<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)

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

For the fiscal year ended December 31, 2000
                                       OR

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

                         Commission File Number 1-13237

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

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

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

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

Securities registered pursuant to Section 12(b) of the Act:
                       Title of each class
                       -------------------
       Shares of Beneficial Interest

       Name of each exchange on which registered:
       ------------------------------------------
       American Stock Exchange


Securities registered pursuant to Section 12(g) of the Act:
       None

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

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     The  approximate  market value of the voting and  non-voting  common equity
held by  non-affiliates  of the Registrant as of March 9, 2001 as  $336,020,034,
based  on a  price  of  $15.00  per  share,  the  closing  sales  price  for the
Registrant's  shares of beneficial  interest on the American  Stock  Exchange on
that date.

     As of March  9,  2001  there  were  22,700,340  outstanding  shares  of the
Registrant's shares of beneficial interest.

                       DOCUMENTS INCORPORATED BY REFERENCE

Part III: Those portions of the Registrant's  Proxy Statement for Annual Meeting
of Shareholders to be held on June 12, 2001, which are  incorporated  into Items
10, 11, 12 and 13.

Index to exhibits may be found on page 60
Page 1 of 75


<PAGE>


                      CAUTIONARY STATEMENT FOR PURPOSES OF
                         THE "SAFE HARBOR" PROVISIONS OF
              THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995



WHEN  USED  IN  THIS  ANNUAL  REPORT  ON  FORM  10-K,   THE  WORDS   "BELIEVES,"
"ANTICIPATES,"  "EXPECTS"  AND  SIMILAR  EXPRESSIONS  ARE  INTENDED  TO IDENTIFY
FORWARD-LOOKING  STATEMENTS.  STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS ANNUAL REPORT ON FORM  10-KPURSUANT  TO THE "SAFE HARBOR"  PROVISION OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE SUBJECT TO
CERTAIN  RISKS AND  UNCERTAINTIES  WHICH  COULD CAUSE  ACTUAL  RESULTS TO DIFFER
MATERIALLY,  INCLUDING,  BUT NOT  LIMITED TO,  THOSE SET FORTH IN  "MANAGEMENT'S
DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF  OPERATIONS."
READERS  ARE  CAUTIONED  NOT TO PLACE UNDUE  RELIANCE  ON THESE  FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF.




<PAGE>



                                     PART I
Item 1.  Business.

General
-------

Charter  Municipal  Mortgage  Acceptance  Company (the  "Company") is a Delaware
business trust principally engaged in the acquisition and ownership (directly or
indirectly) of tax-exempt  multifamily  housing  revenue bonds.  The Company may
also acquire,  at times,  taxable  multifamily  housing revenue bonds.  Both the
tax-exempt  and the  taxable  bonds are  herein  referred  to as  Revenue  Bonds
("Revenue Bonds").  Accordingly, the Company produces tax-exempt income which it
directly  passes  through  to  its  shareholders  in  the  form  of a  quarterly
tax-exempt dividend.

Generally,  Revenue Bonds are secured by mortgage loans on underlying properties
("Underlying Properties"). Revenue Bonds that contain provisions for the Company
to receive additional  interest payments by participating with the borrower in a
portion  of the  cash  flow,  sale or  refinancing  proceeds  on the  Underlying
Properties  are  referred to as  "participating";  Revenue  Bonds  lacking  this
provision are referred to as "non-participating". As of December 31, 2000, 98.5%
of the Revenue Bond par amount owned by the Company were first mortgage bonds.

As of  December  31,  2000  there  were 59  Revenue  Bonds,  with a par value of
$429,371,365, with Underlying Properties either under construction or undergoing
major rehabilitation. The Underlying Properties securing these Revenue Bonds are
garden  apartments  located in major  metropolitan  markets  in 18  states.  The
properties  range in size from 70 units to 549 units with an average size of 215
units. Generally, the properties have a market appropriate,  competitive amenity
package which may include swimming pools, clubhouses,  exercise rooms and tennis
courts.  The remaining  Underlying  Properties in the portfolio have  stabilized
occupancies. The stabilized portfolio as of December 31, 2000 reports an average
occupancy of 96.3%.

The Company does not operate as a mortgage REIT,  which  generally  utilize high
levels of leverage  and acquire  subordinated  interests  in  commercial  and/or
residential  mortgage-backed  securities.  Pursuant to its Trust Agreement,  the
Company  is only  able to incur  leverage  or other  financing  up to 50% of the
Company's Total Market Value (as defined in the Trust  Agreement) as of the date
incurred. Mortgage REITs typically incur leverage at ratios ranging from between
3:1 to 10:1. Furthermore,  the Revenue Bonds owned by the Company generally call
for  ten-year   restrictions   from   prepayments,   eliminating  the  Company's
susceptibility  to significant  levels of repayment risk as a result of interest
rate reductions. Due to the Company's low level of leverage, the Company is less
likely  than  other  higher  leveraged  REITs  to be  affected  by any  lack  of
liquidity.  The Company's  portfolio does not contain assets that are especially
vulnerable  to  volatility   during  periods  of  interest  rate   fluctuations.
Consistent with the foregoing, the Company focuses on providing investors with a
stable level of distributions, even through unstable markets.

Organization
------------

The  Company  was formed on  October  1, 1997 as the  result of the merger  (the
"Merger") of three publicly registered limited  partnerships,  Summit Tax Exempt
Bond Fund,  L.P.,  Summit Tax Exempt L.P. II and Summit Tax Exempt L.P. III (the
"Partnerships").  One  of  the  general  partners  of  the  Partnerships  was an
affiliate of Related Capital Company ("Related"), a nationwide, fully integrated
real estate financial services firm. Unless otherwise indicated,  the "Company",
as hereinafter used, refers to Charter Municipal Mortgage Acceptance Company and
its consolidated subsidiaries. Pursuant to the Merger, the Company issued shares
of  beneficial  interest  ("Common  Shares")  to all  partners  in  each  of the
Partnerships in exchange for their  proportionate  interests.  The Common Shares
commenced  trading on the American  Stock  Exchange on October 1, 1997 under the
symbol "CHC."

The Company is governed by a board of trustees  comprised  of three  independent
managing  trustees and four managing  trustees who are affiliated  with Related.
The Company has engaged  Related  Charter LP (the  "Manager"),  an  affiliate of
Related, to manage its day-to-day affairs.  Through the Manager,  Related offers
the Company a core group of experienced staff and executive management providing
the Company with services on both a full and  part-time  basis.  These  services
include,  among  other  things,  acquisition,   financial,  accounting,  capital
markets, asset monitoring,  portfolio management,  investor relations and public
relations services. The Company believes that it benefits significantly from its
relationship  with Related,  since Related  provides the Company with  resources
that are not generally available to smaller-capitalized, self-managed companies.

Business Plan
-------------

In  order  to  generate  tax-exempt  income  to pass  through  to the  Company's
shareholders and, as a result, enhance the value of the Company's Common Shares,
the  Company  invests in or acquires  tax-exempt  bonds  secured by  multifamily
properties. The Company believes that it can earn above market rates of interest
on its bond  acquisitions  by  focusing  its  efforts  primarily  on  affordable
housing.   The  Manager  estimates  that  nearly  50%  of  all  new  multifamily
development contains an affordable component which produces tax credits pursuant
to Section 42 of the Internal Revenue Code. The traditional  method of financing
such  tax-exempt  properties  requires the  involvement  of credit  enhancement,
rating agencies and investment  bankers.  The up-front cost of such financing is
generally much higher than traditional  multifamily  financing.  The Company has
designed a Direct Purchase Program  specifically to appeal to developers of such
properties  through which the Company will invest in or acquire tax-exempt bonds
without  the cost  associated  with  credit  enhancement,  rating  agencies  and
investment  bankers.  The Company believes that the up-front cost savings to the
developer will  translate  into a higher than market  interest rate on the bonds
acquired by the Company.

The Company  believes that it is well  positioned to market its Direct  Purchase
Program as a result of the Manager's  affiliation with Related. The Manager is a
single  purpose  affiliate of Related and is controlled by the same  individuals
and entities who own Related.  The Manager  benefits from its  affiliation  with
Related  because  the  Manager  is  able  to  utilize  Related's  resources  and
relationships in the multifamily  affordable  housing finance industry to source
potential  borrowers of first mortgage bonds that the Company could invest in or
acquire. Related and its predecessor companies have specialized in offering debt
and equity products to mid-market  multifamily owners and developers for over 29
years.  Related has provided debt and equity  financing to properties  valued at
over $11 billion.  According to the 2000 National  Multihousing  Council survey,
Related is the third largest owner of apartments in the United States.

<PAGE>


In addition to tax-exempt bonds secured by multifamily  properties producing tax
credits,  the Company may acquire other  multifamily  tax-exempt bonds including
those issued to finance low-income  multifamily  projects and facilities for the
elderly owned by Section  501(c)(3)  not-for-profit  organizations.  The Company
also has a portion of assets that produce a small amount of taxable income.


Revenue Bonds - General
-----------------------

The principal  and interest  payments on each Revenue Bond are payable only from
the cash flows of the Underlying  Properties,  including proceeds from a sale of
an  Underlying  Property or the  refinancing  of the mortgage loan securing such
Revenue Bonds (the  "Mortgage  Loans").  None of the Revenue Bonds  constitute a
general  obligation of any state or local government,  agency or authority.  The
structure  of each  Mortgage  Loan mirrors the  structure  of the  corresponding
Revenue Bond that it secures.  In order to protect the tax-exempt  status of the
Revenue  Bonds,  the owners of the  Underlying  Properties are required to enter
into certain agreements to own, manage and operate the Underlying  Properties in
accordance with requirements of the Internal Revenue Code of 1986, as amended.

Revenue Bonds are  generally  not expected to be subject to optional  prepayment
during the first five to ten years of the  Company's  ownership of the bonds and
may carry  prepayment  penalties  thereafter  beginning at 5% of the outstanding
principal  balance,  declining  by 1% per annum.  Certain  Revenue  Bonds may be
purchased  at a discount  from their face value.  Up to 15% of the Total  Market
Value of the  Company  (as  defined in its Trust  Agreement)  may be invested in
Revenue  Bonds  secured by  Underlying  Properties  in which  affiliates  of the
Manager have a controlling interest,  equity interest or security interest.  The
15% limit is not applicable to properties to which the Manager or its affiliates
have taken  title for the  benefit of the  Company  and only  applies to Revenue
Bonds acquired after the Merger. In selected circumstances and generally only in
connection  with the  acquisition of tax-exempt  Revenue Bonds,  the Company may
acquire a small amount of taxable bonds (i) which the Company may be required to
acquire in order to satisfy  state  regulations  with respect to the issuance of
tax-exempt  bonds and (ii) to fund certain costs associated with the issuance of
Revenue Bonds, that under current law cannot be funded by such Revenue Bonds.

From  time to time,  the  Company  has  advanced  funds  to  owners  of  certain
Underlying   Properties  in  order  to  preserve  the  underlying   asset.  Such
preservation may include funds for construction completion, past due real estate
taxes, remedial deferred maintenance or other operating deficiencies. Promissory
notes and/or second mortgages typically secure such advances. As of December 31,
2000, the face amount of such advances was $15,165,389,  with rates ranging from
8% to 13% and a  carrying  value  of  $9,909,933,  (net of  purchase  accounting
adjustments),  and a reserve for  collectibility  of $138,000.  Included in such
amounts  were  advances to obligors  which are  affiliates  of the Manager at an
aggregate face amount of $5,028,812, with rates ranging from 8% to 10%.

With respect to Revenue Bonds which are subject to forbearance  agreements  with
their respective obligors,  the difference between the stated interest rates and
the rates paid (whether  deferred and payable out of available  future cash flow
or, ultimately,  from sale or refinancing proceeds) is not accrued for financial
statement  purposes.  The accrual of interest at the stated  interest  rate will
resume  once an  Underlying  Property's  ability to pay the stated rate has been
adequately   demonstrated.    Unrecorded   contractual   interest   income   was
approximately $1,609,000, $1,916,000 and $3,047,000 for the years ended December
31,  2000,  1999 and 1998,  respectively.  Payments  under each of the  existing
forbearance agreements are current as of December 31, 2000.


Participating Revenue Bonds
---------------------------

Participating  Revenue  Bonds with an  aggregate  face  amount of  approximately
$179,502,000  as of December  31,  2000,  call for  interest  only debt  service
payments during their  respective terms (which generally are 24 to 30 years from
issuance or re-issuance) with repayment of principal due in a lump sum "balloon"
payment at the expiration of their respective terms or upon sale or refinancing.
In addition to the stated base rates of interest,  these  Revenue  Bonds provide
for  "participating  interest"  which is based on a percentage of the underlying
properties  cash flow or net  sales/refinancing  proceeds.  Both the  stated and
participating  interest on the  Revenue  Bonds are exempt  from  federal  income
taxation.  During the years ended December 31, 2000,  1999 and 1998, the Company
was paid participating interest amounting to approximately $1,716,000,  $728,000
and $960,000, respectively.


Non-Participating Revenue Bonds
-------------------------------

Non-participating,  tax-exempt  revenue bonds,  with an aggregate face amount of
approximately  $690,518,000 as of December 31, 2000, generally bear a fixed base
interest rate and may or may not provide for  amortization  of principal.  Terms
are  expected  to be 5 to 35 years,  although  the Company may have the right to
cause repayment prior to maturity through a mandatory  redemption  feature (five
to seven years with up to six month's notice).  Bonds that call for amortization
or "sinking  fund"  payments of principal  are usually  based on thirty to forty
year level debt  service  amortization  schedules  with  amortization  generally
beginning at the completion of rehabilitation or construction.

Certain other non-participating  Revenue Bonds, with an aggregate face amount of
$6,195,000  are taxable and call for  amortization  or sinking fund  payments of
principal on a term ranging between 13 and 40 years.

<PAGE>



Modified Revenue Bonds
----------------------

From time to time, the Company, as an alternative to foreclosure in the event of
default,  enters into forbearance agreements and/or permanent modifications with
certain borrowers. The determination as to whether it is in the best interest of
the Company to enter into permanent modifications or forbearance agreements,  to
advance second  mortgages,  or  alternatively,  to pursue its remedies under the
loan documents,  including  foreclosure,  is based upon several  factors.  These
factors  include,  but are not limited to,  Underlying  Property  operations and
performance, owner cooperation and projected costs of foreclosure and litigation
-  irrespective  of  whether  or not the  obligor  has an  affiliation  with the
Manager.

In connection with the sale of two of the Underlying Properties, Cedar Creek and
Pelican  Cove,  the  Company  has agreed to a  modification  of the terms of the
respective  Revenue Bonds.  Subject to the local issuer's  approval,  the stated
interest rate of the Cedar Creek and Pelican Cove Revenue Bonds will be modified
to a stated interest rate of 7.43% and 7.25%, respectively, and the maturity and
call dates for each will be  extended  to  October 1, 2010 and  October 1, 2020,
respectively.

In  addition  to the above two  Revenue  Bonds,  other  Revenue  Bonds,  with an
aggregate face amount of  $130,025,000,  have  previously  been modified.  These
modifications  have generally  encompassed an extension of the maturity together
with a prepayment lock out feature and/or prepayment  penalties together with an
extension of the mandatory  redemption  feature (5-10 years from  modification).
Stated  interest  rates have also been  adjusted  together  with a change in the
participating interest features.  Base interest rates,  participating  interest,
prepayment lock-outs,  mandatory redemption and maturity features are arrived at
through  negotiations  between  the  Company  and the  owners of the  Underlying
Properties  and vary  dependent on the facts of a particular  Revenue Bond,  the
owner of the Underlying  Property,  the Underlying  Property's  performance  and
requirements of bond counsel and local issuers.  Should negotiations break down,
the Company has the option to pursue its other remedies  including  acceleration
and  foreclosure.  The Company may agree to the  modification  of other  Revenue
Bonds to generally reflect similar terms as those modified previously, where and
as appropriate.  Significant  modifications to interest rates and maturity dates
are subject to final approval of the local  issuers,  bond counsel and indenture
trustees.


Revenue Bonds with the Obligor as an Affiliate of the Manager
-------------------------------------------------------------

The  obligors  of  $404,263,000  of  Revenue  Bonds  are  partnerships  in which
affiliates of the Manager own a 1% general partner  interest.  In addition,  the
original owners of underlying  properties and obligors of $11,282,000 of Revenue
Bonds,  have been  replaced  with  affiliates  of the  Manager who have not made
equity  investments.  These affiliate  entities could have interests that do not
coincide   with,   and  may  be  adverse  to,  the  interests  of  the  Company.
Negotiations, if any, with respect to modifications of Revenue Bonds between the
Company and obligors who are  affiliates  may be affected by these  conflicts as
the Manager  determines the appropriate terms and conditions of modifications or
otherwise opts for some other remedy including foreclosure.

The  original  obligors  and owners of the  Underlying  Properties  of the Cedar
Creek,  Highpointe,  Pelican Cove and Loveridge Revenue Bonds have been replaced
with  affiliates  of the  Manager who have not made  equity  investments.  These
affiliates have assumed the day-to-day  responsibilities  and obligations of the
Underlying Properties. On September 29, 2000, the affiliates of the Manager sold
49% of Pelican Cove and Cedar Creek,  with an option from the buyers to purchase
the  remaining  51% in 2001.  Buyers  are being  sought  for the  remaining  two
Underlying  Properties.  These  properties  are generally  paying as interest an
amount equal to the net cash flow generated by  operations,  which in some cases
is less than the stated  rate of the  Revenue  Bond.  The Company has no present
intention of declaring  default on these Revenue Bonds.  The aggregate  carrying
value of these  remaining  Revenue  Bonds at December  31, 2000 and December 31,
1999 was approximately $11,282,000 and $12,280,000, respectively, and the income
earned  from  them  for  the  years  ended   December  31,  2000  and  1999  was
approximately $849,000 and $847,500, respectively.


Revenue Bond Repayments
-----------------------

During the period January 1, 2000 through December 31, 2000, three Revenue Bonds
were repaid and two RITES were terminated as described in the table below.

