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

| o | 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)                           |

| 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                                                                                                               |   | 18     |
|       | Item 2.  | Properties                                                                                                                              |   | 18     |
|       | Item 3.  | Legal Proceedings                                                                                                                       |   | 18     |
|       |     |                                                                                                                                    |   |   |
|       |     |                                                                                                                                    |   |   |
| PART II    |     |                                                                                                                                    |   |   |
|       | Item 5.  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities                      |   | 22     |
|       | Item 6.  | Selected Financial Data                                                                                                                 |   | 24     |
|       | Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations (see Table of Contents at front of section) |   | 25     |
|       | Item 7A. | Quantitative and Qualitative Disclosures about Market Risks                                                                             |   | 74     |
|       | Item 8.  | Financial Statements and Supplementary Data (see Table of Contents at front of section)                                                 |   | 77     |
|       | Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                                    |   | 172    |
|       | Item 9A. | Controls and Procedures                                                                                                                 |   | 172    |
|       | Item 9B. | Other Information                                                                                                                       |   | 172    |
|       |     |                                                                                                                                    |   |   |
| PART III   |     |                                                                                                                                    |   |   |
|       | Item 10. | Directors, Executive Officers and Corporate Governance                                                                                  |   | 173    |
|       | Item 11. | Executive Compensation                                                                                                                  |   | 173    |
|       | Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                                          |   | 173    |
|       | Item 13. | Certain Relationships and Related Transactions, and Director Independence                                                               |   | 173    |
|       | Item 14. | Principal Accounting Fees and Services                                                                                                  |   | 173    |
|       |     |                                                                                                                                    |   |   |
| PART IV    |     |                                                                                                                                    |   |   |
|       | Item 15. | Exhibits and Financial Statement Schedules                                                                                              |   | 174    |
|       |     |                                                                                                                                    |   |   |
| SIGNATURES |     |                                                                                                                                    | 181    |

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

| ·   | 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 under mortgage banking loss sharing agreements; and |
|--------------------|------------------------------------------------------------------|

| ·   | risks associated with providing credit intermediation. |
|--------------------|--------------------------------------------------------|

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| ·   | we sold our Portfolio Management group and the portion of the Commercial Real Estate group that did not relate to loan originations; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

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

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

| ·   | we restructured our credit intermediation agreements; and |
|--------------------|-----------------------------------------------------------|

| ·   | we settled several unsecured liabilities. |
|--------------------|-------------------------------------------|

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

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

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|   | · | asset management fees and expense reimbursements, paid and recognized over the life of the fund as earned provided that collection is reasonably assured. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (i) | $8.7 billion of loans serviced on behalf of our Commercial Real Estate and Affordable Housing groups for Fannie Mae, Freddie Mac and other agencies; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | $5.6 billion of interim servicing, which is short-term servicing of commercial mortgage loans on behalf of third parties prior to securitization; and |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | $5.4 billion of loans within our managed investment funds, on behalf of third parties and their funds or for our own account. |
|-------|-------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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 had foreclosed upon the property (“Tax Credit Property Partnerships”); |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | funds our Commercial Real Estate businesses managed, which invest in CMBS and associated re-securitization trusts (“CMBS Fund Partnerships”); and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Centerline Real Estate Special Situations Mortgage Fund LLC (“CRESS”), the high-yield debt partnership our Commercial Real Estate business managed (“High-Yield Debt Fund Partnership”). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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 Commercial Real Estate and Affordable Housing groups compete with 24 other licensed DUS lenders which originate multifamily mortgages on behalf of Fannie Mae, 25 other Freddie Mac Program Plus lenders, other companies that participate in the DUI program, over 100 FHA-approved multi-family lenders as well as numerous banks, finance companies and others that originate mortgages for investment or resale. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

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

|   | (4) | Finance; and |
|--------|-----|--------------|

|   | (5) | Rights Plan Evaluation. |
|--------|-----|-------------------------|

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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 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 Credit Risk Products Group |
|--------|----|-------------------------------------------------|

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

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

|   | · | severe and continued declines to the market values of the investment portfolios of Consolidated Partnerships, leading to significant other-than-temporary impairments (“OTTI”); |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | 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 sharp downturn in the tax credit syndication market, three key investors provided an average of 61.8% of the equity capital raised by tax credit syndication funds we sponsored (Bank of America, N.A. (“Bank of America”), Citibank, N.A., and JP Morgan Chase & Co. each provided over 15% of the equity raised).  These amounts exclude Fannie Mae and Freddie Mac, as both have ceased investing in these funds; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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. These amounts exclude developers no longer in business or with whom we do not anticipate doing further business; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Fannie Mae and Freddie Mac were the purchasers of all of the loans originated by our Commercial Real Estate and Affordable Housing groups in 2009; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Freddie Mac is the counterparty to the re-securitization of our mortgage revenue bond portfolio. |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | 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; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | 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 which 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; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | 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. |
|--------|--------|------------------------------------------------------------------------------------------------|

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

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

|   | · | reductions in 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. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | 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”); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (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 |
|--------------------|--------------------------------------------------------------------------------|

| ·   | 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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| ·   | C-III Capital Partners LLC, the Purchaser in the March 2010 Restructuring, holds Special Series A Shares that are convertible into 139.7 million common shares; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Natixis holds Special Series A Shares that are convertible into 17.8 million common shares; |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | TRCLP, its owners and TRCLP affiliates hold 10.2 million of the outstanding SCUs and 1.2 million common shares; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

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| ·   | Former executives of our Company held 1.5 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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| · | San Rafael, CA – an office facility; the lease expires in 2010 |
|--------|----------------------------------------------------------------------|

| · | Morristown, NJ – an office facility; the lease expires in 2010 |
|--------|----------------------------------------------------------------------|

| · | Dallas, TX – an office facility; the lease expires in 2010 |
|--------|------------------------------------------------------------------|

| · | 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 |
|--------|------------------------------------------------------------------|

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

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

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| ·   | On January 18, 2008, Kramer v. Ross, et al., Index. No. 100861-08, was filed against us and our board of trustees, in New York County Supreme Court; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On January 25, 2008, Carfagno v. Schnitzer, et al., No. 08 CV 00912, was filed against us and our board of trustees in the United States District Court for the Southern District of New York; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On January 30, 2008, Ciszerk v. Ross, et al., CA No. 3511, was filed against us, our board of trustees and The Related Companies, L.P. in the Delaware Court of Chancery; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On February 22, 2008, Kanter v. Ross, et al., 08 Civ. 01827, was filed against us, our board of trustees and The Related Companies, L.P. in the United States District Court for the Southern District of New York; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On February 27, 2008, Broy v. Centerline Holding Company et al., No. 08 CV 01971, was filed against us and certain of our officers and trustees in the United States District Court for the Southern District of New York; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On April 10, 2008, Kastner v. Schnitzer et al, Index No. 601043-08, was filed against us and our board of trustees, in New York Supreme Court; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On April 10, 2008, Kostecka v. Schnitzer et al, Index No. 601044-08, was filed against us and our board of trustees, in New York Supreme Court. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

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----

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

|                                                                                                                                  |   | 2009 |   | 2008   |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|------|--------|--------|--------|
| Quarter Ended                                                                                                                         |   | Low  |   | High   |   | Low |   | High |   |
|  March 31                                                                                                                        |   | $    | 0.11   |   | $      | 0.45 |   | $ | 3.68 |   | $ | 7.60 |   |
| June 30                                                                                                                               |   | $    | 0.20   |   | $      | 0.46 |   | $ | 1.10 | (1) | $ | 4.26 |   |
| September 30                                                                                                                          |   | $    | 0.17   |   | $      | 0.51 |   | $ | 0.86 |   | $ | 3.46 |   |
| December 31                                                                                                                           |   | $    | 0.09   |   | $      | 0.32 |   | $ | 0.10 |   | $ | 1.99 |   |
|  (1)  During the second quarter of 2008, there was an erroneous trade of $0.39 which is excluded from the above table. |

| Cash Distribution for Quarter Ended |   | DatePaid |   |   | PerShare |   |   | Total AmountDistributed(In thousands) |   |
|-------------------------------------|--------|----------|--------|--------|----------|--------|--------|---------------------------------------|--------|
|  March 31, 2008                |   | 5/15/08  |   |   | $        | 0.150  |   |                                  | $      | 8,237 |   |
| June 30, 2008                       |   | 8/15/08  |   |   |     | 0.075  |   |                                  |   | 4,158 |   |
| September 30, 2008                  |   |     | N/A    |   |     |   | --     |                                  |   |   | -- |   |
| December 31, 2008                   |   |     | N/A    |   |     |   | --     |                                  |   |   | -- |   |
|  Total for 2008                |   |     |   |   |     | $      | 0.225  |                                  |   | $ | 12,395 |   |

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|                                                                                                                                                                                                                                                                                                                                   | (a)                                                                                         |   | (b)                                                                        |   | (c)                                                                                                                                          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                   | Number of securities to be issued upon exercise of outstanding options, warrants and rights |   | Weighted-averageexercise price of outstanding options, warrants and rights |   | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a)(1) |
|  Equity compensation plans approved by security holders                                                                                                                                                                                                                                                                           | 1,397,995                                                                                   |   | $                                                                          | 20.21  |                                                                                                                                         | 1,794,676 |
| Equity compensation plans not approved by security holders                                                                                                                                                                                                                                                                             | --                                                                                          |   |                                                                       | --     |                                                                                                                                         | -- |
| Totals                                                                                                                                                                                                                                                                                                                                 | 1,397,995                                                                                   |   | $                                                                          | 20.21  |                                                                                                                                         | 1,794,676 |
|  (1)    Our 2007 Incentive Share Plan (see Note 25 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(1) |   | Averageprice paidper share |   | Total numberof sharespurchased aspart of publiclyannouncedprogram |   | Maximumnumber ofshares that mayyet be purchasedunder the plansor program |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|----------------------------|--------|-------------------------------------------------------------------|--------|--------------------------------------------------------------------------|---------|
|  October 1 – 31, 2009                                                                                                                                                                                                                                  |   | --                               |   | $                          | --     |                                                              | --     |                                                                     |    |   |
| November 1 – 30, 2009                                                                                                                                                                                                                                       |   | 4,461                            |   |                       | 0.16   |                                                              | --     |                                                                     |    |   |
| December 1 – 31, 2009                                                                                                                                                                                                                                       |   | 119,401                          |   |                       | 0.10   |                                                              | --     |                                                                     |    |   |
|  Total                                                                                                                                                                                                                                                       |   | 123,862                          |   | $                          | 0.10   |                                                              | --     |                                                                     | 303,854 |   |
|  (1)   These repurchases were in connection with tax withholding obligations incurred by holders of newly vested restricted shares, were outside of our share repurchase program and not subject to the debt covenant restriction described above. |   |

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

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| 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.                                           |   | 26       |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |     |
| SECTION 2 – Consolidated Results of OperationsThe consolidated results of operations section provides an analysis of our results on a consolidated basis for the year ended December 31, 2009, against the comparable prior year period.  Significant subsections within this section are as follows:                                                                            |   | 26       |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |     |
| Comparability of Results                                                                                                                                                                                                                                                                                                                                                                         |   | 26       |
| Summary Consolidated Results                                                                                                                                                                                                                                                                                                                                                                     |   | 28       |
| Revenues                                                                                                                                                                                                                                                                                                                                                                                         |   | 28       |
| Expenses                                                                                                                                                                                                                                                                                                                                                                                         |   | 30       |
| Other Items                                                                                                                                                                                                                                                                                                                                                                                      |   | 34       |
| Income Taxes                                                                                                                                                                                                                                                                                                                                                                                     |   | 37       |
| Accounting Changes                                                                                                                                                                                                                                                                                                                                                                               |   | 37       |
| Inflation                                                                                                                                                                                                                                                                                                                                                                                        |   | 38       |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |     |
| SECTION 3 – Results by GroupThe results by group section provides an analysis of our results on a reportable group basis for the year ended December 31, 2009, against the comparable prior year period.  We provide certain statistical information by group and discuss known trends and uncertainties.  Significant subsections within this section are as follows: |   | 38       |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |     |
| Affordable Housing                                                                                                                                                                                                                                                                                                                                                                               |   | 40       |
| Commercial Real Estate                                                                                                                                                                                                                                                                                                                                                                           |   | 45       |
| Portfolio Management                                                                                                                                                                                                                                                                                                                                                                             |   | 50       |
| Credit Risk Products                                                                                                                                                                                                                                                                                                                                                                             |   | 52       |
| Corporate                                                                                                                                                                                                                                                                                                                                                                                        |   | 54       |
| Consolidated Partnerships                                                                                                                                                                                                                                                                                                                                                                        |   | 56       |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |     |
| SECTION 4 – Liquidity and Capital ResourcesThe liquidity and capital resources section provides discussion of our ability to generate adequate amounts of cash to meet our current and future needs.  Significant subsections within this section are as follows:                                                                                                                |   | 57       |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |     |
| Liquidity                                                                                                                                                                                                                                                                                                                                                                                        |   | 57       |
| Cash Flows                                                                                                                                                                                                                                                                                                                                                                                       |   | 59       |
| Liquidity Requirements after December 31, 2009                                                                                                                                                                                                                                                                                                                                                   |   | 60       |
| Fair Value Disclosures                                                                                                                                                                                                                                                                                                                                                                           |   | 60       |
| Capital Resources                                                                                                                                                                                                                                                                                                                                                                                |   | 63       |
| Commitments and Contingencies                                                                                                                                                                                                                                                                                                                                                                    |   | 66       |
|  SECTION 5 – Application of Critical Accounting Policies and Estimates                                                                                                                                                                                                                                                                                                                |   |  68 |
|  SECTION 6 – Related Party Transactions                                                                                                                                                                                                                                                                                                                                               |   |  71 |
|  SECTION 7 – Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                         |   |  72 |
| SECTION 8 – Forward Looking Statements                                                                                                                                                                                                                                                                                                                                                     |   |  72 |

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| ·   | sell a portion of our Commercial Real Estate business and our Portfolio Management business; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | restructure agreements related to our Credit Risk Products business; |
|--------------------|----------------------------------------------------------------------|

| ·   | restructure our debt obligations; |
|--------------------|-----------------------------------|

| ·   | settle liabilities with unsecured creditors; and |
|--------------------|--------------------------------------------------|

| ·   | restructure certain components of our equity. |
|--------------------|-----------------------------------------------|

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| (in thousands)                                                                                   |   | 2009   |     |   | 2008   |   |
|--------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                                                                             |   |   |     |   |   |   |
| (Reduction)/increase to net income:                                                              |   |   |     |   |   |   |
|                                                                                             |   |   |     |   |   |   |
| Asset impairments (excluding equity investments):                                                |   |   |     |   |   |   |
| Affordable Housing and Credit Risk Products groups:                                              |   |   |     |   |   |   |
| Mortgage revenue bonds                                                                           |   | $      | (9,114   | )      |   | $      | (10,928 | ) |
| Series B Freddie Mac Certificates                                                                |   |   | (44,830  | )      |   |   | (7,968 | ) |
| Stabilization escrow                                                                             |   |   | (39,987  | )      |   |   | -- |   |
| Mortgage loans held for investment and other investments                                         |   |   | (2,210   | )      |   |   | (563 | ) |
| Syndicated corporate debt, including loss on sale                                                |   |   | --       |   |   |   | (4,196 | ) |
|                                                                                             |   |   |     |   |   |   |   |   |
| Commercial Real Estate group:                                                                    |   |   |     |   |   |   |   |   |
| CMBS                                                                                             |   |   | (15,546  | )      |   |   | -- |   |
| Retained CMBS Certificates                                                                       |   |   | (37,596  | )      |   |   | (10,736 | ) |
|                                                                                             |   |   |     |   |   |   |   |   |
| Corporate group:                                                                                 |   |   |     |   |   |   |   |   |
| Leasehold improvements                                                                           |   |   | --       |   |   |   | (15,892 | ) |
| Investments, including gain on sale                                                              |   |   | 1,433    |   |   |   | -- |   |
|                                                                                             |   |   |     |   |   |   |   |   |
| Other items:                                                                                     |   |   |     |   |   |   |   |   |
| Affordable Housing and Credit Risk Products groups:                                              |   |   |     |   |   |   |   |   |
| Impairment of tax credit partnership investments                                                 |   |   | (8,922   | )      |   |   | -- |   |
| Affordable housing loss reserve                                                                  |   |   | (140,000 | )      |   |   | -- |   |
| Losses associated with the December 2007 re-securitization                                       |   |   | --       |   |   |   | (2,793 | ) |
|                                                                                             |   |   |     |   |   |   |   |   |
| Commercial Real Estate group:                                                                    |   |   |     |   |   |   |   |   |
| Equity loss and loan impairments related to AMAC                                                 |   |   | (5,300   | )      |   |   | (78,056 | ) |
| Impairment of loans to consolidated partnership                                                  |   |   | (28,479  | )      |   |   | -- |   |
| Reserve for loan loss sharing                                                                    |   |   | (11,163  | )      |   |   | (1,483 | ) |
| Equity income reduction due to fund-level asset impairments                                      |   |   | (92,242  | )      |   |   | (17,486 | ) |
|                                                                                             |   |   |     |   |   |   |   |   |
| Corporate group:                                                                                 |   |   |     |   |   |   |   |   |
| Write-off of goodwill and intangible assets                                                      |   |   | (150,796 | )      |   |   | (152,792 | ) |
| Lease termination costs                                                                          |   |   | (30,755  | )      |   |   | -- |   |
|                                                                                             |   |   |     |   |   |   |   |   |
| Non-cash impact of derivatives(1)                                                                |   |   | 19,263   |   |   |   | 492 |   |
| Severance costs                                                                                  |   |   | (846     | )      |   |   | (2,846 | ) |
|    (1)   2009 includes gains on termination of several derivative contracts. |   |

----

| · | General economic conditions which reduced margins in several of our businesses resulted in decreased volumes in most of the products we originate. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Concerns about our financial stability interfered with business activity as several fund originations were postponed. |
|--------|-----------------------------------------------------------------------------------------------------------------------|

| · | A decrease in mortgage origination volume and overall reduced margins due to spread compression in the markets related to tax credit fund origination fees and mortgage banking fees, which impacts both our Commercial Real Estate and Affordable Housing groups.  Combined mortgage originations were $597.4 million during 2009, as compared to $1.0 billion in 2008. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The change in the non-cash impact of derivatives includes changes in the fair value of derivatives, the termination of several derivative agreements and the amortization of unrealized losses prior to the termination. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During 2008, in response to market conditions, the Company reduced its workforce in an effort to improve its cost structure and its general operating efficiencies.  During 2009, we continued this effort, but terminated the employment of fewer employees as compared to 2008. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands)                                           |   | 2009   |       | % ofRevenues |   | 2008   |   | % ofRevenues |   | % Change |   |
|------------------------------------------------------------------|--------|--------|------------|--------------|--------|--------|--------|--------------|--------|----------|--------|
|  Revenues                                                   |   | $      | 446,808    |         | 100.0  | %      | $      | 523,203      |   | 100.0    | %      | (14.6 | )% |
| Expenses                                                         |   |   | 2,994,519  |         | (670.2 | )      |   | 1,129,198    |   | (215.8   | )      | 165.2 |   |
| Equity losses and other items                                    |   |   | (640,249   | )            | (143.3 | )      |   | (369,660     | )      | (70.7    | )      | (73.2 | ) |
| Loss before income taxes                                         |   |   | (3,187,960 | )            | (713.5 | )      |   | (975,655     | )      | (186.5   | )      | (226.8 | ) |
| Income tax benefit (provision)                                   |   |   | 3,307      |         | 0.7    |   |   | (3,823       | )      | (0.7     | )      | 186.5 |   |
| Net loss                                                         |   |   | (3,184,653 | )            | (712.8 | )      |   | (979,478     | )      | (187.2   | )      | (225.1 | ) |
| Net loss attributable to non-controlling interests               |   |   | 2,729,272  |         | 610.8  |   |   | 747,320      |   | 142.8    |   | 265.2 |   |
| Net loss attributable to Centerline Holding Company shareholders |   | $      | (455,381   | )            | (101.9 | )      | $      | (232,158     | )      | (44.4    | )      | (96.2 | ) |

----

| (dollars in thousands)                                 |   | 2009   |    |   | 2008   |   |    | % Change |   |
|--------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|  Operating Groups                                 |   |   |    |   |   |   |    |     |   |
| Interest income                                        |   | $      | 64,414  |   |   | $      | 98,677  |     |   |   | (34.7 | )% |
| Fee income                                             |   |   | 66,118  |   |   |   | 65,877  |     |   |   | 0.4 |   |
| Other                                                  |   |   | 21,310  |   |   |   | 18,690  |     |   |   | 14.0 |   |
| Subtotal                                               |   |   | 151,842 |   |   |   | 183,244 |     |   |   | (17.1 | ) |
|  Consolidated Partnerships                        |   |   |    |   |   |   |    |     |   |   |   |   |
| Revenues of Tax Credit Fund and Property Partnerships  |   |   | 78,902  |   |   |   | 86,738  |     |   |   | (9.0 | ) |
| Revenues of CMBS and High-Yield Debt Fund Partnerships |   |   | 216,064 |   |   |   | 253,221 |     |   |   | (14.7 | ) |
|  Total revenues                                   |   | $      | 446,808 |   |   | $      | 523,203 |     |   |   | (14.6 | )% |

| ·   | $27.6 million reduction of interest income, primarily related to reduced servicing portfolio and stabilization escrow balances, a decline in the interest rates earned on these balances and the absence in 2009 of interest from our loan to AMAC as it is developing a plan of liquidation.  Interest income also decreased as a result of the sale of certain Series A-1 Freddie Mac Certificates in July 2009 and due to reduced cash flow expectations for the Series B Freddie Mac Certificates. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $6.7 million reduction of interest income related to mortgage revenue bonds, primarily due to the smaller average balance of bonds on the balance sheet, due to either sale of the investments or sale recognition in connection with the re-securitization.  See further discussion in SECTION 3 – RESULTS BY GROUP – Affordable Housing. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)                                                                    |   | 2009   |      |   | 2008   |   |      | % Change |   |
|-------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|----------|--------|
|                                                                                      |   |   |      |   |   |   |      |     |   |
| Operating Groups                                                                          |   |   |      |   |   |   |      |     |   |
| General and administrative:                                                               |   |   |      |   |   |   |      |     |   |
| Salaries and benefits                                                                     |   | $      | 66,234    |   |   | $      | 87,322    |     |   |   | (24.1 | )% |
| Loss reserves                                                                             |   |   | 199,230   |   |   |   | 8,720     |     |   |   | N/M |   |
| Other                                                                                     |   |   | 47,619    |   |   |   | 71,200    |     |   |   | (33.1 | ) |
| Total G&A                                                                             |   |   | 313,083   |   |   |   | 167,242   |     |   |   | 87.2 |   |
|  Interest expense:                                                                   |   |   |      |   |   |   |      |     |   |   |   |   |
| Borrowings and financings                                                                 |   |   | 51,807    |   |   |   | 74,175    |     |   |   | (30.2 | ) |
| Preferred shares of subsidiary                                                            |   |   | 14,088    |   |   |   | 18,898    |     |   |   | (25.5 | ) |
|  Depreciation and amortization                                                       |   |   | 39,008    |   |   |   | 46,030    |     |   |   | (15.3 | ) |
| Write-off of goodwill and intangible assets                                               |   |   | 150,796   |   |   |   | 152,792   |     |   |   | (1.3 | ) |
| Loss on impairment of assets                                                              |   |   | 149,348   |   |   |   | 48,935    |     |   |   | 205.2 |   |
| Expenses – operating groups                                                         |   |   | 718,130   |   |   |   | 508,072   |     |   |   | 41.3 |   |
|  Consolidated PartnershipsInterest expense:Tax Credit Fund and Property Partnerships |   |   | 9,213     |   |   |   | 15,300    |     |   |   | (39.8 | ) |
| CMBS Fund and High-Yield Debt Fund Partnerships                                           |   |   | 140,052   |   |   |   | 149,722   |     |   |   | (6.5 | ) |
|                                                                                      |   |   | 149,265   |   |   |   | 165,022   |     |   |   | (9.5 | ) |
|  Loss on impairment of assets (net):                                                 |   |   |      |   |   |   |      |     |   |   |   |   |
| Tax Credit Fund and Property Partnerships                                                 |   |   | 30,151    |   |   |   | --        |     |   |   | 100.0 |   |
| CMBS Fund and High-Yield Debt Fund Partnerships                                           |   |   | 1,929,699 |   |   |   | 317,264   |     |   |   | 518.2 |   |
|                                                                                      |   |   | 1,959,850 |   |   |   | 317,264   |     |   |   | 517.7 |   |
|  Other expenses:                                                                     |   |   |      |   |   |   |      |     |   |   |   |   |
| Tax Credit Fund and Property Partnerships                                                 |   |   | 139,582   |   |   |   | 128,385   |     |   |   | 8.7 |   |
| CMBS Fund and High-Yield Debt Fund Partnerships                                           |   |   | 27,692    |   |   |   | 10,455    |     |   |   | 164.9 |   |
|                                                                                      |   |   | 167,274   |   |   |   | 138,840   |     |   |   | 20.5 |   |
| Expenses – consolidated partnerships                                                |   |   | 2,276,389 |   |   |   | 621,126   |     |   |   | 266.5 |   |
|  Total expenses                                                                      |   | $      | 2,994,519 |   |   | $      | 1,129,198 |     |   |   | 165.2 | % |
|  N/M – not meaningful.                                                         |   |

| ·   | $8.8 million of reduced cash-based compensation and benefits expense resulting from a reduction in average headcount of approximately 20%; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $5.3 million of lower share-based compensation expense including $4.2 million which is a result of lower compensation paid in shares due to limitations in our incentive share plans and $1.1 million related to shares issued in connection with our acquisition of Centerline Investors I LLC (“Centerline Investors”) in August 2006 as many of the shares continued to vest or were forfeited; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | $2.2 million of reduced promote-sharing distributions resulting from a reduction in the performance of the funds; |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | $2.0 million reduction in severance cost due to lower reduction in workforce in 2009 over 2008; |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | $1.7 million of reduced bonus expense; and |
|--------------------|--------------------------------------------|

| ·   | $1.1 million of reduced payroll taxes due to the decrease in cash-based compensation and benefits expense resulting from a reduction in average headcount as noted above. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $140.0 million loss reserve recorded during 2009 reflecting possible losses related to non-stabilized affordable housing properties and associated credit intermediation of Tax Credit Fund Partnerships (see Note 31 to the consolidated financial statements); |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Lease termination restructuring charges of $30.8 million recorded during 2009 (see Note 16 to the consolidated financial statements); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an increase of $9.7 million in our provision for mortgage banking loss sharing (see Note 31 to the consolidated financial statements); and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an increase of $8.5 million in reserves against advances made to our sponsored funds (see Note 31 to the consolidated financial statements). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $5.2 million decrease related to professional fees, particularly audit, consulting and legal costs which were lower during 2009 due to a lower volume of business and associated transactions, as well as increased efficiencies achieved over the past year and cost savings initiatives; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $4.0 million decrease in rent expense, primarily the result of rent accrued during 2008 in connection with office space we no longer use in operations.  We ceased recording the expense when we recorded the lease termination charge noted above; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $3.7 million decrease in fund origination expenses associated with our Affordable Housing business (see corresponding decrease in revenue in the Affordable Housing group discussion below); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $2.7 million reduction during 2009 in professional fees paid to Natixis for advisory services in our Credit Risk Products group.  The agreement was terminated in October 2008; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a reduction in overall expenses including $3.6 million in travel and entertainment costs resulting from the reduction in personnel as well as from a company-wide strategic focus of reducing expenses. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2009   |    |   | 2008   |   |    | % Change |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |    |   |   |   |    |     |   |
| Borrowings and financings:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |    |   |   |   |    |     |   |
| Revolver and term loan interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $      | 16,700  |   |   | $      | 18,794  |     |   |   | (11.1 | )% |
| Asset backed (warehouse) lines                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 1,681   |   |   |   | 7,531   |     |   |   | (77.7 | ) |
| Secured financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 3,336   |   |   |   | 2,916   |     |   |   | 14.4 |   |
| Cash interest payments for derivatives, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 15,309  |   |   |   | 15,231  |     |   |   | 0.5 |   |
| Non-cash impact of derivatives(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | (19,263 | )      |   |   | (492    | )        |   |   | N/M |   |
| Other interest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 5,554   |   |   |   | 2,447   |     |   |   | 127.0 |   |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 23,317  |   |   |   | 46,427  |     |   |   | (49.8 | ) |
| Freddie Mac secured financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 28,490  |   |   |   | 27,748  |     |   |   | 2.7 |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      | 51,807  |   |   | $      | 74,175  |     |   |   | (30.2 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |    |   |   |   |    |     |   |   |   |   |
| Average borrowings(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      | 359,857 |   |   | $      | 459,870 |     |   |   | (21.7 | )% |
| Average borrowing rate(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 5.87    | %      |   |   | 6.92    | %        |   |   |   |   |
| Average SIFMA rate(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 0.41    | %      |   |   | 2.25    | %        |   |   |   |   |
| Average LIBOR rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 0.33    | %      |   |   | 2.67    | %        |   |   |   |   |
|  (1)    Includes ineffectiveness, amortization of unrealized losses reclassified from accumulated other comprehensive income and gains on termination of certain swap agreements.(2)    Excluding Freddie Mac secured financing.(3)    Includes impact of interest rate swaps, as applicable.(4)    Our free standing derivatives are principally based on the Securities Industry and Financial Markets Association Municipal Swap Index (“SIFMA”) rate.N/M – not meaningful. |   |

----

| ·   | impairment of our Series B Freddie Mac Certificates and stabilization escrow due to the plan to restructure the underlying bond portfolio due to increasing levels of default; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | impairment of CMBS and retained CMBS certificate investments due to sharply higher actual and expected credit losses on the underlying commercial real estate loans; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | declines in the fair value of non-core assets that we sold or forfeited. |
|--------------------|--------------------------------------------------------------------------|

----

| (dollars in thousands)                                                                                                                                                                                                                                                               |   | 2009   |     |   | 2008   |   |    | % Change |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|---------|----------|--------|
|  Equity and other (loss) income:                                                                                                                                                                                                                                                |   |   |     |   |   |   |    |     |   |
| Consolidated Partnerships – co-investment(1)                                                                                                                                                                                                                                   |   | $      | (90,672  | )      |   | $      | (16,146 | )        |   |   | (461.6 | )% |
| Consolidated Partnerships – management and incentive allocations(1)                                                                                                                                                                                                            |   |   | 16,183   |   |   |   | 23,969  |     |   |   | (32.5 | ) |
| Impairment of loans to Consolidated Partnership                                                                                                                                                                                                                                      |   |   | (28,479  | )      |   |   | --      |     |   |   | (100.0 | ) |
| AMAC                                                                                                                                                                                                                                                                                 |   |   | (5,300   | )      |   |   | (78,056 | )        |   |   | 93.2 |   |
| Other                                                                                                                                                                                                                                                                                |   |   | (10,375  | )      |   |   | (1,093  | )        |   |   | (849.2 | ) |
| Total equity and other loss                                                                                                                                                                                                                                                          |   |   | (118,643 | )      |   |   | (71,326 | )        |   |   | (66.3 | ) |
| Eliminations(1)                                                                                                                                                                                                                                                                      |   |   | 74,489   |   |   |   | (7,823  | )        |   |   | N/M |   |
| Equity and other loss – as reported                                                                                                                                                                                                                                            |   | $      | (44,154  | )      |   | $      | (79,149 | )        |   |   | 44.2 |   |
|  (1)   For management purposes, we treat consolidated partnerships as equity investments in evaluating our results. As we consolidate the funds, we eliminate the earnings for presentation in the consolidated financial statements.N/M – not meaningful. |   |

----

| (dollars in thousands)                       |   | 2009   |   |   | 2008   |   |   | % Change |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                                         |   |   |   |   |   |   |   |     |   |
| Mortgage revenue bonds and other investments |   | $      | 2,672  |   |   | $      | (6,744 | )        |   |   | 139.6 | % |

| ·   | $7.6 million of incremental losses in 2008 associated with the December 2007 re-securitization transaction.  These losses primarily resulted from valuation adjustments for the stabilization escrow maintained for certain bonds (see Note 10 to the consolidated financial statements).  Upon the final deposit of funds to the escrow, the difference between the cash deposit and its present value was recognized as a loss; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a $2.5 million loss relating to five mortgage revenue bonds we sold (see Note 8 to the consolidated financial statements); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | a loss of $1.3 million related to the sale of syndicated corporate debt investments (see Note 8 to the consolidated financial statements); and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $4.7 million of gains associated with bonds included in the re-securitization transaction, but for which our guarantee of payment expired and as a result, we had no continuing involvement with the assets thereby allowing recognition of them as sold. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | Years Ended December 31, |     |
|-------------------------------------------------|--------|--------------------------|----------|
| (dollars in thousands)                          |   | 2009                     |     | 2008 |   | % Change |   |
|  Tax Credit Fund and Property Partnerships |   | $                        | (593,347 | ) | $ | (279,062 | ) | (112.6 | )% |
| CMBS and High-Yield Debt Fund Partnerships      |   |                     | (5,420   | ) |   | (4,705 | ) | (15.2 | ) |
| Total                                           |   | $                        | (598,767 | ) | $ | (283,767 | ) | (111.0 | )% |

| ·   | Impairments recognized in the Tax Credit Fund Partnerships, which losses are recognized as equity losses.  These impairments resulted from: |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.   | the foreclosure of four properties in which three fund partnerships had limited partner equity investments.  The losses upon foreclosure totaled $32.7 million; and |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | deterioration of the economy which has lowered the value of tax credits associated with property partnerships in which our Tax Credit Fund Partnerships invest.  As a result, those fund partnerships recorded aggregate impairments of $222.7 million to write down the carrying value of certain investments. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A decrease in gain on sale of property partnership interests of $14.4 million. |
|--------------------|--------------------------------------------------------------------------------|

----

| ·   | Remaining difference primarily attributed to properties placed into service throughout 2008 reflecting a full year of operating losses during 2009.  This was partially offset by Tax Credit Fund Partnerships no longer recognizing losses for property partnerships whose carrying value was reduced to zero after the impairments noted above. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands)                                  |   | 2009   |      |   | 2008   |   |    | % Change |   |
|---------------------------------------------------------|--------|--------|-----------|--------|--------|--------|---------|----------|--------|
|  Limited partners of consolidated partnerships     |   | $      | 2,580,103 |   |   | $      | 659,228 |     |   |   | 291.4 | % |
| Preferred shareholders of subsidiary                    |   |   | (6,225    | )      |   |   | (6,225  | )        |   |   | -- |   |
| SCUs                                                    |   |   | 151,547   |   |   |   | 92,685  |     |   |   | 63.5 |   |
| SCIs                                                    |   |   | 2,216     |   |   |   | 1,269   |     |   |   | 74.6 |   |
| Other non-controlling interests                         |   |   | 1,631     |   |   |   | 363     |     |   |   | 349.3 |   |
| Net loss attributable to non-controlling interests, net |   | $      | 2,729,272 |   |   | $      | 747,320 |     |   |   | 265.2 | % |

