SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)


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

For the quarterly period ended June 30, 2004


                                       OR


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

                         Commission File Number 1-13237


                                   CHARTERMAC
                                   ----------
         (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) 317-5700


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

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes    X    No
                                          -----      -----

<PAGE>


ITEM 1.  FINANCIAL STATEMENTS

                           CHARTERMAC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                       June 30,      December 31,
                                                                         2004            2003
                                                                      -----------    -----------
                                                                      (Unaudited)
<S>                                                                   <C>            <C>
                                     ASSETS

Revenue bonds-at fair value                                           $ 1,948,126    $ 1,871,009
Cash and cash equivalents                                                 207,892         58,257
Cash and cash equivalents-restricted                                       25,582         26,636
Other investments                                                          63,942         48,460
Mortgage servicing rights                                                  34,305         33,351
Deferred costs - net of amortization of $16,565 and $13,463                58,958         58,408
Goodwill                                                                  207,582        214,744
Other intangible assets - net of amortization of $12,503 and $4,163       185,863        194,203
Loan to affiliate                                                           3,122             --
Other assets                                                              163,021         75,946
Investments in partnerships of consolidated VIEs                        2,301,697             --
Other assets of consolidated VIEs                                         249,266             --
                                                                      -----------    -----------

Total assets                                                          $ 5,449,356    $ 2,581,014
                                                                      ===========    ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
   Financing arrangements                                             $   959,952    $   900,008
   Preferred shares of subsidiary (subject to mandatory
     repurchase)                                                          273,500        273,500
   Notes payable                                                          254,130        153,350
   Accounts payable, accrued expenses and other liabilities                57,029         56,318
   Deferred tax liability                                                  41,674         60,370
   Distributions payable                                                   35,491         27,612
   Notes payable and other liabilities of consolidated VIEs             1,119,860             --
                                                                      -----------    -----------

Total liabilities                                                       2,741,636      1,471,158
                                                                      -----------    -----------

Minority interests in subsidiaries                                        278,339        292,199
                                                                      -----------    -----------
Limited partners' interests in consolidated VIEs                        1,400,002             --
                                                                      -----------    -----------

Commitments and contingencies

SHAREHOLDERS' EQUITY:
   Beneficial owners' equity - Convertible CRA Shareholders
     (7,192 shares issued
     and outstanding in 2004 and
     8,180 issued and outstanding in 2003)                                159,733        160,618
   Preferred shares of subsidiary (not subject to mandatory
     repurchase)                                                          104,000             --
   Beneficial owners' equity - special preferred voting shares                151            161
   Beneficial owners' equity-other common shareholders
     (100,000 shares authorized; 50,599 shares issued
     and 50,516 outstanding in 2004 and 42,726
     shares issued and 42,704 outstanding in 2003)                        733,021        622,771
   Deferred compensation                                                  (14,099)       (19,385)
   Treasury shares of beneficial interest at cost (83 shares in
     2004 and 23 shares in 2003)                                           (1,706)          (378)
   Accumulated other comprehensive income                                  48,279         53,870
                                                                      -----------    -----------
Total shareholders' equity                                              1,029,379        817,657
                                                                      -----------    -----------

Total liabilities and shareholders' equity                            $ 5,449,356    $ 2,581,014
                                                                      ===========    ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       2
<PAGE>


                           CHARTERMAC AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                           Three Months Ended         Six Months Ended
                                                                June 30,                  June 30,
                                                         ----------------------    ----------------------
                                                           2004         2003          2004        2003
                                                         ---------    ---------    ---------    ---------
<S>                                                      <C>          <C>          <C>          <C>
Revenues:
   Revenue bond interest income                          $  32,487    $  26,925    $  64,338    $  53,175
   Fee income:
     Mortgage banking fees                                   4,687        3,473        7,803        6,540
     Fund management                                        11,070           --       18,937           --
     Guarantees                                              2,929          995        4,826        1,991
   Other income                                              3,478        1,815        6,131        3,423
   Revenues of consolidated VIEs                             2,790           --        2,790           --
                                                         ---------    ---------    ---------    ---------
       Total revenues                                       57,441       33,208      104,825       65,129
                                                         ---------    ---------    ---------    ---------
Expenses:
   Interest expense                                          6,444        4,887       11,965        8,703
   Interest expense of consolidated VIEs                     6,689           --        6,689           --
   Interest expense - distributions to
     preferred shareholders of subsidiary                    4,725           --        9,449           --
   Recurring fees - securitizations                          1,067        1,019        2,132        1,982
   Salaries and benefits                                    13,050        3,360       26,932        5,325
   Interest rate derivatives                                (3,361)          --           26           --
   General and administrative                               11,706        2,575       18,055        7,664
   Depreciation and amortization                             7,796        2,915       14,689        4,602
   Other expenses of consolidated VIEs                       8,481           --        8,481           --
                                                         ---------    ---------    ---------    ---------
       Total expenses                                       56,597       14,756       98,418       28,276
                                                         ---------    ---------    ---------    ---------
Income before equity in earnings of investments,
   loss on investments held by consolidated
   VIEs, gain on sale of loans and gain (loss) on
   repayment of revenue bonds                                  844       18,452        6,407       36,853
Equity in earnings of investments                              565          555        1,120        1,110
Loss on investments held by consolidated
   VIEs                                                    (48,677)          --      (48,677)          --
Gain on sale of loans                                        3,330          411        5,075        2,550
Gain (loss) on repayment of revenue bonds                      (38)       2,652          222        2,240
                                                         ---------    ---------    ---------    ---------
Income (loss) before allocation of income
   (loss) to  preferred  shareholders  of  subsidiary,
   Special  Common Units of subsidiary,
   minority interests and limited partners of
   consolidated VIEs                                       (43,976)      22,070      (35,853)      42,753
Income allocated to preferred shareholders of
   subsidiary                                                 (830)      (4,725)        (830)      (9,449)
Income allocated to Special Common Units of
   subsidiary                                               (9,548)          --      (13,253)          --
(Income) loss allocated to minority interests                 (260)          67         (365)          39
Loss allocated to limited partners of
   consolidated VIEs                                        71,818           --       71,818           --
                                                         ---------    ---------    ---------    ---------
Income before income taxes                                  17,204       17,412       21,517       33,343
Income tax benefit                                           7,228          788       11,066        2,764
                                                         ---------    ---------    ---------    ---------
Net income                                               $  24,432    $  18,200    $  32,583    $  36,107
                                                         =========    =========    =========    =========

Allocation of net income to:
   Special distribution to Manager                       $      --    $   1,459    $      --    $   2,870
                                                         =========    =========    =========    =========
   Manager                                               $      --    $       1    $      --    $       3
                                                         =========    =========    =========    =========
   Common shareholders                                   $  20,924    $  15,316    $  27,847    $  30,405
   Convertible CRA shareholders                              3,508        1,424        4,736        2,829
                                                         ---------    ---------    ---------    ---------
     Total for shareholders                              $  24,432    $  16,740    $  32,583    $  33,234
                                                         =========    =========    =========    =========

Net income per share:
   Basic                                                 $    0.47    $    0.37    $    0.63    $    0.74
                                                         =========    =========    =========    =========
   Diluted                                               $    0.47    $    0.37    $    0.62    $    0.74
                                                         =========    =========    =========    =========

Weighted average shares outstanding:
   Basic                                                    52,017       45,090       51,805       45,054
                                                         =========    =========    =========    =========
   Diluted                                                  52,359       45,130       52,193       45,090
                                                         =========    =========    =========    =========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>


                           CHARTERMAC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                    Six Months Ended
                                                                                        June 30,
                                                                               --------------------------
                                                                                  2004           2003
                                                                               -----------    -----------
<S>                                                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                  $    32,583    $    36,107
   Adjustments to reconcile net income to net cash provided by
     operating activities:
   Gain on repayment of revenue bonds                                                 (222)        (2,240)
   Depreciation and amortization                                                    16,032          5,790
   Income allocated to preferred shareholders of subsidiary                         10,279          9,449
   Income allocated to Special Common Units of subsidiary                           13,253             --
   Income (loss) allocated to minority interests                                       365            (39)
   Non-cash compensation expense                                                     6,031            676
   Deferred taxes                                                                  (10,699)        (2,020)
   Changes in operating assets and liabilities:
     Mortgage servicing rights                                                      (4,571)        (1,737)
     Loans to affiliates                                                            (3,122)            --
     Other assets                                                                  (73,698)        49,826
     Accounts payable, accrued expenses and other liabilities                       (9,865)       (16,500)
                                                                               -----------    -----------

Net cash (used in) provided by operating activities                                (23,634)        79,312
                                                                               -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from revenue bonds and notes                                            47,484         75,071
   Revenue bond acquisitions and fundings                                         (164,208)      (146,036)
   Investments in partnerships                                                     (14,695)       (12,100)
   Other investments                                                                  (543)            --
   Increase in goodwill                                                               (835)           (64)
   Decrease (increase) in cash and cash equivalents - restricted                     1,054           (346)
                                                                               -----------    -----------

