SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)


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


For the quarterly period ended March 31, 2003


                                       OR


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


                         Commission File Number 1-13237


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



       Delaware                                   13-3949418
-------------------------------               -------------------
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)                Identification No.)



625 Madison Avenue, New York, New York               10022
---------------------------------------       -------------------
(Address of principal executive offices)          (Zip Code)


Registrant's telephone number, including area code (212) 421-5333


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


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


<PAGE>


                         PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                     ===============         ===============
                                                        March 31,            December 31,
                                                          2003                   2002
                                                     ---------------         ---------------
                                                      (Unaudited)
<S>                                                    <C>                      <C>

ASSETS
Revenue bonds-at fair value                             $1,551,808              $1,579,590
Other investments                                           29,782                  44,096
Mortgage servicing rights                                   36,072                  35,595
Cash and cash equivalents                                   74,923                  55,227
Cash and cash equivalents-restricted                         5,444                   5,257
Interest receivable - net                                    8,550                   9,020
Promissory notes and mortgages receivable                   50,463                  53,278
Deferred costs - net of amortization of $9,468
  and $8,451                                                48,880                  48,693
Goodwill                                                     4,793                   4,793
Other intangible assets - net of amortization of
  $1,867 and $1,750                                         11,199                  11,316
Other assets                                                 9,390                   6,003
                                                         ---------               ---------
Total assets                                            $1,831,304              $1,852,868
                                                         =========               =========

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Financing arrangements                                $  671,164              $  671,659
  Notes payable                                             71,349                  68,556
  Interest rate derivatives                                  4,936                   5,504
  Accounts payable, accrued expenses and
   other liabilities                                        12,511                  32,378
  Deferred income                                            8,274                   8,998
  Due to Manager and affiliates                              3,054                   4,126
  Deferred tax liability                                     9,586                  10,790
  Distributions payable                                     19,367                  19,020
                                                         ---------               ---------
Total liabilities                                          800,241                 821,031
                                                         ---------               ---------

Preferred shares of subsidiary (subject to
  mandatory repurchase)                                    273,500                 273,500
                                                         ---------               ---------

Minority interest in consolidated subsidiary                 5,718                   4,822
                                                         ---------               ---------

Commitments and contingencies

Shareholders' equity:
  Beneficial owners' equity - convertible CRA
   share-holders  (3,835,002 shares, issued
   and outstanding in 2003 and 2002,
   respectively)                                            58,332                  58,174
  Beneficial owner's  equity-manager                         1,128                   1,126
  Beneficial owners' equity-other
   common shareholders
   (100,000,000 shares authorized;  41,228,527
   issued and 41,220,127 outstanding
   and  41,168,618  shares issued and 41,160,218
   outstanding in 2003 and 2002,
   respectively)                                           606,867                 604,496
  Treasury shares of beneficial interest (8,400 shares)       (103)                   (103)
  Accumulated other comprehensive income                    85,621                  89,822
                                                         ---------               ---------
Total shareholders' equity                                 751,845                 753,515
                                                         ---------               ---------

Total liabilities and shareholders' equity              $1,831,304              $1,852,868
                                                         =========               =========

</TABLE>


    See accompanying notes to consolidated financial statements

                                       2

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                 (Dollars in thousands except per share amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                  =========================
                                                                      Three Months Ended
                                                                            March 31,
                                                                  -------------------------
                                                                     2003          2002
                                                                  -------------------------
<S>                                                               <C>           <C>

Revenues:
  Interest income:
   Revenue bonds                                                  $     26,250  $    22,920
   Other interest income                                                   837        1,625
   Promissory notes and mortgages receivable                               181          163
  Mortgage banking fees                                                    941        1,656
  Mortgage servicing fees                                                2,126        1,853
  Other income                                                           1,586          586
                                                                  ------------   ----------

  Total revenues                                                        31,921       28,803
                                                                  ------------   ----------

Expenses:
  Interest expense                                                       3,816        3,991
  Recurring fees relating to the Private Label
   Tender Option Program                                                   963          727
  Bond servicing                                                         1,015          766
  General and administrative                                             6,039        5,599
  Depreciation and amortization                                          1,687        2,240
                                                                  ------------   ----------

   Total expenses                                                       13,520       13,323
                                                                  ------------   ----------

Income before gain (loss) on repayment of revenue bonds,
  gain on sales of loans and equity in earnings of
  ARCap                                                                 18,401       15,480

Equity in earnings of ARCap                                                555          547

Gain on sales of loans                                                   2,139        3,287

Gain (loss) on repayment of revenue bonds                                 (412)       3,757
                                                                  ------------   ----------

Income before allocation to preferred shareholders
  of subsidiary and minority interest                                   20,683       23,071

  Income allocated to preferred shareholders of
    subsidiary                                                          (4,724)      (3,764)

  Income allocated to minority interest                                    (28)        (302)
                                                                  ------------   ----------

Income before benefit (provision) for income taxes                      15,931       19,005

  Benefit (provision) for income taxes                                   1,976         (181)
                                                                  ------------   ----------
Net income                                                       $      17,907  $    18,824
                                                                  ============   ==========

Allocation of net income to:
  Special distribution to manager                                $       1,411  $     1,088
                                                                  ============   ==========
  Manager                                                        $           2  $       177
                                                                  ============   ==========
  Common shareholders                                            $      15,089  $    16,707
  Convertible CRA shareholders                                           1,405          852
                                                                  ------------   ----------
   Total for shareholders                                        $      16,494  $    17,559
                                                                  ============   ==========

Net income per share
  Basic                                                          $         .37  $       .45
                                                                  ============   ==========
  Diluted                                                        $         .37  $       .45
                                                                  ============   ==========

Weighted average shares
  outstanding:

  Basic                                                             45,013,292   38,781,464
                                                                  ============   ==========
  Diluted                                                           45,070,595   38,845,985
                                                                  ============   ==========

</TABLE>


          See accompanying notes to consolidated financial statements


                                       3


<PAGE>


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

<TABLE>
<CAPTION>


                           Beneficial                   Beneficial
                             Owners'                      Owners'      Treasury                        Accumulated
                             Equity       Beneficial      Equity-       Shares                           Other
                           Convertible     Owner's        Other           of                          Comprehensive
                               CRA         Equity         Common       Beneficial     Comprehensive      Income
                           Shareholders    Manager     Shareholders     Interest          Income         (Loss)         Total
                           ------------  -----------   ------------    ----------     -------------   -------------    --------
<S>                        <C>           <C>           <C>             <C>            <C>             <C>              <C>

Balance at January 1,      $   58,174    $   1,126     $  604,496     $  (103)                        $  89,822        $753,515
 2003
Comprehensive income:
 Net income                     1,405        1,413         15,089                     $ 17,907                           17,907
                                                                                       -------
 Other comprehensive
  gain (loss):
  Net unrealized gain                                                                      602
   on interest rate
   derivatives
  Net unrealized loss
   on revenue bonds:
  Unrealized holding                                                                    (5,215)
   loss arising during
   the period
  Less: Reclassification
   adjustment for net
   loss included in
   net income                                                                              412
                                                                                       -------
Total other
   comprehensive loss                                                                   (4,201)          (4,201)         (4,201)
                                                                                       -------
Total comprehensive                                                                   $ 13,706
  income                                                                               =======
Options exercised                                             679                                                           679
Distributions                  (1,247)      (1,411)       (13,397)                                                      (16,055)
                             --------      -------        -------       ----                            -------          ------
Balance at March 31,
  2003                      $  58,332     $  1,128       $606,867      $(103)                          $ 85,621         $751,845
                             ========      =======        =======       ====                            =======          =======

</TABLE>



          See accompanying notes to consolidated financial statements


                                       4


<PAGE>


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



                                            ==============================
                                                 Three Months Ended
                                                      March 31,
                                            ------------------------------
                                                 2003             2002
                                            -------------    -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                $   17,907        $   18,824
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
  Loss (gain) on repayment of revenue bonds        412            (3,757)
  Other amortization                               370               200
  Amortization of other intangible assets          118               118
  Amortization of bond selection costs             650               599
  Amortization of mortgage servicing rights      1,335             1,968
  Income allocated to preferred shareholders
   of subsidiary                                 4,724             3,764
  Equity in earnings of ARCap, in excess of
   distributions  received                          --               (97)
  Increase in mortgage servicing  rights        (1,812)           (2,682)
  Income  allocated  to minority  interest          28               302
  Issuance of shares of subsidiary-compensation
   expense                                         867                --
  Increase in mortgages receivable              (2,793)          (17,551)
Changes in operating assets and liabilities:
   Interest receivable                             470              (388)
   Other assets                                 (3,387)              (61)
   Increase in goodwill                             --               (27)
   Guaranteed investment contracts              14,314                47
   Deferred income                                (724)               --
   Accounts payable, accrued expenses and
    other liabilities                          (19,858)            1,074
   Deferred tax liability                       (1,204)              181
   Due to Manager and affiliates                (1,203)               49
   Fair value of interest rate cap                  34              (216)
                                            ----------       -----------
Net cash provided by operating activities       10,248             2,347
                                            ----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from repayments of revenue
    bonds                                       18,853            75,650
  Periodic principal payments of revenue
    bonds                                        6,750               968
  Purchase/advances to revenue bonds            (3,050)          (28,375)
  Increase in deferred bond selection
    costs                                          (63)             (859)
  Increase in temporary investments                 --           (88,570)
  (Increase) decrease in cash and cash
    equivalents - restricted                      (187)              141
  Loans made to properties                      (1,839)             (862)
  Principal  payments received from loans
    made to properties                           7,448               809
                                            ----------       -----------
Net cash provided by (used in) investing
    activities                                  27,912           (41,098)
                                            ----------       -----------




                                   Continued

                                       5

<PAGE>




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

<TABLE>

                                            ==============================
                                                 Three Months Ended
                                                      March 31,
                                            ------------------------------
                                                 2003             2002
                                            -------------    -------------
<S>                                         <C>              <C>

CASH FLOWS FROM FINANCING ACTIVITIES:
  Distributions paid to the
   Manager and Common shareholders             (14,421)         (11,476)
  Distributions paid to preferred
   shareholders of subsidiary                   (4,724)          (3,693)
  Distributions paid to Convertible
   CRA shareholders                             (1,125)            (565)
  Principal repayments of financing
   arrangements                                   (495)         (15,603)
  Increase in notes payable                      2,793           17,551
  Increase in deferred costs relating
   to the Private Label Tender Option
   Program                                        (290)             (35)
  Options exercised                                649           92,587
  Increase in other deferred costs                (851)            (218)
                                              --------        ---------
Net cash (used in) provided by financing
  activities                                   (18,464)          78,548
                                              --------        ---------
Net increase in cash and cash equivalents       19,696           39,797
Cash and cash equivalents at the
  beginning of the period                       55,227          105,364
                                              --------        ---------
Cash and cash equivalents at the
  end of the period                          $  74,923       $  145,161
                                              ========        =========

SUPPLEMENTAL INFORMATION:
  Interest paid                              $   4,414       $    2,502
                                              ========        =========
  Taxes paid                                 $     103       $        9
                                              ========        =========

</TABLE>



           See accompanying notes to consolidated financial statements

                                       6

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)

NOTE 1 - General

Charter Municipal  Mortgage  Acceptance Company  ("CharterMac"),  along with its
consolidated  subsidiaries  (the  "Company"),  is  a  Delaware  statutory  trust
principally engaged in the acquisition and ownership (directly or indirectly) of
tax-exempt  multi-family  housing  revenue  bonds  ("Revenue  Bonds")  and other
investments  that produce  tax-exempt  income,  issued by various state or local
governments,  agencies, or authorities. The Company is also engaged in providing
credit enhancements and yield guarantees,  and originates loans for multi-family
housing  through its  subsidiary  PW Funding  Inc.  ("PWF").  Revenue  Bonds are
primarily secured by participating and non-participating first mortgage loans on
underlying properties ("Underlying Properties").  In some cases the Company also
acquires smaller taxable loans in conjunction with acquiring a Revenue Bond.

