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

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

| Delaware                                                       |   | 13-3949418                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |
|                                                           |   |                                 |
| 625 Madison Avenue, New York, New York                         |   | 10022                                |
| (Address of principal executive offices)                       |   | (Zip Code)                           |

| (212) 317-5700                                              |
|-------------------------------------------------------------|
| Registrant’s telephone number, including area code    |
|                                                        |
| Securities registered pursuant to Section 12(b) of the Act: |
| None                                                        |

| Large accelerated filer | o      |                                          |   | Accelerated filer         | o      |
|-------------------------|--------|-----------------------------------------------|--------|---------------------------|--------|
|                    |   |                                          |   |                      |   |
| Non-accelerated filer   | o      | (Do not check if a smaller reporting company) |   | Smaller reporting company | þ |

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|       |     |                                                                                                                                    |   | Page   |
|------------|----------|-----------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| PART I     |     |                                                                                                                                    |   |   |   |
|       | Item 1.  | Business                                                                                                                                |   | 1      |   |
|       | Item 1A. | Risk Factors                                                                                                                            |   | 6      |   |
|       | Item 1B. | Unresolved Staff Comments                                                                                                               |   | 19     |   |
|       | Item 2.  | Properties                                                                                                                              |   | 19     |   |
|       | Item 3.  | Legal Proceedings                                                                                                                       |   | 19     |   |
|       | Item 4.  | Removed and Reserved                                                                                                                    |   | 20     |   |
|       |     |                                                                                                                                    |   |   |   |
| PART II    |     |                                                                                                                                    |   |   |   |
|       | Item 5.  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities                      |   | 21     |   |
|       | Item 6.  | Selected Financial Data                                                                                                                 |   | 22     |   |
|       | Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations (see Table of Contents at front of section) |   | 23     |   |
|       | Item 7A. | Quantitative and Qualitative Disclosures about Market Risk                                                                              |   | 62     |   |
|       | Item 8.  | Financial Statements and Supplementary Data (see Table of Contents at front of section)                                                 |   | 64     |   |
|       | Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                                    |   | 140    |   |
|       | Item 9A. | Controls and Procedures                                                                                                                 |   | 140    |   |
|       | Item 9B. | Other Information                                                                                                                       |   | 140    |   |
|       |     |                                                                                                                                    |   |   |   |
| PART III   |     |                                                                                                                                    |   |   |   |
|       | Item 10. | Directors, Executive Officers and Corporate Governance                                                                                  |   | 141    |   |
|       | Item 11. | Executive Compensation                                                                                                                  |   | 141    |   |
|       | Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                                          |   | 141    |   |
|       | Item 13. | Certain Relationships and Related Transactions, and Director Independence                                                               |   | 141    |   |
|       | Item 14. | Principal Accounting Fees and Services                                                                                                  |   | 141    |   |
|       |     |                                                                                                                                    |   |   |   |
| PART IV    |     |                                                                                                                                    |   |   |   |
|       | Item 15. | Exhibits and Financial Statement Schedules                                                                                              |   | 142    |   |
|       |     |                                                                                                                                    |   |   |   |
| SIGNATURES |     |                                                                                                                                    | 148/   |   |

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| ·   | business limitations caused by adverse changes in real estate and credit markets and general economic and business conditions; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| ·   | risks related to the form and structure of our financing arrangements; |
|--------------------|------------------------------------------------------------------------|

| ·   | our ability to generate new income sources, raise capital for investment funds and maintain business relationships with providers and users of capital; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes in applicable laws and regulations; |
|--------------------|---------------------------------------------|

| ·   | our tax treatment, the tax treatment of our subsidiaries and the tax treatment of our investments; |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | competition with other companies; |
|--------------------|-----------------------------------|

| ·   | risk of loss associated with mortgage originations; |
|--------------------|-----------------------------------------------------|

| ·   | risks associated with providing credit intermediation; and |
|--------------------|------------------------------------------------------------|

| ·   | risks associated with enforcement by our creditors of any rights or remedies which they may possess. |
|--------------------|------------------------------------------------------------------------------------------------------|

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| ·   | sold our Portfolio Management Group and the portion of the Commercial Real Estate Group that did not relate to loan originations to affiliates of Island Capital Group LLC (“Island Capital”); |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | amended and restructured our senior credit facility; |
|--------------------|------------------------------------------------------|

| ·   | restructured various components of our equity and issued a new series of shares; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | restructured our credit intermediation agreements by assigning obligations of our parent trust and CCG under credit intermediation agreements to certain isolated special purpose entities; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | settled a majority of our unsecured liabilities. |
|--------------------|--------------------------------------------------|

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| ·   | investment management fees, including acquisition fees and allowances to cover origination and underwriting costs, that are paid at closing and recognized as properties are acquired within the fund; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | partnership management fees for administrative services that are paid at closing and generally recognized over five years; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| ·   | asset management fees and expense reimbursements that are paid and recognized over the life of the fund as earned, providing that fee collection and reimbursement can be reasonably assured. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | funds our Affordable Housing Group originates and manages (“Tax Credit Fund Partnerships”); |
|--------|---------------------------------------------------------------------------------------------------------|

| · | property-level partnerships for which we have assumed the role of general partner or for which we have foreclosed upon the property (“Tax Credit Property Partnerships”). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our Affordable Housing group competes directly with other Tax Credit syndicators seeking to raise capital for tax advantaged funds, some of which offer credit intermediation for their funds.  We also compete with regional and national banks that directly acquire Tax Credit property investments; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our Mortgage Banking and Affordable Housing groups compete with 24 other licensed DUS lenders that originate multifamily mortgages on behalf of Fannie Mae, 27 other Freddie Mac Program Plus lenders, over 100 FHA-approved multi-family lenders as well as numerous banks, insurance companies, finance companies and others that originate multi-family mortgages for investment or resale. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our on-going relationships with developers and borrowers; |
|--------------------|-----------------------------------------------------------|

| ·   | our on-going relationships with GSEs; and |
|--------------------|-------------------------------------------|

| ·   | our diversified product platform. |
|--------------------|-----------------------------------|

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|   | (1) | Audit; |
|--------|-----|--------|

|   | (2) | Compensation; |
|--------|-----|---------------|

|   | (3) | Nominating/Governance; and |
|--------|-----|----------------------------|

|   | (4) | Finance. |
|--------|-----|----------|

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|   | · | our annual report on Form 10-K; |
|--------|--------|---------------------------------|

|   | · | our quarterly reports on Form 10-Q; |
|--------|--------|-------------------------------------|

|   | · | our current reports on Form 8-K; |
|--------|--------|----------------------------------|

|   | · | our proxy filings; and |
|--------|--------|------------------------|

|   | · | amendments, if any, to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | 1. | General Risks Related to Our Business |
|--------|----|---------------------------------------|

|   | 2. | Risks Related to Our Affordable Housing Group |
|--------|----|-----------------------------------------------|

|   | 3. | Risks Related to our Mortgage Banking Group |
|--------|----|---------------------------------------------|

|   | 4. | Risks Related to Application of Tax Laws |
|--------|----|------------------------------------------|

|   | 5. | Risks Related to Investing in Our Company |
|--------|----|-------------------------------------------|

|   | · | a general decline in business activity caused by stagnation and slow recovery in the many markets in which we operate; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | curtailment of our liquidity as described in Item 7 – Management’s Discussion and Analysis. |
|--------|--------|---------------------------------------------------------------------------------------------------------|

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| ·   | in the three years prior to the downturn in the tax credit syndication market, 10 developers provided 37.3% of the tax credit properties for which we arranged equity financing through our tax credit funds; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Fannie Mae and Freddie Mac were the purchasers of 90% of the loans originated by our Mortgage Banking and Affordable Housing groups in 2010 and 100% of the loans originated in 2009; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | originating and managing funds that provide equity to Tax Credit property partnerships; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | originating and servicing multifamily mortgages; and |
|--------|--------|------------------------------------------------------|

|   | · | investing in loans secured by real estate or revenues from real estate. |
|--------|--------|-------------------------------------------------------------------------|

|   | · | the properties might not generate sufficient income to meet their operating expenses and payments on the related debt and/or operating expenses may escalate leading to the same result; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | economic conditions may limit the amount of rent that can be charged at the properties, the timeliness of rent payments or a reduction in occupancy levels; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | there may be rent limitations for certain properties that could limit our ability to generate the funds necessary to maintain the properties in proper condition; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | current market conditions have led to increased foreclosures, resulting in greater supply of low-cost homes which could lower the demand for multifamily rental housing; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if an investment defaults, the fair market value of the property securing such investment may be less than the principal amount of our investment; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | there are certain types of losses that are either uninsurable or not economically insurable; as a result, the owners of the real estate securing our investments could be required to pay for such costs; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a guarantor may be unable to fulfill its obligations. |
|--------|--------|-------------------------------------------------------|

|   | · | a property owner may be unable to meet its obligations to us as holder of its debt; |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | a property owner may default on a mortgage for which we have a loss-sharing obligation; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | a fund may not be able to pay our fees; and |
|--------|--------|---------------------------------------------|

|   | · | we could lose our invested capital and/or anticipated future revenue. |
|--------|--------|-----------------------------------------------------------------------|

|   | · | reduce the fair value of our investments and residual interests in securitization transactions; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | decrease the amount we could realize on the sale or financing of those investments; |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | reduce the number of properties economically feasible to finance; |
|--------|--------|-------------------------------------------------------------------|

|   | · | reduce the demand for financing, which could limit our ability to originate loans or to structure transactions, thereby reducing fees and interest we receive; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | restrict our access to capital; and |
|--------|--------|-------------------------------------|

|   | · | cause investors to find alternative investments that are more attractive than the funds we sponsor. |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | the potential inability to refinance debt at terms we find acceptable; |
|--------|--------|------------------------------------------------------------------------|

|   | · | lack of availability of alternate sources of fixed-rate or lower cost financing; |
|--------|--------|----------------------------------------------------------------------------------|

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|   | · | default by interest rate swap counterparties on their obligations to us; |
|--------|--------|--------------------------------------------------------------------------|

|   | · | our inability to match the duration or reset periods of assets and liabilities that we want to mitigate the effect of changing rates; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | other efforts to manage risks related to changes in interest rates that may not be successful. |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | reductions in volume of funds originated and/or the rate of fees we earn from originating and managing funds; |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

|   | · | reductions in the rate of interest we earn on investments; and |
|--------|--------|----------------------------------------------------------------|

|   | · | reductions in volume of mortgage originations and/or the rates of origination and servicing fees for mortgages. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

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|   | · | the risk that borrowers may not be able to make payments, resulting in us, as the holder of the residual interests, receiving principal and interest payments that are less than expected or no payment at all; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the risk that the holders of the senior interests may control the ability to enforce remedies, limiting our ability to take actions that might protect our interests. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 4% credits – for new buildings and existing buildings financed with mortgage revenue bonds that receive an allocation of the volume cap, or for new and existing buildings financed with below-market federal financing that receive an allocation of federal LIHTCs from state agencies; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 9% credits – for new buildings that receive an allocation of federal LIHTCs from state agencies. |
|--------|--------|--------------------------------------------------------------------------------------------------------|

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| ·   | 20% of the units must be rented to individuals or families whose income is less than 50% of the area median gross income (the “20/50 test”); or |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 40% of the units must be rented to individuals or families whose income is less than 60% of the area median gross income (the “40/60 test”); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | which is 15 years after 50% of the units are occupied; |
|--------|-----|--------------------------------------------------------|

|   | (ii) | on which all the bonds have been retired; or |
|--------|------|----------------------------------------------|

|   | (iii) | on which any assistance provided under Section 8 of the U.S. Housing Act of 1937 terminates. |
|--------|-------|----------------------------------------------------------------------------------------------|

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| ·   | identification of investment and acquisition opportunities; |
|--------------------|-------------------------------------------------------------|

| ·   | advising as to operation and development of our remaining businesses; |
|--------------------|-----------------------------------------------------------------------|

| ·   | advising as to debt and equity financings and hedging activities; |
|--------------------|-------------------------------------------------------------------|

| ·   | advising as to selection and engagement of professional service providers; and |
|--------------------|--------------------------------------------------------------------------------|

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| ·   | advising as to negotiations with counterparties with respect to the above. |
|--------------------|----------------------------------------------------------------------------|

| ·   | without cause by our Manager; or |
|--------------------|----------------------------------|

| ·   | with or without cause by a majority of our Board of Trustees |
|--------------------|--------------------------------------------------------------|

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| ·   |  Issued Special Series A Shares to Natixis in consideration for restructuring certain credit intermediation agreements; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | Issued Special Series A Shares to  Bank of America Corporation and Wells Fargo & Co (or to certain of their subsidiaries or affiliates) in  conversion of their Convertible CRA shares |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | C-III Capital Partners LLC, the Purchaser in the March 2010 Restructuring, holds 139.7 million Common Shares; |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | Natixis holds 17.8 million Common Shares; |
|--------------------|-------------------------------------------|

| ·   | Bank of America Corporation holds 30.9 million Common Shares; |
|--------------------|---------------------------------------------------------------|

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| ·   | Wells Fargo & Company holds 27.8 million Common Shares; |
|--------------------|-------------------------------------------------------------|

| ·   | TRCLP, its owners and TRCLP affiliates hold 10.2 million of the outstanding SCUs and 1.1 million Common Shares; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | Former executives of our Company held 1.6 million of the outstanding SCUs.  These SCUs are not subject to lock-up agreements and may be converted to Common Shares at any time. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Irvine, CA – an office facility; the lease expires in 2012 |
|--------------------|------------------------------------------------------------------|

| ·   | Overland Park, KS – an office facility; the lease expires in 2012 |
|--------------------|-------------------------------------------------------------------------|

| ·   | San Francisco, CA – an office facility; the lease expires in 2012 |
|--------------------|-------------------------------------------------------------------------|

| ·   | Kansas City, MO – an office facility; the lease expires in 2012 |
|--------------------|-----------------------------------------------------------------------|

| ·   | Vienna, VA – an office facility; the lease expires in 2012 |
|--------------------|------------------------------------------------------------------|

| ·   | San Rafael, CA – an office facility; the lease expires in 2013 |
|--------------------|----------------------------------------------------------------------|

| ·   | Chicago, IL – an office facility; the lease expires in 2014 |
|--------------------|-------------------------------------------------------------------|

| ·   | Irving, TX – an office facility; the leases expires in 2018 |
|--------------------|-------------------------------------------------------------------|

| ·   | On or about March 6, 2009, Regions Bank, as Trustee under a Trust Indenture dated April 1, 2005 respecting the Walton Trail Apartments, commenced an action, entitled Regions Bank v. Deickman, et al., Civil Action No. 2009-CV-165607-MJW, in the Superior Court of Fulton County, Georgia, against Stephen R. Dieckman, Arthur Dickson Cannon, Jr. and Arthur Dickson Cannon, III (the “Defendants”) seeking to collect money owed under a certain Guaranty and Suretyship Agreement dated as of May 1, 2005.  On or about May 28, 2009, the Defendants filed a Third-Party Complaint in that action against CCG and Caswyck Trail, LLC (“Caswyck”).  Defendants thereafter amended their Third-Party Complaint.  Caswyck is a Georgia limited liability company, which owns the Walton Trail affordable housing apartment complex in Georgia and in which indirect subsidiaries of CCG and an investment fund sponsored by CCG are members.  The Amended Third-Party Complaint alleges that CCG misled and defrauded the Defendants and acted in bad faith in connection with certain unsuccessful and unconsummated negotiations to restructure the finances of Caswyck.  The Amended Third-Party Complaint asserts a claim for common law fraud against CCG and claims for subrogation, indemnification, unjust enrichment and declaratory judgment against Caswyck for any liability that Defendants may have to the Trustee.  The Defendants seek unspecified amounts of damages, attorneys fees and costs.  On or about August 10, 2009, CCG and Caswyck each separately moved to dismiss the claims then asserted against it.  In accordance with Georgia procedures, each also answered the Third-Party Complaint on or about August 10, 2009 and asserted counterclaims against the Third-Party Plaintiffs.  In two written orders each dated December 14, 2009, the Court granted CCG’s and Caswyck’s motions to dismiss and dismissed the subrogation and contribution claims against Caswyck and the fraud claim against Centerline.  After Caswyck moved to dismiss the subrogation and contribution claims, but prior to the Court ruling on that motion, the third-party plaintiffs amended their Third-Party Complaint to assert their claims for indemnification and unjust enrichment against Caswyck.  After the entry of the Court’s December 14, 2009 dismissal orders, the third-party plaintiffs moved for reconsideration of the Court’s decision to dismiss the fraud claim against CCG and for permission to take an immediate appeal of that decision.  The Court has not yet ruled on those two motions by the third-party plaintiffs.  On or about July 9, 2010, the Court entered a Case Scheduling Order requiring, among other pretrial deadlines and procedures, that all discovery be completed by August 15, 2011, dispositive motions must be made by September 30, 2011 and the case will be set on a trial calendar in early 2012.  CCG and Caswyck intend to continue to defend vigorously against the claims asserted against them. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | On or about July 23, 2010, Locust Street Lofts, LP, (“Lofts”), Locust Street Tenant, LP, (“Tenant”), Elias Haus Partners, LLC, Elias Tenant, LLC, Bill L. Bruce and Richard Yackey commenced an action in the Circuit Court of the City of St. Louis, Missouri, entitled Locust Street Lofts, LP, et al v. CCL Locust Street Owner LLC, et al., Cause No. 1022-CC10087, against certain of our subsidiaries and investment funds managed by our subsidiaries (the “Centerline Locust Street Defendants” ).  The plaintiffs, however, did not immediately serve the summons and complaint on the Centerline Locust Street Defendants.  On or about September 20, 2010, the Centerline Locust Street Defendants served their answer and counterclaim and filed certain motions in the action, including one for a preliminary injunction or the appointment of a receiver. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
|---------|---------------------------------------------------------------------------------------------------------------------|

|          |   | 2010   |   |   | 2009   |   |
|---------------|--------|--------|--------|--------|--------|--------|
| Quarter Ended |   | Low    |   |   | High   |   |   | Low |   |   | High |   |
|          |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31      |   | $      | 0.09   |   |   | $      | 0.45 |   |   | $ | 0.11 |   |   | $ | 0.45 |   |
| June 30       |   | $      | 0.16   |   |   | $      | 0.36 |   |   | $ | 0.22 |   |   | $ | 0.46 |   |
| September 30  |   | $      | 0.10   |   |   | $      | 0.18 |   |   | $ | 0.17 |   |   | $ | 0.51 |   |
| December 31   |   | $      | 0.07   |   |   | $      | 0.16 |   |   | $ | 0.09 |   |   | $ | 0.32 |   |

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|                                                                                                                                                                                                                                                                                                                       | (a)                                                                                  |   | (b)                                                                    |   | (c)                                                                                                                                |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                       |                                                                                 |   |                                                                   |   |                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                       | Number ofsecurities to beissued uponexercise ofoutstandingoptions,warrants andrights |   | Weighted-averageexercise price ofoutstandingoptions,warrants andrights |   | Number ofsecuritiesremainingavailable forfuture issuanceunder equitycompensationplans (excludingsecuritiesreflected incolumn a)(1) |
|                                                                                                                                                                                                                                                                                                                       |                                                                                 |   |                                                                   |   |                                                                                                                               |   |
| Equity compensation plans approved by security holders                                                                                                                                                                                                                                                                     | --                                                                                   |   | $                                                                      | --     |                                                                                                                               | 2,559,644 |
| Equity compensation plans not approved by security holders                                                                                                                                                                                                                                                                 | --                                                                                   |   |                                                                   | --     |                                                                                                                               | -- |
|                                                                                                                                                                                                                                                                                                                       |                                                                                 |   |                                                                   |   |                                                                                                                               |   |
| Totals                                                                                                                                                                                                                                                                                                                     | --                                                                                   |   | $                                                                      | --     |                                                                                                                               | 2,559,644 |
|                                                                                                                                                                                                                                                                                                                       |
| (1)   Our 2007 Incentive Share Plan (see Note 26 to the consolidated financial statements) authorizes us to issue options or other share-based compensation equal to 10% of the total shares outstanding (as defined in the plan) as of December 31 of the year preceding the issuance of new grants or options. |

| Securities purchased by us |
|----------------------------|

| Period                      |   | Totalnumber ofsharespurchased |   | Averageprice paidper share |   | Total numberof sharespurchased aspart of publiclyannouncedprogram |   | Maximumnumber ofshares that mayyet be purchasedunder the plansor program |
|-----------------------------|--------|-------------------------------|--------|----------------------------|--------|-------------------------------------------------------------------|--------|--------------------------------------------------------------------------|
|                        |   |                          |   |                       |   |                                                              |   |                                                                     |   |
| October 1 – 31, 2010  |   | --                            |   | $                          | --     |                                                              | --     |                                                                     | -- |
| November 1 – 30, 2010 |   | --                            |   |                       | --     |                                                              | --     |                                                                     | -- |
| December 1 – 31, 2010 |   | --                            |   |                       | --     |                                                              | --     |                                                                     | -- |
|                        |   |                          |   |                       |   |                                                              |   |                                                                     |   |
| Total                       |   | --                            |   | $                          | --     |                                                              | --     |                                                                     | 303,854 |

| Item 6. | Selected Financial Data |
|---------|-------------------------|

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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

| Significant components of the MD&A section include:                                                                                                                                                                                                                                                                                                |   | Page   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| SECTION 1 – OverviewThe overview section provides a summary of Centerline and our reportable business groups (as more fully discussed in Note 1 to the consolidated financial statements).  We also include a discussion of factors affecting our consolidated results of operations as well as items specific to each business group. |   | 24     |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| SECTION 2 – Consolidated Results of OperationsThe consolidated results of operations section provides an analysis of our consolidated results on a reportable segment basis for the year ended December 31, 2010, against the comparable prior year period.  Significant subsections within this section are as follows:               |   | 25     |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| Comparability of Results                                                                                                                                                                                                                                                                                                                               |   | 25     |   |
| Summary Consolidated Results                                                                                                                                                                                                                                                                                                                           |   | 26     |   |
| Affordable Housing                                                                                                                                                                                                                                                                                                                                     |   | 28     |   |
| Mortgage Banking                                                                                                                                                                                                                                                                                                                                       |   | 36     |   |
| Corporate                                                                                                                                                                                                                                                                                                                                              |   | 39     |   |
| Consolidated Partnerships                                                                                                                                                                                                                                                                                                                              |   | 42     |   |
| Income Taxes                                                                                                                                                                                                                                                                                                                                           |   | 43     |   |
| Loss Attributable to Non-controlling Interest                                                                                                                                                                                                                                                                                                          |   | 44     |   |
| Accounting Changes                                                                                                                                                                                                                                                                                                                                     |   | 45     |   |
| Inflation                                                                                                                                                                                                                                                                                                                                              |   | 46     |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| SECTION 3 – Liquidity and Capital ResourcesThe liquidity and capital resources section discusses our ability to generate adequate amounts of cash to meet our current and future needs.  Significant subsections within this section are as follows:                                                                                   |   | 46     |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| Liquidity                                                                                                                                                                                                                                                                                                                                              |   | 46     |   |
| Cash Flows                                                                                                                                                                                                                                                                                                                                             |   | 47     |   |
| Liquidity Requirements after December 31, 2010                                                                                                                                                                                                                                                                                                         |   | 48     |   |
| Fair Value Disclosures                                                                                                                                                                                                                                                                                                                                 |   | 48     |   |
| Capital Resources                                                                                                                                                                                                                                                                                                                                      |   | 50     |   |
| Commitments and Contingencies                                                                                                                                                                                                                                                                                                                          |   | 54     |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| SECTION 4 – Application of Critical Accounting Policies and Estimates                                                                                                                                                                                                                                                                            |   | 55     |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| SECTION 5 – Related Party Transactions                                                                                                                                                                                                                                                                                                           |   | 59     |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| SECTION 6 – Forward Looking Statements                                                                                                                                                                                                                                                                                                           |   | 60     |   |

----

| ·   | sold our Portfolio Management Group and the portion of the Commercial Real Estate Group that did not relate to loan originations to affiliates of Island Capital; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | amended and restructured our senior credit facility; |
|--------------------|------------------------------------------------------|

| ·   | restructured various components of our equity and issued a new series of shares; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | restructured our credit intermediation agreements by assigning obligations of our parent trust and CCG under credit intermediation agreements to certain isolated special purpose entities; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | settled a majority of our unsecured liabilities. |
|--------------------|--------------------------------------------------|

----

----

|                                               |   | 2010                     |    | 2009             |   |      |
|----------------------------------------------------|--------|--------------------------|---------|------------------|--------|-----------|
| (in thousands)                                     |   |  Affordable Housing |    | Mortgage Banking |   | Corporate |   | Consolidated Partnerships |   |  Eliminations and Adjustments |   | Total |   | % of Revenues |   | Affordable Housing |   | Mortgage Banking |   | Corporate |   | Consolidated Partnerships |   | Eliminations and Adjustments |   | Total |   | % of Revenues |   | % Change |   |
|                                               |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                           |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage revenue bonds                             |   | $                        | 50,310  |             | $      | --        |   | $ | -- |   | $ | -- |   | $ | (29,876 | ) | $ | 20,434 |   |   | 9.3 | % | $ | 37,772 |   | $ | -- |   | $ | -- |   | $ | -- |   | $ | (28,452 | ) | $ | 9,320 |   |   | 5.2 | % |   | 119.2 | % |
| Other interest income                              |   |                     | 20,828  |             |   | 2,996     |   |   | 504 |   |   | -- |   |   | (666 | ) |   | 23,662 |   |   | 10.8 |   |   | 38,220 |   |   | 2,467 |   |   | 1,201 |   |   | -- |   |   | (722 | ) |   | 41,166 |   |   | 22.9 |   |   | (42.5 | ) |
| Interest income                                    |   |                     | 71,138  |             |   | 2,996     |   |   | 504 |   |   | -- |   |   | (30,542 | ) |   | 44,096 |   |   | 20.1 |   |   | 75,992 |   |   | 2,467 |   |   | 1,201 |   |   | -- |   |   | (29,174 | ) |   | 50,486 |   |   | 28.1 |   |   | (12.7 | ) |
|                                               |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fund sponsorship                                   |   |                     | 43,828  |             |   | --        |   |   | -- |   |   | -- |   |   | (37,435 | ) |   | 6,393 |   |   | 2.9 |   |   | 34,854 |   |   | -- |   |   | -- |   |   | -- |   |   | (29,101 | ) |   | 5,753 |   |   | 3.2 |   |   | 11.1 |   |
| Mortgage origination fees                          |   |                     | 1,104   |             |   | 3,234     |   |   | -- |   |   | -- |   |   | -- |   |   | 4,338 |   |   | 2.0 |   |   | 1,005 |   |   | 2,711 |   |   | -- |   |   | -- |   |   | -- |   |   | 3,716 |   |   | 2.1 |   |   | 16.7 |   |
| Mortgage servicing fees                            |   |                     | 2,177   |             |   | 19,204    |   |   | -- |   |   | -- |   |   | 109 |   |   | 21,490 |   |   | 9.8 |   |   | 1,993 |   |   | 18,206 |   |   | -- |   |   | -- |   |   | (55 | ) |   | 20,144 |   |   | 11.2 |   |   | 6.7 |   |
| Credit intermediation fees                         |   |                     | 6,337   |             |   | --        |   |   | 68 |   |   | -- |   |   | (6,093 | ) |   | 312 |   |   | 0.1 |   |   | 7,878 |   |   | -- |   |   | 182 |   |   | -- |   |   | (7,790 | ) |   | 270 |   |   | 0.1 |   |   | 15.6 |   |
| Other fee income                                   |   |                     | --      |             |   | 621       |   |   | -- |   |   | -- |   |   | -- |   |   | 621 |   |   | 0.3 |   |   | -- |   |   | 244 |   |   | 19 |   |   | -- |   |   | -- |   |   | 263 |   |   | 0.1 |   |   | 136.1 |   |
| Fee income                                         |   |                     | 53,446  |             |   | 23,059    |   |   | 68 |   |   | -- |   |   | (43,419 | ) |   | 33,154 |   |   | 15.1 |   |   | 45,730 |   |   | 21,161 |   |   | 201 |   |   | -- |   |   | (36,946 | ) |   | 30,146 |   |   | 16.7 |   |   | 10.0 |   |
|                                               |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gain on sale of mortgage loans                     |   |                     | 3,616   |             |   | 24,346    |   |   | -- |   |   | -- |   |   | -- |   |   | 27,962 |   |   | 12.8 |   |   | 3,186 |   |   | 13,811 |   |   | 289 |   |   | -- |   |   | -- |   |   | 17,286 |   |   | 9.6 |   |   | 61.8 |   |
| Prepayment penalties                               |   |                     | --      |             |   | 547       |   |   | -- |   |   | -- |   |   | -- |   |   | 547 |   |   | 0.2 |   |   | -- |   |   | 453 |   |   | -- |   |   | -- |   |   | -- |   |   | 453 |   |   | 0.3 |   |   | 20.7 |   |
| Expense reimbursements                             |   |                     | 8,755   |             |   | --        |   |   | 400 |   |   | -- |   |   | (9,155 | ) |   | -- |   |   | 0.0 |   |   | 6,810 |   |   | -- |   |   | 395 |   |   | -- |   |   | (6,060 | ) |   | 1,145 |   |   | 0.6 |   |   | (100.0 | ) |
| Miscellaneous                                      |   |                     | 406     |             |   | 573       |   |   | 250 |   |   | -- |   |   | (4 | ) |   | 1,225 |   |   | 0.6 |   |   | 1,210 |   |   | 214 |   |   | -- |   |   | -- |   |   | (63 | ) |   | 1,361 |   |   | 0.8 |   |   | (10.0 | ) |
| Other revenues                                     |   |                     | 12,777  |             |   | 25,466    |   |   | 650 |   |   | -- |   |   | (9,159 | ) |   | 29,734 |   |   | 13.6 |   |   | 11,206 |   |   | 14,478 |   |   | 684 |   |   | -- |   |   | (6,123 | ) |   | 20,245 |   |   | 11.3 |   |   | 46.9 |   |
|                                               |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues – consolidated partnerships         |   |                     | --      |             |   | --        |   |   | -- |   |   | 112,173 |   |   | -- |   |   | 112,173 |   |   | 51.2 |   |   | -- |   |   | -- |   |   | -- |   |   | 78,902 |   |   | -- |   |   | 78,902 |   |   | 43.9 |   |   | 42.2 |   |
| Total revenues                                     |   | $                        | 137,361 |             | $      | 51,521    |   | $ | 1,222 |   | $ | 112,173 |   | $ | (83,120 | ) | $ | 219,157 |   |   | 100.0 | % | $ | 132,928 |   | $ | 38,106 |   | $ | 2,086 |   | $ | 78,902 |   | $ | (72,243 | ) | $ | 179,779 |   |   | 100.0 | % |   | 21.9 | % |
|                                               |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                           |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salary                                             |   | $                        | 17,894  |             | $      | 10,982    |   | $ | 16,490 |   | $ | -- |   | $ | -- |   | $ | 45,366 |   |   | 20.7 | % | $ | 17,009 |   | $ | 7,801 |   | $ | 18,218 |   | $ | -- |   | $ | -- |   | $ | 43,028 |   |   | 23.9 | % |   | 5.4 | % |
| Other general and administrative                   |   |                     | 35,744  |             |   | 10,429    |   |   | 38,039 |   |   | -- |   |   | (2,106 | ) |   | 82,106 |   |   | 37.5 |   |   | 14,254 |   |   | 8,537 |   |   | 26,097 |   |   | -- |   |   | (8,280 | ) |   | 40,608 |   |   | 22.6 |   |   | 102.2 |   |
| General and administrative                         |   |                     | 53,638  |             |   | 21,411    |   |   | 54,529 |   |   | -- |   |   | (2,106 | ) |   | 127,472 |   |   | 58.2 |   |   | 31,263 |   |   | 16,338 |   |   | 44,315 |   |   | -- |   |   | (8,280 | ) |   | 83,636 |   |   | 46.5 |   |   | 52.4 |   |
|                                               |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss reserve and lease termination costs           |   |                     | (50,600 | )                |   | --        |   |   | (48,244 | ) |   | -- |   |   | -- |   |   | (98,844 | ) |   | (45.1 | ) |   | 140,000 |   |   | -- |   |   | 30,755 |   |   | -- |   |   | 26 |   |   | 170,781 |   |   | 95.0 |   |   | (157.9 | ) |
| Bad debt expense                                   |   |                     | 10,573  |             |   | --        |   |   | -- |   |   | -- |   |   | 362 |   |   | 10,935 |   |   | 5.0 |   |   | 15,786 |   |   | -- |   |   | -- |   |   | -- |   |   | -- |   |   | 15,786 |   |   | 8.8 |   |   | (30.7 | ) |
| Provision for risk-sharing obligations             |   |                     | 1,349   |             |   | 8,653     |   |   | -- |   |   | -- |   |   | -- |   |   | 10,002 |   |   | 4.6 |   |   | -- |   |   | 11,163 |   |   | -- |   |   | -- |   |   | -- |   |   | 11,163 |   |   | 6.2 |   |   | (10.4 | )  |
| Recovery (Provision) for Losses                    |   |                     | (38,678 | )                |   | 8,653     |   |   | (48,244 | ) |   | -- |   |   | 362 |   |   | (77,908 | ) |   | (35.5 | ) |   | 155,786 |   |   | 11,163 |   |   | 30,755 |   |   | -- |   |   | 26 |   |   | 197,730 |   |   | 110.0 |   |   | (139.4 | ) |
|                                               |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Borrowing and Financing                            |   |                     | 48,219  |             |   | 961       |   |   | 8,164 |   |   | -- |   |   | (1,845 | ) |   | 55,499 |   |   | 25.3 |   |   | 43,249 |   |   | 567 |   |   | 27,880 |   |   | -- |   |   | (2,237 | ) |   | 69,459 |   |   | 38.6 |   |   | (20.1 | ) |
| Derivatives – non-cash impact                |   |                     | 736     |             |   | --        |   |   | -- |   |   | -- |   |   | -- |   |   | 736 |   |   | 0.3 |   |   | (15,422 | ) |   | -- |   |   | (3,840 | ) |   | -- |   |   | -- |   |   | (19,262 | ) |   | (10.7 | ) |   | 103.8 |   |
| Preferred shares of subsidiary                     |   |                     | 8,825   |             |   | --        |   |   | -- |   |   | -- |   |   | -- |   |   | 8,825 |   |   | 4.0 |   |   | 14,088 |   |   | -- |   |   | -- |   |   | -- |   |   | -- |   |   | 14,088 |   |   | 7.8 |   |   | (37.4 | ) |
| Interest expense                                   |   |                     | 57,780  |             |   | 961       |   |   | 8,164 |   |   | -- |   |   | (1,845 | ) |   | 65,060 |   |   | 29.6 |   |   | 41,915 |   |   | 567 |   |   | 24,040 |   |   | -- |   |   | (2,237 | ) |   | 64,285 |   |   | 35.7 |   |   | 1.2 |   |
|                                               |   |                     |    |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                      |   |                     | 2,894   |             |   | 10,625    |   |   | 9,752 |   |   | -- |   |   | -- |   |   | 23,271 |   |   | 10.6 |   |   | 7,507 |   |   | 9,892 |   |   | 17,109 |   |   | -- |   |   | -- |   |   | 34,508 |   |   | 19.2 |   |   | (32.6 | ) |
| Write-off intangible assets                        |   |                     | --      |             |   | --        |   |   | 93,283 |   |   | -- |   |   | -- |   |   | 93,283 |   |   | 42.6 |   |   | -- |   |   | -- |   |   | 45,000 |   |   | -- |   |   | -- |   |   | 45,000 |   |   | 25.0 |   |   | 107.3 |   |
| Loss on impairment                                 |   |                     | 75,887  |             |   | --        |   |   | -- |   |   | -- |   |   | -- |   |   | 75,887 |   |   | 34.6 |   |   | 96,141 |   |   | -- |   |   | 65 |   |   | -- |   |   | -- |   |   | 96,206 |   |   | 53.5 |   |   | (21.1 | ) |
| Interest expense – consolidated partnerships |   |                     | --      |             |   | --        |   |   | -- |   |   | 47,835 |   |   | (29,951 | ) |   | 17,884 |   |   | 8.2 |   |   | -- |   |   | -- |   |   | -- |   |   | 37,776 |   |   | (28,563 | )  |   | 9,213 |   |   | 5.1 |   |   | 94.1 |   |
| Other expense – consolidated partnerships    |   |                     | --      |             |   | --        |   |   | -- |   |   | 299,897 |   |   | (51,300 | ) |   | 248,597 |   |   | 113.4 |   |   | -- |   |   | -- |   |   | -- |   |   | 211,948 |   |   | (42,215 | )  |   | 169,733 |   |   | 94.5 |   |   | 46.5 |   |
| Total expenses                                     |   | $                        | 151,521 |             | $      | 41,650    |   | $ | 117,484 |   | $ | 347,732 |   | $ | (84,840 | ) | $ | 573,546 |   |   | 261.7 | % | $ | 332,612 |   | $ | 37,960 |   | $ | 161,284 |   | $ | 249,724 |   | $ | (81,269 | ) | $ | 700,311 |   |   | 389.5 | % |   | (18.1 | )% |