Net cash used in investing activities                                             (131,743)       (83,475)
                                                                               -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions to shareholders                                                   (38,063)       (31,600)
   Distributions to preferred shareholders of subsidiary                            (9,449)        (9,449)
   Distributions to Special Common Unit holders                                    (11,787)            --
   Proceeds from financing arrangements                                            127,569        109,421
   Repayments of financing arrangements                                            (67,624)          (591)
   Increase (decrease) in notes payable                                            100,548         (5,447)
   Issuance of common shares                                                       105,541             --
   Issuance of preferred shares                                                    101,920             --
   Retirement of special preferred voting shares                                       (10)            --
   Proceeds from stock options exercised                                                --          1,530
   Treasury stock purchases                                                         (1,328)            --
   Deferred financing costs                                                         (2,305)        (6,469)
                                                                               -----------    -----------

Net cash provided by financing activities                                          305,012         57,395
                                                                               -----------    -----------


Net increase in cash and cash equivalents                                          149,635         53,232

Cash and cash equivalents at the beginning of the year                              58,257         55,227
                                                                               -----------    -----------

Cash and cash equivalents at the end of the period                             $   207,892    $   108,459
                                                                               ===========    ===========

SUPPLEMENTAL INFORMATION:
   Interest paid                                                               $    13,320    $     8,394
                                                                               ===========    ===========
   Taxes paid                                                                  $       482    $       135
                                                                               ===========    ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       4
<PAGE>


                           CHARTERMAC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                    Six Months Ended
                                                                                        June 30,
                                                                               --------------------------
                                                                                  2004           2003
                                                                               -----------    -----------
<S>                                                                            <C>            <C>
SUPPLEMENTAL NON-CASH INFORMATION:
   Supplemental  disclosure of non cash  activities  relating to adoption of
     FIN 46R:
     Decrease in revenue  bonds                                                $    31,101
     Increase in investments in partnerships of consolidated VIEs               (2,301,697)
     Increase in other assets of consolidated VIEs                                (249,266)
     Increase in notes payable and other liabilities of consolidated
       VIEs                                                                      1,119,860
     Increase in limited partners'  interests of consolidated VIEs               1,400,002
                                                                               -----------
                                                                               $        --
                                                                               ===========

   Conversion of Special Common Units to Common Shares                         $    17,789
                                                                               ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       5
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)


NOTE 1 - BASIS OF PRESENTATION

The consolidated  financial  statements include the accounts of CharterMac,  its
wholly owned and majority owned subsidiaries and entities  consolidated pursuant
to the adoption of FASB  Interpretation  No. 46R (see Note 2). All  intercompany
accounts  and  transactions  have  been  eliminated  in  consolidation.   Unless
otherwise indicated,  "the Company", as used throughout this document, refers to
CharterMac and its consolidated subsidiaries.

The accompanying  interim 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  statements  of the interim  periods.  However,  given the highly
seasonal nature of our business,  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 the annual
consolidated   financial  statements  prepared  in  accordance  with  accounting
principles generally accepted in the United States of America ("GAAP") have been
condensed or omitted. It is suggested that these financial statements be read in
conjunction  with  the  consolidated  financial  statements  and  notes  thereto
included in our Form 10-K for the year ended December 31, 2003.

We are  responsible  for the  unaudited  financial  statements  included in this
document.  Our  consolidated  financial  statements  are prepared on the accrual
basis of  accounting  in  accordance  with GAAP.  The  preparation  of financial
statements in conformity with GAAP requires us to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent  assets and  liabilities  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.

Certain  amounts in the 2003  financial  statements  have been  reclassified  to
conform to the 2004 presentation.

NOTE 2 - VARIABLE INTEREST ENTITIES CONSOLIDATED PURSUANT TO FASB INTERPRETATION
46R

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable  Interest  Entities"  ("FIN 46"). In December 2003, the FASB issued FIN
46R, which revises FIN 46, codifying  certain FASB Staff positions and extending
the  implementation  date.  FIN  46,  as  revised  by  FIN  46R,  clarifies  the
application of existing  accounting  pronouncements to certain entities in which
equity  investors do not have the  characteristics  of a  controlling  financial
interest or do not have sufficient  equity at risk for the entity to finance its
activities without additional subordinated financial support from other parties.
We had not applied FIN 46 to any entities;  effective March 31, 2004, we adopted
FIN 46R.

Through our  acquisition of Related  Capital  Company  ("RCC") and in subsequent
fund  originations,  we became the general  partner,  or equivalent,  in over 70
investment  funds in which we have no direct  financial  investment.  Typically,
outside investors acquire all limited partnership interest in an upper-tier,  or
investment  partnership,  or 100% of the membership  interest if structured as a
limited liability  company.  The investment  partnership,  in turn, invests as a
limited partner in one or more lower-tier,  or operating partnerships,  that own
and  operate  the  multi-family  housing  complexes.  Limited  partners  in  the
investment  partnerships are most often corporations who are able to utilize the
tax benefits, which are comprised of operating losses and Low Income Housing Tax
Credits ("LIHTCs").

Investment and operating  partnerships in which the limited  partners or limited
members do not have the right to remove us as the  general  partner or  managing
member are variable  interest  entities  ("VIEs") as defined by FIN 46R. We have
concluded  that,  as the general  partner or  managing  member for these type of
investments,  we are the  primary  beneficiary  as defined by FIN 46R because we
absorb  the  majority  of the  expected  income and loss  variability,  which is
disproportionate  to any actual  ownership  interest.  We have  consolidated the
assets and  liabilities of these entities in our balance sheet and have recorded
their results of operations in our statement of income  beginning April 1, 2004.
The balance  sheets and statements of operations  consolidated  in our financial
statements are as of March 31, 2004, the latest date available.

                                       6
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)


NOTE 3 - REVENUE BONDS

The following table summarizes our revenue bond portfolio:
<TABLE>
<CAPTION>

(In thousands)                        June 30,      December 31,
                                        2004           2003
                                     -----------    -----------
<S>                                  <C>            <C>
Unamortized cost basis               $ 1,931,255    $ 1,814,180
Gross unrealized gains                    65,467         65,394
Gross unrealized losses                  (13,897)        (8,565)
                                     -----------    -----------
Subtotal/fair value                    1,982,825      1,871,009

  Less: eliminations (1)                 (34,699)            --
                                     -----------    -----------
Total fair value per balance sheet   $ 1,948,126    $ 1,871,009
                                     ===========    ===========
</TABLE>


The fair value and gross  unrealized  losses of our revenue bonds  aggregated by
length of time that individual  bonds have been in a continuous  unrealized loss
position, at June 30, 2004, is summarized in the table below:
<TABLE>
<CAPTION>

                         Less than    12 Months
(Dollars in thousands)   12 Months     or More       Total
                         ---------    ---------    ---------
<S>                      <C>          <C>          <C>
Number of bonds                 63           10           73
Fair value               $ 307,195    $  52,626    $ 359,821
Gross unrealized loss    $ (13,132)   $    (765)   $ (13,897)
</TABLE>

All these debt  securities  are performing as expected.  The  unrealized  losses
related to these revenue bonds are due solely to changes in interest  rates.  We
have the intent and ability to hold these bonds to maturity  and have  therefore
concluded that these impairments are temporary.

The following  summarizes the maturity dates of our revenue bonds,  all of which
have fixed interest rates:
<TABLE>
<CAPTION>

                                                            Weighted
                            Outstanding                      Average
(In thousands)              Bond Amount     Fair Value    Interest Rate
                            -----------    -----------    -------------
<S>                         <C>            <C>                <C>
Due in less than one year   $       166    $       344        7.65%

Due between one and
   five years                    34,944         32,517        7.02%
Due after five years          1,908,308      1,949,964        6.81%
                            -----------    -----------    -------------
Total / Weighted
   Average                    1,943,418      1,982,825        6.82%
                                                          =============

   Less: eliminations (1)       (31,101)       (34,699)
                            -----------    -----------
Total per balance sheet     $ 1,912,317    $ 1,948,126
                            ===========    ===========
</TABLE>

(1) These bonds are recorded as  liabilities  on the balance  sheets of entities
    consolidated  pursuant to FIN 46R (see Note 2) and are therefore  eliminated
    in consolidation.

The following table summarizes our acquisition  activity and additional fundings
to previously acquired revenue bonds for the six months ended June 30, 2004.
<TABLE>
<CAPTION>

                                                                Weighted          Weighted         Number of
                                               Aggregate         Average           Average          Revenue
                                                Purchase      Construction        Permanent          Bonds
(In thousands)               Face Amount         Price        Interest Rate     Interest Rate      Acquired
                             ------------     ------------    -------------     -------------    -------------
<S>                          <C>                <C>              <C>               <C>                <C>
Construction/rehabilitation  $164,208           $164,208         5.38%             6.34%              20
  properties
</TABLE>

                                       7
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)


During the six months  ended June 30, 2004,  six revenue  bonds were repaid with
net proceeds of approximately $26.5 million.  The bonds had a net carrying value
of approximately $26.3 million, resulting in a gain of approximately $222,000.

At June 30, 2004,  $1.87 billion of revenue bonds were pledged as collateral for
our borrowing facilities.  Two of these bonds,  aggregating  approximately $25.8
million,  are included in the bonds pledged as collateral  and are eliminated in
consolidation as noted in the tables above.