----

| (dollars in thousands)                                             |   | 2009   |       |   | 2008   |   |     | % Change |   |
|--------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|----------|----------|--------|
|  Loss subject to tax                                          |   | $      | (347,933   | )      |   | $      | (183,866 | )        |   |   | (89.2 | )% |
| Loss not subject to tax                                            |   |   | (2,840,027 | )      |   |   | (791,789 | )        |   |   | (258.7 | )% |
|  Loss before income taxes                                     |   | $      | (3,187,960 | )      |   | $      | (975,655 | )        |   |   | (226.8 | )% |
|  Income tax (benefit) provision                               |   | $      | (3,307     | )      |   | $      | 3,823    |     |   |   | 186.5 | % |
|  Effective tax rate – consolidated basis                |   |   | 0.1        | %      |   |   | (0.4     | )%       |   |   |   |   |
|  Effective tax rate for corporate subsidiaries subject to tax |   |   | 1.0        | %      |   |   | (2.1     | )%       |   |   |   |   |

| 1.   | In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement No. 160, Non-controlling Interests in Consolidated Financial Statements – an amendment of ARB No. 51 (“SFAS 160”).  SFAS 160 requires that a non-controlling interest (formerly displayed as minority interests in consolidated subsidiaries, preferred shares of subsidiary (not subject to mandatory repurchase) and limited partners’ interests in consolidated partnerships) be reported in equity and the amount of consolidated net income specifically attributable to the non-controlling interest be identified in the consolidated financial statements.  SFAS 160 was effective for us on January 1, 2009 and most of its provisions were applied prospectively, except for the presentation and disclosure requirements, which we applied retrospectively.  The adoption of SFAS 160 had no material impact on our consolidated financial statements. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | In May 2009, the FASB issued SFAS No. 165, Subsequent Events, (“SFAS 165”), which became effective for the Company during the second quarter 2009.  SFAS 165 as amended by Accounting Standards Update (“ASU”) 2010-09 sets forth the circumstances and the period after the balance sheet date for which an entity should evaluate events for recognition or disclosure in its financial statements.  SFAS 165 requires that evaluation of subsequent events must include events that occur up to and including the date the financial statements are issued.  The adoption of SFAS 165 had no material effect on the Company’s results of operations and consolidated financial statements. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3.   | In January 2009, the FASB issued FASB Staff Position (“FSP”) EITF 99-20-1, Amendments to the Impairment of Guidance of EITF Issue No. 99-20, which was effective for the Company in the fourth quarter of 2008.  In April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly and FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, both of which were effective for the Company in the second quarter of 2009.  These FSPs provide guidance on determining the fair value of assets and the amounts of other than temporary impairments in periods of market turbulence such as that experienced in 2009.  The adoption of the FSPs had no material effect on our consolidated financial statements. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)                                                                                                                                                                                                                               |   | 2009   |      |   | 2008   |   |      | % Change |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|----------|--------|
|  Revenues:                                                                                                                                                                                                                                      |   |   |      |   |   |   |      |     |   |
| Affordable Housing                                                                                                                                                                                                                                   |   | $      | 124,970   |   |   | $      | 166,037   |     |   |   | (24.7 | )% |
| Commercial Real Estate                                                                                                                                                                                                                               |   |   | 68,538    |   |   |   | 74,495    |     |   |   | (8.0 | ) |
| Portfolio Management                                                                                                                                                                                                                                 |   |   | 40,218    |   |   |   | 41,464    |     |   |   | (3.0 | ) |
| Credit Risk Products                                                                                                                                                                                                                                 |   |   | 7,062     |   |   |   | 8,508     |     |   |   | (17.0 | ) |
| Corporate                                                                                                                                                                                                                                            |   |   | 1,626     |   |   |   | 13,719    |     |   |   | (88.1 | ) |
| Consolidated Partnerships                                                                                                                                                                                                                            |   |   | 294,966   |   |   |   | 339,959   |     |   |   | (13.2 | ) |
| Eliminations                                                                                                                                                                                                                                         |   |   | (90,572   | )      |   |   | (120,979  | )        |   |   | 25.1 |   |
| Total revenues                                                                                                                                                                                                                                       |   | $      | 446,808   |   |   | $      | 523,203   |     |   |   | (14.6 | )% |
|  Expenses:                                                                                                                                                                                                                                      |   |   |      |   |   |   |      |     |   |   |   |   |
| Affordable Housing                                                                                                                                                                                                                                   |   | $      | 305,674   |   |   | $      | 145,489   |     |   |   | 110.1 | % |
| Commercial Real Estate                                                                                                                                                                                                                               |   |   | 112,479   |   |   |   | 58,724    |     |   |   | 91.5 |   |
| Portfolio Management                                                                                                                                                                                                                                 |   |   | 23,325    |   |   |   | 33,103    |     |   |   | (29.5 | ) |
| Credit Risk Products                                                                                                                                                                                                                                 |   |   | 24,912    |   |   |   | 15,574    |     |   |   | 60.0 |   |
| Corporate                                                                                                                                                                                                                                            |   |   | 267,910   |   |   |   | 291,263   |     |   |   | (8.0 | ) |
| Consolidated Partnerships                                                                                                                                                                                                                            |   |   | 2,350,791 |   |   |   | 707,597   |     |   |   | 232.2 |   |
| Eliminations                                                                                                                                                                                                                                         |   |   | (90,572   | )      |   |   | (122,552  | )        |   |   | 26.1 |   |
| Total expenses                                                                                                                                                                                                                                       |   | $      | 2,994,519 |   |   | $      | 1,129,198 |     |   |   | 165.2 | % |
|  Other income (loss)(1):                                                                                                                                                                                                                        |   |   |      |   |   |   |      |     |   |   |   |   |
| Affordable Housing                                                                                                                                                                                                                                   |   | $      | (8,222    | )      |   | $      | (5,708    | )        |   |   | (44.0 | )% |
| Commercial Real Estate(2)                                                                                                                                                                                                                            |   |   | (109,248  | )      |   |   | (67,599   | )        |   |   | (61.6 | ) |
| Portfolio Management                                                                                                                                                                                                                                 |   |   | --        |   |   |   | --        |     |   |   | -- |   |
| Credit Risk Products                                                                                                                                                                                                                                 |   |   | --        |   |   |   | (1,348    | )        |   |   | 100.0 |   |
| Corporate                                                                                                                                                                                                                                            |   |   | 1,499     |   |   |   | (138      | )        |   |   | N/M |   |
| Consolidated Partnerships(1)                                                                                                                                                                                                                         |   |   | 1,981,336 |   |   |   | 375,461   |     |   |   | 427.7 |   |
| Eliminations                                                                                                                                                                                                                                         |   |   | 74,489    |   |   |   | (11,100   | )        |   |   | 771.1 |   |
| Total other income                                                                                                                                                                                                                                   |   | $      | 1,939,854 |   |   | $      | 289,568   |     |   |   | 569.9 | % |
|  Income (loss) before other allocations(1):                                                                                                                                                                                                     |   |   |      |   |   |   |      |     |   |   |   |   |
| Affordable Housing                                                                                                                                                                                                                                   |   | $      | (188,926  | )      |   | $      | 14,840    |     |   |   | N/M |   |
| Commercial Real Estate                                                                                                                                                                                                                               |   |   | (153,189  | )      |   |   | (51,828   | )        |   |   | (195.6 | )% |
| Portfolio Management                                                                                                                                                                                                                                 |   |   | 16,893    |   |   |   | 8,361     |     |   |   | 102.0 |   |
| Credit Risk Products                                                                                                                                                                                                                                 |   |   | (17,850   | )      |   |   | (8,414    | )        |   |   | (112.1 | ) |
| Corporate                                                                                                                                                                                                                                            |   |   | (264,785  | )      |   |   | (277,682  | )        |   |   | 4.6 |   |
| Consolidated Partnerships                                                                                                                                                                                                                            |   |   | (74,489   | )      |   |   | 7,823     |     |   |   | N/M |   |
| Eliminations                                                                                                                                                                                                                                         |   |   | 74,489    |   |   |   | (9,527    | )        |   |   | 881.9 |   |
| Total loss before other allocations                                                                                                                                                                                                                  |   | $      | (607,857  | )      |   | $      | (316,427  | )        |   |   | (92.1 | )% |
|  Net income (loss) attributable to Centerline Holding Company shareholders:                                                                                                                                                                     |   |   |      |   |   |   |      |     |   |   |   |   |
| Affordable Housing                                                                                                                                                                                                                                   |   | $      | (195,151  | )      |   | $      | 8,070     |     |   |   | N/M |   |
| Commercial Real Estate                                                                                                                                                                                                                               |   |   | (153,283  | )      |   |   | (51,686   | )        |   |   | (196.6 | )% |
| Portfolio Management                                                                                                                                                                                                                                 |   |   | 16,893    |   |   |   | 8,361     |     |   |   | 102.0 |   |
| Credit Risk Products                                                                                                                                                                                                                                 |   |   | (16,125   | )      |   |   | (8,192    | )        |   |   | (96.8 | ) |
| Corporate                                                                                                                                                                                                                                            |   |   | (107,715  | )      |   |   | (187,007  | )        |   |   | 42.4 |   |
| Consolidated Partnerships                                                                                                                                                                                                                            |   |   | (74,489   | )      |   |   | 7,823     |     |   |   | N/M |   |
| Eliminations                                                                                                                                                                                                                                         |   |   | 74,489    |   |   |   | (9,527    | )        |   |   | 881.9 |   |
| Net loss                                                                                                                                                                                                                                             |   | $      | (455,381  | )      |   | $      | (232,158  | )        |   |   | (96.2 | )% |
|  (1)   Includes losses allocated to limited partners of consolidated partnerships.(2)   Includes equity income of CMBS Fund and High-Yield Debt Fund Partnerships as more fully described below.N/M – not meaningful. |   |

----

| ·   | Loss on impairment of assets recognized by this segment in 2009 was $96.1 million as compared to $19.5 million in 2008 as well as a recognition of $119.0 million loss reserve during 2009 related to Affordable Housing transactions and associated credit intermediation of Tax Credit Fund Partnerships (the remainder was recorded in the Credit Risk Products group).  Most of the 2009 impairments and the loss reserve relate to a planned restructuring of mortgage revenue bonds included in the 2007 re-securitization transaction as more fully described in Notes 23 and 31 to the consolidated financial statements. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The disruptions in the economy and credit markets have reduced the demand for tax credits, which has resulted in fewer tax credit fund originations during 2009, even as compared to the low levels during 2008.  During 2009, we raised $91.6 million of gross equity in Tax Credit Funds, as compared to $162.5 million of gross equity raised in 2008. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Beginning in the fourth quarter of 2008, the Affordable Housing group performs its own asset management services and thus fees, which averaged $2.7 million per quarter during 2008, are no longer paid to our Portfolio Management group for these services. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Certain bonds included in the December 2007 Freddie Mac re-securitization transaction were not considered “sold” for accounting purposes and we carry debt associated with those bonds (see Notes 8 and 15 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. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands)                |   | 2009   |    |   | 2008   |   |    | % Change |   |
|---------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|  Interest income:                |   |   |    |   |   |   |    |     |   |
| Mortgage revenue bond interest income |   | $      | 37,772  |   |   | $      | 44,333  |     |   |   | (14.8 | )% |
| Other interest income                 |   |   | 38,026  |   |   |   | 48,254  |     |   |   | (21.2 | ) |
| Fee income:                           |   |   |    |   |   |   |    |     |   |   |   |   |
| Fund sponsorship                      |   |   | 39,398  |   |   |   | 63,740  |     |   |   | (38.2 | ) |
| Mortgage origination fees             |   |   | 1,005   |   |   |   | 843     |     |   |   | 19.2 |   |
| Mortgage servicing fees               |   |   | 998     |   |   |   | 751     |     |   |   | 32.9 |   |
| Other:                                |   |   |    |   |   |   |    |     |   |   |   |   |
| Gain on sale of mortgage loans        |   |   | 3,186   |   |   |   | 1,861   |     |   |   | 71.2 |   |
| Expense reimbursements                |   |   | 3,390   |   |   |   | 4,178   |     |   |   | (18.9 | ) |
| Miscellaneous                         |   |   | 1,195   |   |   |   | 2,077   |     |   |   | (42.5 | ) |
|  Total revenues                  |   | $      | 124,970 |   |   | $      | 166,037 |     |   |   | (24.7 | )% |

----

| (dollars in thousands)                               |   | 2009   |    |   | 2008   |   |    | % Change |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                                 |   |   |    |   |   |   |    |     |   |
| Average portfolio balance (unpaid principal balance) |   | $      | 679,838 |   |   | $      | 692,548 |     |   |   | (1.8 | )% |
| Weighted average yield of portfolio                  |   |   | 5.62    | %      |   |   | 6.40    | %        |   |   |   |   |

| (dollars in thousands)                                                                                  |   | 2009   |      |   | 2008   |   |      | % Change |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|----------|--------|
|  Fees based on equity invested                                                                     |   |   |      |   |   |   |      |     |   |
| Property acquisition fees                                                                               |   | $      | 847       |   |   | $      | 12,611    |     |   |   | (93.3 | )% |
| Organization, offering and acquisition allowance fees                                                   |   |   | 622       |   |   |   | 6,078     |     |   |   | (89.8 | ) |
|  Fees based on management of sponsored funds                                                       |   |   |      |   |   |   |      |     |   |   |   |   |
| Partnership management fees                                                                             |   |   | 10,312    |   |   |   | 11,190    |     |   |   | (7.8 | ) |
| Asset management fees                                                                                   |   |   | 21,099    |   |   |   | 25,728    |     |   |   | (18.0 | ) |
| Other fee income                                                                                        |   |   | 6,518     |   |   |   | 8,133     |     |   |   | (19.9 | ) |
|  Total fund sponsorship fee income                                                                 |   | $      | 39,398    |   |   | $      | 63,740    |     |   |   | (38.2 | )% |
|  Assets under management – tax credit funds                                                  |   | $      | 9,278,261 |   |   | $      | 9,614,548 |     |   |   | (3.5 | )% |
| Equity raised by tax credit funds                                                                       |   | $      | 91,557    |   |   | $      | 162,470   |     |   |   | (43.6 | )% |
| Equity invested by tax credit funds(1)                                                                  |   | $      | 91,557    |   |   | $      | 472,978   |     |   |   | (80.6 | )% |
|    (1)  Excludes warehoused properties that have not yet closed into an investment fund. |   |

----

| (dollars in thousands)                                                                      |   | 2009   |    |   |       | 2008   |   | % Change |   |
|---------------------------------------------------------------------------------------------|--------|--------|---------|--------|------------|--------|--------|----------|--------|
|                                                                                        |   |   |    |   |       |   |   |     |   |   |   |
|                                                                                        |   |   |    |   |       |   |   |     |   |   |   |
| Total mortgage origination activity(1)                                                      |   | $      | 89,934  |   |       |   | $      | 96,247   |   | (6.6 | )% |
| Mortgages originated in prior periods and sold during the period                            |   |   | 12,718  |   |       |   |   | 8,062    |   |   |   |
| Total mortgage origination activity recognized for GAAP and for which revenue is recognized |   | $      | 102,652 |   |       |   | $      | 104,309  |   | (1.6 | )% |
|                                                                                        |   |   |    |   |       |   |   |     |   |   |   |
|                                                                                        |   |   |    |   | % of Total |   |   |     |   | % of Total |   |
|  Fannie Mae                                                                            |   | $      | 29,648  |   | 28.9       | %      | $      | 28,070   |   | 26.9 | % |
| Freddie Mac                                                                                 |   |   | 73,004  |   | 71.1       |   |   | 76,239   |   | 73.1 |   |
|  Total                                                                                 |   | $      | 102,652 |   | 100.0      | %      | $      | 104,309  |   | 100.0 | % |
|  (1)   Includes all mortgages funded during the period.                      |

----

| (dollars in thousands)                     |   | 2009   |    |   | 2008   |   |    | % Change |   |
|--------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                       |   |   |    |   |   |   |    |     |   |
| Primary servicing portfolio at December 31 |   | $      | 397,258 |   |   | $      | 307,792 |     |   |   | 29.1 | % |
| Carrying value of MSRs                     |   | $      | 5,200   |   |   | $      | 3,240   |     |   |   | 60.5 | % |

| (dollars in thousands)              |   | 2009   |    |   | 2008   |   |    | % Change |   |
|-------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                |   |   |    |   |   |   |    |     |   |
| General and administrative expenses |   | $      | 160,603 |   |   | $      | 48,847  |     |   |   | 228.8 | % |
| Interest expense:                   |   |   |    |   |   |   |    |     |   |   |   |   |
| Borrowings and financings           |   |   | 43,492  |   |   |   | 43,725  |     |   |   | (0.5 | ) |
| Derivatives – non-cash impact |   |   | (16,114 | )      |   |   | 12,092  |     |   |   | (233.3 | ) |
| Preferred shares of subsidiary      |   |   | 14,088  |   |   |   | 18,898  |     |   |   | (25.5 | ) |
| Depreciation and amortization       |   |   | 7,464   |   |   |   | 2,451   |     |   |   | 204.5 |   |
| Loss on impairment of assets        |   |   | 96,141  |   |   |   | 19,476  |     |   |   | 393.6 |   |
|  Total expenses                |   | $      | 305,674 |   |   | $      | 145,489 |     |   |   | 110.1 | % |
|  Average borrowing rate        |   |   | 5.94    | %      |   |   | 6.13    | %        |   |   |   |   |
| Average SIFMA rate                  |   |   | 0.41    | %      |   |   | 2.25    | %        |   |   |   |   |

| ·   | $8.0 million decrease in asset management and loan servicing fees.  Beginning in the fourth quarter of 2008, the Affordable Housing group performs its own asset management services and thus no further fees will be paid to our Portfolio Management group for these services; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $1.2 million reduction of salaries and benefits expense due largely to company-wide staff reductions, despite the Affordable Housing group performing its own asset management services beginning in December 2008; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $3.7 million decrease in tax credit acquisition costs due to the lower volume of fund closings; |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | $1.2 million reduction in legal expenses; and |
|--------------------|-----------------------------------------------|

----

| ·   | $0.8 million reduction in bonus expenses. |
|--------------------|-------------------------------------------|

| ·   | A $28.2 million decrease in non-cash interest expense on derivatives was primarily due to favorable changes in the fair value of our free-standing derivatives of $21.0 million.  In addition to this decrease was the termination of six swaps during 2009 which resulted in a $7.2 million reduction to interest expense.  As of December 31, 2009, we are party to 19 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. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cash interest expense on the above swaps, for which we are a variable interest receiver, increased $1.8 million, primarily the results of interest rates declining over the period. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Interest expense on preferred shares of subsidiary decreased due to the sale of certain Series A-1 Freddie Mac Certificates in July 2009 and the redemption of the related preferred shares.  We experienced a comparable decrease in revenues related to the Series A-1 Freddie Mac Certificates. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                  |   | Years Ended December 31, |   |
|---------------------------------------|--------|--------------------------|--------|
| (in thousands)                        |   | 2009                     |   |   | 2008 |   |
|  Available-for-sale investments: |   |                     |   |   |   |   |
| Series B Freddie Mac certificates     |   | $                        | 44,830 |   |   | $ | 7,968 |   |
| Stabilization escrow                  |   |                     | 39,987 |   |   |   | -- |   |
| Mortgage revenue bonds                |   |                     | 9,114  |   |   |   | 10,928 |   |
| Other                                 |   |                     | 2,210  |   |   |   | 580 |   |
|                                  |   | $                        | 96,141 |   |   | $ | 19,476 |   |

| (dollars in thousands)                                  |   | 2009   |   |   | 2008   |   |   | % Change |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                                                    |   |   |   |   |   |   |   |     |   |
| Equity and other loss                                   |   | $      | (9,396 | )      |   | $      | (389   | )        |   |   | N/M |   |
| Gain (loss) from repayment or sales of investments, net |   |   | 1,174  |   |   |   | (5,319 | )        |   |   | 122.1 | % |
|  Total other loss                                  |   | $      | (8,222 | )      |   | $      | (5,708 | )        |   |   | (44.0 | )% |
|    N/M – not meaningful.                |   |

----

| (dollars in thousands)                 |   | 2009   |     | 2008   |   | % Change |   |
|----------------------------------------|--------|--------|----------|--------|--------|----------|--------|
|                                   |   |   |     |   |   |     |   |   |   |
| (Loss) income before other allocations |   | $      | (188,926 | )      | $      | 14,840   |   | N/M |   |
| Net (loss) income                      |   |   | (195,151 | )      |   | 8,070    |   | N/M |   |
|  N/M – not meaningful.      |   |

| ·   | Our CMBS and CDO debt and equity investments, whether held by our funds or for our own account, experienced a significant decline in fair value and cash flow.  Actual and expected credit losses have been increasing sharply in the underlying assets, leading to significant impairments.  For 2009, our proportionate share of impairment charges recognized by the CMBS Fund Partnerships and the High-Yield Debt Fund Partnership was $92.2 million (as compared to $17.5 million in 2008). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | AMAC (a publicly traded REIT that we manage) is developing a plan of liquidation.  As a result, revenue streams that we earned in 2008 (interest income on a loan, asset management fees, expense reimbursements) ceased in the third quarter of 2008.  In addition, we recorded a portion of AMAC’s GAAP losses during 2008 due to our co-investment and recorded charges to write down those investments when it began to develop its liquidation plan.  A further charge was recorded during 2009 as AMAC has not yet liquidated and the value of assets that we may recover has declined. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | While we continue to originate mortgage loans for Fannie Mae and Freddie Mac, origination levels declined in 2009 due to tightening underwriting standards, although our earnings rate on originations has increased. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | As part of an agreement with Nomura, in 2008 we began to act as collateral manager for two commercial real estate CDOs previously managed by Nomura and are managing a portfolio of assets that Nomura holds for its own account. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)         |   | 2009   |   |   | 2008   |   |   | % Change |   |
|--------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                           |   |   |   |   |   |   |   |     |   |
| Interest income                |   | $      | 20,578 |   |   | $      | 26,360 |     |   |   | (21.9 | )% |
| Fee income:                    |   |   |   |   |   |   |   |     |   |   |   |   |
| Mortgage origination fees      |   |   | 2,711  |   |   |   | 4,406  |     |   |   | (38.5 | ) |
| Mortgage servicing fees        |   |   | 19,201 |   |   |   | 18,998 |     |   |   | 1.1 |   |
| Other fees:                    |   |   |   |   |   |   |   |     |   |   |   |   |
| CDO collateral management      |   |   | 5,101  |   |   |   | 5,696  |     |   |   | (10.4 | ) |
| Other fees                     |   |   | 6,356  |   |   |   | 7,126  |     |   |   | (10.8 | ) |
| Other:                         |   |   |   |   |   |   |   |     |   |   |   |   |
| Gain on sale of mortgage loans |   |   | 13,811 |   |   |   | 9,361  |     |   |   | 47.5 |   |
| Prepayment penalties           |   |   | 453    |   |   |   | 1,252  |     |   |   | (63.8 | ) |
| Other revenues                 |   |   | 327    |   |   |   | 1,296  |     |   |   | (74.8 | ) |
|  Total revenues           |   | $      | 68,538 |   |   | $      | 74,495 |     |   |   | (8.0 | )% |

| ·   | $4.0 million of income in 2008 from our loan to AMAC with none recognized in 2009.  Due to the pending liquidation of AMAC, we stopped receiving interest payments in the third quarter of 2008 and do not anticipate future interest income from this loan; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $1.3 million decrease in interest income earned on originated mortgage loans due to a lower level of loans outstanding on the warehouse line during the 2009 period as compared to the 2008 period and lower interest rates for originated loans. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)                                                                                                                                    |   | 2009   |    |   |       | 2008   |   | % Change |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|------------|--------|--------|----------|--------|
|                                                                                                                                                      |   |   |    |   |       |   |   |     |   |   |   |
| Total mortgage origination activity(1)                                                                                                                    |   | $      | 488,737 |   |       |   | $      | 871,129  |   | (43.9 | )% |
| Mortgages originated in prior periods and sold during the period                                                                                          |   |   | 34,507  |   |       |   |   | 83,642   |   |   |   |
| Less: mortgages originated but not yet sold(2)                                                                                                            |   |   | (28,520 | )      |       |   |   | (47,225  | )      |   |   |
| Total mortgage origination activity recognized for GAAP and for which revenue is recognized                                                               |   | $      | 494,724 |   |       |   | $      | 907,546  |   | (45.5 | )% |
|                                                                                                                                                      |   |   |    |   |       |   |   |     |   |   |   |
|                                                                                                                                                      |   |   |    |   | % of Total |   |   |     |   | % of Total |   |
|  Fannie Mae                                                                                                                                          |   | $      | 457,815 |   | 92.5       | %      | $      | 672,517  |   | 74.1 | % |
| Freddie Mac                                                                                                                                               |   |   | 36,909  |   | 7.5        |   |   | 224,029  |   | 24.7 |   |
| Conduit and other                                                                                                                                         |   |   | --      |   | --         |   |   | 11,000   |   | 1.2 |   |
|  Total                                                                                                                                               |   | $      | 494,724 |   | 100.0      | %      | $      | 907,546  |   | 100.0 | % |
|  (1)   Includes all mortgages funded during the period.(2)   Included in Other Investments – mortgage loans held for sale. |   |

| (dollars in thousands)                     |   | 2009   |      |   | 2008   |   |      | % Change |   |
|--------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|----------|--------|
|                                       |   |   |      |   |   |   |      |     |   |
| Primary servicing portfolio at December 31 |   | $      | 8,387,885 |   |   | $      | 8,475,191 |     |   |   | (1.0 | )% |
| Carrying value of MSRs                     |   | $      | 55,784    |   |   | $      | 57,434    |     |   |   | (2.9 | ) |

----

| (dollars in thousands)              |   | 2009   |    |   | 2008   |   |    | % Change |   |
|-------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                |   |   |    |   |   |   |    |     |   |
| General and administrative expenses |   | $      | 46,535  |   |   | $      | 43,258  |     |   |   | 7.6 | % |
| Interest expense:                   |   |   |    |   |   |   |    |     |   |   |   |   |
| Borrowings and financings           |   |   | 2,406   |   |   |   | 5,767   |     |   |   | (58.3 | ) |
| Derivatives – non-cash impact |   |   | --      |   |   |   | (13,444 | )        |   |   | 100.0 |   |
| Depreciation and amortization       |   |   | 10,396  |   |   |   | 12,407  |     |   |   | (16.2 | ) |
| Loss on impairment of assets, net   |   |   | 53,142  |   |   |   | 10,736  |     |   |   | 395.0 |   |
|  Total expenses                |   | $      | 112,479 |   |   | $      | 58,724  |     |   |   | 91.5 | % |

----

| (dollars in thousands)                                                 |   | 2009   |     |   | 2008   |   |    | % Change |   |
|------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|---------|----------|--------|
|                                                                   |   |   |     |   |   |   |    |     |   |
| Equity and other (loss) income:                                        |   |   |     |   |   |   |    |     |   |
| AMAC                                                                   |   | $      | (5,300   | )      |   | $      | (78,056 | )        |   |   | 93.2 | % |
| Consolidated Partnerships – co-investment                        |   |   | (90,669  | )      |   |   | (16,274 | )        |   |   | (457.1 | ) |
| Consolidated Partnerships – management and incentive allocations |   |   | 16,183   |   |   |   | 23,969  |     |   |   | (32.5 | ) |
| Impairment of loans to Consolidated Partnership                        |   |   | (28,479  | )      |   |   | --      |     |   |   | (100.0 | ) |
| Other                                                                  |   |   | (983     | )      |   |   | 2,762   |     |   |   | (135.6 | ) |
|  Total other income (loss)                                        |   | $      | (109,248 | )      |   | $      | (67,599 | )        |   |   | (61.6 | )% |

| (dollars in thousands)        |   | 2009   |     |   | 2008   |   |    | % Change |   |
|-------------------------------|--------|--------|----------|--------|--------|--------|---------|----------|--------|
|                          |   |   |     |   |   |   |    |     |   |
| Loss before other allocations |   | $      | (153,189 | )      |   | $      | (51,828 | )        |   |   | (195.6 | )% |
| Net Loss                      |   |   | (153,283 | )      |   |   | (51,686 | )        |   |   | (196.6 | ) |

----

|   | · | Our total primary loan servicing portfolio decreased to $19.7 billion at December 31, 2009, as compared to $22.0 billion at December 31, 2008, due principally to declining pre-securitization servicing.  Meanwhile, our 2009 special servicing portfolio increased to $7.8 billion, as compared to $2.1 billion in 2008.  Both portfolios have been affected by the disruption in credit markets. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Beginning in the fourth quarter of 2008, the Affordable Housing group performs its own asset management services and thus no longer pays fees (which averaged $2.7 million per quarter in 2008) to the Portfolio Management group for such services, although this group continued to service mortgage loans for the Affordable Housing group. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands) |   | 2009   |   |   | 2008   |   |   | % Change |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                   |   |   |   |   |   |   |   |     |   |
| Interest income        |   | $      | 824    |   |   | $      | 6,939  |     |   |   | (88.1 | )% |
| Fee income:            |   |   |   |   |   |   |   |     |   |   |   |   |
| Asset management:      |   |   |   |   |   |   |   |     |   |   |   |   |
| Primary servicing      |   |   | 9,067  |   |   |   | 9,925  |     |   |   | (8.6 | ) |
| Special servicing      |   |   | 12,933 |   |   |   | 1,494  |     |   |   | 765.7 |   |
| Inter-segment          |   |   | 5,828  |   |   |   | 13,928 |     |   |   | (58.2 | ) |
| Other fee income       |   |   | 10,209 |   |   |   | 7,913  |     |   |   | 29.0 |   |
| Other                  |   |   | 1,357  |   |   |   | 1,265  |     |   |   | 7.3 |   |
|  Total revenues   |   | $      | 40,218 |   |   | $      | 41,464 |     |   |   | (3.0 | )% |

| (dollars in millions)                                                                                                    |   | 2009   |     |   | 2008   |   |     | % Change |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|----------|--------|
|                                                                                                                     |   |   |     |   |   |   |     |     |   |
| Primary Servicing Portfolio(1)                                                                                           |   | $      | 19,658.5 |   |   | $      | 22,000.2 |     |   |   | (10.6 | )% |
| Special Servicing Portfolio                                                                                              |   | $      | 7,819.2  |   |   | $      | 2,120.4  |     |   |   | 268.8 |   |
|  Carrying value of MSRs                                                                                             |   | $      | 599      |   |   | $      | 3,031    |     |   |   | (80.2 | ) |
|    (1)  Includes sub-servicing of the Commercial Real Estate and Affordable Housing servicing portfolios. |   |

----

| (dollars in thousands)              |   | 2009   |   |   | 2008   |   |   | % Change |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                                |   |   |   |   |   |   |   |     |   |
| General and administrative expenses |   | $      | 20,787 |   |   | $      | 28,211 |     |   |   | (26.3 | )% |
| Interest expense                    |   |   | --     |   |   |   | 581    |     |   |   | (100.0 | ) |
| Depreciation and amortization       |   |   | 2,538  |   |   |   | 4,311  |     |   |   | (41.1 | ) |
|  Total expenses                |   | $      | 23,325 |   |   | $      | 33,103 |     |   |   | (29.5 | )% |

| (dollars in thousands)          |   | 2009   |   |   | 2008   |   |   | % Change |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                            |   |   |   |   |   |   |   |     |   |
| Income before other allocations |   | $      | 16,893 |   |   | $      | 8,361  |     |   |   | 102.0 | % |
| Net Income                      |   |   | 16,893 |   |   |   | 8,361  |     |   |   | 102.0 |   |

----

| ·   | This group recognized a $21.0 million loss reserve during 2009 related to a planned restructuring of Affordable Housing mortgage revenue bonds included in the 2007 re-securitization transaction and associated credit intermediation of Tax Credit Fund Partnerships.  The planned restructuring may impact credit intermediation transactions Centerline Financial has entered into, as more fully described in Note 31 to the consolidated financial statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Beginning in the fourth quarter of 2007, we began purchasing syndicated corporate debt investments in anticipation of a collateralized loan obligation transaction.  Principally as a result of market conditions, we did not purchase any additional investments during 2008 and instead liquidated our positions.  Substantially all of the assets were sold at a loss by December 31, 2008 and the debt utilized to acquire the assets was repaid, reducing interest expense. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We eliminated the personnel associated with the syndicated corporate debt investing portion of the business during the fourth quarter of 2008, and several positions in the credit intermediation portion during 2009, lowering the group’s cost structure. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands)     |   | 2009   |   |   | 2008   |   |   | % Change |   |
|----------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                       |   |   |   |   |   |   |   |     |   |
| Interest income            |   | $      | 193    |   |   | $      | 3,230  |     |   |   | (94.0 | )% |
| Credit intermediation fees |   |   | 6,854  |   |   |   | 4,664  |     |   |   | 47.0 |   |
| Other revenues             |   |   | 15     |   |   |   | 614    |     |   |   | (97.6 | ) |
|  Total revenues       |   | $      | 7,062  |   |   | $      | 8,508  |     |   |   | (17.0 | )% |

----

| (dollars in thousands)                               |   | 2009   |   |   | 2008   |   |   | % Change |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                                                 |   |   |   |   |   |   |   |     |   |
| General and administrative expenses                  |   | $      | 24,421 |   |   | $      | 10,799 |     |   |   | 126.1 | % |
| Interest expense:                                    |   |   |   |   |   |   |   |     |   |   |   |   |
| Borrowings, including net cash impact of derivatives |   |   | (243   | )      |   |   | 1,122  |     |   |   | (121.7 | ) |
| Derivatives – non-cash impact                  |   |   | 691    |   |   |   | (1,071 | )        |   |   | 164.5 |   |
| Depreciation and amortization                        |   |   | 43     |   |   |   | 1,876  |     |   |   | (97.7 | ) |
| Impairment of assets                                 |   |   | --     |   |   |   | 2,848  |     |   |   | (100.0 | ) |
|  Total expenses                                 |   | $      | 24,912 |   |   | $      | 15,574 |     |   |   | 60.0 | % |

| ·   | $2.7 million reduction in professional fees paid to Natixis for advisory services.  One of these agreements was terminated in October 2008.  Under another agreement (approximately $0.4 million in expense per quarter), we reached the maximum fee level under the agreement in May 2009 and will incur no more such expenses. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $1.2 million reduction in consulting and legal costs due to the absence of new or planned business activity. |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | $1.9 million net reduction in salaries and benefits expense (due to reduction in personnel) partially offset by severance costs incurred in the first quarter of 2009 due to the departure of an executive officer in this group. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Lower headcount in this group, which also resulted in lower administrative allocations of $0.8 million. |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | $0.2 million reduction in income tax expense relating to a state tax refund. |
|--------------------|------------------------------------------------------------------------------|

| (dollars in thousands) |   | 2009   |   |   | 2008   |   |   | % Change |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                   |   |   |   |   |   |   |   |     |   |
| Loss on sale of assets |   | $      | --     |   |   | $      | (1,348 | )        |   |   | 100.0 | % |

----

| (dollars in thousands)        |   | 2009   |    |   | 2008   |   |   | % Change |   |
|-------------------------------|--------|--------|---------|--------|--------|--------|--------|----------|--------|
|                          |   |   |    |   |   |   |   |     |   |
| Loss before other allocations |   | $      | (17,850 | )      |   | $      | (8,414 | )        |   |   | (112.1 | )% |
| Net loss                      |   |   | (16,125 | )      |   |   | (8,192 | )        |   |   | (96.8 | ) |

| (dollars in thousands) |   | 2009   |   |   | 2008   |   |   | % Change |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                   |   |   |   |   |   |   |   |     |   |
| Interest income        |   | $      | 1,238  |   |   | $      | 9,940  |     |   |   | (87.5 | )% |
| Other revenues         |   |   | 388    |   |   |   | 3,779  |     |   |   | (89.7 | ) |
|  Total revenues   |   | $      | 1,626  |   |   | $      | 13,719 |     |   |   | (88.1 | )% |

| (dollars in thousands)                      |   | 2009   |    |   | 2008   |   |    | % Change |   |
|---------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                        |   |   |    |   |   |   |    |     |   |
| General and administrative expenses         |   | $      | 74,442  |   |   | $      | 61,455  |     |   |   | 21.1 | % |
| Interest expense:                           |   |   |    |   |   |   |    |     |   |   |   |   |
| Borrowings and financings                   |   |   | 27,880  |   |   |   | 33,272  |     |   |   | (16.2 | ) |
| Derivatives – non-cash impact         |   |   | (3,840  | )      |   |   | 2,867   |     |   |   | (233.9 | ) |
| Depreciation and amortization               |   |   | 18,567  |   |   |   | 24,985  |     |   |   | (25.7 | ) |
| Write-off of goodwill and intangible assets |   |   | 150,796 |   |   |   | 152,792 |     |   |   | (1.3 | ) |
| Loss on impairment of assets                |   |   | 65      |   |   |   | 15,892  |     |   |   | (99.6 | ) |
|  Total expenses                        |   | $      | 267,910 |   |   | $      | 291,263 |     |   |   | (8.0 | )% |