----

|           |   | 2010                     |   | 2009             |   |      |
|----------------|--------|--------------------------|--------|------------------|--------|-----------|
| (in thousands) |   |  Affordable Housing |   | Mortgage Banking |   | Corporate |   | Consolidated Partnerships |   |  Eliminations and Adjustments |   | Total |   | % of Revenues |   | Affordable Housing |   | Mortgage Banking |   | Corporate |   | Consolidated Partnerships |   | Eliminations and Adjustments |   | Total |   | % of Revenues |   | % Change |   |
|           |   |                     |   |             |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Equity and other income (loss)                                                                            |   | $      | 220     |   | $      | --     |   | $      | --      |   | $      | --       |   | $      | --     |   | $      | 220      |   |   | 0.1    | %      | $      | (9,396   | )      | $      | --     |   | $      | --       |   | $      | --       |    | $      | --     |   | $      | (9,396     | )      |   | (5.2    | )%     |   | (102.3 | )%     |
|-----------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|--------|----------|--------|--------|--------|--------|--------|----------|--------|--------|--------|--------|--------|----------|--------|--------|--------|--------|--------|----------|--------|--------|----------|---------|--------|--------|--------|--------|------------|--------|--------|---------|--------|--------|--------|--------|
| Gain on extinguishment of liability                                                                       |   |   | --      |   |   | --     |   |   | 25,253  |   |   | --       |   |   | --     |   |   | 25,253   |   |   | 11.5   |   |   | --       |   |   | --     |   |   | --       |   |   | --       |    |   | --     |   |   | --         |   |   | 0.0     |   |   | 100.0  |   |
| Repayment of bonds/sales of assets                                                                        |   |   | 3,879   |   |   | --     |   |   | 191     |   |   | --       |   |   | --     |   |   | 4,070    |   |   | 1.9    |   |   | 1,174    |   |   | --     |   |   | 1,498    |   |   | --       |    |   | --     |   |   | 2,672      |   |   | 1.5     |   |   | 52.3   |   |
| Other income (loss)                                                                                       |   |   | 4,099   |   |   | --     |   |   | 25,444  |   |   | --       |   |   | --     |   |   | 29,543   |   |   | 13.5   |   |   | (8,222   | )      |   | --     |   |   | 1,498    |   |   | --       |    |   | --     |   |   | (6,724     | )      |   | (3.7    | )      |   | (539.4 | )      |
| Loss on investments – consolidated partnerships                                                     |   |   | --      |   |   | --     |   |   | --      |   |   | (368,481 | )      |   | --     |   |   | (368,481 | )      |   | (168.1 | )      |   | --       |   |   | --     |   |   | --       |   |   | (593,347 | )       |   | --     |   |   | (593,347   | )      |   | (330.0  | )      |   | (37.9  | )      |
| Other (loss) income                                                                                       |   |   | 4,099   |   |   | --     |   |   | 25,444  |   |   | (368,481 | )      |   | --     |   |   | (338,938 | )      |   | (154.7 | )      |   | (8,222   | )      |   | --     |   |   | 1,498    |   |   | (593,347 | )       |   | --     |   |   | (600,071   | )      |   | (333.8  | )      |   | (43.5  | )      |
| Income tax provision/benefit – continuing operations                                                |   |   | --      |   |   | --     |   |   | (610    | )      |   | --       |   |   | --     |   |   | (610     | )      |   | (0.3   | )      |   | --       |   |   | --     |   |   | 4,123    |   |   | --       |    |   | --     |   |   | 4,123      |   |   | 2.3     |   |   | (114.8 | )      |
| Net loss – continuing operations                                                                    |   |   | (10,061 | )      |   | 9,871  |   |   | (91,428 | )      |   | (604,040 | )      |   | 1,720  |   |   | (693,937 | )      |   | (316.6 | )      |   | (207,906 | )      |   | 146    |   |   | (153,577 | )      |   | (764,169 | )       |   | (9,026 | )      |   | (1,116,480 | )      |   | (621.0  | )      |   | (37.8  | )      |
| Allocation – preferred shares                                                                       |   |   | (6,225  | )      |   | --     |   |   | --      |   |   | --       |   |   | --     |   |   | (6,225   | )      |   | (2.8   | )      |   | (6,225   | )      |   | --     |   |   | --       |   |   | --       |    |   | --     |   |   | (6,225     | )      |   | (3.5    | )      |   | 0.0    |   |
| Allocation – non-controlling interests                                                              |   |   | 1,034   |   |   | --     |   |   | (1,084  | )      |   | --       |   |   | --     |   |   | (50      | )      |   | --     |   |   | 1,725    |   |   | --     |   |   | 153,763  |   |   | --       |    |   | --     |   |   | 155,488    |   |   | 86.5    |   |   | (100.0 | )      |
| Allocation – consolidated partnerships                                                              |   |   | --      |   |   | --     |   |   | --      |   |   | 604,027  |   |   | --     |   |   | 604,027  |   |   | 275.6  |   |   | --       |   |   | --     |   |   | --       |   |   | 764,166  |    |   | --     |   |   | 764,166    |   |   | 425.1   |   |   | (21.0  | )      |
| Net loss attributable to non-controllinginterests – continuing operations                           |   |   | (5,191  | )      |   | --     |   |   | (1,084  | )      |   | 604,027  |   |   | --     |   |   | 597,752  |   |   | 272.8  |   |   | (4,500   | )      |   | --     |   |   | 153,763  |   |   | 764,166  |    |   | --     |   |   | 913,429    |   |   | 508.1   |   |   | (34.6  | )      |
| Net income (loss) attributable to Centerline Holding Company shareholders – continuing operations   |   | $      | (15,252 | )      | $      | 9,871  |   | $      | (92,512 | )      | $      | (13      | )      | $      | 1,720  |   | $      | (96,185  | )      |   | (43.9  | )      | $      | (212,406 | )      | $      | 146    |   | $      | 186      |   | $      | (3       | )  | $      | (9,026 | )      | $      | (203,051   | )      |   | (112.9  | )      |   | (52.6  | )      |
| Net income (loss) – discontinued operations                                                         |   |   |    |   |   |   |   |   |    |   |   |     |   |   |   |   |   | 161,278  |   |   | 73.6   |   |   |     |   |   |   |   |   |     |   |   |     |    |   |   |   |   | (2,068,173 | )      |   | (1150.4 | )      |   | (107.8 | )      |
| Net (income) loss attributable to non-controlling interests – discontinued operations               |   |   |    |   |   |   |   |   |    |   |   |     |   |   |   |   |   | (89,918  | )      |   | (41.0  | )      |   |     |   |   |   |   |   |     |   |   |     |    |   |   |   |   | 1,815,843  |   |   | 1010.0  |   |   | (105.0 | )      |
| Net income (loss) attributable to Centerline Holding Company shareholders – discontinued operations |   |   |    |   |   |   |   |   |    |   |   |     |   |   |   |   |   | 71,360   |   |   | 32.6   |   |   |     |   |   |   |   |   |     |   |   |     |    |   |   |   |   | (252,330   | )      |   | (140.4  | )      |   | (128.3 | )      |
| Total loss attributable to Centerline Holding Company shareholders                                        |   |   |    |   |   |   |   |   |    |   |   |     |   |   |   |   | $      | (24,825  | )      |   | (11.3  | )%     |   |     |   |   |   |   |   |     |   |   |     |    |   |   |   | $      | (455,381   | )      |   | (253.3  | )%     |   | (94.5  | )%     |

----

| (in thousands)                                                                                          |   | 2010   |    |   | 2009   |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                                    |   |   |    |   |   |   |
| Reduction/(increase) to net income:                                                                     |   |   |    |   |   |   |
|                                                                                                    |   |   |    |   |   |   |
| Asset impairments (excluding equity investments):                                                       |   |   |    |   |   |   |
| Affordable Housing:                                                                                     |   |   |    |   |   |   |
| Mortgage revenue bonds                                                                                  |   | $      | --      |   |   | $      | 9,114 |   |
| Series B Freddie Mac Certificates                                                                       |   |   | 78,031  |   |   |   | 44,830 |   |
| Stabilization escrow                                                                                    |   |   | (2,492  | )      |   |   | 39,987 |   |
| Mortgage loans held for investment and other investments                                                |   |   | 348     |   |   |   | 2,210 |   |
|                                                                                                    |   |   |    |   |   |   |   |   |
| Corporate group:                                                                                        |   |   |    |   |   |   |   |   |
| Investments, including gain on sale                                                                     |   |   | --      |   |   |   | (1,433 | ) |
|                                                                                                    |   |   |    |   |   |   |   |   |
| Other items:                                                                                            |   |   |    |   |   |   |   |   |
| Affordable Housing group:                                                                               |   |   |    |   |   |   |   |   |
| Affordable housing loss reserve                                                                         |   |   | (50,600 | )      |   |   | 140,000 |   |
| Provision for risk-sharing obligations                                                                  |   |   | 1,349   |   |   |   | -- |   |
|                                                                                                    |   |   |    |   |   |   |   |   |
| Mortgage Banking group:                                                                                 |   |   |    |   |   |   |   |   |
| Provision for risk-sharing obligations                                                                  |   |   | 8,653   |   |   |   | 11,163 |   |
|                                                                                                    |   |   |    |   |   |   |   |   |
| Corporate group:                                                                                        |   |   |    |   |   |   |   |   |
| Write-off of goodwill and intangible assets                                                             |   |   | 93,283  |   |   |   | 45,000 |   |
| Gain on sale of discontinued operations                                                                 |   |   | (20,500 | )      |   |   | -- |   |
| Gain on settlement of liabilities                                                                       |   |   | (25,253 | )      |   |   | -- |   |
| Assumption fee relating to restructuring of credit intermediation agreements                            |   |   | 25,748  |   |   |   | -- |   |
| Professional fees related to the March 2010 Restructuring                                               |   |   | 13,176  |   |   |   | -- |   |
| Expense for Series A shares issued in connection with restructuring of credit intermediation agreements |   |   | 2,842   |   |   |   | -- |   |
| (Reversal) accrual of lease termination costs                                                           |   |   | (48,044 | )      |   |   | 30,755 |   |
|                                                                                                    |   |   |    |   |   |   |   |   |
| Non-cash impact of derivatives(1)                                                                       |   |   | 735     |   |   |   | (19,263 | ) |
| Severance costs                                                                                         |   |   | 1,717   |   |   |   | 785 |   |
|                                                                                                    |   |
| (1)   Includes gains on termination of several derivative contracts.                          |   |

----

| ·   | Interest income earned from mortgage revenue bonds for 2010 increased primarily due to the net increase in the average balance of bonds in the December 2007 re-securitization that have been re-recognized since 2009 as a result of default, placement in special servicing, or for which we made commitments to fund operating deficits to the underlying property partnerships.  As our role as servicer of the bonds allows us to repurchase those bonds (although we do not intend to) we re-recognize bonds as assets when transferring these into special servicing and de-recognize bonds when transferring these out of special servicing.  We carry debt associated with these bonds in Freddie Mac secured financings (see Notes 8 and 16 to the consolidated financial statements).  As the level of bonds and securitization debt changes, the amounts of mortgage revenue bond interest income, other interest income and interest expense in this group will fluctuate. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The decrease in market interest rates resulted in an increase of $9.0 million in non-cash interest expenses due to the unfavorable impact the interest rate movement had on the fair value of our free-standing derivatives.  During 2010 we terminated less developer swaps as compared to 2009 resulting in a decrease in termination gains in 2010 or an additional increase of $7.0 million in non-cash interest expenses. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In 2009 we developed a strategy to address a marked decline in the operating performance of many of the non-stabilized properties underlying our Affordable Housing investments. The strategy was developed to manage our exposure under the yield transactions and to address the declining cash flows to our Series B Freddie Mac Certificates.  In 2009, we recorded a $140.0 million provision for potential exposure related to the credit intermediation agreements.  In 2010, in connection with the Natixis Master Agreement and the Merrill Transaction Assignment Agreement, we agreed to terms for the restructuring of certain of the mortgage revenue bonds that underlie the Series B Freddie Mac Certificates and are associated with the guaranteed funds.  As a result of the terms reached in these restructurings, in 2010, we recorded a net $50.6 million reduction in the Affordable Housing Loss Reserve, as well as an impairment of $78.0 million related to our Series B Freddie Mac Certificates and a net recovery in the stabilization escrow of $2.5 million.  Additionally, in connection with this restructuring, we accrued assumption fee expenses of $25.7 million. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)                |   | 2010   |    |   | 2009   |   |    | % Change |   |
|---------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                  |   |   |    |   |   |   |    |     |   |
| Interest income:                      |   |   |    |   |   |   |    |     |   |
| Mortgage revenue bond interest income |   | $      | 50,310  |   |   | $      | 37,772  |     |   |   | 33.2 | % |
| Other interest income                 |   |   | 20,828  |   |   |   | 38,220  |     |   |   | (45.5 | ) |
| Fee income:                           |   |   |    |   |   |   |    |     |   |   |   |   |
| Fund sponsorship                      |   |   | 43,828  |   |   |   | 34,854  |     |   |   | 25.7 |   |
| Mortgage origination fees             |   |   | 1,104   |   |   |   | 1,005   |     |   |   | 9.9 |   |
| Mortgage servicing fees               |   |   | 2,177   |   |   |   | 1,993   |     |   |   | 9.2 |   |
| Credit intermediation fees            |   |   | 6,337   |   |   |   | 7,878   |     |   |   | (19.6 | ) |
| Other:                                |   |   |    |   |   |   |    |     |   |   |   |   |
| Gain on sale of mortgage loans        |   |   | 3,616   |   |   |   | 3,186   |     |   |   | 13.5 |   |
| Expense reimbursements                |   |   | 8,755   |   |   |   | 6,810   |     |   |   | 28.6 |   |
| Miscellaneous                         |   |   | 406     |   |   |   | 1,210   |     |   |   | (66.4 | ) |
|                                  |   |   |    |   |   |   |    |     |   |   |   |   |
| Total revenues                        |   | $      | 137,361 |   |   | $      | 132,928 |     |   |   | 3.3 | % |

| (dollars in thousands)                                                      |   | 2010   |    |   | 2009   |   |    | % Change |   |
|-----------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                                                        |   |   |    |   |   |   |    |     |   |
| Average number of bonds on the balance sheet not receiving sale recognition |   |   | 92      |   |   |   | 70      |     |   |   | 31.4 | % |
| Average balance (unpaid principal balance)                                  |   | $      | 813,354 |   |   | $      | 679,838 |     |   |   | 19.6 |   |
| Weighted average yield                                                      |   |   | 6.19    | %      |   |   | 5.62    | %        |   |   |   |   |

----

| (dollars in thousands)                              |   | 2010   |    |   | 2009   |   |
|-----------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                |   |   |    |   |   |   |
| Total fee income                                    |   | $      | 53,446  |   |   | $      | 45,730 |   |
| Fee income generated from Consolidated Partnerships |   |   | (43,419 | )      |   |   | (36,946 | ) |
| Total fee income included in consolidated results   |   | $      | 10,027  |   |   | $      | 8,784 |   |

| (dollars in thousands)                                                                           |   | 2010   |      |   | 2009   |   |      | % Change |   |
|--------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|----------|--------|
|                                                                                             |   |   |      |   |   |   |      |     |   |
| Fees based on equity invested                                                                    |   |   |      |   |   |   |      |     |   |
| Property acquisition fees                                                                        |   | $      | 663       |   |   | $      | 847       |     |   |   | (21.7 | )% |
| Organization, offering and acquisition allowance fees                                            |   |   | 275       |   |   |   | 622       |     |   |   | (55.8 | ) |
|                                                                                             |   |   |      |   |   |   |      |     |   |   |   |   |
| Fees based on management of sponsored funds                                                      |   |   |      |   |   |   |      |     |   |   |   |   |
| Partnership management fees                                                                      |   |   | 6,982     |   |   |   | 9,807     |     |   |   | (28.8 | ) |
| Asset management fees                                                                            |   |   | 27,478    |   |   |   | 17,679    |     |   |   | 55.4 |   |
| Other fee income                                                                                 |   |   | 8,430     |   |   |   | 5,899     |     |   |   | 42.9 |   |
|                                                                                             |   |   |      |   |   |   |      |     |   |   |   |   |
| Total fund sponsorship fee income                                                                |   | $      | 43,828    |   |   | $      | 34,854    |     |   |   | 25.7 | % |
|                                                                                             |   |   |      |   |   |   |      |     |   |   |   |   |
| Assets under management – tax credit funds                                                 |   | $      | 9,291,187 |   |   | $      | 9,278,261 |     |   |   | 0.1 | % |
| Equity raised by tax credit funds                                                                |   | $      | 21,602    |   |   | $      | 91,557    |     |   |   | (76.4 | )% |
| Equity invested by tax credit funds(1)                                                           |   | $      | 24,569    |   |   | $      | 91,557    |     |   |   | (73.2 | )% |
|                                                                                             |   |
| (1)   Excludes warehoused properties that have not yet closed into an investment fund. |   |

----

| (dollars in thousands)                                                                                                                              |   | 2010   |    |   |       | 2009   |   | % Change |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|------------|--------|--------|----------|--------|
|                                                                                                                                                |   |   |    |   |       |   |   |     |   |   |   |
| Total mortgage origination activity(1)                                                                                                              |   | $      | 113,871 |   |       |   | $      | 89,934   |   | 26.6 | % |
| Mortgages originated in prior periods and sold during the period                                                                                    |   |   | --      |   |       |   |   | 12,718   |   |   |   |
| Less: mortgages originated but not yet sold(2)                                                                                                      |   |   | (17,000 | )      |       |   |   | --       |   |   |   |
| Total mortgage origination activity recognized for GAAP and for which revenue is recognized                                                         |   | $      | 96,871  |   |       |   | $      | 102,652  |   | (5.6 | )% |
|                                                                                                                                                |   |   |    |   |       |   |   |     |   |   |   |
|                                                                                                                                                |   |   |    |   | % of Total |   |   |     |   | % of Total |   |
| Loan Purchasers                                                                                                                                     |   |   |    |   |       |   |   |     |   |   |   |
| Fannie Mae                                                                                                                                          |   | $      | 10,836  |   | 11.2       | %      | $      | 29,648   |   | 28.9 | % |
| Freddie Mac                                                                                                                                         |   |   | 86,035  |   | 88.8       |   |   | 73,004   |   | 71.1 |   |
| Total                                                                                                                                               |   | $      | 96,871  |   | 100.0      | %      | $      | 102,652  |   | 100.0 | % |
|                                                                                                                                                |
| (1)   Includes all mortgages funded during the period.(2)   Included in Other Investments – mortgage loans held for sale. |

| (dollars in thousands)                     |   | 2010   |    |   | 2009   |   |    | % Change |   |
|--------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                       |   |   |    |   |   |   |    |     |   |
| Primary servicing portfolio at December 31 |   | $      | 483,742 |   |   | $      | 397,258 |     |   |   | 21.8 | % |

----

| (dollars in thousands)                                                                   |   | 2010   |    | 2009   |   | % Change |   |
|------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|----------|--------|
|                                                                                     |   |   |    |   |   |     |   |   |   |
| General and administrative expenses                                                      |   |   |    |   |   |     |   |   |   |
| Salaries and benefits                                                                    |   | $      | 17,894  |   | $      | 17,009   |   | 5.0 |   |
| Other                                                                                    |   |   | 35,744  |   |   | 14,254   |   | 151.0 |   |
| Total general and administrative                                                         |   |   | 53,638  |   |   | 31,263   |   | 71.6 |   |
| (Recovery) provision for losses                                                          |   |   | (38,678 | )      |   | 155,786  |   | (124.8 | ) |
| Interest expense:                                                                        |   |   |    |   |   |     |   |   |   |
| Borrowings and financings                                                                |   |   | 48,219  |   |   | 43,249   |   | 11. | 5 |
| Derivatives – non-cash impact                                                      |   |   | 736     |   |   | (15,422  | )      | 104.8 |   |
| Preferred shares of subsidiary                                                           |   |   | 8,825   |   |   | 14,088   |   | (37.4 | ) |
| Depreciation and amortization                                                            |   |   | 2,894   |   |   | 7,507    |   | (61.4 | ) |
| Loss on impairment of assets                                                             |   |   | 75,887  |   |   | 96,141   |   | (21.1 | ) |
|                                                                                     |   |   |    |   |   |     |   |   |   |
| Total expenses                                                                           |   | $      | 151,521 |   | $      | 332,612  |   | (54.4 | )% |
|                                                                                     |   |   |    |   |   |     |   |   |   |
| Average borrowing rate                                                                   |   |   | 6.45    | %      |   | 5.91     | %      |   |   |
| Average Securities Industry and Financial Markets Association (“SIFMA”) rate |   |   | 0.26    | %      |   | 0.41     | %      |   |   |

| (dollars in thousands)                     |   | 2010   |    | 2009   |   | % Change |   |
|--------------------------------------------|--------|--------|---------|--------|--------|----------|--------|
|                                       |   |   |    |   |   |     |   |   |   |
| Affordable Housing loss reserve            |   | $      | (50,600 | )      | $      | 140,000  |   | (136.1 | )% |
| Bad debt expense                           |   |   | 10,573  |   |   | 15,786   |   | (33.0 | ) |
| DUI provision for risk-sharing obligations |   |   | 1,349   |   |   | --       |   | 100.0 |   |
|                                       |   |   |    |   |   |     |   |   |   |
| Total (recovery) provision for losses      |   | $      | (38,678 | )      | $      | 155,786  |   | (124.8 | )% |

| ·   | In 2009 we developed a strategy to address a decline in the operating performance of many of the non-stabilized properties underlying our Affordable Housing investments.  The strategy was developed to manage our exposure under the yield transactions and to address the declining cash flows to our Series B Freddie Mac Certificates.  In 2009, we recorded a $140.0 million provision for potential exposure related to the credit intermediation agreements.  In 2010, in connection with the Natixis Master Agreement and the Merrill Transaction Assignment Agreement, we have agreed to terms for the restructuring of certain of the mortgage revenue bonds.  As a result, we recorded a $50.6 million reduction in loss reserves on our credit intermediation agreements in 2010. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | $4.9 million decrease in bad debt expense primarily due to a reduction in the reserves against property advances to Tax Credit Fund Partnerships of approximately $6.2 million and a decrease of $1.2 million due to cash recoveries from receivables previously reserved offset by an increase of $2.5 million in reserves recorded on fee receivables.  The reduction pertained to cash payments received as well as improved performance of certain underlying properties. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $1.3 million increase in provision for risk-sharing obligations related to DUI loans in our loan loss sharing program with Freddie Mac.  We are obligated to reimburse Freddie Mac for a portion of any loss that may result from borrower defaults in DUI transactions.  The increase in the provision is a result of the expected loss severity on certain properties for which additional potential losses are anticipated. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $5.0 million increase pertaining to borrowing and financings in 2010 primarily due to an increase of $10.1 million related to the Freddie Mac secured financing attributable to a $141.0 million increase in the average bond principal balance, to $617.1 million.  This is a result of an increase of bonds in the December 2007 re-securitization that have been re-recognized in 2010 as a result of default, placement in special servicing, or for which we made commitments to fund operating deficits to the underlying property partnerships.  An additional $2.1 million increase in interest expense is due to the $20.0 million loan CFin Holdings took from Natixis as part of the March 2010 Restructuring and due to the Merrill Lynch Modification fee which is due from Centerline Guaranteed Holdings.  This was partially offset by a $3.2 million reduction relating to the termination of a securitization in the fourth quarter of 2009, a $0.7 million reduction of interest incurred relating to borrowings related to the equity interests in tax credit partnerships we held and subsequently sold in 2009, as well as a $2.0 million reduction pertaining to swaps primarily due to variable interest rates declining over the period and the termination of eight swaps since the second quarter of 2009.  We are the variable interest receiver of these swaps.  Additionally, there was a $1.3 million decrease in 2010 mainly due to fewer property closings, at which time the interest incurred on warehousing those properties is expensed. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $16.2 million increase in 2010 in non-cash interest expense on derivatives primarily due to unfavorable changes in the fair value of our free-standing derivatives contributing $20.1 million as well as the termination of six swap agreements during 2009 that were not included in the 2010 amounts that totaled $11.0 million.  The current notional amount of our derivatives is $159.6 million at December 31, 2010.  Also contributing to the increase is a $7.0 million reduction on the gains on termination of the developer swaps.  There were two developer swaps terminated during the first quarter of 2010 which resulted in a $2.1 million gain recorded as a reduction to interest expense, while there was a $9.0 million gain recorded in the second half of 2009 on the termination of six developer swaps.  As of December 31, 2010, we are party to 17 interest rate swap agreements with the developers of properties underlying certain mortgage revenue bonds we previously owned.  Where able, we plan to continue terminating these developer swaps.  As the swaps are all out-of-the-money, we would record additional gains upon termination. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $5.3 million decrease pertaining to interest on preferred shares of subsidiary due to the sale of certain Series A-1 Freddie Mac Certificates in July 2009 and December 2010 which resulted in the redemption of the related preferred shares.  We experienced a comparable decrease in revenues related to the Series A-1 Freddie Mac Certificates. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)            |   | 2010   |   |   | 2009   |   |   | % Change |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                              |   |   |   |   |   |   |   |     |   |
| Available-for-sale investments:   |   |   |   |   |   |   |   |     |   |
| Series B Freddie Mac certificates |   | $      | 78,031 |   |   | $      | 44,830 |     |   |   | 74.1 | % |
| Stabilization escrow (recovery)   |   |   | (2,492 | )      |   |   | 39,987 |     |   |   | (106.2 | ) |
| Mortgage revenue bonds            |   |   | --     |   |   |   | 9,114  |     |   |   | 100.0 |   |
| Other                             |   |   | 348    |   |   |   | 2,210  |     |   |   | (84.3 | ) |
|                              |   |   |   |   |   |   |   |     |   |   |   |   |
|                              |   | $      | 75,887 |   |   | $      | 96,141 |     |   |   | (21.1 | )% |

| (dollars in thousands)                                  |   | 2010   |   |   | 2009   |   |   | % Change |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                                                    |   |   |   |   |   |   |   |     |   |
| Equity and other (loss) income                          |   | $      | 220    |   |   | $      | (9,396 | )        |   |   | 102.4 | % |
| Gain (loss) from repayment or sales of investments, net |   |   | 3,879  |   |   |   | 1,174  |     |   |   | 230.3 |   |
|                                                    |   |   |   |   |   |   |   |     |   |   |   |   |
| Total other income (loss)                               |   | $      | 4,099  |   |   | $      | (8,222 | )        |   |   | 149.9 | % |

| (dollars in thousands)        |   | 2010   |    |   | 2009   |   |     | % Change |   |
|-------------------------------|--------|--------|---------|--------|--------|--------|----------|----------|--------|
|                          |   |   |    |   |   |   |     |     |   |
| Loss before other allocations |   | $      | (10,061 | )      |   | $      | (207,906 | )        |   |   | 95.2 | % |
| Net loss                      |   |   | (15,252 | )      |   |   | (212,406 | )        |   |   | 92.8 |   |

----

| (dollars in thousands)         |   | 2010   |   |   | 2009   |   |   | % Change |   |
|--------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                           |   |   |   |   |   |   |   |     |   |
| Interest income                |   | $      | 2,996  |   |   | $      | 2,467  |     |   |   | 21.4 | % |
| Fee income:                    |   |   |   |   |   |   |   |     |   |   |   |   |
| Mortgage origination fees      |   |   | 3,234  |   |   |   | 2,711  |     |   |   | 19.3 |   |
| Mortgage servicing fees        |   |   | 19,204 |   |   |   | 18,206 |     |   |   | 5.5 |   |
| Other fee income               |   |   | 621    |   |   |   | 244    |     |   |   | 154.5 |   |
| Other:                         |   |   |   |   |   |   |   |     |   |   |   |   |
| Gain on sale of mortgage loans |   |   | 24,346 |   |   |   | 13,811 |     |   |   | 76.3 |   |
| Prepayment penalties           |   |   | 547    |   |   |   | 453    |     |   |   | 20.8 |   |
| Other revenues                 |   |   | 573    |   |   |   | 214    |     |   |   | 167.8 |   |
|                           |   |   |   |   |   |   |   |     |   |   |   |   |
| Total revenues                 |   | $      | 51,521 |   |   | $      | 38,106 |     |   |   | 35.2 | % |

| ·   | $0.3 million increase in the interest earned on servicing escrow balances, which is primarily due to an increase of 16 basis points  in the interest rates on servicing escrows from 0.24% in 2009 to 0.40% in 2010; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | $0.3 million increase in the interest earned on loans during 2010 while financed on the warehouse line.  Although average interest rates on multifamily mortgage loans decreased during 2010, interest income earned increased due to the increase in origination volume achieved during 2010 as compared to 2009. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2010   |    |   |       | 2009   |   | % Change |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|------------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |    |   |       |   |   |     |   |   |   |
| Total mortgage origination activity(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $      | 803,015 |   |       |   | $      | 488,737  |   | 64.3 | % |
| Mortgages originated in prior periods and sold during the period                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 28,520  |   |       |   |   | 34,507   |   |   |   |
| Less: mortgages originated but not yet sold(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | (58,460 | )      |       |   |   | (28,520  | )      |   |   |
| Total mortgage origination activity recognized for GAAP and for which revenue is recognized                                                                                                                                                                                                                                                                                                                                                                                                       |   | $      | 773,075 |   |       |   | $      | 494,724  |   | 56.3 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |    |   |       |   |   |     |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |    |   | % of Total |   |   |     |   | % of Total |   |
| Loan Purchasers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |    |   |       |   |   |     |   |   |   |
| Fannie Mae                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $      | 542,114 |   | 70.1       | %      | $      | 457,815  |   | 92.5 | % |
| Freddie Mac                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 145,010 |   | 18.8       |   |   | 36,909   |   | 7.5 |   |
| FHA and other(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 85,951  |   | 11.1       |   |   | --       |   | -- |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |    |   |       |   |   |     |   |   |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      | 773,075 |   | 100.0      | %      | $      | 494,724  |   | 100.0 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
| (1)   Includes all mortgages funded during the period.(2)   Included in Other Investments – mortgage loans held for sale.(3)   $15.6 million of FHA originations were closed using our warehouse facilities with the servicing rights retained by us.  $70.3 million of these originations were closed in the name of an affiliated party.  We received origination fees for these loans but have not retained mortgage servicing rights. |   |

