SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A
                                (Amendment No. 1)

(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>


EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A ("Form  10-Q/A") to our Quarterly  Report on
Form 10-Q for the quarterly period ended June 30, 2004, initially filed with the
Securities and Exchange  Commission (the "SEC") on August 5, 2004 (the "Original
Filing"),  is being filed to reflect restatements of our condensed  consolidated
balance  sheet  at June 30,  2004,  our  condensed  consolidated  statements  of
operations  for the three and six months  ended June 30, 2004 and our  condensed
consolidated statement of cash flows for the six months ended June 30, 2004, and
certain  disclosures  in the notes  thereto,  including  the  disclosure  of our
commitments  and  contingencies  in Note 13. For a more detailed  description of
these  restatements,  see  Note 1A to the  accompanying  condensed  consolidated
financial statements in this Form 10-Q/A.

For the  convenience  of the reader,  this Form  10-Q/A sets forth the  Original
Filing in its entirety. However, this Form 10-Q/A only amends and restates Items
1, 2 and 4 of Part I of the Original  Filing,  in each case,  solely as a result
of, and to reflect,  the restatement,  and no other  information in the Original
Filing is amended  hereby.  The foregoing items have not been updated to reflect
other events  occurring  after the Original  Filing or to modify or update those
disclosures affected by subsequent events. In addition, pursuant to the rules of
the SEC,  Item 6 of Part II of the  Original  Filing has been amended to contain
currently-dated  certifications  from our  Chief  Executive  Officer  and  Chief
Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act
of 2002. The  certifications  of our Chief Executive Officer and Chief Financial
Officer  are  attached  to this Form  10-Q/A  as  exhibits  31.1,  31.2 and 32.1
respectively.

Except for the  foregoing  amended  information,  this Form 10-Q/A  continues to
describe  conditions  as of the  date of the  Original  Filing,  and we have not
updated the  disclosures  contained  herein to reflect events that occurred at a
later date.  Other events  occurring  after the date of the  Original  Filing or
other  disclosures  necessary to reflect  subsequent events have been or will be
addressed  in our  amended  Quarterly  Report on Form  10-Q/A for the  quarterly
period ended  September  30, 2004,  which is being filed  concurrently  with the
filing of this Form 10-Q/A and any reports filed with the SEC  subsequent to the
date of this filing.



<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                           CHARTERMAC AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                       June 30,       December 31,
                                                                         2004             2003
                                                                    --------------   --------------
                                                                    (As Restated -
                                                                      See Note 1A)
<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                                                                  205,652          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                                                          $ 5,447,426      $ 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                58,392           56,318
   Deferred tax liability                                                  40,998           60,370
   Distributions payable                                                   35,491           27,612
   Notes payable and other liabilities of consolidated VIEs             1,119,860               --
                                                                      -----------      -----------

Total liabilities                                                       2,742,323        1,471,158
                                                                      -----------      -----------

Minority interest in consolidated subsidiary - convertible SCUs           272,984          288,006
                                                                      -----------      -----------
Minority interest in consolidated subsidiary - PWF                          4,558            4,193
                                                                      -----------      -----------
Preferred shares of subsidiary (not subject to mandatory
   repurchase)                                                            104,000               --
                                                                      -----------      -----------
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)                                159,448          160,618
   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)                        731,486          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                                                923,559          817,657
                                                                      -----------      -----------

Total liabilities and shareholders' equity                            $ 5,447,426      $ 2,581,014
                                                                      ===========      ===========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                           Three Months Ended         Six Months Ended
                                                                June 30,                  June 30,
                                                         ----------------------    ----------------------
                                                           2004         2003          2004        2003
                                                         ---------    ---------    ---------    ---------
                                                       (As Restated -            (As Restated -
                                                        See Note 1A)              See Note 1A)
<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                                        10,507           --       17,287           --
     Guarantees                                              2,929          995        4,826        1,991
   Other income                                              3,606        1,815        6,275        3,423
   Revenues of consolidated VIEs                             2,790           --        2,790           --
                                                         ---------    ---------    ---------    ---------
       Total revenues                                       57,006       33,208      103,319       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                                  409       18,452        4,901       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                                       (44,411)      22,070      (37,359)      42,753
Income allocated to preferred shareholders of
   subsidiary                                                 (830)      (4,725)        (830)      (9,449)
Income allocated to Special Common Units of
   subsidiary                                               (9,537)          --      (12,455)          --
(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                                  16,780       17,412       20,809       33,343
Income tax benefit                                           7,423          788        9,812        2,764
                                                         ---------    ---------    ---------    ---------
Net income                                               $  24,203    $  18,200    $  30,621    $  36,107
                                                         =========    =========    =========    =========