NOTE 4 - OTHER INVESTMENTS

Investments other than revenue bonds consisted of:
<TABLE>
<CAPTION>

                                                                June 30,       December 31,
            (In thousands)                                        2004             2003
                                                              -------------    -------------
            <S>                                                 <C>              <C>
            Investment to acquire equity interests              $38,914          $24,644
            Investment in properties under development            2,419            1,994
            Investment in ARCap                                  19,054           19,054
            Other investments                                     3,555            2,768
                                                              -------------    -------------
                                                                $63,942          $48,460
                                                              =============    =============
</TABLE>

NOTE 5 - GOODWILL AND INTANGIBLE ASSETS

The components of identifiable intangible assets are as follows:
<TABLE>
<CAPTION>

                                                                          Other            Total
                                       RCC             Mortgage        Identifiable     Identifiable
                                    Intangible         Banking          Intangible       Intangible
      (In thousands)                  Assets           Licenses           Assets           Assets         Goodwill
                                  --------------    --------------    --------------   -------------    ------------

<S>                                 <C>             <C>                <C>               <C>              <C>
Balance at December 31, 2003        $185,300        $    8,639         $    4,427        $198,366         $214,744
Accumulated amortization              (1,936)               --             (2,227)         (4,163)              --
                                  --------------    --------------    --------------   -------------    ------------
Net balance at December 31, 2003     183,364             8,639              2,200         194,203          214,744
Additions                                 --                --                 --              --              835
Tax effect of conversion of                                                    --
  SCUs to common shares                   --                --        --                       --           (7,997)
                                                                             (237)
Amortization expense                  (8,103)               --        -                    (8,340)              --
                                  --------------    --------------    --------------   -------------    ------------
Net balance at June 30, 2004        $175,261        $    8,639         $    1,963        $185,863         $207,582
                                  ==============    ==============    ==============   =============    ============

Amortization expense for the
  six months ended June 30, 2004    $  8,103        $       --         $      237        $  8,340         $     --
                                  ==============    ==============    ==============   =============    ============
Estimated amortization expense      $ 16,206        $       --         $      474        $ 16,680         $     --
  per year for next five years
                                  ==============    ==============    ==============   =============    ============
</TABLE>

The  amortization  of other  identifiable  intangible  assets is  included  as a
reduction to revenue bond interest  income as they pertain to the acquisition of
such bond investments.

                                       8
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)


NOTE 6 - RELATED PARTY TRANSACTIONS

Following  are the  expenses  and the special  distributions  paid or payable to
related  parties.  For periods prior to November 17, 2003, the amounts were paid
or payable to RCC. For periods  after our  acquisition  of RCC, the amounts were
paid or payable to The Related Companies, L.P. ("TRCLP").
<TABLE>
<CAPTION>

                                       Three Months Ended               Six Months Ended
                                            June 30,                        June 30,
                                   ---------------------------    ------------------------------

(In thousands)                        2004           2003             2004             2003
                                   -----------    ------------    -------------    -------------
<S>                                <C>            <C>             <C>              <C>
Special distribution/investment
  management fee                   $        --    $      1,539    $          --    $       3,022
Bond servicing fees                         --           3,651               --            4,666
Expense reimbursement                       --             246               --              479
Shared services agreement                  917              --            1,936               --
                                   -----------    ------------    -------------    -------------
                                   $       917    $      5,436    $       1,936    $       8,167
                                   ===========    ============    =============    =============
</TABLE>

In addition, Related Management Company ("RMC"), which is wholly owned by TRCLP,
earned fees for performing  property  management services for various properties
held in  investment  funds,  which  are  managed  by  RCC.  These  fees  totaled
approximately  $661,000 and are included in other expenses of consolidated  VIEs
for the three and six months ended June 30, 2004.

A subsidiary of RCC collects asset management and incentive management fees from
American Mortgage  Acceptance  Company ("AMAC"),  an affiliated  publicly-traded
real estate  investment  trust.  These fees totaled  $808,000 for the six months
ended June 30, 2004.

In June 2004,  we entered  into a  revolving  credit  facility  (the  "Revolving
Facility")  with AMAC.  The Revolving  Facility will provide up to $20.0 million
and bear interest at LIBOR plus 300 basis points.  The Revolving Facility is for
a term of one  year  with a one  year  optional  extension.  In the  opinion  of
management, the terms of this facility are consistent with those of transactions
with  independent  third  parties.  As  of  June  30,  2004,  we  have  advanced
approximately $3.1 million through the Revolving Facility.

NOTE 7 - DERIVATIVE INSTRUMENTS

We have  designated  our interest rate swaps as cash flow hedges on the variable
interest  payments  on our  floating  rate  securitizations.  All but one of the
interest rate swaps begin in 2005.  The one interest rate swap that is currently
in place is recorded  at its fair  market  value each  accounting  period,  with
changes in market value recorded in accumulated  other  comprehensive  income to
the extent the hedge is effective in achieving offsetting cash flows. This hedge
has been perfectly  effective to date. The  effectiveness  of the other swaps is
measured using the  hypothetical  swap method until they go into effect in 2005.
During the first  quarter of 2004,  we incurred  an expense for the  ineffective
portion of these  swaps,  which due to interest  rate  fluctuations,  completely
reversed  during the second  quarter of 2004.  For the six months ended June 30,
2004, we recorded  approximately  $26,000 of expense related to an interest rate
cap.

NOTE 8 - YIELD GUARANTEE AND FUND SPONSORSHIP TRANSACTIONS

Yield Guarantees
----------------

In April 2004,  we  completed a  transaction  to  guarantee  tax  benefits to an
investor  in  a  partnership   designed  to  generate  LIHTCs.  Our  subsidiary,
CharterMac  Corporation  ("CM Corp."),  has agreed to back-up the guarantee of a
primary  guarantor of an agreed upon  internal rate of return to the investor in
Related  Capital  Guaranteed  Corporate  Partners  II,  L.P.  - Series D (a fund
managed by RCC), for which we will receive guarantee fees totaling approximately
$6.5  million  in  three  installments,  as  well  as  acquisition,  partnership
management and asset  management  fees amounting to $7.4 million.  We recorded a
liability  of  approximately  $2.8 million in deferred  income  relating to this
guarantee.

In June 2004,  we  completed  a  transaction  to  guarantee  tax  benefits to an
investor in a partnership  designed to generate  Georgia State LIHTCs.  CM Corp.
has agreed to back-up the  guarantee  of a primary  guarantor  of an agreed upon

                                       9
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)


internal rate of return to the investor in Related Capital Guaranteed  Corporate
Partners II, L.P - Series E (a fund  managed by RCC),  for which we will receive
guarantee fees totaling  approximately  $1.1 million in three  installments,  as
well as acquisition,  partnership management and asset management fees amounting
to approximately  $883,000. We recorded a liability of approximately $658,000 in
deferred income relating to this guarantee.

Fund Sponsorship
----------------

In May 2004, RCC completed the sponsorship of Related  Corporate  Partners XXVI,
L.P.  ("RCP 26"), a $225 million  multi-investor  corporate tax credit fund. RCP
26, which is comprised of LIHTC equity investments in more than 30 properties in
15 states  across the country,  was sold to seven  institutional  investors,  of
which the majority are Fortune 500 companies.

NOTE 9 - EQUITY

Equity Conversions
------------------

In January 2004, at a holder's  request,  we converted  992,688  special  common
units to an equivalent number of common shares.

In February and April 2004, at shareholders'  requests, we converted 771,080 and
216,450 of Convertible CRA Shares to an equivalent number of common shares.

Preferred Shares of a Subsidiary
--------------------------------

On May 14, 2004, our subsidiary CharterMac Equity Issuer Trust ("Equity Issuer")
completed a $104.0 million preferred equity offering to institutional investors.
Securities sold were as follows:

     o    60 of its  5.75%  Series  A-4-1  Perpetual  Preferred  Shares  with an
          aggregate liquidation amount of $30 million;
     o    58 of its  6.00%  Series  A-4-2  Perpetual  Preferred  Shares  with an
          aggregate liquidation amount of $29 million;
     o    50 of its 6.00% Series B-3-1  Subordinate  Perpetual  Preferred Shares
          with an aggregate liquidation amount of $25 million and
     o    40 of its 6.30% Series B-3-2  Subordinate  Perpetual  Preferred Shares
          with an aggregate liquidation amount of $20 million.

Total net proceeds of the offering,  after deducting  underwriter  discounts and
commissions,  were $101.9 million. The underwriter for this offering was Merrill
Lynch & Co.

These  preferred  shares  have most of the same  characteristics  of  previously
outstanding  preferred shares of Equity Issuer, with the exception that they are
not subject to mandatory  redemption.  As such, they are classified as equity on
our balance sheet, with their dividends classified as preferred dividends on the
income statement.  The previously issued preferred shares,  due to the mandatory
redemption  feature,  are  classified on our balance sheet as  liabilities  with
their dividends classified as interest expense.

Common Share Offering
---------------------

On June 30, 2004,  we completed a common  share  offering,  whereby we sold 5.75
million shares  (including an over-allotment of 750,000 shares) to the public at
a price  of  $19.27  per  share.  This  offering  resulted  in net  proceeds  of
approximately  $105.5  million  after  deducting   underwriting   discounts  and
commissions.  The underwriters for this offering were Wachovia  Securities,  UBS
Securities LLC, RBC Capital Markets Corporation and Legg Mason Wood Walker.