----

| (dollars in thousands)                     |   | 2010   |      |   | 2009   |   |      | % Change |   |
|--------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|----------|--------|
|                                       |   |   |      |   |   |   |      |     |   |
| Primary servicing portfolio at December 31 |   | $      | 8,340,582 |   |   | $      | 8,387,885 |     |   |   | (0.6 | )% |

| (dollars in thousands)        |   | 2010   |   |   | 2009   |   |   | % Change |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                          |   |   |   |   |   |   |   |     |   |
| General and administrative    |   | $      | 21,411 |   |   | $      | 16,338 |     |   |   | 31.1 | % |
| Provision for losses          |   |   | 8,653  |   |   |   | 11,163 |     |   |   | (22.5 | ) |
| Interest expenses             |   |   | 961    |   |   |   | 567    |     |   |   | 69.5 |   |
| Depreciation and amortization |   |   | 10,625 |   |   |   | 9,892  |     |   |   | 7.4 |   |
|                          |   |   |   |   |   |   |   |     |   |   |   |   |
| Total expenses                |   | $      | 41,650 |   |   | $      | 37,960 |     |   |   | 9.7 | % |

----

| (dollars in thousands)          |   | 2010   |   |   | 2009   |   |   | % Change |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                            |   |   |   |   |   |   |   |     |   |
| Income before other allocations |   | $      | 9,871  |   |   | $      | 146    |     |   |   | N/M |   |
| Net income                      |   |   | 9,871  |   |   |   | 146    |     |   |   | N/M |   |
|                            |   |   |   |   |   |   |   |     |   |   |   |   |
| N/M – not meaningful.     |   |   |   |   |   |   |   |     |   |   |   |   |

| (dollars in thousands) |   | 2010   |   |   | 2009   |   |   | % Change |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                   |   |   |   |   |   |   |   |     |   |
| Interest income        |   | $      | 504    |   |   | $      | 1,201  |     |   |   | (58.0 | )% |
| Other revenues         |   |   | 718    |   |   |   | 885    |     |   |   | (18.9 | ) |
|                   |   |   |   |   |   |   |   |     |   |   |   |   |
| Total revenues         |   | $      | 1,222  |   |   | $      | 2,086  |     |   |   | (41.4 | )% |

----

| (dollars in thousands)                      |   | 2010   |    |   | 2009   |   |    | % Change |   |
|---------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                        |   |   |    |   |   |   |    |     |   |
| General and administrative expenses:        |   |   |    |   |   |   |    |     |   |
| Salaries and benefits                       |   | $      | 16,490  |   |   | $      | 18,218  |     |   |   | (9.5 | )% |
| Other                                       |   |   | 38,039  |   |   |   | 26,097  |     |   |   | 45.8 |   |
| Total general and administrative            |   |   | 54,529  |   |   |   | 44,315  |     |   |   | 23.0 |   |
| Provision (recovery) for losses             |   |   | (48,244 | )      |   |   | 30,755  |     |   |   | (256.9 | ) |
| Interest expense:                           |   |   |    |   |   |   |    |     |   |   |   |   |
| Borrowings and financings                   |   |   | 8,164   |   |   |   | 27,880  |     |   |   | (70.7 | ) |
| Derivatives – non-cash impact         |   |   | --      |   |   |   | (3,840  | )        |   |   | 100.0 |   |
| Depreciation and amortization               |   |   | 9,752   |   |   |   | 17,109  |     |   |   | (43.0 | ) |
| Write-off of goodwill and intangible assets |   |   | 93,283  |   |   |   | 45,000  |     |   |   | 107.3 |   |
| Loss on impairment of assets                |   |   | --      |   |   |   | 65      |     |   |   | (100.0 | ) |
|                                        |   |   |    |   |   |   |    |     |   |   |   |   |
| Total expenses                              |   | $      | 117,484 |   |   | $      | 161,284 |     |   |   | (27.2 | )% |

| ·   | $13.2 million increase in professional fees, primarily legal and consulting, related to the March 2010 Restructuring; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | $8.2 million increase related to management services fee and procedures review payments made to Island (see Note 30 to the consolidated financial statements); and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $2.8 million increase relating to expenses recorded in the first quarter of 2010 on the issuance of Special Series A Shares to Natixis as part of the restructuring of certain intermediation agreements (see Note 32 to the consolidated financial statements). |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $8.1 million decrease in rent expense relating to the termination of two office space leases and the increase in sublease income, primarily for office space sublet to C-III, which offsets rent expense; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $3.6 million decrease primarily in office expenses and computer expenses due to a general effort to reduce expenses, as well as the reduction in office space. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | $9.3 million decrease due to reduced principal balances on our Term Loan and Revolving Credit Facility as a result of $65.0 million in principal on our Term Loan and Revolving Credit Facility being assumed by related parties in connection with the March 2010 Restructuring, $22.1 million in net principal repayments since the first quarter of 2010, as well as decreased interest rates for both our restructured Term Loan and Revolving Credit Facility; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $7.1 million decrease due to the cash interest expense related to the termination of the swap associated with the Term Loan and Revolving Credit facility in June 2009.  There was an $8.2 million decrease in interest payments made in 2010 and a $1.6 million decrease related to a loss on termination which was recorded in 2009 for which there is no comparable amount in 2010, partially offset by a $2.7 million decrease in interest receipts in 2010; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $3.2 million decrease in other interest expenses primarily the result of settling a transaction cost payable with Morgan Stanley in connection with the March 2010 Restructuring. Such transaction cost payable incurred interest for the full year in 2009 (see Other Income section below). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $3.8 million increase due to the non-cash interest expense related to the termination of the swap associated with the Term Loan and Revolving Credit facility in June 2009.  In 2009, there was a $4.9 million favorable change in the fair value of the derivative and a $1.6 million gain for which there is no comparable amount in 2010, partially offset by a $2.6 million amortization of the swap for which there is no comparable amount in 2010. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $4.0 million decrease related to certain intangible assets being fully amortized in 2009; and |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | $2.9 million decrease related to a reduction in amortization expense on the deferred financing costs related to the December 2007 re-securitization, which were fully amortized as of June 2009, as well as deferred financing costs on the revolver loan extension which was fully amortized in March 2010 due to the March 2010 Restructuring. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands)            |   | 2010   |   |   | 2009   |   |   | % Change |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                              |   |   |   |   |   |   |   |     |   |
| Gain on settlement of liabilities |   | $      | 25,253 |   |   | $      | --     |     |   |   | 100.0 | % |

----

| (in thousands)                                   |   | 2010   |     |   | 2009   |   |
|--------------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                             |   |   |     |   |   |   |
| Revenues                                         |   | $      | 112,173  |   |   | $      | 78,902 |   |
| Interest expense                                 |   |   | (17,884  | )      |   |   | (9,213 | ) |
| Loss on impairment of assets                     |   |   | (23,350  | )      |   |   | (30,151 | ) |
| Other expenses                                   |   |   | (225,247 | )      |   |   | (139,582 | ) |
| Partnership expenses eliminated in consolidation |   |   | (81,251  | )      |   |   | (70,778 | ) |
| Other loss                                       |   |   | (368,481 | )      |   |   | (593,347 | ) |
| Allocations to limited partners                  |   |   | 604,027  |   |   |   | 764,166 |   |
|                                             |   |   |     |   |   |   |   |   |
| Net impact                                       |   | $      | (13      | )      |   | $      | (3 | ) |

|                             |   | 2010   |   |   | 2009   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|
|                             |   |   |   |   |   |   |
| Tax Credit Fund Partnerships     |   |   | 140    |   |   |   | 137 |   |
| Tax Credit Property Partnerships |   |   | 113    |   |   |   | 52 |   |

----

| (dollars in thousands)                                       |   | 2010   |     | % ofRevenues |   | 2009   |   | % ofRevenues |   | % Change |   |
|--------------------------------------------------------------|--------|--------|----------|--------------|--------|--------|--------|--------------|--------|----------|--------|
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Within continuing operations:Gain (loss) subject to tax      |   | $      | 33,135   |         | 15.1   | %      | $      | (111,396     | )      | 62.0     | %      | 129.7 | % |
| Loss not subject to tax                                      |   | $      | (726,462 | )            | 331.5  | %      | $      | (1,009,207   | )      | 561.4    | %      | 28.0 | % |
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Loss before income taxes                                     |   | $      | (693,327 | )            | 316.4  | %      | $      | (1,120,603   | )      | 623.3    | %      | 38.1 | % |
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Income tax provision/(benefit)                               |   | $      | 610      |         | 0.3    | %      | $      | (4,123       | )      | 2.3      | %      | 114.8 | % |
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Effective tax rate – consolidated basis                |   |   | (0.09    | )%           |   |   |   | 0.37         | %      |     |   |   |   |
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Effective tax rate for corporate subsidiaries subject to tax |   |   | 1.84     | %            |   |   |   | 3.70         | %      |     |   |   |   |
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Within discontinued operations:Income subject to tax         |   | $      | 7,832    |         | N/M    |   | $      | (236,537     | )      | N/M      |   |   |   |
| Income (loss) not subject to tax                             |   | $      | 153,977  |         | N/M    |   | $      | (1,830,820   | )      | N/M      |   |   |   |
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Income tax provision/(benefit)                               |   | $      | 161,809  |         | N/M    |   | $      | (2,067,357   | )      | N/M      |   |   |   |
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Income taxes                                                 |   | $      | 531      |         | N/M    |   | $      | 816          |   | N/M      |   |   |   |
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Effective tax rate – consolidated basis                |   |   | 0.33     | %            |   |   |   | (0.04        | )%     |     |   |   |   |
|                                                         |   |   |     |         |   |   |   |         |   |     |   |   |   |
| Effective tax rate for corporate subsidiaries subject to tax |   |   | 6.78     | %            |   |   |   | (0.34        | )%     |     |   |   |   |
|                                                         |   |
| N/M – Not meaningful.                                  |   |

----

| (dollars in thousands)                                                                 |   | 2010   |    | 2009   |   | % Change  |   |
|----------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|-----------|--------|
|                                                                                   |   |   |    |   |   |      |   |   |   |
| Within continued operations:Limited partners interests in consolidated partnerships    |   | $      | 604,027 |   | $      | 764,166   |   | (21.0 | )% |
| Preferred shares of a subsidiary (not subject to mandatory repurchase)                 |   |   | (6,225  | )      |   | (6,225    | )      | -- |   |
| SCUs                                                                                   |   |   | (1,075  | )      |   | 151,547   |   | (100.7 | ) |
| SCIs                                                                                   |   |   | (9      | )      |   | 2,216     |   | (100.4 | ) |
| Other                                                                                  |   |   | 1,034   |   |   | 1,725     |   | (40.1 | ) |
|                                                                                   |   |   |    |   |   |      |   |   |   |
| Total for continued operations                                                         |   | $      | 597,752 |   | $      | 913,429   |   | (34.6 | )% |
|                                                                                   |   |   |    |   |   |      |   |   |   |
| Within discontinued operations:Limited partners interests in consolidated partnerships |   | $      | (90,649 | )      | $      | 1,815,936 |   | 105.0 | % |
| Other                                                                                  |   |   | 731     |   |   | (93       | )      | (886.0 | ) |
|                                                                                   |   |   |    |   |   |      |   |   |   |
| Total for discontinued operations                                                      |   | $      | (89,918 | )      | $      | 1,815,843 |   | 105.0 | % |
|                                                                                   |   |   |    |   |   |      |   |   |   |
| Total net loss attributable to non-controlling interests                               |   | $      | 507,834 |   | $      | 2,729,272 |   | (81.4 | )% |

----

| ·   | In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.  ASU 2010-06 revises two disclosure requirements concerning fair value measurements and clarifies two others. It requires separate presentation of significant transfers into and out of Levels 1 and 2 of the fair value hierarchy and disclosure of the reasons for such transfers. It also requires the presentation of purchases, sales, issuances and settlements within Level 3 on a gross basis rather than a net basis.  The amendments also clarify that disclosures should be disaggregated by class of asset or liability and that disclosures about inputs and valuation techniques should be provided for both recurring and non-recurring fair value measurements. The Company’s disclosures regarding fair value measurements are presented in Note 5 – Fair Value Disclosures.  These new disclosure requirements first applied to the Company in our financial statements for the period ended March 31, 2010, except for the requirement concerning gross presentation of Level 3 activity, which is effective for the financial statements for the period ending March 31, 2011.  The gross presentation of Level 3 activity disclosure requirements will impact our disclosure.  All other disclosure requirements have no material impact on the Company’s disclosures. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In February 2010, the FASB issued ASU 2010-09, Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements.  The amendments remove the requirement for an SEC registrant to disclose the date through which subsequent events were evaluated.  This ASU became effective upon issuance.  Removal of the disclosure requirement has no material effect on the nature or timing of subsequent events evaluations performed by the Company. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In July 2010, the FASB issued ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The update requires companies to provide more disclosures about the credit quality of their financing receivables, which include loans, lease receivables, and other long-term receivables, and the credit allowances held against them.  ASU 2010-20 is effective for interim and annual reporting periods ending on and after December 15, 2010. The adoption of ASU 2010-20 had no material impact on our consolidated financial statements. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 (which was codified and superseded by ASU 2009-16, Transfers and Servicing), which, among other provisions, eliminated the concept of Qualified Special Purpose Entities (“QSPEs”). Simultaneously, the FASB issued Statement No. 167, Amendments to FASB Interpretation No. 46(R) (which was codified and superseded by ASU 2009-17, Consolidation), which revised the consolidation model with respect to Variable Interest Entities (“VIEs”).  ASU 2009-17: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | requires that former QSPEs be reviewed for consolidation; |
|---------------|-----------------------------------------------------------|

| o   | requires ongoing reconsideration of consolidation conclusions for VIEs; and |
|---------------|-----------------------------------------------------------------------------|

| o   | requires a qualitative determination of the primary beneficiary of a VIE based on the entity with the power to direct the VIE’s activities and which also has a significant economic interest in the VIE. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | a significant decline in our cash flow from operations due to decreased transaction related revenues, primarily due to a reduction in the number of new Affordable Housing funds we have sponsored as well as a significant decline in our cash flow from the Series B Freddie Mac Certificates due to the credit deterioration of the underlying assets; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a sharp decline in our Common Share price has made obtaining equity capital through equity offerings extremely difficult and uneconomical for us; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the lower level of debt financing available in the marketplace. |
|--------------------|-----------------------------------------------------------------|

----

| ·   | increasing revenues through increased volume of mortgage originations and growth of assets under management; |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | instituting measures to reduce general and administrative expenses; |
|--------------------|---------------------------------------------------------------------|

| ·   | continuing to sell and/or monetize investments that do not meet our long-term investment criteria; and |
|--------------------|--------------------------------------------------------------------------------------------------------|

| ·   | reducing our risk of loss by continuing to improve our Asset Management infrastructure. |
|--------------------|-----------------------------------------------------------------------------------------|

----

| (in thousands)                          |   | 2010   |    |   | 2009   |   |
|-----------------------------------------|--------|--------|---------|--------|--------|--------|
|                                    |   |   |    |   |   |   |
| Net cash flow from operating activities |   | $      | (66,685 | )      |   | $      | 10,457 |   |
| Net cash flow from investing activities |   |   | 119,327 |   |   |   | 249,989 |   |
| Net cash flow from financing activities |   |   | (28,754 | )      |   |   | (268,597 | ) |
| Net change in cash                      |   | $      | 23,888  |   |   | $      | (8,151 | ) |

|                           |   | (In thousands) |   |
|--------------------------------|--------|----------------|--------|
|                           |   |           |   |   |
| Equity Issuer preferred shares |   | $              | 2,516  |   |

----

| ·   | significant increase in dependence on model-related assumptions and/or unobservable inputs; |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | doubts about the quality of the market information utilized as inputs; and |
|--------------------|----------------------------------------------------------------------------|

| ·   | rapidly changing expectations of default levels. |
|--------------------|--------------------------------------------------|

|                                                                                                                                           |   | Years Ended December 31, |    |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
| (in thousands)                                                                                                                                 |   | 2010                     |    |   | 2009 |   |
|                                                                                                                                           |   |                     |    |   |   |   |
| Level 3 assets:                                                                                                                                |   |                     |    |   |   |   |
| Series A-1 Freddie Mac Certificates                                                                                                            |   | $                        | 129,406 |   |   | $ | 183,093 |   |
| Series B Freddie Mac Certificates                                                                                                              |   |                     | 63,215  |   |   |   | 61,003 |   |
| Mortgage revenue bonds                                                                                                                         |   |                     | 292,659 |   |   |   | 245,671 |   |
| Goodwill(1)                                                                                                                                    |   |                     | --      |   |   |   | 93,283 |   |
| Mortgage servicing rights(2)                                                                                                                   |   |                     | 65,614  |   |   |   | 60,423 |   |
| Other intangible assets(1)                                                                                                                     |   |                     | 9,494   |   |   |   | 17,338 |   |
| Total Level 3 assets                                                                                                                           |   | $                        | 560,388 |   |   | $ | 660,811 |   |
|                                                                                                                                           |   |                     |    |   |   |   |   |   |
| Level 3 assets as a percentage of total fair value assets                                                                                      |   |                     | 88.0    | % |   |   | 95.1 | % |
|                                                                                                                                           |   |
| (1)   Non-financial asset fair valued on a non-recurring basis.(2)   Financial asset fair valued on a non-recurring basis. |   |

----

|                                                                      |   | Years Ended December 31, |    |
|---------------------------------------------------------------------------|--------|--------------------------|---------|
| (in thousands)                                                            |   | 2010                     |    |   | 2009 |   |
|                                                                      |   |                     |    |   |   |   |
| Series B Freddie Mac Certificates                                         |   | $                        | 78,031  |   |   | $ | 44,830 |   |
|                                                                      |   |                     |    |   |   |   |   |   |
| Mortgage revenue bonds                                                    |   |                     | --      |   |   |   | 9,114 |   |
|                                                                      |   |                     |    |   |   |   |   |   |
| Goodwill(1)                                                               |   |                     | 93,283  |   |   |   | 45,000 |   |
|                                                                      |   |                     |    |   |   |   |   |   |
| Total                                                                     |   | $                        | 171,314 |   |   | $ | 98,944 |   |
|                                                                      |   |
| (1)   Non-financial asset fair valued on a non-recurring basis. |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |             |      |             |   | December 31, 2010        |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|-----------|------------------|--------|--------------------------|--------|
| (in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | December 31,2010 |      | December 31,2009 |   |  Available toBorrow |   | MaximumCommitment |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Credit Facility:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Term loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $                | 127,990   |             | $      | 11,082                   |   | $ | -- |   | $ | 127,990 |   |
| Revolving credit facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |             | 6,000     |             |   | 210,000                  |   |   | 19,000 | (1) |   | 37,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Other Notes Payable:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Mortgage banking committed warehouse facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |             | 26,415    |             |   | 550                      |   |   | 73,585 | (2) |   | 100,000 |   |
| Multifamily ASAP facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |             | 49,276    |             |   | 28,132                   |   |   | N/A | (2) |   | N/A |   |
| CFin Holdings credit facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |             | 21,693    | (3)              |   | --                       |   |   | -- |   |   | 20,000 |   |
| Centerline Financial credit facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |             | --        |             |   | --                       |   |   | 30,000 |   |   | 30,000 |   |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |             | 231,374   |             |   | 249,764                  |   |   | 122,585 |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Freddie Mac Secured Financing(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             | 665,875   |             |   | 585,528                  |   |   | N/A |   |   | N/A |   |
| Subtotal (excluding Consolidated Partnerships)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |             | 897,249   |             |   | 835,292                  |   |   | 122,585 |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Consolidated Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |             | 137,054   |             |   | 155,810                  |   |   | N/A |   |   | N/A |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                | 1,034,303 |             | $      | 991,102                  |   | $ | 122,585 |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (1)   Availability reduced by an outstanding letter of credit in the amount of $12.0 million.(2)   Borrowings under these facilities are limited to qualified mortgage loans, which serve as collateral.(3)   Balance at December 31, 2010 includes interest that has been capitalized.(4)   Relates to mortgage revenue bonds that we re-securitized but have not been accounted for as sold for accounting purposes (see Note 16 to the consolidated financial statements). |

----

| ·   | $60.0 million assumed by C-III as part of the March 2010 Restructuring; |
|--------------------|-------------------------------------------------------------------------|

| ·   | $5.0 million assumed by an affiliate of The Related Companies L.P. (“TRCLP”), as part of the March 2010 Restructuring (see Note 30 to the consolidated financial statements); and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $5.5 million we repaid at the time of the March 2010 Restructuring. |
|--------------------|---------------------------------------------------------------------|

| ·   | The remaining balance of the termed-out portion of the Revolving Credit Facility ($137.5 million) was restructured as a Term Loan maturing in March 2017 with an interest rate of 3.0% over either the prime rate or LIBOR (at our election which currently is LIBOR).  There are no scheduled repayments of principal until December 2011.  At that time, we must repay $3.0 million in principal per quarter until maturity, at which time the remaining principal is due.  On July 29, 2010, $10.0 million that was held in an escrow account funded with transaction proceeds at the time of the March 2010 Restructuring was released.  $0.5 million was used to pay certain expenses.  The remaining $9.5 million was used to pay down principal on the Term Loan, reducing its outstanding balance to $128.0 million. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The revolving portion of the Revolving Credit Facility was restructured into a new Revolving Credit Facility with a total capacity of $37.0 million. The Revolving Credit Facility matures in March 2015 and bears interest at 3.0% over either the prime rate or LIBOR at our election (which currently is LIBOR).  The Revolving Credit Facility is to be used for LIHTC property investments or for working capital purposes.  As of December 31, 2010, $6.0 million was drawn and $12.0 million in letters of credit were issued under the Revolving Credit Facility.  Once the letters of credit are terminated, the amount of the Revolving Credit Facility associated with these letters of credit cannot be redrawn.  As of December 31, 2010 the undrawn balance of the Revolving Credit Facility was $19.0 million. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Revolving Credit Facility has customary financial covenants, but excludes certain provisions that had been in the previous facility such as required asset sales and repayments based on specific cash flow streams.  The following financial covenants will not be effective immediately: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | a minimum ratio of consolidated EBITDA to fixed charges, which will become effective for us as of September 30, 2011; and |
|---------------|---------------------------------------------------------------------------------------------------------------------------|

| o   | a maximum ratio of funded debt to consolidated EBITDA, which will become effective for us as of September 30, 2012. |
|---------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | The new Term Loan and Revolving Credit Facility agreement contains restrictions on distributions.  Under the agreement, we are generally not permitted to make any distributions except for certain cases such as to the holders of the Equity Issuer preferred shares. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Mortgage Banking Warehouse Facilities |
|---------------------------------------|

| ·   | We have a $100 million committed warehouse line that matures in September 2011 and bears interest at LIBOR plus 2.50%.  Mortgages financed by such advances (see Note 7 to the consolidated financial statements), as well as the related servicing and other rights (see Note 12 to the consolidated financial statements) have been pledged as security under the warehouse facility.  The interest rate on the warehouse facility was 2.76% as of December 31, 2010 and 2.98% as of December 31, 2009.  All loans securing this facility have firm sale commitments with GSEs. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We have an uncommitted facility with Fannie Mae under its Multifamily As Soon As Pooled (“ASAP”) Facility funding program.  After approval of certain loan documents, Fannie Mae will fund loans after closing and the advances are used to repay the primary warehouse line.  Subsequently, Fannie Mae funds approximately 99% of the loan and Centerline Mortgage Capital Inc. (“CMC”) fund the remaining 1%.  CMC is later reimbursed by Fannie Mae when the assets are sold.  Interest on this facility accrues at a rate of LIBOR plus 0.85% with a minimum rate of 1.20%.  The interest rate on the warehouse facility was 1.20% as of December 31, 2010 and as of December 31, 2009. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | We have two uncommitted warehouse lines and repurchase facilities which we entered into on November 22, 2010, in order to provide us with additional resources for warehousing of mortgage loans with Freddie Mac and Fannie Mae.  These agreements are scheduled to mature in November 2011 and bear an interest of LIBOR plus 3.5% with a minimum of 4.5% for all Fannie Mae’s loans and 4% for all Freddie Mac’s loans.  At December 31, 2010, there was no outstanding balance on these two warehouse facilities. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| CFin Holdings Credit Facility |
|-------------------------------|

| Centerline Financial Credit Facility |
|--------------------------------------|

| ·   | LIBOR plus 0.4%; or |
|--------------------|---------------------|

| ·   | 1.40% plus the higher of the prime rate or the federal funds effective rate plus 0.5%. |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | notes payable by the Tax Credit Fund Partnerships collateralized either by the funds’ limited partners’ equity subscriptions or by the underlying investments of the funds; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | mortgages and notes payable on properties. |
|--------------------|--------------------------------------------|

----

| (in thousands)                                                                                                                                                                                                                                                                                                             |   | 2010   |    |   | 2009   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                       |   |   |    |   |   |   |
| Mezzanine equity:                                                                                                                                                                                                                                                                                                          |   |   |    |   |   |   |
| Redeemable CRA Shares(1)                                                                                                                                                                                                                                                                                                   |   | $      | 12,462  |   |   | $      | 203,252 |   |
| 11.0% Preferred shares(2)                                                                                                                                                                                                                                                                                                  |   |   | --      |   |   |   | 129,228 |   |
|                                                                                                                                                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
| Centerline Holding Company equity                                                                                                                                                                                                                                                                                          |   |   |    |   |   |   |   |   |
| CRA Shares(2)                                                                                                                                                                                                                                                                                                              |   |   | --      |   |   |   | (1,235 | ) |
|                                                                                                                                                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
| Non-controlling equity:                                                                                                                                                                                                                                                                                                    |   |   |    |   |   |   |   |   |
| Preferred shares of subsidiary (not subject to mandatory repurchase)                                                                                                                                                                                                                                                       |   |   | 104,000 |   |   |   | 104,000 |   |
| Convertible SCUs                                                                                                                                                                                                                                                                                                           |   |   | (88,300 | )      |   |   | (89,375 | ) |
| Convertible SCIs(3)                                                                                                                                                                                                                                                                                                        |   |   | --      |   |   |   | 364 |   |
| Other                                                                                                                                                                                                                                                                                                                      |   |   | 4,379   |   |   |   | 5,715 |   |
|                                                                                                                                                                                                                                                                                                                       |   |
| (1)   Most were converted into the Special Series A Shares which were later converted to Common Shares at a 1:15 ratio.(2)   All were converted into the Special Series A Shares which were later converted to Common Shares at a 1:15 ratio.(3)   Redeemed in February 2010. |   |

----

|                                                                |   | Payments due by period |      |
|---------------------------------------------------------------------|--------|------------------------|-----------|
| (in thousands)                                                      |   | Total                  |      |  Less than1 year |   | 1-3 years |   | 3-5 years |   | More than5 years |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Notes payable:                                                      |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Credit Facility:                                                    |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Term Loan                                                           |   | $                      | 127,990   |   | $ | 2,976 |   | $ | 23,810 |   | $ | 23,810 |   | $ | 77,394 |   |
| Revolving credit facility                                           |   |                   | 6,000     |   |   | -- |   |   | -- |   |   | 6,000 |   |   | -- |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage banking committed warehouse facility(1)                    |   |                   | 26,415    |   |   | 26,415 |   |   | -- |   |   | -- |   |   | -- |   |
| Multifamily ASAP facility(1)                                        |   |                   | 49,276    |   |   | 49,276 |   |   | -- |   |   | -- |   |   | -- |   |
| CFin Holdings credit facility(2)                                    |   |                   | 21,693    |   |   | -- |   |   | -- |   |   | -- |   |   | 21,693 |   |
| Subtotal                                                            |   |                   | 231,374   |   |   | 78,667 |   |   | 23,810 |   |   | 29,810 |   |   | 99,087 |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating lease obligations                                         |   |                   | 52,105    |   |   | 8,422 |   |   | 14,494 |   |   | 13,841 |   |   | 15,348 |   |
| Subleases                                                           |   |                   | (14,308   | ) |   | (2,854 | ) |   | (4,737 | ) |   | (3,103 | ) |   | (3,614 | ) |
| Preferred shares of subsidiary (subject to mandatory repurchase)(3) |   |                   | 55,000    |   |   | -- |   |   | -- |   |   | 55,000 |   |   | -- |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subtotal                                                            |   |                   | 324,171   |   |   | 84,235 |   |   | 33,567 |   |   | 95,548 |   |   | 110,821 |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Freddie Mac secured financing(4)                                    |   |                   | 665,875   |   |   | 33,818 |   |   | -- |   |   | 165 |   |   | 631,892 |   |
| Unfunded investment commitments(5)                                  |   |                   | 14,111    |   |   | 14,111 |   |   | -- |   |   | -- |   |   | -- |   |
| Redeemable securities                                               |   |                   | 12,462    |   |   | -- |   |   | 12,462 |   |   | -- |   |   | -- |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subtotal before Consolidated Partnerships                           |   |                   | 1,016,619 |   |   | 132,164 |   |   | 46,029 |   |   | 95,713 |   |   | 742,713 |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Notes payable of consolidated partnerships(6)                       |   |                   | 137,054   |   |   | 17,263 |   |   | 10,016 |   |   | 4,188 |   |   | 105,587 |   |
| Consolidated Partnership unfunded investment commitments(7)         |   |                   | 86,642    |   |   | 39,261 |   |   | 37,940 |   |   | 9,441 |   |   | -- |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subtotal of Consolidated Partnerships                               |   |                   | 223,696   |   |   | 56,524 |   |   | 47,956 |   |   | 13,629 |   |   | 105,587 |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                               |   | $                      | 1,240,315 |   | $ | 188,688 |   | $ | 93,985 |   | $ | 109,342 |   | $ | 848,300 |   |

| ) | Represents borrowings by our Mortgage Banking subsidiaries for which the associated mortgage loans held for sale have firm sale commitments.  The amounts borrowed are repaid upon sale of the loans or when mortgage backed securities are purchased by the investors. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The CFin Holding credit facility is due by March 5, 2037.  Due to an event of default under our CFin Holdings Senior Secured Credit Agreement, Natixis can call the loan balance under the CFin Holdings Credit Agreement due immediately, although they have not done so as of yet. If requested, CFin Holdings has sufficient available cash to repay this loan in full. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Economically defeased by investments in Series A-1 Freddie Mac certificates (see Notes 8, 19 and 22 to the consolidated financial statements). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Represents a liability established related to mortgage revenue bonds re-securitized in December 2007 which have not been accounted for as sold due to continuing involvement with the underlying assets.  Amounts are based upon the expected repayment dates of the underlying bonds.  As the associated mortgage revenue bonds are repaid and/or receive sale treatment, the associated liability will be reduced (see Notes 8 and 16 to the consolidated financial statements). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Represent our Mortgage Banking subsidiaries forward commitments under Freddie Mac and unfunded loan commitments with Fannie Mae. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| (6) | Of the notes payable of consolidated partnerships, $11.2 million are collateralized by equity subscriptions of certain equity partners of the investment funds.  Under the partnership agreements, the equity partners are also obligated to pay the principal and interest on the notes.  The remaining balance is collateralized with the underlying properties of the consolidated operating partnerships or investments held by the Consolidated Fund Partnership.  All of this debt is non-recourse to us. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (7) | To be funded from capital of Consolidated Partnerships.  Payments of investment commitments are based on property performance thresholds as defined in the partnership agreements.  The estimated scheduled payments can vary based on the actual performance of the properties. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (in thousands                                           |   | Maximum Exposure |      | Carrying Amount |   |
|---------------------------------------------------------|--------|------------------|-----------|-----------------|--------|
|                                                    |   |             |      |            |   |   |   |
| Tax Credit Fund credit intermediation(1)                |   | $                | 1,428,543 |            | $      | 23,670 |   |
| Mortgage banking loss sharing agreements(2)             |   |             | 984,783   |            |   | 29,924 |   |
| Credit support to developers(3)                         |   |             | 203,819   |            |   | -- |   |
| Centerline Financial credit intermediation(4)           |   |             | 33,715    |            |   | 917 |   |
| General Partner property indemnifications               |   |             | 1,940     |            |   | -- |   |
| Contingent liabilities at the Consolidated Partnerships |   |             | 857       |            |   | -- |   |
|                                                    |   |             |      |            |   |   |   |
|                                                    |   | $                | 2,653,657 |            | $      | 54,511 |   |
|                                                    |

|  (1) | These transactions were undertaken to expand our Affordable Housing business by offering specified rates of return to customers.  We have recorded a $89.4 million reserve for potential losses relating to these transactions but anticipate no material liquidity requirements in satisfaction of any arrangement.  The carrying values disclosed above relate to the deferred fees we earn for the transactions, which we recognize over the period until maturity of these credit intermediations.                                                                                                                                                                                                                                                                                                                                             |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  (2) | The loss sharing agreements with Fannie Mae and Freddie Mac are a normal part of the DUS and DUI lender programs and afford a higher level of fees than we earn for other comparable transactions.  The carrying value disclosed above is our estimate of potential exposure under the guarantees, although any funding requirements for such exposure is based on the contractual requirements of the underlying loans we sell to Fannie Mae and Freddie Mac, which vary as to amount and duration, up to a maximum of 30 years.  The carrying value disclosed above represents the reserve we have recorded for potential losses under the agreements.  Based on current expectations of defaults in the portfolio of loans, we anticipate that we may be required to pay between $5.0 – $7.0 million in the next twelve months. |
|  (3) | Generally relates to business requirements for developers to obtain construction financing.  As part of our role as co-developer of certain properties, we issue these guarantees in order to secure properties as assets for the funds we manage.  To date, we have had minimal exposure to losses under these guarantees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  (4) | These transactions were undertaken to expand our Credit Risk Products business by offering credit intermediation to third-party customers.  To date, we have had minimal exposure to losses and anticipate no material liquidity requirements in satisfaction of any arrangement.  The carrying values disclosed above relate to the deferred fees we earn for the transactions, which we recognize over the period until maturity of these swaps.                                                                                                                                                                                                                                                                                                                                                                                                 |

----

| ·   | estimating the default and prepayment rates of the mortgage revenue bonds in the managed portfolio, which estimates are based on our historical experience and industry studies related to properties comparable to those underlying the bonds; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | estimating the extent to which other parties involved in our planned restructuring of the bonds underlying the certificates will participate and the timing of that restructuring;  and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | applying an appropriate discount rate, which we consider in comparison to taxable residual interests, along with consideration of the tax-free nature of the associated income. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Determining the fair value of the asset retained when the associated mortgage is sold and in subsequent reporting periods, including such factors as costs to service the loans, the estimated rate of prepayments, the estimated rate of default and an appropriate discount rate to calculate the present value of cash flows; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Estimating the appropriate proportion and period for amortizing the asset. |
|--------------------|----------------------------------------------------------------------------|