Allocation of net income to:
   Special distribution to Manager                       $      --    $   1,459    $      --    $   2,870
                                                         =========    =========    =========    =========
   Manager                                               $      --    $       1    $      --    $       3
                                                         =========    =========    =========    =========
   Common shareholders                                   $  20,721    $  15,316    $  26,170    $  30,405
   Convertible CRA shareholders                              3,482        1,424        4,451        2,829
                                                         ---------    ---------    ---------    ---------
     Total for shareholders                              $  24,203    $  16,740    $  30,621    $  33,234
                                                         =========    =========    =========    =========

Net income per share:
   Basic                                                 $    0.47    $    0.37    $    0.59    $    0.74
                                                         =========    =========    =========    =========
   Diluted                                               $    0.46    $    0.37    $    0.59    $    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 condensed consolidated financial statements.

                                       4
<PAGE>


                           CHARTERMAC AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                    Six Months Ended
                                                                                        June 30,
                                                                               --------------------------
                                                                                  2004           2003
                                                                               -----------    -----------
                                                                             (As Restated -
                                                                              See Note 1A)
<S>                                                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                  $    30,621    $    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                           12,455             --
   Income (loss) allocated to minority interests                                       365            (39)
   Non-cash compensation expense                                                     6,031            676
   Deferred taxes                                                                   (9,445)        (2,020)
   Changes in operating assets and liabilities:
     Mortgage servicing rights                                                      (4,571)        (1,737)
     Loans to affiliates                                                            (3,122)            --
     Other assets                                                                  (84,362)        49,826
     Accounts payable, accrued expenses and other liabilities                        2,305       (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 condensed consolidated financial statements.

                                       5
<PAGE>


                           CHARTERMAC AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                    Six Months Ended
                                                                                        June 30,
                                                                               --------------------------
                                                                                  2004           2003
                                                                               -----------    -----------
                                                                             (As Restated -
                                                                              See Note 1A)
<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 condensed consolidated financial statements.

                                       6
<PAGE>

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


NOTE 1 - BASIS OF PRESENTATION

The  condensed   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  condensed  consolidated
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 condensed consolidated financial statements
included in this document.  Our condensed  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 1A - RESTATEMENT

In the course of finalizing the 2004 year-end audit,  management determined that
the Company had not properly  accounted  for certain  components of its deferred
tax accounts.  In the first quarter of 2004,  certain  Special Common Units of a
subsidiary that were issued as part of the Related Capital Company,  LLC ("RCC")
purchase  were  converted  to  common  shares  of  the  Company,  triggering  an
adjustment to the deferred tax liability and the corresponding goodwill. The tax
effect of this conversion was recorded incorrectly,  leading to an overstatement
of the tax benefit in that quarter in the amount of $1,930,000. Accordingly, the
Company has restated the condensed  consolidated  financial statements to reduce
the tax benefit in the income statement by approximately  $1,930,000 for the six
months  ended  June 30,  2004  and to  correct  goodwill  and the  deferred  tax
liability on the balance  sheet.  There was no impact for the three months ended
June 30, 2004.

Also, in the course of finalizing the year-end audit, management determined that
the Company had not properly  accounted for bond  acquisition  and  construction
service  fees in the Fund  Management  segment.  Due to the  purchase  of RCC in
November  2003,  the character of these  revenue  streams  changed,  requiring a
shorter  recognition  period  for the  construction  service  fees  and a longer
recognition period for the bond acquisition fees.  Accordingly,  the Company has
restated the condensed consolidated financial statements to properly reflect:

     (1)  the  recognition  of the  construction  service fees over the expected
          construction period (increasing other income by a net of approximately
          $128,000  and  $144,000  for the three and six  months  ended June 30,
          2004);
     (2)  the recognition of the bond  acquisition fees over the estimated lives
          of the related bonds  (reducing fund management fee income by a net of
          approximately  $563,000  and  $1,650,000  for the three and six months
          ended June 30, 2004); and
     (3)  the related tax benefit of approximately $195,000 and $676,000 for the
          three and six months ended June 30, 2004.

In  addition,  the  Company  restated  the  deferred  revenue and  deferred  tax
liabilities on the balance sheet.

The net effect of the revenue and tax restatement adjustments, before allocation
of the net impact to SCUs, was a decrease in earnings of approximately  $240,000
and $2,760,000 for the three and six months ended June 30, 2004.