The Company is governed by a board of trustees  comprised  of three  independent
managing  trustees and five managing  trustees who are  affiliated  with Related
Capital  Company  ("Related"),  a  nationwide,   fully  integrated  real  estate
financial  services  firm.  CharterMac,   through  CharterMac  Corporation  ("CM
Corp."),  a  wholly-owned  subsidiary,  has engaged  Related  Charter L.P.  (the
"Manager"),   an  affiliate  of  Related,  to  manage  its  day-to-day  affairs.
CharterMac  has  also  directly  engaged  the  Manager  to  provide   additional
management services.

The  consolidated  financial  statements  include the accounts of CharterMac and
four subsidiary statutory trusts which it controls: CM Holding Trust, CharterMac
Equity Issuer Trust,  CharterMac  Origination Trust I and CharterMac Owner Trust
I, and one  wholly-owned  corporation,  CM Corp. CM Corp. owns 80% of PW Funding
Inc. ("PWF"),  which is also included in the consolidated  financial statements.
All   intercompany   accounts  and   transactions   have  been   eliminated   in
consolidation.  Unless otherwise indicated,  the "Company", as hereinafter used,
refers to Charter  Municipal  Mortgage  Acceptance  Company 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, the operating results
for the interim periods may not be indicative of the results for the full year.

Certain  information  and  footnote  disclosures  normally  included  in  annual
financial statements prepared in accordance with accounting principles generally
accepted  in the  United  States of  America  ("GAAP")  have been  condensed  or
omitted.  It is  suggested  that these  financial  statements  should be read in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's Form 10-K for the year ended December 31, 2002.

The  consolidated  financial  statements  of the Company are prepared  using the
accrual method of accounting in conformity with GAAP, which requires the Manager
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent  assets and liabilities at the date
of the  financial  statements  as well as the  reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.  Significant  estimates  in  the  financial  statements  include  the
valuation of the Company's  investments  in Revenue  Bonds,  mortgage  servicing
rights ("MSRs") and interest rate derivatives.

On December 18, 2002, the Company  announced it had entered into an agreement to
acquire  100%  of  the  ownership  interests  in  and  substantially  all of the
businesses  operated by Related (other than specific  excluded  interests).  The
acquisition  will  enable  the  Company  to  terminate  its  outside  management
agreement with the Manager and to become an internally-managed company.

Certain  amounts in the 2002  financial  statements  have been  reclassified  to
conform to the 2003 presentation.



                                       7

<PAGE>



                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


Significant Accounting Policies
-------------------------------

Investment in Revenue Bonds and Promissory Notes Receivable

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

In most  cases,  the Company  has a right to require  redemption  of the Revenue
Bonds prior to their maturity,  although it can and may elect to hold them up to
their maturity dates unless otherwise  modified.  As such, SFAS 115 requires the
Company to classify  these  investments  as  "available-for-sale."  Accordingly,
investments in Revenue Bonds are carried at their  estimated  fair values,  with
unrealized gains and losses reported in other comprehensive  income.  Unrealized
gains or losses do not affect the cash flow generated from property  operations,
distributions to shareholders,  the  characterization  of the tax-exempt  income
stream or the financial obligations under the Revenue Bonds.

If, in the judgment of the manager,  it is determined  probable that the Company
will not receive all contractual payments required,  when they are due, the bond
is deemed  impaired and is written down to its then estimated  fair value,  with
the amount of the write-down accounted for as a realized loss.

Because  Revenue Bonds have a limited market,  the Company  estimates fair value
for each bond as the present  value of its expected  cash flows using a discount
rate  for  comparable  tax-exempt  investments.   This  process  is  based  upon
projections of future economic events affecting the real estate  collateralizing
the bonds,  such as property  occupancy  rates,  rental  rates,  operating  cost
inflation,  market  capitalization  rates and  determination  of an  appropriate
market  rate of  interest,  all of which are based on good faith  estimates  and
assumptions  developed  by  the  Manager.   Changes  in  market  conditions  and
circumstances  may occur which would cause these  estimates and  assumptions  to
change;  therefore,  actual results may vary from the estimates and the variance
may be material.

Occasionally,  the Company has  advanced  funds to owners of certain  Underlying
Properties  in  order to  preserve  the  underlying  asset  due to  difficulties
including  construction  completion,  past due real estate taxes and/or deferred
maintenance.  Such  advances are typically  secured by  promissory  notes and/or
second  mortgages  and are carried at cost less a valuation  allowance as may be
periodically deemed appropriate.  In some cases, an actual note was issued which
was recorded as a separate  note  receivable.  In each of these  instances,  the
ability of the borrower to repay was examined and  appropriate  allowances  were
established.  At  March  31,  2003,  each of these  notes  was  fully  reserved.
Alternatively,   when  a  cash  advance  is  made,  the  Company  establishes  a
contra-income  account,  which was reduced as cash payments for interest  income
were received.  The Company  currently has no outstanding  advances that utilize
this method.

Other Investments

Other investments include the following items:

     Investment in ARCap - The Company's  preferred  equity  investment in ARCap
     Investors,  L.L.C.  ("ARCap")  is  accounted  for using the  equity  method
     because the Company has the ability to exercise significant influence,  but
     not control, over ARCap's operating and financial policies.

     Guaranteed   Investment   Contracts  -  The   Company,   through   PWF,  is
     participating in the Fannie Mae "Guaranteed  Investment Agreement Rate Lock
     Loan Financing" program for properties which are in the construction phase.
     Under this  program,  Fannie  Mae  commits  to a fixed  interest  rate on a
     permanent loan,  which will be closed at the completion of the construction
     phase of the project.  The rate lock forward commitment  provided by Fannie
     Mae exists for a maximum


                                       8

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


     period of  twenty-four  months.  Fannie Mae loans the Company the amount of
     the  future  permanent  loan,  which  is  required  to  be  deposited  in a
     guaranteed  investment  contract during the construction phase. In exchange
     for such  loan,  the  Company  issues  Fannie Mae a  promissory  note whose
     interest  will be paid  from  the  interest  on the  guaranteed  investment
     contract and the negative arbitrage paid by the borrower. The interest rate
     on the note  will be  equivalent  to the  fixed  rate  committed  to on the
     permanent loan. At the close of the  construction  phase,  the Company will
     unwind the guaranteed  investment contract to repay the note to Fannie Mae.
     The Company will  originate the permanent  loan to the borrower at the rate
     locked  amount,  which will be  subsequently  purchased from the Company by
     Fannie Mae. The Company has commitments  from Fannie Mae under this program
     of approximately $5.3 million as of March 31, 2003.

     Temporary  Investments  -  Temporary  investments  may  consist of puttable
     floating option  tax-exempt  receipts,  short-term  senior securities which
     bear interest at a floating rate that is reset weekly and other  short-term
     investments that generate  tax-exempt and taxable  interest  income.  These
     investments are recorded at cost which is equal to market value.

Cash and Cash Equivalents

Cash and cash  equivalents  includes cash in banks and investments in short-term
instruments with an original  maturity of three months or less.  Certain amounts
of cash and cash  equivalents are restricted and serve as additional  collateral
for borrowings under securitizations.

Mortgage Banking Activities

PWF is an approved  seller/servicer  of  multifamily  mortgage loans for Federal
National  Mortgage  Association  ("Fannie  Mae"),  Federal  Home  Loan  Mortgage
Corporation  ("Freddie Mac") and the Government  National  Mortgage  Association
("Ginnie Mae"). For Fannie Mae, PWF is approved under the Delegated Underwriting
and  Servicing  ("DUS")  program.  Under DUS, upon  obtaining a commitment  from
Fannie Mae with regard to a particular  loan,  Fannie Mae commits to acquire the
mortgage loan based upon PWF's  underwriting and PWF agrees to bear a portion of
the risk of potential  losses in the event of a default.  Fannie Mae commitments
may be made to acquire the mortgage  loan for cash or in exchange for a mortgage
backed  security  backed by the  mortgage  loan.  As a Program  Plus  lender for
Freddie Mac, Freddie Mac agrees to acquire for cash from PWF loans for which PWF
has issued  commitments.  Ginnie Mae agrees to  exchange  FHA-insured  mortgages
originated by PWF for Ginnie Mae securities.

Mortgage loans  originated for Fannie Mae,  Freddie Mac or Ginnie Mae are closed
in the name of PWF and PWF uses  corporate  cash  obtained by  borrowing  from a
warehouse  lender to fund the loans.  Approximately  a week to a month following
closing of a loan,  loan  documentation  and an assignment are delivered  Fannie
Mae, Freddie Mac or Ginnie Mae, or a document  custodian on its behalf,  and the
cash  purchase  price or mortgage  backed  security is delivered to PWF. Cash is
used to repay warehouse  loans and mortgage backed  securities are sold pursuant
to prior  agreements for cash which is used to repay warehouse  loans.  PWF also
underwrites and originates  multifamily  and commercial  mortgages for insurance
companies and banks.

PWF  receives  a fee  ranging  from  50bps to 100bps  for its  underwriting  and
origination  services,  included in mortgage  servicing fees in the Consolidated
Statements of Income. Neither the Company nor PWF retains any interest in any of
the mortgage loans, except for mortgage servicing rights and certain liabilities
under the loss-sharing arrangement with Fannie Mae.


                                       9

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


Since the  inception of the Fannie Mae DUS product line in 1988,  PWF has closed
over $2.9 billion of mortgage  loans. At March 31, 2003, PWF serviced Fannie Mae
loans of approximately $1.9 billion and had received commitments from Fannie Mae
on two loans totaling  approximately $11.7 million. A substantial portion of the
underlying properties subject to these mortgages are located in California.  PWF
also services loans with face values of approximately $108.4 million under other
Fannie  Mae  non-risk  sharing  programs.  As of March 31,  2003,  PWF  serviced
approximately  $375.3  million  of loans  under  the FHA  223(f),  232,  and 242
Programs, of which approximately $129.1 million had GNMA securities outstanding.
At March 31, 2003,  PWF  serviced  approximately  $613.7  million of Freddie Mac
loans in its  portfolio.  A  substantial  portion of the  underlying  properties
subject to these  mortgages  are located in New Jersey.  At March 31, 2003,  PWF
serviced  approximately  $165.2  million  of loans  made on  behalf  of banks or
insurance  companies  in its  portfolio.  The  Company  does not hold any of the
mortgages serviced by PWF.

Mortgage Servicing Rights

The  Company  recognizes  as assets  the rights to  service  mortgage  loans for
others,  whether the MSRs are  acquired  through a separate  purchase or through
loan  origination,  by allocating total costs incurred between the MSRs retained
based on their  relative fair value.  MSRs are being  carried at their  adjusted
cost  basis.  MSRs are  amortized  in  proportion  to,  and over the  period of,
estimated net servicing income.

SFAS No. 140 also  requires an entity to record the  impairment of MSRs based on
the  difference  between the carrying  amount of the MSRs and their current fair
value. Impairment of MSRs is recognized in the Consolidated Statements of Income
during the applicable  period through  additions to a valuation  allowance.  The
amount of  impairment  recognized  is the amount by which the  capitalized  MSRs
exceed their fair value.  Subsequent to the initial  measurement  of impairment,
the valuation allowance is adjusted to reflect changes in impairment. Fair value
in excess of the amount capitalized as MSRs (net of amortization),  however,  is
not  recognized.  For the purpose of  evaluating  and  measuring  impairment  of
capitalized  MSRs, the Company  stratifies those rights based on the predominant
risk characteristics of the underlying loans. The Company maintains an allowance
for loan  losses for loans  originated  by PWF under the Fannie Mae DUS  product
line at a level  that,  in  management's  judgment,  is  adequate to provide for
estimated losses.  This reserve was approximately  $4.5 million and $4.3 million
at March 31, 2003 and December 31, 2002, respectively.