                 Dispositions for the Year Ended December 31, 2000
                                Par            Amortized       Realized Gains
    Property/Bond Name        Amount              Cost           / (Losses)
    -------------------- ------------------- ---------------- ---------------
    Bonds
    Bay Club               $6,400,000          $6,438,942       $ (38,942)
    East Ridge              8,700,000           8,437,747         262,253
    Martin's Creek          7,300,000           6,842,946         457,054

    RITES
    Avalon                      5,000              40,073         (35,073)
    Meadowview Park             5,000               5,141            (141)
                                                                ---------
                                                                 $645,151
                                                                 --------



<PAGE>




As of December 31, 2000,  the Company and its  consolidated  subsidiaries  owned
participating and non-participating  Revenue Bonds. Certain of the Revenue Bonds
are taxable, were acquired in connection with the purchase of tax-exempt Revenue
Bonds  and are  secured  by the  same  Underlying  Properties  that  secure  the
associated  tax-exempt  Revenue  Bonds.  The following  table  provides  certain
information with respect to each of the Revenue Bonds.

                              Table of Investments
                              --------------------

<TABLE>
<CAPTION>


                                                                                                               Unit
                                      Last Year Partici- Type                  Revenue Bond          Rental   Rental   Number of
                                       Of Con-  pating- (LIHTC/        Revenue  Fair Value  Stated  Occupancy Rates at  Compet-
                                      struction  Bond    501c3/  Date  Bond Par at December Interest December December ing Prop-
Property        Location       Units  /Rehab (Y)es/(N)o Other6  Closed  Amount  31, 2000 1   Rate2   31, 2000 31, 2000  erties Notes
--------        --------       -----  -------  --------  ------ ------  ------  ----------   -----   -------- -------- ------- -----




Tax-Exempt First Mortgage Bonds
-------------------------------

Owned by the Company (not including its consolidated subsidiaries)
------------------------------------------------------------------

<S>               <C>              <C>   <C>    <C> <C>    <C>     <C>          <C>         <C>     <C>     <C>          <C>    <C>
Highpointe        Harrisburg, PA   240   1991   Y   Other  Jul-86  $ 8,900,000  $5,591,000  8.500%  96.2%   $ 450-830    24     D, E


Owned by the CM Holding Trust 3
-------------------------------

Highpointe        Harrisburg, PA     -   1991   N   Other   Nov-00    3,250,000   3,927,000 9.000%    -        -           -       D
Lexington Trails  Houston, TX      200   1997   N   501c3   Nov-00    4,900,000   5,921,000 9.000   88.9%   435-700       25
Reflections       Casselberry, FL  336   1995   Y   Other   Nov-00   10,700,000  12,929,000 9.000   88.9%   280-780        9
Rolling Ridge     Chino Hills, CA  110   1996   Y   Other   Nov-00    4,925,000   5,951,000 9.000   96.3%   830-1,005      7
                                  -------                           ------------- -----------

  Subtotal                           646                               23,775,000  28,728,000
                                  -------                           ------------- -----------

Owned by CharterMac Equity Issuer Trust3
----------------------------------------

Armstrong Farm      Jeffersonville, IN 168    -     N   LIHTC   Oct-00    8,246,000   8,246,000 7.500%    -        -     158 C,G,H,J
Barnaby Manor       Washington, DC     124    -     N   LIHTC   Nov-99    4,500,000   4,418,000 7.375   82.5%   850-975  12  B,C,I,J
Bay Colony          League City, TX    248    -     N   LIHTC   Aug-00   10,100,000  10,084,000 7.500     -        -     15  C,G,H,J
Chandler Creek      Round Rock, TX     216    -     N   501c3   Oct-00   15,850,000  15,850,000 8.500     -        -     19 G,H,J,CC
Chapel Ridge of     Claremore, OK      104    -     N   LIHTC   Oct-00    4,100,000   4,100,000 7.500     -        -      5 C,G,H,J
Claremore
Del Monte Pines     Fresno, CA         366   2000   N   LIHTC   May-99   11,000,000   9,957,000 6.800   94.8%   388-544 256   A, C
Douglas Pointe      Miami, FL          176    -     N   LIHTC   Sep-99    7,100,000   6,616,000 7.000   59.1%   504-604 184A,C,G,H,J

Forest Hills        Garner, NC         136   2000   N   LIHTC   Dec-98    5,930,000   5,580,000 7.125   91.9%   550-650    152  A, C
Fort Chaplin        Washington, DC     549    -     N   LIHTC   Dec-99   25,800,000  23,698,000 6.900   98.4%   419-1,032 158  B,C,F
Franciscan Riviera  Antioch, CA        129    -     N   LIHTC   Aug-99    6,587,500   6,248,000 7.125  100.0%   500-872     17 A,C,F
Garfield Park       Washington, DC      94   2000   N   LIHTC   Aug-99    3,260,000   3,146,000 7.250  100.0%   585-946    158
Grace Townhomes     Ennis, TX          112    -     N   LIHTC   May-00    5,225,600   5,217,000 7.500     -        -        9  G,H,J
Grandview Forest    Durham, NC          92    -     N   LIHTC   Dec-00    5,483,907   5,484,000 8.500     -        -    82C,G,H,J,GG
Greenbriar          Concord, CA        199    -     N   LIHTC   May-99    9,585,000   8,772,000 6.875   98.0%   750-1,100  55  B,C,F
Greenbridge at      Richardson, TX     242    -     N   501c3   Nov-00   19,735,000  19,735,000 7.400     -        -       30  G,H,J
Buckingham
Hamilton Gardens    Hamilton, NJ       174    -     N   LIHTC   Mar-99    6,400,000   6,054,000 7.125   98.3%   625-730    16  A,C,N
Hidden Grove        Miami, FL          222    -     N   LIHTC   Sep-00    8,600,000   8,472,000 7.400     -        -      184C,G,H,J
Lake Jackson        Lake Jackson, TX   160   2000   N   LIHTC   Dec-98   10,934,000  10,189,000 7.000   85.9%   550-1095    10  A, C
Lake Park           Turlock, CA        104   2000   N   LIHTC   Jun-99    3,638,000   3,511,000 7.250   98.0%   452-634    24   B, C
Lakemoor            Durham, NC         160    -     N   LIHTC   Dec-99    9,000,000   8,686,000 7.250     -        -      89 A,G,H,J
Lakes Edge at WaldenMiami, FL          400   1986   N   LIHTC   Jun-99   14,850,000  13,640,000 6.900   97.5%   618-944    184  B, F
Lenox Park          Gainesville, GA    292   2000   N   LIHTC   Jul-99   13,000,000  11,768,000 6.800   47.2%   431-620     15  B, C
Lewis Place         Gainesville, FL    112   2000   N   LIHTC   Jun-99    4,000,000   3,594,000 6.750   89.2%   529-642     91 B,C,T
Millpond Village    East Windsor, CT   360    -     N   LIHTC   Dec-00   14,300,000  14,300,000 8.550   62.5%   477-1,020   2  F, HH
Mountain Ranch      Austin, TX         196    -     N   LIHTC   Dec-98    9,128,000   8,658,000 7.125   99.5%   586-814    453A,C,G,
                                                                                                                               H, J
Newark Commons      New Castle, DE     220    -     N   LIHTC   May-00   14,300,000  13,896,000 7.300     -        -       35 A,C,G,
                                                                                                                                H, J
Oaks at Hampton     Dallas, TX         250    -     N   LIHTC   Apr-00    9,535,000   9,139,000 7.200     -        -        11 B,C,G
Parks at            DeSoto, TX         250    -     N   LIHTC   Jul-00    9,535,000   9,139,000 8.500     -        -        14 G,H,J
Westmoreland                                                                                                                      X
Princess Anne House Virginia Beach, VA 186    -     N   LIHTC   Apr-00    7,500,000   7,488,000 7.500     -        -       250 A,C,G
                                                                                                                                H, J
Red Hill Villas     Round Rock, TX     168    -     N   LIHTC   Dec-00    9,900,000   9,900,000 8.400     -        -       19 C,G,FF
Running Brook       Miami, FL          186    -     N   LIHTC   Sep-00    8,495,000   8,368,000 7.400     -        -       15C,G,H,J
Southwest Trails    Austin, TX         160    -     N   LIHTC   Aug-00    6,500,000   6,360,000 7.350     -        -      15 C,G,H,J
Standiford          Modesto, CA        250    -     N   LIHTC   Sep-99    9,520,000   9,029,000 7.125   97.1%   395-650   63 A, C, F
Sunset Creek        Lancaster, CA      148   1989   N   Other   Mar-88    8,275,000   6,129,000 5.477   98.6%   460-869  37 B,U,V,II
Sunset Village      Lancaster, CA      204   1989   N   Other   Mar-88   11,375,000   8,434,000 5.477   94.5%   520-840  37 B,U,V,II
Sycamore Woods      Antioch, CA        186   2000   N   LIHTC   May-99    9,415,000   8,616,000 6.875   97.8%   575-1,003 17    A, C
Tallwood            Virginia Beach, VA 120   2000   N   LIHTC   Sep-99    6,205,000   5,988,000 7.250   96.7%   597-688   86    A, C
Williams Run        Dallas, TX         252   1986   N   501c3   Dec-00   12,650,000  12,650,000 7.650   92.1%   554-751   10
Woods Edge          Charlottesville, VA 97    -     N   LIHTC   Nov-00    4,850,000   4,850,000 7.800       -        -    20     EE
                                    -------                           ------------- -----------

  Subtotal                           7,812                              364,408,007 346,009,000
                                    -------                           ------------- -----------




Owned by CharterMac Origination Trust3, 4
-----------------------------------------

Cedar Pointe        Nashville, TN         210   1989   N  Other  Apr-87    9,500,000   8,852,000 7.000% 95.7%   540-860   168
Clarendon Hills     Hayward, CA           285   1989   Y  Other  Dec-86   17,600,000  12,933,000 5.520  99.7%   619-1,700  99    W
Cypress Run         Tampa, FL             408   1988   Y  Other  Aug-86   15,402,428  13,156,000 5.500  89.0%   485-855   247    U
Greenway Manor      St. Louis, MO         312   1987   Y  Other  Oct-86   12,850,000  14,540,000 8.500  99.7%   535-625   172
Lakepoint           Atlanta, GA           360   1989   N  Other  Nov-87   15,100,000  12,061,000 6.000  98.3%   462-895    30
Lakes, The          Kansas City, MO       400   1989   Y  Other  Dec-86   13,650,000  10,636,000 4.870  92.4%   495-700   152    W
Lexington Square    Clovis, CA            130   2000   N  LIHTC  Aug-98    3,850,000   3,267,000 6.375  96.9%   393-471    42  C,P
Loveridge           Pittsburg, CA         148   1987   Y  Other  Nov-86    8,550,000   5,691,000 5.000  98.6%   650-1,300  18  D,E
San Marcos          San Marcos, TX        156    -     N  LIHTC  May-00    7,231,000   7,099,000 7.375    -        -       25C,G,H,J
Shannon Lake        Atlanta, GA           294   1988   Y  Other  Jun-87   12,000,000  11,182,000 7.000  94.3%   463-855   371  L, W
Summer Lake         Davie, FL             108    -     N  LIHTC  Mar-00    5,600,000   5,516,000 7.400    -        -       6 C,G,H,J
Sunset Downs        Lancaster, CA         264   1987   N  Other  Feb-87   15,000,000  10,965,000 5.477  96.6%   535-810    37 U,V,II
Sunset Terrace      Lancaster, CA         184   1987   N  Other  Feb-87   10,350,000   7,566,000 5.477  95.6%   530-815    37 U,V,II
                                       -------                            ------------- -----------

  Subtotal                              3,259                               146,683,428 123,464,000
                                       -------                             ------------- -----------

Owned by CharterMac Owner Trust3,5
----------------------------------

Autumn Ridge        San Marcos, CA        192  -       N  LIHTC  Aug-00   9,304,230   9,475,000 8.000%  95.6%   569-930    11  C,F,Z
Bristol Village     Bloomington, MN       290  1989    N  Other  Jul-87  17,000,000  16,973,000 7.500   93.7%   400-2,398  25
Carrington Point    Los Banos, CA          80  1999    N  LIHTC  Sep-98   3,375,000   2,864,000 6.375   98.7%   448-565     5     C
Casa Ramon          Orange County, CA      75  1976    N  LIHTC  Jul-00   4,744,000   4,736,000 7.500  100.0%   652-1,086  43  C, F
Cedar Creek         McKinney, TX          250  1988    N  Other  Dec-86   8,100,000   8,011,000 7.430   93.5%   250-940    10   U, V
Cedarbrook          Hanford, CA            70  1999    N  LIHTC  Apr-98   2,840,000   2,691,000 7.125  100.0%   418-517    18     C
Chapel Ridge at     Little Rock, AR       128  -       N  LIHTC  Aug-99   5,600,000   5,311,000 7.125     -        -       83C,G,H,J
Little Rock
Chapel Ridge at     Texarkana, AR         144  -       N  LIHTC  Sep-99   5,800,000   5,694,000 7.375   72.7%   320-685    26     C
Texarkana
College Park        Naples, FL            210  2000    N  LIHTC  Jul-98  10,100,000   9,748,000 7.250   89.8%   451-780    33     O
Columbia at Bells   Cherokee Co., GA      272  -       N  LIHTC  Apr-00  13,000,000  12,806,000 7.400              -        5  G,H J
Ferry
Country Lake        W. Palm Beach, FL     192  1985    N  Other  Nov-99   6,255,000   6,255,000 6.000   96.3%   647-995     44 M,F
Crowne Pointe       Olympia, WA           160  1986    Y  Other  Dec-86   5,075,000   4,898,000 7.250   97.4%   485-845     39
Falcon Creek        Indianapolis, IN      131  2000    N  LIHTC  Sep-98   6,144,600   5,930,000 7.250   97.0%   425-800    252  C, R
Gulfstream          Dania, FL              96  2000    N  LIHTC  Jul-98   3,500,000   3,371,000 7.250   89.5%   502-633      5     C
Highland Ridge      St. Paul, MN          228  1989    Y  Other  Dec-86  15,000,000  14,477,000 7.250   94.7%   850-1,460   86
Jubilee Courtyards  Florida City, FL       98  1999    N  LIHTC  Sep-98   4,150,000   3,867,000 7.125   96.9%   525-710      2  C, S
Kings Villages      Pasadena, CA          313  -       N  LIHTC  Jul-00  17,650,000  17,622,000 8.500   80.2%   456-855     12 C,F,Y
Madalyn Landing     Palm Bay, FL          304  2000    N  LIHTC  Nov-98  14,000,000  13,046,000 7.000   67.6%   425-599      8    C
Mansion, The        Independence, MO      550  1987    N  Other  May-86  19,450,000  19,124,000 7.250   93.0%   410-1,350   15
Marsh Landing       Portsmouth, VA        250  -       N  LIHTC  May-98   6,050,000   5,834,000 7.250   72.7%   300-475     23 C, F
Newport Village     Tacoma, WA            402  1987    Y  Other  Feb-87  13,000,000  12,546,000 7.250   95.1%   376-690    181
North Glen          Atlanta, GA           284  1987    Y  Other  Sep-86  12,400,000  12,380,000 7.500   95.1%   575-1,010  371  K, W
Northpointe Village Fresno, CA            406  2000    N  LIHTC  Aug-98  13,250,000  13,229,000 7.500   93.5%   388-583    256 C, Q
Ocean Air           Norfolk, VA           434  -       N  LIHTC  Apr-98  10,000,000   9,651,000 7.250   78.3%   590-690     60 C,I,J
Orchard Hills       Tacoma, WA            176  1987    Y  Other  Dec-86   5,650,000   5,453,000 7.250   99.4%   475-815    181
Orchard Mill        Atlanta, GA           238  1990    Y  Other  May-89  10,500,000  10,483,000 7.500   92.4%   459-900    371   C
Park Sequoia        San Jose, CA           81  -       N  LIHTC  Oct-00   6,740,000   6,740,000 8.500   78.2%   799-1,350  165C,F,BB
Pelican Cove        St. Louis, MO         402  1989    N  Other  Feb-87  18,000,000  17,372,000 7.250   99.0%   390-725    172  U, V
Phoenix             Stockton, CA          186  2000    N  LIHTC  Apr-98   3,250,000   3,055,000 7.125   99.5%   395-721     96    C
River Run           Miami, FL             164  1987    Y  Other  Aug-87   7,200,000   7,668,000 8.000   98.8%   351-1,034  184    C
Silvercrest         Clovis, CA            100  1999    N  LIHTC  Sep-98   2,275,000   2,158,000 7.125  100.0%   300-393    142    C
South Congress      Austin, TX            172  -       N  LIHTC  May-00   6,300,000   6,290,000 7.500   65.1%   303-504    152   C,F
Stonecreek          Clovis, CA            120  2000    N  LIHTC  Apr-98   8,820,000   8,350,000 7.125  100.0%   654-993      5   C
Thomas Lake         Eagan, MN             216  1988    N  Other  Sep-86  12,975,000  12,954,000 7.500   95.3%   830-1,300   16
Village Green       Merced, CA              -  -       N  LIHTC  Aug-00     503,528     503,000 8.500   47.7%   380-485     11C,F,AA
Village Green       Merced, CA            128  -       N  LIHTC  Aug-00   3,078,000   3,073,000 8.500     -        -         -C,F,AA
Walnut Creek        Austin, TX              -  -       N  LIHTC  May-00     360,000     349,000 7.500   76.5%   338-556    152    F
Walnut Creek        Austin, TX             98  -       N  LIHTC  May-00   3,240,000   3,235,000 7.500     -        -         -    F
Walnut Park Plaza   Philadelphia, PA      224  2000    N  LIHTC  Apr-00   5,500,000   5,491,000 7.500   83.9%   597-650     49  C, F
Willow Creek        Ames, IA              138  1988    Y  Other  Feb-87   6,100,000   5,887,000 7.250  100.0%   565-810      7
                                       -------                         ------------ -----------

  Subtotal                              8,002                            326,279,358 319,600,000
                                       -------                         ------------- -----------

  Subtotal - Tax-Exempt First Mortgage 19,959                            870,045,793 823,392,000
  Bonds
                                       -------                           ------------- -----------



Taxable First Mortgage Bonds
----------------------------

Owned by the Company (not including its consolidated subsidiaries)
------------------------------------------------------------------

Chandler Creek      Round Rock, TX        -    -       N  501c3  Oct-00   350,000     350,000 9.750%    -        -         19 G H,J,
                                                                                                                                 DD
Greenbriar          Concord, CA           -    -       N  LIHTC  May-99 2,015,000   2,015,000 9.000   98.0%   750-1,100    55  C,F
Greenbridge at      Richardson, TX        -    -       N  501c3  Nov-00   350,000     350,000 10.000    -        -            G,H,J
Buckingham
Lake Park           Turlock Park, CA      -    2000    N  LIHTC  Jun-99   375,000     375,000 9.000   98.0%   452-634      24
Lakes Edge at WaldenMiami, FL             -    -       N  LIHTC  Jun-99 1,400,000   1,711,111 11.000  97.5%   618-944     184   F
Oaks at Hampton     Dallas, TX            -    -       N  LIHTC  Apr-00   525,000     525,000 9.000     -        -         11  C, G
Parks at            DeSoto, TX            -    -       N  LIHTC  Jul-00   455,000     455,000 9.000     -        -         14 G,H,J
Westmoreland
Princess Anne House Virginia Beach, VA    -    -       N  LIHTC  Apr-00   125,000     131,945 9.500     -        -        250C,G,H,J
Red Hill Villas     Round Rock, TX        -    -       N  LIHTC  Dec-00   400,000     400,000 9.500     -        -         19   C, G
Williams Run        Dallas, TX            -    1986    N  501c3  Dec-00   200,000     200,000 9.250     -        -         10
                                       -------                         ---------- -----------

  Subtotal                                  0                              6,195,000   6,513,056
                                       -------                         ------------- -----------

  Total First Mortgage Bonds           19,959                           $876,240,793 $829,905,056
                                       -------                         ------------- -----------


Tax-Exempt Subordinate Bonds
----------------------------


Owned by the CharterMac Equity Issuer Trust3
--------------------------------------------

Museum Tower        Philadelphia, PA      286          N  Other Nov-00  $ 6,000,000 $ 6,000,000 8.250%                             B
Park Landmark       Alexandria, VA        396          N  Other Sep-00    9,500,000   9,500,000 8.750                              B
                                       -------                            ------------- -----------

  Total Tax-Exempt Subordinate Bonds      682                             15,500,000  15,500,000
                                       -------                             ------------- -----------


  Total Revenue Bonds                  20,641                             $891,740,793 $845,405,056
                                       =======                            ============= ===========




</TABLE>



<PAGE>


1 The Revenue Bonds are deemed to be  available-for-sale  debt  securities  and,
accordingly, are carried at their estimated fair values at December 31, 2000.