----

| ·   | $11.0 million decrease in salaries, benefits and bonus expense due to reduction in personnel; |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | $2.1 million decrease in professional fees, primarily lower auditing and accounting fees as a result of lower volume of business and greater efficiencies; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $3.9 million decrease in rent expense, primarily the result of rent expenses recorded during 2008 in connection with office space we no longer use in operations. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                             |   | Years Ended December 31,                |     |
|--------------------------------------------------|--------|-----------------------------------------|----------|
|                                             |   |  2009                              |     | 2008 |   |
| (in thousands)                                   |   | Tax Credit Fund andPropertyPartnerships |     |  CMBS andHigh-YieldDebt FundPartnerships |   | Total |   | Tax Credit Fund andPropertyPartnerships |   | CMBS andHigh-YieldDebt FundPartnerships |   | Total |   |
|  Revenues                                   |   | $                                       | 78,902   |   | $ | 216,064 |   | $ | 294,966 |   | $ | 86,738 |   | $ | 253,221 |   | $ | 339,959 |   |
| Interest expense                                 |   |                                    | (9,213   | ) |   | (140,052 | ) |   | (149,265 | ) |   | (15,300 | ) |   | (149,722 | ) |   | (165,022 | ) |
| Loss on impairment of assets                     |   |                                    | (30,151  | ) |   | (1,929,699 | ) |   | (1,959,850 | ) |   | -- |   |   | (317,264 | ) |   | (317,264 | ) |
| Other expenses                                   |   |                                    | (139,582 | ) |   | (27,692 | ) |   | (167,274 | ) |   | (128,385 | ) |   | (10,455 | ) |   | (138,840 | ) |
| Partnership expenses eliminated in consolidation |   |                                    | (70,778  | ) |   | (3,624 | ) |   | (74,402 | ) |   | (82,906 | ) |   | (3,565 | ) |   | (86,471 | ) |
| Other loss                                       |   |                                    | (593,347 | ) |   | (5,420 | ) |   | (598,767 | ) |   | (279,062 | ) |   | (4,705 | ) |   | (283,767 | ) |
| Allocations to limited partners                  |   |                                    | 764,166  |   |   | 1,815,937 |   |   | 2,580,103 |   |   | 419,043 |   |   | 240,185 |   |   | 659,228 |   |
|  Net impact                                 |   | $                                       | (3       | ) |   | (74,486 | ) | $ | (74,489 | ) | $ | 128 |   |   | 7,695 |   | $ | 7,823 |   |

|                             |   | December 31, |   |
|----------------------------------|--------|--------------|--------|
|                             |   | 2009         |   |   | 2008 |   |
|                             |   |         |   |   |   |   |
| Tax Credit Fund Partnerships     |   |         | 137    |   |   |   | 135 |   |
| Tax Credit Property Partnerships |   |         | 52     |   |   |   | 55 |   |
| CMBS Fund Partnerships           |   |         | 5      |   |   |   | 5 |   |
| High-Yield Debt Fund Partnership |   |         | 1      |   |   |   | 1 |   |

----

| ·   | lower interest earned in the current year due to the November 2008 sale of investments by the High-Yield Debt Fund Partnership; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | non-accrual of interest for certain mortgage loan investments and CMBS structured investments held by the CMBS and High-Yield Debt Fund Partnerships due to uncertain collectability; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower interest earned on cash and restricted cash balances (due to a significant drop in interest rates during 2009). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | a significant decline in transaction related revenues, primarily due to fewer investors for our Affordable Housing and Commercial Real Estate funds, as many of our earnings streams involve establishing and managing such funds while many of our costs are fixed. In addition, we have experienced lower volume of mortgage originations for Fannie Mae and Freddie Mac; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | increasing rates of default in commercial real estate, which have resulted in reduced cash flows within and downgrades of structured finance vehicles, leading to “hyper-amortization” of debt senior to the securities in which our funds invest.  The resulting decline in cash flows to the funds has reduced the cash we can realize from both managing and co-investing in the funds and to repay loans we had made to one fund.  The increasing rates of default have also negatively impacted the cash flow to CMBS and retained CMBS certificates that until the March 2010 Restructuring we held directly; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increasing rates of default in our Affordable Housing portfolio, which have resulted in declining cash flows on our Series B Freddie Mac certificates.  This led us to conclude that substantially all of an escrow account (associated with the re-securitization from which we retained those certificates) will not be recovered, as the cash will instead be needed to restructure the debt for some of the underlying property partnerships.  We may also be required to provide additional funds to restructure other properties; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increasing rates of default in our portfolio of loans under the DUS and DUI programs which we expect to increase cash outflows required under our loss sharing arrangements. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a sharp decline in our common share price and the general environment for equity offerings, which made obtaining equity capital extremely difficult.  In addition we are no longer a New York Stock Exchange listed company; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a decline in available debt financing and an increase in its cost; and |
|--------------------|------------------------------------------------------------------------|

| ·   | turbulence in the credit markets that began in 2007 led to decreased availability of many forms of financing.  Specifically, since mid-2007 we experienced more constrained credit in the following areas: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | for asset-backed financing (such as we use to fund Fannie Mae and Freddie Mac mortgage originations in our Commercial Real Estate and Affordable Housing groups), the capacity of our financing facilities has decreased while the cost of borrowing has increased; |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | market stagnation and asset impairments prevented the refinancing of debt in a CMBS Fund Partnership; |
|---------------|-------------------------------------------------------------------------------------------------------|

| o   | for our Term Loan and Revolving Credit Facility, the terms included a higher rate of interest and more stringent covenants (including restrictions on funding new business opportunities and incurring any additional debt without lender approval) than had been the norm in prior periods. In addition, our Term Loan and Revolving Credit Facility prohibited us from paying common and preferred dividends.  The only exception to this limitation was for dividends related to the preferred shares of Equity Issuer and distributions from our REIT subsidiary; |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | under the terms of our Term Loan and Revolving Credit Facility, there were rapid amortization requirements and we were required to utilize any excess cash available (as defined in the agreement) to pay down the debt each quarter end.  We were also required to generate specified levels of cash from sale or collection of certain non-core assets and to reduce the balance of the Term Loan to specified levels at specified dates; and |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | under the terms of the Revolving Credit Facility, the amount available to borrow for working capital needs declined from $15.0 million to $10.0 million on October 1, 2009, as scheduled. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

| ·   | continuing to sell investments that did not meet our long-term investment criteria; and |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | exploring alternatives that would allow the release of cash in escrow associated with various historical transactions. |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| (in thousands)                          |   | 2009   |     |   | 2008   |   |
|-----------------------------------------|--------|--------|----------|--------|--------|--------|
|                                    |   |   |     |   |   |   |
| Net cash flow from operating activities |   | $      | 10,457   |   |   | $      | (1,088 | ) |
| Net cash flow from investing activities |   |   | 249,989  |   |   |   | 14,133 |   |
| Net cash flow from financing activities |   |   | (268,597 | )      |   |   | (46,277 | ) |
| Net change in cash                      |   | $      | (8,151   | )      |   | $      | (33,232 | ) |

----

|                                 |   | (In thousands) |   |
|--------------------------------------|--------|----------------|--------|
|  Equity Issuer Preferred shares |   | $              | 2,583  |   |

| ·   | uncertainty resulting from a drastic decline in market activity for certain of our mortgage backed products, including CMBS; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

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

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

| ·   | rapidly changing expectations of default levels; and |
|--------------------|------------------------------------------------------|

| ·   | the downgrades of certain trusts in which we may hold certificates. |
|--------------------|---------------------------------------------------------------------|

----

|                                                                                                                                                                                               |   | Years Ended December 31, |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
| (in thousands)                                                                                                                                                                                     |   | 2009                     |    |   | 2008 |   |
|  Level 3 assets held for our own account:                                                                                                                                                     |   |                     |    |   |   |   |
| Series A-1 Freddie Mac Certificates                                                                                                                                                                |   | $                        | 183,093 |   |   | $ | 335,047 |   |
| Series B Freddie Mac Certificates                                                                                                                                                                  |   |                     | 61,003  |   |   |   | 123,122 |   |
| Mortgage revenue bonds                                                                                                                                                                             |   |                     | 245,671 |   |   |   | 69,217 |   |
| Retained CMBS certificates(1)                                                                                                                                                                      |   |                     | 8,025   |   |   |   | 7,313 |   |
| CMBS(1)                                                                                                                                                                                            |   |                     | 1,430   |   |   |   | 2,550 |   |
| Goodwill(2)                                                                                                                                                                                        |   |                     | 103,585 |   |   |   | 248,978 |   |
| Mortgage servicing rights(3)                                                                                                                                                                       |   |                     | 63,097  |   |   |   | 65,599 |   |
| Other intangible assets(2)                                                                                                                                                                         |   |                     | 17,723  |   |   |   | 37,189 |   |
| Level 3 assets held by Consolidated Partnerships(1):                                                                                                                                               |   |                     |    |   |   |   |   |   |
| CMBS                                                                                                                                                                                               |   |                     | 126,195 |   |   |   | 182,828 |   |
| Retained CMBS certificates – available-for-sale                                                                                                                                              |   |                     | 6,646   |   |   |   | 9,867 |   |
| Retained CMBS certificates – held-to-maturity(3)                                                                                                                                             |   |                     | 52,277  |   |   |   | 47,310 |   |
| CDO debt and equity                                                                                                                                                                                |   |                     | 536     |   |   |   | 33,189 |   |
| Total Level 3 assets                                                                                                                                                                               |   | $                        | 869,281 |   |   | $ | 1,162,209 |   |
|  Level 3 assets as a percentage of total fair value assets                                                                                                                                    |   |                     | 93.0    | % |   |   | 91.1 | % |
|    (1)  Included in the March 2010 Restructuring.(2)  Non-financial asset fair valued on a non-recurring basis.(3)  Financial asset fair valued on a non-recurring basis. |   |

----

|                                                                                     |   | Years Ended December 31, |      |
|------------------------------------------------------------------------------------------|--------|--------------------------|-----------|
| (in thousands)                                                                           |   | 2009                     |      |   | 2008 |   |
|  Series B Freddie Mac Certificates                                                  |   | $                        | 44,830    |   |   | $ | 7,968 |   |
|  Mortgage revenue bonds                                                             |   |                     | 9,114     |   |   |   | 10,928 |   |
|  Retained CMBS certificates(1)                                                      |   |                     | 37,596    |   |   |   | 10,736 |   |
|  CMBS(1)                                                                            |   |                     | 15,546    |   |   |   | -- |   |
|  Goodwill and intangible assets                                                     |   |                     | 150,796   |   |   |   | 152,792 |   |
|  Subtotal (excluding Consolidated Partnerships)                                     |   |                     | 257,882   |   |   |   | 182,424 |   |
|  CMBS (held by Consolidated Partnerships)(1)                                        |   |                     | 1,462,801 |   |   |   | 95,975 |   |
|  Retained CMBS certificates (held by Consolidated Partnerships)(1)                  |   |                     | 123,669   |   |   |   | 27,016 |   |
|  CDO debt and equity (held by Consolidated Partnerships)(1)                         |   |                     | 154,699   |   |   |   | 101,027 |   |
|  Total                                                                              |   | $                        | 1,999,051 |   |   | $ | 406,442 |   |
|    (1)  Relate to assets we sold as part of the March 2010 Restructuring. |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             |      |             |   | December 31, 2009        |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|-----------|------------------|--------|--------------------------|--------|
| (in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | December 31,2009 |      | December 31,2008 |   |  Available toBorrow |   | MaximumCommitment |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Credit Facility(1):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Term loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                | 11,082    |             | $      | 68,884                   |   | $ | -- |   | $ | 11,082 |   |
| Termed-out portion of revolving credit facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |             | 208,000   |             |   | 208,000                  |   |   | -- |   |   | 220,000 |   |
| Revolving portion of revolving credit facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |             | 2,000     |             |   | 20,000                   |   |   | 23,000 |   |   | 25,000 |   |
|  Other Notes Payable:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Mortgage banking warehouse line                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |             | 550       |             |   | 32,229                   |   |   | N/A | (2) |   | 100,000 |   |
| Multifamily ASAP plus facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |             | 28,132    |             |   | 14,869                   |   |   | N/A | (2) |   | N/A |   |
| Commercial Real Estate lines(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |             | 3,226     |             |   | 13,846                   |   |   | N/A |   |   | 3,226 |   |
| Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |             | --        |             |   | 233                      |   |   | N/A |   |   | N/A |   |
|  Financing Arrangements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |             |      |             |   |                     |   |   |   |   |   |   |   |
| Bond securitization(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |             | --        |             |   | 62,424                   |   |   | N/A |   |   | N/A |   |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |             | 252,990   |             |   | 420,485                  |   |   | 23,000 |   |   |   |   |
|  Freddie Mac Secured Financing(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |             | 585,528   |             |   | 348,989                  |   |   | N/A |   |   | N/A |   |
| Subtotal (excluding Consolidated Partnerships)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |             | 838,518   |             |   | 769,474                  |   |   | 23,000 |   |   |   |   |
|  Consolidated Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |             | 1,707,007 |             |   | 1,833,330                |   |   | N/A |   |   | N/A |   |
|  Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                | 2,545,525 |             | $      | 2,602,804                |   | $ | 23,000 |   |   |   |   |
|  (1)   These facilities were repaid in the first quarter of 2010 and/or reduced and restructured as part of the March 2010 Restructuring.(2)   Borrowings under these facilities are limited to assets that serve as collateral.(3)   This bond securitization expired in December 2009 (see Note 15 to the consolidated financial statements).(4)   Relates to mortgage revenue bonds that we re-securitized but for which the transaction was not recognized as a sale (see Note 15 to the consolidated financial statements). |

| ·   | a Term Loan of $137.5 million that matures in March 2017 and incurs interest at a rate of 3.0% above LIBOR and no scheduled repayments until December 2011 and which can be potentially reduced by additional $10.0 million placed in escrow at the time of the March 2010 Restructuring; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a Revolving Credit Facility with a total capacity of $25.0 million, which was undrawn as of the date of the March 2010 Restructuring. The Revolving Credit Facility matures in March 2015 and incurs interest at a rate of 3.0% above LIBOR; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $12 million in outstanding letters of credit which cannot be redrawn once the letters of credit mature. |
|--------------------|---------------------------------------------------------------------------------------------------------|

----

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

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

| ·   | four CDO financing arrangements of the CMBS Fund Partnerships; |
|--------------------|----------------------------------------------------------------|

| ·   | 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; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a repurchase agreement for the High-Yield Debt Fund Partnership; |
|--------------------|------------------------------------------------------------------|

| ·   | bridge loans extended to a CMBS Fund Partnership by its investors (including us); and |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | mortgages on properties. |
|--------------------|--------------------------|

----

| (in thousands)                                                                                                                                                                                                                                                                                                                                                                                            |   | 2009   |    |   | 2008   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|  Mezzanine equity:                                                                                                                                                                                                                                                                                                                                                                                   |   |   |    |   |   |   |
| Redeemable CRA Shares(1)                                                                                                                                                                                                                                                                                                                                                                                  |   | $      | 203,252 |   |   | $      | 197,006 |   |
| 11.0% Preferred shares(2)                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 129,228 |   |   |   | 129,373 |   |
|  Centerline Holding Company equity                                                                                                                                                                                                                                                                                                                                                                   |   |   |    |   |   |   |   |   |
| CRA Shares(2)                                                                                                                                                                                                                                                                                                                                                                                             |   |   | (1,235  | )      |   |   | 3,144 |   |
|  Non-controlling equity:                                                                                                                                                                                                                                                                                                                                                                             |   |   |    |   |   |   |   |   |
| Preferred shares of subsidiary (not subject to mandatory repurchase)                                                                                                                                                                                                                                                                                                                                      |   |   | 104,000 |   |   |   | 104,000 |   |
| Convertible SCUs                                                                                                                                                                                                                                                                                                                                                                                          |   |   | (89,375 | )      |   |   | 64,318 |   |
| Convertible SCIs(3)                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 364     |   |   |   | 2,611 |   |
| Other                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 5,715   |   |   |   | 8,037 |   |
|  (1)    Most were converted into a new series of shares that are economically equivalent to 15 of our common shares as part of the March 2010 Restructuring.(2)    All were converted into a new series of shares that are economically equivalent to 15 of our common shares as part of the March 2010 Restructuring.(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(1)(2):                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Credit Facility:                                                    |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Term Loan(3)                                                        |   | $                      | 11,082    |   | $ | 11,082 |   | $ | -- |   | $ | -- |   | $ | -- |   |
| Termed out portion of Revolving Credit Facility(4)                  |   |                   | 208,000   |   |   | 208,000 |   |   | -- |   |   | -- |   |   | -- |   |
| Revolving portion of Revolving Credit Facility(4)                   |   |                   | 2,000     |   |   | 2,000 |   |   | -- |   |   | -- |   |   | -- |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage banking warehouse line(5)                                  |   |                   | 550       |   |   | 550 |   |   | -- |   |   | -- |   |   | -- |   |
| Multifamily ASAP plus facility(5)                                   |   |                   | 28,132    |   |   | 28,132 |   |   | -- |   |   | -- |   |   | -- |   |
| Commercial Real Estate term note(6)                                 |   |                   | 3,226     |   |   | 3,226 |   |   | -- |   |   | -- |   |   | -- |   |
| Subtotal                                                            |   |                   | 252,990   |   |   | 252,990 |   |   | -- |   |   | -- |   |   | -- |   |
|  Operating lease obligations                                   |   |                   | 60,583    |   |   | 8,873 |   |   | 15,528 |   |   | 13,924 |   |   | 22,258 |   |
| Subleases                                                           |   |                   | (4,879    | ) |   | (1,423 | ) |   | (2,854 | ) |   | (545 | ) |   | (57 | ) |
| Preferred shares of subsidiary (subject to mandatory repurchase)(7) |   |                   | 128,500   |   |   | 73,500 |   |   | -- |   |   | 55,000 |   |   | -- |   |
|  Subtotal                                                      |   |                   | 437,194   |   |   | 333,940 |   |   | 12,674 |   |   | 68,379 |   |   | 22,201 |   |
|                                                                |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Freddie Mac secured financing(8)                                    |   |                   | 585,528   |   |   | 32,636 |   |   | 9,463 |   |   | 227 |   |   | 543,202 |   |
| Unfunded investment commitments(9)                                  |   |                   | 125,481   |   |   | 125,481 |   |   | -- |   |   | -- |   |   | -- |   |
|  Subtotal before Consolidated Partnerships                     |   |                   | 1,148,203 |   |   | 492,057 |   |   | 22,137 |   |   | 68,606 |   |   | 565,403 |   |
|  Notes payable of consolidated partnerships(10)                |   |                   | 582,810   |   |   | 477,816 |   |   | 15,955 |   |   | 78,334 |   |   | 10,705 |   |
| Financing arrangements of consolidated partnerships                 |   |                   | 1,116,742 |   |   | 14 |   |   | 258,803 |   |   | 110,717 |   |   | 747,208 |   |
| Repurchase agreements of consolidated partnerships                  |   |                   | 7,455     |   |   | 7,455 |   |   | -- |   |   | -- |   |   | -- |   |
| Consolidated Partnership unfunded investment commitments(11)        |   |                   | 212,083   |   |   | 82,445 |   |   | -- |   |   | 129,638 |   |   | -- |   |
|  Subtotal of Consolidated Partnerships                         |   |                   | 1,919,090 |   |   | 567,730 |   |   | 274,758 |   |   | 318,689 |   |   | 757,913 |   |
|  Total                                                         |   | $                      | 3,067,293 |   | $ | 1,059,787 |   | $ | 296,895 |   | $ | 387,295 |   | $ | 1,323,316 |   |

| (1) | The amounts included in each category reflect the current expiration, reset or renewal date of each facility or security certificate.  Management has the intent and believes it has the ability to repay, renew, refinance or remarket the borrowings beyond their current due dates. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Recourse debt represents principal amount only.  The weighted average interest rate at period end was 5.92%. |
|-----|------------------------------------------------------------------------------------------------------------------------|

| (3) | Balance was repaid in January and February 2010. |
|-----|--------------------------------------------------|

| (4) | This facility was restructured in March 2010.  Terms of the new facility are described in Financing Obligations above. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| (5) | 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. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Balance was partially repaid in January and February 2010 with the balance fully repaid in connection with the March 2010 Restructuring. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Economically defeased by investments in Series A-1 Freddie Mac certificates (see Notes 8, 17 and 21 to the consolidated financial statements). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Represents a liability established related to mortgage revenue bonds re-securitized in December 2007 which were not 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 15 to the consolidated financial statements). |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (9) | Represent our Commercial Real Estate subsidiaries forward commitments under Freddie Mac and unfunded loan commitments with Fannie Mae. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

| (10) | Of the notes payable of consolidated partnerships, $59.9 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.  Of the remaining balance, $522.9 million 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. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (11) | 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                | 1,334,529 |            | $      | 26,480 |   |
| Mortgage banking loss sharing agreements(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |             | 895,394   |            |   | 24,219 |   |
| Credit support to developers(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |             | 206,769   |            |   | 190 |   |
| Centerline Financial credit default swaps(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |             | 33,715    |            |   | 970 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                | 2,470,407 |            | $      | 51,859 |   |
|  (1)  These transactions were undertaken to expand our Affordable Housing business by offering specified rates of return to customers.  To date, we have had minimal exposure to losses but anticipate that we may incur losses in connection with these agreements as we proceed with restructuring some of the mortgage revenue bonds of certain property partnerships.  The carrying values disclosed above relate to the fees we earn for the transactions, which we recognize as their fair values and exclude $140.0 million of potential exposure that we have reserved for that might arise related directly or indirectly to these agreements.  These factors are more fully described in Note 31 to the consolidated financial statements.  While we cannot currently estimate what cash payments will be necessary with respect to this exposure, nor when any payments may need to be made, the funding will be limited to the assets available in the bankruptcy-remote subsidiaries liable for the losses as guarantees of these obligations by the parent trust and/or CCG were terminated as part of the March 2010 Restructuring.  See also Note 32 to the consolidated financial statements regarding the restructuring of these agreements. |
| (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 incurred through December 31, 2009, 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 relate 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.  We believe that any funding pursuant to these obligations would be limited to the assets available in the subsidiary that entered into the agreements.  The carrying values disclosed above relate to the fees we earn for the transactions, which we recognize as their fair values.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

----

| (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 fees we earn for the transactions, which we recognize as their fair values. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 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-free nature of the associated income. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | estimating the default rates of the mortgages held by the CMBS trusts and CDOs, which estimates are based on our historical experience and industry studies; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | applying an appropriate discount rate, which we consider in comparison to comparable residual interests secured by multifamily loans, 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. |
|--------|--------|----------------------------------------------------|

----

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

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

| ·   | 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. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 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 under mortgage banking loss sharing agreements; and |
|--------------------|------------------------------------------------------------------|

| ·   | risks associated with providing credit intermediation. |
|--------------------|--------------------------------------------------------|

----

----

| /s/ Marc D. Schnitzer   |   | /s/ Robert L. Levy      |
|-------------------------|--------|-------------------------|
| Marc D. Schnitzer       |   | Robert L. Levy          |
| Chief Executive Officer |   | Chief Financial Officer |
| March 31, 2010          |   | March 31, 2010          |

----

----

| Item 8. |   | Financial Statements and Supplementary Data.                                                |   |   |
|---------|--------|---------------------------------------------------------------------------------------------|--------|--------|
|    |   |                                                                                        |   | Page   |
| (a) 1.  |   | Financial Statements                                                                        |   |   |
|    |   |                                                                                        |   |   |
|    |   | Report of Independent Registered Public Accounting Firm                                     |   | 78     |
|    |   |                                                                                        |   |   |
|    |   | Consolidated Balance Sheets as of December 31, 2009 and 2008                                |   | 79     |
|    |   |                                                                                        |   |   |
|    |   | Consolidated Statements of Operations for the years ended December 31, 2009 and 2008        |   | 80     |
|    |   |                                                                                        |   |   |
|    |   | Consolidated Statements of Changes in Equity for the years ended December 31, 2009 and 2008 |   | 81     |
|    |   |                                                                                        |   |   |
|    |   | Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008        |   | 82     |
|    |   |                                                                                        |   |   |
|    |   | Notes to Consolidated Financial Statements                                                  |   |   |
|    |   |                                                                                        |   |   |
|    |   | Note 1 – Description of Business and Basis of Presentation                            |   | 84     |
|    |   | Note 2 – Summary of Significant Accounting Policies                                   |   | 84     |
|    |   | Note 3 – New Accounting Pronouncements                                                |   | 95     |
|    |   | Note 4 – Market Conditions and Liquidity                                              |   | 95     |
|    |   | Note 5 – Fair Value of Financial Instruments                                          |   | 96     |
|    |   | Note 6 – Variable Interest Entities and Qualifying Special Purpose Entities           |   | 102    |
|    |   | Note 7 – Assets Pledged as Collateral                                                 |   | 104    |
|    |   | Note 8 – Available-for-Sale Investments                                               |   | 105    |
|    |   | Note 9 – Equity Method Investments                                                    |   | 113    |
|    |   | Note 10 – Other Investments                                                           |   | 113    |
|    |   | Note 11 – Goodwill and Intangible Assets, Net                                         |   | 114    |
|    |   | Note 12 – Deferred Costs and Other Assets, Net                                        |   | 119    |
|    |   | Note 13 – Assets of Consolidated Partnerships                                         |   | 120    |
|    |   | Note 14 – Notes Payable                                                               |   | 130    |
|    |   | Note 15 – Financing Arrangements and Secured Financing                                |   | 131    |
|    |   | Note 16 – Accounts Payable, Accrued Expenses and Other Liabilities                    |   | 132    |
|    |   | Note 17 – Preferred Shares of a Subsidiary – Subject to Mandatory Repurchase    |   | 134    |
|    |   | Note 18 – Liabilities of Consolidated Partnerships                                    |   | 135    |
|    |   | Note 19 – Redeemable Securities                                                       |   | 137    |
|    |   | Note 20 – Centerline Holding Company Equity                                           |   | 139    |
|    |   | Note 21 – Non-controlling interests                                                   |   | 141    |
|    |   | Note 22 – General and Administrative Expenses                                         |   | 143    |
|    |   | Note 23 – Loss on Impairment of Assets                                                |   | 143    |
|    |   | Note 24 – Revenues and Expenses of Consolidated Partnerships                          |   | 145    |
|    |   | Note 25 – Share-Based Compensation                                                    |   | 146    |
|    |   | Note 26 – Income Taxes                                                                |   | 149    |
|    |   | Note 27 – Earnings per Share                                                          |   | 153    |
|    |   | Note 28 – Financial Risk Management and Derivatives                                   |   | 153    |
|    |   | Note 29 – Related Party Transactions                                                  |   | 157    |
|    |   | Note 30 – Business Segments                                                           |   | 160    |
|    |   | Note 31 – Commitments and Contingencies                                               |   | 161    |
|    |   | Note 32 – Subsequent Events                                                           |   | 167    |

----

----

|                                                                                                                                                  | December 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|--------|
|                                                                                                                                                  | 2009         |   | 2008 |   |
|  ASSETS                                                                                                                                          |
|  Cash and cash equivalents                                                                                                                       |         | $      | 95,728 |   |   | $ | 103,879 |   |
| Restricted cash                                                                                                                                       |         |   | 11,476 |   |   |   | 10,852 |   |
| Investments:                                                                                                                                          |         |   |   |   |   |   |   |   |
| Available-for-sale (Note 8)                                                                                                                           |         |   | 499,222 |   |   |   | 539,213 |   |
| Equity method (Note 9)                                                                                                                                |         |   | 530 |   |   |   | 31,367 |   |
| Other (Note 10)                                                                                                                                       |         |   | 39,037 |   |   |   | 134,227 |   |
| Investments in and loans to affiliates, net (Note 29)                                                                                                 |         |   | 9,800 |   |   |   | 19,222 |   |
| Goodwill and intangible assets, net (Note 11)                                                                                                         |         |   | 184,405 |   |   |   | 351,766 |   |
| Deferred costs and other assets, net (Note 12)                                                                                                        |         |   | 109,253 |   |   |   | 135,679 |   |
| Consolidated partnerships (Note 13):                                                                                                                  |         |   |   |   |   |   |   |   |
| Investments:                                                                                                                                          |         |   |   |   |   |   |   |   |
| Available-for-sale                                                                                                                                    |         |   | 138,486 |   |   |   | 273,742 |   |
| Held to maturity                                                                                                                                      |         |   | 284,971 |   |   |   | 288,960 |   |
| Equity method                                                                                                                                         |         |   | 3,571,323 |   |   |   | 4,234,251 |   |
| Other                                                                                                                                                 |         |   | 46,094 |   |   |   | 200,611 |   |
| Land, buildings and improvements, net                                                                                                                 |         |   | 651,199 |   |   |   | 697,422 |   |
| Other assets                                                                                                                                          |         |   | 362,002 |   |   |   | 373,932 |   |
|  Total assets                                                                                                                                    |         | $      | 6,003,526 |   |   | $ | 7,395,123 |   |
|  LIABILITIES AND EQUITY                                                                                                                          |
|  Liabilities:                                                                                                                                    |         |   |   |   |   |   |   |   |
| Notes payable (Note 14)                                                                                                                               |         | $      | 252,990 |   |   | $ | 358,061 |   |
| Financing arrangements and secured financing (Note 15)                                                                                                |         |   | 585,528 |   |   |   | 411,413 |   |
| Accounts payable, accrued expenses and other liabilities (Note 16)                                                                                    |         |   | 346,848 |   |   |   | 218,580 |   |
| Preferred shares of subsidiary (subject to mandatory repurchase) (Note 17)                                                                            |         |   | 128,500 |   |   |   | 273,500 |   |
| Consolidated partnerships (Note 18):                                                                                                                  |         |   |   |   |   |   |   |   |
| Financing arrangements                                                                                                                                |         |   | 1,116,742 |   |   |   | 1,121,475 |   |
| Notes payable                                                                                                                                         |         |   | 582,810 |   |   |   | 672,730 |   |
| Repurchase agreements                                                                                                                                 |         |   | 7,455 |   |   |   | 39,125 |   |
| Due to property partnerships                                                                                                                          |         |   | 209,868 |   |   |   | 577,160 |   |
| Other liabilities                                                                                                                                     |         |   | 256,870 |   |   |   | 208,664 |   |
|  Total liabilities                                                                                                                               |         |   | 3,487,611 |   |   |   | 3,880,708 |   |
|  Redeemable securities (Note 19)                                                                                                                 |         |   | 332,480 |   |   |   | 326,379 |   |
|  Commitments and contingencies (Note 31)                                                                                                         |         |   |   |   |   |   |   |   |
|  Equity:                                                                                                                                         |         |   |   |   |   |   |   |   |
| Centerline Holding Company beneficial owners’ deficit (Note 20):                                                                                |         |   |   |   |   |   |   |   |
| Convertible CRA preferred shares; no par value; 519 shares issued and outstanding in 2009 and 2008                                                    |         |   | (1,235 | ) |   |   | 3,144 |   |
| Special preferred voting shares; no par value; 12,731 shares issued and outstanding in 2009 and 13,131 shares issued and outstanding in 2008          |         |   | 127 |   |   |   | 131 |   |
| Common shares; no par value; 160,000 shares authorized; 57,881 issued and 53,820 outstanding in 2009 and 56,662 issued and 52,970 outstanding in 2008 |         |   | (104,054 | ) |   |   | 338,619 |   |
| Treasury shares of beneficial interest – common, at cost; 4,061 shares in 2009 and 3,692 shares in 2008                                         |         |   | (65,351 | ) |   |   | (65,283 | ) |
| Accumulated other comprehensive loss                                                                                                                  |         |   | (1,007,837 | ) |   |   | (1,144,122 | ) |
|  Centerline Holding Company total                                                                                                                |         |   | (1,178,350 | ) |   |   | (867,511 | ) |
|  Non-controlling interests (Note 21)                                                                                                             |         |   | 3,361,785 |   |   |   | 4,055,547 |   |
|  Total equity                                                                                                                                    |         |   | 2,183,435 |   |   |   | 3,188,036 |   |
|  Total liabilities and equity                                                                                                                    |         | $      | 6,003,526 |   |   | $ | 7,395,123 |   |

----

|                                                                                      |   | Years Ended December 31, |       |
|-------------------------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                                      |   | 2009                     |       |   | 2008 |   |
|  Revenues:                                                                           |   |                     |       |   |   |   |
| Interest income                                                                           |   | $                        | 64,414     |   |   | $ | 98,677 |   |
| Fee income                                                                                |   |                     | 66,118     |   |   |   | 65,877 |   |
| Other                                                                                     |   |                     | 21,310     |   |   |   | 18,690 |   |
| Consolidated partnerships (Note 24):                                                      |   |                     |       |   |   |   |   |   |
| Interest income                                                                           |   |                     | 202,318    |   |   |   | 262,997 |   |
| Rental income                                                                             |   |                     | 89,705     |   |   |   | 75,106 |   |
| Other                                                                                     |   |                     | 2,943      |   |   |   | 1,856 |   |
| Total revenues                                                                            |   |                     | 446,808    |   |   |   | 523,203 |   |
|  Expenses:                                                                           |   |                     |       |   |   |   |   |   |
| General and administrative (Note 22)                                                      |   |                     | 313,083    |   |   |   | 167,242 |   |
| Interest                                                                                  |   |                     | 51,807     |   |   |   | 74,175 |   |
| Interest – distributions to preferred shareholders of subsidiary                    |   |                     | 14,088     |   |   |   | 18,898 |   |
| Depreciation and amortization                                                             |   |                     | 39,008     |   |   |   | 46,030 |   |
| Write-off of goodwill and intangible assets (Note 11)                                     |   |                     | 150,796    |   |   |   | 152,792 |   |
| Loss on impairment of assets (Note 23)                                                    |   |                     |       |   |   |   |   |   |
| Total Other-than-temporary impairment                                                     |   |                     | 152,010    |   |   |   | 48,935 |   |
| Less:  amount recognized in other comprehensive loss                            |   |                     | (2,662     | ) |   |   | -- |   |
| Net impairment reflected in operations                                                    |   |                     | 149,348    |   |   |   | 48,935 |   |
| Consolidated partnerships (Note 24):                                                      |   |                     |       |   |   |   |   |   |
| Interest                                                                                  |   |                     | 149,265    |   |   |   | 165,022 |   |
| Loss on impairment of assets:                                                             |   |                     |       |   |   |   |   |   |
| Total Other-than-temporary impairment                                                     |   |                     | 2,060,644  |   |   |   | 317,264 |   |
| Less:  amount recognized in other comprehensive loss                            |   |                     | (100,794   | ) |   |   | -- |   |
| Net impairment reflected in operations                                                    |   |                     | 1,959,850  |   |   |   | 317,264 |   |
| Other expenses                                                                            |   |                     | 167,274    |   |   |   | 138,840 |   |
| Total expenses                                                                            |   |                     | 2,994,519  |   |   |   | 1,129,198 |   |
|  Loss before other income                                                            |   |                     | (2,547,711 | ) |   |   | (605,995 | ) |
|  Other (loss) income:                                                                |   |                     |       |   |   |   |   |   |
| Equity and other (loss) income                                                            |   |                     | (44,154    | ) |   |   | (79,149 | ) |
| Gain (loss) from repayment or sale of investments                                         |   |                     | 2,672      |   |   |   | (6,744 | ) |
| Other losses from consolidated partnerships (Note 24)                                     |   |                     | (598,767   | ) |   |   | (283,767 | ) |
|  Loss before income taxes                                                            |   |                     | (3,187,960 | ) |   |   | (975,655 | ) |
|  Income tax benefit (provision) (Note 26)                                            |   |                     | 3,307      |   |   |   | (3,823 | ) |
| Net loss                                                                                  |   |                     | (3,184,653 | ) |   |   | (979,478 | ) |
|  Net loss attributed to non-controlling interests (Note 21)                          |   |                     | 2,729,272  |   |   |   | 747,320 |   |
|  Net loss attributed to Centerline Holding Company shareholders                      |   |                     | (455,381   | ) |   |   | (232,158 | ) |
|  Dividends for preferred and participating securities including dividends in arrears |   |                     | (20,035    | ) |   |   | (21,039 | ) |
| Effect of redeemable share conversions                                                    |   |                     | (6,246     | ) |   |   | (16,912 | ) |
| Net loss for earnings per share calculations                                              |   | $                        | (481,662   | ) |   | $ | (270,109 | ) |
|  Net loss per share – basic and diluted                                        |   | $                        | (8.93      | ) |   | $ | (5.19 | ) |
|  Weighted average shares outstanding – basic and diluted                       |   |                     | 53,963     |   |   |   | 51,997 |   |