----

| ·   | projecting the ability of a borrower to meet debt service requirements; |
|--------------------|-------------------------------------------------------------------------|

| ·   | estimating the likelihood of default by a borrower, including whether the loan would meet underwriting standards as it approaches maturity; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | estimating the severity of a loss if the borrower were to default; and |
|--------------------|------------------------------------------------------------------------|

| ·   | the timing of such events. |
|--------------------|----------------------------|

| ·   | the financial performance of the underlying properties since losses in excess of projections could necessitate additional steps or lead to incremental losses; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the timing of executing the plan; |
|--------------------|-----------------------------------|

| ·   | the extent to which other parties to the plan contribute funds or provide necessary approvals to execute; and |
|--------------------|---------------------------------------------------------------------------------------------------------------|

----

| ·   | the extent to which the plan can be funded by capital sources that would mitigate losses under the credit intermediation agreements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | · | determination of degree of control over an entity by its various equity holders; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | structure of the entity; |
|--------|--------|--------------------------|

|   | · | relationships between equity holders; |
|--------|--------|---------------------------------------|

|   | · | determination of primary beneficiary; and |
|--------|--------|-------------------------------------------|

|   | · | ability to replace general partners, among others. |
|--------|--------|----------------------------------------------------|

----

| Island Centerline Manager LLC (the “Manager”) |
|-----------------------------------------------------------|

| ·   | Island will provide executive management and strategic, restructuring and general advisory services to us; and |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | we paid $5.0 million of advisory fees over a 12 month period from the date of the agreement for certain fund management review services, a $5.0 million annual base management fee and an annual incentive fee if certain EBITDA thresholds are met (as defined in the agreement). |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| The Related Companies L.P. |
|----------------------------|

----

| ·   | business limitations caused by adverse changes in real estate and credit markets and general economic and business conditions; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| ·   | risks related to the form and structure of our financing arrangements; |
|--------------------|------------------------------------------------------------------------|

| ·   | our ability to generate new income sources, raise capital for investment funds and maintain business relationships with providers and users of capital; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes in applicable laws and regulations; |
|--------------------|---------------------------------------------|

| ·   | our tax treatment, the tax treatment of our subsidiaries and the tax treatment of our investments; |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | competition with other companies; |
|--------------------|-----------------------------------|

----

| ·   | risk of loss associated with mortgage originations; |
|--------------------|-----------------------------------------------------|

| ·   | risks associated with providing credit intermediation; and |
|--------------------|------------------------------------------------------------|

| ·   | risks associated with enforcement by our creditors of any rights or remedies which they may possess. |
|--------------------|------------------------------------------------------------------------------------------------------|

----

----

|   | /s/ Robert L. Levy                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------|
|   | Robert L. Levy                                                                                                             |
|   | President, Chief Financial Officer andChief Operating Officer(Principal Financial Officer and Principal Executive Officer) |
|   | March 30, 2011                                                                                                             |

----

| Item 8. |   | Financial Statements and Supplementary Data.                                                |   |   |   |
|---------|--------|---------------------------------------------------------------------------------------------|--------|--------|--------|
|    |   |                                                                                        |   | Page   |
| (a) 1.  |   | Financial Statements                                                                        |   |   |   |
|    |   |                                                                                        |   |   |   |
|    |   | Report of Independent Registered Public Accounting Firm                                     |   | 65     |   |
|    |   |                                                                                        |   |   |   |
|    |   | Consolidated Balance Sheets as of December 31, 2010 and 2009                                |   | 66     |   |
|    |   |                                                                                        |   |   |   |
|    |   | Consolidated Statements of Operations for the years ended December 31, 2010 and 2009        |   | 67     |   |
|    |   |                                                                                        |   |   |   |
|    |   | Consolidated Statements of Changes in Equity for the years ended December 31, 2010 and 2009 |   | 68     |   |
|    |   |                                                                                        |   |   |   |
|    |   | Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009        |   | 69     |   |
|    |   |                                                                                        |   |   |   |
|    |   | Notes to Consolidated Financial Statements                                                  |   |   |   |
|    |   |                                                                                        |   |   |   |
|    |   | Note 1 – Description of Business and Basis of Presentation                            |   | 71     |   |
|    |   | Note 2 – Summary of Significant Accounting Policies                                   |   | 71     |   |
|    |   | Note 3 – Discontinued Operations                                                      |   | 81     |   |
|    |   | Note 4 – Market Conditions and Liquidity                                              |   | 83     |   |
|    |   | Note 5 – Fair Value of Financial Instruments                                          |   | 84     |   |
|    |   | Note 6 – Variable Interest Entities                                                   |   | 89     |   |
|    |   | Note 7 – Assets Pledged as Collateral                                                 |   | 90     |   |
|    |   | Note 8 – Available-for-Sale Investments                                               |   | 91     |   |
|    |   | Note 9 – Equity Method Investments                                                    |   | 95     |   |
|    |   | Note 10 – Mortgage Loans Held for Sale and Other Assets                               |   | 96     |   |
|    |   | Note 11 – Goodwill and Intangible Assets, Net                                         |   | 97     |   |
|    |   | Note 12 – Mortgage Servicing Rights, Net                                              |   | 99     |   |
|    |   | Note 13 – Deferred Costs and Other Assets, Net                                        |   | 101    |   |
|    |   | Note 14 – Assets of Consolidated Partnerships                                         |   | 102    |   |
|    |   | Note 15 – Notes Payable                                                               |   | 103    |   |
|    |   | Note 16 – Financing Arrangements and Secured Financing                                |   | 106    |   |
|    |   | Note 17 – Accounts Payable, Accrued Expenses and Other Liabilities                    |   | 107    |   |
|    |   | Note 18 – Preferred Shares of a Subsidiary – Subject to Mandatory Repurchase    |   | 108    |   |
|    |   | Note 19 – Liabilities of Consolidated Partnerships                                    |   | 109    |   |
|    |   | Note 20 – Redeemable Securities                                                       |   | 111    |   |
|    |   | Note 21 – Centerline Holding Company Equity                                           |   | 113    |   |
|    |   | Note 22 – Non-controlling interests                                                   |   | 116    |   |
|    |   | Note 23 – General and Administrative Expenses and Provision (Recovery) for Losses     |   | 118    |   |
|    |   | Note 24 – Loss on Impairment of Assets                                                |   | 119    |   |
|    |   | Note 25 – Revenues and Expenses of Consolidated Partnerships                          |   | 121    |   |
|    |   | Note 26 – Share-Based Compensation                                                    |   | 121    |   |
|    |   | Note 27 – Income Taxes                                                                |   | 123    |   |
|    |   | Note 28 – Earnings per Share                                                          |   | 126    |   |
|    |   | Note 29 – Financial Risk Management and Derivatives                                   |   | 127    |   |
|    |   | Note 30 – Related Party Transactions                                                  |   | 129    |   |
|    |   | Note 31 – Business Segments                                                           |   | 132    |   |
|    |   | Note 32 – Commitments and Contingencies                                               |   | 133    |   |
|    |   | Note 33 – Subsequent Events                                                           |   | 139    |   |

----

----

|                                                                                                                                                    |   | December 31, |      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|
|                                                                                                                                                    |   | 2010         |      | 2009 |   |
|                                                                                                                                                    |
| ASSETS                                                                                                                                                  |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Cash and cash equivalents                                                                                                                               |   | $            | 119,598   |   | $ | 88,853 |   |
| Restricted cash                                                                                                                                         |   |         | 13,231    |   |   | 11,476 |   |
| Investments:                                                                                                                                            |   |         |      |   |   |   |   |
| Available-for-sale (Note 8)                                                                                                                             |   |         | 485,280   |   |   | 489,767 |   |
| Equity method (Note 9)                                                                                                                                  |   |         | 5,635     |   |   | 530 |   |
| Mortgage loans held for sale and other assets (Note 10)                                                                                                 |   |         | 77,287    |   |   | 39,037 |   |
| Investments in and loans to affiliates, net (Note 30)                                                                                                   |   |         | 510       |   |   | 1,982 |   |
| Goodwill and intangible assets, net (Note 11)                                                                                                           |   |         | 9,494     |   |   | 110,621 |   |
| Mortgage servicing rights, net (Note 12)                                                                                                                |   |         | 65,614    |   |   | 60,423 |   |
| Deferred costs and other assets, net (Note 13)                                                                                                          |   |         | 76,686    |   |   | 100,460 |   |
| Consolidated partnerships (Note 14):                                                                                                                    |   |         |      |   |   |   |   |
| Investments:                                                                                                                                            |   |         |      |   |   |   |   |
| Available-for-sale                                                                                                                                      |   |         | --        |   |   | 5,109 |   |
| Equity method                                                                                                                                           |   |         | 3,302,667 |   |   | 3,571,323 |   |
| Land, buildings and improvements, net                                                                                                                   |   |         | 567,073   |   |   | 571,520 |   |
| Other assets                                                                                                                                            |   |         | 282,665   |   |   | 298,528 |   |
| Assets of discontinued operations (Note 3)                                                                                                              |   |         | 18        |   |   | 653,897 |   |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Total assets                                                                                                                                            |   | $            | 5,005,758 |   | $ | 6,003,526 |   |
|                                                                                                                                                    |
| Liabilities:                                                                                                                                            |   |         |      |   |   |   |   |
| Notes payable (Note 15)                                                                                                                                 |   | $            | 231,374   |   | $ | 249,764 |   |
| Financing arrangements and secured financing (Note 16)                                                                                                  |   |         | 665,875   |   |   | 585,528 |   |
| Accounts payable, accrued expenses and other liabilities (Note 17)                                                                                      |   |         | 237,804   |   |   | 343,696 |   |
| Preferred shares of subsidiary (subject to mandatory repurchase) (Note 18)                                                                              |   |         | 55,000    |   |   | 128,500 |   |
| Consolidated partnerships (Note 19):                                                                                                                    |   |         |      |   |   |   |   |
| Notes payable                                                                                                                                           |   |         | 137,054   |   |   | 155,810 |   |
| Due to property partnerships                                                                                                                            |   |         | 86,642    |   |   | 209,868 |   |
| Other liabilities                                                                                                                                       |   |         | 273,409   |   |   | 226,391 |   |
| Liabilities of discontinued operations (Note 3)                                                                                                         |   |         | --        |   |   | 1,588,054 |   |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Total liabilities                                                                                                                                       |   |         | 1,687,158 |   |   | 3,487,611 |   |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Redeemable securities (Note 20)                                                                                                                         |   |         | 12,462    |   |   | 332,480 |   |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Commitments and contingencies (Note 32)                                                                                                                 |   |         |      |   |   |   |   |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Equity:                                                                                                                                                 |   |         |      |   |   |   |   |
| Centerline Holding Company beneficial owners’ equity (deficit) (Note 21):                                                                         |   |         |      |   |   |   |   |
| Convertible CRA preferred shares; no par value; 519 shares issued and outstanding in 2009                                                               |   |         | --        |   |   | (1,235 | ) |
| Special preferred voting shares; no par value; 12,731 shares issued and outstanding in 2010 and 2009                                                    |   |         | 127       |   |   | 127 |   |
| Common shares; no par value; 800,000 shares authorized; 355,362 issued and 348,302 outstanding in 2010 and 57,881 issued and 53,820 outstanding in 2009 |   |         | 148,110   |   |   | (104,054 | ) |
| Treasury shares of beneficial interest – common, at cost; 7,060 shares in 2010 and 4,061 shares in 2009                                           |   |         | (65,764   | ) |   | (65,351 | ) |
| Accumulated other comprehensive income (loss)                                                                                                      |   |         | 78,831    |   |   | (1,007,837 | ) |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Centerline Holding Company total                                                                                                                        |   |         | 161,304   |   |   | (1,178,350 | ) |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Non-controlling interests (Note 22)                                                                                                                     |   |         | 3,144,834 |   |   | 3,361,785 |   |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Total equity                                                                                                                                            |   |         | 3,306,138 |   |   | 2,183,435 |   |
|                                                                                                                                                    |   |         |      |   |   |   |   |
| Total liabilities and equity                                                                                                                            |   | $            | 5,005,758 |   | $ | 6,003,526 |   |

----

|                                                                   |   | Years Ended December 31, |     |
|------------------------------------------------------------------------|--------|--------------------------|----------|
|                                                                   |   | 2010                     |     | 2009 |   |
|                                                                   |   |                     |     |   |   |   |   |
| Revenues:                                                              |   |                     |     |   |   |   |   |
| Interest income                                                        |   | $                        | 44,096   |   | $ | 50,486 |   |
| Fee income                                                             |   |                     | 33,154   |   |   | 30,146 |   |
| Other                                                                  |   |                     | 29,734   |   |   | 20,245 |   |
| Consolidated partnerships (Note 25):                                   |   |                     |     |   |   |   |   |
| Interest income                                                        |   |                     | 1,222    |   |   | 3,372 |   |
| Rental income                                                          |   |                     | 106,350  |   |   | 74,697 |   |
| Other                                                                  |   |                     | 4,601    |   |   | 833 |   |
| Total revenues                                                         |   |                     | 219,157  |   |   | 179,779 |   |
|                                                                   |   |                     |     |   |   |   |   |
| Expenses:                                                              |   |                     |     |   |   |   |   |
| General and administrative (Note 23)                                   |   |                     | 127,472  |   |   | 83,636 |   |
| (Recovery) provision of losses                                         |   |                     | (77,908  | ) |   | 197,730 |   |
| Interest                                                               |   |                     | 56,235   |   |   | 50,197 |   |
| Interest – distributions to preferred shareholders of subsidiary |   |                     | 8,825    |   |   | 14,088 |   |
| Depreciation and amortization                                          |   |                     | 23,271   |   |   | 34,508 |   |
| Write-off of goodwill and intangible assets (Note 11)                  |   |                     | 93,283   |   |   | 45,000 |   |
| Loss on impairment of assets (Note 24)                                 |   |                     | 75,887   |   |   | 96,206 |   |
| Consolidated partnerships (Note 25):                                   |   |                     |     |   |   |   |   |
| Interest                                                               |   |                     | 17,884   |   |   | 9,213 |   |
| Loss on impairment of assets                                           |   |                     | 23,350   |   |   | 30,151 |   |
| Other expenses                                                         |   |                     | 225,247  |   |   | 139,582 |   |
| Total expenses                                                         |   |                     | 573,546  |   |   | 700,311 |   |
|                                                                   |   |                     |     |   |   |   |   |
| Loss before other income                                               |   |                     | (354,389 | ) |   | (520,532 | ) |
|                                                                   |   |                     |     |   |   |   |   |
| Other (loss) income:                                                   |   |                     |     |   |   |   |   |
| Equity and other income (loss), net                                    |   |                     | 220      |   |   | (9,396 | ) |
| Gain on settlement of liabilities (Note 17)                            |   |                     | 25,253   |   |   | -- |   |
| Gain from repayment or sale of investments                             |   |                     | 4,070    |   |   | 2,672 |   |
| Other losses from consolidated partnerships (Note 25)                  |   |                     | (368,481 | ) |   | (593,347 | ) |
|                                                                   |   |                     |     |   |   |   |   |
| Loss from continuing operations before income tax provision            |   |                     | (693,327 | ) |   | (1,120,603 | ) |
| Income tax (provision) benefit – continuing operations           |   |                     | (610     | ) |   | 4,123 |   |
|                                                                   |   |                     |     |   |   |   |   |
| Net loss from continuing operations                                    |   |                     | (693,937 | ) |   | (1,116,480 | ) |
|                                                                   |   |                     |     |   |   |   |   |
| Discontinued operations (Note 3):                                      |   |                     |     |   |   |   |   |
| Income (loss) from discontinued operations before income taxes         |   |                     | 141,309  |   |   | (2,067,357 | ) |
| Gain on sale of discontinued operations, net                           |   |                     | 20,500   |   |   | -- |   |
| Income tax provision – discontinued operations                   |   |                     | (531     | ) |   | (816 | ) |
|                                                                   |   |                     |     |   |   |   |   |
| Net income (loss) from discontinued operations                         |   |                     | 161,278  |   |   | (2,068,173 | ) |
|                                                                   |   |                     |     |   |   |   |   |
| Net loss                                                               |   |                     | (532,659 | ) |   | (3,184,653 | ) |
|                                                                   |   |                     |     |   |   |   |   |
| Net loss attributable to non-controlling interests (Note 22)           |   |                     | 507,834  |   |   | 2,729,272 |   |
|                                                                   |   |                     |     |   |   |   |   |
| Net loss attributable to Centerline Holding Company shareholders       |   | $                        | (24,825  | ) | $ | (455,381 | ) |
|                                                                   |   |                     |     |   |   |   |   |
| Net income (loss) per share (Note 28):                                 |   |                     |     |   |   |   |   |
| Basic                                                                  |   |                     |     |   |   |   |   |
| Income (loss) from continuing operations                               |   | $                        | 0.72     |   | $ | (4.25 | ) |
| Income (loss) from discontinued operations                             |   | $                        | 0.24     |   | $ | (4.68 | ) |
| Diluted                                                                |   |                     |     |   |   |   |   |
| Income (loss) from continuing operations                               |   | $                        | 0.72     |   | $ | (4.25 | ) |
| Income (loss) from discontinued operations                             |   | $                        | 0.24     |   | $ | (4.68 | ) |
|                                                                   |   |                     |     |   |   |   |   |
| Weighted average shares outstanding (Note 28):                         |   |                     |     |   |   |   |   |
| Basic                                                                  |   |                     | 297,088  |   |   | 53,963 |   |
| Diluted                                                                |   |                     | 297,802  |   |   | 53,963 |   |

----

|                                                        |   | ConvertibleCRA Shares |   | SpecialPreferredVoting Shares |   | Special Series A Shares |   | Common Shares |   | Treasury Shares |     |   AccumulatedOtherComprehensiveIncome/(loss) |    | Non-ControllingInterests |   | Total    |   | ComprehensiveIncome/(loss) |    | RedeemableSecurities |   |
|-------------------------------------------------------------|--------|-----------------------|--------|-------------------------------|--------|-------------------------|--------|---------------|--------|-----------------|----------|--------------------------------------------------------|---------|--------------------------|--------|----------|--------|----------------------------|---------|----------------------|--------|
|                                                        |   |                  |   |                          |   |                    |   | Shares        |   |            |     |                                                   | Shares  |                     |   |     |   |                       |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |                  |   |                          |   |                    |   |          |   |            |     |                                                   |    |                     |   |     |   |                       |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January 1, 2010                                             |   | $                     | (1,235 | )                             | $      | 127                     |   | --            |   | $               | --       |                                                   | 53,820  |                     | $      | (104,054 | )      | $                          | (65,351 | )                    | $      | (1,007,837 | ) | $ | 3,361,785 |   | $ | 2,183,435 |   | $ | -- |   | $ | 332,480 |   |
| Net income (loss)                                           |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | (24,825  | )      |                       | --      |                 |   | -- |   |   | (507,834 | ) |   | (532,659 | ) |   | (532,659 | ) |   | -- |   |
| Allocation of earnings                                      |   |                  | 32     |                          |   | --                      |   | --            |   |            | 59,101   |                                                   | --      |                     |   | (59,133  | )      |                       | --      |                 |   | -- |   |   | -- |   |   | -- |   |   | -- |   |   | -- |   |
| Unrealized gains (losses)                                   |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | --       |   |                       | --      |                 |   | 108,457 |   |   | 16,597 |   |   | 125,054 |   |   | 125,054 |   |   | -- |   |
| Share-based compensation                                    |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | 7,343   |                     |   | 2,237    |   |                       | --      |                 |   | -- |   |   | -- |   |   | 2,237 |   |   | -- |   |   | -- |   |
| Conversions or redemptions                                  |   |                  | --     |                          |   | --                      |   | (19,325       | )      |            | (105,581 | )                                                      | 290,138 |                     |   | 105,999  |   |                       | --      |                 |   | -- |   |   | (385 | ) |   | 33 |   |   | -- |   |   | -- |   |
| Fair value accretion                                        |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | (1,466   | )      |                       | --      |                 |   | -- |   |   | -- |   |   | (1,466 | ) |   | -- |   |   | 1,466 |   |
| Contributions                                               |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | --       |   |                       | --      |                 |   | -- |   |   | 158,080 |   |   | 158,080 |   |   | -- |   |   | -- |   |
| Issuance of and conversion to Special Series A shares       |   |                  | 1,203  |                          |   | --                      |   | 19,325        |   |            | 46,480   |                                                   | --      |                     |   | 286,231  |   |                       | --      |                 |   | -- |   |   | -- |   |   | 333,914 |   |   | -- |   |   | (321,484 | ) |
| Adoption of ASU 2009-17                                     |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | (55,123  | )      |                       | --      |                 |   | 994,594 |   |   | (321,024 | ) |   | 618,447 |   |   | -- |   |   | -- |   |
| Treasury shares                                             |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | (2,999  | )                        |   | --       |   |                       | (413    | )                    |   | -- |   |   | -- |   |   | (413 | ) |   | -- |   |   | -- |   |
| Net increase due to deconsolidation/sale                    |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | (1,756   | )      |                       | --      |                 |   | (16,383 | ) |   | 446,873 |   |   | 428,734 |   |   | -- |   |   | -- |   |
| Net increase due to newly consolidated general partnerships |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | --       |   |                       | --      |                 |   | -- |   |   | 14,862 |   |   | 14,862 |   |   | -- |   |   | -- |   |
| Distributions to non-controlling interests                  |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | --       |   |                       | --      |                 |   | -- |   |   | (24,120 | ) |   | (24,120 | ) |   | -- |   |   | -- |   |
| December 31, 2010                                           |   | $                     | --     |                          | $      | 127                     |   | --            |   | $               | --       |                                                   | 348,302 |                     | $      | 148,110  |   | $                          | (65,764 | )                    | $      | 78,831 |   | $ | 3,144,834 |   | $ | 3,306,138 |   | $ | (407,605 | ) | $ | 12,462 |   |
|                                                        |   | ConvertibleCRA Shares |   | SpecialPreferredVoting Shares |   | Special Series A Shares |   | Common Shares |   | Treasury Shares |     |  AccumulatedOtherComprehensiveIncome (loss)       |    | Non-ControllingInterests |   | Total    |   | ComprehensiveIncome/(loss) |    | RedeemableSecurities |   |
|                                                        |   |                  |   |                          |   |                    |   | Shares        |   |            |     |                                                   | Shares  |                     |   |     |   |                       |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |                  |   |                          |   |                    |   |          |   |            |     |                                                   |    |                     |   |     |   |                       |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January 1, 2009                                             |   | $                     | 3,144  |                          | $      | 131                     |   | --            |   | $               | --       |                                                   | 52,970  |                     | $      | 338,619  |   | $                          | (65,283 | )                    | $      | (1,144,122 | ) | $ | 4,055,547 |   | $ | 3,188,036 |   | $ | -- |   | $ | 326,379 |   |
| Net loss                                                    |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | (455,381 | )      |                       | --      |                 |   | -- |   |   | (2,729,272 | ) |   | (3,184,653 | ) |   | (3,184,653 | ) |   | -- |   |
| Allocation of earnings                                      |   |                  | (4,379 | )                             |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | 4,379    |   |                       | --      |                 |   | -- |   |   | -- |   |   | -- |   |   | -- |   |   | -- |   |
| Unrealized gains                                            |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | --       |   |                       | --      |                 |   | 136,285 |   |   | 1,580,512 |   |   | 1,716,797 |   |   | 1,716,797 |   |   | -- |   |
| Share-based compensation                                    |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | 1,206   |                     |   | 5,995    |   |                       | --      |                 |   | -- |   |   | -- |   |   | 5,995 |   |   | -- |   |   | -- |   |
| Conversions or redemptions                                  |   |                  | --     |                          |   | (4                      | )      | --            |   |            | --       |                                                   | 13      |                     |   | 1,572    |   |                       | --      |                 |   | -- |   |   | (1,468 | ) |   | 100 |   |   | -- |   |   | (145 | ) |
| Fair value accretion                                        |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | (6,246   | )      |                       | --      |                 |   | -- |   |   | -- |   |   | (6,246 | ) |   | -- |   |   | 6,246 |   |
| Contributions                                               |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | --       |   |                       | --      |                 |   | -- |   |   | 513,887 |   |   | 513,887 |   |   | -- |   |   | -- |   |
| Treasury shares                                             |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | (369    | )                        |   | --       |   |                       | (68     | )                    |   | -- |   |   | -- |   |   | (68 | ) |   | -- |   |   | -- |   |
| Purchase of non-controlling interest                        |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | 7,008    |   |                       | --      |                 |   | -- |   |   | (7,758 | ) |   | (750 | ) |   | -- |   |   | -- |   |
| Distributions to non-controlling interests                  |   |                  | --     |                          |   | --                      |   | --            |   |            | --       |                                                   | --      |                     |   | --       |   |                       | --      |                 |   | -- |   |   | (49,663 | ) |   | (49,663 | ) |   | -- |   |   | -- |   |
| December 31, 2009                                           |   | $                     | (1,235 | )                             | $      | 127                     |   | --            |   | $               | --       |                                                   | 53,820  |                     | $      | (104,054 | )      | $                          | (65,351 | )                    | $      | (1,007,837 | ) | $ | 3,361,785 |   | $ | 2,183,435 |   | $ | (1,467,856 | ) | $ | 332,480 |   |

----

|                                                                       |   | Years Ended December 31, |     |
|----------------------------------------------------------------------------|--------|--------------------------|----------|
|                                                                       |   | 2010                     |     | 2009 |   |
|                                                                       |   |                     |     |   |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                      |   |                     |     |   |   |   |   |
| Net loss                                                                   |   | $                        | (532,659 | ) | $ | (3,184,653 | ) |
| Adjustments to reconcile net loss to cash flows from operating activities: |   |                     |     |   |   |   |   |
| Non-cash loss from consolidated partnerships                               |   |                     | 463,893  |   |   | 2,671,654 |   |
| Gain from repayment or sale of investments                                 |   |                     | (4,070   | ) |   | (2,672 | ) |
| Gain on sale of discontinued operations                                    |   |                     | (20,500  | ) |   | -- |   |
| Gain on settlement of liabilities                                          |   |                     | (25,253  | ) |   | -- |   |
| Lease termination costs                                                    |   |                     | (48,044  | ) |   | 29,435 |   |
| Reserves for bad debts, net of reversals                                   |   |                     | 10,934   |   |   | 14,839 |   |
| Affordable Housing loss reserve                                            |   |                     | (50,600  | ) |   | 140,000 |   |
| Mortgage Banking allowance for risk-sharing obligations                    |   |                     | 10,002   |   |   | 11,103 |   |
| Loss on impairment of assets                                               |   |                     | 75,887   |   |   | 96,206 |   |
| Depreciation and amortization                                              |   |                     | 23,271   |   |   | 34,477 |   |
| Equity in losses of unconsolidated entities                                |   |                     | (220     | ) |   | 9,396 |   |
| Share-based compensation expense                                           |   |                     | 2,237    |   |   | 5,995 |   |
| Non-cash expenses relating to issuance of Special Series A Shares          |   |                     | 2,842    |   |   | -- |   |
| Non-cash interest expense, net                                             |   |                     | 14,861   |   |   | 5,474 |   |
| Other non-cash expense, net                                                |   |                     | 4,461    |   |   | (4,980 | ) |
| Write-off goodwill and intangible assets                                   |   |                     | 93,283   |   |   | 45,000 |   |
| Impact of interest rate derivatives                                        |   |                     | 735      |   |   | (19,263 | ) |
| Capitalization of mortgage servicing rights                                |   |                     | (15,797  | ) |   | (10,181 | ) |
| Changes in operating assets and liabilities:                               |   |                     |     |   |   |   |   |
| Mortgage loans held for sale                                               |   |                     | (46,911  | ) |   | 18,458 |   |
| Assumption fee                                                             |   |                     | 25,748   |   |   | -- |   |
| Deferred revenues                                                          |   |                     | (20,893  | ) |   | (23,624 | ) |
| Receivables                                                                |   |                     | (24,425  | ) |   | (10,163 | ) |
| Other assets                                                               |   |                     | 4,040    |   |   | 1,924 |   |
| Accounts payable, accrued expenses and other liabilities                   |   |                     | (10,777  | ) |   | (10,488 | ) |
| Changes in operating assets and liabilities of discontinued operations     |   |                     | 1,270    |   |   | 192,520 |   |
|                                                                       |   |                     |     |   |   |   |   |
| Net cash flow from operating activities                                    |   |                     | (66,685  | ) |   | 10,457 |   |
|                                                                       |   |                     |     |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                      |   |                     |     |   |   |   |   |
| Sale and repayment of available-for-sale securities                        |   |                     | 75,463   |   |   | 151,357 |   |
| Sale and repayments of mortgage loans held for investment                  |   |                     | 5,992    |   |   | 1,894 |   |
| Proceeds from sale of discontinued operations                              |   |                     | 37,795   |   |   | -- |   |
| Advances to partnerships                                                   |   |                     | (6,418   | ) |   | (3,550 | ) |
| Collection of advances to partnerships                                     |   |                     | 790      |   |   | 23,979 |   |
| Sale and repayment of other investments                                    |   |                     | --       |   |   | 7,157 |   |
| Acquisition, net of cash acquired                                          |   |                     | --       |   |   | 1,158 |   |
| Deferred investment acquisition cost                                       |   |                     | (102     | ) |   | (221 | ) |
| Decrease in restricted cash, escrows and other cash collateral             |   |                     | 7,023    |   |   | 40,620 |   |
| Acquisition of furniture, fixtures and leasehold improvements              |   |                     | (713     | ) |   | (1,156 | ) |
| Equity investments and other investing activities                          |   |                     | (503     | ) |   | 28,751 |   |
|                                                                       |   |                     |     |   |   |   |   |
| Net cash flow from investing activities                                    |   |                     | 119,327  |   |   | 249,989 |   |

----

|                                                                                 |   | Years Ended December 31, |    |
|--------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                 |   | 2010                     |    | 2009 |   |
|                                                                                 |   |                     |    |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                |   |                     |    |   |   |   |   |
| Repayments of financing arrangements                                                 |   |                     | --      |   |   | (11,321 | ) |
| Distributions to equity holders                                                      |   |                     | (6,225  | ) |   | (6,867 | ) |
| Repayments of term loan                                                              |   |                     | (23,818 | ) |   | (68,422 | ) |
| Proceeds from CFin Holdings Credit Facility                                          |   |                     | 20,000  |   |   | -- |   |
| Increase in mortgage loan warehouse facility and ASAP facility                       |   |                     | 47,009  |   |   | (18,416 | ) |
| Decrease in other notes payable                                                      |   |                     | (1,500  | ) |   | (18,000 | ) |
| Repurchase of preferred shares of subsidiary and non-controlling interest            |   |                     | (73,500 | ) |   | (145,103 | ) |
| Proceeds from Special Series A Preferred Shares, net of offering costs               |   |                     | 9,558   |   |   | -- |   |
| Deferred financing and equity offering costs                                         |   |                     | (278    | ) |   | (468 | ) |
|                                                                                 |   |                     |    |   |   |   |   |
| Net cash flow from financing activities                                              |   |                     | (28,754 | ) |   | (268,597 | ) |
|                                                                                 |   |                     |    |   |   |   |   |
| Net increase in cash and cash equivalents                                            |   |                     | 23,888  |   |   | (8,151 | ) |
| Cash and cash equivalents at the beginning of the period                             |   |                     | 95,728  |   |   | 103,879 |   |
|                                                                                 |   |                     |    |   |   |   |   |
| Cash and cash equivalents at the end of the period                                   |   |                     | 119,616 |   |   | 95,728 |   |
| Less cash and cash equivalents of discontinued operations                            |   |                     | 18      |   |   | 6,875 |   |
| Cash and cash equivalents of continuing operations at end of period                  |   | $                        | 119,598 |   | $ | 88,853 |   |
|                                                                                 |   |                     |    |   |   |   |   |
| Supplemental Information:                                                            |   |                     |    |   |   |   |   |
| Interest paid                                                                        |   |                     | 110,793 |   |   | 34,183 |   |
| Taxes paid                                                                           |   |                     | 1,781   |   |   | 2,808 |   |
|                                                                                 |   |                     |    |   |   |   |   |
| Non-cash investing and financing activities:                                         |   |                     |    |   |   |   |   |
| Net change in re-securitized mortgage revenue bonds:                                 |   |                     |    |   |   |   |   |
| Secured financing liability                                                          |   | $                        | 62,926  |   | $ | 236,539 |   |
| Mortgage revenue bonds                                                               |   | $                        | (76,740 | ) | $ | (238,045 | ) |
| Increase in Series B Freddie Mac Certificates                                        |   | $                        | (912    | ) | $ | -- |   |
| Decrease in Series A-1 Freddie Mac Certificates                                      |   | $                        | 14,726  |   | $ | 1,506 |   |
| Re-purchase of Series A-1 Freddie Mac Certificates                                   |   | $                        | (18,593 | ) | $ | -- |   |
| Conversion of redeemable securities to Special Series A Shares (see Notes 20 and 21) |   | $                        | 321,484 |   | $ | -- |   |
| Treasury stock purchase via employee withholding                                     |   | $                        | 413     |   | $ | 68 |   |
| Share grants issued                                                                  |   | $                        | --      |   | $ | 1,299 |   |
| Debt assumed by third parties (see Note 15)                                          |   | $                        | 65,000  |   | $ | -- |   |
| Issuance of Special Series A Shares                                                  |   | $                        | 2,842   |   | $ | -- |   |

----

| ·   | sold our Portfolio Management business and the portion of the Commercial Real Estate Group that was not affiliated with loan originations (see Note 3); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | amended and restructured our senior credit facility (see Note 15); |
|--------------------|--------------------------------------------------------------------|

| ·   | restructured various components of our equity and issued a new series of shares (see Note 21); |
|--------------------|------------------------------------------------------------------------------------------------|

| ·   | restructured our credit intermediation agreements (see Note 32); and |
|--------------------|----------------------------------------------------------------------|

| ·   | settled the majority of our unsecured liabilities (see Note 17). |
|--------------------|------------------------------------------------------------------|