2 The stated  interest  rate  represents  the coupon rate of the Revenue Bond at
December 31, 2000.

3 This entity is a consolidated subsidiary of the Company (see Merger).

4 The  Revenue  Bonds are held as  collateral  in  connection  with the TOP (see
Private Label Tender Option Program below).

5 These  Revenue  Bonds  have been  transferred  to  CharterMac  Owner  Trust in
connection  with the Company's  Private Label Tender Option Program (see Private
Label Tender Option Program below).

6 LIHTC  bonds are bonds for  which  the  owner of the  Underlying  Property  is
eligible to receive Low Income Housing Tax Credits.  Bonds for which the obligor
is a  non-for-profit  entity under Section 501(c)3 of the Internal  Revenue Code
are classified as 501(c)3  bonds.  Other bonds are those which are neither LIHTC
or 501(c)3 bonds.

A Held by Merrill Lynch as collateral for secured borrowings (see Securitization
Transactions below).

B These Revenue  Bonds are held as  collateral  in  connection  with the Merrill
Lynch RITES/P-FLOATS Program (see Securitization Transactions below).

C The obligors of these Revenue Bonds are  partnerships  in which  affiliates of
the Manager are partners that own a controlling interest.

D The original  owners of the  Underlying  Properties  and the obligors of these
Revenue Bonds have been replaced with affiliates of the Manager.

E The minimum pay rate is the current cash flow of the property.

F The Underlying Property is undergoing substantial rehabilitation.

G The Underlying  Property is still in the construction phase as of December 31,
2000.

H The Underlying  Property is under  construction.  In the event construction is
not completed in a timely manner,  the Company may "put" the Revenue Bond to the
construction lender at par.

I The Underlying Property is undergoing substantial rehabilitation. In the event
it is not completed in a timely  manner,  the Company may "put" the Revenue Bond
to the construction lender at par.

J All of the "puts"  (see (H) and (I)  above) are  secured by a letter of credit
issued by the construction lender to the Company.

K Pursuant to a bond  modification  as of October 1, 1997,  the stated  interest
rate was lowered to 7% through June 30, 2000, and 7.5% thereafter.

L Pursuant to a bond  modification  as of October 1, 1997,  the stated  interest
rate was lowered to 6% through July 31, 2000, and 7% thereafter.

M The interest rate for this Revenue Bond is 6% until expected  refunding in 2nd
quarter 2001.

N The  interest  rate for this Revenue  Bond is 7.625%  during the  construction
period and 7.125% thereafter.

O The interest rate for this Revenue Bond is 7% during the  construction  period
and 7.25% thereafter.

P The interest rate for this Revenue Bond is 7% during the  construction  period
and 6.375% thereafter.

Q The interest rate for this Revenue Bond is 7.965% through  September 23, 1998,
8.125% for the remainder of the construction period and 7.5% thereafter.

R The  interest  rate for this  Revenue  Bond is 7% through  August 31, 2000 and
7.25% thereafter.

S The interest  rate for this Revenue Bond is 7% through  September 30, 2000 and
7.125% thereafter.

T The interest  rate for this Revenue Bond is 6.75%  through May 31, 2000 and 7%
thereafter.

U These  Revenue  Bonds are  currently  awaiting  approval  from the  Issuer for
modification.  The Company is confident that the modification will occur and has
therefore  shown the terms of the Revenue  Bond as per a  forbearance  agreement
which mirrors the terms of the bond modification.

V Due to the sale of the Underlying Property, the Company received deferred Base
Interest.

W The Company received participating interest during 2000.

X The interest  rate for this Revenue Bond is 8.5% through  October 31, 2001 and
7.2% thereafter.

Y The interest  rate for this Revenue Bond is 8.5% through  October 31, 2001 and
7.5% thereafter.

Z The  interest  rate for this  Revenue  Bond is 8.0%  through July 31, 2001 and
7.65% thereafter.

AA The  interest  rate for this  Revenue  Bond is 8.5% through June 30, 2001 and
7.5% thereafter.

BB The interest  rate for this Revenue Bond is 8.5% through  August 31, 2001 and
7.5% thereafter.

CC The interest rate for this Revenue Bond is 8.5% through November 30, 2002 and
7.6% thereafter.

DD The interest  rate for this Revenue Bond is 9.75%  through  November 30, 2002
and 9.25% thereafter.

EE The interest rate for this Revenue Bond is 7.8% through November 30, 2002 and
7.5% thereafter.

FF The interest rate for this Revenue Bond is 8.4% through December 31, 2002 and
7.4% thereafter.

GG The interest rate for this Revenue Bond is 8.5% through  January 31, 2003 and
7.5% thereafter.

HH The interest  rate for this Revenue Bond is 8.55%  through  November 30, 2001
and 7.55% thereafter.

II A third party has the option to acquire  these Revenue Bonds for an aggregate
of $35,250,000.  The right to exercise the option commenced  January 1, 2001 and
shall continue as long as these bonds are outstanding.


<PAGE>

Raising Capital
---------------

In order for the Company to fund its investments in Revenue Bonds and facilitate
growth,  the Company  will need to access  additional  capital.  The Company has
primarily used two sources of capital:  collateralized debt  securitizations and
equity  offerings.  The most  efficient  and  economical  source of  capital  is
securitization. The Company has two primary securitization programs: the Private
Label  Tender   Option   Program   ("TOP")  and  the   P-FLOATS/RITES   program.
Securitizations  continue  to offer the  lowest  cost of  capital,  albeit  with
certain  covenants and leverage  limits.  Pursuant to its Trust  Agreement,  the
Company  is only  able to incur  leverage  or other  financing  up to 50% of the
Company's Total Market Value; this leverage  restriction is generally consistent
or more conservative than leverage covenants on the Company' s securitized debt.
The Company's  conservative capital structure therefore requires periodic equity
offerings to maintain leverage within required limits.

During  2000,  the  Company's  growth was  financed by the Private  Label Tender
Option  Program,  preferred  stock  offerings  by a  subsidiary,  the  Company's
Convertible Community  Reinvestment Act Preferred Share offerings  ("Convertible
CRA Shares") and  securitization  transactions  as well as funds  generated from
operations in excess of  distributions.  The Company's  continued growth will be
financed by the TOP or similar programs,  additional securitization transactions
and funds  generated from  operations in excess of  distributions.  In addition,
before the end of 2001,  the Company  expects to raise funds through  additional
common,  preferred  and  Convertible  CRA  offerings;  however,  there can be no
assurance that these initiatives will be successful.


Private Label Tender Option Program
-----------------------------------

On May 21, 1998,  the Company  closed on its Private Label Tender Option Program
("TOP")  in order to raise  additional  capital to  acquire  additional  Revenue
Bonds.  As of December  31,  1999,  the maximum  amount of capital that could be
raised under the TOP was $400,000,000.  On December 7, 2000, the Company refined
the  structure  the TOP for the primary  purpose of  segregating  Revenue  Bonds
issued by governmental  entities in California from the remainder of the Revenue
Bonds under the TOP and to  increase  the  maximum  amount of capital  available
under the program to $500,000,000.

As of December 31, 2000, the Company has  contributed 53 issues of Revenue Bonds
in the  aggregate  par  amount of  approximately  $473,000,000  to  Charter  Mac
Origination  Trust  I  (the  "Origination  Trust"),  a  wholly-owned,   indirect
subsidiary of the Company.  The  Origination  Trust then  contributed  40 of its
Revenue Bonds,  with an aggregate par amount of approximately  $326,000,000,  to
Charter  Mac  Owner  Trust I (the  "Owner  Trust")  which is  controlled  by the
Company.  The Owner Trust contributes selected bonds to specific "Series Trusts"
in order to segregate Revenue Bonds issued by governmental  entities selected by
state of origin. As of December 31, 2000, two such Series Trusts were created: a
"California  only" series that had 12 issues of Revenue  Bonds in the  aggregate
par amount of approximately  $76,000,000 and a "National"  (non-state  specific)
series that had 28 issues of Revenue Bonds in the aggregate  principal amount of
approximately $250,000,000.

Each Series  Trust  issues two equity  certificates:  (i) a Senior  Certificate,
which has been deposited into another  Delaware  business trust (a  "Certificate
Trust") which issues and sells "Floater Certificates"  representing proportional
interests  in the  Senior  Certificate  to new  investors  and  (ii) a  Residual
Certificate  representing the remaining  beneficial  ownership  interest in each
Series Trust,  which has been issued to the  Origination  Trust. At December 31,
2000, the California  only and National  Series Trusts had Floater  Certificates
with an outstanding amount of $70,000,000 and $205,000,000, respectively.

The Revenue Bonds remaining in the Origination Trust (aggregate principal amount
of approximately  $147,000,000) are additional  collateral for the Owner Trust's
obligations under the Senior Certificate.  In addition, the Owner Trust obtained
a  municipal  bond  insurance  policy  from MBIA to credit  enhance  Certificate
distributions  for the benefit of the holders of the  Floater  Certificates  and
arranged  for a  liquidity  facility,  issued by a  consortium  of highly  rated
European banks,  with respect to the Floater  Certificates.  The Company owns no
beneficial interest in and does not control the Certificate Trusts.

The effect of the TOP  structure is that a portion of the  interest  received by
the Owner Trust on the Revenue Bonds it holds is distributed  through the Senior
Certificate  to the  holders  of the  Floater  Certificates  with  the  residual
interest  remitted  to the  Origination  Trust  (and thus to the  benefit of the
Company)  via the  Residual  Certificate.  The effect of the  December  7, 2000,
refinement of the TOP structure was to segregate the California  related Floater
Certificates  as they  generally  will pay  distributions  at lower  rates  than
National  (non-state  specific)  Floater  Certificates and thus the yield on the
Residual Certificates owned by the Origination Trust is increased.

The Owner Trust,  controlled by the Company, is consolidated and is noted on the
Balance  Sheet of the Company as "minority  interest in  subsidiary  (subject to
mandatory  redemption)."  The  Company's  cost  of  funds  relating  to the  TOP
(calculated as income allocated to the minority  interest plus recurring fees as
a  percentage  of  the  weighted  average  amount  of  the  outstanding   Senior
Certificate) was approximately  5.4%, 4.5% and 4.9% for the years ended December
31, 2000, 1999 and 1998, respectively.


P-FLOATs/RITES
--------------

Another source of financing for the Company's  investments is the securitization
of  selected  Revenue  Bonds  through the Merrill  Lynch  Pierce  Fenner & Smith
Incorporated  ("Merrill Lynch") P-FLOATS/RITES  program.  Merrill Lynch deposits
each Revenue Bond into an  individual  special  purpose  trust  together  with a
Credit  Enhancement  Guarantee  ("Guarantee").  Two types of securities are then
issued  by  each  trust,  (1)  Puttable  Floating  Option  Tax-Exempt   Receipts
("P-FLOATS"),  a short-term  senior  security which bears interest at a floating
rate that is reset  weekly  and (2)  Residual  Interest  Tax  Exempt  Securities
("RITES"),  a subordinate  security which receives the residual interest payment
after payment of P-FLOAT interest and ongoing transaction fees. The P-FLOATS are
sold to qualified third party,  tax-exempt investors and the RITES are generally
sold back to the Company.  The Company has the right, with 14 days notice to the
trustee,  to purchase the  outstanding  P-FLOATS and to withdraw the  underlying
Revenue  Bonds from the trust.  When the Revenue  Bonds are  deposited  into the
P-FLOAT Trust,  the Company  receives the proceeds from the sale of the P-FLOATS
less  certain  transaction  costs.  In certain  other cases,  Merrill  Lynch may
directly buy the Revenue  Bonds from local  issuers,  deposit them in the trust,
sell the P-FLOAT security to qualified  investors and then sell the RITES to the
Company.

In order to  facilitate  the  securitization  under the  P-FLOATS  program,  the
Company has pledged certain  additional Revenue Bonds, cash and cash equivalents
and temporary  investments as collateral for the benefit of the credit  enhancer
or liquidity  provider.  At December 31, 2000, the total carrying amount of such
additional  Revenue Bonds,  cash and cash equivalents and temporary  investments
pledged as collateral was $120,058,000.

During  the year 2000,  the  Company  transferred  three  Revenue  Bonds with an
aggregate face amount of $30,800,000 to the P-FLOATS/RITES  program and received
proceeds of $29,348,725.

The Company's cost of funds relating to its secured borrowings under the Merrill
Lynch P-FLOATS/RITES  program (calculated as interest expense as a percentage of
the weighted average amount of the secured  borrowings) was approximately  4.96%
and 4.8%,  annualized,  for the years ended December 31, 2000 and for the period
June  29,  1999  (inception  of  this  program)   through   December  31,  1999,
respectively.


ATEBT Merger
------------

On November 2, 1999,  the Company and American Tax Exempt Bond Trust  ("ATEBT"),
whose  manager was an affiliate  of the Manager of the Company,  entered into an
Agreement and Plan of Merger providing for the merger of ATEBT into and with the
Company as the  surviving  trust in the merger (the "ATEBT  Merger").  The ATEBT
Merger  was  approved  by the  ATEBT  shareholders  on  September  27,  2000 and
consummated on November 14, 2000.

On the ATEBT Merger  consummation  date, ATEBT had total assets of approximately
$29,700,000  and  net  assets  of  approximately  $28,300,000.  ATEBT  had  four
tax-exempt  first mortgage bonds  financing  properties in four states,  with an
aggregate  outstanding face amount of $23,775,000,  and with individual interest
rates of 9.0%.

Pursuant to the Merger  Agreement,  each share of beneficial  ownership in ATEBT
issued and  outstanding was converted into 1.43112 Common Shares of the Company.
Following the ATEBT Merger,  previous ATEBT  shareholders  own 2,115,722  Common
Shares (representing approximately 9.3% of the outstanding Common Shares) of the
Company.


Competition
-----------

The Company,  from time to time, may be in competition  with private  investors,
mortgage banking companies,  lending institutions,  quasi-governmental  agencies
such as FNMA and FHA,  trust funds,  mutual funds,  domestic and foreign  credit
enhancers,  bond  insurers,  investment  partnerships  and other  entities  with
objectives  similar  to  the  Company.   Although  the  Company  operates  in  a
competitive  environment,  competitors focused on providing tax-exempt financing
on multifamily  housing consistent with the Company's  custom-designed  programs
are relatively few.

The Company's  business is also affected by  competition  to the extent that the
Underlying Properties from which it derives interest and, ultimately,  principal
payments  may be subject to  competition  relating to rental  rates and relative
levels of amenities from those offered by comparable neighboring properties. See
the  comprehensive  table under the heading  "Revenue Bonds -  Characteristics",
above, for additional competitive information.

In addition,  the Manager and/or its affiliates have formed, and may continue to
form,  various entities to engage in businesses that may be competitive with the
Company.  However, the Company generally benefits from its relationship with the
Manager and its affiliates as a "one-stop" shopping source for borrowers seeking
debt and equity financing for affordable multifamily housing.


Employees and Management
------------------------

The Company has no employees.  Management  and  administrative  services for the
Company and its  subsidiaries  are  performed by the Manager and its  affiliates
pursuant to the Management  Agreement  between the Company and the Manager dated
October 1, 1997,  as amended  (the  "Management  Agreement").  The  Manager  has
subcontracted  with  Related  to provide  the  services  contemplated  under the
Management  Agreement.  The Manager receives  compensation for such services and
the  Company  and its  subsidiaries  reimburses  the  Manager and certain of its
affiliates for expenses  incurred in connection with the performance of employee
services to the Company in accordance with the Management Agreement.