                                       7
<PAGE>

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


A summary of the significant effects of the restatement is as follows:

<TABLE>
<CAPTION>

                                                               As previously                  As previously
(in thousands except per share amounts)                           reported     As restated       reported    As restated
------------------------------------------------------------------------------------------------------------------------

                                                                   THREE MONTHS ENDED              SIX MONTHS ENDED
Condensed Consolidated Statement of Income data:                      JUNE 30, 2004                 JUNE 30, 2004
------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>            <C>             <C>            <C>
Fund management fee income                                      $   11,070     $   10,507      $   18,937     $   17,287
Other income                                                         3,478          3,606           6,131          6,275
Total revenues                                                      57,441         57,006         104,825        103,319
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            409           6,407          4,901
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)       (44,411)        (35,853)       (37,359)
Income allocated to Special Common Units of subsidiaries            (9,548)        (9,537)        (13,253)       (12,455)
Income before income taxes                                          17,204         16,780          21,517         20,809
Income tax benefit                                                   7,228          7,423          11,066          9,812
  Net income                                                        24,432         24,203          32,583         30,621
Allocation of net income to common shareholders                     20,924         20,721          27,847         26,170
Allocation of net income to Convertible CRA shareholders             3,508          3,482           4,736          4,451
Net income per share - basic                                    $     0.47     $     0.47      $     0.63     $     0.59
Net income per share - diluted                                  $     0.47     $     0.46      $     0.62     $     0.59

Condensed Consolidated Balance Sheet data:                         AS OF JUNE 30, 2004

Goodwill                                                        $  207,582     $  205,652
Total assets                                                     5,449,356      5,447,426
Accounts payable, accrued expenses and other liabilities            57,029         58,392
Deferred tax liability                                              41,674         40,998
Total liabilities                                                2,741,636      2,742,323
Minority interest in consolidated subsidiary - convertible SCUs    273,781        272,984
Shareholders' equity                                             1,029,379        923,559
</TABLE>

The Company also determined that the preferred shares of subsidiary (not subject
to  mandatory  repurchase)  of  $104.0  million  issued  in May 2004  should  be
presented between  liabilities and equity on the balance sheet as opposed to its
prior  classification as a component of Stockholders'  Equity. As a result, this
amount has been reclassified from equity.

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").

                                       8
<PAGE>

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


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 condensed  consolidated  balance
sheet  and  have   recorded   their  results  of  operations  in  our  condensed
consolidated statement of income beginning April 1, 2004. The balance sheets and
statements of operations in our condensed  consolidated financial statements are
as of March 31, 2004, the latest date available.

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.

                                       9
<PAGE>

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


<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>

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                   --                --                 --              --           (9,927)

Amortization expense                  (8,103)               --               (237)         (8,340)              --
                                  --------------    --------------    --------------   -------------    ------------
Net balance at June 30, 2004        $175,261        $    8,639         $    1,963        $185,863         $205,652
                                  ==============    ==============    ==============   =============    ============

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

                                       10
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
              NOTES TO CONDENSED 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

                                       11
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
              NOTES TO CONDENSED 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.  After  this  conversion,
15,172,217 SCUs remained outstanding.

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  between
liabilities and equity,  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.

                                       12
<PAGE>

                           CHARTERMAC AND SUBSIDIARIES
              NOTES TO CONDENSED 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                                                           $ 30,621    $ 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                                                 $ 25,030    $ 52,589
                                                                     ========    ========
</TABLE>


NOTE 11 - EARNINGS PER SHARE

Diluted  income per share is  calculated  using the weighted  average  number of
shares  outstanding  during the period plus the  additional  dilutive  effect of
common share  equivalents.  The dilutive effect of outstanding  share options is
calculated  using the treasury stock method.  The dilutive effect of the SCUs is
calculated   using  the   "if-converted   method".   The  SCUs  will  always  be
antidilutive,  because while the shares are  convertible on a one-to-one  basis,
the  dividends  paid will always be greater than the  dividends  paid per common
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                                  24,203    52,017     $   .47         $30,621    51,805      $     .59
                                                                 =======                               =========
Effect of dilutive securities                   --       342                         --       388
                                           -------    ------                    -------    ------
Diluted EPS                                24,203    52,359     $   .46         $30,621    52,193      $     .59
                                           =======    ======     =======        =======    ======      =========

<CAPTION>

                                           Three Months Ended June 30, 2003     Six Months Ended June 30, 2003
                                           --------------------------------   ----------------------------------
                                            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.

                                       13
<PAGE>

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


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.