Treasury Stock Repurchased
--------------------------

During the six months ended June 30, 2004,  we increased  the number of treasury
shares by 59,798 for a total cost of approximately $1.3 million,  in conjunction
with the tax  withholdings  associated with stock based  compensation  awards to
employees.

                                       10
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)


NOTE 10 - COMPREHENSIVE INCOME

Comprehensive  income for the first six months ended June 30, 2004 and 2003, was
as follows:
<TABLE>
<CAPTION>
          (In thousands)                                               2004        2003
                                                                     --------    --------
<S>                                                                  <C>         <C>
Net income                                                           $ 32,583    $ 36,107
Net unrealized gain on interest rate derivatives                        3,266       1,040
Net unrealized gain on revenue bonds:
   Unrealized gain (loss) during the period                            (8,635)     17,682
   Reclassification adjustment for net gain included in net income       (222)     (2,240)
                                                                     --------    --------
Comprehensive income                                                 $ 26,992    $ 52,589
                                                                     ========    ========
</TABLE>


NOTE 11 - EARNINGS PER SHARE
<TABLE>
<CAPTION>
                                           Three Months Ended June 30, 2004     Six Months Ended June 30, 2004
                                           --------------------------------   ----------------------------------
(In thousands, except per share amounts)    Income    Shares     Per Share      Income     Shares      Per Share
                                           --------------------------------   ----------------------------------
<S>                                        <C>        <C>        <C>            <C>        <C>         <C>
Basic EPS                                  $24,432    52,017     $   .47        $32,583    51,805      $     .63
                                                                 =======                               =========
Effect of dilutive securities                   --       342                         --       388
                                           -------    ------                    -------    ------
Diluted EPS                                $24,432    52,359     $   .47        $32,583    52,193      $     .62
                                           =======    ======     =======        =======    ======      =========

<CAPTION>

                                           Three Months Ended June 30, 2003     Six Months Ended June 30, 2003
                                           --------------------------------   ----------------------------------
(In thousands, except per share amounts)    Income    Shares     Per Share      Income     Shares      Per Share
                                           --------------------------------   ----------------------------------
<S>                                        <C>        <C>        <C>            <C>        <C>         <C>


Basic EPS                                  $16,740    45,090     $   .37        $33,234    45,054      $     .74
                                                                 =======                               =========
Effect of dilutive securities                   --        40                        --         36
                                           -------    ------                    -------    ------
Diluted EPS                                $16,740    45,130     $   .37        $33,234    45,090      $     .74
                                           =======    ======     =======        =======    ======      =========
</TABLE>

The  number  of  shares  includes  common  and  Convertible  CRA  Shares  as the
Convertible CRA Shares have the same economic benefits as common shares.

NOTE 12 - BUSINESS SEGMENTS

We  operate in three  business  segments,  which  include  Portfolio  Investing,
Mortgage Banking, and Fund Management.

o        The Portfolio  Investing  segment  consists  primarily of  subsidiaries
         holding  investments in revenue bonds  producing  primarily  tax-exempt
         interest income.
o        The Mortgage Banking segment  consists of subsidiaries  which originate
         mortgages on behalf of third parties and receive  mortgage  origination
         and mortgage servicing fees generated by those activities.
o        The Fund  Management  segment  includes two business  lines.  The first
         consists  of  subsidiaries  that  generate  fee  income  from the asset
         management,  underwriting,  originating and other services  provided to
         the real  estate  equity  investment  programs  RCC  sponsors,  and the
         management and related  services  provided to us and an affiliate.  The
         second  business line  encompasses  credit  enhancement  for properties
         underlying  fund  investments  and yield  guarantee to fund  investors.
         Since the adoption of FIN 46R,  effective  March 31, 2004, this segment
         also includes the results of consolidated VIEs (see Note 2).

In prior  periods,  results from credit  enhancement  services  were included in
Portfolio  Investing.  We have  reclassified  the results to Fund  Management to
better  reflect the  management of our  businesses  and have restated prior year
results accordingly.

Segment results include all direct and contractual revenues and expenses of each
segment and  allocations of indirect  expenses based on specific  methodologies.
These reportable  segments are strategic  business units that primarily generate
revenue  streams  that  are  distinctly  different  and  are  generally  managed
separately.

                                       11
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)


The following table provides more information regarding our segments:
<TABLE>
<CAPTION>

                                          Three Months Ended June 30, 2004                   Three Months Ended June 30, 2003
                                  -----------------------------------------------    -----------------------------------------------
                                  Portfolio    Mortgage     Fund                     Portfolio    Mortgage      Fund
(In thousands)                    Investing    Banking    Management     Total       Investing    Banking    Management     Total
                                  -----------------------------------------------    -----------------------------------------------
<S>                               <C>          <C>        <C>          <C>           <C>          <C>         <C>         <C>
Total revenues                    $   33,101   $  6,657   $   17,683   $   57,441    $   26,928   $ 5,285     $    995    $   33,208
                                  ===============================================    ===============================================

Net income                        $   21,173   $  1,731   $    1,528   $   24,432    $   17,123   $   366     $    711    $   18,200
                                  ===============================================    ===============================================

<CAPTION>

                                            Six Months Ended June 30, 2004                     Six Months Ended June 30, 2003
                                  -----------------------------------------------    -----------------------------------------------
                                  Portfolio   Mortgage       Fund                    Portfolio    Mortgage      Fund
                                  Investing   Banking     Management     Total       Investing    Banking    Management     Total
                                  -----------------------------------------------    -----------------------------------------------
<S>                               <C>          <C>        <C>          <C>           <C>          <C>         <C>         <C>
Total revenues                    $   65,685   $ 10,537   $   28,603   $  104,825    $   54,534   $ 8,604     $  1,991    $   65,129
                                  ===============================================    ===============================================

Net income (loss)                 $   37,429   $  2,431   $   (7,277)  $   32,583    $   34,614   $  (214)    $  1,707    $   36,107
                                  ===============================================    ===============================================
Total assets as of June
30                                $2,322,106   $176,407   $2,950,843   $5,449,356    $1,881,843   $75,058     $  1,927    $1,958,828
                                  ===============================================    ===============================================
Assets as of June 30 of
  consolidated VIEs included in
  total assets (see Note 2)       $  (34,699)  $     --   $2,550,963   $2,516,264
                                  ===============================================
</TABLE>

NOTE 13 - SUBSEQUENT EVENTS

New Revenue Bond Acquisitions
-----------------------------
In July 2004,  we have advanced  additional  funds to one revenue bond which was
previously acquired totaling approximately $2.5 million.

Capri Capital Loan
------------------
On July 16, 2004,  CM Investor  LLC ("CM  Investor"),  one of our  subsidiaries,
provided  two  interim  loans   totaling  $84  million   ("Interim   Loans")  to
Chicago-based  Capri Capital Limited  Partnership  ("CCLP"),  both of which bear
interest at a rate of 11.5% and mature on or before  December 31, 2004.  Pending
the required regulatory and agency approval, the completion of due diligence and
the negotiation and execution of additional  documents and agreements with CCLP.
We anticipate  that the loan will be the first step in CM Investor's  subsequent
acquisition of 100% of CCLP's mortgage banking affiliate, Capri Capital Finance,
and the formation of a strategic  alliance with Capri Capital  Advisors,  CCLP's
pension fund advisory affiliate.

We anticipate that the Interim Loans will be repaid in full and that CM Investor
would then make two new loans in the aggregate  principal amount of $90 million,
one of which would give CM Investor the right to acquire  100% of Capri  Capital
Finance within six months, and the other one of which would give CM Investor the
right to acquire a 49% equity  interest  in Capri  Capital  Advisors on or after
August 1, 2005,  but no later than June 30,  2006.  The  acquisition  of 100% of
Capri  Capital  Finance and the  acquisition  of a 49% equity  interest in Capri
Capital  Advisors  are both  subject  to  certain  approvals,  including  agency
approval for the acquisition of Capri Capital  Finance.  We have signed a letter
of intent  with  respect to the  subsequent  transactions;  however,  definitive
agreements  have  yet to be  signed,  and  there  can be no  assurance  that the
subsequent transactions will occur.

CM Corp.  has funded the Interim Loans through a bridge loan from Fleet National
Bank, a subsidiary  of Bank of America  Corporation,  which bears  interest at a
rate of LIBOR plus 1.65% and matures in 12 months.  At the time of closing,  the
weighted average interest rate on the notes was 3.15%

If CM Investor  ultimately  acquires both the 100%  ownership  interest in Capri
Capital  Finance and the 49%  interest in Capri  Capital  Advisors,  pursuant to
these  arrangements,  the total  purchase  price will be based on the  operating
performance of the businesses.

LIHTC Guarantee
---------------
In July 2004,  we  completed  a  transaction  to  guarantee  tax  benefits to an
investor in a partnership  designed to generate  Georgia State LIHTCs.  CM Corp.
has agreed to back-up the  guarantee  of a primary  guarantor  of an agreed upon
internal rate of return to the investor in Related Capital Guaranteed  Corporate
Partners II, L.P. - Series F, for which we will receive  guarantee fees totaling
approximately  $3.9  million  in  three  installments,  as well as  acquisition,
partnership management and asset management fees amounting to approximately $5.8
million.