----

| ·   | the determination of fair value for investments, goodwill and intangible assets, mortgage servicing rights, and any impairment thereon; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | accounting for income taxes, including the potential outcome of uncertain tax positions; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | accrual for loss contingencies; and |
|--------------------|-------------------------------------|

| ·   | determination of consolidated entities. |
|--------------------|-----------------------------------------|

----

| ·   | estimating the default and prepayment rates of the mortgage revenue bonds in the managed portfolio, which estimates are based on our historical experience and industry studies related to properties comparable to those underlying the bonds; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | estimating the extent to which other parties involved in our planned restructuring of the bonds underlying the certificates will participate and the timing of that restructuring; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | applying an appropriate discount rate, which we consider in comparison to comparable residual interests, along with consideration of the tax-exempt nature of the associated income. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | the present value of expected future cash flows discounted at the loan’s effective interest rate; |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | the loan’s observable market price; or |
|--------------------|----------------------------------------------|

| ·   | the fair value of the collateral if the loan is collateral-dependent. |
|--------------------|-----------------------------------------------------------------------|

----

| ·   | determining the fair value of the asset retained when the associated mortgage is sold and in subsequent reporting periods, including the factors noted above; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | estimating the appropriate proportion and period for amortizing the asset. |
|--------------------|----------------------------------------------------------------------------|

----

----

| i.)   | Organization, offering and acquisition allowance fees are for reimbursement of costs we incur for organizing tax credit investment funds and for providing assistance in acquiring the properties to be included in the funds.  We recognize the organization, offering and acquisition allowance fee when the investment funds acquire properties.  The related expenses are included in general and administrative expenses. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ii.)   | Property acquisition fees are for services we perform for the tax credit investment funds to acquire interests in property partnerships.  We recognize these fees when the investor equity is invested and as the properties’ limited partnership interests are acquired by the investment fund. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| iii.)   | Partnership management fees are for maintaining the books and records of tax credit investment funds, including requisite investor reporting.  We recognize these fees over the five-year contractual service period following the initial closing of the fund. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iv.)   | Construction service fees from borrowers for servicing mortgage revenue bonds during the construction period are deferred and amortized into other income over the estimated construction period. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| v.)   | Administration fees charged to the property partnerships or to other entities we manage are recorded as the payments are received due to the uncertainty of collectability. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| vi.)   | Asset management fees from tax credit investment funds are recorded based on a percentage of each investment fund’s invested assets earned for monitoring the acquired property interests and to ensure that their development, leasing and operations comply with LIHTC or other tax credit requirements and are recognized when collectability is reasonably assured. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| vii.)   | Bond acquisition fees are paid by borrowers when we acquire mortgage revenue bonds.  These fees are recognized as yield adjustments in mortgage revenue bond interest income if we retain the bond or recognized immediately if we were to sell the bond. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | preferred dividends (including cumulative dividends in arrears); |
|--------------------|------------------------------------------------------------------|

| ·   | dividends to the holders of Participating Securities; and |
|--------------------|-----------------------------------------------------------|

| ·   | charges to equity for the difference between the carrying amounts of redeemable securities and the redemption prices of those shares. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.  ASU 2010-06 revises two disclosure requirements concerning fair value measurements and clarifies two others. It requires separate presentation of significant transfers into and out of Levels 1 and 2 of the fair value hierarchy and disclosure of the reasons for such transfers.  It also requires the presentation of purchases, sales, issuances and settlements within Level 3 on a gross basis rather than a net basis.  The amendments also clarify that disclosures should be disaggregated by class of asset or liability and that disclosures about inputs and valuation techniques should be provided for both recurring and non-recurring fair value measurements.  The Company’s disclosures regarding fair value measurements are presented in Note 5 – Fair Value Disclosures.  These new disclosure requirements first applied to the Company in our financial statements for the period ended March 31, 2010, except for the requirement concerning gross presentation of Level 3 activity, which is effective for the financial statements for the period ending March 31, 2011.  The gross presentation of Level 3 activity disclosure requirements will impact our disclosure.  All other disclosure requirements have no material impact on the Company’s disclosures. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In February 2010, the FASB issued ASU 2010-09, Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements.  The amendments remove the requirement for an SEC registrant to disclose the date through which subsequent events were evaluated.  This ASU became effective upon issuance.  Removal of the disclosure requirement has no material effect on the nature or timing of subsequent events evaluations performed by the Company. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In July 2010, the FASB issued ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The update requires companies to provide more disclosures about the credit quality of their financing receivables, which include loans, lease receivables, and other long-term receivables, and the credit allowances held against them. ASU 2010-20 is effective for interim and annual reporting periods ending on and after December 15, 2010. The adoption of ASU 2010-20 had no material impact on our consolidated financial statements. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 (which was codified and superseded by ASU 2009-16, Transfers and Servicing), which, among other provisions, eliminated the concept of Qualified Special Purpose Entities (“QSPEs”).  Simultaneously, the FASB issued Statement No. 167, Amendments to FASB Interpretation No. 46(R) (which was codified and superseded by ASU 2009-17, Consolidation), which revised the consolidation model with respect to Variable Interest Entities (“VIEs”). |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | our co-investment and management interests in, and a loan receivable from, the CMBS Fund and High-Yield Debt Fund Partnerships and our co-investment and management interests in Centerline Urban Capital LLC (“CUC”); |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our CMBS and retained-CMBS certificate investments; |
|--------------------|-----------------------------------------------------|

| ·   | our loan to American Mortgage Acceptance Corporation (“AMAC”); |
|--------------------|----------------------------------------------------------------------------|

| ·   | our interests pursuant to collateral management agreements with respect to two collateralized debt obligations (“CDOs”) in which the High-Yield Debt Fund Partnership invests and AMAC’s CDO; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | servicing assets with respect to CMBS re-securitization transactions; and |
|--------------------|---------------------------------------------------------------------------|

| ·   | our interest in Centerline Servicing LLC (formerly known as Centerline Servicing Inc. (“CSI”), and now known as C-III Asset Management LLC)) a subsidiary that engages in the business of servicing and special servicing, among others. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (in thousands)                                           |   | December 31,2010 |   | December 31,2009 |   |
|----------------------------------------------------------|--------|------------------|--------|------------------|--------|
|                                                     |
| ASSETS:                                                  |
|                                                     |   |             |   |             |   |   |   |
| Cash and cash equivalents                                |   | $                | 18     |             | $      | 6,875 |   |
| Investments                                              |   |             | --     |             |   | 9,455 |   |
| Investments in and loans to affiliates, net              |   |             | --     |             |   | 7,818 |   |
| Goodwill and intangible assets, net                      |   |             | --     |             |   | 13,361 |   |
| Deferred costs and other assets, net                     |   |             | --     |             |   | 8,794 |   |
| Consolidated partnerships:                               |   |             |   |             |   |   |   |
| Investments                                              |   |             | --     |             |   | 464,442 |   |
| Land, buildings and improvements, net                    |   |             | --     |             |   | 79,679 |   |
| Other assets                                             |   |             | --     |             |   | 63,473 |   |
|                                                     |   |             |   |             |   |   |   |
| Total assets                                             |   | $                | 18     |             | $      | 653,897 |   |
|                                                     |
| LIABILITIES:                                             |
|                                                     |   |             |   |             |   |   |   |
| Liabilities:                                             |   |             |   |             |   |   |   |
| Notes payable                                            |   | $                | --     |             | $      | 3,226 |   |
| Accounts payable, accrued expenses and other liabilities |   |             | --     |             |   | 3,152 |   |
| Consolidated partnerships                                |   |             | --     |             |   | 1,581,676 |   |
|                                                     |   |             |   |             |   |   |   |
| Total liabilities                                        |   |             | --     |             |   | 1,588,054 |   |
|                                                     |   |             |   |             |   |   |   |
| Net assets (liabilities)                                 |   | $                | 18     |             | $      | (934,157 | ) |

----

|                                                                                                                                                                                                                                                                                                                 |   | Year Ended December 31, |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|
| (in thousands)                                                                                                                                                                                                                                                                                                       |   | 2010                    |       | 2009 |   |
|                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |
| Operating revenues                                                                                                                                                                                                                                                                                                   |   | $                       | 1,096,271  |   | $ | 267,030 |   |
| Operating expenses                                                                                                                                                                                                                                                                                                   |   |                    | (1,046,726 | ) |   | (2,334,387 | ) |
|                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |
| Operating income (loss) from discontinued operations before income tax provision                                                                                                                                                                                                                                     |   |                    | 49,545     | (1) |   | (2,067,357 | ) |
|                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |
| Gain from liquidation of fund partnership                                                                                                                                                                                                                                                                            |   |                    | 91,764     | (2) |   | -- |   |
|                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                 |   |                    | 141,309    |   |   | (2,067,357 | ) |
|                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |
| Gain on sale of discontinued operations                                                                                                                                                                                                                                                                              |   |                    | 20,500     |   |   | -- |   |
|                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |
| Income tax provision                                                                                                                                                                                                                                                                                                 |   |                    | (531       | ) |   | (816 | ) |
|                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |
| Net income (loss) from discontinued operations                                                                                                                                                                                                                                                                       |   |                    | 161,278    |   |   | (2,068,173 | ) |
|                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |
| Net (income) loss attributed to non-controlling interests – discontinued operations                                                                                                                                                                                                                            |   |                    | (89,918    | ) |   | 1,815,843 |   |
|                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |
| Net income (loss) attributed to Centerline Holding Company shareholders – discontinued operations                                                                                                                                                                                                              |   | $                       | 71,360     |   | $ | (252,330 | ) |
|                                                                                                                                                                                                                                                                                                                 |   |
| (1)   Comprised of an approximately $64.0 million reversal of loan loss reserves, established pursuant to our ASU 2009-17 adoption, offset by losses from operating activity.(2)   Principally comprised of non-cash reversals of impairments recorded on liquidated CMBS investments. |   |

| ·   | a significant decline in our cash flow from operations due to decreased transaction related revenues, primarily due to a reduction in the number of new Affordable Housing funds we have sponsored as well as a significant decline in our cash flow from the Series B Freddie Mac Certificates due to the credit deterioration of the underlying assets; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a sharp decline in our common share price has made obtaining equity capital through equity offerings extremely difficult and uneconomical for us; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the lower level of debt financing available in the marketplace. |
|--------------------|-----------------------------------------------------------------|

----

| ·   | instituting measures to reduce general and administrative expenses; |
|--------------------|---------------------------------------------------------------------|

| ·   | continuing to sell and/or monetize investments that do not meet our long-term investment criteria; |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | increasing revenue through increased volume of mortgage originations; and |
|--------------------|---------------------------------------------------------------------------|

| ·   | reducing our risk of loss by continuing to improve our asset management infrastructure. |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 2 inputs utilize other-than-quoted prices that are observable, either directly or indirectly.  Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3 inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (in thousands)                             |   | Level 1 |      |  Level 2 |   |  Level 3 |   | Balanceas ofDecember 31,2010 |    |
|--------------------------------------------|--------|---------|-----------|---------------|--------|---------------|--------|------------------------------|---------|
|                                       |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Measured on a recurring basis:             |   |    |      |          |   |          |   |                         |    |   |   |   |   |
|                                       |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Assets                                     |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Available-for-sale investments:            |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Freddie Mac Certificates:                  |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Series A-1                                 |   | $       | --        |          | $      | --            |   | $                            | 129,406 |   | $ | 129,406 |   |
| Series B                                   |   |    | --        |          |   | --            |   |                         | 63,215  |   |   | 63,215 |   |
| Mortgage revenue bonds                     |   |    | --        |          |   | --            |   |                         | 292,659 |   |   | 292,659 |   |
| Total available-for-sale investments       |   | $       |   -- |          | $      |   --     |   | $                            | 485,280 |   | $ | 485,280 |   |
|                                       |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Interest rate swaps                        |   | $       | --        |          | $      | 742           |   | $                            | --      |   | $ | 742 |   |
|                                       |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Liabilities                                |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Interest rate swaps                        |   | $       | --        |          | $      | 18,831        |   | $                            | --      |   | $ | 18,831 |   |
|                                       |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Measured on a non-recurring basis:         |   |    |      |          |   |          |   |                         |    |   |   |   |   |
|                                       |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Assets                                     |   |    |      |          |   |          |   |                         |    |   |   |   |   |
| Mortgage loans held-for-sale               |   | $       | --        |          | $      | 75,365        |   | $                            | --      |   | $ | 75,365 |   |
| Mortgage servicing rights                  |   |    | --        |          |   | --            |   |                         | 65,614  |   |   | 65,614 |   |
| Other intangible assets(1)                 |   |    | --        |          |   | --            |   |                         | 9,494   |   |   | 9,494 |   |
|                                       |   | $       | --        |          | $      | 75,365        |   | $                            | 75,108  |   | $ | 150,473 |   |
|                                       |   |
| (1)   Non-financial assets. |   |

----

| (in thousands)                                      |   | Level 1 |   |  Level 2 |   |  Level 3 |   | Balanceas ofDecember 31,2009 |    |
|-----------------------------------------------------|--------|---------|--------|---------------|--------|---------------|--------|------------------------------|---------|
|                                                |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Measured on a recurring basis:                      |   |    |   |          |   |          |   |                         |    |   |   |   |   |
|                                                |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Assets                                              |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Available-for-sale investments:                     |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Freddie Mac Certificates:                           |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Series A-1                                          |   | $       | --     |          | $      | --            |   | $                            | 183,093 |   | $ | 183,093 |   |
| Series B                                            |   |    | --     |          |   | --            |   |                         | 61,003  |   |   | 61,003 |   |
| Mortgage revenue bonds                              |   |    | --     |          |   | --            |   |                         | 245,671 |   |   | 245,671 |   |
| Total available-for-sale investments                |   | $       | --     |          | $      | --            |   | $                            | 489,767 |   | $ | 489,767 |   |
|                                                |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Interest rate swaps                                 |   | $       | --     |          | $      | 612           |   | $                            | --      |   | $ | 612 |   |
|                                                |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Liabilities                                         |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Interest rate swaps                                 |   | $       | --     |          | $      | 17,964        |   | $                            | --      |   | $ | 17,964 |   |
|                                                |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Measured on a non-recurring basis:                  |   |    |   |          |   |          |   |                         |    |   |   |   |   |
|                                                |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Assets                                              |   |    |   |          |   |          |   |                         |    |   |   |   |   |
| Mortgage loans held-for-sale                        |   | $       | --     |          | $      | 28,454        |   | $                            | --      |   | $ | 28,454 |   |
| Mortgage loans held for investment – impaired |   |    | --     |          |   | 90            |   |                         | --      |   |   | 90 |   |
| Mortgage servicing rights                           |   |    | --     |          |   | --            |   |                         | 60,423  |   |   | 60,423 |   |
| Goodwill(1)                                         |   |    | --     |          |   | --            |   |                         | 93,283  |   |   | 93,283 |   |
| Other intangible assets(1)                          |   |    | --     |          |   | --            |   |                         | 17,338  |   |   | 17,338 |   |
|                                                |   |    |   |          |   |          |   |                         |    |   |   |   |   |
|                                                |   | $       | --     |          | $      | 28,544        |   | $                            | 171,044 |   | $ | 199,588 |   |
|                                                |   |
| (1)   Non-financial assets.          |   |

----

|                                                                                                                                                                           |   | Year Ended December 31, 2010            |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                                                                                                                                           |   |                                    |    |   |   |   |   |   |   |
| (in thousands)                                                                                                                                                                 |   |  Series A-1Freddie MacCertificates |    | Series BFreddie MacCertificates |   | Mortgagerevenuebonds |   | Total |   |
|                                                                                                                                                                           |   |                                    |    |   |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2010                                                                                                                                                     |   | $                                       | 183,093 |   | $ | 61,003 |   | $ | 245,671 |   | $ | 489,767 |   |
| Total realized and unrealized gains or (losses):                                                                                                                               |   |                                    |    |   |   |   |   |   |   |   |   |   |   |
| Realized gain (losses) recorded in Consolidated Statement of Operations                                                                                                        |   |                                    | --      |   |   | (77,865 | )(2) |   | 1,741 | (3) |   | (76,124 | ) |
| Unrealized gain (loss) recorded in other comprehensive income (loss)(3)                                                                                                        |   |                                    | (1,474  | ) |   | 93,839 |   |   | 1,209 |   |   | 93,574 |   |
| Amortization or accretion                                                                                                                                                      |   |                                    | --      |   |   | (13,285 | ) |   | 220 |   |   | (13,065 | ) |
| Purchases, issuances, settlements and other adjustments(4)                                                                                                                     |   |                                    | (52,213 | ) |   | (477 | ) |   | 43,818 |   |   | (8,872 | ) |
| Balance at December 31, 2010                                                                                                                                                   |   | $                                       | 129,406 |   | $ | 63,215 |   | $ | 292,659 |   | $ | 485,280 |   |
|                                                                                                                                                                           |   |                                    |    |   |   |   |   |   |   |   |   |   |   |
| Amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2010 |   | $                                       | --      |   | $ | (77,865 | )(2) | $ | -- |   | $ | (77,865 | ) |

|                                                                                                                                                                              |   | Year Ended December 31, 2009            |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|----------|
|                                                                                                                                                                              |   |                                    |     |   |   |   |   |   |   |
| (in thousands)                                                                                                                                                                    |   |  Series A-1Freddie MacCertificates |     | Series BFreddie MacCertificates |   | MortgageRevenueBonds |   | Total |   |
|                                                                                                                                                                              |   |                                    |     |   |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2009                                                                                                                                                        |   | $                                       | 335,047  |   | $ | 123,122 |   | $ | 69,217 |   | $ | 527,386 |   |
| Total realized and unrealized gains or (losses):                                                                                                                                  |   |                                    |     |   |   |   |   |   |   |   |   |   |   |
| Realized gain (losses) recorded in Consolidated Statement of Operations                                                                                                           |   |                                    | --       |   |   | (44,830 | )(1) |   | (7,955 | )(2) |   | (52,785 | ) |
| Unrealized gain (loss) recorded in other comprehensive income (loss)(3)                                                                                                           |   |                                    | (5,448   | ) |   | (8,910 | ) |   | 8,880 |   |   | (5,478 | ) |
| Amortization or accretion                                                                                                                                                         |   |                                    | --       |   |   | (9,069 | ) |   | 989 |   |   | (8,080 | ) |
| Purchases, issuances, settlements and other adjustments(4)                                                                                                                        |   |                                    | (146,506 | ) |   | 690 |   |   | 174,540 |   |   | 28,724 |   |
| Balance at December 31, 2009                                                                                                                                                      |   | $                                       | 183,093  |   | $ | 61,003 |   | $ | 245,671 |   | $ | 489,767 |   |
|                                                                                                                                                                              |   |                                    |     |   |   |   |   |   |   |   |   |   |   |
| Amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2009(1) |   | $                                       | --       |   | $ | (44,830 | ) | $ | (198 | ) | $ | (45,028 | ) |

| (1) | Recorded in “Loss on impairment of assets” in the Consolidated Statement of Operations (see also Note 24). |
|-----|------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes amounts recorded in “Gain (loss) from repayment or sale of investments, net” and in “Loss on impairment of assets” (Note 24) in the Consolidated Statement of Operations. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Net of amounts reclassified to net loss. |
|-----|------------------------------------------|

| (4) | Principally related to sale and re-recognition transactions described in Note 8. |
|-----|----------------------------------------------------------------------------------|

----

| C. | Financial Assets and Liabilities of Consolidated Partnerships |
|----|---------------------------------------------------------------|

| (in thousands)                       |   | Level 1 |   |   | Level 2 |   |   | Balanceas ofDecember 31,2010 |   |
|--------------------------------------|--------|---------|--------|--------|---------|--------|--------|------------------------------|--------|
|                                 |   |    |   |   |    |   |   |                         |   |
| Measured on a recurring basis:       |   |    |   |   |    |   |   |                         |   |
|                                 |   |    |   |   |    |   |   |                         |   |
| Assets                               |   |    |   |   |    |   |   |                         |   |
| Available-for-sale investments:      |   |    |   |   |    |   |   |                         |   |
| Corporate bonds                      |   | $       | --     |   |    | $      | --     |                         |   | $ | -- |   |
| Total available-for-sale investments |   | $       | --     |   |    | $      | --     |                         |   | $ | -- |   |

| (in thousands)                       |   | Level 1 |   |   | Level 2 |   |   | Balanceas ofDecember 31,2009 |   |
|--------------------------------------|--------|---------|--------|--------|---------|--------|--------|------------------------------|--------|
|                                 |   |    |   |   |    |   |   |                         |   |
| Measured on a recurring basis:       |   |    |   |   |    |   |   |                         |   |
|                                 |   |    |   |   |    |   |   |                         |   |
| Assets                               |   |    |   |   |    |   |   |                         |   |
| Available-for-sale investments:      |   |    |   |   |    |   |   |                         |   |
| Corporate bonds                      |   | $       | --     |   |    | $      | 5,109  |                         |   | $ | 5,109 |   |
| Total available-for-sale investments |   | $       | --     |   |    | $      | 5,109  |                         |   | $ | 5,109 |   |

| D. | Assets and Liabilities Not Measured at Fair Value |
|----|---------------------------------------------------|

| Mortgage loans held for investment and other investments         | Fair value is determined as described in Note 2.                                                                                                                                                                                                                |
|------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                             |                                                                                                                                                                                                                                                            |
| Financing arrangements and secured financing                     | Fair value is estimated using either quoted market prices or discounted cash flow analyses based on our current borrowing rates for similar types of borrowing arrangements, which reflect our current credit standing.                                         |
|                                                             |                                                                                                                                                                                                                                                            |
| Preferred shares of subsidiary (subject to mandatory repurchase) | Fair value is determined as described for Series A-1 Freddie Mac certificates in Note 2 with the exception of the Series A-1 Certificates which were acquired by Guaranteed Holding LLC as the preferred shares are economically defeased by those investments. |

----

|                                                             |   | December 31, 2010 |    | December 31, 2009 |   |
|------------------------------------------------------------------|--------|-------------------|---------|-------------------|--------|
| (in thousands)                                                   |   | CarryingValue     |    | Fair Value        |   | CarryingValue |   | Fair Value |   |
|                                                             |   |              |    |              |   |   |   |   |   |   |   |   |   |
| Mortgage loans held for investment                               |   | $                 | 1,405   |              | $      | 1,405 |   | $ | 7,540 |   | $ | 7,540 |   |
| Other investments                                                |   |              | 502     |              |   | 191 |   |   | 1,060 |   |   | 2,328 |   |
| Financing arrangements and secured financing                     |   |              | 665,875 |              |   | 595,163 |   |   | 585,528 |   |   | 484,299 |   |
| Preferred shares of subsidiary (subject to mandatory repurchase) |   |              | 55,000  |              |   | 62,744 |   |   | 128,500 |   |   | 139,850 |   |
|                                                             |   |              |    |              |   |   |   |   |   |   |   |   |   |
| Consolidated Partnerships:                                       |   |              |    |              |   |   |   |   |   |   |   |   |   |
| Fixed-rate notes payable                                         |   |              | 137,054 |              |   | 88,126 |   |   | 155,810 |   |   | 98,259 |   |

| ·   | providing asset management and fund management services; |
|--------------------|----------------------------------------------------------|

| ·   | acting as general partner; |
|--------------------|----------------------------|

| ·   | underwriting and acquiring assets on behalf of the funds; |
|--------------------|-----------------------------------------------------------|

| ·   | on occasion, warehousing investments on our balance sheet and selling them to the fund; and |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | disposing of fund assets. |
|--------------------|---------------------------|

----

| Collateral                                                            |   | Balance Sheet Classification                                                     |   | CarryingAmount ofCollateral atDecember 31,2010(in thousands) |    | Associated Debt Facility/Liability |
|-----------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|------------------------------------|
|                                                                  |   |                                                                             |   |                                                         |    |                               |   |
| Cash at Centerline Mortgage Capital Inc.                              |   | Restricted cash                                                                  |   | $                                                            | 10,906  |                               | Mortgage loan loss sharing agreements(Note 32) |
|                                                                  |   |                                                                             |   |                                                         |    |                               |   |
| Cash at Centerline Financial LLC                                      |   | Cash and cash equivalents                                                        |   | $                                                            | 67,577  |                               | Affordable Housing yield transactions (Note 32)and Centerline Financial LLC undrawn credit facility (Note 15)(1) |
|                                                                  |   |                                                                             |   |                                                         |    |                               |   |
| Cash at Centerline Financial Holdings (“CFin Holdings”)   |   | Cash and cash equivalents                                                        |   | $                                                            | 27,555  |                               | CFin Holdings credit facilities (Note 15)(2) |
|                                                                  |   |                                                                             |   |                                                         |    |                               |   |
| Cash at Centerline Guaranteed Holdings                                |   | Cash and cash equivalents                                                        |   | $                                                            | 55      |                               | Affordable Housing yield transactions (Note 32) |
|                                                                  |   |                                                                             |   |                                                         |    |                               |   |
| Series A-1 Freddie Mac Certificates                                   |   | Investments – available-for-sale – Freddie Mac certificates (Note 8) |   | $                                                            | 111,017 |                               | Preferred shares of subsidiary(3) (Notes 18 and 22) |
|                                                                  |   |                                                                             |   |                                                         |    |                               |   |
| Series A-1 Freddie Mac Certificates of Centerline Guaranteed Holdings |   | Investments – available-for-sale – Freddie Mac certificates (Note 8) |   | $                                                            | 18,389  |                               | Affordable Housing yield transactions (Note 32) |
|                                                                  |   |                                                                             |   |                                                         |    |                               |   |
| Mortgage loans                                                        |   | Other investments – mortgage loans held for sale (Note 10)                 |   | $                                                            | 75,365  |                               | Mortgage Banking committed warehouse facility/Multifamily ASAP facility (Note 15) |
|                                                                  |   |                                                                             |   |                                                         |    |                               |   |
| Cash collateral posted with counterparties                            |   | Deferred costs and other assets (Note 13)                                        |   | $                                                            | 46,327  |                               | Affordable Housing yield transactions (Note 32) |

| (1) | These assets are subject to a priority lien related to the Affordable Housing yield transaction and a subordinated lien related to the Centerline Financial LLC undrawn credit facility. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Borrowings under the CFin Holdings’ Credit Facilities are secured by a first priority lien on substantially all of CFin Holdings’ assets including its investment in subsidiaries, fee receivable, deferred costs and derivative instruments. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | While not collateral, these assets economically defease the preferred shares of subsidiary. |
|-----|---------------------------------------------------------------------------------------------|

----

|                      |   | December 31, |    |
|---------------------------|--------|--------------|---------|
| (in thousands)            |   | 2010         |    |   | 2009 |   |
|                      |   |         |    |   |   |   |
| Freddie Mac Certificates: |   |         |    |   |   |   |
| Series A-1                |   | $            | 129,406 |   |   | $ | 183,093 |   |
| Series B                  |   |         | 63,215  |   |   |   | 61,003 |   |
| Mortgage revenue bonds    |   |         | 292,659 |   |   |   | 245,671 |   |
|                      |   |         |    |   |   |   |   |   |
| Total                     |   | $            | 485,280 |   |   | $ | 489,767 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | December 31, |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
| (in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2010         |    | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         |    |   |   |   |   |
| Amortized cost basis                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $            | 177,592 |   | $ | 232,500 |   |
| Gross unrealized gains                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         | 17,865  |   |   | 18,866 |   |
| Fair value                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |         | 195,457 |   |   | 251,366 |   |
| Less: eliminations(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         | (66,051 | ) |   | (68,273 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         |    |   |   |   |   |
| Consolidated fair value                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $            | 129,406 |   | $ | 183,093 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (1)   A portion of the Series A-1 Certificates relate to re-securitized mortgage revenue bonds that are not reflected as sold for GAAP purposes.  Accordingly, that portion is eliminated in consolidation.  The change from December 31, 2009 resulted from the re-recognition of twenty mortgage revenue bonds, sale or sale treatment of six mortgage revenue bonds, and fluctuations due to changes in the fair value of the asset. |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                 |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
| (in thousands)                                                                                                                                                                                                                                                                                                                                                                                       |   | 2010         |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |   |   |   |   |   |
| Amortized cost basis(1)                                                                                                                                                                                                                                                                                                                                                                              |   | $            | 42,021 |   | $ | 137,974 |   |
| Gross unrealized losses(1)                                                                                                                                                                                                                                                                                                                                                                           |   |         | (6,067 | ) |   | (64,142 | ) |
| Subtotal/fair value                                                                                                                                                                                                                                                                                                                                                                                  |   |         | 35,954 |   |   | 73,832 |   |
| Eliminations(2)                                                                                                                                                                                                                                                                                                                                                                                      |   |         | 27,261 |   |   | (12,829 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |   |   |   |   |   |
| Consolidated fair value                                                                                                                                                                                                                                                                                                                                                                              |   | $            | 63,215 |   | $ | 61,003 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| (1)   The unrealized losses presented above do not include cumulative impairments of $130.8 million at December 31, 2010 and $52.8 million at December 31, 2009, which reflect losses due to credit deterioration of the underlying assets.  Amortized cost is shown net of these amounts (see Note 24).                                                                         |   |
| (2)   A portion of the Series B Certificates relates to re-securitized mortgage revenue bonds that were not reflected as sold.  Accordingly, that portion is eliminated in consolidation.  The change from December 31, 2009 resulted from fluctuations due to changes in the fair value of the asset and the sale or sale treatment of twelve mortgage revenue bonds. |   |

|                           |   | December 31, |        |
|--------------------------------|--------|--------------|-------------|
|                           |   | 2010         |        | 2009 |   |
|                           |   |         |        |   |   |
| Weighted average discount rate |   | 26.0         | %           | 27.5 | % |
| Constant prepayment rate       |   | 90.0         | %           | 90.0 | % |
| Weighted average life          |   | 9.1          |  years | 10.1 |  years |
| Constant default rate          |   | 2.0          | %           | 2.0 | % |
| Default severity rate          |   | 21.0         | %           | 21.0 | % |

----

| (in thousands)                                          |   | December 31, 2010 |   |
|---------------------------------------------------------|--------|-------------------|--------|
|                                                    |   |              |   |   |
| Fair value of Freddie Mac B Certificates at December 31 |   | $                 | 63,215 |   |
|                                                    |   |              |   |   |
| Constant prepayment rate:                               |   |              |   |   |
| Fair value after impact of 5% increase                  |   |              | 62,980 |   |
| Fair value after impact of 10% increase                 |   |              | 62,206 |   |
|                                                    |   |              |   |   |
| Discount rate:                                          |   |              |   |   |
| Fair value after impact of 10% increase                 |   |              | 48,291 |   |
| Fair value after impact of 20% increase                 |   |              | 39,080 |   |
|                                                    |   |              |   |   |
| Constant default rate:                                  |   |              |   |   |
| Fair value after impact of 1% increase                  |   |              | 57,149 |   |
| Fair value after impact of 2% increase                  |   |              | 51,364 |   |
|                                                    |   |              |   |   |
| Default severity rate:                                  |   |              |   |   |
| Fair value after impact of 5% increase                  |   |              | 61,846 |   |
| Fair value after impact of 10% increase                 |   |              | 60,476 |   |