Loss  reserves are only  recorded  for loans for which PWF has a potential  loss
obligation,  i.e.,  DUS  loans.  The  monthly  amount of  reserves  recorded  is
initially a mechanical  calculation  - 25bp for each DUS loan.  The level of the
reserve is reviewed  quarterly by PWF  management  to identify  any  significant
misstatement.

On an annual  basis,  PWF utilizes the results of the current  year's  Financial
Analysis  of  Operations  to  stratify  the at-risk  portfolio  by debt  service
coverage  ("DSC").  The entire DUS portfolio is used,  including loans that have
been closed but are not yet settled.

The totals in each DSC category are multiplied by a default  percentage and then
further  by an  expected  loss  percentage  to  result in the  minimum  required
reserve.  The default  percentage is an estimate made by  management;  it has an
inverse  relationship  with the DSC (the  higher the DSC,  the lower the default
percentage). The expected loss percentage is also a


                                       10

<PAGE>

                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


management  estimate,  but it is based upon the actual  loss  experience  of the
company.  Historically,  for Level 1 loans,  (see Note 7), the average loss size
has been  approximately  11%. The expected loss  percentages  are distributed so
that a loan with a DSC just under the  origination  minimum (1.25 DSC) will have
an expected loss percentage  equal to this historical  average.  Lower DSC loans
are anticipated to have higher losses since it is likely that the properties are
performing below expectations,  that PWF has made significant advances, and that
the appraisal will be lower for loss calculation purposes.

In  order  to  test  the  adequacy  of the  reserve  resulting  from  the  above
calculation,  PWF  performs  sensitivity  analysis  to  develop  a "worst  case"
scenario. In this analysis,  the default percentages are raised dramatically for
low DSC  loans.  In fact,  any loan  below 1.0 DSC is  assumed to have a default
percentage  of 100%.  Only those loans with a DSC above 1.3 are not changed from
the original set of assumptions.  This "worst case" scenario  provides a ceiling
for the reserve.

Based upon the annual  calculation  of reserves  and the "worst  case"  scenario
developed above, management, determines the appropriate amount of reserves to be
recorded.

In using this valuation model, the Company incorporated  assumptions that market
participants  would use in estimating future net servicing  income.  The Company
estimates the term of servicing for each loan by assuming that  servicing  would
not end prior to the  yield  maintenance  date,  at which  point the  prepayment
penalty expires. The Company provides an estimated default amount to be deducted
in each year based on the borrower's debt service ratio.  The debt service ratio
is a  measurement  of the  amount of excess  cash  flow a  borrower  has to make
monthly mortgage  payments.  Purchased MSRs are measured  initially at the price
paid,  which  approximates  fair value At March 31,  2003,  the  Company has not
provided for impairment on any MSRs.

Revenue Recognition

The Company  derives its revenues from a variety of investments  and guarantees,
summarized as follows:

     Interest  Income from Revenue Bonds - Interest  income is recognized at the
     stated  rate as it accrues  and when  collectibility  of future  amounts is
     reasonably  assured.  Participating  interest is recognized  when received.
     Interest  income  from  Revenue  Bonds  with  modified  terms or where  the
     collectibility  of future  amounts is  uncertain is  recognized  based upon
     expected cash receipts.  Certain  construction Revenue Bonds carry a higher
     interest rate during the  construction  period,  which  declines to a lower
     rate for the balance of the term.  In these cases,  the Company  calculates
     the  effective  yield on the Revenue  Bond and uses that rate to  recognize
     interest over the life of the bond.

     Interest Income from Promissory  Notes and Mortgages  Receivable - Interest
     on mortgage  loans and notes  receivable is recognized on the accrual basis
     as it becomes due.  Deferred loan origination  costs and fees are amortized
     over the life of the applicable  loan as an adjustment to interest  income,
     using the interest  method.  Interest  which was accrued is reversed out of
     income if deemed to be uncollectible.

     Interest  Income on Temporary  Investments - Interest income from temporary
     investments,   such  as  cash  in  banks  and  short-term  instruments,  is
     recognized on the accrual basis as it becomes due.

     Equity in Earnings of ARCap - The Company's equity in the earnings of ARCap
     Investors,  LLC  ("ARCap") is accrued at the Company's  preferred  dividend
     rate of 12%, unless ARCap does not have earnings and cash flows adequate to
     meet this dividend requirement.

     Construction  Service Fees - The Company  receives  fees, in advance,  from
     borrowers for servicing Revenue Bonds during the construction period. These
     fees are deferred  and  amortized  into other  income over the  anticipated
     construction period.


                                       11

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


     Credit  Enhancement  and  Guarantee  Fees - The Company  receives  fees for
     providing credit  enhancement and guaranteed yields. The credit enhancement
     fees are received monthly and recognized in other income when received. The
     guarantee  fees are  deferred and  recognized  in other income on a prorata
     basis over the guarantee period.

     Mortgage Banking Fees - PWF fees earned for arranging  financings under the
     FNMA DUS  product  line as well as Freddie  Mac,  insurance  and banking or
     other  programs  are  recorded  at the point the  financing  commitment  is
     accepted by the  mortgagor  and the interest  rate of the mortgage  loan is
     fixed.

     Mortgage  Servicing Fees - PWF receives fees for servicing the loans it has
     originated. This income is recognized on an accrual basis.

Deferred Costs

Fees paid to the Manager (see Note 5) for its activities  performed to originate
Revenue Bonds, including their evaluation and selection, negotiation of mortgage
loan terms,  coordination of property  developers and government  agencies,  and
other direct  expenditures  of acquiring  or  investing  in Revenue  Bonds,  are
capitalized  and  amortized as a reduction to interest  income over the terms of
the Revenue Bonds.  Direct costs relating to unsuccessful  acquisitions  and all
indirect costs relating to the Revenue Bonds are charged to operations.

Costs incurred in connection with the Company's TOP, such as legal,  accounting,
documentation  and  other  direct  costs,  have been  capitalized  and are being
amortized using the straight-line  method over 10 years,  which approximates the
average remaining term to maturity of the Revenue Bonds in this program.

Costs incurred in connection with the issuance of cumulative preferred shares of
subsidiary,  such as legal,  accounting,  documentation  and other direct costs,
have been  capitalized  and are being  amortized  using the straight line method
over the period to the mandatory repurchase date of the shares, approximately 50
years. Costs incurred in connection with the issuance of Convertible CRA Shares,
such as legal,  accounting,  documentation  and other  direct  costs,  have been
accounted for as an offset to beneficial owners' equity of such shares.

Financial Risk Management and Derivatives

The Company has entered into two interest  rate swaps,  an interest rate cap and
two forward  commitments,  all of which are accounted for under the Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging Activities", as amended and interpreted.  The Company designated the
two interest rate swaps as cash flow hedges on the variable interest payments in
the floating rate financing.  Accordingly,  the interest rate swaps are recorded
at their fair  market  values each  accounting  period,  with  changes in market
values being recorded in other comprehensive income to the extent the hedges are
effective  in  achieving  offsetting  cash flows.  These hedges have been highly
effective,  so there  has been no  ineffectiveness  included  in  earnings.  The
interest  rate cap,  although  designed to mitigate  the  Company's  exposure to
rising interest rates,  was not designated as a hedging  derivative;  therefore,
any change in fair market value flows  through the  Consolidated  Statements  of
Income,  where it is included in interest  income.  The two 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 will be
recorded  at  fair  value,   with  changes  in  fair  value  recorded  in  other
comprehensive income until the Revenue Bonds are funded.

Fair Value of Financial Instruments

As described above, the Company's investments in Revenue Bonds, its MSRs and its
liability  under the interest  rate  derivatives  are carried at estimated  fair
values.  The  Company  has  determined  that  the fair  value  of its  remaining
financial  instruments,  including  its  temporary  investments,  cash  and cash
equivalents,   promissory  notes  receivable,   mortgage  notes  receivable  and
borrowings  approximate their carrying values at March 31, 2003 and December 31,
2002.


                                       12

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


Income Taxes

Effective  July 1, 2001,  the Company  began  operation  of a new  wholly-owned,
taxable  subsidiary -- CM Corp.,  which on December 31, 2001,  purchased PWF. CM
Corp.  will  conduct  most of the  Company's  taxable  business,  including  any
fee-generating activities in which the Company may engage and provide management
services to  CharterMac  and its other  subsidiaries.  The Company  provides for
income taxes in accordance with Statement of Financial  Accounting Standards No.
109, "Accounting for Income Taxes" ("FAS 109"). FAS 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.

New Pronouncements
------------------

In April 2002, the FASB issued SFAS No. 145  "Rescission of FASB  Statements No.
4, 44 and 64,  Amendment of FASB  Statement No. 13 and  Technical  Corrections".
SFAS No. 145,  among other  things,  rescinds SFAS No. 4,  "Reporting  Gains and
Losses from Extinguishment of Debt", and accordingly,  the reporting of gains or
losses from the early  extinguishments of debt as extraordinary  items will only
be required if they meet the specific  criteria of extraordinary  items included
in  Accounting  Principles  Board  Opinion  No. 30,  "Reporting  the  Results of
Operations".  The  revision of SFAS No. 4 became  effective  January  2003.  The
implementation  of SFAS No. 145 did not have a material  impact on the Company's
consolidated financial statements.

In July 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated with
Exit  or  Disposal  Activities".   SFAS  No.  146  replaces  current  accounting
literature  and  requires  the  recognition  of costs  associated  with  exit or
disposal  activities  when  they  are  incurred  rather  than  at the  date of a
commitment to an exit or disposal plan. SFAS No. 146 became effective January 1,
2003. The  implementation  of SFAS No. 146 did not have a material impact on the
Company's consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantors' Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness of Others." The Interpretation  elaborates on the disclosures to be
made by a guarantor in its  financial  statements  about its  obligations  under
certain  guarantees  that it has issued.  It also  clarifies that a guarantor is
required to recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in issuing the guarantee. This Interpretation
does  not  prescribe  a  specific   approach  for  subsequently   measuring  the
guarantor's  recognized  liability over the term of the related  guarantee.  The
initial  recognition and initial  measurement  provisions of this Interpretation
are  applicable on a prospective  basis to guarantees  issued or modified  after
December  31,  2002.  The  Company  has  entered  into  one  credit  enhancement
transaction  and two  yield  guarantee  transactions.  The  fee  for the  credit
enhancement  transaction is received  monthly and recognized as income when due.
The fee for the first yield guarantee  transaction was received in advance,  was
deferred and is being amortized over the guarantee period.  The Company believes
that the fees received approximate the fair value of the obligations  undertaken
in issuing the guarantees;  therefore, for any such similar transactions entered
into after  December 31, 2002,  the Company will record the fair market value of
the guarantee, when entered into.

In  December  2002,  the FASB issued SFAS No. 148  "Accounting  for  Stock-Based
Compensation-Transition and Disclosure," an amendment of FASB statement No. 123.
This statement amends SFAS No. 123, "Accounting for Stock-Based Compensation" to
provide  alternative  methods of transition  for a voluntary  change to the fair
value based method of accounting for stock-based employer compensation.  Because
the  Company  currently  accounts  for its share  options  using the fair  value
method, implementation of this statement did not have an impact on the Company's
consolidated  financial  statements.  The Company has adopted the  provisions of
SFAS No. 123,  "Accounting for Stock-Based  Compensation"  for its share options
issued to non-employees.  Accordingly, compensation cost is accrued based on the
estimated  fair value of the  options  issued,  and  amortized  over the vesting
period.  Because  vesting  of the  options  is  contingent  upon  the  recipient
continuing  to provide  services to the  Company  until the  vesting  date,  the
Company estimates the fair value of the non-employee  options at each period-end
up to the vesting date, and


                                       13

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


adjusts  expensed  amounts  accordingly.  The fair value of each option grant is
estimated using the Black-Scholes option-pricing model.

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable  Interest  Entities"  ("FIN 46").  This  Interpretation  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.
The provision of FIN 46 will be immediately effective for all variable interests
in variable  interest  entities  created after January 31, 2003, and the Company
will need to apply its provisions to any existing variable interests in variable
interest  entities by no later than July 1, 2003.  The Company  believes at this
time,  it has no variable  interests  in variable  interest  entities  requiring
consolidation.