                                       12
<PAGE>

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

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

Certain   statements  made  in  this  report  may  constitute   "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended,  and Section 21E of the  Securities  Exchange Act of 1934,  as amended.
These  forward-looking  statements  are not  historical  facts,  but  rather our
beliefs  and  expectations  are based on our  current  expectations,  estimates,
projections,  beliefs and assumptions about our Company and industry. Words such
as  "anticipates,"   "expects,"   "intends,"   "plans,"   "believes,"   "seeks,"
"estimates"  and similar  expressions  are intended to identify  forward-looking
statements.  These  statements are not guarantees of future  performance and are
subject to risks,  uncertainties and other factors, some of which are beyond our
control,  are  difficult  to predict  and could cause  actual  results to differ
materially from those expressed or forecasted in the forward-looking statements.
Some of these risks  include,  among other things:  adverse  changes in the real
estate  markets;  risk of default  associated  with the revenue  bonds and other
securities held by us or our subsidiaries;  interest rate fluctuations;  our tax
treatment,  the tax treatment of our  subsidiaries  and the tax treatment of our
investments;  general and local economic and business conditions; and changes in
applicable laws and  regulations.  We caution you not to place undue reliance on
these  forward-looking  statements,  which  reflect our view only as of the date
hereof.

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

Our operating results for 2004 were impacted  significantly by the November 2003
acquisition of RCC, an affiliated  business that, until the date of acquisition,
had acted as an external  manager for our  Company  and our  subsidiaries.  As a
result of the  acquisition,  we generate  more  taxable  income and have assumed
numerous expenses that had previously been covered by fees paid to RCC. Further,
the  issuance  of a new class of  subsidiary  equity as part of the  acquisition
requires  us to  apportion  certain  earnings  and  identify  them as due to the
holders of that equity.

Additionally, the adoption of several accounting pronouncements has caused us to
reclassify  certain  liability and expense  categories  while not increasing the
actual  amounts to be  recorded,  and has led to a  significant  increase in the
amount of assets and  liabilities  we record due to  consolidation  of  numerous
investment  partnerships (see Note 2 to the Consolidated  Financial Statements).
This  consolidation  also results in the recognition of the operating results of
partnerships  in  which  we  have  no  equity   interest,   the  elimination  of
transactions between our businesses and those partnerships and the allocation of
their results to their limited partners.

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

QUARTER ENDED JUNE 30, 2004 VS. QUARTER ENDED JUNE 30, 2003
-----------------------------------------------------------

The following is a summary of our operations for the three months ended June 30,
2004 and 2003:
<TABLE>
<CAPTION>
                                         % of                % of
                               2004    Revenues     2003    Revenues   % Change
                             ---------------------------------------------------
<S>                          <C>         <C>      <C>         <C>        <C>
Revenues                     $57,441              $33,208                73.0
Income before income taxes    17,204     30.0      17,412     52.4       (1.2)
Net income                    24,432     42.5      18,200     54.8       34.2
</TABLE>

Compared  to 2003,  the second  quarter  of 2004  benefited  from a  substantial
expansion of our core Portfolio Investing  business,  the addition of the equity
fund sponsorship portion of our Fund Management segment and the expansion of the
credit  enhancement  portion  of that  segment.  These  revenue  gains  drove an
increase in net income,  although the increase was  partially  offset by the net
increase in costs of the Fund  Management  business in the current  year results
due to the RCC  acquisition.  In addition,  non-cash  income related to interest
rate  derivatives  is recognized  in the current  period (which is a reversal of
expense recognized in the first quarter of 2004), while no such instruments were
in  place  in  2003  (see  Note 7 to  the  Consolidated  Financial  Statements).
Offsetting these gains is the elimination of $10.8 million of revenues earned by
our subsidiaries in transactions with VIEs we have consolidated  beginning April
1, 2004.  Although the amounts are  eliminated  in  consolidation,  the expenses
recognized  by the VIEs in  connection  with  these  transactions  are  absorbed
entirely  by the limited  partners  of the VIEs;  as such,  the  elimination  in
consolidation has no impact on our net income.



                                       13
<PAGE>


REVENUES

Our revenues were as follows:
<TABLE>
<CAPTION>
                                         For the Three Months Ended June 30,
(In thousands)                              2004         2003      % Change
                                          --------     --------    --------
<S>                                       <C>          <C>          <C>
Revenue bond interest income              $32,487      $26,925       20.7
Fee income
   Mortgage banking fees                    4,687        3,473       35.0
   Fund management fees                    11,070         --          N/A
   Guarantee fees                           2,929          995      194.4
Other income                                3,478        1,815       91.6
Revenues of consolidated VIEs               2,790         --          N/A
                                          -------      -------      -----

Total revenues                            $57,441      $33,208       73.0
                                          =======      =======      =====
</TABLE>

The  increase in revenue  bond  interest  income is  primarily  due to new bonds
acquired  during  later  quarters of 2003 and during  2004.  We  acquired  $73.1
million of bonds at an average  yield of 6.0% in the 2004  period as compared to
acquisitions of $141.3 million at an average yield of 6.7% in the same period in
2003. The weighted  average level of bond  investments in the quarter was $1,886
million,  an increase of 25.0% over the same period in 2003.  The average annual
yield for the bond  portfolio  was 6.94%  compared to 7.14% in the 2003  period.
Offsetting  these increases is the elimination in consolidation of approximately
$247,000 of revenue on bonds where the debtor is a VIE that is now  consolidated
in our financial statements.

The  increase  in  mortgage  banking  fees  resulted  from  an 85%  increase  in
origination fees, with solid increases in origination activity under Freddie Mac
and FHA  programs.  Loan  originations  amounted  to $418.1  million in the 2004
quarter as compared to $171.7 million in the same period last year and the total
serviced loan  portfolio  reached $4.3 billion  compared to $3.9 billion at June
30, 2003. Originations in the second quarter are broken down as follows:
<TABLE>
<CAPTION>
                        2004       % of total      2003         % of total
                      --------     ----------    --------       ----------
<S>                   <C>             <C>        <C>               <C>
Fannie Mae            $121,264        29.0       $ 76,263          44.4
Freddie Mac            229,131        54.8          9,015           5.3
FHA                     27,749         6.6             --            --
Assumptions              6,983         1.7         10,764           6.3
Conduit - Bank          32,934         7.9         71,838          41.8
Other                     --            --          3,800           2.2
                      --------       -----       --------         -----

Total                 $418,061       100.0       $171,680         100.0
                      ========       =====       ========         =====
</TABLE>

In addition,  servicing  fees  increased 7.4% over 2003 due to the growth in the
servicing portfolio.

The increase in Fund  Management  fees  represents  the fee income earned by RCC
which was not acquired until the fourth  quarter of 2003. The reported  amounts,
however,  exclude  $9.6  million  of fees  earned  by RCC in  transactions  with
consolidated  VIEs. On a pro forma basis,  comparing the 2004 period  (including
the revenues eliminated in consolidation) to the same pre-acquisition  period in
2003, revenue in the Fund Management  business increased 37% over the prior year
due to steady growth in the level of assets under  management and an increase in
origination  fees  as a  result  of  an  increase  in  equity  raised  for  fund
sponsorships.  The increases were partially  offset by a decrease in acquisition
fees, paid by third-party  borrowers of the underlying  revenue bonds,  due to a
decrease in revenue bond  acquisitions.  Equity raised for fund  sponsorships in
the quarter totaled $370 million  compared to $170 million in the second quarter
of 2003.  Revenue bonds  acquired by us, totaled in excess of $70 million in the
second  quarter of 2004  compared  to revenue  bonds  acquired in excess of $140
million in the second quarter of 2003.

The  increase in  guarantee  fee income  relates to  acceleration  of the credit
enhancement   business.  In  the  second  quarter  of  2004,  we  completed  two
transactions to guarantee tax benefits to investors,  and continued to earn fees
from three transactions completed in 2003.



                                       14
<PAGE>



EXPENSES

Our expenses were as follows:
<TABLE>
<CAPTION>
                                      For the Three Months Ended June 30,
(In thousands)                        2004           2003         % Change
                                    --------       --------       --------
<S>                                 <C>            <C>             <C>
Interest expense                    $  6,444       $  4,887         31.9
Interest expense on preferred
   shares of subsidiary                4,725             --          N/A
Recurring fees - securitizations       1,067          1,019          4.7
Salaries and benefits                 13,050          3,360        288.4
Interest rate derivatives             (3,361)            --          N/A
General and administrative            11,706          2,575        354.6
Depreciation and amortization          7,796          2,915        167.4
Expenses of consolidated VIEs         15,170             --          N/A
                                    --------       --------        -----

Total expenses                      $ 56,597       $ 14,756        283.5
                                    ========       ========        =====
</TABLE>

The increase in interest  expense  reflects the higher borrowing levels stemming
from our  acquisition  of RCC,  additional  investments in revenue bonds and the
short  term  investments  to  acquire  equity  interests  inherent  in the  Fund
Management fund sponsorship  business,  which was not yet part of our Company in
the second  quarter of 2003.  The increase was partially  offset by a decline in
the average borrowing rate to 2.4% as compared to 2.7% in the 2003 period.

The amount  reported  as  interest  expense on  preferred  shares of  subsidiary
represents  dividends on our preferred  shares subject to mandatory  redemption,
which had  previously  been  reported  as an  allocation  of income  outside  of
operating earnings.