----

|                                      |   | 4.4%ConvertibleCRA preferred |    |   | ConvertibleCRA Shares |   |    | SpecialPreferredVoting Shares |   |   | Common Shares |   |   | Treasury Shares |   |   | AccumulatedOtherComprehensiveLoss |   |     | Non-Controlling Interests |   |   | Total   |   |   | ComprehensiveLoss |       |   | RedeemableSecurities |   |
|-------------------------------------------|--------|------------------------------|---------|--------|-----------------------|--------|---------|-------------------------------|--------|--------|---------------|--------|--------|-----------------|--------|--------|-----------------------------------|--------|----------|---------------------------|--------|--------|---------|--------|--------|-------------------|------------|--------|----------------------|--------|
|                                      |   |                         |    |   |                  |   |    |                          |   |   | Shares        |   |   |            |   |   |                              |   |     |                      |   |   |    |   |   |              |       |   |                 |   |   |   |   |
|  January 1, 2008                     |   | $                            | 51,281  |   |                  | $      | 66,879  |                          |   | $      | 143           |   |   |            | 50,567 |   |                              | $      | 592,505  |                      |   | $      | (64,312 | )      |   | $                 | (105,904   | )      |                 | $      | 4,063,628 |   |   | $ | 4,604,220 |   |   |   |   |   | $ | 69,888 |   |
| Net loss                                  |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | --     |   |                              |   | (232,158 | )                         |   |   | --      |   |   |              | --         |   |                 |   | (747,320 | ) |   |   | (979,478 | ) |   | $ | (979,478 | ) |   |   | -- |   |
| Allocation of earnings                    |   |                         | 38      |   |                  |   | (3,550  | )                             |   |   | --            |   |   |            | --     |   |                              |   | (11,786  | )                         |   |   | --      |   |   |              | --         |   |                 |   | -- |   |   |   | (15,298 | ) |   |   | -- |   |   |   | 15,298 |   |
| Unrealized losses, net                    |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | --     |   |                              |   | --       |                      |   |   | --      |   |   |              | (1,038,218 | )      |                 |   | (288,931 | ) |   |   | (1,327,149 | ) |   |   | (1,327,149 | ) |   |   | -- |   |
| Share-based compensation                  |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | 1,470  |   |                              |   | 13,775   |                      |   |   | --      |   |   |              | --         |   |                 |   | -- |   |   |   | 13,775 |   |   |   | -- |   |   |   | -- |   |
| Issuance of 11% Preferred Shares          |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | --     |   |                              |   | --       |                      |   |   | --      |   |   |              | --         |   |                 |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 129,404 |   |
| Conversions or redemptions                |   |                         | --      |   |                  |   | --      |                          |   |   | (12           | )      |   |            | 1,249  |   |                              |   | 5,383    |                      |   |   | --      |   |   |              | --         |   |                 |   | (4,298 | ) |   |   | 1,073 |   |   |   | -- |   |   |   | (1,083 | ) |
| Reclassification to redeemable securities |   |                         | (51,281 | )      |                  |   | (59,977 | )                             |   |   | --            |   |   |            | --     |   |                              |   | (10,797  | )                         |   |   | --      |   |   |              | --         |   |                 |   | -- |   |   |   | (122,055 | ) |   |   | -- |   |   |   | 122,055 |   |
| Contributions                             |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | --     |   |                              |   | --       |                      |   |   | --      |   |   |              | --         |   |                 |   | 1,090,051 |   |   |   | 1,090,051 |   |   |   | -- |   |   |   | -- |   |
| Fair value accretion                      |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | --     |   |                              |   | (6,115   | )                         |   |   | --      |   |   |              | --         |   |                 |   | -- |   |   |   | (6,115 | ) |   |   | -- |   |   |   | 6,115 |   |
| Treasury shares                           |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | (316   | )      |                              |   | --       |                      |   |   | (971    | )      |   |              | --         |   |                 |   | -- |   |   |   | (971 | ) |   |   | -- |   |   |   | -- |   |
| Distributions                             |   |                         | (38     | )      |                  |   | (208    | )                             |   |   | --            |   |   |            | --     |   |                              |   | (12,188  | )                         |   |   | --      |   |   |              | --         |   |                 |   | (57,583 | ) |   |   | (70,017 | ) |   |   | -- |   |   |   | (15,298 | ) |
| December 31, 2008                         |   |                         | --      |   |                  |   | 3,144   |                          |   |   | 131           |   |   |            | 52,970 |   |                              | $      | 338,619  |                      |   |   | (65,283 | )      |   |              | (1,144,122 | )      |                 |   | 4,055,547 |   |   |   | 3,188,036 |   |   | $ | (2,306,627 | ) |   |   | 326,379 |   |
|  Net loss                            |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | --     |   |                              |   | (455,381 | )                         |   |   | --      |   |   |              | --         |   |                 |   | (2,729,272 | ) |   |   | (3,184,653 | ) |   | $ | (3,184,653 | ) |   |   | -- |   |
| Allocation of earnings                    |   |                         | --      |   |                  |   | (4,379  | )                             |   |   | --            |   |   |            | --     |   |                              |   | 4,379    |                      |   |   | --      |   |   |              | --         |   |                 |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Unrealized losses, net                    |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | --     |   |                              |   | --       |                      |   |   | --      |   |   |              | 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                             |   |                         | --      |   |                  |   | --      |                          |   |   | --            |   |   |            | --     |   |                              |   | --       |                      |   |   | --      |   |   |              | --         |   |                 |   | (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, |       |
|----------------------------------------------------------------|--------|--------------------------|------------|
|                                                           |   | 2009                     |       |   | 2008 |   |
|                                                           |   |                     |       |   |   |   |
|  CASH FLOWS FROM OPERATING ACTIVITIES:                    |   |                     |       |   |   |   |
| Net loss                                                       |   | $                        | (3,184,653 | ) |   | $ | (979,478 | ) |
| Reconciling items:                                             |   |                     |       |   |   |   |   |   |
| Net non-cash losses of consolidated partnerships               |   |                     | 2,671,654  |   |   |   | 659,228 |   |
| (Gain) loss from repayment or sale of investments              |   |                     | (2,672     | ) |   |   | 6,744 |   |
| Impairment of investments and other assets                     |   |                     | 149,348    |   |   |   | 48,935 |   |
| Write-off of goodwill and intangible assets               |   |                     | 150,796    |   |   |   | 152,792 |   |
| Depreciation and amortization                                  |   |                     | 39,008     |   |   |   | 46,030 |   |
| Equity in losses of unconsolidated entities, net               |   |                     | 44,154     |   |   |   | 79,149 |   |
| Non-cash interest expense, net                                 |   |                     | 3,800      |   |   |   | 239 |   |
| Share-based compensation expense                               |   |                     | 5,995      |   |   |   | 12,945 |   |
| Other non-cash income, net                                     |   |                     | (4,970     | ) |   |   | (209 | ) |
| Capitalization of mortgage servicing rights                    |   |                     | (10,181    | ) |   |   | (8,475 | ) |
| Deferred taxes                                                 |   |                     | (46        | ) |   |   | (941 | ) |
| Affordable Housing loss reserve                                |   |                     | 140,000    |   |   |   | -- |   |
| Reserves for bad debt, net of reversals                        |   |                     | 14,672     |   |   |   | 5,179 |   |
| Non-cash impact of interest rate derivatives                   |   |                     | (19,263    | ) |   |   | (492 | ) |
| Changes in operating assets and liabilities:                   |   |                     |       |   |   |   |   |   |
| Mortgage loans held for sale                                   |   |                     | 18,458     |   |   |   | 44,153 |   |
| Deferred revenues                                              |   |                     | (23,606    | ) |   |   | (30,290 | ) |
| Receivables                                                    |   |                     | (14,649    | ) |   |   | 2,578 |   |
| Other assets                                                   |   |                     | 3,601      |   |   |   | (9,443 | ) |
| Loan loss reserve                                              |   |                     | 11,103     |   |   |   | -- |   |
| Restructuring costs payable                                    |   |                     | 29,435     |   |   |   | 2,443 |   |
| Accounts payable, accrued expenses and other liabilities       |   |                     | (11,527    | ) |   |   | (32,175 | ) |
|  Net cash flow from operating activities                  |   |                     | 10,457     |   |   |   | (1,088 | ) |
|  CASH FLOWS FROM INVESTING ACTIVITIES:                    |   |                     |       |   |   |   |   |   |
| Sale and repayment of available-for-sale securities            |   |                     | 151,357    |   |   |   | 78,206 |   |
| Purchases of available-for-sale securities                     |   |                     | --         |   |   |   | (50,830 | ) |
| Acquisition of mortgage loans held for investment              |   |                     | --         |   |   |   | (2,910 | ) |
| Sale and repayments of mortgage loans held for investment      |   |                     | 1,894      |   |   |   | 6,930 |   |
| Advances to partnerships                                       |   |                     | (3,550     | ) |   |   | (51,087 | ) |
| Collection of advances to partnerships                         |   |                     | 23,979     |   |   |   | 58,482 |   |
| Sale and repayment of other investments                        |   |                     | 7,157      |   |   |   | 11,256 |   |
| Investment in properties and other advances                    |   |                     | --         |   |   |   | (2,203 | ) |
| Deferred investment acquisition costs                          |   |                     | (221       | ) |   |   | (2,927 | ) |
| Decrease in restricted cash, escrows and other cash collateral |   |                     | 40,620     |   |   |   | 14,994 |   |
| Return of capital from equity investees                        |   |                     | --         |   |   |   | 460 |   |
| Acquisitions, net of cash acquired                             |   |                     | 1,158      |   |   |   | -- |   |
| Acquisition of furniture, fixtures and leasehold improvements  |   |                     | (1,156     | ) |   |   | (6,744 | ) |
| Acquisition of asset management contract                       |   |                     | --         |   |   |   | (7,505 | ) |
| Loan to AMAC                                                   |   |                     | --         |   |   |   | (2,192 | ) |
| Equity investments and other investing activities              |   |                     | 28,751     |   |   |   | (29,797 | ) |
|  Net cash flow from investing activities                  |   |                     | 249,989    |   |   |   | 14,133 |   |

----

|                                                              |   | Years Ended December 31, |     |
|-------------------------------------------------------------------|--------|--------------------------|----------|
|                                                              |   | 2009                     |     |   | 2008 |   |
|  CASH FLOWS FROM FINANCING ACTIVITIES:                       |   |                     |     |   |   |   |
| Repayments of financing arrangements                              |   |                     | (11,321  | ) |   |   | (14,275 | ) |
| Proceeds from financing arrangements                              |   |                     | --       |   |   |   | 62,757 |   |
| Distributions to equity holders                                   |   |                     | (6,867   | ) |   |   | (76,972 | ) |
| Repayments of term loans                                          |   |                     | (68,422  | ) |   |   | (81,116 | ) |
| Proceeds from term loans                                          |   |                     | --       |   |   |   | 23,847 |   |
| Increase (decrease) in loan warehouse line and ASAP plus facility |   |                     | (18,416  | ) |   |   | (43,385 | ) |
| Decrease in other notes payable                                   |   |                     | (18,000  | ) |   |   | (45,604 | ) |
| Non-controlling interest contribution                             |   |                     | --       |   |   |   | 1,900 |   |
| Proceeds from 11.0% Preferred shares                              |   |                     | --       |   |   |   | 131,235 |   |
| Proceeds from 11.0% Preferred shares rights offering              |   |                     | --       |   |   |   | 4,365 |   |
| Repurchase of non-controlling interests                           |   |                     | (103     | ) |   |   | -- |   |
| Redemption of preferred shares of subsidiary                      |   |                     | (145,000 | ) |   |   | -- |   |
| Treasury stock purchases                                          |   |                     | --       |   |   |   | (4,365 | ) |
| Deferred financing and equity offering costs                      |   |                     | (468     | ) |   |   | (4,664 | ) |
|  Net cash flow from financing activities                     |   |                     | (268,597 | ) |   |   | (46,277 | ) |
|  Net decrease in cash and cash equivalents                   |   |                     | (8,151   | ) |   |   | (33,232 | ) |
| Cash and cash equivalents at the beginning of the period          |   |                     | 103,879  |   |   |   | 137,111 |   |
|  Cash and cash equivalents at the end of the period          |   | $                        | 95,728   |   |   | $ | 103,879 |   |
|  Supplemental information:                                   |   |                     |     |   |   |   |   |   |
| Interest paid                                                     |   | $                        | 216,160  |   |   | $ | 251,134 |   |
| Taxes paid                                                        |   | $                        | 2,936    |   |   | $ | 3,717 |   |
|  Non-cash investing and financing activities:                |   |                     |     |   |   |   |   |   |
| Net change in re-securitized mortgage revenue bonds:              |   |                     |     |   |   |   |   |   |
| Secured financing liability                                       |   | $                        | 152,090  |   |   | $ | (193,406 | ) |
| Mortgage revenue bonds                                            |   | $                        | (184,829 | ) |   | $ | 232,597 |   |
| Series A-1 Freddie Mac Certificates                               |   | $                        | (8,581   | ) |   | $ | (31,463 | ) |
| Series B Freddie Mac Certificates                                 |   | $                        | 41,320   |   |   | $ | (18,128 | ) |
| Increase in mortgage servicing rights                             |   | $                        | --       |   |   | $ | 8,885 |   |
| Leasehold improvements accrued                                    |   | $                        | --       |   |   | $ | 11,062 |   |
| Share grants issued                                               |   | $                        | 6,839    |   |   | $ | 7,882 |   |
| Conversion of non-controlling interests to common shares          |   | $                        | 1,831    |   |   | $ | 20,897 |   |
| Treasury stock purchase via employee withholding                  |   | $                        | 68       |   |   | $ | 971 |   |
| Purchase of non-controlling interest                              |   | $                        | 7,008    |   |   | $ | -- |   |

----

----

| ·   | the determination of fair value for investments, goodwill and intangible assets 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. |
|--------------------|-----------------------------------------|

| Account                              |   | Included in:                        |   | Amount for theYear EndedDecember 31,2009 |   | AmountReclassified forthe Year EndedDecember 31,2008 |   |
|--------------------------------------|--------|-------------------------------------|--------|------------------------------------------|--------|------------------------------------------------------|--------|
|  Gain on sale of mortgage loans |   | Other revenues                      |   | $                                        | 16,268 |                                                 | $      | 11,333 |   |
| Reserve for loan losses              |   | General and administrative expenses |   |                                     | 11,163 |                                                 |   | 1,483 |   |

----

|   | ·   | 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. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | analyzing the securities based on vintage year, rating and asset type; |
|--------------------|------------------------------------------------------------------------|

----

| ·   | analyzing the credit quality of the underlying loans utilizing our expertise as special servicer of the loan portfolios; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | consulting numerous third party sources including research on forecasted cumulative losses, servicer advancing, loss severity, resolution data, and yield data from bonds of similar rating. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | 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, based on a percentage of each investment fund’s invested assets are earned for monitoring the acquired property interests and to ensure that their development, leasing and operations comply with LIHTC or other tax credit requirements. |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| 1.   | In December 2007, the FASB issued Statement No. 160, Non-controlling Interests in Consolidated Financial Statements – an amendment of ARB No. 51 (“SFAS 160”).  SFAS 160 requires that a non-controlling interest (formerly displayed as minority interests in consolidated subsidiaries, preferred shares of subsidiary (not subject to mandatory repurchase) and limited partners’ interests in consolidated partnerships) be reported in equity and the amount of consolidated net income specifically attributable to the non-controlling interest be identified in the consolidated financial statements.  SFAS 160 was effective for us on January 1, 2009 and most of its provisions were applied prospectively, except for the presentation and disclosure requirements, which we applied retrospectively.  The adoption of SFAS 160 had no material impact on our consolidated financial statements. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | In May 2009, the FASB issued SFAS No. 165, Subsequent Events, (“SFAS 165”), which became effective for us during the second quarter of 2009.  SFAS 165, as amended by Accounting Standards Update (“ASU”) 2010-09, sets forth the circumstances and the period after the balance sheet date for which an entity should evaluate events for recognition or disclosure in its financial statements.  SFAS 165 requires that evaluation of subsequent events must include events that occur up to and including the date the financial statements are issued.  The adoption of SFAS 165 had no material effect on our consolidated financial statements. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | In January 2009, the FASB issued FASB Staff Position (“FSP”) EITF 99-20-1, Amendments to the Impairment of Guidance of EITF Issue No. 99-20, which was effective for us in the fourth quarter of 2008.  In April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly and FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, both of which were effective for us in the second quarter of 2009.  These FSPs provide guidance on determining the fair value of assets and the amounts of OTTI in periods of market turbulence such as that experienced in 2009.  The adoption of the FSPs had no material effect on our consolidated financial statements. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

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

| ·   | 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 transaction related revenues, primarily due to fewer investors for our Affordable Housing and Commercial Real Estate funds, as many of our earnings streams involve establishing and managing such funds while many of our costs are fixed. In addition, we have experienced lower volume of mortgage originations for Fannie Mae and Freddie Mac; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increasing rates of default in commercial real estate, which resulted in reduced cash flows within and downgrades of structured finance vehicles, leading to “hyper-amortization” of debt senior to the securities in which our funds invest.  The resulting decline in cash flows to the funds reduced the cash we can realize from both managing and co-investing in the funds and to repay loans we had made to one fund.  The increasing rates of default also negatively impacted the cash flow to CMBS and retained CMBS certificates that we held directly; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increasing rates of default in our Affordable Housing portfolio, which have resulted in declining cash flows on our Series B Freddie Mac certificates.  This led us to conclude that substantially all of an escrow account (associated with the re-securitization from which we retained those certificates) will not be recovered, as the cash will instead be needed to restructure the debt for some of the underlying property partnerships.  We may also be required to provide additional funds to restructure other properties; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increasing rates of default in our portfolio of loans under the DUS and DUI programs which we expect to increase cash outflows required under our loss sharing arrangements (see Note 31); and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a sharp decline in our common share price and the general environment for equity offerings, which made obtaining equity capital extremely difficult.  In addition we are no longer a New York Stock Exchange listed company; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a decline in available debt financing and an increase in its cost; and |
|--------------------|------------------------------------------------------------------------|

----

| ·   | turbulence in the credit markets that began in 2007 led to decreased availability of many forms of financing.  Specifically, since mid-2007 we experienced more constrained credit in the following areas: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | for asset-backed financing (such as we use to fund Fannie Mae and Freddie Mac mortgage originations in our Commercial Real Estate and Affordable Housing groups), the capacity of our financing facilities has decreased while the cost of borrowing has increased; |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | market stagnation and asset impairments prevented the refinancing of debt in a CMBS Fund Partnership; |
|---------------|-------------------------------------------------------------------------------------------------------|

| o   | for our Term Loan and Revolving Credit Facility, the terms included a higher rate of interest and more stringent covenants (including restrictions on funding new business opportunities and incurring any additional debt without lender approval) than had been the norm in prior periods. In addition, our Term Loan and Revolving Credit Facility prohibited us from paying common and preferred dividends.  The only exception to this limitation was for dividends related to the preferred shares of Equity Issuer and distributions from our REIT subsidiary; |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | under the terms of our Term Loan and Revolving Credit Facility, we were required to utilize any excess cash available (as defined in the agreement)  to pay down the debt each quarter end.  We were also required to generate specified levels of cash from sale or collection of certain non-core assets and to reduce the balance of the Term Loan to specified levels at specified dates; and |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | under the terms of the Revolving Credit Facility, the amount available to borrow for working capital needs declined from $15.0 million to $10.0 million on October 1, 2009, as scheduled. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | continuing to sell investments that did not meet our long-term investment criteria; and |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | exploring alternatives that would allow the release of cash in escrow associated with various historical transactions (see Affordable Housing Transactions in Note 31). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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 31,2009 |   |
|-----------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|------------------------------|--------|
|                                                |   |    |   |   |    |   |   |    |   |   |                         |   |
| 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 |   |
| Retained CMBS certificates                          |   |    | --     |   |    |   | --     |    |   |   | 8,025                        |   |   |   | 8,025 |   |
| CMBS                                                |   |    | --     |   |    |   | --     |    |   |   | 1,430                        |   |   |   | 1,430 |   |
| Total available-for-sale investments                |   | $       | --     |   |    | $      | --     |    |   | $      | 499,222                      |   |   | $ | 499,222 |   |
|  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                           |   |    | --     |   |    |   | --     |    |   |   | 63,097                       |   |   |   | 63,097 |   |
| Goodwill(1)                                         |   |    | --     |   |    |   | --     |    |   |   | 103,585                      |   |   |   | 103,585 |   |
| Other intangible assets(1)                          |   |    | --     |   |    |   | --     |    |   |   | 17,723                       |   |   |   | 17,723 |   |
|                                           |   | $       | --     |   |    | $      | 28,544 |    |   | $      | 184,405                      |   |   | $ | 212,949 |   |
|  (1)   Non-financial assets.         |   |

----

| (in thousands)                                      |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Balanceas ofDecember 31,2008 |   |
|-----------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|------------------------------|--------|
|                                                |   |    |   |   |    |   |   |    |   |   |                         |   |
| Measured on a recurring basis:                      |   |    |   |   |    |   |   |    |   |   |                         |   |
|  Assets                                        |   |    |   |   |    |   |   |    |   |   |                         |   |
| Available-for-sale investments:                     |   |    |   |   |    |   |   |    |   |   |                         |   |
| Freddie Mac Certificates:                           |   |    |   |   |    |   |   |    |   |   |                         |   |
| Series A-1                                          |   | $       | --     |   |    | $      | --     |    |   | $      | 335,047                      |   |   | $ | 335,047 |   |
| Series B                                            |   |    | --     |   |    |   | --     |    |   |   | 123,122                      |   |   |   | 123,122 |   |
| Mortgage revenue bonds                              |   |    | --     |   |    |   | --     |    |   |   | 69,217                       |   |   |   | 69,217 |   |
| Retained CMBS certificates                          |   |    | --     |   |    |   | --     |    |   |   | 7,313                        |   |   |   | 7,313 |   |
| CMBS                                                |   |    | --     |   |    |   | --     |    |   |   | 2,550                        |   |   |   | 2,550 |   |
| Syndicated corporate debt                           |   |    | 1,964  |   |    |   | --     |    |   |   | --                           |   |   |   | 1,964 |   |
| Total available-for-sale investments                |   | $       | 1,964  |   |    | $      | --     |    |   | $      | 537,249                      |   |   | $ | 539,213 |   |
|  Interest rate swaps                           |   | $       | --     |   |    | $      | 1,307  |    |   | $      | --                           |   |   | $ | 1,307 |   |
|  Liabilities                                   |   |    |   |   |    |   |   |    |   |   |                         |   |   |   |   |   |
| Interest rate swaps                                 |   | $       | --     |   |    | $      | 40,525 |    |   | $      | --                           |   |   | $ | 40,525 |   |
|  Measured on a non-recurring basis:            |   |    |   |   |    |   |   |    |   |   |                         |   |   |   |   |   |
|  Assets                                        |   |    |   |   |    |   |   |    |   |   |                         |   |   |   |   |   |
| Mortgage loans held-for-sale                        |   | $       | --     |   |    | $      | 46,912 |    |   | $      | --                           |   |   | $ | 46,912 |   |
| Mortgage loans held for investment – impaired |   |    | --     |   |    |   | 1,794  |    |   |   | --                           |   |   |   | 1,794 |   |
| Mortgage servicing rights                           |   |    | --     |   |    |   | --     |    |   |   | 65,599                       |   |   |   | 65,599 |   |
| Goodwill(1)                                         |   |    | --     |   |    |   | --     |    |   |   | 248,978                      |   |   |   | 248,978 |   |
| Other intangible assets(1)                          |   |    | --     |   |    |   | --     |    |   |   | 37,189                       |   |   |   | 37,189 |   |
|                                           |   | $       | --     |   |    | $      | 48,706 |    |   | $      | 351,766                      |   |   | $ | 400,472 |   |
|  (1)   Non-financial assets.         |   |

----

|                                                                                                                                                                                    |   | Year Ended December 31, 2009      |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|----------|
| (in thousands)                                                                                                                                                                          |   | Series A-1Freddie MacCertificates |     | Series BFreddie MacCertificates |   | MortgageRevenueBonds |   | RetainedCMBSCertificates |   | CMBS |   | Total |   |
|                                                                                                                                                                                    |   |                              |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2009                                                                                                                                                              |   | $                                 | 335,047  |   | $ | 123,122 |   | $ | 69,217 |   | $ | 7,313 |   | $ | 2,550 |   | $ | 537,249 |   |
| Total realized and unrealized gains or (losses):                                                                                                                                        |   |                              |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                                                                                                                                                                    |   |                              | --       |   |   | (44,830 | )(1) |   | (7,955 | )(2) |   | (37,596 | )(1) |   | (15,546 | )(1) |   | (105,927 | ) |
| Included in other comprehensive loss(3)                                                                                                                                                 |   |                              | (5,448   | ) |   | (8,910 | ) |   | 8,880 |   |   | 38,679 |   |   | 14,691 |   |   | 47,892 |   |
| Amortization or accretion                                                                                                                                                               |   |                              | --       |   |   | (9,069 | ) |   | 989 |   |   | (371 | ) |   | (265 | ) |   | (8,716 | ) |
| Purchases, settlements, issuances and other adjustments(4)                                                                                                                              |   |                              | (146,506 | ) |   | 690 |   |   | 174,540 |   |   | -- |   |   | -- |   |   | 28,724 |   |
| Balance at December 31, 2009                                                                                                                                                            |   | $                                 | 183,093  |   | $ | 61,003 |   | $ | 245,671 |   | $ | 8,025 |   | $ | 1,430 |   | $ | 499,222 |   |
|  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 | ) | $ | (37,596 | ) | $ | (15,546 | ) | $ | (98,170 | ) |

| (1) | Recorded in “Loss on impairment of assets” in the Consolidated Statement of Operations (see also Note 23). |
|-----|------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes amounts recorded in “Gain (loss) from repayment or sale of investments, net” and in “Loss on impairment of assets” (Note 23) 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. |
|-----|----------------------------------------------------------------------------------|

|                                                                                                                                                                            |   | Years Ended December 31, 2008           |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|
| in thousands)                                                                                                                                                                   |   |  Series A-1Freddie MacCertificates |    | Series BFreddie MacCertificates |   | MortgageRevenueBonds |   | RetainedCMBSCertificates |   | CMBS |   | Total |   |
|                                                                                                                                                                            |   |                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2008                                                                                                                                                      |   | $                                       | --      |   | $ | 153,468 |   | $ | 376,432 |   | $ | 75,328 |   | $ | 13,361 |   | $ | 618,589 |   |
| Total realized and unrealized gains or (losses):                                                                                                                                |   |                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings(1)                                                                                                                                                         |   |                                    | --      |   |   | (7,968 | ) |   | (10,928 | ) |   | (10,736 | ) |   | -- |   |   | (29,632 | ) |
| Included in other comprehensive loss(2)                                                                                                                                         |   |                                    | 17,801  |   |   | (37,526 | ) |   | (10,047 | ) |   | (54,050 | ) |   | (14,519 | ) |   | (98,341 | ) |
| Amortization or accretion                                                                                                                                                       |   |                                    | --      |   |   | (6,632 | ) |   | 276 |   |   | (3,229 | ) |   | 44 |   |   | (9,541 | ) |
| Purchases, issuances, settlements and other adjustments                                                                                                                         |   |                                    | 28,574  |   |   | 21,780 |   |   | (286,516 | ) |   | -- |   |   | 3,664 |   |   | (232,498 | ) |
| Net transfers in and/or out of Level 3(3)                                                                                                                                       |   |                                    | 288,672 |   |   | -- |   |   | -- |   |   | -- |   |   | -- |   |   | 288,672 |   |
| Balance at December 31, 2008                                                                                                                                                    |   | $                                       | 335,047 |   | $ | 123,122 |   | $ | 69,217 |   | $ | 7,313 |   | $ | 2,550 |   | $ | 537,249 |   |
|  Amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2008(1) |   | $                                       | --      |   | $ | (7,968 | ) | $ | (3,700 | ) | $ | (10,736 | ) | $ | -- |   | $ | (22,404 | ) |

| (1) | Recorded in “Loss on impairment of assets” in the Consolidated Statement of Operations (see also Note 23). |
|-----|------------------------------------------------------------------------------------------------------------------------|

| (2) | Net of amounts reclassified to net loss. |
|-----|------------------------------------------|

| (3) | During 2008, management evaluated the number of transactions conducted with instruments similar to the Series A-1 Freddie Mac Certificates and concluded that due to the unique terms of the certificates, such population was too limited to continue a Level 2 designation initially determined and as a result, were reclassified as Level 3 assets. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (in thousands)                                      |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Balanceas ofDecember 31,2009 |   |
|-----------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|------------------------------|--------|
|                                                |   |    |   |   |    |   |   |    |   |   |                         |   |
| Measured on a recurring basis:                      |   |    |   |   |    |   |   |    |   |   |                         |   |
|  Assets                                        |   |    |   |   |    |   |   |    |   |   |                         |   |
| Available-for-sale investments:                     |   |    |   |   |    |   |   |    |   |   |                         |   |
| CMBS                                                |   | $       | --     |   |    | $      | --     |    |   | $      | 126,195                      |   |   | $ | 126,195 |   |
| Retained CMBS certificates                          |   |    | --     |   |    |   | --     |    |   |   | 6,646                        |   |   |   | 6,646 |   |
| CDO debt and equity                                 |   |    | --     |   |    |   | --     |    |   |   | 536                          |   |   |   | 536 |   |
| Corporate bonds (temporary investments)             |   |    | --     |   |    |   | 5,109  |    |   |   | --                           |   |   |   | 5,109 |   |
| Total available-for-sale investments                |   | $       | --     |   |    | $      | 5,109  |    |   | $      | 133,377                      |   |   | $ | 138,486 |   |
|  Measured on a non-recurring basis:            |   |    |   |   |    |   |   |    |   |   |                         |   |   |   |   |   |
|  Assets                                        |   |    |   |   |    |   |   |    |   |   |                         |   |   |   |   |   |
| Retained CMBS certificates, held-to-maturity        |   | $       | --     |   |    | $      | --     |    |   | $      | 52,277                       |   |   | $ | 52,277 |   |
| Mortgage loans held for investment – impaired |   |    | --     |   |    |   | 30,730 |    |   |   | --                           |   |   |   | 30,730 |   |
|                                                |   | $       | --     |   |    | $      | 30,730 |    |   | $      | 52,277                       |   |   | $ | 83,007 |   |

| (in thousands)                                      |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Balanceas ofDecember 31,2008 |   |
|-----------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|------------------------------|--------|
|                                                |   |    |   |   |    |   |   |    |   |   |                         |   |
| Measured on a recurring basis:                      |   |    |   |   |    |   |   |    |   |   |                         |   |
|                                                |   |    |   |   |    |   |   |    |   |   |                         |   |
| Assets                                              |   |    |   |   |    |   |   |    |   |   |                         |   |
| Available-for-sale investments:                     |   |    |   |   |    |   |   |    |   |   |                         |   |
| CMBS                                                |   | $       | --     |   |    | $      | --     |    |   | $      | 182,828                      |   |   | $ | 182,828 |   |
| Retained CMBS certificates                          |   |    | --     |   |    |   | --     |    |   |   | 9,867                        |   |   |   | 9,867 |   |
| CDO debt and equity                                 |   |    | --     |   |    |   | --     |    |   |   | 33,189                       |   |   |   | 33,189 |   |
| Corporate bonds                                     |   |    | --     |   |    |   | 47,858 |    |   |   | --                           |   |   |   | 47,858 |   |
| Total available-for-sale investments                |   | $       | --     |   |    | $      | 47,858 |    |   | $      | 225,884                      |   |   | $ | 273,742 |   |
|  Measured on a non-recurring basis:            |   |    |   |   |    |   |   |    |   |   |                         |   |   |   |   |   |
|  Assets                                        |   |    |   |   |    |   |   |    |   |   |                         |   |   |   |   |   |
| Retained CMBS certificates, held-to-maturity        |   | $       | --     |   |    | $      | --     |    |   | $      | 47,310                       |   |   | $ | 47,310 |   |
| Mortgage loans held for investment – impaired |   |    | --     |   |    |   | 14,137 |    |   |   | --                           |   |   |   | 14,137 |   |
|                                                |   | $       | --     |   |    | $      | 14,137 |    |   | $      | 47,310                       |   |   | $ | 61,447 |   |

----

|                                                                                                                                                             |   | Year Ended December 31, 2009 |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|
| (in thousands)                                                                                                                                                   |   | CMBS                         |       |  RetainedCMBSCertificates |   | CDO Debt andEquity |   | Total |   |
|                                                                                                                                                             |   |                         |       |   |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2009                                                                                                                                       |   | $                            | 182,828    |   | $ | 9,867 |   | $ | 33,189 |   | $ | 225,884 |   |
| Total realized and unrealized gains (losses):                                                                                                                    |   |                         |       |   |   |   |   |   |   |   |   |   |   |
| Included in earnings(1)                                                                                                                                          |   |                         | (1,462,801 | ) |   | (86,471 | ) |   | (154,699 | ) |   | (1,703,971 | ) |
| Included in other comprehensive loss(2)                                                                                                                          |   |                         | 1,411,629  |   |   | 83,662 |   |   | 112,821 |   |   | 1,608,112 |   |
| Amortization or accretion                                                                                                                                        |   |                         | (5,461     | ) |   | (412 | ) |   | 9,225 |   |   | 3,352 |   |
| Purchases, issuances, settlements and other adjustments                                                                                                          |   |                         | --         |   |   | -- |   |   | -- |   |   | -- |   |
| Balance at December 31, 2009                                                                                                                                     |   | $                            | 126,195    |   | $ | 6,646 |   | $ | 536 |   | $ | 133,377 |   |
|  Amount of total losses included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2009(1) |   | $                            | (1,462,801 | ) | $ | (86,471 | ) | $ | (154,699 | ) | $ | (1,703,971 | ) |