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities".  This  Statement  amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including   certain   derivative   instruments   embedded  in  other   contracts
(collectively  referred to as derivatives) and for hedging activities under FASB
Statement No. 133, Accounting for Derivative  Instruments and Hedging Activities
and is effective for contracts entered into or modified after June 20, 2003. The
Company is currently  evaluating  the impact that this Statement may have on its
financial position and results of operations.

NOTE 2 - Revenue Bonds

Total interest income from Revenue Bonds, including  participating interest, for
the three  months  ended March 31, 2003 and 2002,  were 6.99% and 8.02% based on
weighted   average   face   amounts   of   approximately    $1,501,876,963   and
$1,142,812,000, respectively.

The amortized  cost basis of the  Company's  portfolio of Revenue Bonds at March
31,  2003  and  December  31,  2002  was  $1,461,224,032   and   $1,484,202,610,
respectively.  The net  unrealized  gain  on  Revenue  Bonds  in the  amount  of
$90,583,968 at March 31, 2003 consisted of gross  unrealized gains and losses of
$98,640,060  and  $8,056,092,  respectively.  The net unrealized gain on Revenue
Bonds of $95,387,390 at December 31, 2002  consisted of gross  unrealized  gains
and losses of $100,964,090 and $5,576,700, respectively.

The following is a table reflecting the maturity dates of the Company's  Revenue
Bonds.

(Dollars In                     Outstanding                          Fair
 thousands)                     Bond Amount                          Value
--------------------------------------------------------------------------------

 Due in less than
 one year                   $       10,117                       $      11,480
 Due between one
 and five years                     38,979                              36,727
 Due after five
 years                           1,424,131                           1,503,601
--------------------------------------------------------------------------------
        Total               $    1,473,227                       $   1,551,808
--------------------------------------------------------------------------------

All of the Company's Revenue Bonds have fixed interest rates.

2003 Transactions
-----------------

During the three months ended March 31, 2003 the Company did not acquire any new
Revenue Bonds, but did advance  additional funds of approximately  $3,050,000 to
Revenue Bonds which were previously acquired.

During the three months ended March 31, 2003, two Revenue Bonds were repaid. The
Company  received net proceeds of approximately  $19.0 million.  The bonds had a
carrying  value  of  approximately  $19.4  million,   resulting  in  a  loss  of
approximately $412,000.

During the second quarter of 2001,  the borrowers of Lexington  Trails failed to
make the regular interest payments. As a result, the Company determined the bond
was  impaired,  and  wrote  down  the  bond  to  its  estimated  fair  value  of
approximately $5.5 million and took a loss on impairment of $400,000. During the
fourth quarter of 2001,  the Company caused the trustee,  for the benefit of the
Company, to foreclose on the underlying  property.  Negotiations for the sale of
the underlying property began during the fourth quarter of 2002 at a sales price
of  approximately  $4.5 million and the Company wrote this bond down to its fair
value of $4.5 million in the fourth quarter of 2002,  taking a loss of $932,000.
In May 2002,  the Company  entered into a contract  with an  unaffiliated  third
party,  to sell the underlying  property  securing the Lexington  Trails Revenue
Bond for a sales price of  approximately  $4.5 million.  The Company expects the
sale  transaction to be completed,


                                       14

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


however,  there  can  be  no  assurance  that  the  Company  will  complete  the
transaction.

NOTE 3 - Deferred Costs

The components of deferred costs are as follows:


                                                  (Dollars in Thousands)
                                               March 31,        December 31,
                                                 2003               2002
                                          -----------------  -----------------

Deferred bond selection costs (1)            $  34,873          $  34,810
Deferred financing costs                         8,320              8,030
Deferred costs relating to the
  issuance of preferred shares of
  subsidiary                                    10,445             10,445
Deferred costs relating to acquisition
  of Related                                     3,334              2,483
Other deferred costs                             1,376              1,376
                                              --------           --------
                                                58,348             57,144

Less: Accumulated amortization                  (9,468)            (8,451)
                                              --------           --------
                                             $  48,880          $  48,693
                                              ========           ========


(1)  This  primarily  represents  the 2% bond  selection fee paid to the Manager
     (see Note 5).

NOTE 4 - Goodwill and Intangible Assets

The Company  adopted  SFAS 141 on July 1, 2001 and SFAS 142, on January 1, 2002.
The Company has determined that the amounts  previously  capitalized as goodwill
relating to the initial  formation  of the Company and to the merger of American
Tax  Exempt  Bond  Trust,  meet  the  criteria  in SFAS 141 for  recognition  as
intangible  assets apart from  goodwill,  and  accordingly  will  continue to be
amortized over their remaining useful lives, subject to impairment testing.

During the quarter ended June 30, 2002, PWF engaged a third party valuation firm
to evaluate PWF's  licenses with Fannie Mae,  Freddie Mac, FHA, GNMA and various
private  investors.  As a result of this process  approximately $8.6 million has
been reclassified from goodwill to intangible assets, representing the estimated
market value of PWF's licenses. These licenses have an indefinite life and, as a
result, are not being amortized.

During 2002 and the three months ended March 31, 2003, the Company,  pursuant to
the original acquisition agreement, paid approximately $3.6 million in "true-up"
payments  representing  payments due to the original PWF stockholders  which was
recorded  as  additional  goodwill  during  the  fourth  quarter of 2002 . These
true-up  payments  were  based on i) the  increase  in the  value of MSRs due to
certain loans closing,  ii) positive  changes  between the audited balance sheet
used for the initial  purchase  price and the audited  balance sheet at December
31, 2001, iii) payments of certain  servicing fees, and iv) forward  conversions
of loans previously  committed.  The acquisition agreement stipulates additional
true-up payments to be made  periodically for a period of up to three years from
the acquisition date.


                                       15

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


The  following  table  provides  further  information  regarding  the  Company's
intangible assets:

                                                (Dollars in Thousands)


                                     Identifiable
                                        Other
                                      Intangible         PWF
                                        Assets         Licenses       Total
                                     -------------     --------       -----


Balance at March 31, 2003             $  4,427         $  8,639       $  13,066

Accumulated Amortization                (1,867)               -          (1,867)
                                        ------          -------          ------

Net balance at March 31, 2003         $  2,560         $  8,639       $  11,199
                                       =======          =======        ========

Amortization Expense for the
three months ended March 31, 2003     $    118         $      -       $     118
                                       =======          =======        ========

Estimated amortization
expense per year
for next five years                   $    472         $      -       $     472
                                       =======          =======        ========


The amortization is included as a reduction to Revenue Bond interest income.

The amount  indicated  as goodwill in the  accompanying  consolidated  financial
statements as of March 31, 2003 is related to the  acquisition,  on December 31,
2001 of PWF. This amount represents  goodwill under SFAS 142, and therefore,  is
not being  amortized.  In  accordance  with SFAS 142,  the  Company  tested this
goodwill for impairment  during the fourth quarter of 2002 and determined  there
was no impairment.

NOTE 5 - Related Party Transactions

The Manager is entitled to  subcontract  its  obligations  under the  Management
Agreements to an affiliate.  In accordance  with the foregoing,  the Manager has
assigned its rights and obligations to Related.

Pursuant to the terms of the Management  Agreements,  the Manager is entitled to
receive the fees and other compensation set forth below:

Fees/Compensation *      Amount
-----------------        ------

Bond Selection Fee       2.00% of the face amount of each asset invested in or
                         acquired by CharterMac or its subsidiaries.

Special                  0.375%  per  annum  of the total  invested  assets of
Distributions/           CharterMac or its subsidiaries.
Investment
Management Fee

Loan                    0.25% per  annum based on the outstanding face amount of
Servicing Fee           revenue bonds and other investments owned by  CharterMac
                        or its subsidiaries.

Operating Expense       For    direct    expenses  incurred   by   the   Manager
Reimbursement           in an amount not to exceed  $950,978 per annum  (subject
                        to increase based on increases in  CharterMac's  and its
                        subsidiaries'  assets and to annual increases based upon
                        increases in the Consumer Price Index).

Incentive Share         The Manager may  receive  options to acquire  additional
Options                 Common Shares  pursuant to the Share Option Plan only if
                        CharterMac's  distributions  in any year exceed  $0.9517
                        per Common Share and the  Compensation  Committee of the
                        Board of  Trustees  determines  to grant  such  options.
                        Liquidation  Fee 1.50% of the gross  sales  price of the
                        assets  sold  by  CharterMac   in   connection   with  a
                        liquidation  of  CharterMac  assets  supervised  by  the
                        Manager.


                                       16

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


* The Manager is also  permitted to earn  miscellaneous  compensation  which may
include,  without  limitation,  construction  fees,  escrow  interest,  property
management fees, leasing  commissions and insurance  brokerage fees. The payment
of any such  compensation is generally  limited to the competitive  rate for the
services  being  performed.  A bond  placement  fee of 1.0% to 1.5% of the  face
amount of each asset  invested in or acquired by CharterMac or its  subsidiaries
is  payable  to the  Manager  by the  borrower,  and  not by  CharterMac  or its
subsidiaries.

The  terms of each of the  management  agreements  is one year.  The  management
agreements  may be renewed,  subject to  evaluation  of the  performance  of the
Manager by CharterMac's Board of Trustees. Both agreements may be terminated (i)
without  cause by the Manager;  or (ii) for cause by a majority of  CharterMac's
Board of  Trustees,  in each case  without  penalty  and each upon 60 days prior
written notice to the non-terminating party.


The costs,  expenses and the special  distributions  incurred to the Manager and
its  affiliates  for the three  months  ended  March  31,  2003 and 2002 were as
follows:


                                                           Three Months Ended
                                                                 March 31,
                                                         ----------------------
                                                         (Dollars in thousands)
                                                         ----------------------
                                                           2003          2002
                                                         --------      --------

Bond selection fees                                     $      --      $    568
Special distribution/Investment Management fee              1,483         1,088
Bond servicing fees                                         1,015           766
Expense reimbursement                                         233           309
                                                         --------       -------
                                                        $   2,731      $  2,731
                                                         ========       =======


Certain  of the  Revenue  Bonds held by the  Company  are  supported  by various
guarantees including,  but not limited to, construction and operating guarantees
from affiliates of the Manager.

During the quarter  ended  September 30, 2002,  the Company  agreed to back up a
primary  guarantor's  obligation  to guarantee an  agreed-upon  internal rate of
return to the investor in Related Capital Guaranteed Corporate Partners II, L.P.
("RCGCP").  RCGCP is a fund  sponsored by Related,  which is an affiliate of the
Manager. The Company is the beneficiary of a guarantee against losses associated
with  construction  and operating  stabilization  for each of the  properties in
RCGCP,  which is capped at $15 million.  The  guarantee has been provided by The
Related Companies,  L.P.  ("TRCLP"),  an affiliate of Related.  If the Company's
acquisition  of Related is completed,  then this  guarantee will no longer be in
force.

In connection with the  refinancing of River Run, the general  partners of which
are  affiliates  of the Manager,  the Company  entered  into an agreement  which
allows  the  Revenue  Bond to be put to the  Company  should  the  owner  of the
underlying  property  default on the bond.  The Company,  in turn,  entered into
agreements which allow the Company to put the bond to the general partners.  The
Company's  put  right  is  secured  by  collateral  assignments  of the  general
partners'  partnership  interests  in the  limited  partnership  which  owns the
underlying property.

The Company has entered into a credit enhancement transaction with Merrill Lynch
Capital  Services  ("MLCS").  TRCLP has  provided  the Company with an indemnity
covering 50% of any losses incurred by the Company.