Despite a 23.0% increase in the average balance of financing arrangements in the
second quarter of 2004 over the prior year period, securitization fees increased
only 4.7% because of more favorable terms due to a lower  proportionate share of
financing arrangements generating recurring fees.

The  increases  in  salaries  and  benefits,   general  and  administrative  and
depreciation  and  amortization  all relate to the RCC acquisition in the fourth
quarter  of 2003  and  the  resulting  recognition  of  expenses  due to the new
ownership  structure,  as well as  amortization of intangible  assets  acquired.
General and  administrative  expenses in the 2004  quarter  also  included  $5.0
million of recoverable costs relating to originations.

See Note 7 to the Consolidated  Financial  Statements for information  regarding
the expense related to interest rate derivatives.

We did not record the expenses of consolidated  VIEs prior to April 1, 2004. The
expenses are not  controlled  by us, nor do they  represent any cash or non-cash
charges to be absorbed by us. The expenses of the VIEs are absorbed  entirely by
the limited partners of the VIEs.

OTHER ITEMS

Gains on sales of loans  increased  for the three  months  ended  June 30,  2004
compared to the second quarter of 2003, due to the higher level of  originations
in 2004.  The income  allocation  to SCUs  represents  distributions  payable to
holders of the new class of equity issued at the time of the RCC  acquisition in
the fourth quarter of 2003.

SIX MONTHS ENDED JUNE 30, 2004 VS. SIX MONTHS ENDED JUNE 30, 2003
-----------------------------------------------------------------

The following is a summary of our  operations  for the six months ended June 30,
2004 and 2003:
<TABLE>
<CAPTION>
                                       % of                 % of
                             2004    Revenues      2003   Revenues   % Change
                           -----------------------------------------------------
<S>                        <C>         <C>       <C>        <C>       <C>
Revenues                   $104,825              $65,129               60.9
Income before income taxes   21,517    20.5       33,343    51.2      (35.5)
Net income                   32,583    31.1       36,107    55.4       (9.8)
</TABLE>

The  first  half of 2004  benefited  from a  substantial  expansion  of our core
Portfolio  Investing  business,  the  addition  of the equity  fund  sponsorship
portion  of our  Fund  Management  segment  and  the  expansion  of  the  credit
enhancement  portion of that segment.  Despite these gains,  net income declined
primarily due to the costs of the Fund  Management  business in the current year
results,   whereby  newly  incorporated  expenses  exceeded  newly  incorporated
revenues and the benefit of fees eliminated by the new ownership structure.



                                       15
<PAGE>

Offsetting these gains is the elimination of $10.8 million of revenues earned by
our subsidiaries in transactions with VIEs we have consolidated  beginning April
1, 2004.  Although the amounts are  eliminated  in  consolidation,  the expenses
recognized  by the VIEs in  connection  with  these  transactions  are  absorbed
entirely  by the limited  partners  of the VIEs;  as such,  the  elimination  in
consolidation has no impact on our net income.

REVENUES

Our revenues were as follows:
<TABLE>
<CAPTION>
                                      For the Six Months Ended June 30,
(In thousands)                       2004          2003         % Change
                                   --------      --------       --------
<S>                                <C>           <C>             <C>
Revenue bond interest income       $ 64,338      $ 53,175         21.0
Fee income
   Mortgage banking fees              7,803         6,540         19.3
   Fund management fees              18,937            --          N/A
   Guarantee fees                     4,826         1,991        142.4
Other income                          6,131         3,423         79.1
Revenues of consolidated VIEs         2,790            --          N/A
                                   --------      --------        -----

Total revenues                     $104,825      $ 65,129         60.9
                                   ========      ========        =====
</TABLE>

The  increase in revenue  bond  interest  income is  primarily  due to new bonds
acquired  during  later  quarters of 2003 and during  2004.  We acquired  $164.2
million of bonds at an average  yield of 6.34% in the 2004 period as compared to
acquisitions  of $141.3  million at an average yield of 6.70% in the same period
in 2003.  The weighted  average level of bond  investments  in the first half of
2004 was $1,912 million,  an increase of 26.1% over the same period in 2003. The
average  annual yield for the bond  portfolio was 6.76% compared to 7.01% in the
2003 period.  Offsetting  these increases is the elimination in consolidation of
approximately $247,000 of revenue on bonds where the debtor is a VIE that is now
consolidated in our financial statements.

The  increase  in  mortgage  banking  fees  resulted  from  a  42%  increase  in
origination fees with solid increases in Freddie Mac and FHA originations.  Loan
originations amounted to $551.0 million in 2004 as compared to $299.9 million in
the same period last year.  Originations in the first six months are broken down
as follows:
<TABLE>
<CAPTION>

(in thousands)       2004          % of total      2003          % of total
                   --------------------------------------------------------
<S>                <C>               <C>         <C>                <C>
Fannie Mae         $199,275           36.2       $151,378            50.5
Freddie Mac         237,631           43.1         37,585            12.5
FHA                  27,749            5.0             --              --
Assumptions          31,957            5.8         27,900             9.3
Conduit - Bank       54,437            9.9         78,538            26.2
Other                    --             --          4,500             1.5
                   --------------------------------------------------------

   Total           $551,049          100.0       $299,901           100.0
                   ========================================================
</TABLE>

In addition,  servicing fees increased 8% over the first half of 2003 due to the
9.4% growth in the servicing portfolio.

The increase in Fund  Management  fees  represents the fee income earned by RCC,
which was not acquired until the fourth  quarter of 2003. The reported  amounts,
however,  exclude  $9.6  million  of fees  earned  by RCC in  transactions  with
consolidated  VIEs. On a pro forma basis,  comparing the 2004 period  (including
the revenues eliminated in consolidation) to the same pre-acquisition  period in
2003, revenue in the Fund Management  business increased 38% over the prior year
due to steady growth in the level of assets under  management and an increase in
origination and acquisition fees as a result of an increase in equity raised for
fund  sponsorships  and revenue  bonds  acquired by us.  Equity  raised for fund
sponsorships in first half of 2004 totaled $399 million compared to $253 million
in the first half of 2003.  Debt and debt  securities  acquired,  mostly revenue
bonds,  by us and AMAC,  which is managed by RCC,  totaled  $198  million in the
first half of 2004  compared to $168  million in the first half of 2003.  Of the
debt acquired in the first half of 2004, $33.8 million has not been funded as of
June 30, 2004.

The  increase in  guarantee  fee income  relates to  acceleration  of the credit
enhancement  business.  In the first half of 2004, we completed two transactions
to guarantee  tax benefits to  investors,  and continued to earn fees three from
transactions completed in 2003.



                                       16
<PAGE>



EXPENSES

Our expenses were as follows:
<TABLE>
<CAPTION>
                                             For the Six Months Ended June 30,
(In thousands)                                  2004        2003    % Change
                                              -------     -------   --------
<S>                                           <C>         <C>         <C>
Interest expense                              $11,965     $ 8,703      37.5
Interest expense on preferred shares of
   subsidiary                                   9,449          --       N/A
Recurring fees - securitizations                2,132       1,982       7.6
Salaries and benefits                          26,932       5,325     405.8
Interest rate derivatives                          26          --       N/A
General and administrative                     18,055       7,664     135.6
Depreciation and amortization                  14,689       4,602     219.2
Expenses of consolidated VIEs                  15,170          --       N/A
                                              -------     -------     -----

Total expenses                                $98,418     $28,276     248.1
                                              =======     =======     =====
</TABLE>

The increase in interest  expense  reflects the higher borrowing levels stemming
from our  acquisition  of RCC,  additional  investments in revenue bonds and the
short  term  investments  to  acquire  equity  interests  inherent  in the  Fund
Management fund sponsorship  portion of the Fund Management  segment,  which was
not yet  part of our  Company  in the  first  half of  2003.  The  increase  was
partially offset by a decline in the average  borrowing rate to 2.4% as compared
to 2.7% in the 2003 period.

The amount  reported  as  interest  expense on  preferred  shares of  subsidiary
represent  dividends on our preferred  shares  subject to mandatory  redemption,
which had  previously  been  reported  as an  allocation  of income  outside  of
operating earnings.

Despite a 23.0% increase in the average balance of financing arrangements in the
first half of 2004 over the prior year  period,  securitization  fees  increased
only 7.6% because of more favorable terms due to a lower  proportionate share of
financing arrangements generating recurring fees.

The  increases  in  salaries  and  benefits,   general  and  administrative  and
depreciation  and  amortization  all relate to the RCC acquisition in the fourth
quarter  of 2003  and  the  resulting  recognition  of  expenses  due to the new
ownership  structure,  as well as  amortization of intangible  assets  acquired.
General and administrative  expenses in the first half of 2004 also include $5.2
million of recoverable costs relating to originations.

We did not record the expenses of consolidated  VIEs prior to April 1, 2004. The
expenses are not  controlled  by us, nor do they  represent any cash or non-cash
charges to be absorbed by us. The expenses of the VIEs are absorbed  entirely by
the limited partners of the VIEs.

OTHER ITEMS

Gains on sales of loans increased  approximately  99.0% for the six months ended
June 30,  2004  versus  the same  period  in 2003,  due to the  higher  level of
originations  in 2004. The income  allocation to SCUs  represents  distributions
payable  to  holders  of the new class of  equity  issued at the time of the RCC
acquisition in the fourth quarter of 2003.