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

| (2) | Net of amounts reclassified to net loss. |
|-----|------------------------------------------|

|                                                                                                                                                             |   | Year Ended December 31, 2008 |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|
| (in thousands)                                                                                                                                                   |   | CMBS                         |       |  RetainedCMBSCertificates |   | CDO Debt andEquity |   | Total |   |
|                                                                                                                                                             |   |                         |       |   |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2008                                                                                                                                       |   | $                            | 1,235,059  |   | $ | 482,424 |   | $ | 65,060 |   | $ | 1,782,543 |   |
| Total realized and unrealized gains (losses):                                                                                                                    |   |                         |       |   |   |   |   |   |   |   |   |   |   |
| Included in earnings(1)                                                                                                                                          |   |                         | (95,975    | ) |   | (27,016 | ) |   | (101,027 | ) |   | (224,018 | ) |
| Included in other comprehensive loss(2)                                                                                                                          |   |                         | (1,001,861 | ) |   | (164,338 | ) |   | (74,526 | ) |   | (1,240,725 | ) |
| Amortization or accretion                                                                                                                                        |   |                         | (1,935     | ) |   | 1,792 |   |   | 1,554 |   |   | 1,411 |   |
| Purchases, issuances, settlements and other adjustments                                                                                                          |   |                         | 47,540     |   |   | (282,995 | )(3) |   | 142,128 |   |   | (93,327 | ) |
| Balance at December 31, 2008                                                                                                                                     |   | $                            | 182,828    |   | $ | 9,867 |   | $ | 33,189 |   | $ | 225,884 |   |
|  Amount of total losses included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2008(1) |   | $                            | (95,975    | ) | $ | (27,016 | ) | $ | (101,027 | ) | $ | (224,018 | ) |

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

| (2) | Net of amounts reclassified to net loss. |
|-----|------------------------------------------|

| (3) | During 2008, management elected to reclassify certain investments from available-for-sale to held-to-maturity (see Notes 2 and 13). |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

----

| 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.                                                                                                                                                                        |
|------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                             |                                                                                                                                                                                                                    |
| Fixed-rate notes payable 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 as the preferred shares are economically defeased by those investments.                                                         |
|                                                             |                                                                                                                                                                                                                    |
| Retained CMBS certificates – held-to-maturity              | Fair value is determined as described in Note 2.                                                                                                                                                                        |

|                                                             |   | December 31, 2009   |      |   | December 31, 2008 |   |
|------------------------------------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|
| (in thousands)                                                   |   |  CarryingValue |      |   | Fair Value        |   |   | CarryingValue |   |   | Fair Value |   |
|                                                             |   |                |      |   |              |   |   |   |   |   |   |   |
| Mortgage loans held for investment                               |   | $                   | 7,540     |   |              | $      | 7,540 |   |   | $ | 10,792 |   |   | $ | 12,071 |   |
| Other investments                                                |   |                | 1,060     |   |              |   | 2,328 |   |   |   | 4,126 |   |   |   | 4,126 |   |
| Fixed-rate notes payable and secured financing                   |   |                | 588,754   |   |              |   | 487,652 |   |   |   | 363,068 |   |   |   | 275,799 |   |
| Preferred shares of subsidiary (subject to mandatory repurchase) |   |                | 128,500   |   |              |   | 139,850 |   |   |   | 273,500 |   |   |   | 286,900 |   |
|                                                             |   |                |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated Partnerships:                                       |   |                |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Retained CMBS certificates – held-to-maturity              |   |                | 284,971   |   |              |   | 52,277 |   |   |   | 288,960 |   |   |   | 47,310 |   |
| Mortgage loans held for investment                               |   |                | 46,094    |   |              |   | 36,971 |   |   |   | 200,611 |   |   |   | 132,001 |   |
| Fixed-rate notes payable and financing arrangements              |   |                | 1,567,552 |   |              |   | 280,944 |   |   |   | 1,794,205 |   |   |   | 950,217 |   |

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

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

| ·   | managing and servicing their assets; |
|--------------------|--------------------------------------|

| ·   | warehousing investments on our balance sheet and selling them to the fund (principally for Affordable Housing funds); and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| ·   | in certain cases, co-investing in the funds (principally for Commercial Real Estate funds). |
|--------------------|---------------------------------------------------------------------------------------------|

----

| (in thousands)                                     |   | December 31,2009 |    |
|----------------------------------------------------|--------|------------------|---------|
|                                               |   |             |    |   |
| Held for our own account                           |   | $                | 1,430   |   |
| Held by CMBS and High-Yield Debt Fund Partnerships |   |             | 126,195 |   |
|  Total at fair value                          |   | $                | 127,625 |   |

----

| Collateral                                                            |   | Balance Sheet Classification                                                                            |   | CarryingAmount ofCollateral atDecember 31,2009(in thousands) |    | Associated Debt Facility/Liability |
|-----------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|------------------------------------|
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| Cash                                                                  |   | Restricted cash                                                                                         |   | $                                                            | 10,754  |                               | Mortgage loan loss sharing agreements (Note 31)(1) |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| Letter of Credit                                                      |   | Reduces availability of Revolving Credit Facility (Note 14)                                             |   | $                                                            | 11,981  |                               | Mortgage loan loss sharing agreements (Note 31) |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| Series A-1 Freddie Mac certificates                                   |   | Investments – available-for-sale – Freddie Mac certificates (Note 8)                        |   | $                                                            | 183,093 |                               | Preferred shares of subsidiary (Notes 17 and 21)(2) |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| CMBS and retained CMBS certificates                                   |   | Investments – available-for-sale – CMBS and retained CMBS certificates (Note 8)             |   | $                                                            | 9,006   |                               | CMBS term loan (Note 14)(3) |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| Stabilization escrow                                                  |   | Other investments – stabilization escrow (Note 10)                                                |   | $                                                            | 1,983   |                               | December 2007 re-securitization |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| Mortgage loans                                                        |   | Other investments – mortgage loans held for sale (Note 10)                                        |   | $                                                            | 28,454  |                               | Mortgage Banking warehouse line/Multifamily ASAP plus facility (Note 14) |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| Mortgage servicing rights                                             |   | Goodwill and intangible assets – mortgage servicing rights (Note 11)                              |   | $                                                            | 612     |                               | Debt facilities of third party for which Centerline provides loan servicing |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| Cash deposits                                                         |   | Deferred costs and other assets (Note 12)                                                               |   | $                                                            | 69,200  |                               | Affordable housing yield transactions (Note 31) |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| CMBS and retained CMBS certificates held by Consolidated Partnerships |   | Consolidated partnerships – investments – available-for-sale and held-to-maturity (Note 13) |   | $                                                            | 366,103 |                               | Consolidated partnerships – financing arrangements (Note 18)(4) |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| CMBS held by Consolidated Partnerships                                |   | Consolidated partnerships – investments – available-for-sale (Note 13)                      |   | $                                                            | 47,994  |                               | Consolidated partnerships – notes payable (Note 18)(5) |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| Mortgage loans held by Consolidated Partnerships                      |   | Consolidated Partnerships – investments other (Note 13)                                           |   | $                                                            | 7,231   |                               | Consolidated partnerships – repurchase agreements (Note 18)(5) |
|                                                                  |   |                                                                                                    |   |                                                         |    |                               |   |
| Land, building and improvements held by Consolidated Partnerships     |   | Consolidated Partnerships – land, buildings and improvements, net (Note 13)                       |   | $                                                            | 79,679  |                               | Consolidated partnerships – notes payable(Note 18)(5) |

| (1) | In addition and following the requirements of its operating agreement, Centerline Financial had a cash balance of $68 million as of December 31, 2009 in order to maintain its minimum capital requirements.  This balance is not pledged as collateral and is not considered by us as restricted cash. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | While not collateral, these assets economically defease the preferred shares. |
|-----|-------------------------------------------------------------------------------|

| (3) | Assets are restricted solely to satisfy the debt obligations. Debt is non-recourse to the Company. The balance was repaid in March 2010 (see Note 32). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Included in a collateralized debt obligation and assets are restricted solely to satisfy those obligations.  Debt is non-recourse to the Consolidated Partnership and the Company. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Assets are restricted solely to satisfy the debt obligations. Debt is non-recourse to the Consolidated Partnership and the Company. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

----

|                       |   | December 31, |    |
|----------------------------|--------|--------------|---------|
| (in thousands)             |   | 2009         |    |   | 2008 |   |
|                       |   |         |    |   |   |   |
| Freddie Mac Certificates:  |   |         |    |   |   |   |
| Series A-1                 |   | $            | 183,093 |   |   | $ | 335,047 |   |
| Series B                   |   |         | 61,003  |   |   |   | 123,122 |   |
| Mortgage revenue bonds     |   |         | 245,671 |   |   |   | 69,217 |   |
| Retained CMBS certificates |   |         | 8,025   |   |   |   | 7,313 |   |
| CMBS                       |   |         | 1,430   |   |   |   | 2,550 |   |
| Syndicated corporate debt  |   |         | --      |   |   |   | 1,964 |   |
|  Total                |   | $            | 499,222 |   |   | $ | 539,213 |   |

|                          |   | December 31, |    |
|-------------------------------|--------|--------------|---------|
| (in thousands)                |   | 2009         |    |   | 2008 |   |
|  Face amount             |   | $            | 232,500 |   |   | $ | 377,500 |   |
| Gross unrealized gains        |   |         | 18,866  |   |   |   | 22,526 |   |
| Fair value                    |   |         | 251,366 |   |   |   | 400,026 |   |
| Less: eliminations(1)         |   |         | (68,273 | ) |   |   | (64,979 | ) |
|  Consolidated fair value |   | $            | 183,093 |   |   | $ | 335,047 |   |

| (1)   A portion of the Series A-1 Certificates relate to re-securitized mortgage revenue bonds that were not reflected as sold.  Accordingly, that portion is eliminated in consolidation.  The change from December 31, 2008 resulted from re-recognition of certain mortgage revenue bonds during 2009 (see B. Mortgage Revenue Bonds below) and the sale of certain certificates and also fluctuates as the value of the assets changes. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                           |   | December 31, |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
| (in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 2009         |    | 2008 |   |
|  Amortized cost basis(1)                                                                                                                                                                                                                                                                                                                                                                                                  |   | $            | 137,974 |   | $ | 188,790 |   |
| Gross unrealized losses(1)                                                                                                                                                                                                                                                                                                                                                                                                     |   |         | (64,142 | ) |   | (42,066 | ) |
| Subtotal/fair value                                                                                                                                                                                                                                                                                                                                                                                                            |   |         | 73,832  |   |   | 146,724 |   |
| Less: eliminations(2)                                                                                                                                                                                                                                                                                                                                                                                                          |   |         | (12,829 | ) |   | (23,602 | ) |
|  Consolidated fair value                                                                                                                                                                                                                                                                                                                                                                                                  |   | $            | 61,003  |   | $ | 123,122 |   |
|  (1)    The unrealized losses presented above do not include cumulative impairment write-downs of $52.8 million at December 31, 2009 and $8.0 million at December 31, 2008 due to credit losses related to the underlying assets.  Amortized cost is shown net of these amounts.                                                                                                                 |   |
| (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, 2008 resulted from re-recognition of certain mortgage revenue bonds during 2009 (see B. Mortgage Revenue Bonds below) and also fluctuates as the value of the assets changes. |   |

|                           |   | December 31, |        |
|--------------------------------|--------|--------------|-------------|
|                           |   | 2009         |        | 2008 |   |
|                           |   |         |        |   |   |
| Weighted average discount rate |   | 27.5         | %           | 16.5 | % |
| Constant prepayment rate       |   | 90.0         | %           | 90.0 | % |
| Weighted average life          |   | 10.1         |  years | 10.9 |  years |
| Constant default rate          |   | 2.0          | %           | 2.0 | % |
| Default severity rate          |   | 21.0         | %           | 10.0 | % |

----

| (in thousands)                                                |   | December 31, 2009 |   |
|---------------------------------------------------------------|--------|-------------------|--------|
|  Fair value of Freddie Mac B Certificates at December 31 |   | $                 | 61,003 |   |
|                                                          |   |              |   |   |
| Constant prepayment rate:                                     |   |              |   |   |
| Fair value after impact of 5% increase                        |   |              | 60,826 |   |
| Fair value after impact of 10% increase                       |   |              | 60,244 |   |
|                                                          |   |              |   |   |
| Discount rate:                                                |   |              |   |   |
| Fair value after impact of 10% increase                       |   |              | 46,803 |   |
| Fair value after impact of 20% increase                       |   |              | 38,021 |   |
|                                                          |   |              |   |   |
| Constant default rate:                                        |   |              |   |   |
| Fair value after impact of 1% increase                        |   |              | 54,904 |   |
| Fair value after impact of 2% increase                        |   |              | 49,089 |   |
|                                                          |   |              |   |   |
| Default severity rate:                                        |   |              |   |   |
| Fair value after impact of 5% increase                        |   |              | 59,771 |   |
| Fair value after impact of 10% increase                       |   |              | 58,540 |   |

|                                                                                  |   | December 31, |    |
|---------------------------------------------------------------------------------------|--------|--------------|---------|
| (in thousands)                                                                        |   | 2009         |    |   | 2008 |   |
|                                                                                  |   |         |    |   |   |   |
| Securitized:                                                                          |   |         |    |   |   |   |
| Included in December 2007 re-securitization transaction and accounted for as financed |   | $            | 242,484 |   |   | $ | 12,345 |   |
| Included in other securitizations (Note 15)                                           |   |         | --      |   |   |   | 49,641 |   |
| Subtotal                                                                              |   |         | 242,484 |   |   |   | 61,986 |   |
| Not securitized                                                                       |   |         | 3,187   |   |   |   | 7,231 |   |
|  Total at fair value                                                             |   | $            | 245,671 |   |   | $ | 69,217 |   |

----

|                      |   |           |   | Face Amount of Bond(1) |    | Fair Value atDecember 31, 2009 |   |   |   |
|---------------------------|--------|----------------|--------|------------------------|---------|--------------------------------|--------|--------|--------|
| (dollars in thousands)    |   | Number ofBonds |   | Amount                 |    | % of Total                     |   | Amount |   | % of Total |   | CurrentStatedInterest Rate |   |
|  By Property Status: |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| Stabilized                |   | 24             |   | $                      | 157,930 |                           | 48.1   | %      | $      | 114,369 |   | 46.6 | % | 7.0 | % |
| Lease-up                  |   | 18             |   |                   | 170,254 |                           | 51.9   |   |   | 131,302 |   | 53.4 |   | 6.7 |   |
| 2009 Total                |   | 42             |   | $                      | 328,184 |                           | 100.0  | %      | $      | 245,671 |   | 100.0 | % | 6.8 | % |
| 2008 Total                |   | 24             |   | $                      | 89,758  |                           |   |   | $      | 69,217 |   |   |   |   |   |
|                      |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| By State:(2)              |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| Texas                     |   | 20             |   | $                      | 174,619 |                           | 53.2   | %      | $      | 138,094 |   | 56.2 | % | 6.9 | % |
| Georgia                   |   | 3              |   |                   | 30,880  |                           | 9.4    |   |   | 19,463 |   | 7.9 |   | 6.5 |   |
| Arkansas                  |   | 2              |   |                   | 9,200   |                           | 2.8    |   |   | 8,279 |   | 3.4 |   | 7.5 |   |
| All Others                |   | 17             |   |                   | 113,485 |                           | 34.6   |   |   | 79,835 |   | 32.5 |   | 6.8 |   |
| 2009 Total                |   | 42             |   | $                      | 328,184 |                           | 100.0  | %      | $      | 245,671 |   | 100.0 | % | 6.8 | % |
| 2008 Total                |   | 24             |   | $                      | 89,758  |                           |   |   | $      | 69,217 |   |   |   |   |   |
|                      |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| By Maturity Date:         |   |           |   |                   |    |                           |   |   |   |   |   |   |   |   |   |
| 2009-2010                 |   | 1              |   | $                      | 285     |                           | 0.1    | %      | $      | 84 |   | -- | % | 9.5 | % |
| 2011-2015                 |   | 3              |   |                   | 2,170   |                           | 0.7    |   |   | 584 |   | 0.3 |   | 8.1 |   |
| 2016-2020                 |   | 3              |   |                   | 4,030   |                           | 1.2    |   |   | 2,298 |   | 0.9 |   | 8.7 |   |
| 2021-2025                 |   | 4              |   |                   | 15,475  |                           | 4.7    |   |   | 12,291 |   | 5.0 |   | 7.8 |   |
| 2026-2030                 |   | --             |   |                   | --      |                           | 0.0    |   |   | -- |   | 0.0 |   | 0.0 |   |
| 2031-2035                 |   | 1              |   |                   | 5,930   |                           | 1.8    |   |   | 5,392 |   | 2.2 |   | 7.1 |   |
| 2036-2040                 |   | 6              |   |                   | 57,064  |                           | 17.4   |   |   | 44,197 |   | 18.0 |   | 7.0 |   |
| 2041-2045                 |   | 22             |   |                   | 230,200 |                           | 70.1   |   |   | 171,526 |   | 69.8 |   | 6.7 |   |
| 2046 and After            |   | 2              |   |                   | 13,030  |                           | 4.0    |   |   | 9,299 |   | 3.8 |   | 6.0 |   |
| 2009 Total                |   | 42             |   | $                      | 328,184 |                           | 100.0  | %      | $      | 245,671 |   | 100.0 | % | 6.8 | % |
| 2008 Total                |   | 24             |   | $                      | 89,758  |                           |   |   | $      | 69,217 |   |   |   |   |   |

| (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)                                                                                                                                                                                                                                                                                          |   | 2009         |    | 2008 |   |
|                                                                                                                                                                                                                                                                                                    |   |         |    |   |   |   |   |
| Amortized cost basis(1)                                                                                                                                                                                                                                                                                 |   | $            | 247,424 |   | $ | 79,850 |   |
| Gross unrealized gains                                                                                                                                                                                                                                                                                  |   |         | 13,688  |   |   | 1,682 |   |
| Gross unrealized losses(1)                                                                                                                                                                                                                                                                              |   |         | (15,441 | ) |   | (12,315 | ) |
|  Fair value                                                                                                                                                                                                                                                                                        |   | $            | 245,671 |   | $ | 69,217 |   |
|  (1)   The unrealized losses presented above do not include cumulative impairment write-downs of $2.4 million at December 31, 2009 and $8.1 million at December 31, 2008 due to credit losses related to the underlying assets.  Amortized cost is shown net of these amounts. |   |

| (dollars in thousands) |   | Less than12 Months |   |   | 12 Monthsor More |   |   | Total  |   |
|------------------------|--------|--------------------|--------|--------|------------------|--------|--------|--------|--------|
|                   |   |               |   |   |             |   |   |   |   |
| December 31, 2009      |   |               |   |   |             |   |   |   |   |
|                   |   |               |   |   |             |   |   |   |   |
| Number                 |   |               | 10     |   |             |   | --     |   |   |   | 10 |   |
| Fair value             |   | $                  | 47,632 |   |             | $      | --     |   |   | $ | 47,632 |   |
| Gross unrealized loss  |   | $                  | 15,441 |   |             | $      | --     |   |   | $ | 15,441 |   |
|                   |   |               |   |   |             |   |   |   |   |   |   |   |
| December 31, 2008      |   |               |   |   |             |   |   |   |   |   |   |   |
|                   |   |               |   |   |             |   |   |   |   |   |   |   |
| Number                 |   |               | 17     |   |             |   | --     |   |   |   | 17 |   |
| Fair value             |   | $                  | 50,596 |   |             | $      | --     |   |   | $ | 50,596 |   |
| Gross unrealized loss  |   | $                  | 12,315 |   |             | $      | --     |   |   | $ | 12,315 |   |

----

| (dollars in thousands)                  |   | FaceAmount |    | PurchaseCost |   | AccretedCost(1) |   | UnrealizedGain |   | UnrealizedLoss(1) |   | Fair Value |   | Percentageof FairValue |    |
|-----------------------------------------|--------|------------|---------|--------------|--------|-----------------|--------|----------------|--------|-------------------|--------|------------|--------|------------------------|---------|
|  December 31, 2009Security rating: |   |       |    |         |   |            |   |           |   |              |   |       |   |                   |    |   |   |   |   |   |   |
| BBB- interest only                      |   | $          | --      |         | $      | 24,612          |   | $              | 2,105  |              | $      | 3,456      |   | $                      | --      |   | $ | 5,561 |   | 69.3 | % |
| CC                                      |   |       | 21,439  |         |   | 10,121          |   |           | 424    |              |   | --         |   |                   | --      |   |   | 424 |   | 5.3 |   |
| C                                       |   |       | 57,490  |         |   | 23,374          |   |           | 1,841  |              |   | 78         |   |                   | --      |   |   | 1,919 |   | 23.9 |   |
| D                                       |   |       | 27,584  |         |   | 8,097           |   |           | --     |              |   | 62         |   |                   | --      |   |   | 62 |   | 0.8 |   |
| Non-rated                               |   |       | 23,818  |         |   | 8,639           |   |           | 25     |              |   | 34         |   |                   | --      |   |   | 59 |   | 0.7 |   |
| Non-rated interest only                 |   |       | --      |         |   | 581             |   |           | --     |              |   | --         |   |                   | --      |   |   | -- |   | -- |   |
|  Total                             |   | $          | 130,331 |         | $      | 75,424          |   | $              | 4,395  |              | $      | 3,630      |   | $                      | --      |   | $ | 8,025 |   | 100.0 | % |
|  December 31, 2008Security rating: |   |       |    |         |   |            |   |           |   |              |   |       |   |                   |    |   |   |   |   |   |   |
| AAA interest only                       |   | $          | --      |         | $      | 24,612          |   | $              | 2,328  |              | $      | --         |   | $                      | --      |   | $ | 2,328 |   | 31.8 | % |
| CCC-                                    |   |       | 119,671 |         |   | 40,466          |   |           | 40,565 |              |   | 29         |   |                   | (36,053 | ) |   | 4,541 |   | 62.1 |   |
| D                                       |   |       | 15,240  |         |   | 1,126           |   |           | --     |              |   | 152        |   |                   | --      |   |   | 152 |   | 2.1 |   |
| Non-rated                               |   |       | 29,147  |         |   | 8,639           |   |           | 1,477  |              |   | --         |   |                   | (1,185  | ) |   | 292 |   | 4.0 |   |
| Non-rated interest only                 |   |       | --      |         |   | 581             |   |           | --     |              |   | --         |   |                   | --      |   |   | -- |   | -- |   |
|  Total                             |   | $          | 164,058 |         | $      | 75,424          |   | $              | 44,370 |              | $      | 181        |   | $                      | (37,238 | ) | $ | 7,313 |   | 100.0 | % |

| (1) | The unrealized losses presented above do not include cumulative impairment write-downs of $48.3 million at December 31, 2009 and $10.7 million at December 31, 2008 due to credit losses related to the underlying assets.  Accreted cost is shown net of this amount. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands)  |   | Less than12 Months |   |   | 12 Monthsor More |   |   | Total  |   |
|-------------------------|--------|--------------------|--------|--------|------------------|--------|--------|--------|--------|
|  December 31, 2009 |   |               |   |   |             |   |   |   |   |
|  Number            |   |               | --     |   |             |   | --     |   |   |   | -- |   |
| Fair Value              |   | $                  | --     |   |             | $      | --     |   |   | $ | -- |   |
| Gross Unrealized loss   |   | $                  | --     |   |             | $      | --     |   |   | $ | -- |   |
|  December 31, 2008 |   |               |   |   |             |   |   |   |   |   |   |   |
|  Number            |   |               | 7      |   |             |   | 7      |   |   |   | 14 |   |
| Fair Value              |   | $                  | 3,847  |   |             | $      | 891    |   |   | $ | 4,738 |   |
| Gross Unrealized loss   |   | $                  | 25,247 |   |             | $      | 11,991 |   |   | $ | 37,238 |   |

----

|                    |   |                            |   |                              |   | ExpectedCredit Loss |   | Discount RateApplied to Cash Flows |   |
|-------------------------|--------|---------------------------------|--------|-----------------------------------|--------|---------------------|--------|------------------------------------|--------|
| (dollars in thousands)  |   |  WeightedAverageLife (yrs) |   | Discount Rateapplied toCash Flows |   | 4.0%CDR             |   | 5.0%CDR                            |   | 5.0%AdverseChange |   | 35.0%AdverseChange |   |
|                    |   |                            |   |                              |   |                |   |                               |   |   |   |   |   |   |   |   |   |
| Security rating:        |   |                            |   |                              |   |                |   |                               |   |   |   |   |   |   |   |   |   |
| BBB- interest only      |   | 4.69                            |   | 35.0                              | %      |                | 2.1    | %                                  |   | 3.7 | % |   | (6.7 | )% |   | (33.4 | )% |
| CC                      |   | 9.83                            |   | 35.0                              |   |                | (30.5  | )                                  |   | (48.0 | ) |   | (2.0 | ) |   | (12.5 | ) |
| C                       |   | 2.33                            |   | 35.0                              |   |                | (9.4   | )                                  |   | (17.8 | ) |   | (4.3 | ) |   | (24.1 | ) |
| D                       |   | --                              |   | --                                |   |                | --     |                               |   | -- |   |   | -- |   |   | -- |   |
| Non-rated               |   | --                              |   | --                                |   |                | --     |                               |   | -- |   |   | -- |   |   | -- |   |
| Non-rated interest only |   | --                              |   | --                                |   |                | --     |                               |   | -- |   |   | -- |   |   | -- |   |

----

| (dollars in thousands)                                                                                                                              |   | FaceAmount |   | PurchaseCost |   | AccretedCost(1) |   | UnrealizedGain |   | UnrealizedLoss(1) |   | Fair Value |   | Percentageof FairValue |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------------|--------|-----------------|--------|----------------|--------|-------------------|--------|------------|--------|------------------------|---------|
|  December 31, 2009Security rating:                                                                                                             |   |       |   |         |   |            |   |           |   |              |   |       |   |                   |    |   |   |   |   |   |   |
| CCC+                                                                                                                                                |   | $          | 6,698  |         | $      | 2,807           |   | $              | 272    |              | $      | 30         |   | $                      | --      |   | $ | 302 |   | 21.1 | % |
| CCC                                                                                                                                                 |   |       | 18,191 |         |   | 8,364           |   |           | 506    |              |   | --         |   |                   | --      |   |   | 506 |   | 35.4 |   |
| CCC-                                                                                                                                                |   |       | 6,497  |         |   | 1,354           |   |           | 135    |              |   | --         |   |                   | --      |   |   | 135 |   | 9.4 |   |
| Non-rated                                                                                                                                           |   |       | 25,819 |         |   | 5,269           |   |           | 378    |              |   | 109        |   |                   | --      |   |   | 487 |   | 34.1 |   |
|  Total                                                                                                                                         |   | $          | 57,205 |         | $      | 17,794          |   | $              | 1,291  |              | $      | 139        |   | $                      | --      |   | $ | 1,430 |   | 100.0 | % |
|                    December 31, 2008Security rating: |   |       |   |         |   |            |   |           |   |              |   |       |   |                   |    |   |   |   |   |   |   |
| BB+                                                                                                                                                 |   | $          | 3,898  |         | $      | 2,244           |   | $              | 2,336  |              | $      | --         |   | $                      | (2,063  | ) |   | 273 |   | 10.7 | % |
| BB                                                                                                                                                  |   |       | 3,898  |         |   | 2,097           |   |           | 2,191  |              |   | --         |   |                   | (1,918  | ) |   | 273 |   | 10.7 |   |
| BB-                                                                                                                                                 |   |       | 3,898  |         |   | 1,959           |   |           | 2,056  |              |   | --         |   |                   | (1,783  | ) |   | 273 |   | 10.7 |   |
| B+                                                                                                                                                  |   |       | 10,395 |         |   | 4,308           |   |           | 4,365  |              |   | --         |   |                   | (3,846  | ) |   | 519 |   | 20.4 |   |
| B                                                                                                                                                   |   |       | 2,599  |         |   | 542             |   |           | 520    |              |   | --         |   |                   | (390    | ) |   | 130 |   | 5.1 |   |
| B-                                                                                                                                                  |   |       | 6,698  |         |   | 1,375           |   |           | 1,321  |              |   | --         |   |                   | (1,014  | ) |   | 307 |   | 12.0 |   |
| Non-rated                                                                                                                                           |   |       | 25,819 |         |   | 5,269           |   |           | 4,968  |              |   | --         |   |                   | (4,193  | ) |   | 775 |   | 30.4 |   |
|  Total                                                                                                                                         |   | $          | 57,205 |         | $      | 17,794          |   | $              | 17,757 |              | $      | --         |   | $                      | (15,207 | ) | $ | 2,550 |   | 100.0 | % |

| (1) | The unrealized losses presented above do not include cumulative impairment write-downs of $15.5 million at December 31, 2009 due to credit losses related to the underlying assets (see Note 23).  Accreted cost is shown net of this amount. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands)  |   | Less than12 Months |   |   | 12 Monthsor More |   |   | Total  |   |
|-------------------------|--------|--------------------|--------|--------|------------------|--------|--------|--------|--------|
|  December 31, 2009 |   |               |   |   |             |   |   |   |   |
|  Number            |   |               | --     |   |             |   | --     |   |   |   | -- |   |
| Fair value              |   | $                  | --     |   |             | $      | --     |   |   | $ | -- |   |
| Gross unrealized losses |   | $                  | --     |   |             | $      | --     |   |   | $ | -- |   |
|  December 31, 2008 |   |               |   |   |             |   |   |   |   |   |   |   |
|  Number            |   |               | 9      |   |             |   | --     |   |   |   | 9 |   |
| Fair value              |   | $                  | 2,550  |   |             | $      | --     |   |   | $ | 2,550 |   |
| Gross unrealized losses |   | $                  | 15,207 |   |             | $      | --     |   |   | $ | 15,207 |   |

----

|                                        |   | December 31, |   |
|---------------------------------------------|--------|--------------|--------|
| (in thousands)                              |   | 2009         |   | 2008 |   |
|                                        |   |         |   |   |   |   |   |
| Equity interests in tax credit partnerships |   | $            | 530    |   | $ | 31,367 |   |

|                                                                                                                                     |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
| (in thousands)                                                                                                                           |   | 2009         |   |   | 2008 |   |
|                                                                                                                                     |   |         |   |   |   |   |
| Mortgage loans held for sale(1)                                                                                                          |   | $            | 28,454 |   |   | $ | 46,912 |   |
| Mortgage loans held for investment(2)                                                                                                    |   |         | 7,540  |   |   |   | 10,792 |   |
| Stabilization escrow                                                                                                                     |   |         | 1,983  |   |   |   | 72,397 |   |
| Miscellaneous investments                                                                                                                |   |         | 1,060  |   |   |   | 4,126 |   |
|  Total                                                                                                                              |   | $            | 39,037 |   |   | $ | 134,227 |   |
|   (1)  Net of deferred origination fees.(2)  Net of valuation allowance of $3.6 million in 2009 and $1.7 million in 2008. |   |

----

|                                                                    |   | December 31, |    |
|-------------------------------------------------------------------------|--------|--------------|---------|
| (in thousands)                                                          |   | 2009         |    |   | 2008 |   |
|  Cash balance                                                      |   | $            | 50,104  |   |   | $ | 84,503 |   |
| Reserve for non-recovery                                                |   |         | (48,121 | ) |   |   | -- |   |
| Present value discount net of eliminations and accumulated amortization |   |         | --      |   |   |   | (12,106 | ) |
|  Total                                                             |   | $            | 1,983   |   |   | $ | 72,397 |   |

|                           |   | December 31, |    |
|--------------------------------|--------|--------------|---------|
| (in thousands)                 |   | 2009         |    |   | 2008 |   |
|                           |   |         |    |   |   |   |
| Goodwill                       |   | $            | 103,585 |   |   | $ | 248,978 |   |
| Other intangible assets, net   |   |         | 17,723  |   |   |   | 37,189 |   |
| Mortgage servicing rights, net |   |         | 63,097  |   |   |   | 65,599 |   |
|  Total                    |   | $            | 184,405 |   |   | $ | 351,766 |   |

----

| (in thousands)                  |   | 2009   |     |   | 2008   |   |
|---------------------------------|--------|--------|----------|--------|--------|--------|
|  Balance as of January 1   |   |   |     |   |   |   |
| Goodwill                        |   | $      | 341,726  |   |   | $      | 342,666 |   |
| Accumulated impairment losses   |   |   | (92,748  | )      |   |   | -- |   |
| Net balance as of January 1     |   |   | 248,978  |   |   |   | 342,666 |   |
|  Impairment losses         |   |   | (145,347 | )      |   |   | (92,748 | ) |
| Other  reductions     |   |   | (46      | )      |   |   | (940 | ) |
|  Balance as of December 31 |   |   |     |   |   |   |   |   |
| Goodwill                        |   | $      | 341,680  |   |   | $      | 341,726 |   |
| Accumulated impairment losses   |   |   | (238,095 | )      |   |   | (92,748 | ) |
| Net balance as of December 31   |   | $      | 103,585  |   |   | $      | 248,978 |   |

| (dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | EstimatedUsefulLife(in Years) |   | GrossCarrying Amount |    | AccumulatedAmortization (1) |   | Net     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|----------------------|---------|-----------------------------|--------|---------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                          |   | 2009                 |    | 2008                        |   | 2009    |   | 2008 |   | 2009 |   | 2008 |   |
|  Amortized intangible assets(2):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                          |   |                 |    |                        |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transactional relationships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 5.3                           |   | $                    | 103,000 |                        | $      | 103,000 |   | $ | 102,190 |   | $ | 97,028 |   | $ | 810 |   | $ | 5,972 |   |
| Partnership service contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 9.0                           |   |                 | 26,521  |                        |   | 44,421  |   |   | 20,183 |   |   | 31,744 |   |   | 6,338 |   |   | 12,677 |   |
| General partner interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 7.7                           |   |                 | 13,521  |                        |   | 13,521  |   |   | 11,504 |   |   | 4,030 |   |   | 2,017 |   |   | 9,491 |   |
| Joint venture developer relationships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | --                            |   |                 | --      |                        |   | 4,800   |   |   | -- |   |   | 4,800 |   |   | -- |   |   | -- |   |
| Mortgage banking broker relationships(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 4.0                           |   |                 | 1,632   |                        |   | 1,080   |   |   | 1,320 |   |   | 829 |   |   | 312 |   |   | 251 |   |
| Weighted average life/subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 6.2                           |   |                 | 144,674 |                        |   | 166,822 |   |   | 135,197 |   |   | 138,431 |   |   | 9,477 |   |   | 28,391 |   |
|  Unamortized intangible assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                          |   |                 |    |                        |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage banking licenses and approvals with no expiration(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                          |   |                 | 8,246   |                        |   | 8,798   |   |   | -- |   |   | -- |   |   | 8,246 |   |   | 8,798 |   |
|  Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                          |   | $                    | 152,920 |                        | $      | 175,620 |   | $ | 135,197 |   | $ | 138,431 |   | $ | 17,723 |   | $ | 37,189 |   |
|  (1)    Including impairment charges recognized.(2)    $4.8 million in joint venture developer relationships and $17.9 million in partnership service contracts, which were fully amortized, are excluded in 2009 from the gross carrying amount and the accumulated amortization.(3)    During 2009, we reevaluated the useful lives of certain mortgage banking business approvals and determined that they have finite useful lives.  Accordingly we began amortizing the assets and have reclassified them from “mortgage banking licenses and approvals with no expiration” to “mortgage banking broker relationships”. |

----

|                       |   | Years Ended December 31, |   |
|----------------------------|--------|--------------------------|--------|
| (in thousands)             |   | 2009                     |   |   | 2008 |   |
|  Amortization expense |   | $                        | 14,017 |   |   | $ | 13,350 |   |
| Impairment                 |   | $                        | 5,449  |   |   | $ | 60,044 |   |

|   |   | (in thousands) |   |
|--------|--------|----------------|--------|
|   |   |           |   |   |
| 2010   |   | $              | 8,003  |   |
| 2011   |   | $              | 869    |   |
| 2012   |   | $              | 601    |   |
| 2013   |   | $              | 4      |   |
| 2014   |   | $              | --     |   |

|                         |   | (in thousands) |    |
|------------------------------|--------|----------------|---------|
|                         |   |           |    |   |
| Balance at January 1, 2008   |   | $              | 71,645  |   |
| MSRs capitalized             |   |           | 6,662   |   |
| Amortization                 |   |           | (12,708 | ) |
| Balance at December 31, 2008 |   |           | 65,599  |   |
| MSRs capitalized             |   |           | 8,668   |   |
| Amortization                 |   |           | (11,170 | ) |
| Balance at December 31, 2009 |   | $              | 63,097  |   |

|   |   | (in thousands) |   |
|--------|--------|----------------|--------|
|   |   |           |   |   |
| 2010   |   | $              | 8,991  |   |
| 2011   |   | $              | 8,350  |   |
| 2012   |   | $              | 7,068  |   |
| 2013   |   | $              | 5,901  |   |
| 2014   |   | $              | 4,801  |   |