Information Regarding Other Companies Managed by Affiliates of the Manager.
---------------------------------------------------------------------------

On or about  February  8, 2001,  a complaint  was filed in the New York  Supreme
Court,  County of New York,  against the external adviser of Aegis Realty,  Inc.
("Aegis"),  a public company which, like the Company,  is externally  advised by
affiliates  of the  Manager.  Also  individually  named in the suit were Messrs.
Boesky, Hirmes, Ross, Brenner, Allen and Fisch. Messrs. Boesky, Hirmes, Brenner,
Allen, and Fisch are trustees of the Company.  Aegis was also named as a nominal
defendant. The action is entitled Paul v. The Related Companies, L.P., Index No.
01-600669,  and is purportedly a class and derivative  action. On or about March
23, 2001 a second action,  entitled  Schnipper v. Aegis Realty,  Inc.,  Case No.
219736-V, was filed in the Circuit Court for Montgomery County, Maryland against
Aegis and each of Aegis's five directors (Messrs. Boesky, Brenner, Hirmes, Allen
and Fisch).  Schnipper is purportedly  brought as a class action.  Each of these
two actions  challenges Aegis' proposed  acquisition of a property portfolio and
development business owned by a third party, which transaction also involves the
acquisition  by Aegis of its external  advisor from  affiliates  of the Manager.
Each suit alleges that the defendants breached their fiduciary duty to the Aegis
stockholders  by, among other things,  committing  Aegis to pay unwarranted fees
and other  consideration  to affiliates  of the Manager.  The actions seek money
damages,  injunctive and declaratory relief and attorneys' fees. The transaction
at issue in each suit,  however,  was approved by Aegis'  independent  directors
(Messrs.  Allen and Fisch),  who first  obtained  legal  advice and two fairness
opinions from nationally  recognized  investment  banking firms before approving
those transactions.  Additionally,  the transaction at issue is subject to Aegis
stockholders approval and will be submitted for a vote of the Aegis stockholders
after proxy materials  describing that transaction are disseminated to the Aegis
stockholders. The defendants have advised the Company that they intend to defend
both actions  vigorously.  With respect to the allegations in the lawsuits,  the
defendants  have advised that they continue to believe that the  transaction  is
fair and reasonable and in the best interests of Aegis and its  stockholders and
will be submitted for approval by a vote of the Aegis stockholders.

The Manager has  advised  the  Company  that it does not believe  that the Aegis
lawsuit will have a material impact on its operations or financial condition.

Recent Legislation
------------------

The States of California and Florida recently adopted administrative  amendments
to their  allocation  plans  pursuant to which they award bond value  capital to
developers of multifamily housing. These amendments will require, in some cases,
that a certain  portion of the debt financing for such properties to be taxable.
Therefore,  in certain  cases,  the Company  may be  required  to offer  taxable
financing to California and Florida developers in order to be competitive.

Since 1986,  the Internal  Revenue Code has provided that any revenue bond which
is a "private  activity  bond"  (other than  certain  refunding  bonds and bonds
issued for  Section  501(c)(3)  organizations)  must  receive an  allocation  of
"volume cap" from the governmental  issuer of the bond. The amount of volume cap
was  established in 1986 and was not indexed for inflation.  Thus, the amount of
available  volume cap in real  dollars has  decreased  each year,  reducing  the
number of projects that may be financed with private activity bonds. On December
21, 2000,  President Clinton signed into law an omnibus funding bill (H.R. 4577)
containing  $31.5  billion  in tax  cuts.  Included  in the law  are  provisions
increasing  both the  low-income  housing  tax credit and tax exempt bond volume
caps over a two year period as follows:  (i) the tax credit cap is  increased to
$1.50 per capita in 2001 and $1.75 per capita in 2002;  (ii) the bond volume cap
is increased to the greater of $62.50 per resident or $187.5 million in 2001 and
$75 per  resident  or $225  million in 2002.  Both  volume  caps are indexed for
inflation beginning in 2003.


Item 2.  Properties

The Company does not own or lease any property.  The Manager leases office space
at 625 Madison Avenue, New York, New York, 10022.


Item 3.  Legal Proceedings

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


Item 4.  Submission of Matters to a Vote of Shareholders

None.

                                     PART II

Item 5.  Market for the Company's Common Shares and Related Shareholder Matters.

As of March 9, 2001, there were 3,793 registered  shareholders owning 22,700,340
Common  Shares.  The  Company's  Common  Shares have been listed on the American
Stock Exchange since October 1, 1997 under the symbol "CHC". Prior to October 1,
1997,  there was no established  public trading market for the Company's  Common
Shares.

The high and low prices for each quarterly period of the last two years during
which the Common Shares were traded are as follows:

                   2000             2000              1999             1999
Quarter Ended      Low              High              Low              High
-------------      ---              ----              ---              ----

March 31         $11.250          $12.375           $11.9375         $13.375
June 30           11.375           12.813            12.375           13.0625
September 30      12.188           14.250            12.375           13.0625
December 31       12.400           13.930            11.375           13.125

The last reported sale price of Common Shares on the American Stock Exchange on
March 9, 2001 was $15.00.


Incentive Share Option Plan
---------------------------

The Company has adopted an  incentive  share option plan (the  "Incentive  Share
Option Plan"), the purpose of which is to (i) permit the Company and the Manager
to attract and retain  qualified  persons as trustees  and  officers and (ii) to
provide  incentive  and to more  closely  align the  financial  interests of the
Manager and its employees and officers with the interests of the shareholders by
providing  the Manager  with  substantial  financial  interest in the  Company's
success. The Compensation Committee administers the Incentive Share Option Plan.
Pursuant to the Incentive Share Option Plan, if the Company's  distributions per
Common  Share in the  immediately  preceding  calendar  year exceed  $0.9517 per
Common Share, the  Compensation  Committee has the authority to issue options to
purchase, in the aggregate, that number of Common Shares which is equal to three
percent of the Common Shares  outstanding  as of December 31 of the  immediately
preceding  calendar  year,  provided  that the  Compensation  Committee may only
issue,  in the aggregate,  options to purchase a maximum number of Common Shares
over the life of the  Incentive  Share  Option  Plan  equal to 10% of the Common
Shares outstanding on October 1, 1997 (2,058,748 Common Shares).

Subject  to  the  limitations  described  in  the  preceding  paragraph,  if the
Compensation Committee does not grant the maximum number of options in any year,
then the excess of the number of  authorized  options over the number of options
granted  in such year will be added to the number of  authorized  options in the
next  succeeding  year  and will be  available  for  grant  by the  Compensation
Committee in such succeeding year.

All options  granted by the  Compensation  Committee will have an exercise price
equal to or greater than the fair market value of the Common  Shares on the date
of the grant.  The maximum option term is ten years from the date of grant.  All
Common Share options  granted  pursuant to the  Incentive  Share Option Plan may
vest  immediately  upon issuance or in accordance with the  determination of the
Compensation  Committee.  For the years  ended  December  31,  1997 and 1998 the
Company did not grant any options since its  distributions  per Common Share did
not exceed the minimum  threshold of $0.9517 per Common Share. In 2000 and 1999,
the Company distributed $1.070 and $0.995 per Common Share,  respectively,  thus
enabling the Compensation Committee, at its discretion, to issue options.

On May 1, 2000,  options to  purchase  297,830  common  shares  were  granted to
officers of the Company and certain  employees  of an  affiliate of the Manager,
none of whom are employees of the Company.  The exercise  price of these options
is $11.5625  per share.  The term of each option is ten years.  The options will
vest in equal  installments  on May 1,  2001,  2002 and 2003.  The  Company  has
adopted  the   provisions  of  SFAS  No.  123,   "Accounting   for   Stock-Based
Compensation"  for its  share  options  issued  to  non-employees.  Accordingly,
compensation  cost is accrued based on the  estimated  fair value of the options
issued, and amortized over the vesting period. Because vesting of the options is
contingent  upon the  recipient  continuing  to provide  services to the Company
until the vesting date, the Company estimates the fair value of the non-employee
options at each period-end up to the vesting date, and adjusts  expensed amounts
accordingly.  The 297,830  options  granted on May 1, 2000 had an estimated fair
value at December 31, 2000 of $.90 per option grant, or a total of $268,047. The
fair  value  of  each  option  grant  is  estimated   using  the   Black-Scholes
option-pricing  model with the following  weighted average  assumptions used for
grants  in 2000:  dividend  yield of  8.18%,  expected  volatility  of 18%,  and
expected  lives of ten  years.  None of the  options  granted  during  2000 were
exercised or expired. The Company recorded  compensation cost of $109,952 during
the year ended December 31, 2000 relating to these option grants.

Common Share Repurchase Plan
----------------------------

On October 9, 1998,  the Board of Trustees  authorized the  implementation  of a
Common Share repurchase plan,  enabling the Company to repurchase,  from time to
time, up to 1,500,000 of its Common Shares.  The repurchases,  if any, are to be
made in the open  market  and the timing is  dependent  on the  availability  of
Common Shares and other market conditions.  As of December 31, 2000, the Company
had  acquired  8,400 of its Common  Shares for an  aggregate  purchase  price of
$103,359 (including commissions and service charges).  Repurchased Common Shares
are accounted for as treasury Common Shares of beneficial interest.


Preferred Equity Issuance by Subsidiary
---------------------------------------

On June 29, 1999 a subsidiary of the Company  completed a sale to  institutional
investors of $90 million tax-exempt "Series A Cumulative  Preferred Shares".  In
connection  with this  transaction,  the Company caused 100% of the ownership of
the Origination  Trust to be transferred to Charter Mac Equity Issuer Trust (the
"Issuer"),  a newly  formed  Delaware  business  trust  and an  indirectly-owned
subsidiary in which the Company owns 100% of the common equity.  The Issuer then
issued  the  Series A  Cumulative  Preferred  Shares  as well as all  subsequent
cumulative preferred issuances (collectively, "Cumulative Preferred Shares"). As
a result,  the Issuer became the direct and indirect owner of all of the Revenue
Bonds held by the Origination Trust and Owner Trust and its  directly-owned  and
indirectly-owned  subsidiaries  (see  discussion  of Private Label Tender Option
Program,  above).  In addition to contributing  the ownership of the Origination
Trust,  the Company also  contributed  certain  additional  Revenue Bonds to the
Issuer.  Net proceeds of  approximately  $86,395,000 from the Series A preferred
offering were used to invest in or acquire additional  tax-exempt assets for the
Issuer.

The Series A  Cumulative  Preferred  Shares  have an annual  preferred  dividend
payable  quarterly in arrears on January 31, April 30, July 31 and October 31 of
each  year,  and  payable  upon  declaration  thereof by the  Issuer's  Board of
Trustees,  but only to the  extent of the  Issuer's  tax-exempt  income  (net of
expenses) for the particular quarter.  The Series A Cumulative  Preferred Shares
are subject to  mandatory  tender by the holders  thereof  for  remarketing  and
purchase on June 30, 2009 and each  remarketing date thereafter at a price equal
to $2,000,000  per share plus an amount equal to all  distributions  accrued but
unpaid on the Series A Cumulative Preferred Shares.

Holders of the Series A  Cumulative  Preferred  Shares may elect to retain their
shares upon remarketing,  with a distribution rate to be determined  immediately
prior to the  remarketing  date by the  remarketing  agent.  Each  holder of the
Series A  Cumulative  Preferred  Shares will be required to tender its shares to
the Issuer for mandatory  repurchase on June 30, 2049, unless the Issuer decides
to  remarket  the  shares on such  date.  The Issuer may not redeem the Series A
Cumulative  Preferred  Shares  before June 30, 2009.  After that date,  all or a
portion of the shares may be redeemed, subject to certain conditions. The Series
A Cumulative  Preferred  Shares are not  convertible  into Common  Shares of the
Issuer or Common Shares of the Company.

The  Series A  Cumulative  Preferred  Shares  rank,  with  respect to payment of
distributions  and amounts upon  liquidation,  dissolution  or winding-up of the
Issuer,  senior to all  classes or series of  Convertible  CRA Shares and Common
Shares of the Issuer and therefore, of the Company.

On July 21,  2000,  the  Company,  through the  Issuer,  completed a $79 million
tax-exempt  preferred  equity  offering  comprised  of  "Series  A-1  Cumulative
Preferred Shares" and "Series B Subordinate  Cumulative  Preferred  Shares." The
Company received net proceeds of approximately $76,126,000 from this offering.

The Series A-1 Cumulative Preferred Shares rank senior to Convertible CRA Shares
and Common Shares and pari passu with the Issuer's Series A Cumulative Preferred
Shares and senior to the Series B Subordinate  Cumulative  Preferred Shares. The
Series A-1  Cumulative  Preferred  Shares have  identical  terms to the Series A
Cumulative  Preferred shares except as to the annual preferred dividend rate and
the liquidation amount per share.

The  Series  B  Subordinate  Cumulative  Preferred  Shares  rank  senior  to the
Company's  Convertible  CRA Shares and Common  Shares and junior to the Issuer's
Series A and Series A-1 Cumulative  Preferred Shares.  The shares have an annual
preferred dividend payable quarterly in arrears on January 31, April 30, July 31
and October 31 of each year but only after payment of all distributions  payable
with respect to the Series A and Series A-1 Cumulative  Preferred Shares and any
other senior securities.  The Series B Subordinate  Cumulative  Preferred Shares
are subject to mandatory tender by the holders at their  liquidation  amount for
remarketing and purchase on November 30, 2010 under the same terms as the Series
A and Series A-1 Cumulative Preferred Shares.

Since inception,  all quarterly  distributions  have been declared at the stated
annualized  dividend rate for each respective  series and all  distributions due
have been paid.  Attributes of each series of Cumulative Preferred Shares are as
follows:


Preferred    Date of     Number        Liquidation      Total Face     Dividend
Series      Issuance    of Shares  Preference per Share   Amount         Rate
---------  ----------  -----------  ------------------  ------------- ---------
Series A     June 29,      45        $2,000,000        $90,000,000      6.625%
             1999
Series A-1   July 21,      48           500,000         24,000,000      7.100%
             2000
Series B     July 21,     110           500,000         55,000,000      7.600%
             2000


Convertible Community Reinvestment Act Preferred Share Offerings
----------------------------------------------------------------

On May 10,  2000,  the Company  completed a  $27,497,000  private  placement  of
Convertible  Community  Reinvestment  Act  Preferred  Shares  ("Convertible  CRA
Shares")  to three  financial  institutions  (1,946,000  Convertible  CRA Shares
priced at $14.13  per  share).  The  Company  incurred  an  initial  purchasers'
discount of  approximately  $1,109,000 and other related costs of  approximately
$610,000  resulting in net proceeds (less expenses) of $25,778,000.  On December
14, 2000, the Company  completed an additional  $9,100,000  private placement of
Convertible  CRA  Shares to three  additional  financial  institutions  (644,000
Convertible CRA Shares priced at $14.13 per share). After an initial purchasers'
discount of  approximately  $367,000 and other  related  costs of  approximately
$318,000, the Company received net proceeds (less expenses) of $8,414,000.

The  Convertible  CRA Shares enable  financial  institutions  to receive certain
regulatory  benefits  in  connection  with their  investment.  The  Company  has
developed  a  proprietary  method  for  specially  allocating  these  regulatory
benefits to specific  financial  institutions that invest in the Convertible CRA
Shares.  Other  than  the  preferred  allocation  of  regulatory  benefits,  the
investors  receive  the same  economic  benefits as Common  Shareholders  of the
Company,  including  receipt  of the same  dividends  per share as those paid to
Common  Shareholders.  Other  than  on  matters  relating  to the  terms  of the
Convertible  CRA Shares or to amendments to the Company's  Trust Agreement which
would adversely affect the Convertible CRA Shares, the Convertible CRA Shares do
not have any voting rights.  The Company's earnings are allocated pro rata among
the Common Shares and the Convertible CRA Shares, and the Convertible CRA Shares
rank on parity with the Common  Shares with respect to rights upon  liquidation,
dissolution or winding up of the Company.  The investors,  at their option, have
the ability to convert  their  Convertible  CRA Shares  into Common  Shares at a
predetermined conversion price. Upon conversion, the investors will no longer be
entitled to a special allocation of the regulatory benefit. The conversion price
is the greater of (i) the Company's  book value per Common Share as set forth in
the Company's most recently issued annual or quarterly report filed with the SEC
prior  to the  respective  Convertible  CRA  issuance  date or (ii)  110% of the
closing  price  of a Common  Share on the  respective  Convertible  CRA  Share's
pricing date. The conversion  price for each  Convertible  CRA Share offering is
indicated on the following table:



     Issuance Date                 Conversion Price     Conversion Ratio
     --------------------------- --------------------- --------------------
     May 10, 2000                       $15.33                 0.9217
     December 20, 2000                  $14.60                 0.9678


The  Company  expects  to raise  additional  equity in the future  from  similar
financial  institutions  that can utilize the regulatory  benefits that have not
previously been allocated to other holders of the Convertible CRA Shares.  While
the Company  expects that these future  offerings will be a source of liquidity,
it is only one of many sources of potential liquidity.  Furthermore, there is no
assurance that the Company will be able to consummate  such  transactions or the
price  or terms  on  which  the  offering  may be  consummated.  If the  federal
regulatory  agencies  that monitor these  regulatory  benefits were to determine
that an investment in the Convertible CRA Shares did not result in the financial
institutions being able to receive these regulatory benefits,  the Company would
lose this potential source of liquidity.


Other
-----

Through  calendar year 1999,  each  independent  trustee was entitled to receive
annual  compensation for serving as a trustee in the aggregate amount of $15,000
payable in cash  (maximum of $5,000 per year)  and/or  Common  Shares  valued at
their fair market  value on the date of  issuance.  Beginning  in calendar  year
2000,  the annual  compensation  for the two original  independent  trustees was
increased from $15,000 to $17,500 and the maximum  payable in cash was increased
from $5,000 to $7,500.  In 2000, a third  independent  trustee was appointed and
such trustee will receive annual compensation in the aggregate amount of $30,000
payable in cash  (maximum  of $20,000  per year)  and/or  Common  Shares.  As of
December 31, 2000 and 1999, 3,552 and 1,910 Common Shares, respectively,  having
an aggregate value on the date of issuance of $45,000 and $25,000, respectively,
were issued to the independent  trustees as compensation for their services.  An
additional  2,001 shares,  with an aggregate value of $30,000 at issuance,  were
issued to the  independent  trustees in January 2001 as  compensation  for their
2000 service.


Distribution Information

Distributions Per Share

The  Company's  earnings are  allocated pro rata among the Common Shares and the
Convertible CRA Shares (collectively,  "Shares"), and the Convertible CRA Shares
rank on parity with the Common  Shares with respect to rights upon  liquidation,
dissolution or winding up of the Company. Quarterly cash distributions per Share
for the years ended December 31, 2000 and 1999 were as follows:


                                   Shareholders of the Company
                       ------------------------------------------------------
 Cash Distribution        Date             Per             Total Amount
 for Quarter Ended        Paid            Share             Distributed
 --------------------- ------------- ------------------ ---------------------
 March 31, 2000          5/15/00           $0.265          $  5,454,406
 June 30, 2000           8/15/00            0.265             5,749,086
 September 30, 2000     11/15/00            0.265             5,970,096
 December 31, 2000       2/15/01            0.275             6,800,306
                                            -----           -----------
 Total for 2000                            $1.070           $23,973,894
                                            =====            ==========

 March 31, 1999          5/14/99           $0.240          $  4,939,437
 June 30, 1999           8/15/99            0.245             5,042,352
 September 30, 1999     11/14/99            0.245             5,042,352
 December 31, 1999       2/14/00            0.265             5,453,971
                                            -----           -----------
 Total for 1999                            $0.995           $20,478,112
                                            =====            ==========


In addition to the  distributions set forth in the table above, the Company paid
the  Manager  a  special  distribution  (equal  to .375%  per annum of the total
invested  assets of the Company) which amounted to $2,743,465 and $2,018,822 for
the years ended December 31, 2000 and 1999, respectively.

