to Exhibit 10
                        (aaaaz) in the Company's June 30, 1999 Quarterly Report
                        on Form 10-Q)

           10(aaaaaa)   First Mortgage Bond dated as of July 1, 1999, with
                        respect to the Lakes Edge at Walden Project, in the
                        principal amount of $14,850,000 (filed herewith)

           10(aaaaab)   First Mortgage Bond dated as of July 29, 1999, with
                        respect to the Lenox Park Apartments Project, in the
                        principal amount of $13,000,000 (filed herewith)


                                       36
<PAGE>

           10(aaaaac)   First Mortgage Bond dated as of August 12, 1999, with
                        respect to the Chapel Ridge of Little Rock Project, in
                        the principal amount of $5,600,000 (filed herewith)

           10(aaaaad)   First Mortgage Bond dated as of August 24, 1999, with
                        respect to the Riviera Apartments Project, in the
                        principal amount of $6,587,500 (filed herewith)

           10(aaaaae)   First Mortgage Bond dated as of August 31, 1999, with
                        respect to the Garfield Park Apartments Project, in the
                        principal amount of $3,260,000 (filed herewith)

           10(aaaaaf)   Restated First Mortgage Bond dated as of December 31,
                        1986, with respect to the Crowne Pointe Apartments
                        Project, in the principal amount of $5,075,000 (filed
                        herewith)

           10(aaaaag)   Restated First Mortgage Bond dated as of February 11,
                        1987, with respect to the Newport Village Apartments
                        Project, in the principal amount of $13,000,000 (filed
                        herewith)

           10(aaaaah)   Restated First Mortgage Bond dated as of December 31,
                        1986, with respect to the Orchard Hills Apartments
                        Project, in the principal amount of $5,650,000 (filed
                        herewith)

           10(aaaaai)   First Mortgage Bond dated as of September 20, 1999, with
                        respect to the Standiford Gardens Apartments Project, in
                        the principal amount of $9,520,000 (filed herewith)

           10(aaaaaj)   First Mortgage Bond dated as of September 28, 1999, with
                        respect to the Douglas Pointe Apartments Project, in the
                        principal amount of $7,100,000 (filed herewith)

           10(aaaaak)   First Mortgage Bond dated as of September 29, 1999, with
                        respect to the Chapel Ridge of Texarkana Project, in the
                        principal amount of $5,800,000 (filed herewith)

           10(aaaaal)   First Mortgage Bond dated as of September 30, 1999, with
                        respect to the Tallwood Project, in the principal amount
                        of $6,205,000 (filed herewith)

           27           Financial Data Schedule (filed herewith).


                                       37
<PAGE>

           99           Amended and Restated Trust Agreement by and among J.
                        Michael Fried, Stuart J. Boesky, Alan P. Hirmes, Robert
                        W. Grier and Andrew T. Panaccione as Managing Trustees,
                        Charter Municipal Mortgage Acceptance Company and
                        Wilmington Trust Company, as Registered Trustee dated
                        June 22, 1999 relating to Charter Mac Equity Issuer
                        Trust (incorporated by reference to Exhibit 99 in the
                        Company's June 30, 1999 Quarterly Report on Form 10-Q)


      (b)  Reports on Form 8-K

           No reports on Form 8-K were filed during the quarter.


                                       38
<PAGE>

                                   SIGNATURES

Pursuant to the requirements 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.

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                  (Registrant)


Date: November 12, 1999             By: /s/ Stuart J. Boesky
                                        --------------------
                                        Stuart J. Boesky
                                        Managing Trustee, President
                                        and Chief Operating Officer


Date: November 12, 1999             By: /s/ John B. Roche
                                        -----------------
                                        John B. Roche
                                        Chief Financial Officer
                                        and Chief Accounting Officer