NOTE 6 - Earnings Per Share

Net income per share is computed in accordance with SFAS No. 128,  "Earnings Per
Share".  Basic income per share is  calculated by dividing  income  allocated to
Common and Convertible CRA Shareholders ("Shareholders") by the weighted average
number of Common and Convertible CRA Shares  outstanding  during the period. The
Convertible CRA Shares are included in the calculation


                                       17

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


of shares outstanding as they share the same economic benefits as Common Shares,
including  payment of the same  dividends  per share as Common  Shares.  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.

Pursuant to the Company's Trust Agreement and the Management Agreements with the
Manager, the Manager is entitled,  in its capacity as the general partner of the
Company,  to a special  distribution  equal to .375% per annum of the  Company's
total  invested  assets  (which  equals the face amount of the Revenue Bonds and
other investments),  payable quarterly. Income is allocated first to the Manager
in an amount equal to the special  distribution.  The net  remaining  profits or
losses, after a special allocation of .01% to the Manager, are then allocated to
shareholders in accordance with their percentage interests.

During the quarter ended  September 30, 2002,  the Company issued 40,000 options
at a strike price of $17.56. These options vest equally, in thirds, in September
2003, 2004 and 2005 and expire in 10 years.  These options were antidilutive for
the three  months  ended March 31,  2003,  so were not taken into account in the
calculation of diluted shares.


                                                 (Dollars in thousands)
                                           Three Months Ended March 31, 2003
                                      ------------------------------------------
                                        Income           Shares        Per Share
                                       Numerator       Denominator *    Amount
                                      -----------      ------------    ---------
Net income allocable to share-
  holders (Basic EPS)                     16,494        45,013,292     $     .37
                                                                        ========
  Effect of dilutive securities
   168,136 stock options                      --            57,303
                                      ----------        ----------
Diluted net income allocable to
  shareholders (Diluted EPS)              16,494        45,070,595     $     .37
                                      ==========        ==========      ========


                                                 (Dollars in thousands)
                                           Three Months Ended March 31, 2003
                                      ------------------------------------------
                                        Income           Shares        Per Share
                                       Numerator       Denominator *    Amount
                                      -----------      ------------    ---------
Net income allocable to share-
  holders (Basic EPS)                 $  17,559          38,781,464    $     .45
                                                                        ========
  Effect of dilutive securities
   228,262 stock options                       -            64,521
                                      ----------        ----------
Diluted net income allocable to
  shareholders (Diluted EPS)          $   17,559        38,845,985      $    .45
                                      ==========        ==========      ========


* Includes Common and Convertible CRA Shares.

NOTE 7 - Commitments and Contingencies

Litigation

The  Company is subject to routine  litigation  and  administrative  proceedings
arising in the  ordinary  course of business.  Management  does not believe that
such matters will have a materially  adverse  impact on the Company's  financial
position, results of operations or cash flows.


                                       18

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


Mortgage Banking Activities

Through PWF, the Company originates and services  multifamily mortgage loans for
Fannie Mae,  Freddie Mac and FHA.  PWF and its  subsidiaries'  mortgage  lending
business is subject to various governmental and  quasi-governmental  regulation.
PWF and/or its subsidiaries,  collectively,  are licensed or approved to service
and/or  originate and sell loans under Fannie Mae,  Freddie Mac,  Ginnie Mae and
FHA  programs.  FHA and Ginnie Mae are  agencies of the Federal  government  and
Fannie Mae and Freddie Mac are federally-chartered  investor-owned corporations.
These agencies  require PWF and its  subsidiaries  to meet minimum net worth and
capital requirements and to comply with other requirements.  Mortgage loans made
under  these  programs  are  also  required  to meet the  requirements  of these
programs. In addition,  under Fannie Mae's DUS program, PWF has the authority to
originate loans without a prior review by Fannie Mae and is required to share in
the losses on loans originated under this program.

The DUS program is Fannie Mae's principal loan program. Under the Fannie Mae DUS
Product Line, the Company,  through PWF,  originates,  underwrites  and services
mortgage loans on multifamily residential properties and sells the project loans
directly to Fannie Mae. The Company assumes  responsibility for a portion of any
loss that may  result  from  borrower  defaults,  based on the  Fannie  Mae loss
sharing  formulas,  Levels I, II or III. At March 31, 2003, all of the Company's
loans consisted of Level I loans. For such loans, the Company is responsible for
the first 5% of the unpaid  principal  balance  and a portion of any  additional
losses to a maximum of 20% of the original principal balance. Level II and Level
III loans carry a higher loss sharing percentage. Fannie Mae bears any remaining
loss.

Under the terms of the Master Loss Sharing  Agreement between Fannie Mae and the
Company,  the Company is responsible  for funding 100% of mortgagor  delinquency
(principal and interest) and servicing (taxes,  insurance and foreclosure costs)
advances until the amounts advanced exceed 5% of the unpaid principal balance at
the date of  default.  Thereafter,  for Level I loans,  the  Company may request
interim  loss  sharing  adjustments  which allow the Company to fund 25% of such
advances  until final  settlement  under the Master Loss Sharing  Agreement.  No
interim loss sharing adjustments are available for Level II and Level III loans.

The Company  maintains 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 March 31, 2003,  that reserve was
approximately  $4.5 million,  which the Company believes  represents its maximum
liability at this time. Unlike loans originated for Fannie Mae, The Company does
not share the risk of loss for loans PWF 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,  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.

PWF  maintains,  as of March 31,  2003,  treasury  notes of  approximately  $5.0
million and a money market account of approximately $400,000,  which is included
in restricted cash and securities in the consolidated  balance sheet, to satisfy
the Fannie Mae collateral requirements of $5.4 million.

Due to the  nature of PWF's  mortgage  banking  activities,  PWF is  subject  to
supervision by certain regulatory  agencies.  Among other things, these agencies
require PWF to meet certain minimum net worth requirements,  as defined. PWF met
these requirements for all agencies, as applicable, as of March 31, 2003.

At March 31, 2003, PWF had  commitments to lend  approximately  $44.1 million to
twelve borrowers.

Credit Enhancement Transaction

In December 2001, the Company  completed a credit  enhancement  transaction with
Merrill Lynch


                                       19

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


Capital Services,  Inc. ("MLCS"),  as described above.  Pursuant to the terms of
the transaction,  CM Corp. assumed MLCS's $46.9 million first loss position on a
$351.9  million pool of tax-exempt  weekly  variable rate  multifamily  mortgage
loans.  The Related  Companies,  L.P.  has  provided CM Corp.  with an indemnity
covering  50% of any  losses  that  are  incurred  by CM  Corp.  as part of this
transaction. As the loans mature or prepay, the first loss exposure and the fees
paid to CM Corp.  will both be reduced.  The latest maturity date on any loan in
the portfolio  occurs in 2009.  The remainder of the real estate  exposure after
the $46.9 million first loss position has been assumed by Fannie Mae and Freddie
Mac.  In  connection  with  the  transaction,   CharterMac  has  guaranteed  the
obligations  of CM Corp.,  and as  security  therefore,  has posted  collateral,
initially  in an amount  equal to 50% of the  first  loss  amount,  which may be
reduced to 40% if certain post closing conditions are met. The Company's maximum
exposure under the terms of this transaction is approximately $23.5 million.

CM Corp.  performed  due  diligence on each  property in the pool,  including an
examination  of  loan-to-value  and debt service  coverage both on a current and
"stressed"  basis.  CM Corp.  analyzed the  portfolio  on a "stressed"  basis by
increasing capitalization rates and assuming an increase in the low floater bond
rate.  As of  March  31,  2003,  the  credit  enhanced  pool of  properties  are
performing  according to their contractual  obligations and the Company does not
anticipate  any losses to be  incurred  on its  guaranty.  Should the  Company's
analysis of risk of loss change in the future,  a provision  for  probable  loss
might be required; such provision could be material.

Fees related to the credit  enhancement  transaction  for the three months ended
March 31, 2003, included in other income, was approximately $312,000.  Income is
recognized monthly as the fees are received.

Yield Guarantee Transaction

On July 18, 2002,  the Company  entered into two  agreements  with Merrill Lynch
(the "Primary  Guarantor") to guarantee an  agreed-upon  internal rate of return
("IRR") for a pool of 11 multi-family properties owned by RCGCP.

The total  potential  liability to the Company  pursuant to these  guarantees is
approximately $44 million.  The Company has analyzed the expected  operations of
the  underlying  properties  and believes there is no risk of loss at this time.
Should the Company's  analysis of risk of loss change in the future, a provision
for probable losses might be required; such provision could be material.

In connection with the transaction,  the Company posted $18.2 million of Revenue
Bonds as  collateral  to the  Primary  Guarantor,  which will be reduced to $1.4
million  over a  period  of up to 20  years  as  the  properties  reach  certain
operating benchmarks. In addition, the Company agreed to subordinate 25% of each
of the bonds it acquired that are secured by the  properties  and to not use the
subordinated  portion  of such  bonds  as  collateral  in  connection  with  any
borrowings.

To mitigate risk, the Company is the  beneficiary of a guarantee  against losses
associated  with  construction  and  operating  stabilization  for  each  of the
properties  in RCGCP,  which is capped at $15 million.  The  guarantee  has been
provided by TRCLP.  If the Company's  acquisition of Related is completed,  then
this guarantee will no longer be in force. As of December 31, 2002,  TRCLP had a
GAAP  net  worth  of   approximately   $175.0  million  with  liquid  assets  of
approximately  $70.1  million.  In  addition,  the  developers  of  each  of the
properties  have also been required to give recourse  completion,  stabilization
and  operating  deficit  guarantees.  TRCLP has also  agreed,  if needed,  after
construction completion and property stabilization, to fund up to the first $2.5
million of  operating  deficits  of the  underlying  properties  or any  amounts
required to pay the guaranteed IRR to the investor.

Bond Forward Transactions

During December 2002, the Company entered into two  transactions  related to two
properties,  Coventry Place and Canyon  Springs.  Pursuant to the terms of these
transactions, the Company will provide credit support to the construction lender
for project  completion  and Fannie Mae permanent


                                       20

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


loan conversion and acquire  subordinated  bonds to the extent the  construction
period bonds do not fully convert. Up until the point of completion, the Company
will  guaranty  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, the Company will guarantee the full amount of the letter of credit.
The developer has also issued  several  guarantees to the  construction  lender,
each of which would be called upon before the Company's guarantees,  and each of
which would be assigned to the Company should its guarantees be called. Once the
construction  loans  convert to  permanent  loans,  the Company is  obligated to
acquire  subordinated  loans for the  amount  by which  each  construction  loan
exceeds the  corresponding  permanent loan, if any. The subordinated  bonds will
bear interest at 10%. Under FNMA guidelines,  the size of the subordinated bonds
will be limited to a 1.0x debt  service  coverage  based on 75% of the cash flow
after the senior debt.

The Company's maximum exposure, related to these two transactions, is 40% of the
stated amount of the letter of credit of approximately $27 million.

Also, during December 2002, the Company entered into two transactions related to
properties  known as Auburn Glenn and  Cottonwood.  Pursuant to the terms of the
transactions,  a  third  party,  unrelated  lender  will  advance  funds  to the
developers,  as needed,  at a floating rate. At the completion of  construction,
the  Company  is  obligated  to  acquire  the  permanent   Revenue  Bonds  at  a
predetermined  price and  interest  rate.  The two  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 will be recorded
at fair value, with changes in fair value recorded in other comprehensive income
until the Revenue  Bonds are funded.  The Revenue Bonds are expected to be $18.8
million  for Auburn  Glenn and $12.4  million  for  Cottonwood,  which  together
represents the Company's maximum liability.

NOTE 8 - Financial Risk Management and Derivatives

The Company's  Revenue  Bonds  generally  bear fixed rates of interest,  but the
P-FLOATS and TOP financing  programs  incur  interest  expense at variable rates
re-set  weekly,  so the  Company is  exposed to  interest  rate  risks.  Various
financial  vehicles exist which allow the Company's  management to hedge against
the  impact of  interest  rate  fluctuations  on the  Company's  cash  flows and
earnings.