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   $   17,248   $   57,006    $   26,928   $ 5,285     $    995    $   33,208
                                  ===============================================    ===============================================

Net income                        $   21,173   $  1,731   $    1,299   $   24,003    $   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   $   27,097   $  103,319    $   54,534   $ 8,604     $  1,991    $   65,129
                                  ===============================================    ===============================================

Net income (loss)                 $   37,429   $  2,431   $   (9,239)  $   30,621    $   34,614   $  (214)    $  1,707    $   36,107
                                  ===============================================    ===============================================
Total assets as of June
30                                $2,322,106   $176,407   $2,948,913   $5,447,426    $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 - COMMITMENTS AND CONTINGENCIES

PW FUNDING INC.

PWF is required to meet minimum net worth and capital requirements and to comply
with other  requirements  set by Fannie Mae, Freddie Mac, Ginnie Mae and FHA and
was in compliance with these requirements as of June 30, 2004.

PWF maintains, as of June 30, 2004, treasury notes of approximately $6.2 million
and a money market account of approximately  $0.2 million,  which is included in
cash and  cash  equivalents-restricted  in the  condensed  consolidated  balance
sheet, to satisfy the Fannie Mae collateral requirements of $6.3 million.

PWF has  liability  under the terms of its master loss  sharing  agreement  with
Fannie Mae for a portion of any loss that may result from  borrower  defaults on
the mortgage loans it originates and sells to Fannie Mae.

We maintain an allowance for loan losses for loans  originated  under the Fannie
Mae DUS product line at a level that, in management's  judgment,  is adequate to
provide for estimated  losses.  At June 30, 2004, that reserve was approximately
$7.5 million,  which we believe  represents its maximum  liability at this time.
Unlike loans  originated for Fannie Mae, PWF does not share the risk of loss for
loans it originates for Freddie Mac or FHA.

In connection  with the PWF warehouse  line,  both  CharterMac and CM Corp. have
entered  into  guarantees  for the  benefit of Fleet  National  Bank  ("Fleet"),
guaranteeing  the total advances drawn under the line, up to the maximum of $100
million,  together with interest,  fees,  costs,  and charges related to the PWF
warehouse line.

At June 30, 2004,  PWF had  commitments of  approximately  $148.3 million to ten
borrowers.

CREDIT ENHANCEMENT TRANSACTION

CM Corp.  completed a credit enhancement  transaction with Merrill Lynch Capital
Services,  Inc. ("MLCS"),  pursuant to which, CM Corp. assumes MLCS's first loss
position on a pool of  tax-exempt  weekly  variable  rate  multifamily  mortgage
loans.  TRCLP has provided CM Corp. with an indemnity covering 50% of any losses
that are incurred by CM Corp. as part of this transaction.  Our maximum exposure
under the terms of the transaction was  approximately  $19.0 million at June 30,
2004.

                                       14
<PAGE>

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


As of June 30, 2004,  the credit  enhanced  pool of  properties  are  performing
according to their  contractual  obligations and we do not anticipate any losses
to be incurred  on its  guaranty.  Should our  ongoing  analysis of risk of loss
change in the future,  a provision  for probable  loss might be  required;  such
provision could be material.

YIELD GUARANTEE TRANSACTIONS

We have  entered  into  several  agreements  with  Merrill  Lynch (the  "Primary
Guarantor")  to  guarantee  an agreed  upon  rates of return  for pools of seven
multifamily  properties  each owned by RCGCP II, an investment fund sponsored by
RCC prior to our acquisition of RCC.

These  transactions  were  each  structured  as  two  separate  guarantees,  one
primarily  guaranteeing  the return through the lease-up phase of the properties
and the  other  guaranteeing  the  return  through  the  operating  phase of the
properties.  The fee for the first guarantee is paid at closing. The fee for the
second  guarantee  is  typically  paid in two  installments.  These fees will be
recognized in income on a straight line basis over the period of the  respective
guarantees.

Some of the  properties  included  in these  pools have been  financed  with the
proceeds of revenue bonds acquired by an affiliate of CharterMac.  In connection
with these transactions, the Primary Guarantor required that those revenue bonds
be deposited  into a trust pursuant to which the revenue bonds were divided into
senior  and  subordinated   interests  with  50%  of  each  revenue  bond  being
subordinated.  We have financed the senior trust interest as part of the Merrill
Lynch P-FloatsSM/RitesSM program. The subordinate trust interests are being used
as collateral in other of our financing programs.

In  connection  with these  transactions,  we posted  collateral  to the Primary
Guarantor  in the form of either cash or revenue  bonds of  approximately  $20.7
million.

OTHER

We have entered into  transactions  related to certain  properties,  pursuant to
which  we  provide  credit  support  to  the  construction  lender  for  project
completion   and  Fannie  Mae  conversion  and  will  be  obligated  to  acquire
subordinated  bonds to the extent  the  construction  period  bonds do not fully
convert.