----

|                                                                                  |   | December 31, |    |
|---------------------------------------------------------------------------------------|--------|--------------|---------|
| (in thousands)                                                                        |   | 2010         |    |   | 2009 |   |
|                                                                                  |   |         |    |   |   |   |
| Securitized:                                                                          |   |         |    |   |   |   |
| Included in December 2007 re-securitization transaction and accounted for as financed |   | $            | 289,614 |   |   | $ | 242,484 |   |
| Not securitized                                                                       |   |         | 3,045   |   |   |   | 3,187 |   |
|                                                                                  |   |         |    |   |   |   |   |   |
| Total at fair value                                                                   |   | $            | 292,659 |   |   | $ | 245,671 |   |

|                   |   |           |   | Face Amount of Bond(1) |    | Fair Value atDecember 31, 2010 |   |   |   |
|------------------------|--------|----------------|--------|------------------------|---------|--------------------------------|--------|--------|--------|
| (dollars in thousands) |   | Number ofBonds |   | Amount                 |    | % of Total                     |   | Amount |   | % of Total |   | CurrentStatedInterest Rate |   |
|                   |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| By Property Status:    |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| Stabilized             |   | 20             |   | $                      | 151,203 |                           | 36.4   | %      | $      | 104,255 |   | 35.6 | % | 6.9 | % |
| Lease-up               |   | 26             |   |                   | 250,527 |                           | 60.1   |   |   | 181,193 |   | 61.9 |   | 6.2 |   |
| Construction           |   | 1              |   |                   | 11,490  |                           | 2.8    |   |   | 6,599 |   | 2.3 |   | 6.5 |   |
| Rehab                  |   | 1              |   |                   | 2,721   |                           | 0.7    |   |   | 612 |   | 0.2 |   | 6.0 |   |
| 2010 Total             |   | 48             |   | $                      | 415,941 |                           | 100.0  | %      | $      | 292,659 |   | 100.0 | % | 6.5 | % |
|                   |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| By State:(2)           |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| Texas                  |   | 20             |   | $                      | 207,825 |                           | 50.0   | %      | $      | 156,992 |   | 53.7 | % | 6.5 | % |
| Georgia                |   | 3              |   |                   | 23,300  |                           | 5.6    |   |   | 18,538 |   | 6.3 |   | 6.7 |   |
| All Others             |   | 25             |   |                   | 184,816 |                           | 44.4   |   |   | 117,129 |   | 40.0 |   | 6.4 |   |
| 2010 Total             |   | 48             |   | $                      | 415,941 |                           | 100.0  | %      | $      | 292,659 |   | 100.0 | % | 6.5 | % |
|                   |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| By Maturity Date:      |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| 2009 – 2010      |   | 2              |   | $                      | 23,500  |                           | 5.6    | %      | $      | 15,714 |   | 5.4 | % | 4.5 | % |
| 2011 – 2015      |   | 2              |   |                   | 1,075   |                           | 0.3    |   |   | 177 |   | 0.1 |   | 8.1 |   |
| 2016 – 2020      |   | 4              |   |                   | 4,492   |                           | 1.1    |   |   | 2,781 |   | 1.0 |   | 8.5 |   |
| 2021 – 2025      |   | 4              |   |                   | 14,800  |                           | 3.6    |   |   | 10,557 |   | 3.6 |   | 7.6 |   |
| 2026 – 2030      |   | --             |   |                   | --      |                           | 0.0    |   |   | -- |   | 0.0 |   | 0.0 |   |
| 2031 – 2035      |   | 4              |   |                   | 27,245  |                           | 6.6    |   |   | 24,430 |   | 8.3 |   | 6.7 |   |
| 2036 – 2040      |   | 2              |   |                   | 28,975  |                           | 7.0    |   |   | 18,563 |   | 6.3 |   | 6.8 |   |
| 2041 – 2045      |   | 25             |   |                   | 271,045 |                           | 65.0   |   |   | 186,518 |   | 63.7 |   | 6.6 |   |
| 2046 and After         |   | 5              |   |                   | 44,809  |                           | 10.8   |   |   | 33,919 |   | 11.6 |   | 5.7 |   |
| 2010 Total             |   | 48             |   | $                      | 415,941 |                           | 100.0  | %      | $      | 292,659 |   | 100.0 | % | 6.5 | % |

| (1) | Original principal amount at issuance. |
|-----|----------------------------------------|

| (2) | Certain properties collateralize multiple mortgage revenue bonds; only one bond is included to avoid duplication. |
|-----|-------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                |   | December 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
| (in thousands)                                                                                                                                                                                                                                                                                                      |   | 2010         |    | 2009 |   |
|                                                                                                                                                                                                                                                                                                                |   |         |    |   |   |   |   |
| Amortized cost basis(1)                                                                                                                                                                                                                                                                                             |   | $            | 293,203 |   | $ | 247,424 |   |
| Gross unrealized gains                                                                                                                                                                                                                                                                                              |   |         | 16,650  |   |   | 13,688 |   |
| Gross unrealized losses(1)                                                                                                                                                                                                                                                                                          |   |         | (17,194 | ) |   | (15,441 | ) |
|                                                                                                                                                                                                                                                                                                                |   |         |    |   |   |   |   |
| Fair value                                                                                                                                                                                                                                                                                                          |   | $            | 292,659 |   | $ | 245,671 |   |
|                                                                                                                                                                                                                                                                                                                |   |
| (1)   The unrealized losses presented above do not include cumulative impairments of $2.4 million at December 31, 2009 due to credit losses related to the underlying assets.  There is no cumulative impairment at December 31, 2010.  Amortized cost is shown net of these amounts. |   |

| (dollars in thousands) |   | Less than12 Months |   |   | 12 Monthsor More |   |   | Total  |   |
|------------------------|--------|--------------------|--------|--------|------------------|--------|--------|--------|--------|
|                   |   |               |   |   |             |   |   |   |   |
| December 31, 2010      |   |               |   |   |             |   |   |   |   |
|                   |   |               |   |   |             |   |   |   |   |
| Number                 |   |               | 17     |   |             |   | 4      |   |   |   | 21 |   |
| Fair value             |   | $                  | 73,396 |   |             | $      | 25,292 |   |   | $ | 98,688 |   |
| Gross unrealized loss  |   | $                  | 9,230  |   |             | $      | 7,964  |   |   | $ | 17,194 |   |
|                   |   |               |   |   |             |   |   |   |   |   |   |   |
| December 31, 2009      |   |               |   |   |             |   |   |   |   |   |   |   |
|                   |   |               |   |   |             |   |   |   |   |   |   |   |
| Number                 |   |               | 10     |   |             |   | --     |   |   |   | 10 |   |
| Fair value             |   | $                  | 47,632 |   |             | $      | --     |   |   | $ | 47,632 |   |
| Gross unrealized loss  |   | $                  | 15,441 |   |             | $      | --     |   |   | $ | 15,441 |   |

|                                        |   | December 31, |   |
|---------------------------------------------|--------|--------------|--------|
| (in thousands)                              |   | 2010         |   | 2009 |   |
|                                        |   |         |   |   |   |   |   |
| Equity interests in tax credit partnerships |   | $            | 5,635  |   | $ | 530 |   |

----

|                                                                                                                                                    |   | December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
| (in thousands)                                                                                                                                          |   | 2010         |   | 2009 |   |
|                                                                                                                                                    |   |         |   |   |   |   |   |
| Mortgage loans held for sale(1)                                                                                                                         |   | $            | 75,365 |   | $ | 28,454 |   |
| Mortgage loans held for investment(2)                                                                                                                   |   |         | 1,405  |   |   | 7,540 |   |
| Stabilization escrow                                                                                                                                    |   |         | 15     |   |   | 1,983 |   |
| Other investments                                                                                                                                       |   |         | 502    |   |   | 1,060 |   |
|                                                                                                                                                    |   |         |   |   |   |   |   |
| Total                                                                                                                                                   |   | $            | 77,287 |   | $ | 39,037 |   |
|                                                                                                                                                    |   |
| (1)   Net of deferred origination fees.(2)   Net of valuation allowance of $3.0 million in 2010 and $3.6 million in 2009. |   |

| A. | Mortgage Loans Held for Sale |
|----|------------------------------|

| B. | Mortgage Loans Held for Investments |
|----|-------------------------------------|

| C. | Stabilization Escrow |
|----|----------------------|

|                     |   | December 31, |    |
|--------------------------|--------|--------------|---------|
| (in thousands)           |   | 2010         |    | 2009 |   |
|                     |   |         |    |   |   |   |   |
| Cash balance             |   | $            | 41,242  |   | $ | 50,104 |   |
| Reserve for non-recovery |   |         | (41,227 | ) |   | (48,121 | ) |
|                     |   |         |    |   |   |   |   |
| Total                    |   | $            | 15      |   | $ | 1,983 |   |

----

|                   |   | December 31, |   |
|------------------------|--------|--------------|--------|
| (in thousands)         |   | 2010         |   |   | 2009 |   |
|                   |   |         |   |   |   |   |
| Goodwill               |   | $            | --     |   |   | $ | 93,283 |   |
| Intangible assets, net |   |         | 9,494  |   |   |   | 17,338 |   |
|                   |   |         |   |   |   |   |   |   |
| Total                  |   | $            | 9,494  |   |   | $ | 110,621 |   |

| (in thousands)                |   | 2010   |     |   | 2009   |   |
|-------------------------------|--------|--------|----------|--------|--------|--------|
|                          |   |   |     |   |   |   |
| Balance as of January 1       |   |   |     |   |   |   |
| Goodwill                      |   | $      | 231,031  |   |   | $      | 231,077 |   |
| Accumulated impairment losses |   |   | (137,748 | )      |   |   | (92,748 | ) |
| Net balance as of January 1   |   |   | 93,283   |   |   |   | 138,329 |   |
|                          |   |   |     |   |   |   |   |   |
| Impairment losses             |   |   | (93,283  | )      |   |   | (45,000 | ) |
| Other  reductions   |   |   | --       |   |   |   | (46 | ) |
|                          |   |   |     |   |   |   |   |   |
| Balance as of December 31     |   |   |     |   |   |   |   |   |
| Goodwill                      |   | $      | 231,031  |   |   | $      | 231,031 |   |
| Accumulated impairment losses |   |   | (231,031 | )      |   |   | (137,748 | ) |
| Net balance as of December 31 |   | $      | --       |   |   | $      | 93,283 |   |

----

| (dollars in thousands)                                                                                                                                                      |   | EstimatedUsefulLife(in Years) |   | GrossCarrying Amount |    | AccumulatedAmortization (1) |   | Net     |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|----------------------|---------|-----------------------------|--------|---------|--------|
|                                                                                                                                                                        |   |                          |   | 2010                 |    | 2009                        |   | 2010    |   | 2009 |   | 2010 |   | 2009 |   |
|                                                                                                                                                                        |   |                          |   |                 |    |                        |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortized intangible assets:                                                                                                                                                |   |                          |   |                 |    |                        |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transactional relationships(1)                                                                                                                                              |   | 5.0                           |   | $                    | 73,400  |                        | $      | 103,000 |   | $ | 73,217 |   | $ | 102,190 |   | $ | 183 |   | $ | 810 |   |
| Partnership service contracts                                                                                                                                               |   | 9.0                           |   |                 | 26,521  |                        |   | 26,521  |   |   | 26,521 |   |   | 20,183 |   |   | -- |   |   | 6,338 |   |
| General partner interests                                                                                                                                                   |   | 9.0                           |   |                 | 5,100   |                        |   | 5,100   |   |   | 4,035 |   |   | 3,468 |   |   | 1,065 |   |   | 1,632 |   |
| Mortgage banking broker relationships                                                                                                                                       |   | 4.0                           |   |                 | 1,632   |                        |   | 1,632   |   |   | 1,632 |   |   | 1,320 |   |   | -- |   |   | 312 |   |
| Weighted average life/subtotal                                                                                                                                              |   | 6.2                           |   |                 | 106,653 |                        |   | 136,253 |   |   | 105,405 |   |   | 127,161 |   |   | 1,248 |   |   | 9,092 |   |
|                                                                                                                                                                        |   |                          |   |                 |    |                        |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unamortized intangible assets:                                                                                                                                              |   |                          |   |                 |    |                        |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage banking licenses and approvals with no expiration                                                                                                                  |   |                          |   |                 | 8,246   |                        |   | 8,246   |   |   | -- |   |   | -- |   |   | 8,246 |   |   | 8,246 |   |
|                                                                                                                                                                        |   |                          |   |                 |    |                        |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                                                                                       |   |                          |   | $                    | 114,899 |                        | $      | 144,499 |   | $ | 105,405 |   | $ | 127,161 |   | $ | 9,494 |   | $ | 17,338 |   |
|  (1)  $29.6 million in transactional relationships, which were fully amortized, are excluded from the gross carrying amount and accumulated depreciation in 2010. |

|                 |   | Years Ended December 31, |   |
|----------------------|--------|--------------------------|--------|
| (in thousands)       |   | 2010                     |   | 2009 |   |
|                 |   |                     |   |   |   |   |   |
| Amortization expense |   | $                        | 7,844  |   | $ | 13,857 |   |
| Impairment           |   | $                        | --     |   | $ | 5,449 |   |

|   |   | (in thousands) |   |
|--------|--------|----------------|--------|
|   |   |           |   |   |
| 2011   |   | $              | 710    |   |
| 2012   |   | $              | 534    |   |
| 2013   |   | $              | 4      |   |

----

|                         |   | (in thousands) |    |
|------------------------------|--------|----------------|---------|
|                         |   |           |    |   |
| Balance at January 1, 2009   |   | $              | 62,925  |   |
| MSRs capitalized             |   |           | 8,668   |   |
| Amortization                 |   |           | (11,170 | ) |
| Balance at December 31, 2009 |   |           | 60,423  |   |
| MSRs capitalized             |   |           | 15,797  |   |
| Amortization                 |   |           | (10,606 | ) |
| Balance at December 31, 2010 |   | $              | 65,614  |   |

|   |   | (in thousands) |   |
|--------|--------|----------------|--------|
|   |   |           |   |   |
| 2011   |   | $              | 9,193  |   |
| 2012   |   | $              | 7,711  |   |
| 2013   |   | $              | 7,074  |   |
| 2014   |   | $              | 6,082  |   |
| 2015   |   | $              | 5,331  |   |

|                                    |   | December 31, |   |
|-----------------------------------------|--------|--------------|--------|
|                                    |   | 2010         |   |   | 2009 |   |
|                                    |   |         |   |   |   |   |
| Fair value of MSRs                      |   | $            | 72,566 |   |   | $ | 77,109 |   |
| Weighted average discount rate          |   |         | 17.64  | % |   |   | 17.84 | % |
| Weighted average pre-pay speed          |   |         | 9.24   | % |   |   | 9.28 | % |
| Weighted average lockout period (years) |   |         | 4.1    |   |   |   | 4.2 |   |
| Weighted average default rate           |   |         | 0.62   | % |   |   | 0.90 | % |
| Cost to service loans                   |   | $            | 2,219  |   |   | $ | 2,183 |   |
| Acquisition cost (per loan)             |   | $            | 1,477  |   |   | $ | 1,474 |   |

----

| (in thousands)                                |   | December 31,2010 |   |
|-----------------------------------------------|--------|------------------|--------|
|                                          |   |             |   |   |
| Prepayment speed:                             |   |             |   |   |
| Fair value after impact of 10% adverse change |   | $                | 71,900 |   |
| Fair value after impact of 20% adverse change |   |             | 71,248 |   |
|                                          |   |             |   |   |
| Discount rate:                                |   |             |   |   |
| Fair value after impact of 10% adverse change |   |             | 68,994 |   |
| Fair value after impact of 20% adverse change |   |             | 65,785 |   |
|                                          |   |             |   |   |
| Default rate:                                 |   |             |   |   |
| Fair value after impact of 10% adverse change |   |             | 72,439 |   |
| Fair value after impact of 20% adverse change |   |             | 72,339 |   |

| (in thousands) |   | TotalServicingFees |   |   | ServicingFees fromSecuritizedAssets(included inTotalServicingFees) |   |
|----------------|--------|--------------------|--------|--------|--------------------------------------------------------------------|--------|
|           |   |               |   |   |                                                               |   |
| 2010           |   | $                  | 20,740 |   |                                                               | $      | 2,099 |   |
| 2009           |   | $                  | 21,541 |   |                                                               | $      | 974 |   |

----

| (in thousands)                                                                                                                                                                                                                                                                                   |   | December 31,2010 |   |   | December 31,2009 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                             |   |             |   |   |             |   |
| Deferred financing and other costs(1)                                                                                                                                                                                                                                                            |   | $                | 12,317 |   |             | $      | 25,684 |   |
| Less:  Accumulated amortization                                                                                                                                                                                                                                                        |   |             | (3,984 | )      |             |   | (14,382 | ) |
|                                                                                                                                                                                                                                                                                             |   |             |   |   |             |   |   |   |
| Net deferred costs                                                                                                                                                                                                                                                                               |   |             | 8,333  |   |             |   | 11,302 |   |
|                                                                                                                                                                                                                                                                                             |   |             |   |   |             |   |   |   |
| Collateral posted with counterparties                                                                                                                                                                                                                                                            |   |             | 46,327 |   |             |   | 69,200 |   |
| Interest and fees receivable, net                                                                                                                                                                                                                                                                |   |             | 4,749  |   |             |   | 3,565 |   |
| Other receivables                                                                                                                                                                                                                                                                                |   |             | 9,165  |   |             |   | 8,501 |   |
| Furniture, fixtures and leasehold improvements, net                                                                                                                                                                                                                                              |   |             | 1,643  |   |             |   | 2,730 |   |
| Other                                                                                                                                                                                                                                                                                            |   |             | 6,469  |   |             |   | 5,162 |   |
|                                                                                                                                                                                                                                                                                             |   |             |   |   |             |   |   |   |
| Total                                                                                                                                                                                                                                                                                            |   | $                | 76,686 |   |             | $      | 100,460 |   |
|                                                                                                                                                                                                                                                                                             |   |
| (1)   $11.0 million in deferred financing cost, relating to the Term Loan and Revolving Credit Facility and the restructured credit intermediation agreements, which were fully amortized, are excluded from the December 31, 2010 gross carrying amount and accumulated amortization. |   |

----

|                                                |   | December 31, |      |
|-----------------------------------------------------|--------|--------------|-----------|
| (in thousands)                                      |   | 2010         |      |   | 2009 |   |
|                                                |   |         |      |   |   |   |
| Available-for-sale                                  |   |         |      |   |   |   |
| Corporate bonds                                     |   | $            | --        |   |   | $ | 5,109 |   |
|                                                |   |         |      |   |   |   |   |   |
| Equity method                                       |   |         |      |   |   |   |   |   |
| Equity interests in tax credit properties           |   |         | 3,302,667 |   |   |   | 3,571,323 |   |
|                                                |   |         |      |   |   |   |   |   |
| Total investments held by consolidated partnerships |   |         | 3,302,667 |   |   |   | 3,576,432 |   |
|                                                |   |         |      |   |   |   |   |   |
| Land, buildings and improvements, net               |   |         | 567,073   |   |   |   | 571,520 |   |
| Other assets                                        |   |         | 282,665   |   |   |   | 298,528 |   |
| Total other assets of consolidated partnerships     |   |         | 849,738   |   |   |   | 870,048 |   |
|                                                |   |         |      |   |   |   |   |   |
| Total assets                                        |   | $            | 4,152,405 |   |   | $ | 4,446,480 |   |

| A. | Corporate Bonds |
|----|-----------------|

| (in thousands)          |   | December 31,2010 |   |   | December 31, 2009 |   |
|-------------------------|--------|------------------|--------|--------|-------------------|--------|
|                    |   |             |   |   |              |   |
| Amortized cost basis    |   | $                | --     |   |              | $      | 4,903 |   |
| Gross unrealized gains  |   |             | --     |   |              |   | 206 |   |
| Gross unrealized losses |   |             | --     |   |              |   | -- |   |
|                    |   |             |   |   |              |   |   |   |
| Fair value              |   | $                | --     |   |              | $      | 5,109 |   |

| B. | Equity Interests in Tax Credit Properties |
|----|-------------------------------------------|

----

| C. | Land, Buildings and Improvements, Net |
|----|---------------------------------------|

| D. | Other Assets |
|----|--------------|

|  (in thousands)                  |   | Interest Rate atDecember 31,2010 |   | December 31, |
|---------------------------------------|--------|----------------------------------|--------|--------------|
| 2010                                  |   | 2009                             |
|                                  |   |                             |   |         |   |   |   |   |
| Term loan                             |   | 3.26                             | %      | $            | 127,990 |   | $ | 11,082 |
| Revolving credit facility             |   | 3.26                             |   |         | 6,000 |   |   | 210,000 |
| Mortgage banking warehouse facilities |   | 2.76                             |   |         | 26,415 |   |   | 550 |
| Multifamily ASAP facility             |   | 1.20                             |   |         | 49,276 |   |   | 28,132 |
| CFin Holdings credit facility         |   | 10.00                            |   |         | 21,693 |   |   | -- |
|                                  |   |                             |   |         |   |   |   |   |
| Total                                 |   |                             |   | $            | 231,374 |   | $ | 249,764 |

| A. | Term Loan and Revolving Credit Facility |
|----|-----------------------------------------|

| ·   | $60.0 million assumed by C-III as part of the March 2010 Restructuring and considered as proceeds in calculating gain on sale; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | $5.0 million assumed by an affiliate of The Related Companies L.P. (“TRCLP”), as part of the March 2010 Restructuring (see Note 30); and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $5.5 million we repaid at the time of the March 2010 Restructuring. |
|--------------------|---------------------------------------------------------------------|

| ·   | The remaining balance of the termed-out portion of the Revolving Credit Facility ($137.5 million) was restructured as a Term Loan maturing in March 2017 with an interest rate of 3.0% over either the prime rate or LIBOR (at our election which currently is LIBOR).  Scheduled repayments of principal on the Term Loan begin in December 2011.  At that time, we must repay $3.0 million in principal per quarter until maturity, at which time the remaining principal is due.  On July 29, 2010, $10.0 million that was held in an escrow account funded with transaction proceeds at the time of the March 2010 Restructuring was released.  Of such amount, $0.5 million was used to pay certain expenses.  The remaining $9.5 million was used to pay down principal on the Term Loan, reducing its outstanding balance to $128.0 million as of December 31, 2010. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The revolving portion of the Revolving Credit Facility was restructured into a new Revolving Credit Facility with a total capacity of $37.0 million.  The Revolving Credit Facility matures in March 2015 and bears interest at 3.0% over either the prime rate or LIBOR at our election (which currently is LIBOR).  The Revolving Credit Facility is to be used for LIHTC property investments or for working capital purposes.  As of December 31, 2010, $6.0 million was drawn and $12.0 million in letters of credit were issued under the Revolving Credit Facility.  Once terminated, the amount of the Revolving Credit Facility associated with these letters of credit cannot be redrawn.  At December 31, 2010, the undrawn balance of the Revolving Credit Facility was $19.0 million. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Revolving Credit Facility has customary financial covenants, but excludes certain provisions that had been in the previous facility such as required asset sales and repayments based on specific cash flow streams.  The following financial covenants will not be effective immediately: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | minimum ratio of consolidated EBITDA to fixed charges, which will become effective for us as of June 30, 2011 ; and |
|---------------|---------------------------------------------------------------------------------------------------------------------|

| o   | maximum ratio of funded debt to consolidated EBITDA which will become effective for us as of June 30, 2012. |
|---------------|-------------------------------------------------------------------------------------------------------------|

| ·   | The new Term Loan and Revolving Credit Facility agreement contains restrictions on distributions to our shareholders.  Under the agreement, we are generally not permitted to make any distributions except for certain cases such as to the holders of the Equity Issuer preferred shares. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | Mortgage Banking Warehouse Facilities |
|----|---------------------------------------|

| ·   | We have a $100 million committed warehouse facility that matures in September 2011 and bears interest at LIBOR plus 2.50%, which we utilize as our primarily warehouse facility.  Mortgages financed by such advances (see Note 10 to the consolidated financial statements), as well as the related servicing and other rights (see Note 12 to the consolidated financial statements) have been pledged as security under the warehouse facility.  The interest rate on the warehouse facility was 2.76% as of December 31, 2010 and 2.98% as of December 31, 2009.  All loans securing this facility have firm sale commitments with GSEs. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We have an uncommitted facility with Fannie Mae under its Multifamily As Soon As Pooled (“ASAP”) Facility funding program.  After approval of certain loan documents, Fannie Mae will fund loans after closing and the advances are used to repay our primary warehouse facility.  Subsequently, Fannie Mae funds approximately 99% of the loan and Centerline Mortgage Capital Inc. (“CMC”) fund the remaining 1%.  CMC is later reimbursed by Fannie Mae when the assets are sold.  Interest on this facility accrues at a rate of LIBOR plus 0.85% with a minimum rate of 1.20%.  The interest rate on the warehouse facility was 1.20% as of December 31, 2010 and as of December 31, 2009. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | We have two uncommitted warehouse lines and repurchase facilities which we entered into on November 22, 2010, in order to provide us with additional resources for warehousing of mortgage loans with Freddie Mac and Fannie Mae.  These agreements are scheduled to mature in November 2011 and bear an interest of LIBOR plus 3.5% with a minimum of 4.5% for all Fannie Mae’s loans and 4% for all Freddie Mac’s loans.  At December 31, 2010, there was no outstanding balance on these two warehouse facilities.  All loans securing this facility would have firm sale commitments with GSEs. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| C. | CFin Holdings Credit Facility |
|----|-------------------------------|

| D. | Centerline Financial Credit Facility |
|----|--------------------------------------|

| ·   | LIBOR plus 0.4% or; |
|--------------------|---------------------|

| ·   | 1.40% plus the higher of the prime rate or the federal funds effective rate plus 0.5%. |
|--------------------|----------------------------------------------------------------------------------------|

| E. | Covenants |
|----|-----------|

----

|                          |   | December 31, |    |
|-------------------------------|--------|--------------|---------|
| (in thousands)                |   | 2010         |    | 2009 |   |
|                          |   |         |    |   |   |   |   |
| Freddie Mac secured financing |   | $            | 665,875 |   | $ | 585,528 |   |

| A. | Freddie Mac Secured Financing |
|----|-------------------------------|

| B. | Cost of Funds |
|----|---------------|

|                                 |   | Years Ended December 31, |   |
|--------------------------------------|--------|--------------------------|--------|
|                                 |   | 2010                     |   | 2009 |   |
|                                 |   |                     |   |   |   |   |   |
| Cost of funds                        |   |                     | 6.45   | % |   | 5.91 | % |
| Interest expense (in millions)       |   | $                        | 38.6   |   | $ | 31.5 |   |
|                                 |   |                     |   |   |   |   |   |
| Rate at December 31, excluding fees: |   |                     |   |   |   |   |   |
|                                 |   |                     |   |   |   |   |   |
| Freddie Mac secured financing        |   |                     | 6.22   | % |   | 5.89 | % |

----

| (in thousands)                                  |   | December 31,2010 |    |   | December 31,2009 |   |
|-------------------------------------------------|--------|------------------|---------|--------|------------------|--------|
|                                            |   |             |    |   |             |   |
| Deferred revenues                               |   | $                | 37,840  |   |             | $      | 48,045 |   |
| Allowance for risk-sharing obligations          |   |             | 29,924  |   |             |   | 24,219 |   |
| Affordable Housing loss reserve                 |   |             | 89,400  |   |             |   | 140,000 |   |
| Transactions costs payable                      |   |             | 2,009   |   |             |   | 29,414 |   |
| Lease termination costs                         |   |             | 141     |   |             |   | 53,649 |   |
| Accounts payable                                |   |             | 2,672   |   |             |   | 3,130 |   |
| Accrued assumption fees                         |   |             | 25,748  |   |             |   | -- |   |
| Interest rate swaps at fair value (Note 29)     |   |             | 18,831  |   |             |   | 17,964 |   |
| Salaries and benefits payable                   |   |             | 11,332  |   |             |   | 7,770 |   |
| Distributions payable                           |   |             | 839     |   |             |   | 1,292 |   |
| Accrued fund organization and offering expenses |   |             | 366     |   |             |   | 2,396 |   |
| Accrued interest payable                        |   |             | 4,475   |   |             |   | 4,389 |   |
| Reserve for uncertain tax position (Note 27)    |   |             | 1,568   |   |             |   | 1,568 |   |
| Other                                           |   |             | 12,659  |   |             |   | 9,860 |   |
|                                            |   |             |    |   |             |   |   |   |
| Total                                           |   | $                | 237,804 |   |             | $      | 343,696 |   |

| A. | Deferred Revenues |
|----|-------------------|

| B. | Mortgage Loan Loss Sharing Reserve |
|----|------------------------------------|

| C. | Affordable Housing Loss Reserve |
|----|---------------------------------|

| D. | Transaction Costs Payable |
|----|---------------------------|

| E. | Lease Termination Costs |
|----|-------------------------|

----

| (in thousands)                               |   | 2010   |    |   | 2009   |   |
|----------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                         |   |   |    |   |   |   |
| Balance at January 1                         |   | $      | 53,649  |   |   | $      | 2,523 |   |
| Additions charged to operations              |   |   | --      |   |   |   | 28,356 |   |
| Accretion of discounts charged to operations |   |   | 865     |   |   |   | 2,615 |   |
| Accrued costs re-characterized               |   |   | --      |   |   |   | 21,691 |   |
| Reserve adjustments                          |   |   | --      |   |   |   | (241 | ) |
| Recovery of loss provision                   |   |   | (48,926 | )      |   |   | -- |   |
| Payments                                     |   |   | (5,447  | )      |   |   | (1,295 | ) |
|  Balance at December 31                 |   | $      | 141     |   |   | $      | 53,649 |   |

| F. | Accrued Assumption Fees |
|----|-------------------------|

| Preferred Series                    |   | Date ofIssuance |   | MandatoryTender |   | MandatoryRepurchase |   | Number ofShares |   | LiquidationPreferenceper Share |   | Total FaceAmount |   | DividendRate |
|-------------------------------------|--------|-----------------|--------|-----------------|--------|---------------------|--------|-----------------|--------|--------------------------------|--------|------------------|--------|--------------|
|                                |   |            |   |            |   |                |   |            |   | (in thousands)                 |   |             |   |
| Outstanding as of December 31, 2010 |   |            |   |            |   |                |   |            |   |                           |   |             |   |         |   |   |   |
| Series A-3                          |   | June 2002       |   | November 2014   |   | November 2052       |   | 60              |   | $                              | 500    |             | $      | 30,000       |   | 6.800 | % |
| Series B-2                          |   | June 2002       |   | November 2014   |   | November 2052       |   | 50              |   |                           | 500    |             |   | 25,000       |   | 7.200 | % |
| Subtotal                            |   |            |   |            |   |                |   |            |   |                           |   |             |   | 55,000       |   |   |   |

| Preferred Series                    |   | Date ofIssuance |   | MandatoryTender |   | MandatoryRepurchase |   | Number ofShares |   | LiquidationPreferenceper Share |   | Total FaceAmount |   | DividendRate |
|-------------------------------------|--------|-----------------|--------|-----------------|--------|---------------------|--------|-----------------|--------|--------------------------------|--------|------------------|--------|--------------|
|                                |   |            |   |            |   |                |   |            |   | (in thousands)                 |   |             |   |
| Outstanding as of December 31, 2009 |   |            |   |            |   |                |   |            |   |                           |   |             |   |         |   |   |   |
| Series B                            |   | July 2000       |   | December 2010   |   | December 2050       |   | 110             |   | $                              | 500    |             | $      | 55,000       |   | 7.600 | % |
| Series B-1                          |   | October 2001    |   | December 2010   |   | December 2050       |   | 37              |   |                           | 500    |             |   | 18,500       |   | 6.800 | % |
| Subtotal                            |   |            |   |            |   |                |   |            |   |                           |   |             |   | 73,500       |   |   |   |
| Total                               |   |            |   |            |   |                |   |            |   |                           |   |             | $      | 128,500      |   |   |   |

----

| ·   | all Series B shares; |
|--------------------|----------------------|

| ·   | all classes or series of Convertible CRA Shares (see Note 20); and |
|--------------------|--------------------------------------------------------------------|

| ·   | our common shares. |
|--------------------|--------------------|

| ·   | the nature of investments it may hold, |
|--------------------|----------------------------------------|

| ·   | leverage levels, |
|--------------------|------------------|

| ·   | timely payment of distributions |
|--------------------|---------------------------------|

| ·   | allocations of any taxable income it may earn; and |
|--------------------|----------------------------------------------------|

| ·   | a prohibition from issuing any further preferred shares. |
|--------------------|----------------------------------------------------------|

----

|                                           |   | December 31, |    |
|------------------------------------------------|--------|--------------|---------|
| (in thousands)                                 |   | 2010         |    |   | 2009 |   |
|                                           |   |         |    |   |   |   |
| Notes payable                                  |   | $            | 137,054 |   |   | $ | 155,810 |   |
| Due to property partnerships                   |   |         | 86,642  |   |   |   | 209,868 |   |
| Other liabilities                              |   |         | 273,409 |   |   |   | 226,391 |   |
|                                           |   |         |    |   |   |   |   |   |
| Total liabilities of consolidated partnerships |   | $            | 497,105 |   |   | $ | 592,069 |   |

----

|                                          |   | December 31,  |   |
|-----------------------------------------------|--------|---------------|--------|
| (in thousands)                                |   |  2010    |   | 2009 |   |
| Series                                        |   | CarryingValue |   | Number ofShares |   |  Number ofCommonShares IfConverted |   | CarryingValue |   | Number ofShares |   | Number ofCommonShares IfConverted |   |
|                                          |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CRA shares equivalent to common shares:       |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Convertible Redeemable CRA Shares             |   | $             | 12,462 |   | 695 |   | 695 |   | $ | 93,170 |   | 5,682 |   | 5,617 |   |
| Redeemable CRA Shares                         |   |          | --     |   | -- |   | -- |   |   | 4,834 |   | 271 |   | -- |   |
|                                          |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred CRA Shares:                         |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Convertible Redeemable CRA Preferred Shares   |   |          | --     |   | -- |   | -- |   |   | 51,193 |   | 1,060 |   | 1,916 |   |
| Redeemable CRA Preferred Shares               |   |          | --     |   | -- |   | -- |   |   | 54,055 |   | 1,100 |   | -- |   |
|                                          |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 11.0% Cumulative Convertible Preferred Shares |   |          | --     |   | -- |   | -- |   |   | 129,228 |   | 11,202 |   | 12,192 |   |
|                                          |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                         |   | $             | 12,462 |   | 695 |   | 695 |   | $ | 332,480 |   | 19,315 |   | 19,725 |   |

| ·   | receipt of the same dividends per share; |
|--------------------|------------------------------------------|

| ·   | pro rata allocation of earnings between the two classes of shares; and |
|--------------------|------------------------------------------------------------------------|

| ·   | equal ranking with the common shares with respect to rights upon liquidation, dissolution or winding up of our Company. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

----

| ·   | we have the option to repurchase the shares for the original gross issuance price per share (plus accumulated and unpaid distributions) at any time from the date of the agreement; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | if we do not repurchase the shares by certain dates, the shareholders have the option to require us to purchase the shares for the original gross issuance price per share (plus accumulated and unpaid distributions). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | 11.0% Cumulative Convertible Preferred Shares |
|----|-----------------------------------------------|

----

| C. | Dividends in Arrears |
|----|----------------------|

| A. | Convertible CRA Shares |
|----|------------------------|

| B. | Special Preferred Voting Shares |
|----|---------------------------------|

| ·   | special preferred voting shares, |
|--------------------|----------------------------------|

| ·   | common shares issuable upon exchange of his SCUs, and |
|--------------------|-------------------------------------------------------|

| ·   | any other common shares currently owned or which may be acquired by him in the future. |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | vote his common shares or special preferred voting shares in favor of the election of any independent trustee approved by our Board of Trustees or in the same proportion as the unaffiliated holders of our common shares vote in such election (this excludes the 11.0% Preferred Shares owned by an affiliate of TRCLP); and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | not exercise any right as shareholder of our Company to nominate any independent trustee. |
|--------------------|-------------------------------------------------------------------------------------------|

| C. | Special Series A Shares |
|----|-------------------------|

----

| D. | Lock-Up Agreements and Series B Special Shares related to Tax Benefits Preservation Plan |
|----|------------------------------------------------------------------------------------------|