The  Company  has entered  into two  interest  rate swaps in order to reduce the
Company's  exposure to increases in the  floating  interest  rate on its TOP and
P-FLOATS  programs.  Under such  interest rate swap  agreements,  the Company is
required to pay MLCS (the  "Counterparty")  a fixed rate on a notional amount of
debt.  In  return,  the  Counterparty  will  pay the  Company  a  floating  rate
equivalent  to The BMA  Municipal  Swap  Index,  an index of  weekly  tax-exempt
variable rate issues on which the Company's variable rate financing programs are
based.  On January 5, 2001, the Company  entered into a five-year  interest rate
swap that fixes the BMA index to 3.98% on a notional  amount of $50 million.  On
February 5, 2001, the Company entered into a three-year  interest rate swap that
fixes the BMA index to 3.64% on an additional notional amount of $100 million.

The average BMA rates for the three months  ended March 31, 2003 and 2002,  were
1.07% and 1.27%,  respectively.  Net swap payments  received by the Company,  if
any, will be taxable income to the Company and, accordingly, to shareholders.  A
possible  risk  of  such  swap  agreements  is  the  possible  inability  of the
Counterparty to meet the terms of the contracts with the Company; however, there
is no current indication of such an inability.

At March 31, 2003,  these two interest  rate swaps were  recorded as a liability
with a combined fair market value of  approximately  $4.96 million,  included in
interest rate derivatives on the consolidated  balance sheets.  Interest paid or
payable under the terms of the swaps, of approximately  $884,000, is included in
interest expense.


                                       21

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


During  January  2002,  the Company  entered into an interest rate cap agreement
with Fleet Bank, with a cap of 8% on a notional amount of $30 million.  Although
this  transaction  is  designed  to mitigate  the  Company's  exposure to rising
interest  rates,  the Company has not  designated  this  interest  rate cap as a
hedging derivative. At March 31, 2003, this interest rate cap was recorded as an
asset with a fair market value of $27,316  included in interest rate derivatives
in the Consolidated Balance Sheets.  Because the Company has not designated this
derivative  as a hedge,  the  change in fair  market  value  flows  through  the
Consolidated  Statements of Income,  where it is included in interest income, in
the amount of $33,738 for the three months ended March 31, 2003.

NOTE 9 - Dividends and Restricted Assets

CharterMac may not receive any distributions from its subsidiary, Equity Issuer,
until Equity Issuer has either paid all accrued but unpaid distributions related
to its  preferred  shares,  or in the  case of the next  following  distribution
payment date, set aside funds sufficient for payment. The distributions  related
to the  preferred  shares are payable only from Equity  Issuer's  quarterly  net
income,  defined as the  tax-exempt  income (net of expenses) for the particular
calendar  quarter.  Equity Issuer is required,  under the terms of its preferred
share  issuance,  to  meet  certain  leverage  ratios  calculated  as its  total
obligations divided by the gross fair value of investments. This could limit the
ability of Equity Issuer to  distribute  cash or Revenue Bonds to the Company or
to make loans or advances to the Company.

Equity Issuer and its  subsidiaries  hold Revenue Bonds which at March 31, 2003,
had an  aggregate  par  amount of  approximately  $1.03  billion  that  serve as
collateral for securitized borrowings or are securitized.  The total securitized
borrowings at March 31, 2003 were  approximately  $671 million.  Equity Issuer's
net assets at March 31, 2003 were approximately $761 million.

NOTE 10 - Business Segments

As a result  of the  December  2001  acquisition  of PWF,  the  Company  has two
reportable business segments: an investing segment and an operating segment.

The investing  segment consists of subsidiaries  holding  investments in Revenue
Bonds producing primarily tax-exempt interest income.

The  operating  segment  generates  taxable  interest  and fee  income.  Taxable
interest  income is generated  through the ownership of taxable  bonds,  certain
taxable  loans  and  other   investments.   Taxable  fee  income  includes  loan
origination  and loan  servicing  fees  (through  PWF) on  portfolios  for third
parties,  fees earned and  associated  with the  acquisition  or  origination of
Revenue Bonds, and fees for credit enhancement and guaranty services.

Segment results include all direct and contractual revenues and expenses of each
segment and  allocations of indirect  expenses based on specific  methodologies.
The reportable  segments are strategic  business  units that primarily  generate
revenue  streams  that  are  distinctly  different  and  are  generally  managed
separately.  Segment  reporting is applicable  beginning with the acquisition of
PWF on December 31,  2001;  prior to December  31,  2001,  all of the  Company's
operations were attributable to the investing  segment.  Of the total assets for
the Company at March 31, 2003 and December 31, 2002, approximately $1.72 billion
and $1.73 billion,  respectively,  are attributable to the investing segment and
approximately $111 million and $124 million,  respectively,  are attributable to
the operating segment.


                                       22

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


The following table provides more information regarding the Company's segments:

<TABLE>


                                                Three Months Ended                      Three Months Ended
                                                   March 31, 2003                         March 31, 2002
                                           ----------------------------------------------------------------------

(Dollars in thousands)                     Investing     Operating     Total     Investing    Operating     Total
----------------------                     ---------     ---------     -----     ---------    ---------     -----
<S>                                        <C>           <C>           <C>       <C>          <C>           <C>

Revenues                                   $  27,884      $  4,037     $ 31,921  $ 23,943     $   4,860     $ 28,803
Interest Revenues                             26,550           718       27,268    23,357         1,351       24,708
Interest Expense                               3,562           254        3,816     3,488           503        3,991
Depreciation and
 Amortization expense                            316         1,371        1,687       240         2,000        2,240
Equity in the income
 of investees
 accounted for under
 the equity method                                28            --           28       302            --          302
Income tax expense or benefit                 (1,873)         (103)      (1,976)       --           181          181
Net Income                                    17,769           138       17,907    17,614         1,210        18,824
</TABLE>



                                       23

<PAGE>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003
                                   (Unaudited)


NOTE 11 - Warehouse Facility

On March 31,  2003,  the Company  entered into a $75 million  secured  revolving
tax-exempt  bond  warehouse  line of credit  with  Fleet  Securities,  Inc.  and
Wachovia  Securities,  Inc.  (the  "Facility").  The  Facility  has a  built  in
accordion  feature  allowing  up to a $25 million  increase  for a total of $100
million  and a term of two years,  plus a one year  extension  at the  Company's
option.  The Facility  bears  interest at either 31, 60, 90, or 180-day  reserve
adjusted LIBOR, or prime plus .25%, at the Company's option.

NOTE 12 - PWF Acquisition

As part of the PWF acquisition,  the purchase agreement provided that CharterMac
has the right to purchase the remaining 20% of PWF shares of stock within the 37
months  following  the  close  of the  acquisition,  (the  "Call  Option").  The
agreement  also gives the owners of the  remaining  20% of PWF's shares of stock
the right to put those shares to CharterMac  (the "Put  Option"),  within the 34
months following the close of the acquisition.  The Company  considers these two
options to be a single unit (a forward contract), due to the fact the Put Option
and Call  Option  were  entered  into at the same  time,  have the same  counter
parties,  have the same  risk,  and  could  have been  accomplished  in a single
transaction.  The price at which the  shares of stock are to be  repurchased  is
based on many factors, determined in the future including the performance of the
underlying  revenues of PWF, the value of PWF's  servicing  portfolio  and other
factors which are not currently determinable. The Company determined the forward
contract should not be recorded until the contract is settled and the associated
shares  transferred to the Company.  During the period of the forward  contract,
the Company will allocate  subsidiary income or loss to the minority interest on
a pro-rata basis, determined by its ownership percentage.

NOTE 13 - Subsequent Events

On April 1, 2003,  the  Company  closed on its sale of  Tax-Exempt  Multi-Family
Housing Trust Certificates Series 2003A (the "Trust").  Pursuant to the terms of
the Trust, the Company contributed 19 fixed-rate, tax-exempt multifamily housing
and senior  housing  Revenue  Bonds  collateralized  by 16 different  properties
totaling approximately $196.8 million in aggregate principal into a trust out of
which was sold $100  million in Class A  Certificates  to various  institutional
investors.  A  wholly-owned  indirect  subsidiary  of  CharterMac  retained  the
subordinated  Class  B  Certificates   totaling   approximately  $96.8  million.
CharterMac has agreed that it will hold the Class B Certificates until the Trust
is terminated.  The Class A Certificates  will accrue interest at the fixed rate
of 3.25% per  annum  for two  years.  Distributions  to the Class A  Certificate
holders are expected to be made on the 15th day of each month, commencing on May
15,  2003.  The Class A  Certificates  will be subject to  mandatory  tender for
purchase at a price equal to the  outstanding  Certificate  Balance thereof plus
accrued  interest thereon on March 15, 2005. If CharterMac does not exercise its
option to terminate the Trust on March 15, 2005, the Class A  Certificates  will
be subject to remarketing. The Class A Certificates will be subject to mandatory
tender  for  purchase  and  cancellation  on the  Final  Distribution  Date from
proceeds  of the  liquidation  of the bonds on March 15,  2007.  This  financing
arrangement will be accounted for as a secured borrowing.

Subsequent to March 31, 2003,  CharterMac has acquired twelve Revenue Bonds with
a total aggregate face amount of approximately  $53.1 million,  secured by 1,013
multifamily units.


                                       24

<PAGE>


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

General
-------

Charter Municipal  Mortgage  Acceptance Company  ("CharterMac"),  along with its
consolidated   subsidiaries  (the  "Company"),  is  a  Delaware  business  trust
principally engaged in the acquisition and ownership (directly or indirectly) of
tax-exempt  multi-family  housing  revenue  bonds  ("Revenue  Bonds")  and other
investments  that produce  tax-exempt  income,  issued by various state or local
governments,  agencies,  or authorities.  Revenue Bonds are primarily secured by
participating   and   non-participating   first  mortgage  loans  on  underlying
properties ("Underlying Properties").

The  Company  believes  that it can earn above  market  rates of interest on its
Revenue  Bond  acquisitions  by focusing  its efforts  primarily  on  affordable
housing.  The  Manager  estimates  that  nearly  30%  of  all  new  multi-family
development contains an affordable component which produces tax credits pursuant
to Section 42 of the Internal Revenue Code. The traditional methods of financing
affordable housing with tax-exempt Revenue Bonds are complex and time consuming,
and involve the participation of many  intermediaries.  Through the Manager, the
process has been streamlined with the "Direct Purchase  Program".  The Company's
Direct Purchase Program removes all  intermediaries  from the financing  process
(except the governmental  issuer of the Revenue Bond) and enables  developers to
deal directly with one source.  Because the Company  purchases its Revenue Bonds
directly  from the  governmental  issuer,  the need for  underwriters  and their
counsel,  rating agencies and costly  documentation is eliminated.  This reduces
the financing  life cycle,  often by several  months,  and also reduces the bond
issuance  costs,  usually by 30% or more. In dealing  directly with the Company,
developers feel more certain about the terms and timing of their financing.  The
Company  believes  the savings in time and up-front  costs and the  certainty of
execution  that the Direct  Purchase  Program  offers to  developers  allows the
Company to receive  above-market  rates of  interest  on the  Company's  Revenue
Bonds.

The Company  believes that it is well  positioned to market its Direct  Purchase
Program as a result of the Manager's  affiliation  with Related  Capital Company
("Related"), a nationwide, fully integrated real estate financial services firm,
because the Manager is able to utilize Related's  resources and relationships in
the  multi-family  affordable  housing  finance  industry  to  source  potential
borrowers  of  Revenue  Bonds.  Related  and  its  predecessor   companies  have
specialized  in offering  debt and equity  products to  mid-market  multi-family
owners and  developers  for over 30 years.  According to the 2001 National Multi
Housing Council survey, Related is the second largest owner of apartments in the
United States.