Up until the point of completion,  we will guaranty to the  construction  lender
reimbursement of any draw on its construction  letter of credit up to 40% of the
stated  amount  of the  letter of  credit.  Following  completion,  up until the
project loan  converts to  permanent  loan status,  we will  guarantee  the full
amount of the letter of credit.  Our  maximum  exposure,  related to these three
transactions, is approximately $27 million.

The developer has also issued  several  guarantees to the  construction  lender,
each of which  would be called  upon  before our  guarantees,  and each of which
would be assigned to us should its guarantees be called.

We have entered into other  transactions  to purchase  revenue bonds pursuant to
agreements  which require us, at the earlier of  stabilization  or conversion to
permanent  financings  to  acquire  Series  A and  Series  B  revenue  bonds  at
predetermined  prices and  interest  rates.  We are  obligated  to purchase  the
revenue bonds only if  construction  is  completed.  We are obligated to buy the
Series B revenue  bonds only if, at the date the Series A bonds are  stabilized,
the property's cash flow is sufficient to provide debt service coverage of 1.15x
for both the Series A and B bonds.  An unrelated third party lender will advance
funds to the developer,  as needed during the construction period, at a floating
rate. These forward  commitments  create  derivative  instruments under SFAS No.
133, which have been designated as a cash flow hedge of the anticipated  funding
of the revenue bonds, and are recorded at fair value, with changes in fair value
recorded in accumulated other  comprehensive  income until the revenue bonds are
funded.  The total  potential  amount we could  possibly  be required to fund is
$131.4 million.

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.

                                       15
<PAGE>

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


NOTE 14 - 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.

                                       16
<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.

Restatements
------------

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  gives  effect  to  the  restatements  disclosed  in  Note  1A to the
condensed consolidated financial statements.

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  Condensed  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                     $57,006              $33,208                71.7
Income before income taxes    16,780     29.4      17,412     52.4       (3.6)
Net income                    24,203     42.5      18,200     54.8       33.0
</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  Condensed   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.

                                       17
<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                    10,507         --          N/A
   Guarantee fees                           2,929          995      194.4
Other income                                3,606        1,815       98.7
Revenues of consolidated VIEs               2,790         --          N/A
                                          -------      -------      -----

Total revenues                            $57,006      $33,208       71.7
                                          =======      =======      =====
</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.

                                       18
<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 Condensed  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                   $106,319              $65,129               58.6
Income before income taxes   20,809    20.1       33,343    51.2      (37.6)
Net income                   30,621    29.6       36,107    55.4      (15.2)
</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.

                                       19
<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              17,287            --          N/A
   Guarantee fees                     4,826         1,991        142.4
Other income                          6,275         3,423         83.3
Revenues of consolidated VIEs         2,790            --          N/A
                                   --------      --------        -----

Total revenues                     $103,319      $ 65,129         58.6
                                   ========      ========        =====
</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.

                                       20
<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.

                                       21
<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
-------------------------------------------------------------

Note 13 to the condensed consolidated financial statements contains a summary of
the Company's guarantees and off-balance sheet arrangements.

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>

                                       22
<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

                                       23
<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 and have
concluded that they were not effective as of that date.

As a result of the evaluation of the  effectiveness  of our disclosure  controls
and  procedures  as of December 31, 2004,  with the  participation  of our Chief
Executive Officer and Chief Financial Officer, we identified material weaknesses
in our internal controls over financial reporting relating to the accounting for
deferred  taxes  and  the   consolidation  of  subsidiaries   (with  respect  to
identifying  revenues  that  should  have  been  recharacterized   following  an
acquisition).  As a  result,  and as  set  forth  in  Note  1A to the  Condensed
Consolidated Financial Statements and the "Restatement" section included in Item
2,  Management's  Discussion and Analysis of Financial  Condition and Results of
Operations,  we have restated our  unaudited  condensed  consolidated  financial
statements  for the  periods  covered by this  report.  We have also  undertaken
remedial  action to address and correct the weaknesses in our internal  controls
over these processes.

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

                                       23
<PAGE>

                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         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  Condensed  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

                                       24
<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.

                                       26
<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:  April 7, 2005           By: /s/ Stuart J. Boesky
                                   --------------------
                                   Stuart J. Boesky
                                   Managing Trustee and Chief Executive Officer



Date:  April 7, 2005           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/A 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:  April 7, 2005                       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/A 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:  April 7, 2005                      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/A OF
                 CHARTERMAC FOR THE QUARTER ENDED JUNE 30, 2004


In  connection  with the Quarterly  Report on Form 10-Q/A 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
     April 7, 2005                                       April 7, 2005