Income Taxes
------------

We are  organized  as a Delaware  statutory  trust and,  for tax  purposes,  are
classified as a partnership.  Much of our recurring  income is tax-exempt.  From
time to time we may sell or  securitize  various  assets  which  may  result  in
capital gains and losses.  This tax structure allows us to have the pass-through
income  characteristics  of a partnership for both taxable and tax-exempt income
while we do not pay tax at the  partnership  level.  Instead,  the  distributive
share of our income,  deductions and credits is reported to each shareholder for
inclusion on their respective  income tax return.  The tax-exempt income derived
from most of our revenue  bonds remains  tax-exempt  as it is passed  through to
shareholders. Any cash dividends received by us from subsidiaries,  organized as
corporations,  will be recorded as dividend  income for tax  purposes.  For such
subsidiaries,  created in 2001,  there  were no  dividends  distributed  for tax
purposes to date.

We have corporate  subsidiaries that are subject to income taxes. We provide for
income taxes in  accordance  with SFAS No. 109,  "Accounting  for Income  Taxes"
("SFAS  109").  SFAS 109  requires  the  recognition  of deferred tax assets and
liabilities  for the expected future tax  consequences of temporary  differences
between the financial statement carrying amounts and the tax basis of assets and
liabilities.  Our  effective  tax rate will  vary  from  period to period as the
composition of our earnings changes and due to the normal  transactional  nature
of much of our taxable business.



                                       17
<PAGE>

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

We meet our long term  liquidity  needs using  primarily two sources of capital:
debt and  various  types of equity  offerings.  We  believe  that our  financing
capacity and cash flow from current  operations are adequate to meet our current
and  projected   liquidity   requirements.   We  fund  our  business  (including
investments  and  acquisitions)  primarily  with cash  provided  by  operations,
securitization  of investments and equity offerings by some of our subsidiaries.
Additionally, we have entered into three revolving warehouse facilities:

o    $100.0  million,  used for  mortgage  banking  needs,  which  is  renewable
     annually;  a temporary  increase to $200  million was secured  through July
     2004.
o    $75.0 million, used to fund mortgage loans and investments in revenue bonds
     on a short  term  basis,  which  matures  March 31,  2005,  with a built in
     accordion  feature  allowing up to a $25 million increase and a term of two
     years, and a one year extension at our option.
o    $85.0  million,  used to acquire  equity  interests  in property  ownership
     entities prior to the inclusion of these equity  interests into investments
     funds,  which matures on October 29, 2004, with a one year extension at our
     option.

As of June 30, 2004, we had  approximately  $189.3  million  available to borrow
under these debt facilities  without  exceeding limits imposed by debt covenants
and our trust agreement.

Short-term liquidity provided by operations comes primarily from interest income
from  revenue  bonds and  promissory  notes in excess of the  related  financing
costs,  mortgage  origination and servicing  fees, and fund management  fees. We
typically generate funds for investment  purposes from  corresponding  financing
activities.

The net  increase  in cash and cash  equivalents  during  the first half of 2004
exceeded the increase in the 2003 period primarily as a result of financing cash
flows,  particularly  issuances  of common and  preferred  shares and  increased
borrowings  from credit  facilities.  The  increased  financing  cash flows were
offset by higher  investing  outflows,  most notably for revenue bond purchases.
The decline in operating cash flows resulted  primarily from the increase in our
asset base resulting from the sharp  increase in mortgage loan  originations  in
the latter part of the second quarter of 2004.

During  August 2004,  distributions  of  approximately  $21.5  million ($.38 per
share) will be paid to holders of common and Convertible CRA Shares,  which were
declared in June 2004.

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.

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

Our annual  report on Form 10-K for the year ended  December 31, 2003 contains a
summary of the Company's  guarantees and off-balance sheet  arrangements.  There
have been no material changes to these items since December 31, 2003.

The following table reflects our maximum exposure and carrying amount as of June
30, 2004 for guarantees we and our subsidiaries have entered into:
<TABLE>
<CAPTION>
                                      Maximum         Carrying
(In thousands)                        Exposure         Amount
--------------------------------     ---------       ---------
<S>                                  <C>             <C>
Payment guarantees                   $  17,933       $      --
Completion guarantees                   53,236              --
Operating deficit guarantees               614              --
CMC credit enhancement                  19,000              --
LIHTC guarantees                       321,000           6,662
                                     ---------       ---------

                                     $ 411,783       $   6,662
                                     =========       =========
</TABLE>



                                       18
<PAGE>

CONTRACTUAL OBLIGATIONS

The following  table provides our commitments as of June 30, 2004 to make future
payments under our debt agreements and other contractual obligations.
<TABLE>
<CAPTION>
                                           Payments due by Period
                              ----------------------------------------------------
(In  thousands)                         Less than 1                        More than
                                Total       year     1-3 years  3-5 years   5 years
                              --------  -----------  ---------  ---------  ---------
<S>                           <C>        <C>         <C>        <C>        <C>
Notes payable                 $254,130   $209,908    $ 27,182   $ 17,040   $     --
Operating lease obligations      5,105        705       2,691      1,418        291
Unfunded loan commitments      169,840     87,470      82,370         --         --
Fixed rate securitization      100,000       --       100,000         --         --
Employee contracts               5,000      2,000       3,000         --         --
                              --------   --------    --------   --------   --------

   Total                      $534,075   $300,083    $215,243   $ 18,458   $    291
                              ========   ========    ========   ========   ========
</TABLE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We invest in certain  financial  instruments,  primarily revenue bonds and other
bond  related  investments  that are  subject to various  forms of market  risk,
including  real estate risk and interest  rate risk.  We seek to  prudently  and
actively  manage  such risks to earn  sufficient  compensation  to  justify  the
undertaking of such risks and to maintain  capital levels which are commensurate
with the risks we undertake.

The  assumptions  related to the  following  discussion  of market risk  involve
judgments   involving  future  economic  market  conditions,   future  corporate
decisions and other interrelating  factors, many of which are beyond our control
and all of which are difficult or impossible to predict with accuracy.  Although
we believe that the assumptions  underlying the forward-looking  information are
reasonable, any of the assumptions could be inaccurate and, therefore, there can
be no assurance that the forward-looking  information included herein will prove
to be accurate. Due to the significant uncertainties inherent in forward-looking
information,  the  inclusion of such  information  should not be regarded as our
representation that our objectives and plans would be achieved.

REAL ESTATE RISK
----------------

We derive income by investing in revenue bonds secured by multifamily affordable
residential  properties.  Investing in such revenue bonds collateralized by such
properties subjects us to various types and degrees of risk that could adversely
affect the value of our assets and our ability to generate revenue.  The factors
that may reduce our revenues, net income and cash available for distributions to
shareholders include the following:

o        the property securing a revenue bond may not generate income sufficient
         to meet its operating  expenses and debt service on its related revenue
         bond;
o        economic conditions,  either local, regional or national, may limit the
         amount of rent that can be charged for rental units at the  properties,
         and may result in a reduction in timely rent payments or a reduction in
         occupancy levels;
o        occupancy and rent levels may be affected by construction of additional
         housing  units and  national,  regional and local  politics,  including
         current  or  future  rent  stabilization  and  rent  control  laws  and
         agreements;
o        federal LIHTC and city,  state and federal  housing  subsidy or similar
         programs  which  apply to many of the  properties,  could  impose  rent
         limitations  and  adversely  affect the  ability to  increase  rents to
         maintain the  properties in proper  condition  during  periods of rapid
         inflation or declining market value of such properties;
o        if a revenue bond  defaults,  the value of the property  securing  such
         revenue bond (plus, for properties that have availed  themselves of the
         federal  LIHTC,  the  value of such  credit)  may be less than the face
         amount of such revenue bond.

Additionally, some of our income may come from additional interest received from
the participation of a portion of the cash flow, sale or refinancing proceeds on
underlying  properties.  The collection of such additional interest may decrease
in periods of economic slowdown due to lower cash flows or values available from
the properties.  In a few instances,  the revenue bonds are  subordinated to the
claims of other senior interest and  uncertainties  may exist as to a borrower's
ability to meet principal and interest payments.

All of these  conditions and events may increase the possibility that a property
owner may be unable to meet its  obligations  to us under its  mortgage  revenue
bond.  This could affect our net income and cash available for  distribution  to
shareholders.   We  manage  these  risks  through  diligent  and   comprehensive
underwriting, asset management and ongoing monitoring of loan performance.

INTEREST RATE RISK
------------------

The nature of our  investments  and the  instruments  used to raise  capital for
their acquisition expose us to income and expense volatility due to fluctuations
in market  interest rates.  Market  interest rates are highly  sensitive to many
factors,  including governmental  policies,  domestic and international economic



                                       19
<PAGE>


and political  considerations and other factors beyond our control. Our exposure
to interest rate is twofold:

o    the potential increase in interest expense on our variable rate debt; and

o    the impact of interest rate on the value of our assets.

IMPACT ON EARNINGS

Our  investments in revenue bonds 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 our floating rate securitization  programs
vary based on market interest rates based on TBMA index and are re-set weekly or
every  35  days.  In  addition,  we  have  floating  rate  debt  related  to our
acquisition financing and our warehouse  facilities.  Other long-term sources of
capital,  such as our Cumulative  Preferred Shares,  carry a fixed dividend rate
and as such, are not impacted by changes in market interest rates.