There are no material legal  restrictions  upon the Company's  present or future
ability to make distributions in accordance with the provisions of the Company's
Amended and Restated Trust Agreement.  Future  distributions paid by the Company
will be at the  discretion of the Trustees  based upon  evaluation of the actual
cash flow of the Company, its financial condition, capital requirements and such
other factors as the Trustees deem relevant.


Item 6.  Selected Financial Data

The information set forth below presents selected financial data of the Company.
Additional  financial   information  is  set  forth  in  the  audited  financial
statements  and notes thereto  contained in "Item 8.  Financial  Statements  and
Supplementary Data".
<TABLE>
<CAPTION>


                                                       For the Year Ended December 31, ($000s except per share data)
                                                       -------------------------------------------------------------
OPERATIONS                                                 2000       1999          1998       1997          1996*
----------                                             -------------------------------------------------------------

<S>                                                     <C>           <C>         <C>          <C>         <C>
Total revenues                                          $  59,091     $ 40,437    $ 27,940     $ 14,230    $ 11,628

Operating expenses                                         (4,563)      (3,151)     (2,391)      (1,902)     (1,783)
Interest expense and financing costs                       (6,414)      (3,166)     (1,959)        (429)          0
Other-than-temporary impairments related to                     -       (1,859)          -       (1,843)     (4,000)
  investments in Revenue Bonds
Gain/(Loss) on repayment of revenue bonds                     645         (463)          0            0           0
                                                       ----------      -------  -----------    ---------   --------


Income before minority interests                           48,759       31,798      23,590       10,056       5,845
Income allocated to preferred shareholders of              (8,594)      (3,014)          0            0           0
  subsidiary
Minority interest in income of subsidiary                 (10,074)      (5,602)     (1,564)           0           0
                                                         --------     --------    --------   ----------- ----------


Net income                                              $  30,091     $ 23,182    $ 22,026     $ 10,056    $  5,845
                                                         ========      =======     =======      =======     =======

Net income applicable to Shareholders *****             $  27,074     $ 20,951    $ 20,343   $    2,438***
                                                         ========      =======     =======    ===========

Net income per Share *****
  Basic                                                $     1.22   $     1.02  $       .99  $       .12***   **
                                                        ==========   ==========  ==========   ==========

  Diluted                                              $     1.22   $     1.02  $       .98  $       .12***   **
                                                        ==========   ========    ==========   ==========


Weighted average Shares outstanding
  Basic                                                    22,141       20,581      20,587       20,587***    **
                                                           ======       ======      ======       ======
  Diluted                                                  22,152       20,581      20,741       20,587***    **
                                                           ======       ======      ======       ======


FINANCIAL POSITION

Total assets                                           $  925,236   $  673,791  $  492,586   $   362,391   $  154,896
                                                        =========    =========   =========    ==========    =========

Secured borrowings                                     $  110,026   $   80,770  $        0   $        0    $        0
                                                        =========    =======     =========    ==========  ===========

Notes payable                                          $        0   $        0  $        0   $   21,445    $        0
                                                        =========    =========   =========    =========    ==========

Total liabilities                                      $  124,222   $   91,239  $   15,092   $   30,722    $      574
                                                        =========    ==========  =========    ========     =========

Minority interest in subsidiary (subject to            $  275,000   $  177,000  $  150,000   $        0    $        0
  mandatory redemption)                                 ========     =========   =========    ========     ==========

Preferred shares of subsidiary (subject to             $  169,000   $   90,000  $       0    $        0    $        0
  mandatory repurchase)                                 =========    ==========  ========     =========    ==========

Total shareholders' equity/partners' capital           $  357,014   $  315,552  $  327,494   $   331,668   $  154,323
                                                        ========     ========   ==========   ==========    ==========


DISTRIBUTIONS

Distributions to Series A preferred shareholders       $  5,962,000 $ 3,014,375        N/A          N/A           N/A
                                                       ===========   =========
Distributions to Series A-1 preferred shareholders     $  762,067          N/A         N/A          N/A           N/A
                                                        ==========
Distributions to Series B preferred shareholders       $ 1,869,389         N/A         N/A          N/A           N/A
                                                        =========
Distributions to BUC$holders                                  N/A          N/A         N/A   $7,138,263****  $9,517,685
                                                                                              =========       =========
Distributions to Shareholders *****                    $23,973,872  $20,478,112 $19,144,597  $4,735,120***
                                                        ==========   ==========  ==========   =========
Distributions per share**                              $      1.07  $      1.00 $       .93  $       .23***
                                                        ===========  =========== ============ =========


</TABLE>


<PAGE>


OTHER DATA

*Information  prior to  October  1, 1997 (the date of the  Merger)  is only with
respect to Summit Tax Exempt L.P. II.  Information  subsequent  to September 30,
1997 is with  respect to the  Company  and its  consolidated  subsidiaries  that
include Summit Tax Exempt II and the other Partnerships pursuant to the Merger.

**Distributions  per share are the same for both common  shares and  Convertible
CRA Shares.  Net income and distribution per Share information for periods prior
to  October  1,  1997  is not  presented  because  it is not  indicative  of the
Company's continuing capital structure.

***Represents amount for the three months ended December 31, 1997.

****Represents amount for the nine months ended September 30, 1997.

*****Includes common shareholders and Convertible CRA Shareholders.




<PAGE>


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.


General
-------

The Company is a Delaware business trust principally  engaged in the acquisition
and ownership (directly or indirectly) of tax-exempt multifamily housing revenue
bonds ("Revenue  Bonds") and other  investments that produce  tax-exempt  income
issued  by  various  state  or  local  governments,  agencies,  or  authorities.
Accordingly,  the Company  produces  tax-exempt  income which it directly passes
through to its  shareholders  in the form of a  quarterly  tax-exempt  dividend.
Revenue  Bonds  are  secured  by  mortgage   loans  on   underlying   properties
("Underlying Properties").

The Company is governed by a board of trustees  comprised  of three  independent
managing  trustees and four managing  trustees who are  affiliated  with Related
Capital Company,  a nationwide,  fully integrated real estate financial services
firm. The Company has engaged Related Charter LP (the  "Manager"),  an affiliate
of Related, to manage its day-to-day affairs and to provide, among other things,
acquisition, financial, accounting, capital markets, asset monitoring, portfolio
management, investor relations and public relations services.

The Company does not operate as a mortgage REIT,  which  generally  utilize high
levels of leverage  and acquire  subordinated  interests  in  commercial  and/or
residential  mortgage-backed  securities.  Unlike  mortgage REITs that typically
incur  leverage at ratios  ranging from 3:1 to 10:1, the Company is only able to
incur leverage or other  financing up to 50% of the Company's Total Market Value
(as  defined  and  pursuant  to its Trust  Agreement)  as of the date  incurred.
Furthermore,  the Revenue Bonds owned by the Company generally call for ten-year
restrictions  from  prepayments,  eliminating  the Company's  susceptibility  to
significant  levels of repayment  risk as a result of interest rate  reductions.
Due to the Company's low level of leverage, the Company has not been affected by
the lack of liquidity  that recently  impaired  mortgage REITs and its portfolio
does not contain  assets that are  especially  vulnerable to  volatility  during
periods of  interest  rate  fluctuations.  Consistent  with the  foregoing,  the
Company  focuses on providing  investors  with a stable level of  distributions,
even through unstable markets.

In order to generate increased  tax-exempt income and, as a result,  enhance the
value of the  Company's  Shares,  the  Company  intends  to invest in or acquire
additional  Revenue  Bonds.  The Company  believes that it can earn above market
rates of interest on its bond  acquisitions by focusing its efforts primarily on
affordable housing.  The traditional method of financing  tax-exempt  properties
requires the involvement of credit  enhancement,  rating agencies and investment
bankers. Therefore, the up-front cost of such financing is generally much higher
than  traditional  multifamily  financing.  The  Company  has  designed a Direct
Purchase Program specifically to appeal to developers of such properties through
which the Company will invest in or acquire  tax-exempt  bonds  without the cost
associated with credit enhancement,  rating agencies and investment bankers. The
Company  believes that the up-front cost savings to the developer will translate
into a higher than market interest rate on the bonds acquired by the Company.

The Company  believes that it is well  positioned to market its Direct  Purchase
Program  as a result of the  Manager's  affiliation  with  Related  because  the
Manager  is  able  to  utilize  Related's  resources  and  relationships  in the
multifamily affordable housing finance industry to source potential borrowers of
first mortgage bonds. Related and its predecessor  companies have specialized in
offering  debt  and  equity  products  to  mid-market   multifamily  owners  and
developers  for  over 26  years.  According  to the 2000  National  Multihousing
Council  survey,  Related is the third largest owner of apartments in the United
States.


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

In order for the Company to fund its investments in Revenue Bonds and facilitate
growth,  the Company has primarily  used two sources of capital:  collateralized
debt  securitizations  and equity  offerings.  To date,  the  primary  source of
long-term  liquidity  has come from the  Company's  Private  Label Tender Option
Program and preferred  equity  offerings by the Company or a subsidiary.  During
the years 1999 and 2000, the Company raised additional capital as follows:

<TABLE>
<CAPTION>


                                                  Amount of Capital Raised During:              Ending Balance
--------------------------------------------------------------------------------------------------------------
     Capital Source                                  1999                   2000               December 31, 2000
------------------------------------------------------------------------------------------------------------------------------------

     Equity:

<S>                                            <C>                       <C>                   <C>
     Series A Preferred                        $  90,000,000             $         0           $  90,000,000
     Series A-1 Preferred                      $           0             $24,000,000           $  24,000,000
     Series B Preferred                        $           0             $55,000,000           $  55,000,000
     Convertible CRA Preferred                 $           0             $36,596,700           $  36,596,700

     Securitizations:

     Private Label Tender Option Program        $177,000,000             $98,000,000            $275,000,000
     P-Floats/RITES                            $  80,769,616             $29,348,725            $110,026,031
</TABLE>

These capital raising transactions are described in more detail below.


The Company has two primary  securitization  programs:  the Private Label Tender
Option Program and the P-FLOATS/RITES program. Securitizations continue to offer
efficient  execution  and  the  lowest  cost of  capital,  albeit  with  certain
covenants and leverage limits.  Pursuant to its Trust Agreement,  the Company is
only able to incur leverage or other  financing up to 50% of the Company's Total
Market Value;  such terms are generally  consistent  or more  conservative  than
leverage covenants on the Company' s securitized debt.

Short-term  liquidity  is  provided by interest  income from  Revenue  Bonds and
promissory  notes in excess of the related  financing costs, and interest income
from cash and  temporary  investments.  The Company  believes that its financing
capacity and cash flow from current  operations are adequate to meet its current
and projected liquidity requirements.

Management is not aware of any trends or events,  commitments or  uncertainties,
which  have not  otherwise  been  disclosed  that  will or are  likely to impact
liquidity in a material way.

<TABLE>
<CAPTION>

Capital Raising Transactions

(i) Preferred Equity Issuances By Subsidiary

Since June 1999, the Company, through a subsidiary, has issued multiple series
of Cumulative Preferred Shares. Proceeds from these offerings were used to
invest in or acquire additional tax-exempt assets for the Company.

Preferred        Date of     Mandatory       Mandatory    Number       Liquidation       Total Face    Dividend
Series          Issuance      Tender        Repurchase   of SharesPreference per Share     Amount      Rate
---------------------------------------------------------------------------------------------------------------

<S>              <C>          <C>             <C>            <C>        <C>             <C>              <C>
Series A         6/29/99      6/30/09         6/30/49        45         $2,000,000      $90,000,000      6.625%
Series A-1       7/21/00      6/30/09         6/30/49        48            500,000       24,000,000      7.100%
Series B         7/21/00     11/30/10        11/30/50       110            500,000       55,000,000      7.600%

</TABLE>

Each series of  Cumulative  Preferred  Shares has an annual  preferred  dividend
payable quarterly in arrears upon declaration  thereof by the Company's Board of
Trustees,  but only to the extent of  tax-exempt  net income for the  particular
quarter.  All series of  Cumulative  Preferred  Shares are subject to  mandatory
tender by the holders thereof for  remarketing and purchase on their  respective
mandatory  tender dates and each remarketing date thereafter at their respective
liquidation  preference  per  share  plus an amount  equal to all  distributions
accrued but unpaid.

Holders of  Cumulative  Preferred  Shares may elect to retain  their shares upon
remarketing,  with a distribution rate to be determined immediately prior to the
remarketing date by the remarketing  agent. Each holder of Cumulative  Preferred
Shares  will be  required  to tender  its  shares to the  Issuer  for  mandatory
repurchase  on the  mandatory  repurchase  date,  unless the Company  decides to
remarket  the  shares  on  such  date.   Cumulative  Preferred  Shares  are  not
convertible into Common Shares of the Company.

The Series A and A-1 Cumulative  Preferred  Shares rank, with respect to payment
of distributions and amounts upon liquidation,  dissolution or winding-up of the
Company,  senior to all classes or series of  Convertible  CRA Shares,  Series B
Cumulative  Preferred Shares and Common Shares of the of the Company. The Series
B  Subordinate  Cumulative  Preferred  Shares  rank,  with respect to payment of
distributions  and amounts upon  liquidation,  dissolution  or winding-up of the
Company, senior to the Company's Common Shares and the Company's Convertible CRA
Shares and junior to the Issuer's Series A and A-1 Cumulative Preferred Shares.

Since inception,  all quarterly  distributions have been declared at each stated
annualized  dividend rate for each respective  series and all  distributions due
have been paid. In February 2001, preferred shareholder  distributions that were
declared in December  2000,  were paid to the preferred  shareholders  from cash
flow from  operations  for the quarter  ended  December 31, 2000.  The per share
distributions declared and paid for this period were as follows:

                                Dividend per Share       Total Distribution
                                ------------------       ------------------

  Series A; 6.625%                     $ 33,125               $1,490,625
  Series A-1; 7.100%                   $  8,875               $  426,000
  Series B; 7.600%                     $  9,500               $1,045,000


(ii) Convertible Community Reinvestment Act Preferred Share Offerings

On May 10,  2000,  the Company  completed a  $27,497,000  private  placement  of
Convertible  Community  Reinvestment  Act  Preferred  Shares  ("Convertible  CRA
Shares")  to three  financial  institutions  (1,946,000  Convertible  CRA Shares
priced at $14.13 per share.) On December  14,  2000,  the Company  completed  an
additional  $9,100,000  private  placement  of  Convertible  CRA Shares to three
additional  financial  institutions  (644,000  Convertible  CRA Shares priced at
$14.13 per share).

The  Convertible  CRA Shares enable  financial  institutions  to receive certain
regulatory  benefits  in  connection  with their  investment.  The  Company  has
developed  a  proprietary  method  for  specially  allocating  these  regulatory
benefits to specific  financial  institutions that invest in the Convertible CRA
Shares.  Other  than  the  preferred  allocation  of  regulatory  benefits,  the
preferred investors receive the same economic benefits as Common Shareholders of
the Company,  including receipt of the same dividends per share as those paid to
Common  Shareholders.  The  Company's  earnings are allocated pro rata among the
Common Shares and the  Convertible  CRA Shares,  and the  Convertible CRA Shares
rank on parity with the Common  Shares with respect to rights upon  liquidation,
dissolution or winding up of the Company.

The investors,  at their option,  have the ability to convert their  Convertible
CRA  Shares  into  Common  Shares  at a  predetermined  conversion  price.  Upon
conversion,  the investors will no longer be entitled to a special allocation of
the regulatory benefit. The conversion price is the greater of (i) the Company's
book value per Common Share as set forth in the Company's  most recently  issued
annual  or  quarterly  report  filed  with  the  SEC  prior  to  the  respective
Convertible  CRA  Share  issuance  date or (ii) 110% of the  closing  price of a
Common  Share on the  respective  Convertible  CRA  Share's  pricing  date.  The
conversion  price for each  Convertible  CRA Share  offering is indicated on the
following table:


    Issuance Date          Conversion Price           Conversion Ratio
    -------------          ----------------           ----------------

    May 10, 2000                $15.33                      0.9217
    December 14, 2000           $14.60                      0.9678



(iii) Private Label Tender Option Program

On May 21, 1998,  the Company  closed on its Private Label Tender Option Program
("TOP")  in order to raise  additional  capital to  acquire  additional  Revenue
Bonds.  As of December  31,  1999,  the maximum  amount of capital that could be
raised under the TOP was $400,000,000.  On December 7, 2000, the Company refined
the  structure  the TOP for the primary  purpose of  segregating  Revenue  Bonds
issued by governmental  entities in California from the remainder of the Revenue
Bonds under the TOP and to  increase  the  maximum  amount of capital  available
under the program to $500,000,000.  In addition, the TOP's surety commitment was
extended for a five-year term. The liquidity  commitment is a one-year renewable
commitment.  The  Company  expects to renew or  replace  such  commitments  upon
expiration of their terms.

Under the TOP structure,  the Company  contributes  Revenue Bonds to Charter Mac
Origination  Trust  I  (the  "Origination  Trust"),  a  wholly  owned,  indirect
subsidiary of the Company.  The Origination  Trust then  contributes  certain of
these  Revenue  Bonds to Charter Mac Owner Trust I (the "Owner  Trust") which is
controlled  by the  Company.  The  Owner  Trust  contributes  selected  bonds to
specific  "Series  Trusts"  in  order  to  segregate  Revenue  Bonds  issued  by
governmental  entities selected by state of origin. As of December 31, 2000, two
such  Series  Trusts  were  created:  a  California  only  series and a National
(non-state specific) series.

Each Series  Trust,  issues two equity  certificates:  (i) a Senior  Certificate
which has been  deposited  into a  "Certificate  Trust"  which  issues and sells
"Floater  Certificates"   representing  proportional  interests  in  the  Senior
Certificate  to new  investors  and (ii) a Residual  Certificate,  issued to the
Origination Trust which represents the remaining  beneficial  ownership interest
in each Series Trust.