----

| E. | Dividend Reinvestment Plan |
|----|----------------------------|

| F. | Repurchases |
|----|-------------|

|                                            |   | Years Ended December 31, |   |
|-------------------------------------------------|--------|--------------------------|--------|
| (in thousands)                                  |   | 2010                     |   | 2009 |   |
|                                            |   |                     |   |   |   |   |   |
| Number of shares                                |   |                     | 2,999  |   |   | 369 |   |
| Cost, including commissions and service charges |   | $                        | 413    |   | $ | 68 |   |

| G. | Accumulated Other Comprehensive Income (Loss) |
|----|-----------------------------------------------|

| (in thousands)                               |   | Net UnrealizedGain/(Loss) onAvailable-for-Sale Securities |    | Net UnrealizedGain/(Loss) onDerivatives,Net of tax |   | Net UnrealizedGain/(Loss) ofEquity Investees |   | Net UnrealizedLossAttributable toNon-controllingInterests InConsolidated Partnerships |     | AccumulatedOtherComprehensive Income (Loss) |   |
|----------------------------------------------|--------|-----------------------------------------------------------|---------|----------------------------------------------------|--------|----------------------------------------------|--------|---------------------------------------------------------------------------------------|----------|---------------------------------------------|--------|
|                                         |   |                                                      |    |                                               |   |                                         |   |                                                                                  |     |                                        |   |   |   |   |   |   |
| Balance at January 1, 2009                   |   | $                                                         | (95,321 | )                                                  | $      | (11,622                                      | )      | $                                                                                     | (142,468 | )                                           | $      | (894,711 | ) | $ | (1,144,122 | ) |
| Unrealized gains (losses), net               |   |                                                      | (75,457 | )                                                  |   | --                                           |   |                                                                                  | 17,977   |                                        |   | -- |   |   | (57,480 | ) |
| OTTI not related to credit losses            |   |                                                      | (2,662  | )                                                  |   | --                                           |   |                                                                                  | (5,692   | )                                           |   | -- |   |   | (8,354 | ) |
| Reclassification to net loss                 |   |                                                      | 104,493 |                                               |   | 11,622                                       |   |                                                                                  | 86,004   |                                        |   | -- |   |   | 202,119 |   |
| Balance at December 31, 2009                 |   |                                                      | (68,947 | )                                                  |   | --                                           |   |                                                                                  | (44,179  | )                                           |   | (894,711 | ) |   | (1,007,837 | ) |
| Unrealized gains (losses), net               |   |                                                      | 17,451  |                                               |   | --                                           |   |                                                                                  | 16,448   |                                        |   | -- |   |   | 33,899 |   |
| Adoption of ASU 2009-17                      |   |                                                      | 56,879  |                                               |   | --                                           |   |                                                                                  | 43,005   |                                        |   | 894,711 |   |   | 994,595 |   |
| Reclassification to net income               |   |                                                      | 74,557  |                                               |   | --                                           |   |                                                                                  | --       |                                        |   | -- |   |   | 74,557 |   |
| Reclassification due to deconsolidation/sale |   |                                                      | (1,109  | )                                                  |   | --                                           |   |                                                                                  | (15,274  | )                                           |   | -- |   |   | (16,383 | ) |
| Balance at December 31, 2010                 |   | $                                                         | 78,831  |                                               | $      | --                                           |   | $                                                                                     | --       |                                        | $      | -- |   | $ | 78,831 |   |

----

|                                                                                                                           |   | December 31, |      |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|
| (in thousands)                                                                                                                 |   | 2010         |      |   | 2009 |   |
|                                                                                                                           |   |         |      |   |   |   |
| Limited partners interests in consolidated partnerships                                                                        |   | $            | 3,124,755 |   |   | $ | 3,341,081 |   |
| Preferred shares of a subsidiary (not subject to mandatory repurchase)                                                         |   |         | 104,000   |   |   |   | 104,000 |   |
| Convertible Special Common Units (“SCUs”) of a subsidiary; 12,731 outstanding in 2010 and 2009                     |   |         | (88,300   | ) |   |   | (89,375 | ) |
| Convertible Special Common Interests (“SCIs”) of a subsidiary; 258 outstanding in 2009                             |   |         | --        |   |   |   | 364 |   |
| Other(1)                                                                                                                       |   |         | 4,379     |   |   |   | 5,715 |   |
|                                                                                                                           |   |         |      |   |   |   |   |   |
| Total                                                                                                                          |   | $            | 3,144,834 |   |   | $ | 3,361,785 |   |
|                                                                                                                           |   |
| (1)   Other non-controlling interests primarily represent the 10.0% interest in CFin Holdings owned by Natixis. |   |

|                                                                   |   | Years Ended December 31, |     |
|------------------------------------------------------------------------|--------|--------------------------|----------|
| (in thousands)                                                         |   | 2010                     |     |   | 2009 |   |
|                                                                   |   |                     |     |   |   |   |
| Limited partners interests in consolidated partnerships                |   | $                        | (513,378 | ) |   | $ | (2,580,103 | ) |
| Preferred shares of a subsidiary (not subject to mandatory repurchase) |   |                     | 6,225    |   |   |   | 6,225 |   |
| SCUs                                                                   |   |                     | 1,075    |   |   |   | (151,547 | ) |
| SCIs                                                                   |   |                     | 9        |   |   |   | (2,216 | ) |
| Other                                                                  |   |                     | (1,765   | ) |   |   | (1,631 | ) |
|  Total                                                            |   | $                        | (507,834 | ) |   | $ | (2,729,272 | ) |

----

| Preferred Series |   | Date ofIssuance |   | MandatoryTender |   | Number ofShares |   | LiquidationPreference per Share |   | Total FaceAmount(in thousands) |   | DividendRate |
|------------------|--------|-----------------|--------|-----------------|--------|-----------------|--------|---------------------------------|--------|--------------------------------|--------|--------------|
|             |   |            |   |            |   |            |   |                            |   |                           |   |         |   |   |   |
| Series A-4-1     |   | May 2004        |   | May 2015        |   | 60              |   | $                               | 500    |                           | $      | 30,000       |   | 5.75 | % |
| Series A-4-2     |   | May 2004        |   | May 2019        |   | 58              |   |                            | 500    |                           |   | 29,000       |   | 6.00 | % |
| Series B-3-1     |   | May 2004        |   | May 2015        |   | 50              |   |                            | 500    |                           |   | 25,000       |   | 6.00 | % |
| Series B-3-2     |   | May 2004        |   | May 2019        |   | 40              |   |                            | 500    |                           |   | 20,000       |   | 6.30 | % |
|             |   |            |   |            |   |            |   |                            |   |                           |   |         |   |   |   |
| Total            |   |            |   |            |   |            |   |                            |   |                           | $      | 104,000      |   |   |   |

| ·   | exchange all or a portion of their SCUs for cash; and |
|--------------------|-------------------------------------------------------|

| ·   | receive cash for any accrued but unpaid distributions with respect to SCUs exchanged (not including accrued and unpaid distributions for the quarterly period in which the exchange occurs). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | exchange all or a portion of their SCIs for cash; and |
|--------------------|-------------------------------------------------------|

| ·   | receive cash for any accrued but unpaid distributions with respect to SCIs exchanged (not including accrued and unpaid distributions for the quarterly period in which the exchange occurs). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| A. | General and Administrative Expenses |
|----|-------------------------------------|

|                                                 |   | Years Ended December 31, |    |
|------------------------------------------------------|--------|--------------------------|---------|
| (in thousands)                                       |   | 2010                     |    |   | 2009 |   |
|                                                 |   |                     |    |   |   |   |
| Salaries and benefits                                |   | $                        | 45,366  |   |   | $ | 43,028 |   |
| Other:                                               |   |                     |    |   |   |   |   |   |
| Other fees                                           |   |                     | 30,383  |   |   |   | -- |   |
| Professional fees                                    |   |                     | 23,738  |   |   |   | 10,039 |   |
| Tax Credit Fund origination and property acquisition |   |                     | (2,555  | ) |   |   | 768 |   |
| Rent expense                                         |   |                     | 5,806   |   |   |   | 14,009 |   |
| Miscellaneous                                        |   |                     | 24,734  |   |   |   | 15,792 |   |
|                                                 |   |                     |    |   |   |   |   |   |
| Total                                                |   | $                        | 127,472 |   |   | $ | 83,636 |   |

| 1.   | Other Fees |
|----------------|------------|

| 2.   | Professional Fees |
|----------------|-------------------|

| 3.   | Rent Expenses |
|----------------|---------------|

----

| B. | (Recovery) Provision for Losses |
|----|---------------------------------|

|                                                                  |   | Years Ended December 31, |    |
|-----------------------------------------------------------------------|--------|--------------------------|---------|
| (in thousands)                                                        |   | 2010                     |    |   | 2009 |   |
|                                                                  |   |                     |    |   |   |   |
| Affordable Housing loss reserve (see Note 32)                         |   | $                        | (50,600 | ) |   | $ | 140,000 |   |
| Mortgage banking allowance for risk-sharing obligations (see Note 32) |   |                     | 10,002  |   |   |   | 11,163 |   |
| Lease termination and other related costs                             |   |                     | (48,244 | ) |   |   | 30,755 |   |
| Bad debt reserves                                                     |   |                     | 10,934  |   |   |   | 15,812 |   |
|                                                                  |   |                     |    |   |   |   |   |   |
| Total                                                                 |   | $                        | (77,908 | ) |   | $ | 197,730 |   |

| 1. | Affordable Housing Loss Reserve |
|----|---------------------------------|

| 2. | Lease Termination Costs |
|----|-------------------------|

| 3. | Bad Debt Reserves |
|----|-------------------|

|                                         |   | Years Ended December 31, |   |
|----------------------------------------------|--------|--------------------------|--------|
| (in thousands)                               |   | 2010                     |   |   | 2009 |   |
|                                         |   |                     |   |   |   |   |
| Available-for-sale investments (see Note 8): |   |                     |   |   |   |   |
| Series B Freddie Mac certificates            |   | $                        | 78,031 |   |   | $ | 44,830 |   |
| Mortgage revenue bonds                       |   |                     | --     |   |   |   | 9,114 |   |
| Syndicated corporate debt                    |   |                     | --     |   |   |   | 65 |   |
| Stabilization escrow (recovery)              |   |                     | (2,492 | ) |   |   | 39,987 |   |
| Other investments                            |   |                     | 348    |   |   |   | 2,210 |   |
|                                         |   |                     |   |   |   |   |   |   |
| Total                                        |   | $                        | 75,887 |   |   | $ | 96,206 |   |

----

| A. | Series B Freddie Mac Certificates and Stabilization Escrow |
|----|------------------------------------------------------------|

| B. | Stabilization Escrow Recovery |
|----|-------------------------------|

----

| (in thousands)                                    |   | 2010   |    |   | 2009   |   |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                              |   |   |    |   |   |   |
| Interest income                                   |   | $      | 1,222   |   |   | $      | 3,372 |   |
| Rental income                                     |   |   | 106,350 |   |   |   | 74,697 |   |
| Other                                             |   |   | 4,601   |   |   |   | 833 |   |
|                                              |   |   |    |   |   |   |   |   |
| Total revenues                                    |   | $      | 112,173 |   |   | $      | 78,902 |   |
|                                              |   |   |    |   |   |   |   |   |
| Interest expense                                  |   | $      | 17,884  |   |   | $      | 9,213 |   |
|                                              |   |   |    |   |   |   |   |   |
| Loss on impairment of assets (net)                |   | $      | 23,350  |   |   | $      | 30,151 |   |
|                                              |   |   |    |   |   |   |   |   |
| Asset management fees                             |   |   | 30,467  |   |   |   | 30,454 |   |
| Property operating expenses                       |   |   | 44,579  |   |   |   | 30,869 |   |
| General and administrative expenses               |   |   | 35,703  |   |   |   | 22,493 |   |
| Depreciation and amortization                     |   |   | 57,027  |   |   |   | 50,045 |   |
| Other expenses                                    |   |   | 57,471  |   |   |   | 5,721 |   |
| Subtotal                                          |   |   | 225,247 |   |   |   | 139,582 |   |
|                                              |   |   |    |   |   |   |   |   |
| Total expenses                                    |   | $      | 266,481 |   |   | $      | 178,946 |   |
|                                              |   |   |    |   |   |   |   |   |
| Other losses from consolidated partnerships (net) |   | $      | 368,481 |   |   | $      | 593,347 |   |

| A. | The Plan |
|----|----------|

----

| ·   | 10% of the number of total shares outstanding (as defined in the Plan) as of December 31 preceding issuances of such awards; or |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | the limits prescribed by the national security exchange or national quotation system on which the shares may then be listed. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| B. | Outperformance Program |
|----|------------------------|

| C. | Share Options |
|----|---------------|

|                             |   | Years Ended December 31,  |   |
|----------------------------------|--------|---------------------------|--------|
|                             |   |  2010                |   | 2009 |   |
|                             |   |    Options |   |  WeightedAverageExercisePrice |   |    Options |   | WeightedAverageExercisePrice |   |
|                             |   |                      |   |   |   |   |   |   |   |   |   |
| Outstanding at beginning of year |   | 1,397,995                 |   | $ | 20.21 |   | 2,386,888 |   | $ | 20.51 |   |
| Granted                          |   | --                        |   |   | -- |   | -- |   |   | -- |   |
| Forfeited/cancelled/terminated   |   | (1,397,995                | )      |   | 20.21 |   | (988,893 | ) |   | 20.94 |   |
| Exercised                        |   | --                        |   |   | -- |   | -- |   |   | -- |   |
| Outstanding at end of year       |   | --                        |   | $ | -- |   | 1,397,995 |   | $ | 20.21 |   |

| D. | Non-vested Shares |
|----|-------------------|

----

|                            |   | Non-vested shares |       |   | WeightedAverageGrant DateFair Value |   |
|---------------------------------|--------|-------------------|------------|--------|-------------------------------------|--------|
|                            |   |              |       |   |                                |   |
| Non-vested at January 1, 2009   |   |              | 2,619,706  |   |                                | $      | 8.25 |   |
| Granted                         |   |              | 6,838,923  |   |                                |   | 0.19 |   |
| Vested                          |   |              | (1,202,091 | )      |                                |   | 9.17 |   |
| Forfeited                       |   |              | (827,729   | )      |                                |   | 1.40 |   |
| Non-vested at December 31, 2009 |   |              | 7,428,809  |   |                                |   | 1.44 |   |
| Granted                         |   |              | --         |   |                                |   | -- |   |
| Vested                          |   |              | (7,304,623 | )      |                                |   | 1.45 |   |
| Forfeited                       |   |              | (124,186   | )      |                                |   | 0.97 |   |
| Non-vested at December 31, 2010 |   |              | --         |   |                                | $      | -- |   |

| E. | Income Statement Impact |
|----|-------------------------|

|                                   |   | Years Ended December 31, |   |
|----------------------------------------|--------|--------------------------|--------|
| (in thousands)                         |   | 2010                     |   |   | 2009 |   |
|                                   |   |                     |   |   |   |   |
| Outperformance program                 |   | $                        | 192    |   |   | $ | 189 |   |
| Share options                          |   |                     | --     |   |   |   | 21 |   |
| Non-vested shares (net of forfeitures) |   |                     | 2,045  |   |   |   | 5,785 |   |
| Trustee grants                         |   |                     | --     |   |   |   | -- |   |
|                                   |   |                     |   |   |   |   |   |   |
| Net                                    |   | $                        | 2,237  |   |   | $ | 5,995 |   |

|                           |   | Years Ended December 31, |     |
|--------------------------------|--------|--------------------------|----------|
| (in thousands)                 |   | 2010                     |     |   | 2009 |   |
|                           |   |                     |     |   |   |   |
| Not subject to tax             |   | $                        | (572,485 | ) |   | $ | (2,840,027 | ) |
| Subject to tax                 |   |                     | 40,967   |   |   |   | (347,933 | ) |
|                           |   |                     |     |   |   |   |   |   |
| Total loss before income taxes |   | $                        | (531,518 | ) |   | $ | (3,187,960 | ) |

----

|                          |   | Years Ended December 31, |    |
|-------------------------------|--------|--------------------------|---------|
| (in thousands)                |   | 2010                     |    |   | 2009 |   |
|                          |   |                     |    |   |   |   |
| Current:                      |   |                     |    |   |   |   |
| Federal                       |   | $                        | 36      |   |   | $ | (863 | ) |
| State and local               |   |                     | 1,106   |   |   |   | (2,491 | ) |
| Total current                 |   |                     | 1,142   |   |   |   | (3,354 | ) |
|                          |   |                     |    |   |   |   |   |   |
| Deferred:                     |   |                     |    |   |   |   |   |   |
| Federal                       |   |                     | 52,315  |   |   |   | (76,949 | ) |
| State and local               |   |                     | 41,250  |   |   |   | (42,118 | ) |
| Total deferred                |   |                     | 93,565  |   |   |   | (119,067 | ) |
|                          |   |                     |    |   |   |   |   |   |
| Valuation allowance           |   |                     | (93,565 | ) |   |   | 119,114 |   |
|                          |   |                     |    |   |   |   |   |   |
| Total tax provision (benefit) |   | $                        | 1,142   |   |   | $ | (3,307 | ) |

|                                          |   | Years Ended December 31, |   |
|-----------------------------------------------|--------|--------------------------|--------|
|                                          |   | 2010                     |   |   | 2009 |   |
|                                          |   |                     |   |   |   |   |
| Statutory tax rate                            |   |                     | 35.0   | % |   |   | 35.0 | % |
| Valuation allowance                           |   |                     | 18.7   |   |   |   | (3.4 | ) |
| State and local taxes, net of federal benefit |   |                     | (5.2   | ) |   |   | 0.9 |   |
| Partnership income not subject to tax         |   |                     | (38.0  | ) |   |   | (33.2 | ) |
| Goodwill write-off                            |   |                     | (6.2   | ) |   |   | (0.5 | ) |
| SCUs                                          |   |                     | --     |   |   |   | 1.6 |   |
| Share-based compensation                      |   |                     | (0.6   | ) |   |   | (0.1 | ) |
| Sale of discontinued operations               |   |                     | (0.6   | ) |   |   | -- |   |
| Other                                         |   |                     | (3.3   | ) |   |   | (0.2 | ) |
| Effective tax rate                            |   |                     | (0.2   | )% |   |   | 0.1 | % |

----

|                               |   | December 31, |     |
|------------------------------------|--------|--------------|----------|
| (in thousands)                     |   | 2010         |     |   | 2009 |   |
|                               |   |         |     |   |   |   |
| Deferred tax assets:               |   |         |     |   |   |   |
| Deferred revenue                   |   | $            | 12,669   |   |   | $ | 19,429 |   |
| Share-based compensation           |   |         | 2,841    |   |   |   | 5,962 |   |
| Goodwill                           |   |         | 5,078    |   |   |   | 8,684 |   |
| Intangible assets                  |   |         | 22,770   |   |   |   | 23,916 |   |
| Derivatives                        |   |         | 18,307   |   |   |   | 7,412 |   |
| Investments                        |   |         | 513      |   |   |   | 23,004 |   |
| Purchased servicing rights         |   |         | 4,251    |   |   |   | 4,276 |   |
| Bad debt reserve                   |   |         | 18,436   |   |   |   | 14,363 |   |
| Affordable Housing loss reserve    |   |         | 34,587   |   |   |   | 62,135 |   |
| Partnerships and depreciation      |   |         | --       |   |   |   | 12,375 |   |
| Lease termination reserve          |   |         | --       |   |   |   | 23,911 |   |
| Net operating losses               |   |         | 51,526   |   |   |   | 57,101 |   |
| Deferred rent                      |   |         | 1,420    |   |   |   | -- |   |
| Capital losses                     |   |         | --       |   |   |   | 6,504 |   |
| Tax credits                        |   |         | 3,761    |   |   |   | 2,320 |   |
| Other                              |   |         | 648      |   |   |   | 347 |   |
| Total deferred tax assets          |   |         | 176,807  |   |   |   | 271,739 |   |
|                               |   |         |     |   |   |   |   |   |
| Deferred tax liabilities:          |   |         |     |   |   |   |   |   |
|                               |   |         |     |   |   |   |   |   |
| Partnerships and depreciation      |   |         | (1,046   | ) |   |   | -- |   |
| Deferred costs                     |   |         | (474     | ) |   |   | (911 | ) |
| Originated mortgage service rights |   |         | (7,327   | ) |   |   | (9,302 | ) |
| Total deferred tax liabilities     |   |         | (8,847   | ) |   |   | (10,213 | ) |
|                               |   |         |     |   |   |   |   |   |
| Valuation allowance                |   |         | (167,960 | ) |   |   | (261,526 | ) |
|                               |   |         |     |   |   |   |   |   |
| Net deferred tax asset             |   | $            | --       |   |   | $ | -- |   |

|                            |   | December 31, |   |
|---------------------------------|--------|--------------|--------|
| (in thousands)                  |   | 2010         |   |   | 2009 |   |
|                            |   |         |   |   |   |   |
| Gross unrecognized tax benefits |   | $            | 1,568  |   |   | $ | 1,489 |   |
| Accrued interest and penalties  |   |         | --     |   |   |   | 79 |   |
|                            |   |         |   |   |   |   |   |   |
| Total                           |   | $            | 1,568  |   |   | $ | 1,568 |   |

----

|                                        |   | (in thousands) |   |
|---------------------------------------------|--------|----------------|--------|
|                                        |   |           |   |   |
| Balance at January 1, 2009                  |   | $              | 2,484  |   |
| Additions for tax positions of prior years  |   |           | 80     |   |
| Reductions for tax positions of prior years |   |           | (996   | ) |
|                                        |   |           |   |   |
| Balance at December 31, 2009                |   |           | 1,568  |   |
| Additions for tax positions of prior years  |   |           | --     |   |
| Reductions for tax positions of prior years |   |           | --     |   |
|                                        |   |           |   |   |
| Balance at December 31, 2010                |   | $              | 1,568  |   |

|                                                                                                                |   | Year Ended December 31,    |    |
|---------------------------------------------------------------------------------------------------------------------|--------|----------------------------|---------|
|                                                                                                                |   |  2010                 |    | 2009 |   |
| (in thousands, except per share amounts)                                                                            |   |  ContinuingOperations |    | DiscontinuedOperations |   |  ContinuingOperations |   | DiscontinuedOperations |   |
|                                                                                                                |   |                       |    |   |   |   |   |   |   |   |   |   |   |
| Numerator:                                                                                                          |   |                       |    |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to Centerline Holding Company shareholders                                           |   | $                          | (96,185 | ) | $ | 71,360 |   | $ | (203,051 | ) | $ | (252,330 | ) |
| Preferred dividends(1)                                                                                              |   |                       | 25,043  |   |   | -- |   |   | (20,035 | ) |   | -- |   |
| Undistributed income (loss) attributable to Centerline Holding Company shareholders                                 |   |                       | (71,142 | ) |   | 71,360 |   |   | (223,086 | ) |   | (252,330 | ) |
| Undistributed earnings attributable to redeemable securities                                                        |   |                       | --      |   |   | -- |   |   | -- |   |   | -- |   |
| Effect of redeemable share conversions (Note 20)(3)                                                                 |   |                       | 284,765 |   |   | -- |   |   | (6,246 | ) |   | -- |   |
| Net income (loss) attributable to Centerline Holding Company shareholders used for EPS calculations – basic   |   | $                          | 213,623 |   | $ | 71,360 |   | $ | (229,332 | ) | $ | (252,330 | ) |
| Undistributed earnings allocated to redeemable securities on a dilution basis                                       |   |                       | --      |   |   | -- |   |   | -- |   |   | -- |   |
| Net income (loss) attributable to Centerline Holding Company shareholders used for EPS calculations – diluted |   | $                          | 213,623 |   | $ | 71,360 |   | $ | (229,332 | ) | $ | (252,330 | ) |
|                                                                                                                |   |                       |    |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                                                                                        |   |                       |    |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding                                                                                 |   |                       |    |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                               |   |                       | 297,088 |   |   | 297,088 |   |   | 53,963 |   |   | 53,963 |   |
| Effect of dilutive shares – Restricted shares(2)                                                              |   |                       | 714     |   |   | 714 |   |   | -- |   |   | -- |   |
| Diluted                                                                                                             |   |                       | 297,802 |   |   | 297,802 |   |   | 53, 963 |   |   | 53,963 |   |
|                                                                                                                |   |                       |    |   |   |   |   |   |   |   |   |   |   |
| Calculation of EPS:                                                                                                 |   |                       |    |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to Centerline Holding Company shareholders – basic                             |   | $                          | 213,623 |   | $ | 71,360 |   | $ | (229,332 | ) | $ | (252,330 | ) |
| Weighted average shares outstanding – basic                                                                   |   |                       | 297,088 |   |   | 297,088 |   |   | 53, 963 |   |   | 53,963 |   |
| Net income (loss) attributable to Centerline Holding Company shareholders – basic                             |   | $                          | 0.72    |   | $ | 0.24 |   | $ | (4.25 | ) | $ | (4.68 | ) |
| Net income (loss) attributable to Centerline Holding Company shareholders – diluted                           |   | $                          | 213,623 |   | $ | 71,360 |   | $ | (229,332 | ) | $ | (252,330 | ) |
| Weighted average shares outstanding –diluted                                                                  |   |                       | 297,802 |   |   | 297,802 |   |   | 53, 963 |   |   | 53,963 |   |
| Net income (loss) per share attributable to Centerline Holding Company shareholders – diluted                 |   | $                          | 0.72    |   | $ | 0.24 |   | $ | (4.25 | ) | $ | (4.68 | ) |
|                                                                                                                |   |                       |    |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (1)   2009 includes dividends in arrears. 2010 reflects a reversal of all preferred dividends in arrears upon conversion of the preferred CRA shares into Special Series A Shares.(2)   Restricted shares have been excluded from the 2009 calculation of the diluted earnings per ordinary shares because of their anti-dilutive effect.  The total restricted shares excluded from the calculations of diluted earnings per share were 7,429 for year ended December 31, 2009.(3)   Effect of redeemable share conversions includes in 2010 the increase to common shareholder’s equity of $286.2 million, representing the difference between the carrying value of the redeemable securities at conversion and the fair value of the Special Series A Shares issued. |

| A. | General |
|----|---------|

| B. | Derivative Positions |
|----|----------------------|

| ·   | Developers of Properties:  We were party to 17 interest rate swap agreements with the developers of properties relating to certain mortgage revenue bonds we previously owned.  We entered into these swap agreements to effectively convert the fixed rate of interest (per the terms of the mortgage revenue bond) to a variable rate.  Under the terms of these agreements, we pay fixed interest rates equal to those of the related bonds and receive interest at a variable rate (based on the Securities Industry and Financial Markets Association (“SIFMA”) index).  Since the December 2007 re-securitization transaction, these swaps are now deemed to be free-standing derivatives.  At December 31, 2010, these swaps had an aggregate notional amount of $159.6 million, a weighted average interest rate of 5.83% and a weighted average remaining term of 12.0 years (we terminated six of these types of swaps during 2009 and two during 2010 at a net gain of $9.0 million in 2009 and $2.1 million in 2010). |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our Affordable Housing Group is party to an interest rate swap whereby we pay a variable rate of interest (based on the SIFMA index) and receive interest at a fixed rate of 3.83%.  At December 31, 2010, the swap had a notional amount of $9.5 million, with a variable interest rate of 0.63% payable to a third party and remaining term of 12.4 years. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| C. | Financial Statement Impact |
|----|----------------------------|

|                   |   | December 31, |   |
|------------------------|--------|--------------|--------|
| (in thousands)         |   | 2010         |   | 2009 |   |
|                   |   |         |   |   |   |   |   |
| Net liability position |   | $            | 18,831 |   | $ | 17,964 |   |
| Net asset position     |   | $            | 742    |   | $ | 612 |   |

|                                                                                       |   | Years Ended December 31, |   |
|--------------------------------------------------------------------------------------------|--------|--------------------------|--------|
| (in thousands)                                                                             |   | 2010                     |   | 2009 |   |
|                                                                                       |   |                     |   |   |   |   |   |
| Not designated as hedges:                                                                  |   |                     |   |   |   |   |   |
|                                                                                       |   |                     |   |   |   |   |   |
| Interest payments                                                                          |   | $                        | 10,138 |   | $ | 23,469 |   |
| Interest receipts                                                                          |   |                     | (3,994 | ) |   | (8,160 | ) |
| Change in fair value                                                                       |   |                     | 2,787  |   |   | (12,820 | ) |
| Amortization of unrealized losses reclassified from accumulated other comprehensive income |   |                     | --     |   |   | 2,603 |   |
| Subtotal                                                                                   |   |                     | 8,931  |   |   | 5,092 |   |
|                                                                                       |   |                     |   |   |   |   |   |
| Terminated swap contracts:                                                                 |   |                     |   |   |   |   |   |
|                                                                                       |   |                     |   |   |   |   |   |
| Loss on termination of free-standing derivatives                                           |   |                     | (2,052 | ) |   | (9,046 | ) |
|                                                                                       |   |                     |   |   |   |   |   |
| Included in interest expense                                                               |   | $                        | 6,879  |   | $ | (3,954 | ) |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | December 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
| (in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 2010         |    |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         |    |   |   |   |
| Within continued operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |    |   |   |   |
| Fund advances related to property partnerships, net(1)                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $            | 55,003  |   |   | $ | 46,549 |   |
| Other receivables from partnerships, net                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | 982     |   |   |   | 820 |   |
| Fees receivable and other, net                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |         | 22,835  |   |   |   | 7,582 |   |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | 78,820  |   |   |   | 54,951 |   |
| Less: Eliminations(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |         | (78,310 | ) |   |   | (52,969 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         |    |   |   |   |   |   |
| Total for continued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $            | 510     |   |   | $ | 1,982 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         |    |   |   |   |   |   |
| Within discontinued operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |         |    |   |   |   |   |   |
| Loan to AMAC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $            | --      |   |   | $ | 79,877 |   |
| Investment in AMAC common and preferred shares                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |         | --      |   |   |   | 12,195 |   |
| Interest receivable on loan to AMAC                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |         | --      |   |   |   | 3,872 |   |
| Fees receivable from AMAC                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |         | --      |   |   |   | 1,290 |   |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | --      |   |   |   | 97,234 |   |
| Cumulative equity losses and reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |         | --      |   |   |   | (92,934 | ) |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | --      |   |   |   | 4,300 |   |
| Co-investment in consolidated CMBS and High-Yield Debt Fund Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | --      |   |   |   | (77,400 | ) |
| Co-investment in CUC                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         | --      |   |   |   | 2,306 |   |
| Fund advances related to property partnerships, net                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |         | --      |   |   |   | 707 |   |
| Other receivables from partnerships, net                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | --      |   |   |   | 12,931 |   |
| Fees receivable and other, net                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |         | --      |   |   |   | 505 |   |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | --      |   |   |   | (56,651 | ) |
| Less:  Eliminations(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |         | --      |   |   |   | 64,469 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         |    |   |   |   |   |   |
| Total for discontinued operation                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $            | --      |   |   | $ | 7,818 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| (1)    Net of reserves of $32.0 million at December 31, 2010 and $24.0 million at December 31, 2009.(2)   For management purposes, we treat consolidated partnerships as equity investments in evaluating our results. As we consolidate the funds, we eliminate the investments for presentation in the consolidated financial statements. In addition, any fees or advances receivable from consolidated partnerships are eliminated in consolidation. |   |

----

| (in thousands)                                                                                    |   | Included in following line itemon ConsolidatedStatements of Operations |   |  Years Ended December 31, |   |
|---------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|--------------------------------|--------|
| 2010                                                                                              |   | 2009                                                                   |   |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| Within continued operations:                                                                      |   |                                                                   |   |                           |   |   |   |   |   |
| Expenses for management services provided by Island and procedures review payments made to Island |   | General and Administrative                                             |   | $                              | 8,224  |   | $ | -- |   |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| Expenses for subservicing of mortgage loans by C-III                                              |   | General and Administrative                                             |   |                           | 6,515  |   |   | -- |   |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| Transition services charged to C-III, net                                                         |   | General and Administrative                                             |   |                           | (379   | ) |   | -- |   |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| Sublease charges to C-III                                                                         |   | General and Administrative                                             |   |                           | (1,317 | ) |   | -- |   |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| Expenses for consulting and advisory services provided by TRCLP                                   |   | General and Administrative                                             |   |                           | 139    |   |   | -- |   |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| Expenses for property management services provided by TRCLP                                       |   | Other Losses from Consolidated Partnerships, Net                       |   |                           | 5,942  |   |   | 5,661 |   |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| Net interest rate swap payments to property developers controlled by TRCLP                        |   | Interest Expense                                                       |   |                           | 2,513  |   |   | 2,441 |   |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| Within discontinued operations:                                                                   |   |                                                                   |   |                           |   |   |   |   |   |
| AMAC servicing fee income                                                                         |   | Fee Income                                                             |   |                           | (46    | ) |   | (309 | ) |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| Equity loss of AMAC(1)                                                                            |   | Equity and Other Income                                                |   |                           | --     |   |   | 5,300 |   |
|                                                                                              |   |                                                                   |   |                           |   |   |   |   |   |
| (1)   Includes write-down of loan and investments                                  |

| A. | Island Centerline Manager LLC (the “Manager”) |
|----|-----------------------------------------------------------|

| ·   | Island will provide executive management and strategic, restructuring and general advisory services to us; and |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | we paid $5.0 million of advisory fees over a 12 month period from the date of the agreement for certain fund management review services and have paid and will pay a $5.0 million annual base management fee and an annual incentive fee if certain EBITDA thresholds are met (as defined in the agreement). |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| B. | The Related Companies L.P. |
|----|----------------------------|

| C. | Fund Advances Related to Property Partnerships, Net |
|----|-----------------------------------------------------|

| D. | Other |
|----|-------|

----

| E. | AMAC |
|----|------|

----

|                                                                                                          |   | Years Ended December 31, |    |
|---------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
| (in thousands)                                                                                                |   | 2010                     |    | 2009 |   |
|                                                                                                          |   |                     |    |   |   |   |   |
| Revenues                                                                                                      |   |                     |    |   |   |   |   |
| Affordable Housing                                                                                            |   | $                        | 137,361 |   | $ | 132,928 |   |
| Mortgage Banking                                                                                              |   |                     | 51,521  |   |   | 38,106 |   |
| Corporate                                                                                                     |   |                     | 1,222   |   |   | 2,086 |   |
| Consolidated Partnerships                                                                                     |   |                     | 112,173 |   |   | 78,902 |   |
| Eliminations                                                                                                  |   |                     | (83,120 | ) |   | (72,243 | ) |
| Consolidated Revenues                                                                                         |   | $                        | 219,157 |   | $ | 179,779 |   |
|                                                                                                          |   |                     |    |   |   |   |   |
| DepreciationandAmortization                                                                                   |   |                     |    |   |   |   |   |
| Affordable Housing                                                                                            |   | $                        | 2,894   |   | $ | 7,507 |   |
| Mortgage Banking                                                                                              |   |                     | 10,625  |   |   | 9,892 |   |
| Corporate                                                                                                     |   |                     | 9,752   |   |   | 17,109 |   |
| Consolidated Depreciation and Amortization                                                                    |   | $                        | 23,271  |   | $ | 34,508 |   |
|                                                                                                          |   |                     |    |   |   |   |   |
| Depreciation and Amortization of Consolidated Partnerships                                                    |   | $                        | 57,027  |   | $ | 50,045 |   |
|                                                                                                          |   |                     |    |   |   |   |   |
| Net Income (Loss) attributable to Centerline Holding Company shareholders                                     |   |                     |    |   |   |   |   |
| Affordable Housing                                                                                            |   | $                        | (15,252 | ) | $ | (212,406 | ) |
| Mortgage Banking                                                                                              |   |                     | 9,871   |   |   | 146 |   |
| Corporate                                                                                                     |   |                     | (92,511 | ) |   | 186 |   |
| Consolidated Partnerships                                                                                     |   |                     | (13     | ) |   | (3 | ) |
| Eliminations                                                                                                  |   |                     | 1,720   |   |   | 9,026 |   |
| Total Net Income (Loss) attributable to Centerline Holding Company shareholders – continuing operations |   | $                        | (96,185 | ) | $ | (203,051 | ) |

|                                              |   | December 31, |      |
|---------------------------------------------------|--------|--------------|-----------|
| (in thousands)                                    |   | 2010         |      | 2009 |   |
|                                              |   |         |      |   |   |   |   |
| Identifiable Assets                               |   |         |      |   |   |   |   |
| Affordable Housing                                |   | $            | 1,139,707 |   | $ | 1,074,696 |   |
| Mortgage Banking                                  |   |         | 41,010    |   |   | 102,521 |   |
| Corporate                                         |   |         | 131,441   |   |   | 153,080 |   |
| Consolidated Partnerships                         |   |         | 4,152,403 |   |   | 4,446,472 |   |
| Eliminations of intersegment balances             |   |         | (458,821  | ) |   | (427,140 | ) |
| Consolidated Assets – continuing operations |   | $            | 5,005,740 |   | $ | 5,349,629 |   |

| A. | Affordable Housing Transactions |
|----|---------------------------------|