----

|                                    |   | December 31, |   |
|-----------------------------------------|--------|--------------|--------|
|                                    |   | 2009         |   |   | 2008 |   |
|  Fair value of MSRs                |   | $            | 77,109 |   |   | $ | 77,463 |   |
| Weighted average discount rate          |   |         | 17.84  | % |   |   | 18.17 | % |
| Weighted average pre-pay speed          |   |         | 9.28   | % |   |   | 9.50 | % |
| Weighted average lockout period (years) |   |         | 4.2    |   |   |   | 4.5 |   |
| Weighted average default rate           |   |         | 0.90   | % |   |   | 0.47 | % |
| Cost to service loans                   |   | $            | 2,183  |   |   | $ | 2,192 |   |
| Acquisition cost (per loan)             |   | $            | 1,474  |   |   | $ | 1,474 |   |

| (in thousands)                                |   | December 31,2009 |   |
|-----------------------------------------------|--------|------------------|--------|
|  Prepayment speed:                       |   |             |   |   |
| Fair value after impact of 10% adverse change |   | $                | 77,459 |   |
| Fair value after impact of 20% adverse change |   |             | 75,812 |   |
|                                          |   |             |   |   |
| Discount rate:                                |   |             |   |   |
| Fair value after impact of 10% adverse change |   |             | 72,865 |   |
| Fair value after impact of 20% adverse change |   |             | 69,190 |   |
|                                          |   |             |   |   |
| Default rate:                                 |   |             |   |   |
| Fair value after impact of 10% adverse change |   |             | 77,009 |   |
| Fair value after impact of 20% adverse change |   |             | 76,910 |   |

| (in thousands) |   | TotalServicingFees |   |   | ServicingFees fromSecuritizedAssets(included inTotalServicingFees) |   |
|----------------|--------|--------------------|--------|--------|--------------------------------------------------------------------|--------|
|  2009     |   | $                  | 21,541 |   |                                                               | $      | 974 |   |
| 2008           |   | $                  | 22,082 |   |                                                               | $      | 826 |   |

----

|                                 |   | Years Ended December 31, |    |
|--------------------------------------|--------|--------------------------|---------|
| (in thousands)                       |   | 2009                     |    |   | 2008 |   |
|                                 |   |                     |    |   |   |   |
| Goodwill                             |   | $                        | 145,347 |   |   | $ | 92,748 |   |
| Amortized intangible assets:         |   |                     |    |   |   |   |   |   |
| Transactional relationships          |   |                     | --      |   |   |   | 55,190 |   |
| Partnership service contracts        |   |                     | --      |   |   |   | 2,879 |   |
| General partner interests            |   |                     | 5,449   |   |   |   | -- |   |
|  Unamortized intangible assets: |   |                     |    |   |   |   |   |   |
| Mortgage banking licenses            |   |                     | --      |   |   |   | 1,975 |   |
|                            |   | $                        | 150,796 |   |   | $ | 152,792 |   |

| (1)   | In connection with the placement of Freddie Mac and Fannie Mae into conservatorship in September 2008, we re-evaluated the fair value of an intangible asset related to these relationships that we recognized upon acquiring CAHA.  Based upon our belief that their future investments in tax credit funds will be limited, we recognized a pre-tax impairment of $55.2 million during the third quarter of 2008 and reduced the estimated life of the remaining balance to five years. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | In light of the continued declining performance of AMAC resulting from the disruption in mortgage and credit markets, we recognized a pre-tax impairment charge of $2.9 million to write off the balance of an intangible asset related to our management of AMAC. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | In connection with acquisitions we made in 2001 and 2005, we hold mortgage banking licenses and approvals.  During 2008, we increasingly focused our mortgage origination efforts on Freddie Mac and Fannie Mae and deemphasized other portions of the business.  This increased focus resulted in other licenses and approvals being considered impaired by $2.0 million. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                |   | December 31, |    |
|-----------------------------------------------------|--------|--------------|---------|
| (in thousands)                                      |   | 2009         |    |   | 2008 |   |
|                                                |   |         |    |   |   |   |
| Deferred financing and other costs                  |   | $            | 25,871  |   |   | $ | 34,673 |   |
| Less: Accumulated amortization                      |   |         | (14,569 | ) |   |   | (11,879 | ) |
|  Net deferred costs                            |   |         | 11,302  |   |   |   | 22,794 |   |
|  Deposits receivable                           |   |         | 69,200  |   |   |   | 75,867 |   |
| Interest and fees receivable, net                   |   |         | 10,660  |   |   |   | 9,470 |   |
| Other receivables                                   |   |         | 10,166  |   |   |   | 2,103 |   |
| Furniture, fixtures and leasehold improvements, net |   |         | 2,731   |   |   |   | 3,588 |   |
| Other                                               |   |         | 5,194   |   |   |   | 21,857 |   |
|  Total                                         |   | $            | 109,253 |   |   | $ | 135,679 |   |

----

|                                                      |   | December 31,                                 |      |
|-----------------------------------------------------------|--------|----------------------------------------------|-----------|
|                                                      |   |  2009                                   |      |   | 2008 |   |
| (in thousands)                                            |   |  Tax CreditFund andPropertyPartnerships |      |   | CMBS andHigh-YieldDebt FundPartnerships |   |   | Total |   |   | Tax CreditFund andPropertyPartnerships |   |   | CMBS andHigh-YieldDebt FundPartnerships |   |   | Total |   |
|                                                      |   |                                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale, at fair value                         |   |                                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CMBS                                                      |   | $                                            | --        |   |   | $ | 126,195 |   |   | $ | 126,195 |   |   | $ | -- |   |   | $ | 182,828 |   |   | $ | 182,828 |   |
| Retained CMBS certificates                                |   |                                         | --        |   |   |   | 6,646 |   |   |   | 6,646 |   |   |   | -- |   |   |   | 9,867 |   |   |   | 9,867 |   |
| CDO Debt and Equity                                       |   |                                         | --        |   |   |   | 536 |   |   |   | 536 |   |   |   | -- |   |   |   | 33,189 |   |   |   | 33,189 |   |
| Corporate bonds                                           |   |                                         | 5,109     |   |   |   | -- |   |   |   | 5,109 |   |   |   | 47,858 |   |   |   | -- |   |   |   | 47,858 |   |
|                                                      |   |                                         | 5,109     |   |   |   | 133,377 |   |   |   | 138,486 |   |   |   | 47,858 |   |   |   | 225,884 |   |   |   | 273,742 |   |
| Held-to-Maturity                                          |   |                                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retained CMBS certificates                                |   |                                         | --        |   |   |   | 284,971 |   |   |   | 284,971 |   |   |   | -- |   |   |   | 288,960 |   |   |   | 288,960 |   |
|  Equity method                                       |   |                                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity interests in tax credit properties                 |   |                                         | 3,571,323 |   |   |   | -- |   |   |   | 3,571,323 |   |   |   | 4,234,251 |   |   |   | -- |   |   |   | 4,234,251 |   |
|  Other                                               |   |                                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage loans held for investment                        |   |                                         | --        |   |   |   | 46,094 |   |   |   | 46,094 |   |   |   | -- |   |   |   | 200,611 |   |   |   | 200,611 |   |
|  Total investments held by consolidated partnerships |   |                                         | 3,576,432 |   |   |   | 464,442 |   |   |   | 4,040,874 |   |   |   | 4,282,109 |   |   |   | 715,455 |   |   |   | 4,997,564 |   |
|  Land, buildings and improvements, net               |   |                                         | 571,520   |   |   |   | 79,679 |   |   |   | 651,199 |   |   |   | 697,422 |   |   |   | -- |   |   |   | 697,422 |   |
| Other assets                                              |   |                                         | 298,529   |   |   |   | 63,473 |   |   |   | 362,002 |   |   |   | 309,962 |   |   |   | 63,970 |   |   |   | 373,932 |   |
| Total other assets of consolidated partnerships           |   |                                         | 870,049   |   |   |   | 143,152 |   |   |   | 1,013,201 |   |   |   | 1,007,384 |   |   |   | 63,970 |   |   |   | 1,071,354 |   |
|  Total                                               |   | $                                            | 4,446,481 |   |   | $ | 607,594 |   |   | $ | 5,054,075 |   |   | $ | 5,289,493 |   |   | $ | 779,425 |   |   | $ | 6,068,918 |   |

----

| A. | CMBS, Available-for-Sale |
|----|--------------------------|

| (dollars in thousands)                                          |   | FaceAmount |      | PurchaseCost |   | AccretedCost(1) |   | UnrealizedGain |      | UnrealizedLoss(1) |   | Fair Value |   | Percentageof FairValue |       |
|-----------------------------------------------------------------|--------|------------|-----------|--------------|--------|-----------------|--------|----------------|-----------|-------------------|--------|------------|--------|------------------------|------------|
|                                                            |   |       |      |         |   |            |   |           |      |              |   |       |   |                   |       |   |   |   |   |   |   |
| December 31, 2009Security rating:                               |   |       |      |         |   |            |   |           |      |              |   |       |   |                   |       |   |   |   |   |   |   |
| BBB-                                                            |   | $          | 39,755    |         | $      | 37,275          |   | $              | 5,511     |              | $      | 1,501      |   | $                      | --         |   | $ | 7,012 |   | 5.6 | % |
| BB+                                                             |   |       | 27,885    |         |   | 22,801          |   |           | 2,473     |              |   | 155        |   |                   | --         |   |   | 2,628 |   | 2.1 |   |
| BB                                                              |   |       | 56,534    |         |   | 46,344          |   |           | 4,909     |              |   | 538        |   |                   | --         |   |   | 5,447 |   | 4.3 |   |
| BB-                                                             |   |       | 65,063    |         |   | 49,025          |   |           | 12,482    |              |   | 584        |   |                   | (3,001     | ) |   | 10,065 |   | 8.0 |   |
| B+                                                              |   |       | 61,537    |         |   | 46,753          |   |           | 11,283    |              |   | 235        |   |                   | (1,244     | ) |   | 10,274 |   | 8.1 |   |
| B                                                               |   |       | 96,225    |         |   | 71,856          |   |           | 8,899     |              |   | 588        |   |                   | (1,018     | ) |   | 8,469 |   | 6.7 |   |
| B-                                                              |   |       | 279,137   |         |   | 209,304         |   |           | 19,409    |              |   | 990        |   |                   | --         |   |   | 20,399 |   | 16.2 |   |
| CCC+                                                            |   |       | 205,634   |         |   | 147,892         |   |           | 11,585    |              |   | 585        |   |                   | --         |   |   | 12,170 |   | 9.6 |   |
| CCC                                                             |   |       | 291,485   |         |   | 216,735         |   |           | 16,900    |              |   | 1,059      |   |                   | (44        | ) |   | 17,915 |   | 14.2 |   |
| CCC-                                                            |   |       | 530,894   |         |   | 357,016         |   |           | 15,515    |              |   | 1,110      |   |                   | (139       | ) |   | 16,486 |   | 13.1 |   |
| CC                                                              |   |       | 125,346   |         |   | 93,485          |   |           | 5,222     |              |   | 515        |   |                   | --         |   |   | 5,737 |   | 4.5 |   |
| C                                                               |   |       | 91,907    |         |   | 61,510          |   |           | 2,041     |              |   | 250        |   |                   | --         |   |   | 2,291 |   | 1.8 |   |
| D                                                               |   |       | 161,002   |         |   | 101,171         |   |           | 1,174     |              |   | 176        |   |                   | --         |   |   | 1,350 |   | 1.1 |   |
| Non-rated                                                       |   |       | 926,188   |         |   | 323,225         |   |           | 6,246     |              |   | 1,762      |   |                   | (2,056     | ) |   | 5,952 |   | 4.7 |   |
|  Total                                                     |   | $          | 2,958,592 |         | $      | 1,784,392       |   | $              | 123,649   |              | $      | 10,048     |   | $                      | (7,502     | ) | $ | 126,195 |   | 100.0 | % |
|      December 31, 2008Security rating: |   |       |      |         |   |            |   |           |      |              |   |       |   |                   |       |   |   |   |   |   |   |
| BBB+                                                            |   | $          | 17,000    |         | $      | 17,000          |   | $              | 17,000    |              | $      | --         |   | $                      | (16,150    | ) | $ | 850 |   | 0.4 | % |
| BBB                                                             |   |       | 86,139    |         |   | 74,530          |   |           | 75,469    |              |   | --         |   |                   | (67,376    | ) |   | 8,093 |   | 4.4 |   |
| BBB-                                                            |   |       | 300,620   |         |   | 267,367         |   |           | 271,091   |              |   | --         |   |                   | (241,856   | ) |   | 29,235 |   | 16.0 |   |
| BB+                                                             |   |       | 309,286   |         |   | 252,025         |   |           | 258,069   |              |   | --         |   |                   | (221,171   | ) |   | 36,898 |   | 20.2 |   |
| BB                                                              |   |       | 288,641   |         |   | 230,680         |   |           | 237,147   |              |   | --         |   |                   | (214,784   | ) |   | 22,363 |   | 12.2 |   |
| BB-                                                             |   |       | 302,145   |         |   | 211,989         |   |           | 221,542   |              |   | --         |   |                   | (199,743   | ) |   | 21,799 |   | 11.9 |   |
| B+                                                              |   |       | 286,434   |         |   | 184,166         |   |           | 186,724   |              |   | --         |   |                   | (169,866   | ) |   | 16,858 |   | 9.2 |   |
| B                                                               |   |       | 177,623   |         |   | 100,012         |   |           | 92,832    |              |   | --         |   |                   | (83,504    | ) |   | 9,328 |   | 5.1 |   |
| B-                                                              |   |       | 209,746   |         |   | 93,553          |   |           | 84,471    |              |   | --         |   |                   | (75,000    | ) |   | 9,471 |   | 5.2 |   |
| CCC+                                                            |   |       | 31,705    |         |   | 17,790          |   |           | 1,122     |              |   | --         |   |                   | --         |   |   | 1,122 |   | 0.6 |   |
| CCC                                                             |   |       | 6,826     |         |   | 4,197           |   |           | 273       |              |   | --         |   |                   | --         |   |   | 273 |   | 0.1 |   |
| CCC-                                                            |   |       | 16,239    |         |   | 7,855           |   |           | 4,869     |              |   | --         |   |                   | (4,382     | ) |   | 487 |   | 0.3 |   |
| Non-rated                                                       |   |       | 967,247   |         |   | 323,228         |   |           | 232,729   |              |   | --         |   |                   | (206,678   | ) |   | 26,051 |   | 14.4 |   |
|  Total                                                     |   | $          | 2,999,651 |         | $      | 1,784,392       |   | $              | 1,683,338 |              | $      | --         |   | $                      | (1,500,510 | ) | $ | 182,828 |   | 100.0 | % |

| (1) | Unrealized losses presented above do not include cumulative impairment write-downs of $1.6 billion at December 31, 2009 and $96.0 million at December 31, 2008.  These impairments were primarily due to increased rates of anticipated default.  Accreted cost is shown net of these amounts. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)  |   | Less than12 Months |   |   | 12 Months orMore |   |      | Total  |   |
|-------------------------|--------|--------------------|--------|--------|------------------|--------|-----------|--------|--------|
|  December 31, 2009 |   |               |   |   |             |   |      |   |   |
|  Number            |   |               | 8      |   |             |   | 2         |   |   |   | 10 |   |
| Fair value              |   | $                  | 9,690  |   |             | $      | 4,978     |   |   | $ | 14,668 |   |
| Gross unrealized loss   |   | $                  | 2,457  |   |             | $      | 5,045     |   |   | $ | 7,502 |   |
|  December 31, 2008 |   |               |   |   |             |   |      |   |   |   |   |   |
|  Number            |   |               | 26     |   |             |   | 297       |   |   |   | 323 |   |
| Fair value              |   | $                  | 19,165 |   |             | $      | 158,655   |   |   | $ | 177,820 |   |
| Gross unrealized loss   |   | $                  | 71,714 |   |             | $      | 1,428,796 |   |   | $ | 1,500,510 |   |

| B. | Retained CMBS Certificates, Available-for-Sale |
|----|------------------------------------------------|

| (dollars in thousands)                                     |   | FaceAmount |    | PurchaseCost |   | AccretedCost(1) |   | UnrealizedGain |   | UnrealizedLoss(1) |   | Fair Value |   | Percentageof FairValue |    |
|------------------------------------------------------------|--------|------------|---------|--------------|--------|-----------------|--------|----------------|--------|-------------------|--------|------------|--------|------------------------|---------|
|                                                       |   |       |    |         |   |            |   |           |   |              |   |       |   |                   |    |   |   |   |   |   |   |
| December 31, 2009Security rating:                          |   |       |    |         |   |            |   |           |   |              |   |       |   |                   |    |   |   |   |   |   |   |
| CC                                                         |   | $          | 220,326 |         | $      | 124,183         |   | $              | 6,051  |              | $      | 271        |   | $                      | --      |   | $ | 6,322 |   | 95.1 | % |
| Non-rated                                                  |   |       | 129,710 |         |   | 11,674          |   |           | 48     |              |   | 276        |   |                   | --      |   |   | 324 |   | 4.9 |   |
| Non-rated interest only                                    |   |       | --      |         |   | 5,863           |   |           | --     |              |   | --         |   |                   | --      |   |   | -- |   | -- |   |
|  Total                                                |   | $          | 350,036 |         | $      | 141,720         |   | $              | 6,099  |              | $      | 547        |   | $                      | --      |   | $ | 6,646 |   | 100.0 | % |
|      December 31, 2008Security rating: |   |       |    |         |   |            |   |           |   |              |   |       |   |                   |    |   |   |   |   |   |   |
| CCC-                                                       |   | $          | 220,326 |         | $      | 124,183         |   | $              | 90,534 |              | $      | --         |   | $                      | (82,490 | ) | $ | 8,044 |   | 81.5 | % |
| Non-rated                                                  |   |       | 158,680 |         |   | 11,674          |   |           | 1,587  |              |   | --         |   |                   | --      |   |   | 1,587 |   | 16.1 |   |
| Non-rated interest only                                    |   |       | --      |         |   | 5,863           |   |           | 3,869  |              |   | --         |   |                   | (3,633  | ) |   | 236 |   | 2.4 |   |
|  Total                                                |   | $          | 379,006 |         | $      | 141,720         |   | $              | 95,990 |              | $      | --         |   | $                      | (86,123 | ) | $ | 9,867 |   | 100.0 | % |

| (1) | Unrealized losses presented above do not include cumulative impairment write-downs of $134.5 million at December 31, 2009 and $48.0 million at December 31, 2008.  One of the CMBS Fund Partnerships (which we refer to as “CMBS Fund I”) is scheduled to liquidate within the next year and may not be able to hold the assets until recovery.  Accreted cost is shown net of these amounts. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)  |   | Less than12 Months |   |   | 12 Monthsor More |   |   | Total  |   |
|-------------------------|--------|--------------------|--------|--------|------------------|--------|--------|--------|--------|
|  December 31, 2009 |   |               |   |   |             |   |   |   |   |
|  Number            |   |               | --     |   |             |   | --     |   |   |   | -- |   |
| Fair value              |   | $                  | --     |   |             | $      | --     |   |   | $ | -- |   |
| Gross unrealized loss   |   | $                  | --     |   |             | $      | --     |   |   | $ | -- |   |
|  December 31, 2008 |   |               |   |   |             |   |   |   |   |   |   |   |
|  Number            |   |               | 2      |   |             |   | 3      |   |   |   | 5 |   |
| Fair value              |   | $                  | 236    |   |             | $      | 4,778  |   |   | $ | 5,014 |   |
| Gross unrealized loss   |   | $                  | 3,633  |   |             | $      | 82,490 |   |   | $ | 86,123 |   |

|                    |   |                            |   |   |                              |   |   | ExpectedCredit Loss |   |   | Discount RateApplied to Cash Flows |   |
|-------------------------|--------|---------------------------------|--------|--------|-----------------------------------|--------|--------|---------------------|--------|--------|------------------------------------|--------|
| (dollars in thousands)  |   |  WeightedAverageLife (yrs) |   |   | Discount Rateapplied toCash Flows |   |   | 4.0%CDR             |   |   | 5.0%CDR                            |   |   | 5.0%AdverseChange |   |   | 35.0%AdverseChange |   |
|                    |   |                            |   |   |                              |   |   |                |   |   |                               |   |   |   |   |   |   |   |
| Security rating:        |   |                            |   |   |                              |   |   |                |   |   |                               |   |   |   |   |   |   |   |
| CC                      |   |                            | 17.08  |   |                              |   | 35.0   | %                   |   |   | (28.91                             | )%     |   |   | (48.54 | )% |   |   | (2.93 | )% |   |   | (17.33 | )% |
| Non-rated               |   |                            | --     |   |                              |   | --     |                |   |   | --                                 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Non-rated interest only |   |                            | --     |   |                              |   | --     |                |   |   | --                                 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |

----

| C. | CDO Debt and Equity, Available-for-Sale |
|----|-----------------------------------------|

| (dollars in thousands)                                                      |   | FaceAmount |    | PurchaseCost |   | AccretedCost(1) |   | UnrealizedGain |    | UnrealizedLoss(1 |   | Fair Value |   | Percentageof FairValue |     |
|-----------------------------------------------------------------------------|--------|------------|---------|--------------|--------|-----------------|--------|----------------|---------|------------------|--------|------------|--------|------------------------|----------|
|                                                                        |   |       |    |         |   |            |   |           |    |             |   |       |   |                   |     |   |   |   |   |   |   |
| December 31, 2009Security rating:                                           |   |       |    |         |   |            |   |           |    |             |   |       |   |                   |     |   |   |   |   |   |   |
| BBB                                                                         |   | $          | 9,974   |         | $      | 9,442           |   | $              | 24      |             | $      | --         |   | $                      | --       |   | $ | 24 |   | 4.5 | % |
| BBB-                                                                        |   |       | 12,688  |         |   | 11,923          |   |           | 31      |             |   | --         |   |                   | --       |   |   | 31 |   | 5.8 |   |
| BB+                                                                         |   |       | 20,054  |         |   | 17,901          |   |           | 49      |             |   | --         |   |                   | --       |   |   | 49 |   | 9.1 |   |
| BB                                                                          |   |       | 8,903   |         |   | 7,821           |   |           | --      |             |   | 22         |   |                   | --       |   |   | 22 |   | 4.1 |   |
| BB-                                                                         |   |       | 5,828   |         |   | 4,975           |   |           | --      |             |   | 14         |   |                   | --       |   |   | 14 |   | 2.6 |   |
| B+                                                                          |   |       | 10,961  |         |   | 9,247           |   |           | --      |             |   | 13         |   |                   | --       |   |   | 13 |   | 2.4 |   |
| B                                                                           |   |       | 7,493   |         |   | 6,286           |   |           | --      |             |   | 9          |   |                   | --       |   |   | 9 |   | 1.7 |   |
| B-                                                                          |   |       | 4,768   |         |   | 4,027           |   |           | --      |             |   | 5          |   |                   | --       |   |   | 5 |   | 0.9 |   |
| C                                                                           |   |       | 75,132  |         |   | 71,510          |   |           | 149     |             |   | 11         |   |                   | --       |   |   | 160 |   | 29.9 |   |
| Non-rated                                                                   |   |       | 118,576 |         |   | 101,890         |   |           | --      |             |   | 209        |   |                   | --       |   |   | 209 |   | 39.0 |   |
|  Total                                                                 |   | $          | 274,377 |         | $      | 245,022         |   | $              | 253     |             | $      | 283        |   | $                      | --       |   | $ | 536 |   | 100.0 | % |
|        December 31, 2008Security rating: |   |       |    |         |   |            |   |           |    |             |   |       |   |                   |     |   |   |   |   |   |   |
| BBB                                                                         |   | $          | 9,750   |         | $      | 9,442           |   | $              | 9,468   |             | $      | --         |   | $                      | (8,006   | ) | $ | 1,462 |   | 4.4 | % |
| BBB-                                                                        |   |       | 28,550  |         |   | 26,986          |   |           | 17,793  |             |   | --         |   |                   | (13,958  | ) |   | 3,835 |   | 11.6 |   |
| BB+                                                                         |   |       | 42,300  |         |   | 40,041          |   |           | 20,765  |             |   | --         |   |                   | (15,689  | ) |   | 5,076 |   | 15.3 |   |
| BB                                                                          |   |       | 17,413  |         |   | 16,342          |   |           | 8,938   |             |   | --         |   |                   | (6,848   | ) |   | 2,090 |   | 6.3 |   |
| BB-                                                                         |   |       | 11,325  |         |   | 10,495          |   |           | 5,708   |             |   | --         |   |                   | (4,349   | ) |   | 1,359 |   | 4.1 |   |
| B+                                                                          |   |       | 18,575  |         |   | 17,068          |   |           | 10,144  |             |   | --         |   |                   | (8,286   | ) |   | 1,858 |   | 5.6 |   |
| B                                                                           |   |       | 7,124   |         |   | 6,286           |   |           | 6,343   |             |   | --         |   |                   | (5,631   | ) |   | 712 |   | 2.1 |   |
| B-                                                                          |   |       | 17,325  |         |   | 16,472          |   |           | 5,341   |             |   | 1,404      |   |                   | (5,012   | ) |   | 1,733 |   | 5.2 |   |
| Non-rated                                                                   |   |       | 118,576 |         |   | 101,890         |   |           | 102,825 |             |   | --         |   |                   | (87,761  | ) |   | 15,064 |   | 45.4 |   |
|  Total                                                                 |   | $          | 270,938 |         | $      | 245,022         |   | $              | 187,325 |             | $      | 1,404      |   | $                      | (155,540 | ) | $ | 33,189 |   | 100.0 | % |

| (1) | Unrealized losses do not include cumulative impairment write-downs of $255.7 million at December 31, 2009 and $101.0 million at December 31, 2008, recorded in the High-Yield Debt Fund Partnership.  The impairments were primarily due to increased rates of expected default within both of the CDOs.  Accreted cost is shown net of these amounts. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)  |   | Less than12 Months |    |   | 12 Monthsor More |   |   | Total  |   |
|-------------------------|--------|--------------------|---------|--------|------------------|--------|--------|--------|--------|
|  December 31, 2009 |   |               |    |   |             |   |   |   |   |
|  Number            |   |               | --      |   |             |   | --     |   |   |   | -- |   |
| Fair value              |   | $                  | --      |   |             | $      | --     |   |   | $ | -- |   |
| Gross unrealized loss   |   | $                  | --      |   |             | $      | --     |   |   | $ | -- |   |
|  December 31, 2008 |   |               |    |   |             |   |   |   |   |   |   |   |
|  Number            |   |               | 9       |   |             |   | 5      |   |   |   | 14 |   |
| Fair value              |   | $                  | 18,223  |   |             | $      | 3,286  |   |   | $ | 21,509 |   |
| Gross unrealized loss   |   | $                  | 112,508 |   |             | $      | 43,032 |   |   | $ | 155,540 |   |

| D. | Corporate Bonds |
|----|-----------------|

| (in thousands)             |   | December 31,2009 |   |   | December 31, 2008 |   |
|----------------------------|--------|------------------|--------|--------|-------------------|--------|
|  Amortized cost basis |   | $                | 4,903  |   |              | $      | 47,086 |   |
| Gross unrealized gains     |   |             | 206    |   |              |   | 847 |   |
| Gross unrealized losses    |   |             | --     |   |              |   | (75 | ) |
|  Fair value           |   | $                | 5,109  |   |              | $      | 47,858 |   |

----

| E. | Retained CMBS Certificates, Held-to-Maturity |
|----|----------------------------------------------|

| (dollars in thousands)  |   | FaceAmount |    | PurchaseCost |   | AccretedCost(1) |   | Unamortized Discount(2) |    | CarryingValue |   | UnrealizedGain |   | UnrealizedLoss(1) |    | Fair Value |   | Percentageof FairValue |   |
|-------------------------|--------|------------|---------|--------------|--------|-----------------|--------|-------------------------|---------|---------------|--------|----------------|--------|-------------------|---------|------------|--------|------------------------|--------|
|  December 31, 2009 |   |       |    |         |   |            |   |                    |    |          |   |           |   |              |    |       |   |                   |   |   |   |   |   |   |   |   |   |
| Security rating:        |   |       |    |         |   |            |   |                    |    |          |   |           |   |              |    |       |   |                   |   |   |   |   |   |   |   |   |   |
| AA                      |   | $          | 52,798  |         | $      | 55,639          |   | $                       | 53,087  |          | $      | (6,129         | )      | $                 | 46,958  |       | $      | --                     |   | $ | (30,063 | ) | $ | 16,895 |   | 32.4 | % |
| AA-                     |   |       | 54,380  |         |   | 49,885          |   |                    | 51,922  |          |   | (4,577         | )      |              | 47,345  |       |   | --                     |   |   | (30,487 | ) |   | 16,858 |   | 32.2 |   |
| BBB+                    |   |       | 66,600  |         |   | 63,897          |   |                    | 65,418  |          |   | (11,020        | )      |              | 54,398  |       |   | --                     |   |   | (47,738 | ) |   | 6,660 |   | 12.7 |   |
| BBB                     |   |       | 20,500  |         |   | 21,522          |   |                    | 20,973  |          |   | (5,192         | )      |              | 15,781  |       |   | --                     |   |   | (14,346 | ) |   | 1,435 |   | 2.7 |   |
| BBB-                    |   |       | 41,900  |         |   | 39,923          |   |                    | 40,844  |          |   | (10,031        | )      |              | 30,813  |       |   | --                     |   |   | (28,453 | ) |   | 2,360 |   | 4.5 |   |
| BB+                     |   |       | 44,600  |         |   | 46,886          |   |                    | 45,650  |          |   | (14,686        | )      |              | 30,964  |       |   | --                     |   |   | (28,734 | ) |   | 2,230 |   | 4.3 |   |
| BB                      |   |       | 43,700  |         |   | 42,381          |   |                    | 42,739  |          |   | (15,428        | )      |              | 27,311  |       |   | --                     |   |   | (25,256 | ) |   | 2,055 |   | 3.9 |   |
| BB-                     |   |       | 58,600  |         |   | 63,556          |   |                    | 48,860  |          |   | (19,519        | )      |              | 29,341  |       |   | --                     |   |   | (26,997 | ) |   | 2,344 |   | 4.5 |   |
| B+                      |   |       | 36,000  |         |   | 32,315          |   |                    | 2,060   |          |   | --             |   |              | 2,060   |       |   | --                     |   |   | (620 | ) |   | 1,440 |   | 2.8 |   |
|  Total             |   | $          | 419,078 |         | $      | 416,004         |   | $                       | 371,553 |          | $      | (86,582        | )      | $                 | 284,971 |       | $      | --                     |   | $ | (232,694 | ) | $ | 52,277 |   | 100.0 | % |
|  December 31, 2008 |   |       |    |         |   |            |   |                    |    |          |   |           |   |              |    |       |   |                   |   |   |   |   |   |   |   |   |   |
| Security rating:        |   |       |    |         |   |            |   |                    |    |          |   |           |   |              |    |       |   |                   |   |   |   |   |   |   |   |   |   |
| AAA                     |   | $          | 147,900 |         | $      | 142,631         |   | $                       | 145,356 |          | $      | (23,632        | )      | $                 | 121,724 |       | $      | --                     |   | $ | (90,149 | ) | $ | 31,575 |   | 66.8 | % |
| AA+                     |   |       | 51,100  |         |   | 48,312          |   |                    | 49,574  |          |   | (12,172        | )      |              | 37,402  |       |   | --                     |   |   | (32,907 | ) |   | 4,495 |   | 9.6 |   |
| AA                      |   |       | 15,400  |         |   | 16,514          |   |                    | 16,083  |          |   | (5,355         | )      |              | 10,728  |       |   | --                     |   |   | (9,958 | ) |   | 770 |   | 1.6 |   |
| A+                      |   |       | 62,600  |         |   | 62,723          |   |                    | 62,697  |          |   | (21,422        | )      |              | 41,275  |       |   | --                     |   |   | (38,145 | ) |   | 3,130 |   | 6.6 |   |
| A                       |   |       | 66,500  |         |   | 73,006          |   |                    | 70,797  |          |   | (31,279        | )      |              | 39,518  |       |   | --                     |   |   | (36,193 | ) |   | 3,325 |   | 7.0 |   |
| A-                      |   |       | 30,700  |         |   | 28,054          |   |                    | 28,841  |          |   | (11,336        | )      |              | 17,505  |       |   | --                     |   |   | (15,970 | ) |   |  1,535 |   | 3.2 |   |
| BBB+                    |   |       | 49,600  |         |   | 44,764          |   |                    | 45,699  |          |   | (24,891        | )      |              | 20,808  |       |   | --                     |   |   | (18,328 | ) |   |  2,480 |   | 5.2 |   |
|  Total             |   | $          | 423,800 |         | $      | 416,004         |   | $                       | 419,047 |          | $      | (130,087       | )      | $                 | 288,960 |       | $      | --                     |   | $ | (241,650 | ) | $ | 47,310 |   | 100.0 | % |

| (1)   | Unrealized losses do not include cumulative impairment write-downs of $37.2 million at December 31, 2009.  The impairments were primarily due to increased rates of expected default.  Accreted cost is shown net of this amount. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Represents unrealized losses recorded when the investments were classified as available-for-sale.  The amounts that existed as of the re-classification date are amortized to accreted cost over the period until the investments mature. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars in thousands)                                                                                                                                                                                                                                                    |   | Less than12 Months |   |   | 12 Months orMore |   |    | Total  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|---------|--------|--------|
|  December 31, 2009                                                                                                                                                                                                                                                   |   |               |   |   |             |   |    |   |   |
|  Number                                                                                                                                                                                                                                                              |   |               | 1      |   |             |   | 12      |   |   |   | 13 |   |
| Fair Value                                                                                                                                                                                                                                                                |   | $                  | 1,440  |   |             | $      | 50,293  |   |   | $ | 51,733 |   |
| Gross Unrealized loss(1)                                                                                                                                                                                                                                                  |   | $                  | 620    |   |             | $      | 318,656 |   |   | $ | 319,276 |   |
|  December 31, 2008                                                                                                                                                                                                                                                   |   |               |   |   |             |   |    |   |   |   |   |   |
|  Number                                                                                                                                                                                                                                                              |   |               | 2      |   |             |   | 12      |   |   |   | 14 |   |
| Fair Value                                                                                                                                                                                                                                                                |   | $                  | 4,385  |   |             | $      | 42,925  |   |   | $ | 47,310 |   |
| Gross Unrealized loss(1)                                                                                                                                                                                                                                                  |   | $                  | 48,660 |   |             | $      | 323,077 |   |   | $ | 371,737 |   |
|    (1)   Including unrealized losses recorded when the investments were classified as available-for-sale. The amounts that existed as of the re-classification date are amortized to accreted cost over the period until the investments mature. |   |