The effect of the TOP  structure is that a portion of the  interest  received on
Revenue Bonds in the Owner Trust is distributed  through the Senior  Certificate
to the holders of the Floater  Certificates with any remaining interest remitted
to the  Origination  Trust  (and thus to the  benefit  of the  Company)  via the
Residual Certificate.  The effect of the December 7, 2000, refinement of the TOP
structure was to segregate the California  related Floater  Certificates as they
generally  will  pay  distributions  at lower  rates  than  National  (non-state
specific) Floater  Certificates and thus the yield on the Residual  Certificates
owned by the Origination Trust is increased.  The Revenue Bonds remaining in the
Origination Trust (aggregate principal amount of approximately $147,000,000) are
an additional collateral pool for the Owner Trust's obligations under the Senior
Certificate.

The  balance of the TOP at December  31,  2000 (the  equity in the Owner  Trust,
represented by the Senior Certificate), was $275,000,000. The Company's floating
rate cost of funds relating to the TOP  (calculated  as income  allocated to the
minority  interest plus recurring  fees as a percentage of the weighted  average
amount of the outstanding Senior  Certificate) was approximately  5.4%, 4.5% and
4.9% for the years ended  December  31,  2000,  1999 and the period May 21, 1998
(inception) through December 31, 1998, respectively.


(iv) P-FLOATs/RITES

Another source for financing the Company's  investments is the securitization of
selected  Revenue  Bonds  through  the  Merrill  Lynch  Pierce  Fenner  &  Smith
Incorporated  ("Merrill Lynch") P-FLOATS/RITES  program.  Merrill Lynch deposits
each Revenue Bond into an  individual  special  purpose  trust  together  with a
credit  enhancement  guarantee.  Two types of securities are then issued by each
trust,  (1)  Puttable  Floating  Option  Tax-Exempt  Receipts  ("P-FLOATS"),   a
short-term senior security which bears interest at a floating rate that is reset
weekly and (2) Residual Interest Tax Exempt Securities ("RITES"),  a subordinate
security which receives the residual  interest  payment after payment of P-FLOAT
interest and ongoing  transaction fees. The P-FLOATS are sold to qualified third
party,  tax-exempt  investors  and the  RITES  are  generally  sold  back to the
Company.

During  the year 2000,  the  Company  transferred  three  Revenue  Bonds with an
aggregate  face amount of  $30,800,000  to  P-FLOATS/RITES  program and received
proceeds of $29,348,725.

The Company's cost of funds relating to its secured borrowings under the Merrill
Lynch P-FLOATS/RITES  program (calculated as interest expense as a percentage of
the weighted average amount of the secured  borrowings) was approximately  4.96%
and 4.8%,  annualized,  for the year ended December 31, 2000 and the period June
29, 1999 (inception of this program) through December 31, 1999, respectively.


Acquisitions and Dispositions of Revenue Bonds

During 2000,  the Company  acquired 44 Revenue  Bonds  (including  Revenue Bonds
acquired  in the  ATEBT  Merger - see  below)  with an  aggregate  par  value of
approximately  $299.8 million, not including bond selection fees and expenses of
approximately $5.8 million.
<TABLE>
<CAPTION>

                         Acquisitions for the Year Ended December 31, 2000
                                                                                        Bond
                                          Closing                     Aggregate       Interest
    Property/Bond Name                     Date      Par Amount    Purchase Price      Rate at
                                                                                      12/31/00
    ----------------------------------- ----------- ------------- ----------------- --------------
<S>                                           <C>     <C>          <C>                 <C>
    Summer Lake                           Mar-14      $5,600,000   $  5,726,806        7.400%
    Princess Anne House                   Apr-6          125,000        127,500        9.500%
    Princess Anne House                   Apr-6        7,500,000      7,684,106        7.500%
    Walnut Park Plaza                     Apr-11       5,500,000      5,611,284        7.500%
    Columbia at Bells Ferry               Apr-19      13,000,000     13,264,889        7.400%
    Oaks at Hampton                       Apr-27         525,000        535,500        9.000%
    Oaks at Hampton                       Apr-27       9,535,000      9,737,266        7.200%
    Walnut Creek                          May-4          360,000        367,200        7.500%
    Walnut Creek                          May-4        3,240,000      3,305,433        7.500%
    South Congress                        May-4        6,300,000      6,431,026        7.500%
    Newark Commons                        May-17      14,300,000     14,643,370        7.300%
    Grace Townhomes                       May-23       5,225,600      5,330,112        7.500%
    San Marcos                            May-23       7,231,000      7,380,311        7.375%
    Casa Ramon                            Jul-11       4,744,000      4,856,800        7.500%
    Parks at Westmoreland                 Jul-17         455,000        464,100        9.000%
    Parks at Westmoreland                 Jul-17       9,535,000      9,745,037        8.500%
    Kings Villages                        Jul-26      17,650,000     18,027,011        8.500%
    Autumn Ridge                          Aug-11       9,304,230      9,495,593        8.000%
    Bay Colony                            Aug-11      10,100,000     10,306,797        7.500%
    Village Green                         Aug-14         503,528        513,598        8.500%
    Village Green                         Aug-14       3,078,000      3,144,885        8.500%
    Southwest Trails                      Aug-14       6,500,000      6,633,855        7.350%
    Park at Landmark                      Sep-7        9,500,000      9,690,000        8.750%
    Hidden Grove                          Sep-26       8,600,000      8,772,000        7.400%
    Running Brook                         Sep-27       8,495,000      8,674,092        7.400%
    Park Sequoia                          Oct-17       6,740,000      6,874,800        8.500%
    Armstrong Farm                        Oct-19       8,246,000      8,410,920        7.500%
    Chapel Ridge of Claremore             Oct-26       4,100,000      4,182,000        7.500%
    Chandler Creek                        Oct-31         350,000        357,000        9.750%
    Chandler Creek                        Oct-31      15,850,000     16,167,000        8.500%
    Greenbridge at Buckingham             Nov-7          350,000        357,000        10.000%
    Greenbridge at Buckingham             Nov-7       19,735,000     20,143,757        7.400%
    Woods Edge                            Nov-13       4,850,000      4,947,000        7.800%
    Highpointe Club                       Nov-14       3,250,000      3,927,000 (a)    9.000%
    Lexington Trails                      Nov-14       4,900,000      5,921,000 (a)    9.000%
    Rolling Ridge                         Nov-14       4,925,000      5,951,000 (a)    9.000%
    Reflections                           Nov-14      10,700,000     12,930,000 (a)    9.000%
    Museum Tower                          Nov-29       6,000,000      6,120,000        8.250%
    Williams Run                          Dec-6          200,000        204,000        9.250%
    Williams Run                          Dec-6       12,650,000     12,903,000        7.650%
    Red Hill Villas                       Dec-12         400,000        408,000        9.500%
    Red Hill Villas                       Dec-12       9,900,000     10,112,024        8.400%
    Grandview Forest                      Dec-22       5,483,907      5,597,602        8.500%
    Millpond Village                      Dec-28      14,300,000     14,586,000        8.550%

(a)  These bonds were purchased as part of the ATEBT merger.
</TABLE>


During the period January 1, 2000 through December 31, 2000, three Revenue Bonds
were  repaid and two RITES were  terminated  as more  fully  described  in table
below.


               Dispositions for the Year Ended December 31, 2000
                                Bond Par          Amortized       Realized Gains
  Property/Bond Name             Amount              Cost           / (Losses)
  ------------------------- ------------------- ---------------- ---------------
  Bonds
  Bay Club                    $6,400,000          $6,438,942       $ (38,942)
  East Ridge                   8,700,000           8,437,747         262,253
  Martin's Creek               7,300,000           6,842,946         457,054
  RITES
  Avalon                           5,000              40,073         (35,073)
  Meadowview Park                  5,000               5,141            (141)
                                                                   ---------
                                                                    $645,151



Revenue Bond Modifications
--------------------------

The original obligors and owners of the Underlying Properties of the Cedar Creek
and Pelican Cove Revenue Bonds have been replaced with affiliates of the Manager
who have  not  made  equity  investments.  These  affiliates  have  assumed  the
day-to-day  responsibilities  and obligations of the Underlying  Properties.  On
September 29, 2000,  the  affiliates of the Manager sold 49% of Pelican Cove and
Cedar  Creek to a third  party  buyer with an option from the buyers to purchase
the remaining 51% in 2001.

In connection with the sale of two of the Underlying Properties, Cedar Creek and
Pelican  Cove,  the  Company  has agreed to a  modification  of the terms of the
respective Revenue Bonds.  Subject to Issuer approval,  the stated interest rate
of the Cedar Creek  Revenue Bond will be modified to a stated  interest  rate of
7.43% and 7.25% and the  maturity  and call dates will be extended to October 1,
2010 and October 1, 2020, respectively.


ATEBT Merger
------------

On November 2, 1999,  the Company and American Tax Exempt Bond Trust  ("ATEBT"),
whose  manager is an affiliate  of the Manager of the  Company,  entered into an
Agreement and Plan of Merger providing for the merger of ATEBT into and with the
Company as the  surviving  trust in the merger (the "ATEBT  Merger").  The ATEBT
Merger  was  approved  by the  ATEBT  shareholders  on  September  27,  2000 and
consummated on November 14, 2000.

On the ATEBT Merger  consummation  date, ATEBT had total assets of approximately
$29,700,000  and  net  assets  of  approximately  $28,300,000.  ATEBT  had  four
tax-exempt  first mortgage bonds  financing  properties in four states,  with an
aggregate  outstanding face amount of $23,775,000,  and with individual interest
rates of 9.0%.

Pursuant to the Merger  Agreement,  each share of beneficial  ownership in ATEBT
issued and  outstanding was converted into 1.43112 Common Shares of the Company.
Following the ATEBT Merger,  previous ATEBT  shareholders  own 2,115,722  Common
Shares  (representing  approximately 9.3% of the then outstanding Common Shares)
of the Company.

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

The following is a summary of the Company's  results of operations for the years
ended December 31, 2000,  1999 and 1998. Net income for the years ended December
31, 2000,  1999 and 1998 was $30.1  million,  $23.2  million and $22.0  million,
respectively.

2000 vs. 1999
-------------

For the year ended December 31, 2000 as compared to 1999, total revenues,  total
expenses and net income increased due to the net result of the acquisition of 44
Revenue Bonds and the repayment of three Revenue Bonds.

Interest income from Revenue Bonds increased approximately $17.2 million for the
year ended  December 31, 2000 as compared to 1999.  This  increase was primarily
due to an  increase  in interest  income of $15.2  million on new Revenue  Bonds
acquired during 1999 and 2000. Also contributing to the increase was the receipt
during 2000 of deferred,  unrecorded,  base interest of $2.5 million relating to
prior periods with respect to certain Revenue Bonds.

Total revenues for the year ended  December 31, 2000 increased by  approximately
$18,700,000, including the increases in interest income from Revenue Bonds noted
above.  The  remaining  increase is due to an  increase in interest  income from
temporary investments of approximately  $1,100,000 primarily due to cash pledged
as  collateral  during  2000  related  to  securitization  transactions,  and an
increase in interest  income from  promissory  notes of  approximately  $300,000
primarily due to the Country Lake note acquired during 2000.

Interest expense and recurring fees increased  approximately  $3,200,000 for the
year ended  December  31, 2000 as compared to 1999  primarily  due to  increased
secured borrowings and a higher outstanding balance of the TOP during 2000.

Loan servicing and asset  management fees increased  approximately  $480,000 for
the year ended December 31, 2000 due to new acquisitions  and the  corresponding
increase in the Revenue  Bond  portfolio  serviced.  General and  administrative
expenses increased  approximately $737,000 for the year ended December 31, 2000,
primarily   due  to  an  increase  in  legal  costs  related  in  part  to  bond
modifications,  an increase in the amortized cost related to stock  options,  an
increase in other fees and an increase in expense  reimbursements to the Manager
and affiliates due to the 2000 and 1999 Revenue Bond acquisition.

Amortization  increased  approximately  $195,000 for the year ended December 31,
2000 as  compared  to 1999  primarily  due to an  increase  in  amortization  of
deferred  costs  relating  to the  TOP  and  issuance  of  preferred  shares  of
subsidiary.

For the year ended  December  31,  2000,  the Company  recognized  a gain on the
repayment of revenue  bonds of  approximately  $645,000 as compared to a loss on
repayment of revenue bonds of  approximately  $463,000  recognized  for the year
ended December 31, 1999.

Income  allocated to preferred  shareholders  of  subsidiary  for the year ended
December 31, 2000 increased approximately  $5,600,000,  related to the Preferred
Offerings  executed on June 29,  1999 and July 21,  2000.  Minority  interest in
income of  subsidiary  increased  approximately  $4,500,000  for the year  ended
December  31,  2000 as compared to 1999  primarily  due to a higher  outstanding
balance of the TOP during 2000.

1999 vs. 1998
-------------

For the year ended December 31, 1999 as compared to 1998, total revenues,  total
expenses and net income increased due to the net result of the acquisition of 23
Revenue Bonds and the repayment of three Revenue Bonds.

Interest income from Revenue Bonds increased approximately $11.3 million for the
year  ended  December  31,  1999 as  compared  to 1998.  This  increase  was due
primarily  to  interest  income of $9.5  million on new Revenue  Bonds  acquired
during 1999 and 1998. Also  contributing to the increase was the receipt of $1.6
million in deferred,  unrecorded,  base interest  relating to prior periods with
respect  to  certain  Revenue  Bonds,  and $3 million  relating  to three  RITES
purchased in June 1999.

Total revenues for the year ended  December 31, 1999 increased by  approximately
$12,500,000,  including  the $9.5 million  increase in interest  income from new
Revenue  Bonds  noted  above.  The  remaining  increase is due to an increase in
interest income from temporary investments primarily due to higher invested cash
balances in 1999.

Interest  expense and recurring fees relating to the Private Label Tender Option
program  increased  approximately  $1.2 million for the year ended  December 31,
1999 as compared to 1998  primarily due to increased  secured  borrowings  and a
higher outstanding balance of the TOP during 1999.

Bond servicing and asset  management fees increased  approximately  $353,000 for
the year ended  December 31, 1999 due to new  acquisitions  and a  corresponding
increase in the Revenue  Bond  portfolio  serviced.  General and  administrative
expenses increased  approximately  $184,000 for the year ended December 31, 1999
primarily  due to an increase in public  relations  expenses  and an increase in
audit/tax fees.

Amortization  increased  approximately  $223,000 for the year ended December 31,
1999 as  compared  to 1998  primarily  due to an  increase  in  amortization  of
deferred costs relating to the TOP.

A loss on impairment  of assets in the amount of  approximately  $1,859,000  was
recorded for the year ended December 31, 1999 to recognize  other than temporary
impairment  losses  on six  modified  Revenue  Bonds and one  Revenue  Bond with
anticipated  modifications.  A loss on repayment on three  Revenue  Bonds in the
amount of  approximately  $463,000 was recorded for the year ended  December 31,
1999.

Income  allocated to preferred  shareholders  of  subsidiary  for the year ended
December 31, 1999  relates to the  Preferred  Offering  which closed on June 29,
1999.  Minority  interest  in  income  of  subsidiary  increased   approximately
$4,038,000  for the year ended  December 31, 1999 as compared to 1998  primarily
due to a higher outstanding balance of the TOP during 1999.


Recently Issued Accounting Standards
------------------------------------

Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative  Instruments  and  Hedging  Activities",   as  amended,   establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities,
and is effective for the Company beginning with the first quarter of 2001. Prior
to December 31, 2000,  the Company did not use  derivatives or engage in hedging
activities.  Beginning in 2001, the Company has entered into interest rate swaps
in order to hedge against rising interest rates on its short-term, floating rate
borrowings.  Management has implemented a formal hedging policy.  Implementation
of this  statement  did not have a material  effect on the  Company's  financial
statements.

SFAS No. 140,  "Accounting  for Transfers and Servicing of Financial  Assets and
Extiguisment of Liabilities"  replaces SFAS No. 125, which had the same name. It
revises the standards for accounting for  securitizations and other transfers of
financial assets and collateral and requires certain disclosures, but it carries
over most of SFAS No. 125's provisions  without  reconsideration.  The Company's
management does not believe that application of this statement,  required in the
second quarter of 2000, will have a material  impact on the Company's  financial
statements.


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

Certain   statements  made  in  this  report  may  constitute   "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking  statements include statements  regarding the intent,  belief or
current  expectations  of the Company and its  management  and involve known and
unknown  risks,  uncertainties  and other  factors  which  may cause the  actual
results,  performance or achievements of the Company to be materially  different
from any future  results,  performance or  achievements  expressed or implied by
such forward-looking  statements.  Such factors include, among other things, the
following:  general  economic and business  conditions,  which will, among other
things,  affect the availability and  creditworthiness  of prospective  tenants,
lease rents and the terms and availability of financing;  adverse changes in the
real estate  markets  including,  among  other  things,  competition  with other
companies;  risks  of real  estate  development  and  acquisition;  governmental
actions and initiatives; and environment/safety requirements.


Inflation
---------

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


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

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

The Revenue  Bonds  generally  bear  interest at fixed  rates,  or pay  interest
according to the cash flows of the Underlying Properties, which do not fluctuate
with changes in market interest rates. In contrast,  payments required under the
TOP program and on the secured  borrowings  under the P-FLOAT program vary based
on market interest rates based on the Bond Market Association  ("BMA") index and
are re-set weekly.  Other  long-term  sources of capital,  such as the Company's
various series of Cumulative  Preferred Shares,  carry a fixed dividend rate and
so are not impacted by changes in market interest rates.

Various  financial  vehicles  exist  which  would allow  Company  management  to
mitigate the impact of interest rate  fluctuations  on the Company's  cash flows
and earnings.  Prior to December 31, 2000,  management  did not engage in any of
these hedging  strategies.  However,  beginning in 2001,  and upon  management's
analysis  of the  interest  rate  environment  and the  costs  and risks of such
strategies,  the Company has entered into  interest rate swaps in order to hedge
against  increases  in the  floating  interest  rate  on its  TOP  and  P-Floats
programs. On January 5, 2001, the Company entered into a five-year interest swap
that  fixes the BMA index to 3.98% on a  notional  amount of $50.0  million.  On
February 5, 2001, the Company entered into a three-year interest swap that fixes
the BMA index to 3.64% on a notional amount of an additional $100.0 million.