The Company,  through its wholly-owned  subsidiary  CharterMac  Corporation ("CM
Corp."),  acquired  80% of the  outstanding  capital  stock of PW Funding,  Inc.
("PWF").  As a result of the acquisition of PWF, the Company has diversified the
range of its  investment  products  and is able to offer  developers  fixed  and
floating rate tax-exempt and taxable  financing  through Fannie Mae, Freddie Mac
and FHA for affordable and market rate multi-family  properties.  Combining this
with  the  Company's  core  business  of  investing  in  Revenue  Bonds  and its
affiliation  with  Related,  the  Company  is able to  provide  developers  with
financing for all aspects of their property's  capital  structure.  In addition,
the Company has  diversified  its revenues  with a fee business that may grow in
value over time and is expected to insulate the Company from the vagaries of the
capital markets.

On January 14, 2002, the Company announced that its Board of Trustees had formed
a special committee to explore  strategic  alternatives for the Company's future
management  structure,  including  internalization  of  management,  and ways to
further diversify the Company's revenue sources.  The special committee consists
of the independent  members of the Board of Trustees,  Peter T. Allen, Arthur P.
Fisch and Charles L. Edson.  On December 18, 2002, the Company  announced it had
entered  into an agreement  to acquire  100% of the  ownership  interests in and
substantially  all of the  businesses  operated by Related  (other than specific
excluded  interests).  The acquisition  will enable the Company to terminate its
outside   management   agreement   with   the   Manager   and   to   become   an
internally-managed company.

The acquisition  will be structured so that the ownership  interests held by the
Related  principals in both Related and the other  entities  which control other
aspects  of  Related's   business  will  be  contributed  into  a  newly-formed,
wholly-owned  subsidiary  of  CharterMac  (the  "CharterMac  Sub").


                                       25

<PAGE>


The selling  principals of Related include the four executive  managing partners
(Stuart J. Boesky, Alan P. Hirmes, Marc D. Schnitzer and Denise L. Kiley) and an
affiliate of The Related Companies,  L.P. ("TRCLP"),  which is majority owned by
Stephen M. Ross (the "Related Principals"). Messrs. Boesky, Hirmes and Schnitzer
and Ms. Kiley have managed RCC over the past 15 years.

CharterMac will pay total  consideration to the Related Principals of up to $338
million. The consideration will be paid as follows:

     The Initial  Payment - $210 million  consisting  of $160 million in special
     common units of the  CharterMac  Sub ("SCUs") and $50 million in cash (with
     the cash position being paid only to TRCLP).  The Initial Payment SCUs will
     be issued  at $17.78  per unit,  which  was the  average  closing  price of
     CharterMac  Common  Shares,   for  the  30  calendar  days  prior  to  this
     announcement (the "Initial Payment SCUs");

     The Contingent  Payment - $128 million of additional SCUs (the  "Contingent
     Payment SCUs"),  based on 7.73x Related's  adjusted audited earnings before
     interest,  taxes,  depreciation and amortization,  as well as certain other
     adjustments,  for the year ended December 31, 2002. The Contingent  Payment
     SCUs are  expected  to be issued at the same price as the  Initial  Payment
     SCUs, subject to a 17.5% symmetrical collar.

In connection with the acquisition, CharterMac will establish a restricted share
award  plan and will  broadly  issue to  employees  of  Related,  other than the
Related Principals, at least $15 million of CharterMac Common Shares and, at the
option  of the  Related  Principals,  up to $20.2  million,  in which  event the
Contingent  Payment  payable to the  Related  Principals  will be reduced by the
amount by which the value of the  Common  Shares  issued  exceeds  $15  million.
Following  the  completion  of the  acquisition,  TRCLP's  economic  interest in
CharterMac will equal  approximately 17.7% and management and Related Principals
(other than TRCLP)  economic  interest in  CharterMac  will equal  approximately
8.7%.

On February 28, 2003,  the Company  filed a  preliminary  proxy  regarding  this
proposed acquisition and has received comments from the SEC. On May 8, 2003, the
Company filed a revised proxy with the SEC.

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

Interest income from Revenue Bonds increased  approximately $3.3 million for the
three  months  ended  March 31,  2003 as compared  to 2002.  This  increase  was
primarily due to an increase in interest  income of  approximately  $7.2 million
from new Revenue Bonds acquired during 2002,  partially off-set by a decrease in
interest  income due to the sale or repayment of Revenue Bonds of  approximately
$3.1 million and a decrease in participating interest.

Total  revenues  for the  three  months  ended  March  31,  2003,  increased  by
approximately  $3.1 million  including  the  increases  in interest  income from
Revenue Bonds noted above, increases in mortgage servicing fees and other income
offset by a decrease of approximately  $700,000,  investment in mortgage banking
fees due to lower origination volume.

General and  administrative  expenses increased  approximately  $440,000 for the
three  months  ended  March 31, 2003 as  compared  to 2002  primarily  due to an
increase  in  stock  based  compensation  to PWF  employees,  mostly  offset  by
decreases in other forms of compensation to PWF employees.

Amortization  decreased  approximately $553,000 for the three months ended March
31, 2003 primarily due to a decrease of amortization  of MSRs at PWF,  primarily
due to the write-off of the remaining MSR asset for loans that paid-off prior to
their term expiration.

Income  allocated to preferred  shareholders  of subsidiary for the three months
ended March 31,  2003  increased  approximately  $960,000  due to the  preferred
offerings consummated on June 4, 2002.

During the three months ended March 31, 2003, the Company recorded a benefit for
income  taxes  of  approximately  $1,976,000,  relating  to a  decrease  in  the
provision for income taxes.

During the three months ended March 31, 2003, the Company  recognized a net loss
on  repayments  of Revenue  Bonds of  approximately  $412,000,  versus a gain of
approximately $3.8 million for 2002,


                                       26

<PAGE>


due to the number and size of Revenue Bonds repaid or sold. Additionally, during
the three months ended March 31, 2003, the Company  recognized gains on sales of
loans of approximately $2.1 million versus  approximately $3.3 million for 2002,
relating to PWF's origination activities.

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

The Company has  primarily  used two  sources of  capital:  collateralized  debt
securitization and various types of equity offerings to fund its investments and
facilitate growth.

On March 31,  2003,  the Company  entered into a $75 million  secured  revolving
tax-exempt  bond  warehouse  line of credit  with  Fleet  Securities,  Inc.  and
Wachovia  Securities,  Inc.  (the  "Facility").  The  Facility  has a built-  in
accordion  feature  allowing  up to a $25 million  increase  for a total of $100
million and a term of two years,  plus a one- year  extension  at the  Company's
option.  The Facility  bears  interest at either 31, 60, 90, or 180-day  reserve
adjusted LIBOR, or prime plus .25%, at the Company's option.

On April 1, 2003,  the  Company  closed on its sale of  Tax-Exempt  Multi-Family
Housing Trust Certificates Series 2003A (the "Trust").  Pursuant to the terms of
the Trust, the Company contributed 19 fixed-rate, tax-exempt multifamily housing
and senior  housing  revenue  bonds  collateralized  by 16 different  properties
totaling approximately $196.8 million in aggregate principal into a trust out of
which was sold $100  million in Class A  Certificates  to various  institutional
investors.  A  wholly-owned  indirect  subsidiary  of  CharterMac  retained  the
subordinated  Class  B  Certificates   totaling   approximately  $96.8  million.
CharterMac has agreed that it will hold the Class B Certificates until the Trust
is terminated.  The Class A Certificates  will accrue interest at the fixed rate
of 3.25% per  annum  for two  years.  Distributions  to the Class A  Certificate
holders are expected to be made on the 15th day of each month, commencing on May
15,  2003.  The Class A  Certificates  will be subject to  mandatory  tender for
purchase at a price equal to the  outstanding  Certificate  Balance thereof plus
accrued  interest thereon on March 15, 2005. If CharterMac does not exercise its
option to terminate the Trust on March 15, 2005, the Class A  Certificates  will
be subject to remarketing. The Class A Certificates will be subject to mandatory
tender  for  purchase  and  cancellation  on the  Final  Distribution  Date from
proceeds of the liquidation of the bonds on March 15, 2007.

During the three  months ended March 31, 2003 cash and cash  equivalents  of the
Company and its consolidated subsidiaries increased approximately $19.7 million.
The increase was  primarily  due to cash  provided by  operating  activities  of
approximately  $13 million,  proceeds from the repayment of two Revenue Bonds of
approximately   $19.0   million,   principal   payments  on  Revenue   Bonds  of
approximately  $6.8 million and principal  payments  received from loans made to
properties of  approximately  $7.4  million,  partially  offset by  distribution
payments of  approximately  $20.3  million,  advances  made to Revenue  Bonds of
approximately  $3.1 million and an increase in mortgages  receivable held at PWF
of approximately $2.8 million.

In April  2003,  distributions  declared  in March  2003 were paid to  Preferred
Shareholders as shown in the table below:

<TABLE>

                                                                                          Liquidation
                                                                                             Value
                                        Dividend       Distribution        Total              per
Series                                    Rate           per Share      Distribution         share
------                                  --------       ------------     ------------      ------------
<S>                                     <C>              <C>            <C>               <C>

A                                         6.625%         $33,125        $1,490,625        $2,000,000
A-1                                       7.100%           8,875           426,000           500,000
A-2                                       6.300%           7,875           488,250           500,000
A-3                                       6.800%           8,500           510,000           500,000
B                                         7.600%           9,500         1,045,000           500,000
B-1                                       6.800%           8,500           314,500           500,000
B-2                                       7.200%           9,000           450,000           500,000

</TABLE>


Also paid, during May 2003, were  distributions of $14,642,929 ($.325 per share)
to holders of common and  convertible  CRA shares,  which were also  declared in
May.

Management is not aware of any trends or events,  commitments or  uncertainties,
which  have not


                                       27

<PAGE>


otherwise  been  disclosed  that will or are  likely to  impact  liquidity  in a
material way.

Critical Accounting Policies
----------------------------

The Company's  critical  accounting  policies are described in its Form 10-K for
the  year  ended  December  31,  2002  and in  Note 1 of  the  footnotes  of the
accompanying  financial statements.  These critical accounting policies have not
changed during 2003.

Acquisitions
------------

During the period  January 1, 2003 through  March 31, 2003,  the Company did not
acquire any new Revenue Bonds, but did advance additional funds to Revenue Bonds
which were previously acquired totaling approximately $3.1 million.

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

Certain   statements  made  in  this  report  may  constitute   "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended,  and Section 21E of the  Securities  Exchange Act of 1934,  as amended.
Such forward-looking  statements include statements regarding the intent, belief
or current  expectations of the Company and its management and involve known and
unknown  risks,  uncertainties  and other  factors  which  may cause the  actual
results,  performance or achievements of the Company to be materially  different
from any future  results,  performance or  achievements  expressed or implied by
such forward-looking  statements.  Such factors include, among other things, the
following:  general  economic and business  conditions,  which will, among other
things,  affect the availability and  creditworthiness  of prospective  tenants,
lease rents and the terms and availability of financing for properties  financed
by Revenue  Bonds  owned by the  Company;  adverse  changes  in the real  estate
markets including,  among other things,  competition with other companies; risks
of  real  estate   development  and   acquisition;   governmental   actions  and
initiatives; and environment/safety  requirements.  Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof.

Inflation
---------

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

Related Parties
---------------

The Company's  day-to-day  affairs are handled under the terms of the Management
Agreements with the Manager.

The Company has  invested  in, and may in the future  invest in,  Revenue  Bonds
secured by properties  in which either direct or indirect  affiliates of Related
own equity interests in the borrower.  The Company's trust agreement  contains a
limitation,  equal to 15% of total  market  value,  on the  aggregate  amount of
Revenue Bonds the Company may hold where the borrowers  under such Revenue Bonds
are either direct or indirect  affiliates of Related and Related generally has a
controlling economic interest.

In some cases,  Related or its affiliates may own a partnership or joint venture
interest merely to facilitate an equity  financing on behalf of one of Related's
investment  funds.   These  instances  are  not  considered  in  the  above  15%
limitation.  This  type of  transaction  with an  affiliated  borrower  would be
structured as a limited partnership as follows:  the general partner would be an
unaffiliated  third  party with a 1% general  partnership  interest  and the 99%
limited  partner would itself be a limited  partnership in which an affiliate of
Related would own a 1% general partnership  interest and one or more Fortune 500
companies would own a 99% limited partnership interest.