----

|                   |   |                      |   |   |                             |   |   | ExpectedCredit Loss |   |   | Discount RateApplied to Cash Flows |   |
|------------------------|--------|---------------------------|--------|--------|----------------------------------|--------|--------|---------------------|--------|--------|------------------------------------|--------|
| (dollars in thousands) |   | WeightedAverageLife (yrs) |   |   | DiscountRateapplied toCash Flows |   |   | 4.0%CDR             |   |   | 5.0%CDR                            |   |   | 5.0%AdverseChange |   |   | 35.0%AdverseChange |   |
|                   |   |                      |   |   |                             |   |   |                |   |   |                               |   |   |   |   |   |   |   |
| Security rating:       |   |                      |   |   |                             |   |   |                |   |   |                               |   |   |   |   |   |   |   |
| AA                     |   |                      | 2.95   |   |                             |   | 56.25  | %                   |   |   | (2.22                              | )%     |   |   | (5.20 | )% |   |   | (9.68 | )% |   |   | (17.87 | )% |
| AA-                    |   |                      | 3.24   |   |                             |   | 52.63  |                |   |   | (3.60                              | )      |   |   | (6.84 | ) |   |   | (9.65 | ) |   |   | (17.99 | ) |
| BBB+                   |   |                      | 4.59   |   |                             |   | 90.96  |                |   |   | (2.52                              | )      |   |   | (7.44 | ) |   |   | (12.98 | ) |   |   | (23.19 | ) |
| BBB                    |   |                      | 3.64   |   |                             |   | 140.58 |                |   |   | (4.48                              | )      |   |   | (11.55 | ) |   |   | (12.74 | ) |   |   | (22.60 | ) |
| BBB-                   |   |                      | 6.74   |   |                             |   | 129.95 |                |   |   | (1.81                              | )      |   |   | (3.89 | ) |   |   | (9.21 | ) |   |   | (16.61 | ) |
| BB+                    |   |                      | 4.87   |   |                             |   | 182.93 |                |   |   | (3.05                              | )      |   |   | (6.25 | ) |   |   | (9.47 | ) |   |   | (16.99 | ) |
| BB                     |   |                      | 6.89   |   |                             |   | 233.18 |                |   |   | (0.82                              | )      |   |   | (2.46 | ) |   |   | (7.75 | ) |   |   | (14.19 | ) |
| BB-                    |   |                      | 18.52  |   |                             |   | 233.57 |                |   |   | (0.96                              | )      |   |   | (3.67 | ) |   |   | (7.28 | ) |   |   | (13.45 | ) |

| F. | Equity Interests in Tax Credit Properties and Due to Property Partnerships |
|----|----------------------------------------------------------------------------|

----

| G. | Mortgage Loans Held for Investment |
|----|------------------------------------|

| (dollars in thousands)                                                                                                                                            |   | CarryingValue(1) |    | Allocation byProduct Type |   | WeightedAverageYield(2) |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|---------------------------|--------|-------------------------|--------|
|                                                                                                                                                              |   |             |    |                      |   |                    |   |
| December 31, 2009                                                                                                                                                 |   |             |    |                      |   |                    |   |
|  Product Type:                                                                                                                                               |   |             |    |                      |   |                    |   |   |
| Bridge loans, variable rate                                                                                                                                       |   | $                | 593     |                      | 1.3    | %                       | 7.07   | % |
| Subordinated notes, variable rate                                                                                                                                 |   |             | 6,450   |                      | 14.0   |                    | 4.94   |   |
| Subordinated notes, fixed rate                                                                                                                                    |   |             | 3,060   |                      | 6.7    |                    | 7.71   |   |
| Mezzanine loans, variable rate                                                                                                                                    |   |             | 14,675  |                      | 31.8   |                    | 4.02   |   |
| Mezzanine loans, fixed rate                                                                                                                                       |   |             | 20,113  |                      | 43.6   |                    | 5.75   |   |
| First mortgage, variable rate                                                                                                                                     |   |             | 1,203   |                      | 2.6    |                    | 3.86   |   |
|  2009 Total/Average                                                                                                                                          |   | $                | 46,094  |                      | 100.0  | %                       | 4.76   | % |
|                                                                                                                                                              |   |             |    |                      |   |                    |   |   |
| December 31, 2008                                                                                                                                                 |   |             |    |                      |   |                    |   |   |
|  Product Type:                                                                                                                                               |   |             |    |                      |   |                    |   |   |
| Bridge loans, variable rate                                                                                                                                       |   | $                | 3,308   |                      | 1.6    | %                       | 4.43   | % |
| Bridge loans, fixed rate                                                                                                                                          |   |             | 8,525   |                      | 4.2    |                    | 7.71   |   |
| Subordinated notes, variable rate                                                                                                                                 |   |             | 65,364  |                      | 32.6   |                    | 5.59   |   |
| Subordinated notes, fixed rate                                                                                                                                    |   |             | 14,191  |                      | 7.1    |                    | 7.74   |   |
| Mezzanine loans, variable rate                                                                                                                                    |   |             | 46,116  |                      | 23.0   |                    | 3.47   |   |
| Mezzanine loans, fixed rate                                                                                                                                       |   |             | 61,822  |                      | 30.8   |                    | 7.10   |   |
| First mortgage, variable rate                                                                                                                                     |   |             | 1,285   |                      | 0.7    |                    | 5.50   |   |
|   2008 Total/Average                                                                                                                                    |   | $                | 200,611 |                      | 100.0  | %                       | 5.93   | % |
|  (1)   Net of valuation allowance.(2)   Represents either the fixed rate or the average yield for variable rate loans as of December 31. |

| (in thousands)     |   | FundedAmount |    | ValuationAllowance |   | CarryingValue |   |
|--------------------|--------|--------------|---------|--------------------|--------|---------------|--------|
|               |   |         |    |               |   |          |   |   |
| December 31, 2009  |   |         |    |               |   |          |   |   |
|               |   |         |    |               |   |          |   |   |   |   |
| Impaired loans     |   | $            | 222,022 |               | $      | (189,497      | )      | $ | 32,525 |   |
| Loans not impaired |   |         | 13,569  |               |   | --            |   |   | 13,569 |   |
|  Total        |   | $            | 235,591 |               | $      | (189,497      | )      | $ | 46,094 |   |
|               |   |         |    |               |   |          |   |   |   |   |
| December 31, 2008  |   |         |    |               |   |          |   |   |   |   |
|               |   |         |    |               |   |          |   |   |   |   |
| Impaired loans     |   | $            | 112,381 |               | $      | (98,244       | )      | $ | 14,137 |   |
| Loans not impaired |   |         | 186,474 |               |   | --            |   |   | 186,474 |   |
|  Total        |   | $            | 298,855 |               | $      | (98,244       | )      | $ | 200,611 |   |

----

|                                                                                                                                                                                                                                                                                                         |   | (in thousands) |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|
|  Balance at January 1, 2008                                                                                                                                                                                                                                                                             |   | $              | --      |   |
| Additions charged to statement of operations (1)                                                                                                                                                                                                                                                             |   |           | 98,244  |   |
| Direct charge offs net of recoveries                                                                                                                                                                                                                                                                         |   |           | --      |   |
| Balance at December 31, 2008                                                                                                                                                                                                                                                                                 |   |           | 98,244  |   |
| Additions charged to statement of operations(1)                                                                                                                                                                                                                                                              |   |           | 136,819 |   |
| Direct charge offs net of recoveries                                                                                                                                                                                                                                                                         |   |           | (45,566 | ) |
| Balance at December 31, 2009                                                                                                                                                                                                                                                                                 |   | $              | 189,497 |   |
|    (1)   Included in “Consolidated Partnerships – Loss on impairment of assets” (see Note 24) or as a reduction of interest income for a loan on non-accrual status. A portion of this amount pertained to properties developed by a related party (see Note 29). |   |

| Year of Maturity |   | Number ofLoansMaturing |   | CurrentCarryingValue(in thousands) |   |
|------------------|--------|------------------------|--------|------------------------------------|--------|
|             |   |                   |   |                               |   |   |
| 2010             |   | 12                     |   | $                                  | 22,339 |   |
| 2011             |   | 3                      |   |                               | 1,687  |   |
| 2012             |   | --                     |   |                               | --     |   |
| 2013             |   | --                     |   |                               | --     |   |
| 2014             |   | 1                      |   |                               | 2,374  |   |
| Thereafter       |   | 4                      |   |                               | 19,694 |   |
| Total            |   | 20                     |   | $                                  | 46,094 |   |

| H. | Land, Buildings and Improvements, net |
|----|---------------------------------------|

| I. | Other Assets |
|----|--------------|

----

|                            |   | Interest Rate atDecember 31,2009 |   | December 31, |
|---------------------------------|--------|----------------------------------|--------|--------------|
| (in thousands)                  |   |                             | 2009   |         | 2008 |
|                            |   |                             |   |         |   |   |   |   |
| Term loan                       |   | 7.75                             | %      | $            | 11,082 |   | $ | 68,884 |
| Revolving credit facility       |   | 6.25                             |   |         | 210,000 |   |   | 228,000 |
| Mortgage banking warehouse line |   | 2.98                             |   |         | 550 |   |   | 32,229 |
| Multifamily ASAP plus facility  |   | 1.20                             |   |         | 28,132 |   |   | 14,869 |
| CMBS term loan                  |   | 20.00                            |   |         | 3,226 |   |   | 13,846 |
| Other                           |   |                             |   |         | -- |   |   | 233 |
|  Total                     |   |                             |   | $            | 252,990 |   | $ | 358,061 |

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

| ·   | the Term Loan, which bears interest at Prime plus 4.50% and was due in full on December 31, 2009, but was extended as described below; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the $220.0 million “termed-out” portion of the Revolving Credit Facility, which was required to be reduced to $190.0 million by June 30, 2010 and was to be due in full by September 30, 2010; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the $25.0 million portion of the Revolving Credit Facility that could be used for tax credit investments and working capital purposes (as defined in the agreement). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | incurring additional unsecured indebtedness without lender approval; |
|--------|--------|----------------------------------------------------------------------|

|   | · | declaring and paying dividends (including distributions to non-controlling interests); |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | certain new business investment without lender approval; and |
|--------|--------|--------------------------------------------------------------|

|   | · | conducting transactions with our affiliates. |
|--------|--------|----------------------------------------------|

|   | · | a minimum level of consolidated net worth; |
|--------|--------|--------------------------------------------|

|   | · | a minimum ratio of consolidated EBITDA to fixed charges; and |
|--------|--------|--------------------------------------------------------------|

----

|   | · | a maximum ratio of funded debt to consolidated EBITDA. |
|--------|--------|--------------------------------------------------------|

| B. | Mortgage Banking Warehouse Line |
|----|---------------------------------|

| C. | Multifamily ASAP Plus Facility |
|----|--------------------------------|

| D. | CMBS Term Loan |
|----|----------------|

| E. | Maturities |
|----|------------|

| F. | Covenants |
|----|-----------|

|                          |   | December 31, |    |
|-------------------------------|--------|--------------|---------|
| (in thousands)                |   | 2009         |    |   | 2008 |   |
|                          |   |         |    |   |   |   |
| Freddie Mac secured financing |   | $            | 585,528 |   |   | $ | 348,989 |   |
| Bond securitizations          |   |         | --      |   |   |   | 62,424 |   |
|  Total                   |   | $            | 585,528 |   |   | $ | 411,413 |   |

----

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

| B. | Bond Securitizations |
|----|----------------------|

| C. | Cost of Funds |
|----|---------------|

|                                       |   | Years Ended December 31, |   |
|--------------------------------------------|--------|--------------------------|--------|
|                                       |   | 2009                     |   |   | 2008 |   |
|                                       |   |                     |   |   |   |   |
| Cost of funds                              |   |                     | 5.94   | % |   |   | 6.13 | % |
| Interest expense (in millions)             |   | $                        | 32.1   |   |   | $ | 31.4 |   |
|  Rate at December 31, excluding fees: |   |                     |   |   |   |   |   |   |
|                                       |   |                     |   |   |   |   |   |   |
| Freddie Mac secured financing              |   |                     | 5.89   | % |   |   | 5.84 | % |
| Bond securitizations                       |   |                     | --     | % |   |   | 4.25 | % |

|                                            |   | December 31, |    |
|-------------------------------------------------|--------|--------------|---------|
| (in thousands)                                  |   | 2009         |    |   | 2008 |   |
|                                            |   |         |    |   |   |   |
| Deferred revenues                               |   | $            | 48,045  |   |   | $ | 69,516 |   |
| Mortgage loan loss sharing reserve              |   |         | 24,219  |   |   |   | 13,116 |   |
| Affordable Housing loss reserve                 |   |         | 140,000 |   |   |   | -- |   |
| Transaction costs payable                       |   |         | 29,414  |   |   |   | 30,414 |   |
| Lease termination costs                         |   |         | 53,649  |   |   |   | 2,523 |   |
| Accounts payable                                |   |         | 3,420   |   |   |   | 13,702 |   |
| Interest rate swaps at fair value (Note 28)     |   |         | 17,964  |   |   |   | 40,525 |   |
| Salaries and benefits payable                   |   |         | 7,892   |   |   |   | 11,781 |   |
| Distributions payable                           |   |         | 1,292   |   |   |   | 2,094 |   |
| Accrued fund organization and offering expenses |   |         | 2,396   |   |   |   | 6,306 |   |
| Accrued interest payable                        |   |         | 4,395   |   |   |   | 4,712 |   |
| Income tax reserves (Note 26)                   |   |         | 1,568   |   |   |   | 2,484 |   |
| Other                                           |   |         | 12,594  |   |   |   | 21,407 |   |
|  Total                                     |   | $            | 346,848 |   |   | $ | 218,580 |   |

----

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

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

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

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

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

| (in thousands)                               |   | 2009   |   |   | 2008   |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                         |   |   |   |   |   |   |
| Balance at January 1                         |   | $      | 2,523  |   |   | $      | 80 |   |
| Additions charged to operations              |   |   | 28,356 |   |   |   | 2,468 |   |
| Accretion of discounts charged to operations |   |   | 2,615  |   |   |   | (25 | ) |
| Accrued costs re-characterized               |   |   | 21,691 |   |   |   | -- |   |
| Reserve adjustments                          |   |   | (241   | )      |   |   | -- |   |
| Payments                                     |   |   | (1,295 | )      |   |   | -- |   |
|  Balance at December 31                 |   | $      | 53,649 |   |   | $      | 2,523 |   |

----

| Preferred Series                    |   | Date ofIssuance |   | MandatoryTender |   | MandatoryRepurchase |   | Number ofShares |   | LiquidationPreferenceper Share |   | Total FaceAmount |   | DividendRate |
|-------------------------------------|--------|-----------------|--------|-----------------|--------|---------------------|--------|-----------------|--------|--------------------------------|--------|------------------|--------|--------------|
|                                |   |            |   |            |   |                |   |            |   | (in thousands)                 |   |             |   |
| Outstanding as of December 31, 2009 |   |            |   |            |   |                |   |            |   |                           |   |             |   |         |   |   |   |
| Series A-3                          |   | June 2002       |   | November 2014   |   | November 2052       |   | 60              |   | $                              | 500    |             | $      | 30,000       |   | 6.800 | % |
| 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 | % |
| Series B-2                          |   | June 2002       |   | November 2014   |   | November 2052       |   | 50              |   |                           | 500    |             |   | 25,000       |   | 7.200 | % |
| Subtotal                            |   |            |   |            |   |                |   |            |   |                           |   |             |   | 128,500      |   |   |   |

| RedeemedDuring 2009 |   |         |   |      |   |      |   |   |   |   |   |   |   |    |
|---------------------|--------|--------------|--------|-----------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|---------|
| Series A            |   | June 1999    |   | July 2009 |   | July 2049 |   | 45     |   |   | 2,000  |   |   | 90,000  |   | 6.625 | % |
| Series A-1          |   | July 2000    |   | July 2009 |   | July 2049 |   | 48     |   |   | 500    |   |   | 24,000  |   | 7.100 | % |
| Series A-2          |   | October 2001 |   | July 2009 |   | July 2049 |   | 62     |   |   | 500    |   |   | 31,000  |   | 6.300 | % |
| Subtotal            |   |         |   |      |   |      |   |   |   |   |   |   |   | 145,000 |   |   |   |
| Total               |   |         |   |      |   |      |   |   |   |   |   |   | $      | 273,500 |   |   |   |

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

|   | · | all classes or series of Convertible CRA Shares (see Note 19); 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,                                 |    |
|------------------------------------------------------|--------|----------------------------------------------|---------|
|                                                 |   |  2009                                   |    |   | 2008 |   |
| (in thousands)                                       |   |  Tax CreditFund andPropertyPartnerships |    |   | CMBS andHigh-YieldDebt FundPartnerships |   |   | Total |   |   | Tax CreditFund andPropertyPartnerships |   |   | CMBS andHigh-YieldDebt FundPartnerships |   |   | Total |   |
|                                                 |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financing arrangements                               |   | $                                            | --      |   |   | $ | 1,116,742 |   |   | $ | 1,116,742 |   |   | $ | -- |   |   | $ | 1,121,475 |   |   | $ | 1,121,475 |   |
| Notes payable                                        |   |                                         | 155,810 |   |   |   | 427,000 |   |   |   | 582,810 |   |   |   | 377,730 |   |   |   | 295,000 |   |   |   | 672,730 |   |
| Repurchase agreements                                |   |                                         | --      |   |   |   | 7,455 |   |   |   | 7,455 |   |   |   | -- |   |   |   | 39,125 |   |   |   | 39,125 |   |
| Due to property partnerships                         |   |                                         | 209,868 |   |   |   | -- |   |   |   | 209,868 |   |   |   | 577,160 |   |   |   | -- |   |   |   | 577,160 |   |
| Other liabilities                                    |   |                                         | 226,390 |   |   |   | 30,480 |   |   |   | 256,870 |   |   |   | 192,508 |   |   |   | 16,156 |   |   |   | 208,664 |   |
|  Total liabilities of consolidated partnerships |   | $                                            | 592,068 |   |   | $ | 1,581,677 |   |   | $ | 2,173,745 |   |   | $ | 1,147,398 |   |   | $ | 1,471,756 |   |   | $ | 2,619,154 |   |

----

|                             |   | December 31,           |   |
|----------------------------------|--------|------------------------|--------|
|                             |   |  2009             |   | 2008 |   |
| (dollars in thousands)           |   |  TotalCommitments |   | OutstandingBalance |   | Fair Value ofCollateral |   | TotalCommitments |   | OutstandingBalance |   | Fair Value ofCollateral |   |
|                             |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| High-Yield Debt Fund Partnership |   | $                      | 7,455  |   | $ | 7,455 |   | $ | 7,231 |   | $ | 228,000 |   | $ | 39,125 |   | $ | 73,926 |   |
|                             |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average interest rate   |   |                   |   |   |   | 1.82 | % |   |   |   |   |   |   |   | 2.9% to 5.0 | % |   |   |   |

----

|                                                |   | December 31,  |    |
|-----------------------------------------------------|--------|---------------|---------|
| (in thousands)                                      |   |  2009    |    | 2008 |   |
| Series                                              |   | CarryingValue |    | Number ofShares |   |  Number ofCommonShares IfConverted |   | CarryingValue |   | Number ofShares |   | Number ofCommonShares IfConverted |   |
|  CRA shares equivalent to common shares:       |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Convertible Redeemable CRA Shares                   |   | $             | 93,170  |   | 5,682 |   | 5,617 |   | $ | 89,273 |   | 5,682 |   | 5,617 |   |
| Redeemable CRA Shares                               |   |          | 4,834   |   | 271 |   | -- |   |   | 4,668 |   | 271 |   | -- |   |
|  Preferred CRA Shares:                         |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Convertible Redeemable CRA Preferred Shares         |   |          | 51,193  |   | 1,060 |   | 1,916 |   |   | 50,291 |   | 1,060 |   | 1,916 |   |
| Redeemable CRA Preferred Shares                     |   |          | 54,055  |   | 1,100 |   | -- |   |   | 52,774 |   | 1,100 |   | -- |   |
|  11.0% Cumulative Convertible Preferred Shares |   |          | 129,228 |   | 11,202 |   | 12,192 |   |   | 129,373 |   | 11,214 |   | 12,205 |   |
|  Total                                         |   | $             | 332,480 |   | 19,315 |   | 19,725 |   | $ | 326,379 |   | 19,327 |   | 19,738 |   |

|   | · | 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. | Special Preferred Voting Shares |
|----|---------------------------------|

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

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

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

|   | · | vote their 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. |
|--------|--------|-------------------------------------------------------------------------------------------|

| B. | Convertible CRA Shares |
|----|------------------------|

| C. | Dividend Reinvestment Plan |
|----|----------------------------|

----

| D. | Repurchases |
|----|-------------|

|                                            |   | Years Ended December 31, |
|-------------------------------------------------|--------|--------------------------|
| (in thousands)                                  |   | 2009                     |   | 2008 |
|                                            |   |                     |   |   |   |   |
| Number of shares                                |   |                     | 369 |   |   | 316 |
| Cost, including commissions and service charges |   | $                        | 68 |   | $ | 971 |

| E. | Accumulated Other Comprehensive 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, 2008                                                                  |   | $                                                         | (1,565   | )      |                                               | $      | (14,098 | )                                            |   | $      | (62,587                                                                               | )      |   | $                                           | (27,654  | ) |   | $ | (105,904 | ) |
| Unrealized gains (losses), net                                                                    |   |                                                      | (130,799 | )      |                                               |   | 255     |                                         |   |   | (95,728                                                                               | )      |   |                                        | --       |   |   |   | (226,272 | ) |
| Net unrealized losses of Consolidated Partnerships in excess of non-controlling interest balances |   |                                                      | --       |   |                                               |   | --      |                                         |   |   | --                                                                                    |   |   |                                        | (867,057 | ) |   |   | (867,057 | ) |
| Reclassification to net loss                                                                      |   |                                                      | 37,043   |   |                                               |   | 2,221   |                                         |   |   | 15,847                                                                                |   |   |                                        | --       |   |   |   | 55,111 |   |
| Balance at December 31, 2008                                                                      |   |                                                      | (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 | ) |

----

|                                                                                                                             |   | December 31, |      |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|
| (in thousands)                                                                                                                   |   | 2009         |      |   | 2008 |   |
|  Limited partners interests in consolidated partnerships                                                                    |   | $            | 3,341,081 |   |   | $ | 3,876,581 |   |
| 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 2009 and 13,131 outstanding in 2008 |   |         | (89,375   | ) |   |   | 64,318 |   |
| Convertible Special Common Interests (“SCIs”) of a subsidiary; 258 outstanding in 2009, and 268 outstanding in 2008  |   |         | 364       |   |   |   | 2,611 |   |
| Other                                                                                                                            |   |         | 5,715     |   |   |   | 8,037 |   |
|  Total                                                                                                                      |   | $            | 3,361,785 |   |   | $ | 4,055,547 |   |

|                                                                   |   | Years Ended December 31, |       |
|------------------------------------------------------------------------|--------|--------------------------|------------|
| (in thousands)                                                         |   | 2009                     |       |   | 2008 |   |
|  Limited partners interests in consolidated partnerships          |   | $                        | (2,580,103 | ) |   | $ | (659,228 | ) |
| Preferred shares of a subsidiary (not subject to mandatory repurchase) |   |                     | 6,225      |   |   |   | 6,225 |   |
| SCUs                                                                   |   |                     | (151,547   | ) |   |   | (92,685 | ) |
| SCIs                                                                   |   |                     | (2,216     | ) |   |   | (1,269 | ) |
| Other                                                                  |   |                     | (1,631     | ) |   |   | (363 | ) |
|  Total                                                            |   | $                        | (2,729,272 | ) |   | $ | (747,320 | ) |

| 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). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                       |   | Years Ended December 31, |    |
|------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
| (in thousands)                                                                                             |   | 2009                     |    |   | 2008 |   |
|                                                                                                       |   |                     |    |   |   |   |
| Salaries and benefits                                                                                      |   | $                        | 66,234  |   |   | $ | 87,322 |   |
| Other:                                                                                                     |   |                     |    |   |   |   |   |   |
| Affordable Housing loss reserve (see Note 31)                                                              |   |                     | 140,000 |   |   |   | -- |   |
| Mortgage banking loan loss reserve (see Note 31)                                                           |   |                     | 11,163  |   |   |   | 1,483 |   |
| Lease termination costs(1)                                                                                 |   |                     | 30,755  |   |   |   | -- |   |
| Bad debt reserves                                                                                          |   |                     | 15,812  |   |   |   | 7,237 |   |
| Professional fees                                                                                          |   |                     | 11,014  |   |   |   | 16,259 |   |
| Tax Credit Fund origination and property acquisition                                                       |   |                     | 768     |   |   |   | 4,480 |   |
| Rent expense                                                                                               |   |                     | 13,855  |   |   |   | 17,816 |   |
| Miscellaneous                                                                                              |   |                     | 23,482  |   |   |   | 32,645 |   |
|  Total                                                                                                |   | $                        | 313,083 |   |   | $ | 167,242 |   |
|    (1)  Includes accretion of present value discount and reserve adjustments (see Note 16). |   |

|                                           |   | Years Ended December 31, |    |
|------------------------------------------------|--------|--------------------------|---------|
| (in thousands)                                 |   | 2009                     |    |   | 2008 |   |
|                                           |   |                     |    |   |   |   |
| Available-for-sale investments:                |   |                     |    |   |   |   |
| Series B Freddie Mac certificates              |   | $                        | 44,830  |   |   | $ | 7,968 |   |
| Retained CMBS certificates                     |   |                     | 37,596  |   |   |   | 10,736 |   |
| Mortgage revenue bonds                         |   |                     | 9,114   |   |   |   | 10,928 |   |
| CMBS                                           |   |                     | 15,546  |   |   |   | -- |   |
| Syndicated corporate debt                      |   |                     | 65      |   |   |   | 2,848 |   |
| Furniture, fixtures and leasehold improvements |   |                     | --      |   |   |   | 15,892 |   |
| Other investments                              |   |                     | 2,210   |   |   |   | 563 |   |
| Stabilization escrow                           |   |                     | 39,987  |   |   |   | -- |   |
|  Total                                    |   | $                        | 149,348 |   |   | $ | 48,935 |   |

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

----

| B. | Retained CMBS Certificates and CMBS |
|----|-------------------------------------|

| C. | Mortgage Revenue Bonds |
|----|------------------------|

| D. | Syndicated Corporate Debt |
|----|---------------------------|

| E. | Furniture, Fixtures and Leasehold Improvements |
|----|------------------------------------------------|

----

|                                                    |   | 2009                                         |    |   | 2008                                     |   |
|---------------------------------------------------------|--------|----------------------------------------------|---------|--------|------------------------------------------|--------|
| (in thousands)                                          |   |  Tax CreditFund andPropertyPartnerships |    |   | CMBS andHigh-Yield Debt FundPartnerships |   |   | Total |   |   | Tax CreditFund andPropertyPartnerships |   |   | CMBS FundHigh-Yield Debt FundPartnerships |   |   | Total |   |
|                                                    |   |                                         |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                         |   | $                                            | 3,372   |   |                                     | $      | 198,946 |   |   | $ | 202,318 |   |   | $ | 10,201 |   |   | $ | 252,796 |   |   | $ | 262,997 |   |
| Rental income                                           |   |                                         | 74,697  |   |                                     |   | 15,008 |   |   |   | 89,705 |   |   |   | 75,106 |   |   |   | -- |   |   |   | 75,106 |   |
| Other                                                   |   |                                         | 833     |   |                                     |   | 2,110 |   |   |   | 2,943 |   |   |   | 1,431 |   |   |   | 425 |   |   |   | 1,856 |   |
|  Total revenues                                    |   | $                                            | 78,902  |   |                                     | $      | 216,064 |   |   | $ | 294,966 |   |   | $ | 86,738 |   |   | $ | 253,221 |   |   | $ | 339,959 |   |
|  Interest expense                                  |   | $                                            | 9,213   |   |                                     | $      | 140,052 |   |   | $ | 149,265 |   |   | $ | 15,300 |   |   | $ | 149,722 |   |   | $ | 165,022 |   |
|  Loss on impairment of assets (net)                |   | $                                            | 30,151  |   |                                     | $      | 1,929,699 |   |   | $ | 1,959,850 |   |   | $ | -- |   |   | $ | 317,264 |   |   | $ | 317,264 |   |
|  Asset management fees                             |   |                                         | 30,454  |   |                                     |   | -- |   |   |   | 30,454 |   |   |   | 28,824 |   |   |   | -- |   |   |   | 28,824 |   |
| Property operating expenses                             |   |                                         | 30,869  |   |                                     |   | -- |   |   |   | 30,869 |   |   |   | 31,473 |   |   |   | -- |   |   |   | 31,473 |   |
| General and administrative expenses                     |   |                                         | 22,493  |   |                                     |   | 18,220 |   |   |   | 40,713 |   |   |   | 25,122 |   |   |   | 4,733 |   |   |   | 29,855 |   |
| Depreciation and amortization                           |   |                                         | 50,045  |   |                                     |   | 7,852 |   |   |   | 57,897 |   |   |   | 33,134 |   |   |   | 5,722 |   |   |   | 38,856 |   |
| Other expenses                                          |   |                                         | 5,721   |   |                                     |   | 1,620 |   |   |   | 7,341 |   |   |   | 9,832 |   |   |   | -- |   |   |   | 9,832 |   |
| Subtotal                                                |   |                                         | 139,582 |   |                                     |   | 27,692 |   |   |   | 167,274 |   |   |   | 128,385 |   |   |   | 10,455 |   |   |   | 138,840 |   |
|  Total expenses                                    |   | $                                            | 178,946 |   |                                     | $      | 2,097,443 |   |   | $ | 2,276,389 |   |   | $ | 143,685 |   |   | $ | 477,441 |   |   | $ | 621,126 |   |
|  Other losses from consolidated partnerships (net) |   | $                                            | 593,347 |   |                                     | $      | 5,420 |   |   | $ | 598,767 |   |   | $ | 279,062 |   |   | $ | 4,705 |   |   | $ | 283,767 |   |

|                                                                           |   | Years Ended December 31, |      |
|--------------------------------------------------------------------------------|--------|--------------------------|-----------|
| (in thousands)                                                                 |   | 2009                     |      |   | 2008 |   |
|  Available-for-sale investments:                                          |   |                     |      |   |   |   |
| Retained CMBS certificates                                                     |   | $                        | 86,471    |   |   | $ | 27,016 |   |
| CMBS                                                                           |   |                     | 1,462,801 |   |   |   | 95,975 |   |
| CDO debt and equity                                                            |   |                     | 154,699   |   |   |   | 101,027 |   |
| Mortgage loans held for investment                                             |   |                     | 136,819   |   |   |   | 93,246 |   |
| Retained CMBS certificates - held-to-maturity                                  |   |                     | 37,198    |   |   |   | -- |   |
| Land, buildings and improvements                                               |   |                     | 51,711    |   |   |   | -- |   |
| Deferred costs related to impaired tax credit investments(1)                   |   |                     | 30,151    |   |   |   | -- |   |
|  Total                                                                    |   | $                        | 1,959,850 |   |   | $ | 317,264 |   |
|    (1)  Related to Other Losses from Consolidated Partnerships. |   |

----

| Other Losses from Consolidated Partnerships, Net |
|--------------------------------------------------|

|   | · | 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. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

----

|                             |   | Years Ended December 31, |   |
|----------------------------------|--------|--------------------------|--------|
|                             |   |  2009               |   | 2008 |   |
|                             |   | Options                  |   |  WeightedAverageExercisePrice |   | Options |   | WeightedAverageExercisePrice |   |
|                             |   |                     |   |   |   |   |   |   |   |   |   |
| Outstanding at beginning of year |   | 2,386,888                |   | $ | 20.51 |   | 2,879,180 |   | $ | 20.17 |   |
| Granted                          |   | --                       |   |   | -- |   | -- |   |   | -- |   |
| Forfeited/cancelled              |   | (988,893                 | )      |   | 20.94 |   | (492,292 | ) |   | 18.52 |   |
| Exercised                        |   | --                       |   |   | -- |   | -- |   |   | -- |   |
| Outstanding at end of year       |   | 1,397,995                |   | $ | 20.21 |   | 2,386,888 |   | $ | 20.51 |   |

|                                               |   | As of December 31, 2009 |   |
|----------------------------------------------------|--------|-------------------------|--------|
|                                               |   | Options                 |   |  Weighted AverageExercisePrice |   |  Weighted AverageRemaining Contractual Term(in years) |   | Aggregate Intrinsic Value(in thousands) |   |
|  Vested and expected to vest at end of period |   | 1,397,995               |   | $ | 20.21 |   | 4.47 |   | $ | -- |   |
| Exercisable at end of year                         |   | 1,397,995               |   | $ | 20.21 |   | 4.47 |   | $ | -- |   |

----

| Exercise Price |          | NumberOutstanding |      | WeightedAverageRemainingContractualLife(in Years) |   | NumberExercisable |      |
|----------------|---------------|-------------------|-----------|---------------------------------------------------|--------|-------------------|-----------|
|           |          |              |      |                                              |   |              |      |   |
| $              | 11.56         |              | 10,000    |                                              | 0.4    |              | 10,000    |   |
| $              | 17.78         |              | 800,000   |                                              | 3.9    |              | 800,000   |   |
| $              | 22.03         |              | 192,245   |                                              | 6.0    |              | 192,245   |   |
| $              | 24.44         |              | 395,750   |                                              | 5.0    |              | 395,750   |   |
|           |     |              | 1,397,995 |                                              | 4.5    |              | 1,397,995 |   |

|                            |   | Non-vested shares |       |   | WeightedAverageGrant DateFair Value |   |
|---------------------------------|--------|-------------------|------------|--------|-------------------------------------|--------|
|                            |   |              |       |   |                                |   |
| Non-vested at January 1, 2008   |   |              | 2,076,489  |   |                                | $      | 18.61 |   |
| Granted                         |   |              | 2,332,534  |   |                                |   | 3.40 |   |
| Vested                          |   |              | (1,230,124 | )      |                                |   | 14.42 |   |
| Forfeited                       |   |              | (559,193   | )      |                                |   | 12.91 |   |
| Non-vested at December 31, 2008 |   |              | 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 |   |

----

|                                   |   | Years Ended December 31, |   |
|----------------------------------------|--------|--------------------------|--------|
| (in thousands)                         |   | 2009                     |   |   | 2008 |   |
|  Outperformance program           |   | $                        | 189    |   |   | $ | 189 |   |
| Share options                          |   |                     | 21     |   |   |   | 322 |   |
| Non-vested shares (net of forfeitures) |   |                     | 5,785  |   |   |   | 12,973 |   |
| Trustee grants                         |   |                     | --     |   |   |   | 291 |   |
|  Net                              |   | $                        | 5,995  |   |   | $ | 13,775 |   |

|                                 |   | Years Ended December 31, |       |
|--------------------------------------|--------|--------------------------|------------|
| (in thousands)                       |   | 2009                     |       |   | 2008 |   |
|                                 |   |                     |       |   |   |   |
| Not subject to tax                   |   | $                        | (2,840,027 | ) |   | $ | (791,789 | ) |
| Subject to tax                       |   |                     | (347,933   | ) |   |   | (183,866 | ) |
|  Total loss before income taxes |   | $                        | (3,187,960 | ) |   | $ | (975,655 | ) |

----

|                                |   | Years Ended December 31, |     |
|-------------------------------------|--------|--------------------------|----------|
| (in thousands)                      |   | 2009                     |     |   | 2008 |   |
|                                |   |                     |     |   |   |   |
| Current:                            |   |                     |     |   |   |   |
| Federal                             |   | $                        | (863     | ) |   | $ | 1,059 |   |
| State and local                     |   |                     | (2,491   | ) |   |   | 2,179 |   |
| Total current                       |   |                     | (3,354   | ) |   |   | 3,238 |   |
|  Deferred:                     |   |                     |     |   |   |   |   |   |
| Federal                             |   |                     | (76,949  | ) |   |   | (72,253 | ) |
| State and local                     |   |                     | (42,118  | ) |   |   | (21,278 | ) |
| Total deferred                      |   |                     | (119,067 | ) |   |   | (93,531 | ) |
|  Valuation allowance           |   |                     | 119,114  |   |   |   | 94,116 |   |
|  Total tax (benefit) provision |   | $                        | (3,307   | ) |   | $ | 3,823 |   |

|                                          |   | Years Ended December 31, |   |
|-----------------------------------------------|--------|--------------------------|--------|
|                                          |   | 2009                     |   |   | 2008 |   |
|                                          |   |                     |   |   |   |   |
| Statutory tax rate                            |   |                     | 35.0   | % |   |   | 35.0 | % |
| Valuation allowance                           |   |                     | (3.4   | ) |   |   | (9.6 | ) |
| State and local taxes, net of federal benefit |   |                     | 0.9    |   |   |   | 1.3 |   |
| Partnership income not subject to tax         |   |                     | (33.2  | ) |   |   | (28.6 | ) |
| Goodwill write-off                            |   |                     | (0.5   | ) |   |   | (2.3 | ) |
| SCUs                                          |   |                     | 1.6    |   |   |   | 3.4 |   |
| Share-based compensation                      |   |                     | (0.1   | ) |   |   | (0.3 | ) |
| Other                                         |   |                     | (0.2   | ) |   |   | 0.7 |   |
| Effective tax rate                            |   |                     | 0.1    | % |   |   | (0.4 | )% |