Subsequent  to December 31, 2000,  with respect to the portion of the  Company's
floating rate financing  programs which are not hedged, a change in the BMA rate
would result in increased or decreased payments under these financing  programs,
without a  corresponding  change in cash flows from the  investments  in Revenue
Bonds. For example, based on the unhedged $235 million ($385 million outstanding
under these  financing  programs at December  31,  2000,  less the $150  million
notional amount  subsequently  hedged and assuming a perfect hedge  correlation)
the Company  estimates  that an increase of 1.0% in the BMA rate would  decrease
the  Company's  annual net income by  approximately  $2,350,000.  Conversely,  a
decrease in market  interest  rates would  generally  benefit the Company in the
same  amount  described  above,  as a result  of  decreased  allocations  to the
minority  interest  and  interest  expense  without  corresponding  decreases in
interest received on Revenue Bonds.

Changes in market  interest  rates would also impact the estimated fair value of
the Company's  portfolio of Revenue Bonds. The Company  estimates the fair value
for each Revenue Bond as the present value of its expected  cash flows,  using a
discount  rate for  comparable  tax-exempt  investments.  Therefore,  as  market
interest rates for tax-exempt  investments increase, the estimated fair value of
the company's  Revenue Bonds will generally  decline,  and a decline in interest
rates would be expected to result in an increase in their estimated fair values.
For  example,  the  Company  projects  that a 1%  increase  in market  rates for
tax-exempt  investments would decrease the estimated fair value of its portfolio
of  Revenue  Bonds  from  its  December  31,  2000  value  of   $845,405,056  to
approximately  $736,636,000.  A 1% decline in interest  rates would increase the
value of the December 31, 2000 portfolio to approximately $956,249,000.  Changes
in the  estimated  fair value of the Revenue  Bonds do not impact the  Company's
reported net income,  earnings per share,  distributions  or cash flows, but are
reported  as  components  of other  comprehensive  income  and  affect  reported
shareholders' equity.

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



<PAGE>


Item 8.  Financial Statements and Supplementary Data.
                                                                           Page
                                                                        --------
(a) 1.   Financial Statements

         Independent Auditors' Report                                         31

         Consolidated Balance Sheets as of December 31, 2000 and 1999         32

         Consolidated  Statements  of Income for the years ended  December 31,
         2000,  1999 and 1998                                                 33

         Consolidated  Statements  of Changes in  Shareholders'  Equity for
         the years ended December 31, 2000, 1999 and 1998                     34

         Consolidated  Statements  of Cash Flows for the years
         ended  December  31,  2000, 1999 and 1998                            36

         Notes to Consolidated Financial Statements                           38




<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Board of Trustees
And Shareholders of
Charter Municipal Mortgage Acceptance Company
New York, New York


We  have  audited  the  accompanying  consolidated  balance  sheets  of  Charter
Municipal  Mortgage  Acceptance  Company and subsidiaries  (the "Company") as of
December 31, 2000 and 1999, and the related  consolidated  statements of income,
changes in  shareholders'  equity and cash flows for each of the three  years in
the period  ended  December  31, 2000.  Our audits also  included the  financial
statement  schedule listed in Item 14(a)2.  These  financial  statements and the
financial statement schedule are the responsibility of the Company's management.
Our  responsibility  is to express an opinion on these financial  statements and
the financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,   the  financial  position  of  Charter  Municipal  Mortgage
Acceptance  Company and  subsidiaries  as of December 31, 2000 and 1999, and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 2000 in  conformity  with  accounting  principles
generally accepted in the United States of America.  Also, in our opinion,  such
financial  statement  schedule,   when  considered  in  relation  to  the  basic
consolidated  financial  statements taken as a whole,  presents  fairly,  in all
material respects, the information set forth therein.


DELOITTE & TOUCHE LLP
New York, New York

March 12, 2001




<PAGE>

         CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>



                                                                 December 31,
                                                        ------------------------------
                                                             2000           1999
                                                        -------------  --------------

                                     ASSETS

<S>                                                      <C>           <C>
Revenue bonds-at fair value                              $845,405,056  $587,892,000
Temporary investments                                               0    45,541,000
Cash and cash equivalents                                  36,116,481     8,653,503
Cash and cash equivalents-restricted                                0     1,028,209
Interest receivable, net                                    5,202,999     2,803,278
Promissory notes receivable                                 9,909,933    10,148,060
Deferred costs, net                                        24,201,342    14,222,451
Goodwill, net                                               3,792,959     2,674,626
Other assets                                                  607,095       828,097
                                                       -------------- -------------

Total assets                                             $925,235,865  $673,791,224
                                                          ===========   ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Secured borrowings                                     $110,026,031  $ 80,769,616
  Accounts payable, accrued expenses and other liabilities  2,835,144     2,306,306
  Due to Manager and affiliates                             1,598,921     1,218,211
  Distributions payable to preferred shareholders
   of subsidiary                                            2,961,625     1,490,625
  Distributions payable to Convertible CRA Shareholders       558,250             0
  Distributions payable to common shareholders              6,242,046       5,453,971
                                                        -------------   -------------

Total liabilities                                         124,222,017    91,238,729
                                                          -----------   -----------

Minority interest in subsidiary (subject to mandatory
  redemption)                                             275,000,000   177,000,000
                                                          -----------   -----------

Preferred shares of subsidiary (subject to mandatory
  repurchase)                                             169,000,000    90,000,000
                                                          -----------  ------------

Commitments and contingencies

Shareholders' equity:
Beneficial owners' equity - Convertible CRA
  shareholders (2,590,000 shares, issued and outstanding)  34,397,168             0
Beneficial owner's equity-manager                             715,342       441,878
Beneficial owners' equity-other common shareholders
  (50,000,000 shares authorized; 22,706,739 issued and
   22,698,339 outstanding and 20,589,375 issued and
   20,580,975 outstanding in 2000 and 1999, respectively) 344,870,761   312,800,380
Treasury shares of beneficial interest (8,400 shares)        (103,359)     (103,359)
Accumulated other comprehensive income (loss)             (22,866,064)    2,413,596
                                                         ------------   -----------

Total shareholders' equity                                357,013,848   315,552,495
                                                          -----------   -----------

Total liabilities and shareholders' equity               $925,235,865  $673,791,224
                                                          ===========   ===========
</TABLE>



<PAGE>

<TABLE>
<CAPTION>

         CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                            Years Ended December 31,
                                              2000            1999         1998
                                            -----------  -----------   -----------
Revenues:
<S>                                         <C>           <C>           <C>
  Interest income:
   Revenue bonds                            $55,708,904   $38,444,530   $27,124,667
   Temporary investments                      2,379,976     1,289,669       221,270
   Promissory notes                           1,001,681       702,991       594,183
                                            -----------  ------------  ------------

   Total revenues                            59,090,561    40,437,190    27,940,120
                                             ----------    ----------    ----------

Expenses:

  Interest expense                            4,216,160     1,749,225     1,504,334
  Recurring fees relating to the Private
   Label Tender Option Program                2,197,557     1,416,756       454,919
  Bond servicing                              1,817,270     1,337,738       985,198
  General and administrative                  2,167,862     1,430,798     1,247,226
  Amortization                                  577,388       382,027       158,572
  Loss on impairment of assets                        0     1,859,042             0
                                             ----------    ------------    ----------

   Total expenses                            10,976,237     8,175,586     4,350,249
                                             ----------    ----------    ----------

Income before gain (loss) on repayment of
  revenue bonds                              48,114,324    32,261,604    23,589,871

Gain (loss) on repayment of revenue bonds       645,151      (463,147)            0
                                           ------------   -----------   -----------

Income before minority interests             48,759,475    31,798,457    23,589,871

Income allocated to preferred shareholders
  of subsidiary                              (8,593,956)   (3,014,375)            0
Minority interest in income of subsidiary   (10,074,463)   (5,602,264)   (1,563,999)
                                            -----------   -----------   -----------

   Net income                               $30,091,056   $23,181,818   $22,025,872
                                             ==========    ==========    ==========

Allocation of net income to:

  Special distribution to Manager          $  2,743,465  $  2,018,822  $  1,477,797
                                            ===========  ============  ============
  Manager                                 $     273,476 $     211,630 $     205,481
                                           ============ ============= =============
  Common shareholders                       $25,500,984   $20,951,366   $20,342,594
  Convertible CRA Shareholders                1,573,131             0             0
                                            -----------   -----------  ------------
   Total for shareholders                   $27,074,115   $20,951,366   $20,342,594
                                             ==========    ==========    ==========

Net income per share:

  Basic                                 $        1.22    $     1.02     $      .99
                                         ============ ============    ==============

  Diluted                               $        1.22    $     1.02     $       .98
                                         ============ ============      ============

Weighted average shares
  outstanding:

  Basic                                      22,140,576    20,580,756    20,587,151
                                             ==========    ==========    ==========

  Diluted                                    22,152,239    20,580,756    20,740,641
                                             ==========    ==========    ==========


</TABLE>



See accompanying notes to consolidated financial statements

<PAGE>
<TABLE>
<CAPTION>





                                CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY





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



<S>                                                <C> <C>          <C>                  <C> <C>                   <C> <C>
Balance at January 1, 1998                         0   $  24,788    $311,322,765 $       0                $20,320,646  $331,668,199


Comprehensive income:

Net income                                         0   1,683,278    20,342,594           0   22,025,872            0   22,025,872
Other comprehensive loss:
  Net unrealized loss on revenue bonds:
  Net unrealized holding loss arising during the                                             (5,260,455)  (5,260,455)  (5,260,455)
                                                                                             ----------
   period
Comprehensive income                                                                         16,765,417
                                                                                             ==========
Issuance of common shares                          0           0         5,000           0                         0        5,000
Purchase of treasury shares                        0           0             0    (103,359)                        0     (103,359)
Consolidation costs                                0           0      (218,657)          0                         0     (218,657)
Distributions                                      0   (1,477,807)  (19,144,587)         0                         0   (20,622,394)
                                          -----------  ----------    ----------  ----------               -----------   ----------


Balance at December 31, 1998                       0     230,259    312,307,115   (103,359)               15,060,191   327,494,206

Comprehensive income:
Net income                                         0   2,230,452    20,951,366           0   23,181,818            0   23,181,818
Other comprehensive loss:
  Net unrealized loss on revenue bonds
  Net unrealized holding loss arising during the                                             (14,968,784)
   period
  Add: Reclassification adjustment for losses
   included in net income
                                                                                              2,322,189
Other comprehensive loss                                                                     (12,646,595) (12,646,595) (12,646,595)
                                                                                             -----------
Comprehensive income                                                                         10,535,223
                                                                                             ==========
Issuance of common shares                          0           0        20,000           0                         0       20,000
Distributions                                      0   (2,018,833)  (20,478,101)         0                         0   (22,496,934)
                                          -----------------------   -----------  -------------                 -------  -----------


Balance at December 31, 1999                       0     441,878    312,800,380   (103,359)                2,413,596   315,552,495

Comprehensive income:
Net income                                 1,573,131   3,016,941    25,500,984           0   30,091,056            0   30,091,056
Other comprehensive loss:
  Net unrealized loss on revenue bonds
  Net unrealized holding loss arising during the                                             (24,634,509)
   period
  Add: Reclassification adjustment for net gain
   included in net income
                                                                                               (645,151)
Other comprehensive loss                                                                     (25,279,660) (25,279,660) (25,279,660)
                                                                                             -----------
Comprehensive income                                                                         $ 4,811,396
                                                                                               =========

Issuance of common shares                          0           0    29,174,649           0                         0   29,174,649
Issuance of Convertible CRA Shares        34,192,657                                                                   34,192,657
Distributions                             (1,368,620)  (2,743,477)  (22,605,252)         0                        0   (26,717,349)
                                          ----------   ----------   -----------  ------------               ---------   -----------
                                                                                         0


Balance at December 31, 2000              $34,397,168  $715,342     $344,870,761 $(103,359)               $(22,866,064)$357,013,848
                                           ==========   =======      =========== -========                 ===========  ===========

</TABLE>

See accompanying notes to consolidated financial statements
<PAGE>
<TABLE>
<CAPTION>

         CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                    Years Ended December 31,
                                               2000          1999           1998
                                          -------------   -----------   ------------

Cash flows from operating activities:
<S>                                         <C>           <C>           <C>
  Net income                                $30,091,056   $23,181,818   $22,025,872
                                             ----------    ----------    ----------
  Adjustments to reconcile net income to net cash
   provided by operating activities:
  (Gain) loss on repayments of revenue bonds   (645,151)      463,147             0
  Loss on impairment of assets                        0     1,859,042             0
  Other amortization                            577,388       382,027       158,572
  Amortization of goodwill                      364,653       297,624       134,592
  Amortization of bond selection costs          938,319       452,949       238,928
  Accretion of excess of acquired net
   assets over cost                                   0             0      (248,559)
  Accretion of deferred income and purchase
   accounting adjustment                       (163,129)      (66,212)      (66,212)
  Income allocated to preferred shareholders
   of subsidiary                              8,593,956     3,014,375             0
  Changes in operating assets and liabilities:
   Interest receivable                       (2,279,045)   (1,290,716)     (633,043)
   Other assets                                  51,357        (5,097)       29,971
   Accounts payable, accrued expenses and
    other liabilities                           212,093    (4,948,125)      608,704
   Due to Manager and affiliates               (705,149)      (87,926)      402,361
                                           ------------ -------------  ------------
  Total adjustments                           6,945,292        71,088       625,314
                                            ----------- -------------  ------------
Net cash provided by operating activities    37,036,348    23,252,906    22,651,186
                                             ----------    ----------    ----------

Cash flows from investing activities:
  Proceeds from repayments of revenue bonds  22,400,000    21,395,213             0
  Periodic principal payments of revenue bonds  378,563             0             0
  Purchase of revenue bonds                (276,011,265) (165,934,618) (117,596,600)
  Increase in deferred bond selection costs  (6,499,035)   (3,906,784)   (2,598,288)
  Net sale (purchase) of temporary investments45,541,000  (45,541,000)    3,500,000
  (Increase) decrease in other assets             1,000      (251,500)            0
  Increase in other deferred costs             (545,632)     (100,000)            0
  Loans made to properties                     (200,000)   (2,847,185)   (1,055,695)
  Principal payments received from loans made to
   properties                                   438,127       328,045       507,040
  Cash acquired in ATEBT merger                 837,958             0             0
                                            ------------    ----------  ------------
Net cash used in investing activities      (213,659,284) (196,857,829) (117,243,543)
                                           ------------  ------------   -----------

<PAGE>


Cash flows from financing activities:
  Proceeds from note payable                          0             0    96,039,231
  Repayments of note payable                          0             0  (117,484,571)
  Proceeds from secured borrowings           29,348,725    80,769,616             0
  Principal repayments of secured borrowings    (92,310)            0             0
  Decrease (increase) in cash and cash
   equivalents-restricted                     1,028,209    (1,028,209)            0
  Distributions paid to the Manager and
   Common shareholders                      (24,343,782)  (21,815,252)  (20,331,395)
  Distributions paid to preferred shareholders
   of subsidiary                             (7,122,956)   (1,523,750)            0
  Distributions paid to Convertible CRA
   shareholders                                (810,370)            0             0
  Increase in minority interest             348,000,000    27,000,000   150,000,000
  Repayment of minority interest           (250,000,000)            0             0
  Increase in deferred costs relating to the Private
   Label Tender Option Program               (2,300,639)     (559,632)   (2,512,768)
  Issuance of preferred stock of subsidiary  79,000,000    90,000,000             0
  Deferred costs relating to the issuance of
   preferred stock of subsidiary             (2,813,620)   (3,605,331)            0
  Increase in other deferred costs                    0       (72,039)            0
  Purchase of treasury shares of beneficial interest  0             0      (103,359)
  Issuance of Convertible CRA Shares         34,192,657             0             0
  Merger costs                                        0             0      (218,657)
                                          --------------   -----------   ------------
Net cash provided by (used in)
 financing activities                      204,085,914    169,165,403    105,388,481
                                           -----------    -----------    -----------

Net increase (decrease) in cash and
  cash equivalents                           27,462,978    (4,439,520)   10,796,124
Cash and cash equivalents at the
  beginning of the year                       8,653,503    13,093,023     2,296,899
                                            -----------    ----------   -----------
Cash and cash equivalents at the
  end of the year                           $36,116,481  $  8,653,503   $13,093,023
                                             ==========   ===========    ==========

Supplemental information:
  Interest paid                            $  4,108,958  $  1,418,865  $  1,507,871
                                            ===========   ===========   ===========

Supplemental disclosure of noncash activities:


Merger and issuance of shares:

  Increase in other assets                $        (150)   $        0     $       0
  Increase in revenue bonds                 (28,729,000)            0             0
  Increase in interest receivable              (120,676)            0             0
  Increase in accounts payable, accrued
   expenses and other liabilities               356,502             0             0
  Increase in due to affiliates               1,013,987             0             0
  Increase in goodwill, net                  (1,482,986)            0             0
  Issuance of shares of common stock         29,154,649             0             0
  Decrease in deferred costs                    645,632             0             0
                                           ------------------------------------------
Cash acquired in ATEBT merger             $     837,958    $        0     $       0
                                           ============   ============   ==============


</TABLE>

<PAGE>


         CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - Organization and Significant Accounting Policies

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

The  Company  was formed on  October  1, 1997 as the  result of the merger  (the
"Merger") of three publicly registered limited  partnerships,  Summit Tax Exempt
Bond Fund,  L.P.,  Summit Tax Exempt L.P. II and Summit Tax Exempt L.P. III (the
"Partnerships").  One  of  the  general  partners  of  the  Partnerships  was an
affiliate of Related Capital Company ("Related"), a nationwide, fully integrated
real estate financial services firm.  Pursuant to the Merger, the Company issued
shares of beneficial  interest  ("Common Shares") to all partners in each of the
Partnerships in exchange for their proportionate interests.

The Company is governed by a board of trustees  comprised  of three  independent
managing  trustees and four managing  trustees who are affiliated  with Related.
The Company has engaged  Related  Charter LP (the  "Manager"),  an  affiliate of
Related, to manage its day-to-day affairs.


Basis of Presentation
---------------------

The consolidated financial statements of the Company are prepared on the accrual
basis of accounting in accordance with accounting  principles generally accepted
in  the  United  States  of  America  ("GAAP").  The  preparation  of  financial
statements  in conformity  with GAAP requires the Manager to make  estimates and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements as well as the reported  amounts of revenues and expenses  during the
reporting period. Actual results could differ from those estimates.  Significant
estimates in the  financial  statements  include the  valuation of the Company's
investments in Revenue Bonds.