Affiliates of the Manager may provide certain financial guarantees to facilitate
leveraging  by  CharterMac,  for which they could be paid market  rate fees.  In
addition,  affiliates of the Manager may provide certain financial guarantees to
the owner (or  partners of the  owners) of the  underlying  properties  securing
CharterMac's revenue bonds, for which they could be paid market rate fees.

Certain  of the  Revenue  Bonds held by the  Company  are  supported  by various
guarantees including,  but not limited to, construction and operating guarantees
from affiliates of the Manager.


                                       28

<PAGE>


During the quarter  ended  September 30, 2002,  the Company  agreed to back up a
primary  guarantor's  obligation  to guarantee an  agreed-upon  internal rate of
return to the investor in Related Capital Guaranteed Corporate Partners II, L.P.
("RCGCP").  RCGCP is a fund  sponsored  by Related,  who is an  affiliate of the
Manager. The Company is the beneficiary of a guarantee against losses associated
with  construction  and operating  stabilization  for each of the  properties in
RCGCP,  which is capped at $15 million.  The  guarantee has been provided by The
Related Companies,  L.P.  ("TRCLP"),  an affiliate of Related.  If the Company's
acquisition  of Related is completed,  then this  guarantee will no longer be in
force.

In connection  with the  refinancing  of River Run, the Company  entered into an
agreement  which  allows the Revenue  Bond to be put to the  Company  should the
owner of the  underlying  property  default on the bond.  The Company,  in turn,
entered into  agreements  which allow the Company to put the bond to the general
partners of the owner who are affiliates of the Manager. The Company's put right
is  secured by  collateral  assignments  of the  general  partners'  partnership
interests in the limited partnership which owns the underlying property.

The Company has entered into a credit enhancement transaction with Merrill Lynch
Capital Services.  TRCLP has provided the Company with an indemnity covering 50%
of any losses incurred by the Company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

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 the TOP
program and on the secured  borrowings  under the P-FLOATS program vary based on
market  interest  rates  based on the Bond  Market  Association  ("BMA") and are
re-set weekly.

Various  financial  vehicles  exist  which  would allow  Company  management  to
mitigate the impact of interest rate  fluctuations  on the Company's  cash flows
and earnings.  Beginning in 2001, and upon management's analysis of the interest
rate environment and the costs and risks of such strategies, the Company entered
into two interest rate swaps in order to hedge against increases in the floating
interest  rate on its TOP and P-FLOATS  programs.  Under such interest rate swap
agreements,  the Company is required to pay Merrill Lynch Capital  Services (the
"Counterparty")  a fixed  rate on a  notional  amount of debt.  In  return,  the
Counterparty  will  pay  the  Company  a  floating  rate  equivalent  to the BMA
Municipal  Swap Index,  an index of weekly  tax-exempt  variable  rate issues on
which the Company's  variable rate financing  programs are based.  On January 5,
2001, the Company entered into a five-year interest rate swap that fixes the BMA
index to 3.98% on a notional  amount of $50  million.  On February 5, 2001,  the
Company entered into a three-year interest rate swap that fixes the BMA index to
3.64% on a notional amount of an additional $100 million. This effectively fixes
$50 million and $100 million of the  Company's  secured  borrowings at 3.98% and
3.64%, respectively,  protecting the Company in the event the BMA Municipal Swap
Index rises.  For the quarter ended March 31, 2003, the Company's cost to borrow
funds  through  the  TOP  and  P-FLOATS   programs   averaged  2.08%  and  2.0%,
respectively,  which  does not  include  the  effect  of the  Company's  hedging
activities.

With respect to the portion of the Company's  floating rate  financing  programs
which are not  hedged,  a change in the BMA rate would  result in  increased  or
decreased  payments  under these  financing  programs,  without a  corresponding
change in cash flows from the investments in Revenue Bonds.  For example,  based
on the unhedged $521 million outstanding under these financing programs at March
31, 2003,  the Company  estimates that an increase of 1.0% in the BMA rate would
increase   interest  expense  and  therefore   decrease  annual  net  income  by
approximately  $5.2 million.  Conversely,  a decrease in market  interest  rates
would  generally  benefit the Company in the same amount  described  above, as a
result of decreased  allocations to the minority  interest and interest  expense
without corresponding decreases in interest received on the Revenue Bonds.


                                       29

<PAGE>


Changes in market  interest  rates would also impact the estimated fair value of
the Company's  portfolio of Revenue Bonds. The Company  estimates the fair value
for each Revenue Bond as the present value of its expected  cash flows,  using a
discount rate for comparable tax-exempt and taxable investments.  Therefore,  as
market  interest  rates for  tax-exempt and taxable  investments  increase,  the
estimated fair value of the Company's 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,  the  Company  projects,  using the same
methodology  used to estimate the  portfolio's  fair market value under FAS 115,
that a 1% increase in market rates for tax-exempt and taxable  investments would
decrease the  estimated  fair value of its  portfolio of Revenue  Bonds from its
March 31, 2003 value of  $1,551,808,000  to approximately  $1,364,862,000.  A 1%
decline  in  interest  rates  would  increase  the value of the  March 31,  2003
portfolio to approximately  $1,803,163,000.  Changes in the estimated fair value
of the Revenue Bonds do not impact the Company's  reported net income,  earnings
per share,  distributions or cash flows, but are reported as components of other
comprehensive income and affect reported shareholders' equity.

The  assumptions  related to the  foregoing  discussion  of market risk  involve
judgments   involving  future  economic  market  conditions,   future  corporate
decisions and other interrelating  factors, many of which are beyond the control
of the Company and all of which are  difficult  or  impossible  to predict  with
accuracy.  Although the Company  believes 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 a representation  of the Company that the
objectives and plans of the Company would be achieved.

Item 4.  Controls and Procedures

(a)  Evaluation  of Disclosure  Controls and  Procedures.  The  Company's  Chief
Executive  Officer and Chief Financial  Officer have evaluated the effectiveness
of the Company's  disclosure controls and procedures (as such term is defined in
Rules  13a-14(c)  under the  Securities  Exchange  Act of 1934,  as amended (the
"Exchange  Act")) as of a date  within 90 days prior to the filing  date of this
quarterly  report  (the  "Evaluation  Date").  Based  on such  evaluation,  such
officers  have  concluded  that,  as  of  the  Evaluation  Date,  the  Company's
disclosure  controls and  procedures  are effective in alerting them on a timely
basis  to  material   information   relating  to  the  Company   (including  its
consolidated  subsidiaries)  required to be included  in the  Company's  reports
filed or submitted under the Exchange Act.

(b) Changes in Internal Controls. Since the Evaluation Date, there have not been
any significant  changes in the Company's  internal controls or in other factors
that could significantly affect such controls.


                                       30

<PAGE>



                           PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

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

Item 2.   Changes in  Securities and  Use of Proceeds - As previously disclosed,
          during the quarter  ended June  30,2002,  a subsidiary  of the Company
          issued  preferred  shares  for gross  proceeds  of  approximately  $55
          million. The following  disclosure  supplements the disclosure made in
          the Company's Form 10Q for that period.  These  preferred  shares were
          sold to qualified  institutional  investors  under a Rule 144A private
          placement. The underwriter was Merrill Lynch and Co.

Item 3.   Defaults Upon Senior Securities - None

Item 4.   Submission  of Matters to a Vote of  Security  Holders -  None

Item 5.   Other Information - None

Item 6.   Exhibits and Reports on Form 8-K

          Exhibits:

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

          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 Form 8-K's were filed or furnished, as noted in the
              applicable Form 8-K, for the quarter ended March 31, 2003.

              Current report on Form 8-K relating to a press release issued by
              the Company reporting fourth quarter and year-end 2002 financial
              results, dated February 27, 2003.

              Current report on Form 8-K relating to the Company making
              available unaudited supplemental data regarding its operations for
              the quarter ended December 31, 2002, dated March 4, 2003.

              Current report on Form 8-K relating to hosting a conference call
              to discuss the Company's fourth quarter and year-end 2002
              earnings, dated February 27, 2003.


                                       31

<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                  (Registrant)




Date:  May 15, 2003                      By:
                                            -------------------------
                                            Stuart J. Boesky
                                            Managing Trustee, President
                                            and Chief Executive Officer




Date:  May 15, 2003                     By:
                                            -------------------------
                                            Stuart A. Rothstein
                                            Chief Financial Officer and
                                            Chief Accounting Officer


                                      32

<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                  (Registrant)




Date:  May 15, 2003                    By:/s/ Stuart J. Boesky
                                          --------------------
                                          Stuart J. Boesky
                                          Managing Trustee, President
                                          and Chief Executive Officer




Date:  May 15, 2003                    By:/s/Stuart A. Rothstein
                                          ----------------------
                                          Stuart A. Rothstein
                                          Chief Financial Officer and Chief
                                          Accounting Officer


                                       33


<PAGE>


                                  CERTIFICATION


I, Stuart J. Boesky, hereby certify that:

     1.   I have  reviewed  this  quarterly  report  on  Form  10-Q  of  Charter
          Municipal Mortgage Acceptance Company;

     2.   Based on my  knowledge,  this  quarterly  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 quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly 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 quarterly 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-14 and 15d-14) for the  registrant
          and we have:

          a) designed  such  disclosure  controls and  procedures  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  quarterly
          report is being prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

          c)  presented  in this  quarterly  report  our  conclusions  about the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  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 in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

          b) any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal controls; and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.



Date: May 15, 2003                          By:
      ------------                             ----------------------
                                               Stuart J. Boesky
                                               Chief Executive Officer


                                       34

<PAGE>


                                  CERTIFICATION


I, Stuart J. Boesky, hereby certify that:

     1.   I have  reviewed  this  quarterly  report  on  Form  10-Q  of  Charter
          Municipal Mortgage Acceptance Company;

     2.   Based on my  knowledge,  this  quarterly  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 quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly 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 quarterly 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-14 and 15d-14) for the  registrant
          and we have:

          a) designed  such  disclosure  controls and  procedures  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  quarterly
          report is being prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

          c)  presented  in this  quarterly  report  our  conclusions  about the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  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 in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

          b) any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal controls; and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.


Date: May 15, 2003                   By:/s/Stuart J. Boesky
      ------------                      ------------------
                                        Stuart J. Boesky
                                        Chief Executive Officer


                                       35

<PAGE>


                                  CERTIFICATION


I, Stuart A. Rothstein, hereby certify that:

     1.   I have  reviewed  this  quarterly  report  on  Form  10-Q  of  Charter
          Municipal Mortgage Acceptance Company;

     2.   Based on my  knowledge,  this  quarterly  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 quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly 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 quarterly 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-14 and 15d-14) for the  registrant
          and we have:

          a) designed  such  disclosure  controls and  procedures  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  quarterly
          report is being prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

          c)  presented  in this  quarterly  report  our  conclusions  about the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  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 in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

          b) any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal controls; and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.



Date: May 15, 2003                        By:
      ------------                           ------------------------
                                             Stuart A. Rothstein
                                             Chief Financial Officer


                                       36

<PAGE>


                                  CERTIFICATION


I, Stuart A. Rothstein, hereby certify that:

     1.   I have  reviewed  this  quarterly  report  on  Form  10-Q  of  Charter
          Municipal Mortgage Acceptance Company;

     2.   Based on my  knowledge,  this  quarterly  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 quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly 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 quarterly 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-14 and 15d-14) for the  registrant
          and we have:

          a) designed  such  disclosure  controls and  procedures  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  quarterly
          report is being prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

          c)  presented  in this  quarterly  report  our  conclusions  about the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  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 in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

          b) any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal controls; and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.



Date: May 15, 2003                         By:/s/Stuart A. Rothstein
      ------------                            ----------------------
                                              Stuart A. Rothstein
                                              Chief Financial Officer


                                       37