With the  exception  of $50.0  million of debt hedged via an interest  rate swap
agreement,  the full amount of our liabilities labeled as Financing Arrangements
and Notes Payable are variable rate debts.  We estimate that an increase of 1.0%
in interest  rates would decrease our annual net income by  approximately  $11.6
million.

We manage this risk through the use of interest  rate swaps,  interest rate caps
and forward  bond  origination  commitments,  as  described  in the notes to our
financial statements.

IMPACT ON VALUATION OF ASSETS

A rising  interest  rate  environment  could  reduce the demand for  multifamily
tax-exempt  and  taxable  financing,  which could limit our ability to invest in
revenue bonds or to structure transactions.  Conversely,  falling interest rates
may prompt historical renters to become homebuyers, in turn potentially reducing
the demand for multifamily housing.

Changes in market  interest  rates would also impact the estimated fair value of
our portfolio of revenue bonds. We estimate the fair value for each revenue bond
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 our revenue bonds
will  generally  decline,  and a decline in interest  rates would be expected to
result in an increase in their estimated fair values. For example,  we estimate,
using the same  methodology  used to estimate  the  portfolio  fair market value
under SFAS 115,  that a 1% increase in market rates for  tax-exempt  investments
would  decrease the estimated  fair value of our portfolio of revenue bonds from
its June 30, 2004 value of  approximately  $2.0  billion to  approximately  $1.9
billion. A 1% decline in interest rates would increase the value of the June 30,
2004  portfolio to  approximately  $2.1 billion.  Changes in the estimated  fair
value of the revenue  bonds do not impact our reported net income,  earnings per
share,  distributions  or cash flows,  but are reported as  components  of other
accumulated comprehensive income and affect reported shareholders' equity.

ITEM 4.  CONTROLS AND PROCEDURES

(a)  EVALUATION  OF  DISCLOSURE  CONTROLS AND  PROCEDURES.  Our Chief  Executive
Officer and Chief  Financial  Officer have  evaluated the  effectiveness  of our
disclosure  controls and procedures (as such term is defined in Rules  13a-15(e)
and  15d-15(e)  under the  Securities  Exchange  Act of 1934,  as  amended  (the
"Exchange Act")),  as of the end of the period covered by this report.  Based on
such  evaluation,  such  officers  have  concluded  that,  as of the end of such
period, our disclosure controls and procedures are effective.

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


                                       20
<PAGE>


                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         We are subject to routine  litigation  and  administrative  proceedings
         arising in the ordinary course of business. Management does not believe
         that such matters will have a material  adverse impact on our financial
         position, results of operations or cash flows.

ITEM 2.  CHANGES IN SECURITIES,  USE OF PROCEEDS AND ISSUER  PURCHASES OF EQUITY
         SECURITIES

         See Note 9 to our Consolidated Financial Statements regarding:

               o    an  offering  of   preferred   securities   by  one  of  our
                    subsidiaries  for gross  proceeds  of  approximately  $104.0
                    million; and

               o    our  offering  of  common  shares  for  gross   proceeds  of
                    approximately $110.8 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 our  shareholders
         for the  annual meeting of shareholders were sent to shareholders on or
         about April 30, 2004.  Such meeting was held on June 10, 2004. Peter T.
         Allen,  Jeff T. Blau, Denise L. Kiley,  Robert A. Meister and Andrew L.
         Farkas were elected as trustees for three-year terms  expiring in 2007.
         Continuing to serve their  current  terms  are the following  trustees:
         Stuart  J. Boesky,  Stephen M. Ross,  Alan P. Hirmes,  Thomas M. White,
         Charles L.  Edson, Marc D. Schnitzer,  Jerome V. Halperin,  Janice Cook
         Roberts,  Nathan  Gantcher and Robert L. Loverd.  The five  individuals
         elected, and the  number of votes cast for and abstaining, with respect
         to each of them, were as follows (no votes were cast "against"):
<TABLE>
<CAPTION>
                                                        For             Abstain
                                                     ----------        ---------
<S>                                                  <C>               <C>
Peter T. Allen
  Common Shares                                      47,277,825          354,237
  Restricted Common Shares                              589,112           15,520
  Special Preferred Voting Shares                    13,592,915        1,486,186

Jeff T. Blau
  Common Shares                                      41,144,077          487,985
  Restricted Common Shares                              589,112           15,520
  Special Preferred Voting Shares                    13,592,915        1,486,186

Andrew L. Farkas
  Common Shares                                      41,228,031          404,031
  Restricted Common Shares                              589,112           15,520
  Special Preferred Voting Shares                    13,592,915        1,486,186

Denise L. Kiley
  Common Shares                                      41,142,458          489,604
  Restricted Common Shares                              589,112           15,520
  Special Preferred Voting Shares                    13,592,915        1,486,186

Robert A. Meister
  Common Shares                                      41,264,680          367,382
  Restricted Common Shares                              589,112           15,520
  Special Preferred Voting Shares                    13,592,915        1,486,186
</TABLE>

ITEM 5.  OTHER INFORMATION - None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         Exhibits:

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

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


                                       21
<PAGE>

         32.1  Chief Executive Officer and Chief Financial Officer certification
               pursuant  to 18 U.S.C.  Section  1350,  as  adopted  pursuant  to
               Section 906 of the Sarbanes-Oxley Act of 2002.

         (b)   Reports on Form 8-K

               The following  8-K reports were filed or  furnished,  as noted in
               the applicable Form 8-K, for the quarter ended June 30, 2004.

               Current  report on Form 8-K relating to a press release we issued
               reporting our first quarter financial results, dated May 6, 2004.

               Current  report  on  Form  8-K  relating  to the  consent  of our
               independent  auditors to the  incorporation  by  reference in our
               previously  filed  Registration  Statements  of  the  independent
               auditors'  report dated March 15, 2004,  which was  inadvertently
               omitted from the exhibit  index of our Annual Report on Form 10-K
               for the year ended December 31, 2003, dated June 22, 2004.



                                       22
<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.



                                   CHARTERMAC
                                  (Registrant)



Date:  August 5, 2004          By: /s/ Stuart J. Boesky
                                   --------------------
                                   Stuart J. Boesky
                                   Managing Trustee and Chief Executive Officer



Date:  August 5, 2004          By: /s/ Alan P. Hirmes
                                   ------------------
                                   Alan P. Hirmes
                                   Managing Trustee, Chief Financial Officer and
                                   Chief Operating Officer



<PAGE>
                                                                    Exhibit 31.1



                      CERTIFICATION PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002



I, Stuart J. Boesky, hereby certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q for the  period
          ending June 30, 2004 of CharterMac;

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary  in  order  to make  the  statements  made,  in light of the
          circumstances  under which such  statements  were made, not misleading
          with respect to the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for the
          registrant and have:

          a) designed such disclosure  controls and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to  ensure  the  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

          c)  disclosed in this report any change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting,  to the  registrant's  auditors and the audit  committee of
          registrant's  board of directors or persons  performing the equivalent
          functions:

          a) all significant  deficiencies and material weaknesses in the design
          or operation of internal  control over financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

          b) any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal control over financial reporting.


          Date:  August 5, 2004                      By: /s/Stuart J. Boesky
                                                         -------------------
                                                         Stuart J. Boesky
                                                         Chief Executive Officer



<PAGE>
                                                                    Exhibit 31.2



                      CERTIFICATION PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002



I, Alan P. Hirmes, hereby certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q for the  period
          ending June 30, 2004 of CharterMac;

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary  in  order  to make  the  statements  made,  in light of the
          circumstances  under which such  statements  were made, not misleading
          with respect to the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for the
          registrant and have:

          a) designed such disclosure  controls and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to  ensure  the  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

          c)  disclosed in this report any change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting,  to the  registrant's  auditors and the audit  committee of
          registrant's  board of directors or persons  performing the equivalent
          functions:

          a) all significant  deficiencies and material weaknesses in the design
          or operation of internal  control over financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

          b) any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal control over financial reporting.


          Date:  August 5, 2004                     By:  /s/ Alan P. Hirmes
                                                         ------------------
                                                         Alan P. Hirmes
                                                         Chief Financial Officer


<PAGE>
                                                                    Exhibit 32.1



        CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
            (UNITED STATES CODE, TITLE 18, CHAPTER 63, SECTION 1350)
                  ACCOMPANYING QUARTERLY REPORT ON FORM 10-Q OF
                 CHARTERMAC FOR THE QUARTER ENDED JUNE 30, 2004


In  connection  with the  Quarterly  Report on Form 10-Q of  CharterMac  for the
quarterly period ending June 30, 2004, as filed with the Securities and Exchange
Commission  on the date  hereof  (the  "Report"),  Stuart  J.  Boesky,  as Chief
Executive Officer of our Company, and Alan P. Hirmes, as Chief Financial Officer
of our Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, that:


    (1) The Report fully  complies  with the  requirements  of Section  13(a) or
15(d), as applicable, of the Securities Exchange Act of 1934; and


    (2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of our Company.



By:  /s/ Stuart J. Boesky                           By:  /s/ Alan P. Hirmes
     --------------------                                ------------------
     Stuart J. Boesky                                    Alan P. Hirmes
     Chief Executive Officer                             Chief Financial Officer
     August 5, 2004                                      August 5, 2004