----

| ·   | Five of the agreements (with $597.7 million of the potential exposure) are transacted by our subsidiary, Centerline Financial, an isolated special purpose entity wholly owned by CFin Holdings. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Seven of the agreements (with $447.9 million of the potential exposure) are with our subsidiary, CFin Holdings, an isolated special purpose entity owned 90% by CCG and 10% by Natixis.  On March 5, 2010, we entered into with Natixis a Master Novation, Stabilization, Assignment, Allocation, Servicing and Asset Management Agreement (the “Natixis Master Agreement”) pursuant to which six of the credit intermediation agreements (with $400.5 million of the potential exposure) originally transacted with Centerline Capital Group Inc. (“CCG”) and Centerline Holding Company (“CHC”) were terminated and assumed by CFin Holdings. Pursuant to an amendment to the Natixis Master Agreement entered into on June 30, 2010, one of the agreements that had been transacted with Centerline Financial (with $47.4 million of potential exposure) was novated and CFin Holdings assumed the obligations thereunder. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Eight of the credit intermediation agreements (with $383.0 million of the potential exposure) are with Centerline Guaranteed Holdings LLC, an isolated special purpose entity and wholly owned subsidiary of CCG. On March 5, 2010, the Company entered into with Merrill Lynch a Master Assignment, Stabilization, Assignment Allocation and Asset Management Agreement (the “Merrill Transaction Assignment Agreement”) pursuant to which the eight credit intermediation agreements originally transacted with CCG and CHC were assigned and assumed by Centerline Guaranteed Holdings LLC, which was capitalized with all current and future voluntary loans, receivables, and SLP fees associated with all Merrill Credit Enhanced Funds, deposit collateral of $46.3 million held by Merrill Lynch, and $0.1 million in cash. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| B. | Forward Transactions |
|----|----------------------|

| C. | Mortgage Loan Loss Sharing Agreements |
|----|---------------------------------------|

|                                          |   | (in thousands) |   |
|-----------------------------------------------|--------|----------------|--------|
|                                          |   |           |   |   |
| Balance at January 1, 2009                    |   | $              | 13,116 |   |
| Additional provision recorded during the year |   |           | 11,163 |   |
| Realized losses on risk-sharing obligations   |   |           | (60    | ) |
|                                          |   |           |   |   |
| Balance at December 31, 2009                  |   |           | 24,219 |   |
| Additional provision recorded during the year |   |           | 10,002 |   |
| Realized losses on risk-sharing obligations   |   |           | (4,297 | ) |
|                                          |   |           |   |   |
| Balance at December 31, 2010                  |   | $              | 29,924 |   |

----

| D. | Legal Contingencies |
|----|---------------------|

| ·   | On or about March 6, 2009, Regions Bank, as Trustee under a Trust Indenture dated April 1, 2005 respecting the Walton Trail Apartments, commenced an action, entitled Regions Bank v. Deickman, et al., Civil Action No. 2009-CV-165607-MJW, in the Superior Court of Fulton County, Georgia, against Stephen R. Dieckman, Arthur Dickson Cannon, Jr. and Arthur Dickson Cannon, III (the “Defendants”) seeking to collect money owed under a certain Guaranty and Suretyship Agreement dated as of May 1, 2005.  On or about May 28, 2009, the Defendants filed a Third-Party Complaint in that action against CCG and Caswyck Trail, LLC (“Caswyck”).  Defendants thereafter amended their Third-Party Complaint.  Caswyck is a Georgia limited liability company, which owns the Walton Trail affordable housing apartment complex in Georgia and in which indirect subsidiaries of CCG and an investment fund sponsored by CCG are members.  The Amended Third-Party Complaint alleges that CCG misled and defrauded the Defendants and acted in bad faith in connection with certain unsuccessful and unconsummated negotiations to restructure the finances of Caswyck.  The Amended Third-Party Complaint asserts a claim for common law fraud against CCG and claims for subrogation, indemnification, unjust enrichment and declaratory judgment against Caswyck for any liability that Defendants may have to the Trustee.  The Defendants seek unspecified amounts of damages, attorneys fees and costs.  On or about August 10, 2009, CCG and Caswyck each separately moved to dismiss the claims then asserted against it.  In accordance with Georgia procedures, each also answered the Third-Party Complaint on or about August 10, 2009 and asserted counterclaims against the Third-Party Plaintiffs.  In two written orders each dated December 14, 2009, the Court granted CCG’s and Caswyck’s motions to dismiss and dismissed the subrogation and contribution claims against Caswyck and the fraud claim against Centerline.  After Caswyck moved to dismiss the subrogation and contribution claims, but prior to the Court ruling on that motion, the third-party plaintiffs amended their Third-Party Complaint to assert their claims for indemnification and unjust enrichment against Caswyck.  After the entry of the Court’s December 14, 2009 dismissal orders, the third-party plaintiffs moved for reconsideration of the Court’s decision to dismiss the fraud claim against CCG and for permission to take an immediate appeal of that decision.  The Court has not yet ruled on those two motions by the third-party plaintiffs.  On or about July 9, 2010, the Court entered a Case Scheduling Order requiring, among other pretrial deadlines and procedures, that all discovery be completed by August 15, 2011, dispositive motions must be made by September 30, 2011 and the case will be set on a trial calendar in early 2012.  CCG and Caswyck intend to continue to defend vigorously against the claims asserted against them. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On or about July 23, 2010, Locust Street Lofts, LP, (“Lofts”), Locust Street Tenant, LP, (“Tenant”), Elias Haus Partners, LLC, Elias Tenant, LLC, Bill L. Bruce and Richard Yackey commenced an action in the Circuit Court of the City of St. Louis, Missouri, entitled Locust Street Lofts, LP, et al v. CCL Locust Street Owner LLC, et al., Cause No. 1022-CC10087, against certain subsidiaries of the Company and investment funds managed by the Company’s subsidiaries (the “Centerline Locust Street Defendants” ).  The plaintiffs, however, did not immediately serve the summons and complaint on the Centerline Locust Street Defendants.  On or about September 20, 2010, the Centerline Locust Street Defendants served their answer and counterclaim and filed certain motions in the action, including one for a preliminary injunction or the appointment of a receiver. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| E. | Other Contingent Liabilities |
|----|------------------------------|

| F. | Funding Commitments |
|----|---------------------|

| (in thousands)           |   | Minimumleasepayments |   |   | Subleaseincome |   |    | Netminimumleasepayments |   |
|--------------------------|--------|----------------------|--------|--------|----------------|--------|---------|-------------------------|--------|
|                     |   |                 |   |   |           |   |    |                    |   |
| Year Ending December 31, |   |                 |   |   |           |   |    |                    |   |
| 2011                     |   | $                    | 8,422  |   |           | $      | (2,854  | )                       |   | $ | 5,568 |   |
| 2012                     |   |                 | 7,453  |   |           |   | (2,862  | )                       |   |   | 4,591 |   |
| 2013                     |   |                 | 7,041  |   |           |   | (1,875  | )                       |   |   | 5,166 |   |
| 2014                     |   |                 | 6,931  |   |           |   | (1,579  | )                       |   |   | 5,352 |   |
| 2015                     |   |                 | 6,910  |   |           |   | (1,524  | )                       |   |   | 5,386 |   |
| Thereafter               |   |                 | 15,348 |   |           |   | (3,614  | )                       |   |   | 11,734 |   |
|                     |   |                 |   |   |           |   |    |                    |   |   |   |   |
| Total                    |   | $                    | 52,105 |   |           | $      | (14,308 | )                       |   | $ | 37,797 |   |

----

| ·   | In January 2011, we signed a redemption agreement with a holder of 107,123 Convertible Redeemable CRA Shares according to which the shares and their rights were cancelled in exchange for $0.2 million.  As a result of this agreement, the aggregate gross issuance price for the Convertible Redeemable CRA Shares due on or after January 1, 2012 was reduced to $11.0 million. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On February 10, 2011, we closed a $119.25 million multi-investor LIHTC fund.  With the closing of the new fund, we are due to receive a $2.3 million in acquisition allowance fees, $2.6 million in property acquisition fees and $1.7 million in partnership management fees.  These fees are deferred and recognized over various periods as described in Note 2. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 9.   | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.  |
|----------------|---------------------------------------------------------------------------------------------|
|           | None.                                                                                  |
| Item 9A.  | Controls and Procedures.                                                               |
|           | (a)                                                                                    | Evaluation of Disclosure Controls and Procedures.Our President, Chief Financial Officer and Chief Operating Officer has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this annual report.  Based on such evaluation, he has concluded that our disclosure controls and procedures as of the end of the period covered by this annual report were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and to ensure that such information is accumulated and communicated to our management, including the President, Chief Financial Officer and Chief Operating Officer, as appropriate, to allow timely decisions regarding required disclosure.  |
|           | (b)                                                                                    | Internal Control over Financial Reporting.There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period ending December 31, 2010, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  |
| Item 9B.  | Other Information                                                                      |
|           | None.                                                                                  |

----

| PART III  |
|----------------|
| Item 10.  | Directors, Executive Officers and Corporate Governance.  |
|           | The information required by this item is incorporated herein by reference to our definitive proxy statement to be filed pursuant to Regulation 14A under the Exchange Act.  |
| Item 11.  | Executive Compensation.  |
|           | The information required by this item is incorporated herein by reference to our definitive proxy statement to be filed pursuant to Regulation 14A under the Exchange Act.  |
| Item 12.  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.  |
|           | The information required by this item is incorporated herein by reference to our definitive proxy statement to be filed pursuant to Regulation 14A under the Exchange Act.  |
| Item 13.  | Certain Relationships and Related Transactions, and Director Independence.  |
|           | The information required by this item is incorporated herein by reference to our definitive proxy statement to be filed pursuant to Regulation 14A under the Exchange Act.  |
| Item 14.  | Principal Accounting Fees and Services.  |
|           | The information required by this item is incorporated herein by reference to our definitive proxy statement to be filed pursuant to Regulation 14A under the Exchange Act.  |

----

| PART IV   |
|----------------|
| Item 15.  | Exhibits and Financial Statement Schedules.  |
|           |   |   | SequentialPage |
| (a)1.     | Financial Statements  |   |   |   |
|           | Report of Independent Registered Public Accounting Firm  |   | 65  |   |
|           | Consolidated Balance Sheets as of December 31, 2010 and 2009  |   | 66 |   |
|           | Consolidated Statements of Operations for the years ended December 31, 2010 and 2009  |   | 67  |   |
|           | Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2010 and 2009  |   | 68  |   |
|           | Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009  |   | 69  |   |
|           | Notes to Consolidated Financial Statements  |   | 71  |   |
| (a)2.     | Financial Statement Schedules All schedules have been omitted because they are not applicable or the required information is included in the consolidated financial statements and the notes thereto.  |

| .  | Exhibits          |
|---------|------------------------|
|    | 1.      | The Restated Certificate of Trust of Centerline, dated February 26, 2002, as filed in the office of the Secretary of State on February 26, 2002*  |
|    | 3.(i)a            | Certificate of Amendment of the Restated Certificate of Business Trust dated as of November 17, 2003 (incorporated by reference to Exhibit 3.3 of our Registration Statement on Form S-8, filed with the Commission on November 25, 2003).  |
|    |                   | Certificate of Amendment of the Restated Certificate of Trust, effective April 2, 2009 and dated March 28, 2009 (incorporated by reference to Exhibit 3.3 of our Current Report on Form 8-K filed with the Commission on April 6, 2007).  |
|    |                   | Third Amended and Restated Trust Agreement dated as of                   , 2010 (incorporated by reference to Exhibit                        of our                             Proxy Statement for Annual Shareholders’ Meeting).  |
|    |                   | Sixth Amended and Restated Bylaws of Centerline Holding Company, dated October 6, 2010 incorporated by reference to Appendix D of the definitive Proxy Statement for our Annual Meeting of Shareholders filed on Schedule 14A with the Commission on August 24, 2010.  |
|    | 4(a)    | Specimen Copy of Share Certificate for our shares of beneficial interest (incorporated by reference to Exhibit 4.1 of our Registration Statement on Form S-8, filed with the Commission on November 25, 2003).  |
|    | 4(b)    | Certificate of Designation of special preferred voting shares, dated November 17, 2003 (incorporated by reference to Exhibit 99.4 of our Current Report on Form 8-K, filed with the Commission on December 1, 2003).  |
|    | 4(c)    | Amendment No. 1 to the Certificate of Designation of special preferred voting shares of Centerline Holding Company, effective May 4, 2007 (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Commission on May 10, 2007).  |
|    | 4(d)    | Amendment No. 2 to the Certificate of Designation of the special preferred voting shares, dated as of March 5, 2010 (incorporated by reference to Exhibit 3.6 of our Current Report on Form 8-K filed with the Commission on March 11, 2010). |

----

|   | 4(e)     | Certificate of Designation relating to the creation of the Special Series B Shares, dated as of March 5, 2010 (incorporated by reference to Exhibit 3.5 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                |
|--------|-------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10(a)    | Contribution Agreement dated as of December 17, 2002 (incorporated by reference to our Preliminary Proxy Statement on Schedule 14A filed with the Commission on February 2, 2003).                                                                                                                                                                                                     |
|   | 10(b)    | Registration Rights Agreement, dated as of November 17, 2003, by and among Centerline Holding Company and APH Associates L.P., DLK Associates L.P., Marc Associates, L.P., Related General II, L.P. and SJB Associates L.P. (incorporated by reference to Exhibit 99.1 of our Registration Statement on Form S-8 filed with the Commission on November 25, 2003).                      |
|   | 10(c)    | Registration Rights Agreement, dated as of March 5, 2010, by and among Centerline Holding Company and C-III Capital Partners LLC (incorporated by reference to Exhibit 10.16 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                           |
|   | 10(d)    | Registration Rights Agreement, dated as of March 5, 2010, by and among Centerline Holding Company and Island Centerline Manager LLC (incorporated by reference to Exhibit 10.17 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                        |
|   | 10(e)    | Restricted Share Plan (incorporated by reference to Exhibit 4.2 of our Registration Statement on Form S-8 filed with the Commission on November 25, 2003).                                                                                                                                                                                                                             |
|   | 10(f)    | Management Agreement dated as of November 17, 2003, between us and Related Capital Company LLC (incorporated by reference to Exhibit 10(a) of our December 31, 2003 Annual Report on Form 10-K).                                                                                                                                                                                       |
|   | 10(g)    | Amended and Restated Operating Agreement of Centerline Capital Company LLC, dated as of November 17, 2003 (incorporated by reference to Exhibit 99.7 of our Current Report on Form 8-K filed with the Commission on December 1, 2003).                                                                                                                                                 |
|   | 10(h)    | Amendment No. 1 to the Amended and Restated Operating Agreement of Centerline Capital Company LLC, dated as of March 5, 2010*.                                                                                                                                                                                                                                                         |
|   | 10(i)    | Voting Agreement, dated as of November 17, 2003, by and among Centerline Holding Company and APH Associates L.P., DLK Associates L.P., Marc Associates, L.P., Related General II, L.P. and SJB Associates L.P. (incorporated by reference to Exhibit 99.10 of our Current Report on Form 8-K filed with the Commission on December 1, 2003).                                           |
|   | 10(j)    | Exchange Rights Agreement, dated as of November 17, 2003, by and among Centerline Capital Company, LLC, Centerline Capital Group Inc., APH Associates L.P., DLK Associates L.P, Marc Associates, L.P., Related General II, L.P. and SJB Associates L.P. (incorporated by reference to Exhibit 99.11 of our Current Report on Form 8-K filed with the Commission on December 1, 2003).  |
|   | 10(k)    | Lock-Up Agreement of Stephen M. Ross, dated November 17, 2003 (incorporated by reference to Exhibit 99.16 of our Current Report on Form 8-K filed with the Commission on December 1, 2003).                                                                                                                                                                                            |
|   | 10(l)    | Centerline Holding Company Guaranty, dated December 17, 2002 (incorporated by reference to Exhibit 99.27 of our Current Report on Form 8-K filed with the Commission on December 1, 2003).                                                                                                                                                                                             |
|   | 10(m)    | Amended and Restated Incentive Share Plan (incorporated by reference to Exhibit 99.1 of our Form S-8/A, filed with the Commission on March 2, 2004).                                                                                                                                                                                                                                   |
|   | 10(n)    | Form of Non-Qualified Share Option Award Agreement (incorporated by reference to Exhibit 10(af) of our December 31, 2004 Annual Report on Form 10-K).                                                                                                                                                                                                                                  |
|   | 10(o)    | Form of Restricted Share Award Agreement (incorporated by reference to Exhibit 10(ag) of our December 31, 2004 Annual Report on Form 10-K).                                                                                                                                                                                                                                                 |

----

|   | 10(p)     | Centerline Holding Company 2007 Incentive Share Plan and Form of 2007 Incentive Share Plan (incorporated by reference to our definitive proxy statement on Schedule 14A filed with the Commission on April 23, 2007).                                                                                                                                                                                                              |
|--------|--------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10(aa)    | First Amended and Restated Limited Liability Company Agreement of Centerline Financial Holdings LLC and Natixis Financial Products Inc. and Centerline Capital Group Inc. dated March 5, 2010*.                                                                                                                                                                                                                                    |
|   | 10(ab)    | Unitholder and Warrant Agreement among Centerline Financial Holdings LLC, Natixis Financial Products Inc. and Centerline Capital Group Inc., dated as of June 28, 2006 (incorporated by reference to Exhibit 10.2 of our June 30, 2006 Quarterly Report on Form 10-Q).                                                                                                                                                             |
|   | 10(ac)    | Second Amended and Restated Limited Liability Company Agreement of Centerline Financial LLC, dated as of December 14, 2007*.                                                                                                                                                                                                                                                                                                       |
|   | 10(ad)    | Senior Loan Agreement among Centerline Financial LLC, the lenders that are party thereto and Citibank, N.A., as senior agent, dated as of June 28, 2006 (incorporated by reference to Exhibit 10.4 of our June 30, 2006 Quarterly Report on Form 10-Q).                                                                                                                                                                            |
|   | 10(ae)    | Subordination and Security Agreement among Centerline Financial LLC, Deutsche Bank Trust Company Americas, and Citibank, N.A., as senior agent and mezzanine agent,  dated as of June 28, 2006 (incorporated by reference to Exhibit 10.6 of our June 30, 2006 Quarterly Report on Form 10-Q).                                                                                                                           |
|   | 10(af)    | Right of First Refusal Letter Agreement among Centerline Holding Company and Centerline Financial LLC, dated as of June 28, 2006 (incorporated by reference to Exhibit 10.8 of our June 30, 2006 Quarterly Report on Form 10-Q).                                                                                                                                                                                                   |
|   | 10(ag)    | Credit Support Swap between Centerline Origination Trust I and Centerline Financial LLC (incorporated by reference to Exhibit 10.10 of our June 30, 2006 Quarterly Report on Form 10-Q).                                                                                                                                                                                                                                           |
|   | 10(ah)    | Letter agreement dated July 12, 2007 between Stephen M. Ross and Centerline Holding Company (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Commission on July 18, 2007).                                                                                                                                                                                                              |
|   | 10(ai)    | Amendment to Amended and Restated Incentive Share Plan (incorporated by reference to Exhibit 10(s) of our December 31, 2006 Annual Report on Form 10-K).                                                                                                                                                                                                                                                                           |
|   | 10(aj)    | Consulting and Advisory Agreement, dated March 5, 2010, between Centerline Capital Group, Inc. and TRCLP Affordable Acquisitions LLC (incorporated by reference to Exhibit 10.22 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                   |
|   | 10(ak)    | Tax Benefits Preservation Plan, dated March 5, 2010, between Centerline Holding Company and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 10.23 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                          |
|   | 10(al)    | Bond Exchange Agreement, dated as of December 27, 2007, among Federal Home Loan Mortgage Corporation, Centerline 2007-1 EIT Securitization, LLC, Centerline 2009-1 SU Securitization, LLC and Centerline 2007-1 T Securitization, LLC (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Commission on January 3, 2007).                                                                  |
|   | 10(am)    | Reimbursement, Pledge and Security Agreement, dated as of December 27, 2007, between Federal Home Loan Mortgage Corporation and Centerline Sponsor 2009-2 Securitization, LLC (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Commission on January 3, 2007).                                                                                                                          |
|   | 10(an)    | Series Certificate Agreement, dated as of December 27, 2007, by and between Federal Home Loan Mortgage Corporation, in its corporate capacity, and Federal Home Loan Mortgage Corporation, in its capacity as administrator, with respect to Freddie Mac Multifamily Variable Rate Certificates Series M012 (incorporated by reference to Exhibit 10.4 of our Current Report on Form 8-K filed with the Commission on January 3, 2007). |

----

|   | 10(ao)    | Series Certificate Agreement, dated as of December 27, 2007, by and between Federal Home Loan Mortgage Corporation, in its corporate capacity, and Federal Home Loan Mortgage Corporation, in its capacity as administrator, with respect to Freddie Mac Multifamily Variable Rate Certificates Series M013 (incorporated by reference to Exhibit 10.4 of our Current Report on Form 8-K filed with the Commission on January 3, 2007).                                                                                  |
|--------|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10(ap)    | Series Certificate Agreement, dated as of December 27, 2007, by and between Federal Home Loan Mortgage Corporation, in its corporate capacity, and Federal Home Loan Mortgage Corporation, in its capacity as administrator, with respect to Freddie Mac Multifamily Variable Rate Certificates Series M014 (incorporated by reference to Exhibit 10.5 of our Current Report on Form 8-K filed with the Commission on January 3, 2007).                                                                                  |
|   | 10(aq)    | Limited Support Agreement, dated as of December 27, 2007, between Centerline Guarantor LLC and Federal Home Loan Mortgage Corporation (incorporated by reference to Exhibit 10.6 of our Current Report on Form 8-K filed with the Commission on January 3, 2007).                                                                                                                                                                                                                                                        |
|   | 10(ar)    | Limited Support Agreement, dated as of December 27, 2007, between Centerline Holding Company and Federal Home Loan Mortgage Corporation (incorporated by reference to Exhibit 10.7 of our Current Report on Form 8-K filed with the Commission on January 3, 2007).                                                                                                                                                                                                                                                      |
|   | 10(as)    | Stabilization Guaranty, Escrow and Security Agreement, dated as of December 27, 2007, between Centerline Stabilization 2009-1 Securitization, LLC and Federal Home Loan Mortgage Corporation (incorporated by reference to Exhibit 10.8 of our Current Report on Form 8-K filed with the Commission on January 3, 2007).                                                                                                                                                                                                 |
|   | 10(at)    | Stabilization Limited Support Agreement, dated as of December 27, 2007, between Centerline Holding Company and Federal Home Loan Mortgage Corporation (incorporated by reference to Exhibit 10.9 of our Current Report on Form 8-K filed with the Commission on January 3, 2007).                                                                                                                                                                                                                                        |
|   | 10(au)    | Certificate Placement Agreement, dated as of December 27, 2007, among Morgan Stanley & Co., Centerline Holding Company and Federal Home Loan Mortgage Corporation (incorporated by reference to Exhibit 10.10 of our Current Report on Form 8-K filed with the Commission on January 3, 2009).                                                                                                                                                                                                                       |
|   | 10(av)    | Purchase and Sale Agreement, dated as of March 5, 2010, by and among Centerline Holding Company trust, Centerline Capital Group Inc., ARCAP 2004 RR3 Resecuritization, Inc., ARCAP 2005 RR5 Resecuritization, Inc., Centerline Fund Management LLC, Centerline CMBS Fund III Management LLC, Centerline REIT, Inc., CM Investor LLC, and C-III Capital Partners LLC (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                           |
|   | 10(ba)    | Management Agreement, dated as of March 5, 2010, entered into by and among Island Centerline Manager LLC, on the one hand, and Centerline Holding Company and Centerline Capital Group Inc., jointly and severally on the other hand (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                          |
|   | 10(bb)    | Master Novation, Stabilization, Assignment, Allocation, Servicing and Asset Management Agreement, dated as of March 5, 2010, by and among Centerline Holding Company, Centerline Capital Group Inc., Centerline Affordable Housing Advisors LLC, Centerline Guaranteed Manager LLC, Centerline Financial Holdings LLC, Centerline Mortgage Capital Inc., and Natixis Financial Products Inc. (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).  |
|   | 10(bc)    | Senior Secured Credit Agreement, dated as of March 5, 2010, between Centerline Financial Holdings LLC, the Lenders named therein, and Natixis Financial Products Inc., as administrative agent (incorporated by reference to Exhibit 10.4 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                     |

----

|   | 10(bd)    | Receivables Assignment and Assumption Agreement (“Natixis Transaction Receivables Assignment”), dated as of March 5, 2010, by and among Centerline Holding Company, Centerline Capital Group Inc., Centerline Affordable Housing Advisors LLC, Centerline Guaranteed Manager LLC, each of the entities listed on Schedule A of the Natixis Transaction Receivables Assignment under the heading Credit Enhanced Fund General Partner, each of the entities listed on Schedule A of the Natixis Transaction Receivables Assignment under the heading Credit Enhanced Partnership General Partner, each of the entities listed on Schedule B of the Natixis Transaction Receivables Assignment under the heading Special Limited Partner, and Centerline Financial Holdings LLC (incorporated by reference to Exhibit 10.5 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).  |
|--------|--------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10(be)    | Transaction Assignment Agreement, dated as of March 5, 2010, by and among Merrill Lynch Capital Services, Inc., Centerline Capital Group Inc., Centerline Guaranteed Holdings LLC, and with the consent and acknowledgement of Centerline Holding Company (incorporated by reference to Exhibit 10.6 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 10(bf)    | Master Assignment, Stabilization, Assignment, Allocation, Servicing and Asset Management Agreement, dated as of March 5, 2010, by and among Centerline Holding Company, Centerline Capital Group Inc., Centerline Affordable Housing Advisors LLC, Centerline Mortgage Capital Inc., Centerline Guaranteed Manager LLC, and Centerline Guaranteed Holdings LLC (incorporated by reference to Exhibit 10.7 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 10(bg)    | Receivables Assignment and Assumption Agreement (the “Merrill Transaction Receivables Assignment”), dated as of March 5, 2010, by and among Centerline Holding Company, Centerline Capital Group Inc., Centerline Affordable Housing Advisors LLC, Centerline Guaranteed Manager II LLC, Centerline Guaranteed Holdings LLC, and each of the entities listed on Schedule A of the Merrill Transaction Receivables Assignment under the heading Special Limited Partner (incorporated by reference to Exhibit 10.8 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                                                                                                                         |
|   | 10(bh)    | ISDA Master Agreement, dated as of March 5, 2010, between Merrill Lynch Capital Services Inc. and Centerline Guaranteed Holdings LLC (incorporated by reference to Exhibit 10.9 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 10(bi)    | Multicurrency – Cross Border Schedule to the Master Agreement, dated as of March 5, 2010, between Merrill Lynch Capital Services Inc. and Centerline Guaranteed Holdings LLC (incorporated by reference to Exhibit 10.10 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | 10(bj)    | ISDA Credit Support Annex to the Schedule to the ISDA Master Agreement, dated as of March 5, 2010, between Merrill Lynch Capital Services Inc. and Centerline Guaranteed Holdings LLC (incorporated by reference to Exhibit 10.11 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | 10(bk)    | Paragraph 13 to ISDA Credit Support Annex to the Schedule to the ISDA Master Agreement, dated as of March 5, 2010, between Merrill Lynch Capital Services Inc. and Centerline Guaranteed Holdings LLC (incorporated by reference to Exhibit 10.12 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | 10(bl)    | ISDA Master Agreement, dated as of March 5, 2010, between Natixis Financial Products Inc. and Centerline Financial Holdings LLC.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | 10(bm)    | Reaffirmation of Guarantee, dated as of March 5, 2010, executed by Centerline Holding Company in favor of Merrill Lynch Capital Services Inc. (incorporated by reference to Exhibit 10.13 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 10(bn)    | Omnibus Agreement, dated as of March 5, 2010, by and among Centerline Holding Company, Centerline Capital Company LLC, Related Special Assets LLC, and Related General II, L.P. (incorporated by reference to Exhibit 10.14 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | 10(bo)    | Amendment No. 1 to the Management Agreement, dated as of March 5, 2010, entered into by and among Island Centerline Manager LLC, on the one hand, and Centerline Holding Company and Centerline Capital Group Inc., jointly and severally on the other hand (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Commission on May 18, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

----

|   | 10(bp)    | Amendment to Master Novation, Stabilization, Contribution, Allocation Servicing and Asset Management Agreement, effective June 30, 2010 among Centerline Holding Company, Centerline Capital Group Inc., Centerline Affordable Housing Advisors LLC, Centerline Guaranteed Manager LLC, Centerline Financial Holdings LLC, Centerline Mortgage Capital Inc. and Natixis Financial Products Inc. (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Commission on July 7, 2010).  |
|--------|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10(bq)    | Amended and Restated and Novation of Management Agreement dated as of July 29, 2010, is by and among Centerline Holding Company, a Delaware statutory trust, Centerline Affordable Housing Advisors LLC, a Delaware limited liability company, and Centerline Capital Group Inc., a Delaware corporation (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Commission on August 3, 2010).                                                                                       |
|   | 10(br)    | Third Amended and Restated Warehousing Credit and Security Agreement, dated as of October 4, 2010, among Centerline Mortgage Capital Inc., Centerline Mortgage Partners Inc., and Bank of America, N.A., as agent for the lender, and as lender (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Commission on October 5, 2010).                                                                                                                                               |
|   | 21                  | Subsidiaries of our Company*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 23                  | Consent of Independent Registered Public Accounting firm*                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 31                  | Principal Executive Officer and Principal Financial Officer certification pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.*                                                                                                                                                                                                                                                                                                                                                                                    |
|   | 32                  | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | *                   | Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

----

| Date:  |   | March 30, 2011 |   | By:    |   | /s/ Robert L. Levy                                                                                                                       |
|--------|--------|----------------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |           |   |   |   | Robert L. LevyPresident, Chief Financial Officer andChief Operating Officer(Principal Financial Officer and Principal Executive Officer) |

| Date:  |   | March 30, 2011 |   | By:    |   | /s/ Robert L. Levy                                                                                                                       |
|--------|--------|----------------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |           |   |   |   | Robert L. LevyPresident, Chief Financial Officer andChief Operating Officer(Principal Financial Officer and Principal Executive Officer) |

----

| Signature                    |   | Title                                                                            |   | Date           |
|------------------------------|--------|----------------------------------------------------------------------------------|--------|----------------|
|                         |   |                                                                             |   |           |
|  /s/ Robert L. Levy     |   |                                                                             |   |           |
| Robert L. Levy               |   | Managing Trustee, President, Chief Financial Officer and Chief Operating Officer |   | March 30, 2011 |
|  /s/ Jerome Y. Halperin |   |                                                                             |   |           |
| Jerome Y. Halperin           |   | Managing Trustee                                                                 |   | March 30, 2011 |
|  /s/ Robert L. Loverd   |   |                                                                             |   |           |
| Robert L. Loverd             |   | Managing Trustee                                                                 |   | March 30, 2011 |
|  /s/ Thomas W. White    |   |                                                                             |   |           |
| Thomas W. White              |   | Managing Trustee                                                                 |   | March 30, 2011 |
|  /s/ Robert A. Meister  |   |                                                                             |   |           |
| Robert A. Meister            |   | Managing Trustee                                                                 |   | March 30, 2011 |

----