----

|                               |   | December 31, |     |
|------------------------------------|--------|--------------|----------|
| (in thousands)                     |   | 2009         |     |   | 2008 |   |
|  Deferred tax assets:         |   |         |     |   |   |   |
| Deferred revenue                   |   | $            | 19,429   |   |   | $ | 27,484 |   |
| Share-based compensation           |   |         | 5,962    |   |   |   | 15,101 |   |
| Goodwill                           |   |         | 8,684    |   |   |   | 9,291 |   |
| Intangible assets                  |   |         | 23,916   |   |   |   | 21,074 |   |
| Derivatives                        |   |         | 7,412    |   |   |   | 1,896 |   |
| Investments                        |   |         | 23,004   |   |   |   | -- |   |
| Purchased servicing rights         |   |         | 4,276    |   |   |   | 2,374 |   |
| Bad debt reserve                   |   |         | 14,363   |   |   |   | 7,587 |   |
| Affordable Housing loss reserve    |   |         | 62,135   |   |   |   | -- |   |
| Partnerships and depreciation      |   |         | 12,375   |   |   |   | 12,084 |   |
| Lease termination reserve          |   |         | 23,911   |   |   |   | 1,100 |   |
| Net operating losses               |   |         | 57,101   |   |   |   | 54,157 |   |
| Capital losses                     |   |         | 6,504    |   |   |   | -- |   |
| Tax credits                        |   |         | 2,320    |   |   |   | 2,394 |   |
| Other                              |   |         | 347      |   |   |   | 864 |   |
| Total deferred tax assets          |   |         | 271,739  |   |   |   | 155,406 |   |
|  Deferred tax liabilities:    |   |         |     |   |   |   |   |   |
|                               |   |         |     |   |   |   |   |   |
| Deferred costs                     |   |         | (911     | ) |   |   | (465 | ) |
| Originated mortgage service rights |   |         | (9,302   | ) |   |   | (11,369 | ) |
| Total deferred tax liabilities     |   |         | (10,213  | ) |   |   | (11,834 | ) |
|  Valuation allowance          |   |         | (261,526 | ) |   |   | (143,572 | ) |
|  Net deferred tax asset       |   | $            | --       |   |   | $ | -- |   |

|                                             |   | (in thousands) |    |
|--------------------------------------------------|--------|----------------|---------|
|  Net operating losses                       |   | $              | 140,417 |   |
| Capital losses                                   |   | $              | 14,592  |   |
| Low income housing credits                       |   | $              | 1,216   |   |
| Minimum tax credit                               |   | $              | 907     |   |
| New York City Unincorporated Business Tax credit |   | $              | 197     |   |
| Other                                            |   | $              | 776     |   |

----

|                            |   | December 31, |   |
|---------------------------------|--------|--------------|--------|
| (in thousands)                  |   | 2009         |   |   | 2008 |   |
|                            |   |         |   |   |   |   |
| Gross unrecognized tax benefits |   | $            | 1,489  |   |   | $ | 2,443 |   |
| Accrued interest and penalties  |   |         | 79     |   |   |   | 41 |   |
|  Total                     |   | $            | 1,568  |   |   | $ | 2,484 |   |

|                                        |   | (in thousands) |   |
|---------------------------------------------|--------|----------------|--------|
|  Balance at January 1, 2008            |   | $              | 3,078  |   |
| Additions for tax positions of prior years  |   |           | 102    |   |
| Reductions for tax positions of prior years |   |           | (696   | ) |
|  Balance at December 31, 2008          |   |           | 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  |   |

----

|                                                                                                                                                       |   | Years Ended December 31, |     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|----------|
| (in thousands, except per share amounts)                                                                                                                   |   | 2009                     |     |   | 2008 |   |
|                                                                                                                                                       |   |                     |     |   |   |   |
| Numerator:                                                                                                                                                 |   |                     |     |   |   |   |
| Net loss attributable to Centerline Holding Company shareholders                                                                                           |   | $                        | (455,381 | ) |   | $ | (232,158 | ) |
| Preferred dividends(1)                                                                                                                                     |   |                     | (20,035  | ) |   |   | (19,085 | ) |
| Dividends for participating securities                                                                                                                     |   |                     | --       |   |   |   | (1,954 | ) |
| Undistributed loss attributable to Centerline Holding Company shareholders                                                                                 |   |                     | (475,416 | ) |   |   | (253,197 | ) |
| Effect of redeemable share conversions                                                                                                                     |   |                     | (6,246   | ) |   |   | (16,912 | ) |
| Net loss attributable to Centerline Holding Company shareholders used for EPS calculations                                                                 |   | $                        | (481,662 | ) |   | $ | (270,109 | ) |
|  Denominator:                                                                                                                                         |   |                     |     |   |   |   |   |   |
| Weighted average shares outstanding                                                                                                                        |   |                     |     |   |   |   |   |   |
| Basic                                                                                                                                                      |   |                     | 53,963   |   |   |   | 51,997 |   |
| Effect of dilutive shares(2)                                                                                                                               |   |                     | --       |   |   |   | -- |   |
| Diluted                                                                                                                                                    |   |                     | 53,963   |   |   |   | 51,997 |   |
|  Calculation of EPS:                                                                                                                                  |   |                     |     |   |   |   |   |   |
|                                                                                                                                                       |   |                     |     |   |   |   |   |   |
| Net loss attributable to Centerline Holding Company shareholders as computed above                                                                         |   | $                        | (481,662 | ) |   | $ | (270,109 | ) |
| Weighted average shares outstanding – basic and diluted                                                                                              |   |                     | 53,963   |   |   |   | 51,997 |   |
| Net loss attributable to Centerline Holding Company shareholders per share – basic and diluted                                                       |   | $                        | (8.93    | ) |   | $ | (5.19 | ) |
|    (1)  Includes dividends in arrears.(2)  Common share equivalents excluded for the 2009 and 2008 periods were less than 0.1 million. |   |

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

----

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

| ·   | Developers of Properties:  We were party to 19 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, 2009, these swaps had an aggregate notional amount of $179.4 million, a weighted average interest rate of 5.92% and a weighted average remaining term of 13.0 years.  We terminated six similar swaps during 2009. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our Credit Risk Products 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.  We entered into this swap agreement as part of our business plan to expand our Credit Risk Products group.  At December 31, 2009, the swap had a notional amount of $9.5 million, with an interest rate of 0.69% and remaining term of 13.4 years.  Similar swap agreements were terminated in 2008. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|                   |   | December 31, |   |
|------------------------|--------|--------------|--------|
| (in thousands)         |   | 2009         |   | 2008 |   |
|                   |   |         |   |   |   |   |   |
| Net liability position |   | $            | 17,964 |   | $ | 40,525 |   |
| Net asset position     |   | $            | 612    |   | $ | 1,307 |   |

----

|                                                                                                                                                                                             |   | Years Ended December 31, |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
| (in thousands)                                                                                                                                                                                   |   | 2009                     |    |   | 2008 |   |
|  Designated as hedges:                                                                                                                                                                      |   |                     |    |   |   |   |
| Interest payments                                                                                                                                                                                |   | $                        | --      |   |   | $ | 14,313 |   |
| Interest receipts                                                                                                                                                                                |   |                     | --      |   |   |   | (8,273 | ) |
| Ineffectiveness                                                                                                                                                                                  |   |                     | --      |   |   |   | 1,877 |   |
| Subtotal                                                                                                                                                                                         |   |                     | --      |   |   |   | 7,917 |   |
|  Not designated as hedges:                                                                                                                                                                  |   |                     |    |   |   |   |   |   |
|  Interest payments                                                                                                                                                                          |   |                     | 23,469  |   |   |   | 21,457 |   |
| Interest receipts                                                                                                                                                                                |   |                     | (8,160  | ) |   |   | (12,266 | ) |
| Change in fair value(1)                                                                                                                                                                          |   |                     | (21,866 | ) |   |   | (2,369 | ) |
| Amortization of  unrealized losses reclassified from accumulated other comprehensive income                                                                                            |   |                     | 2,603   |   |   |   | -- |   |
| Subtotal                                                                                                                                                                                         |   |                     | (3,954  | ) |   |   | 6,822 |   |
|  Included in interest expense                                                                                                                                                               |   | $                        | (3,954  | ) |   | $ | 14,739 |   |
|    (1)   2009 includes $10.6 million related to terminated swaps. 2008 includes $21.0 million related to terminated swaps that were charged to a CMBS Fund Partnership. |   |

|                                         |   | Years Ended December 31, |   |
|----------------------------------------------|--------|--------------------------|--------|
| (in thousands)                               |   | 2009                     |   |   | 2008 |   |
|  Included in other comprehensive income |   | $                        | --     |   |   | $ | 2,502 |   |

|                                                       |   | December 31, |   |
|------------------------------------------------------------|--------|--------------|--------|
| (in thousands)                                             |   | 2009         |   |   | 2008 |   |
|                                                       |   |         |   |   |   |   |
| Terminated cash flow hedges                                |   | $            | --     |   |   | $ | (9,019 | ) |
| Term Loan and Revolving Credit Facility interest rate swap |   |         | --     |   |   |   | (2,603 | ) |
|                                                  |   | $            | --     |   |   | $ | (11,622 | ) |

----

|                                                                                                 |   | Years Ended December 31, |   |
|------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
| (in thousands)                                                                                       |   | 2009                     |   | 2008 |   |
|  Terminated swap contracts:                                                                     |   |                     |   |   |   |   |   |
|  Loss reclassified from accumulated other comprehensive income and included in interest expense |   | $                        | 13,774 |   | $ | 7,301 |   |

|                        |   | December 31, |   |
|-----------------------------|--------|--------------|--------|
| (in thousands)              |   | 2009         |   | 2008 |   |
|                        |   |         |   |   |   |   |   |
| Terminated cash flow hedges |   | $            | 1,796  |   | $ | (11,978 | ) |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | December 31, |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
| (in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2009         |    |   | 2008 |   |
|  Loan to AMAC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $            | 79,877  |   |   | $ | 79,877 |   |
| Investment in AMAC common and preferred shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         | 12,195  |   |   |   | 12,195 |   |
| Interest receivable on loan to AMAC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |         | 3,872   |   |   |   | 3,872 |   |
| Fees receivable from AMAC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | 1,290   |   |   |   | 1,290 |   |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         | 97,234  |   |   |   | 97,234 |   |
| Cumulative equity losses and reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         | (92,934 | ) |   |   | (87,634 | ) |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         | 4,300   |   |   |   | 9,600 |   |
| Co-investment in consolidated CMBS and High-Yield Debt Fund Partnerships(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         | (77,400 | ) |   |   | (55,953 | ) |
| Co-investment in CUC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |         | 2,306   |   |   |   | 3,406 |   |
| Fund advances related to property partnerships, net(2) (Note 31)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |         | 47,554  |   |   |   | 49,201 |   |
| Other receivables from partnerships, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         | 13,453  |   |   |   | 59,431 |   |
| Fees receivable and other, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         | 8,087   |   |   |   | 7,977 |   |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         | (1,700  | ) |   |   | 73,662 |   |
| Less: Eliminations(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         | 11,500  |   |   |   | (54,440 | ) |
|  Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $            | 9,800   |   |   | $ | 19,222 |   |
|  (1)    Represents the carrying amount of these co-investments, including our share of accumulated other comprehensive loss.(2)    Net of reserves of $24.0 million at December 31, 2009, and $10.5 million at December 31, 2008.(3)   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 item in the Consolidated Statements of Operations |   | Years Ended December 31, |   |
|--------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|--------------------------|--------|
| 2009                                                                           |   | 2008                                                                         |   |
|                                                                           |   |                                                                         |   |                     |   |   |   |   |   |
| AMAC asset management and incentive management fees and expense reimbursements |   | Fee Income, Other Revenues                                                   |   | $                        | --     |   | $ | 1,201 |   |
| AMAC credit facility interest income                                           |   | Interest Income                                                              |   | $                        | --     |   | $ | 3,988 |   |
| AMAC servicing fee income                                                      |   | Fee Income                                                                   |   | $                        | 309    |   | $ | 358 |   |
| Equity in loss of AMAC(1)                                                      |   | Equity and Other (Loss) Income                                               |   | $                        | (5,300 | ) | $ | (78,056 | ) |
| Equity in loss of CUC                                                          |   | Equity and Other (Loss) Income                                               |   | $                        | (980   | ) | $ | (703 | ) |
| Expense for property management services provided by TRCLP                     |   | Consolidated Partnerships - Other Expenses                                   |   | $                        | (5,631 | ) | $ | (5,156 | ) |
| Net interest rate swap payments to property developers controlled by TRCLP     |   | Interest Expense                                                             |   | $                        | (2,441 | ) | $ | (1,307 | ) |
|  (1)   Includes write-down of loan and investments.             |   |

----

|                     |   | Year ended December 31, |   |
|--------------------------|--------|-------------------------|--------|
| (in thousands)           |   | 2009                    |   |   | 2008 |   |
|  Operating results: |   |                    |   |   |   |   |
| Revenues                 |   | $                       | 25,360 |   |   | $ | 37,062 |   |
| Operating loss           |   | $                       | 14,755 |   |   | $ | 121,543 |   |
| Net loss                 |   | $                       | 14,757 |   |   | $ | 123,506 |   |

|                        |   | December 31, |    |
|-----------------------------|--------|--------------|---------|
| (in thousands)              |   | 2009         |    |   | 2008 |   |
|  Balance Sheet:        |   |         |    |   |   |   |
| Assets                      |   | $            | 374,680 |   |   | $ | 386,138 |   |
| Liabilities                 |   | $            | 503,681 |   |   | $ | 522,419 |   |
| Shareholders’ deficit |   | $            | 129,001 |   |   | $ | 136,281 |   |

----

| ·   | CRESS recorded aggregate impairment charges of $3.3 million in 2009, of which our proportionate share is $0.2 million and of $63.9 million in 2008, of which our proportionate share is $3.2 million. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | CUC recorded an impairment charge of $18.0 million in 2008 of which our proportionate share is $0.5 million. |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | AMAC recorded aggregate impairment charges of $50.7 million in 2008, which is one of the factors in determining the estimated recovery amount for the revolving credit facility we had extended (see above). |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                            |   | Years Ended December 31, |     |
|---------------------------------------------------------------------------------|--------|--------------------------|----------|
| (in thousands)                                                                  |   | 2009                     |     |   | 2008 |   |
|  Revenues                                                                  |   |                     |     |   |   |   |
| Affordable Housing                                                              |   | $                        | 124,970  |   |   | $ | 166,037 |   |
| Commercial Real Estate                                                          |   |                     | 68,538   |   |   |   | 74,495 |   |
| Portfolio Management                                                            |   |                     | 40,218   |   |   |   | 41,464 |   |
| Credit Risk Products                                                            |   |                     | 7,062    |   |   |   | 8,508 |   |
| Corporate                                                                       |   |                     | 1,626    |   |   |   | 13,719 |   |
| Consolidated Partnerships                                                       |   |                     | 294,966  |   |   |   | 339,959 |   |
| Eliminations                                                                    |   |                     | (90,572  | ) |   |   | (120,979 | ) |
| Consolidated Revenues                                                           |   | $                        | 446,808  |   |   | $ | 523,203 |   |
|  DepreciationandAmortization                                               |   |                     |     |   |   |   |   |   |
| Affordable Housing                                                              |   | $                        | 7,464    |   |   | $ | 2,451 |   |
| Commercial Real Estate                                                          |   |                     | 10,396   |   |   |   | 12,407 |   |
| Portfolio Management                                                            |   |                     | 2,538    |   |   |   | 4,311 |   |
| Credit Risk Products                                                            |   |                     | 43       |   |   |   | 1,876 |   |
| Corporate                                                                       |   |                     | 18,567   |   |   |   | 24,985 |   |
| Consolidated Depreciation and Amortization                                      |   | $                        | 39,008   |   |   | $ | 46,030 |   |
|  Depreciation and Amortization of Consolidated Partnerships                |   | $                        | 57,897   |   |   | $ | 38,856 |   |
|  Net Income (Loss) attributable to Centerline Holding Company shareholders |   |                     |     |   |   |   |   |   |
| Affordable Housing                                                              |   | $                        | (195,151 | ) |   | $ | 8,070 |   |
| Commercial Real Estate                                                          |   |                     | (153,283 | ) |   |   | (51,686 | ) |
| Portfolio Management                                                            |   |                     | 16,893   |   |   |   | 8,361 |   |
| Credit Risk Products                                                            |   |                     | (16,125  | ) |   |   | (8,192 | ) |
| Corporate                                                                       |   |                     | (107,715 | ) |   |   | (187,007 | ) |
| Consolidated Partnerships                                                       |   |                     | (74,489  | ) |   |   | 7,823 |   |
| Eliminations                                                                    |   |                     | 74,489   |   |   |   | (9,527 | ) |
| Total Net Loss attributable to Centerline Holding Company shareholders          |   | $                        | (455,381 | ) |   | $ | (232,158 | ) |

----

|                                  |   | December 31, |      |
|---------------------------------------|--------|--------------|-----------|
| (in thousands)                        |   | 2009         |      |   | 2008 |   |
|  Identifiable Assets             |   |         |      |   |   |   |
| Affordable Housing                    |   | $            | 996,551   |   |   | $ | 1,184,116 |   |
| Commercial Real Estate                |   |         | 155,787   |   |   |   | 228,746 |   |
| Portfolio Management                  |   |         | 8,557     |   |   |   | 6,312 |   |
| Credit Risk Products                  |   |         | 78,145    |   |   |   | 84,584 |   |
| Corporate                             |   |         | 170,779   |   |   |   | 387,970 |   |
| Consolidated Partnerships             |   |         | 5,056,784 |   |   |   | 6,080,481 |   |
| Eliminations of intersegment balances |   |         | (463,077  | ) |   |   | (577,086 | ) |
| Consolidated Assets                   |   | $            | 6,003,526 |   |   | $ | 7,395,123 |   |

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

| ·   | through the construction and lease-up phases of the properties; |
|--------------------|-----------------------------------------------------------------|

| ·   | for the period from the completion of the construction and lease-up phases through the operating phase of the properties; or |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | covering both periods. |
|--------------------|------------------------|

----

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

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

----

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

----

| ·   | On January 18, 2008, Kramer v. Ross, et al., Index. No. 100861-08, was filed against us and our board of trustees, in New York County Supreme Court; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On January 25, 2008, Carfagno v. Schnitzer, et al., No. 08 CV 00912, was filed against us and our board of trustees in the United States District Court for the Southern District of New York; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On January 30, 2008, Ciszerk v. Ross, et al., CA No. 3511, was filed against us, our board of trustees and The Related Companies, L.P. in the Delaware Court of Chancery; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On February 22, 2008, Kanter v. Ross, et al., 08 Civ. 01827, was filed against us, our board of trustees and The Related Companies, L.P. in the United States District Court for the Southern District of New York; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On February 27, 2008, Broy v. Centerline Holding Company et al., No. 08 CV 01971, was filed against us and certain of our officers and trustees in the United States District Court for the Southern District of New York; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On April 10, 2008, Kastner v. Schnitzer et al, Index No. 601043-08, was filed against us and our board of trustees, in New York Supreme Court; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On April 10, 2008, Kostecka v. Schnitzer et al, Index No. 601044-08, was filed against us and our board of trustees, in New York Supreme Court. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

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

----

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

| (in thousands)           |   | Minimumleasepayments |   |   | Subleaseincome |   |   | Netminimumleasepayments |   |
|--------------------------|--------|----------------------|--------|--------|----------------|--------|--------|-------------------------|--------|
|                     |   |                 |   |   |           |   |   |                    |   |
| Year Ending December 31, |   |                 |   |   |           |   |   |                    |   |
| 2010                     |   | $                    | 8,873  |   |           | $      | (1,423 | )                       |   | $ | 7,450 |   |
| 2011                     |   |                 | 8,175  |   |           |   | (1,423 | )                       |   |   | 6,752 |   |
| 2012                     |   |                 | 7,353  |   |           |   | (1,431 | )                       |   |   | 5,922 |   |
| 2013                     |   |                 | 6,993  |   |           |   | (423   | )                       |   |   | 6,570 |   |
| 2014                     |   |                 | 6,931  |   |           |   | (122   | )                       |   |   | 6,809 |   |
| Thereafter               |   |                 | 22,258 |   |           |   | (57    | )                       |   |   | 22,201 |   |
|  Total              |   | $                    | 60,583 |   |           | $      | (4,879 | )                       |   | $ | 55,704 |   |

| ·   | Our co-investment, management interests in and loans receivable from the CMBS Fund and High-Yield Debt Fund Partnerships (see Note 29); |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our CMBS and retained CMBS certificate investments (see Note 8); |
|--------------------|------------------------------------------------------------------|

----

| ·   | Our loan to AMAC and our co-investment and management interests in CUC (see Note 29); |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | The stock of our CSI subsidiary; |
|--------------------|----------------------------------|

| ·   | Our interests pursuant to collateral management agreements with respect to two CDOs in which the High-Yield Debt Fund Partnership invests and AMAC’s CDO; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Servicing assets with respect to CMBS re-securitization transactions. |
|--------------------|-----------------------------------------------------------------------|

| (in thousands)                                           |   |   |      |
|----------------------------------------------------------|--------|--------|-----------|
|  Assets:Cash and cash equivalents                   |   | $      | 6,403     |   |
| Investments:                                             |   |   |      |   |
| Available-for-sale                                       |   |   | 9,455     |   |
| Investments in and loans to affiliates, net              |   |   | 9,842     |   |
| Goodwill and intangible assets, net                      |   |   | 13,360    |   |
| Deferred costs and other assets, net                     |   |   | 9,992     |   |
| Consolidated partnerships:                               |   |   |      |   |
| Investments:                                             |   |   |      |   |
| Available-for-sale                                       |   |   | 133,377   |   |
| Held-to-maturity                                         |   |   | 284,971   |   |
| Equity method                                            |   |   | --        |   |
| Other                                                    |   |   | 46,094    |   |
| Land, buildings and improvements, net                    |   |   | 79,679    |   |
| Other assets                                             |   |   | 63,473    |   |
|  Total assets                                       |   | $      | 656,646   |   |
|  Liabilities:                                       |   |   |      |   |
| Notes payable                                            |   | $      | 3,226     |   |
| Accounts payable, accrued expenses and other liabilities |   |   | 2,816     |   |
| Consolidated partnerships:                               |   |   |      |   |
| Financing arrangements                                   |   |   | 1,116,742 |   |
| Notes payable                                            |   |   | 427,000   |   |
| Repurchase agreements                                    |   |   | 7,455     |   |
| Other liabilities                                        |   |   | 30,480    |   |
|  Total liabilities                                  |   | $      | 1,587,719 |   |

| ·   | $50.0 million in cash, including $33.9 million paid to us, $3.0 million of cash paid to third parties on our behalf (see also Settlement of Unsecured Liabilities below), $3.1 million withheld by purchaser relating to certain assumed liabilities and $10.0 million placed in escrow; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | C-III’s assumption of $60.0 million of debt from our Term Loan and Revolving Credit Facility. |
|--------------------|----------------------------------------------------------------------------------------------------------|

----

| ·   | The termed-out portion of our Revolving Credit Facility ($208.0 million at December 31, 2009) was reduced by $70.5 million from the following sources: |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | $60.0 million assumed by C-III; |
|---------------|---------------------------------|

| o   | $5.0 million assumed by an affiliate of TRCLP (see TRCLP below); and |
|---------------|----------------------------------------------------------------------|

| o   | $5.5 million we repaid at the time of the restructuring; |
|---------------|----------------------------------------------------------|

| ·   | The remaining balance of the termed-out portion of the Revolving Credit Facility ($137.5 million) is now a Term Loan which matures in March 2017 with an interest rate of 3.0% over either the prime rate or LIBOR (at our election).  There are no scheduled repayments until December 2011.  Beginning at that time, we must repay $3.0 million per quarter until maturity; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Revolving Credit Facility portion, to be used for investments in LIHTC property investments or for working capital purposes, has an initial capacity of $25.0 million (as reduced by $12.0 million of outstanding letters of credit) and matures in March 2015, bearing interest at 3.0% over either the prime rate or LIBOR (at our election); |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The 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 financial covenants are not effective immediately; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 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 preservation of REIT status and to the holders of the Equity Issuer preferred shares. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

| ·   | the Company will pay $5.0 million of advisory fees in 2010 for certain fund management review services, a $5.0 million annual base management fee and an annual incentive fee based on EBITDA (as defined in the agreement). |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 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 Chief Executive Officer and Chief Financial Officer have 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, such officers have 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 Chief Executive Officer and Chief Financial 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, 2009, 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  |   | 78 |   |
|          | Consolidated Balance Sheets as of December 31, 2009 and 2008  |   | 79 |   |
|          | Consolidated Statements of Operations for the years ended December 31, 2009 and 2008  |   | 80 |   |
|          | Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2009 and 2008  |   | 81 |   |
|          | Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008  |   | 82 |   |
|          | Notes to Consolidated Financial Statements  |   | 84 |   |
| (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.  |

| (a)3.  | Exhibits                              |
|--------|---------------------------------------|
|   | 3.(i)a                      | 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).  |
|   | 3.(i)b                      | Certificate of Amendment of the Restated Certificate of Trust, effective April 2, 2008 and dated March 28, 2008 (incorporated by reference to Exhibit 3.3 of our Current Report on Form 8-K filed with the Commission on April 6, 2007).  |
|   | 3.(i)c                      | Second Amended and Restated Trust Agreement dated as of November 17, 2003 (incorporated by reference to Exhibit 3.1(c) of our December 31, 2005 Annual Report on Form 10-K). |
|   | 3.(i)d                      | Amendment No. 1 to Second Amended and Restated Trust Agreement dated as of September 20, 2005 (incorporated by reference to Exhibit 99.1 of our Current Report on Form 8-K, filed with the Commission on September 22, 2005).  |
|   | 3.(i)e                      | Amendment No. 2 to Second Amended and Restated Trust Agreement dated as of November 30, 2005 (incorporated by reference to Exhibit 3.3 of our Registration Statement on Form 8-A filed with the Commission on January 3, 2006).  |
|   | 3.(i)f                      | Amendment No. 3 to Second Amended and Restated Trust Agreement (incorporated by reference to Exhibit 3.1(a) of our June 30, 2006 Quarterly Report on Form 10-Q). |
|   | 3.(i)g                      | Amendment No. 4 to the Second Amended and Restated Trust Agreement, effective April 2, 2008 and dated March 28, 2007 (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed with the Commission on April 6, 2007).  |

----

|   | 3.(i)h   | Fifth Amended and Restated Bylaws of Centerline Holding Company, dated March 14, 2007 (incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K filed with the Commission on March 20, 2007).                                                                                                                                                   |
|--------|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 3.(i)i   | Amendment No. 1 to the Fifth Amended and Restated Bylaws of Centerline Holding Company (incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K filed with the Commission on April 6, 2007).                                                                                                                                                   |
|   | 3.(i)j   | Amendment No. 2 to Fifth Amended and Restated Bylaws of Centerline Holding Company (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed with the Commission on October 31, 2008).                                                                                                                                                    |
|   | 3.(i)k   | Amendment No. 3 to Fifth Amended and Restated Bylaws of Centerline Holding Company (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed with the Commission on December 16, 2008).                                                                                                                                              |
|   | 3.(i)l   | Amendment No. 4 to the Fifth Amended and Restated Bylaws of Centerline Holding Company (“the Trust”), approved by the Trust’s board of trustees effective as of March 5, 2010 (incorporated by reference to Exhibit 3.7 of our Current Report on Form 8-K filed with the Commission on March 11, 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 of 4.40% Cumulative Convertible Preferred Shares, Series A-1 (incorporated by reference to Exhibit 99.3 of our Current Report on Form 8-K filed with the Commission on August 3, 2005).                                                                                                                                                |
|   | 4(f)     | Amendment to the Certificate of Designation of the 4.4% Cumulative Perpetual Convertible Community Reinvestment Act Preferred Shares, Series A-1, relating to the reclassification of such shares into Special Series A Shares. 1 (incorporated by reference to Exhibit 3.3 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).  |
|   | 4(g)     | Amended and Restated Certificate of Designation of the 11% Cumulative Convertible Preferred Shares, Series A-1 (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                     |
|   | 4(h)     | Amendment to the Amended and Restated Certificate of Designation of the 11% Cumulative Convertible Preferred Shares, Series A-1 relating to the reclassification of such shares into the Special Series A Shares (incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                   |
|   | 4(i)     | Certificate of Designation of the Special Series A Shares (incorporated by reference to Exhibit 3.4 of our Current Report on Form 8-K filed with the Commission on March 11, 2010).                                                                                                                                                                               |
|   | 4(j)     | 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)   | Ross Non-Qualified Share Option Agreement (incorporated by reference to Exhibit 4.3 of our Registration Statement on Form S-8 filed with the Commission on November 25, 2003).                                                                                                                                                                                                              |
|   | 10(c)   | 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(d)   | Registration Rights Agreement, dated January 25, 2007, between Centerline Holding Company and Related Special Assets LLC (incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K filed with the Commission on January 31 2007).                                                                                                                                    |
|   | 10(e)   | 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(f)   | 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(g)   | 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(h)   | 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(i)   | 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(j)   | Amendment No. 1 to the Amended and Restated Operating Agreement of Centerline Capital Company LLC, dated as of March 5, 2010*.                                                                                                                                                                                                                                                              |
|   | 10(k)   | 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(l)   | 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(m)   | Lock-up Agreement of Marc D. Schnitzer, dated November 17, 2003 (incorporated by reference to Exhibit 99.14 of our Current Report on Form 8-K filed with the Commission on December 1, 2003).                                                                                                                                                                                               |
|   | 10(n)   | 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(o)   | 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(p)   | 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(q)   | 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(r)   | 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(s)    | 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(t)    | Centerline 2007 Outperformance Plan and Form of 2007 Outperformance Plan (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Commission on June 19, 2007).                                                                                                             |
|   | 10(u)    | Centerline Annual Incentive Bonus Program “A” and Form of Centerline Annual Incentive Bonus Program A (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed with the Commission on June 19, 2007).                                                               |
|   | 10(v)    | Centerline Annual Incentive Bonus Program “B” and Form of Centerline Annual Incentive Bonus Program B (incorporated by reference to Exhibit 10.4 of our Current Report on Form 8-K filed with the Commission on June 19, 2007).                                                               |
|   | 10(w)    | Second Amended and Restated Advisory Services Agreement between American Mortgage Acceptance Company and Centerline/AMAC Manager Inc. (incorporated by reference to Exhibit 10(ak) in our December 31, 2005 Annual Report on Form 10-K).                                                                  |
|   | 10(x)    | First Amendment to Second Amended and Restated Advisory Services Agreement between American Mortgage Acceptance Company and Centerline/AMAC Manager Inc., dated July 26, 2006 (incorporated by reference to Exhibit 10(y) of our December 31, 2006 Annual Report on Form 10-K).                           |
|   | 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)   | Participation OPP Letter between Centerline Holding Company and Robert L. Levy dated as of August 10, 2007 (incorporated by reference to Exhibit 10.6 of our Current Report on Form 8-K filed with the Commission on August 16, 2007).                                                                    |
|   | 10(ai)   | Participation OPP Letter between Centerline Holding Company and Marc D. Schnitzer dated as of August 10, 2007 (incorporated by reference to Exhibit 10.4 of our Current Report on Form 8-K filed with the Commission on August 16, 2007).                                                                 |
|   | 10(aj)   | Centerline Holding Company Ross Non-Qualified Share Option Agreement, dated July 13, 2007 (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Commission on July 18, 2007).                                                                                       |
|   | 10(ak)   | 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).                                                                                     |

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|   | 10(al)   | 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(am)   | 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(an)   | 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(ao)   | Bond Exchange Agreement, dated as of December 27, 2007, among Federal Home Loan Mortgage Corporation, Centerline 2007-1 EIT Securitization, LLC, Centerline 2008-1 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(ap)   | Reimbursement, Pledge and Security Agreement, dated as of December 27, 2008, between Federal Home Loan Mortgage Corporation and Centerline Sponsor 2008-2 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(aq)   | 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(ar)   | 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(as)   | 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(at)   | 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(au)   | 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(av)   | Stabilization Guaranty, Escrow and Security Agreement, dated as of December 27, 2007, between Centerline Stabilization 2008-1 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(aw)   | 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(ax)   | 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, 2008).                                                                                                                                       |

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|   | 10(ay)   | 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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|   | 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).                        |
|   |        21   | Subsidiaries of our Company*                                                                                                                                                                                                                                                                                                       |
|   |        23   | Consent of Independent Registered Public Accounting firm*                                                                                                                                                                                                                                                                          |
|   |        31.1 | Chief Executive Officer certification pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.*                                                                                                                                                                                                                                 |
|   |        31.2 | Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                                                  |
|   |        32   | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                                                                          |
|   |        *    | Filed herewith.                                                                                                                                                                                                                                                                                                                    |

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| Date:  |   | March 31, 2010 |   | By:    |   | /s/ Marc D. Schnitzer                                                                                |
|--------|--------|----------------|--------|--------|--------|------------------------------------------------------------------------------------------------------|
|   |   |           |   |   |   | Marc D. SchnitzerManaging Trustee, Chief Executive Officer andPresident(Principal Executive Officer) |

| Date:  |   | March 31, 2010 |   | By:    |   | /s/ Robert L. Levy                                                                                  |
|--------|--------|----------------|--------|--------|--------|-----------------------------------------------------------------------------------------------------|
|   |   |           |   |   |   | Robert L. LevyChief Financial Officer(Principal Financial Officer and Principal Accounting Officer) |

| Date:  |   | March 31, 2010 |   | By:    |   | /s/ Marc D. Schnitzer                                                                                |
|--------|--------|----------------|--------|--------|--------|------------------------------------------------------------------------------------------------------|
|   |   |           |   |   |   | Marc D. SchnitzerManaging Trustee, Chief Executive Officer andPresident(Principal Executive Officer) |

| Date:  |   | March 31, 2010 |   | By:    |   | /s/ Robert L. Levy                                                                                  |
|--------|--------|----------------|--------|--------|--------|-----------------------------------------------------------------------------------------------------|
|   |   |           |   |   |   | Robert L. LevyChief Financial Officer(Principal Financial Officer and Principal Accounting Officer) |

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| Signature                    |   | Title                                                   |   | Date           |
|------------------------------|--------|---------------------------------------------------------|--------|----------------|
|                         |   |                                                    |   |           |
|  /s/ Marc D. Schnitzer  |   |                                                    |   |           |
| Marc D. Schnitzer            |   | Managing Trustee, Chief Executive Officer and President |   | March 31, 2010 |
|  /s/ Jerome Y. Halperin |   |                                                    |   |           |
| Jerome Y. Halperin           |   | Managing Trustee                                        |   | March 31, 2010 |
|  /s/ Robert L. Loverd   |   |                                                    |   |           |
| Robert L. Loverd             |   | Managing Trustee                                        |   | March 31, 2010 |
|  /s/ Robert A. Meister  |   |                                                    |   |           |
| Robert A. Meister            |   | Managing Trustee                                        |   | March 31, 2010 |
|  /s/ Thomas W. White    |   |                                                    |   |           |
| Thomas W. White              |   | Managing Trustee                                        |   | March 31, 2010 |

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