The consolidated  financial  statements  include the accounts of the Company and
four majority owned  subsidiary  business  trusts which it controls:  CM Holding
Trust,  Charter Mac Equity Issuer  Trust,  Charter Mac  Origination  Trust I and
Charter Mac Owner  Trust I (see Notes 8 and 9). All  intercompany  accounts  and
transactions have been eliminated in consolidation.  Unless otherwise indicated,
the  "Company",  as  hereinafter  used,  refers to  Charter  Municipal  Mortgage
Acceptance Company and its consolidated subsidiaries.

Certain amounts in the 1998 and 1999 financial statements have been reclassified
to conform to the 2000 presentation.


Investment in Revenue Bonds and Promissory Notes Receivable
-----------------------------------------------------------

The Company accounts for its investments in Revenue Bonds as  available-for-sale
debt  securities  under the  provisions  of Statement  of  Financial  Accounting
Standards  No.  115,  "Accounting  for  Certain  Investments  in Debt and Equity
Securities" ("SFAS 115").

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

The Company periodically  evaluates its credit risk exposure associated with its
Revenue Bonds to determine  whether other than  temporary  impairments  exist. A
decline  is  considered  to  be  other  than  temporary  if,  based  on  current
information  and  events,  it is  probable  that the  Company  will be unable to
collect all amounts due,  including  principal  and  interest,  according to the
existing contractual terms of the Revenue Bond. The cost basis of a Revenue Bond
with other than temporary  impairment is written down to its then estimated fair
value, with the amount of the write-down accounted for as a realized loss.

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

Occasionally,  the Company has  advanced  funds to owners of certain  Underlying
Properties  in  order to  preserve  the  underlying  asset  due to  difficulties
including  construction  completion,  past due real estate taxes and/or deferred
maintenance.  Such  advances are typically  secured by  promissory  notes and/or
second  mortgages  and  are  carried  at  cost  less a  valuation  allowance  as
periodically deemed appropriate.

For Revenue Bonds and  promissory  notes,  interest  income is recognized at the
stated  rate  as it  accrues  and  when  collectibility  of  future  amounts  is
reasonably assured.  Contingent  interest is recognized when received.  Interest
income from Revenue Bonds with  modified  terms or where the  collectibility  of
future amounts is uncertain is recognized based upon expected cash receipts.


Temporary Investments
---------------------

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


Cash and Cash Equivalents
-------------------------

Cash and cash  equivalents  includes cash in banks and investments in short-term
instruments with an original  maturity of three months or less.  Certain amounts
of cash and cash  equivalents are restricted and serve as additional  collateral
for borrowings under securitizations (see Note 4).


Deferred Costs
--------------

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

Costs  incurred in  connection  with the  Company's  Private Label Tender Option
Program (see Note 5), such as legal,  accounting  documentation and other direct
costs, have been capitalized using the straight-line method over 10 years, which
approximates the average remaining term to maturity of the Revenue Bonds in this
program.

Costs incurred in connection with the issuance of cumulative preferred shares of
subsidiary  (see Note 6),  such as legal,  accounting,  documentation  and other
direct costs,  have been  capitalized and are being amortized using the straight
line  method  over the period to the  mandatory  repurchase  date of the shares,
approximately 50 years.

Costs incurred in connection  with the issuance of  Convertible  CRA Shares (see
Note 7), such as legal,  accounting,  documentation and other direct costs, have
been accounted for as an offset to beneficial owners' equity of such shares.


Goodwill
--------

For financial  accounting and reporting  purposes,  the Merger was accounted for
using the purchase  method of accounting.  Under this method,  Summit Tax Exempt
L.P. II was deemed to be the acquirer.  As the surviving  entity for  accounting
purposes,  the assets and liabilities of Summit Tax Exempt L.P. II were recorded
at  their  historical  cost,  with  the  assets  and  liabilities  of the  other
Partnerships recorded at their estimated fair values.

The  application  of  purchase  accounting  initially  resulted  in the  Company
recording  a deferred  credit for the excess of the fair value of the net assets
acquired over their cost. The accrual of the estimated  value of the Counsel Fee
Shares (see Note 11) at October 1, 1998 was  considered  to be a purchase  price
adjustment  resulting  in the  reversal of the  carrying  value of the excess of
acquired net assets over cost  ($2,982,708)  and the  recognition of goodwill at
October  1,  1998 in the  amount  of  $4,805,828.  In April  1999,  the  Company
successfully  negotiated a Discounted  Cash  Settlement (see Note 11) in lieu of
the issuance of common shares which  resulted in a decrease in the liability for
Counsel  Fee Shares and in  goodwill  in the amount of  $1,698,986.  Goodwill is
being  amortized to interest  income from Revenue Bonds using the  straight-line
method over nine years,  the approximate  average  remaining term to maturity of
the Revenue Bonds acquired in the Merger at that time.

The  application  of purchase  accounting to the merger also resulted in certain
Revenue  Bonds being  initially  recorded at a discount or premium to their face
amounts. These discounts and premiums are included in the applicable bond's cost
basis and  amortized  into  interest  income over the bond's  remaining  term to
maturity. Discounts are not amortized,  however, if collectibility of amounts in
excess of the bond's amortized cost are doubtful.

The merger with American  Tax-Exempt  Bond Trust  ("ATEBT") in 2000 (see Note 9)
resulted in the  capitalization  of an additional  $1,482,986 of goodwill.  This
goodwill is being  amortized  to interest  income from  Revenue  Bonds using the
straight-line  method over 10 years, the approximate average term to maturity of
the four Revenue Bonds acquired in this transaction.

Goodwill is periodically  reviewed for  impairment,  based on the performance of
the Revenue  Bonds that were  acquired in the  applicable  merger,  and would be
written down if impairment was indicated.


Fair Value of Financial Instruments
-----------------------------------

As described  above,  the Company's  investments in Revenue Bonds are carried at
estimated  fair values.  The Company has  determined  that the fair value of its
remaining financial instruments,  including its temporary investments,  cash and
cash equivalents, promissory notes receivable and secured borrowings approximate
their carrying values at December 31, 2000 and 1999.


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

No provision or benefits for income taxes has been  included in these  financial
statement  since the income or loss passes through to, and is reportable by, the
shareholders on their respective  income tax returns.  At December 31, 2000, the
net tax basis of the  Company's  assets and  liabilities  exceeded  the net book
basis by approximately $68,163,000.


Segment Information
-------------------

SFAS  No.  131,  "Disclosures  About  Segments  of  an  Enterprise  and  Related
Information",  requires  enterprises to report certain financial and descriptive
information   about   their   reportable   operating   segments,   and   certain
enterprise-wide  disclosures  regarding products and services,  geographic areas
and major customers.  The Company is an investor primarily in tax-exempt Revenue
Bonds, and operates in only one reportable segment. The Company does not have or
rely upon any major customers.  All of the Company's  investments are located in
the United  States;  accordingly,  all of its  revenues  were  derived from U.S.
operations.


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

Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative  Instruments  and  Hedging  Activities",   as  amended,   establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities,
and is effective for the Company beginning with the first quarter of 2001. Prior
to December 31, 2000,  the Company did not use  derivatives or engage in hedging
activities.  Beginning in 2001, the Company has entered into interest rate swaps
in order to  mitigate  the impact of rising  interest  rates on its  short-term,
floating  rate   borrowings  (see  Note  14  -  Financial  Risk  Management  and
Derivatives). Management has implemented a formal hedging policy. Implementation
of this  statement  did not have a material  effect on the  Company's  financial
statements.

SFAS No. 140,  "Accounting  for Transfers and Servicing of Financial  Assets and
Extinguishment  of Liabilities"  replaces SFAS No. 125, which had the same name.
It revises the standards for accounting for  securitizations and other transfers
of financial  assets and collateral  and requires  certain  disclosures,  but it
carries  over most of SFAS No. 125's  provisions  without  reconsideration.  The
Company's  management  does not  believe  that  application  of this  statement,
required  in the  second  quarter of 2001,  will have a  material  impact on the
Company's financial statements.


<PAGE>



         CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>


NOTE 2 - Revenue Bonds

The following table provides certain information with respect to each of the
Revenue Bonds owned by the Company and its consolidated subsidiaries:

                                                                                                    December 31, 2000
                                                                                        ------------------------------------------

                                                            Stated
                                                    Date   Interest   Call    Maturity    Bond Par                       Bond Fair
Property               Location      Notes        Closed  Rate - (2)  Date       Date      Amount      Amortized Cost    Value (1)
----------------- --------------- ------------- -------- --------- --------- --------- -------------- --------------- --------------


Tax-Exempt Revenue Bonds
   Owned by the Company (not including its consolidated subsidiaries)
   ------------------------------------------------------------------

<S>                  <C>             <C>           <C>      <C>       <C>       <C>      <C>              <C>            <C>
Highpointe Club      Harrisburg, PA  D, E, JJ      07/29/86 8.500%    Jun-98    Jun-06   $8,900,000       $7,000,187     $5,591,000

Owned by CM Holding (3)

Highpointe Club      Harrisburg, PA  D             11/14/00 9.000%        -     Jun-06    3,250,000        3,927,000      3,927,000
Lexington Trails     Houston, TX                   11/14/00 9.000%    May-07    May-22    4,900,000        5,921,000      5,921,000
Reflections          Casselberry, FL               11/14/00 9.000%    Dec-05    Dec-25   10,700,000       12,930,000     12,929,000
Rolling Ridge        Chino Hills, CA               11/14/00 9.000%    Aug-06    Aug-26    4,925,000        5,951,000      5,951,000
                                                                                         ------------- --------------- -------------
     Subtotal - CM Holding                                                              $23,775,000      $28,729,000    $28,728,000
                                                                                         ----------- --------------- ---------------


Owned by CharterMac Equity Issuer Trust (3)

Armstrong Farm        Jeffersonville, C, G, H, J    10/19/00 7.500%    Oct-17    Oct-40  $ 8,246,000     $ 8,246,000     $ 8,246,000
                      IN
Barnaby Manor         Washington, DC  B, C, I, J    11/22/99 7.375%    May-17    May-32    4,500,000       4,500,000       4,418,000
Bay Colony            League City, TX C, G, H, J    08/11/00 7.500%    Aug-17    Aug-42   10,100,000      10,100,000      10,084,000
Chandler Creek        Round Rock, TX  G, H, J, CC   10/31/00 8.500%    Dec-17    Nov-42   15,850,000      15,850,000      15,850,000
Chapel Ridge at
 Claremore            Claremore, OK   C, G, H, J    10/26/00 7.500%    Oct-17    Oct-42    4,100,000       4,100,000       4,100,000
Del Monte Pines       Fresno, CA      A, C          05/05/99 6.800%    May-17    May-36   11,000,000      11,000,000       9,957,000
Douglas Pointe        Miami, FL       A, C, G, H, J 09/28/99 7.000%    Oct-26    Sep-41    7,100,000       7,100,000       6,616,000
Forest Hills          Garner, NC      A, C          12/15/98 7.125%    Jun-16    Jun-34    5,930,000       5,869,479       5,580,000
Fort Chaplin          Washington, DC  B, C, F       12/21/99 6.900%    Jan-17    Jan-36   25,800,000      25,800,000      23,698,000
Franciscan Riviera    Antioch, CA     A, C, F       08/24/99 7.125%    Apr-16    Aug-36    6,587,500       6,587,500       6,248,000
Garfield Park         Washington, DC                08/31/99 7.250%    Aug-17    Aug-31    3,260,000       3,260,000       3,146,000
Grace Townhomes       Ennis, TX       G, H, J       05/23/00 7.500%    Jun-17    Jun-42    5,225,600       5,225,600       5,217,000
Grandview Forest      Durham, NC      C,G,H,J,GG    12/22/00 8.500%    Feb-18    Jan-43    5,483,907       5,483,907       5,484,000
Greenbriar            Concord, CA     B, C, F       05/05/99 6.875%    May-17    May-36    9,585,000       9,585,000       8,772,000
Greenbridge at
 Buckingham           Richardson, TX  G, H, J       11/07/00 7.400%    Mar-17    Nov-40   19,735,000      19,735,000      19,735,000
Hamilton Gardens      Hamilton, NJ    A, C, N       03/26/99 7.125%    Mar-17    Mar-35    6,400,000       6,368,211       6,054,000
Hidden Grove          Miami, FL       C, G, H, J    09/26/00 7.400%    Oct-17    Oct-42    8,600,000       8,600,000       8,472,000
Lake Jackson          Lake Jackson, TXA, C          12/22/98 7.000%    Jan-18    Jan-41   10,934,000      10,934,000      10,189,000
Lake Park             Turlock, CA     B, C          06/08/99 7.250%    Oct-15    Sep-35    3,638,000       3,638,000       3,511,000
Lakemoor              Durham, NC      A, G, H, J    12/22/99 7.250%    Jan-17    Dec-41    9,000,000       9,000,000       8,686,000
Lakes Edge at Walden  Miami, FL       B, F          06/30/99 6.900%    Jun-13    May-35   14,850,000      14,850,000      13,640,000
Lenox  Park           Gainesville, GA B, C          07/29/99 6.800%    Aug-21    Jul-41   13,000,000      13,000,000      11,768,000
Lewis Place           Gainesville, FL B, C, T       06/22/99 6.750%    Jun-16    Jun-41    4,000,000       4,000,000       3,594,000
Millpond Village      East Windsor, CTF, HH         12/28/00 8.550%        -     Dec-31   14,300,000      14,300,000      14,300,000
Mountain Ranch        Austin, TX      A, C, G, H, J 12/23/98 7.125%    Jan-18    Jan-41    9,128,000       9,128,000       8,658,000
Newark Commons        New Castle, DE  A, C, G, H, J 05/17/00 7.300%    May-18    May-43   14,300,000      14,300,000      13,896,000
Oaks at Hampton       Dallas, TX      B, C, G       04/27/00 7.200%    Mar-27    Mar-40    9,535,000       9,535,000       9,139,000
Parks at Westmoreland DeSoto, TX      G, H, J, X    07/17/00 8.500%    Jul-17    Jul-40    9,535,000       9,535,000       9,139,000
Princess Anne House   Virginia Beach, A, C, G, H, J 04/07/00 7.500%    Apr-25    Apr-42    7,500,000       7,500,000       7,488,000
                      VA
Red Hill Villas       Round Rock, TX  C, G, FF      12/13/00 8.400%    Dec-17    Dec-40    9,900,000       9,900,000       9,900,000
Running Brook         Miami, FL       C, G, H, J    09/27/00 7.400%    Jan-27    Dec-42    8,495,000       8,495,000       8,368,000
Southwest Trails      Austin, TX      C, G, H, J    08/14/00 7.350%    Jun-17    Jun-42    6,500,000       6,500,000       6,360,000
Standiford            Modesto, CA     A, C, F       09/20/99 7.125%    Apr-16    Aug-36    9,520,000       9,520,000       9,029,000
Sunset Creek          Lancaster, CA   B, U, V, II   03/24/88 5.477%    Dec-09    Dec-19    8,275,000       6,074,293       6,129,000
Sunset Village        Lancaster, CA   B, U, V, II   03/24/88 5.477%    Dec-09    Dec-19   11,375,000       8,678,176       8,434,000
Sycamore Woods        Antioch, CA     A, C          05/05/99 6.875%    May-17    May-36    9,415,000       9,415,000       8,616,000
Tallwood              Virginia Beach, A, C          09/30/99 7.250%    Nov-17    Oct-41    6,205,000       6,205,000       5,988,000
                      VA
Williams Run          Dallas, TX                    12/06/00 7.650%    Jan-11    Nov-40   12,650,000      12,650,000      12,650,000
Woods Edge            Charlottesville,EE            11/13/00 7.800%    Nov-17    Nov-40    4,850,000       4,850,000       4,850,000
                      VA
                                                                                          ------------- --------------- -----------

     Subtotal - Charter Mac Equity Issuer Trust                                          $364,408,007    $359,418,166   $346,009,000
                                                                                          ----------- --------------- --------------

Owned by CharterMac Origination Trust I (3)(4)

Cedar Pointe         Nashville, TN                 04/22/87 7.000%    Nov-06    Apr-17  $ 9,500,000     $ 8,500,000     $ 8,852,000
Clarendon Hills      Hayward, CA     W             12/08/86 5.520%    Dec-03    Dec-03   17,600,000      14,683,645      12,933,000
Cypress Run          Tampa, FL       U             08/14/86 5.500%    -         Dec-29   15,402,428      13,749,815      13,156,000
Greenway Manor       St. Louis, MO   JJ            10/09/86 8.500%    Oct-98    Sep-06   12,850,000      12,757,911      14,540,000
Lakepoint            Atlanta, GA                   11/18/87 6.000%    Jul-05    Jun-17   15,100,000      13,098,387      12,061,000
Lakes, The           Kansas City, MO W             12/30/86 4.870%    Dec-06    Dec-06   13,650,000      12,750,000      10,636,000
Lexington Square     Clovis, CA      C, P          08/25/98 6.375%    Sep-17    Aug-40    3,850,000       3,842,964       3,267,000
Loveridge            Pittsburg, CA   D, E, JJ      11/13/86 8.000%    Nov-98    Nov-06    8,550,000       6,850,000       5,691,000
San Marcos           San Marcos, TX  C, G, H, J    05/23/00 7.375%    Mar-17    Mar-42    7,231,000       7,231,000       7,099,000
Shannon Lake         Atlanta, GA     L, W          06/26/87 7.000%    Jul-05    Jun-17   12,000,000      11,571,000      11,182,000
Summer Lake          Davie, FL       C, G, H, J    03/14/00 7.400%    Apr-00    Mar-42    5,600,000       5,600,000       5,516,000
Sunset Downs         Lancaster, CA   U, V, II      02/11/87 5.477%    Dec-09    Dec-19   15,000,000      11,284,000      10,965,000
Sunset Terrace       Lancaster, CA   U, V, II      02/11/87 5.477%    Dec-09    Dec-19   10,350,000       7,888,839       7,566,000
                                                                                        ------------- --------------- --------------

     Subtotal - CharterMac Origination Trust I                                          $146,683,428    $129,807,561   $123,464,000
                                                                                        ------------- --------------- --------------

Owned by Charter Mac Owner Trust I (3) (5)

Autumn Ridge         San Marcos, CA  C, F, Z       08/11/00  8.000%    Aug-17   Jul-37  $ 9,304,230     $ 9,304,230     $ 9,475,000
Bristol Village      Bloomington, MN               07/31/87 7.500%    Jan-10    Dec-27   17,000,000      17,000,000      16,973,000
Carrington Point     Los Banos, CA   C             09/24/98 6.375%    Oct-17    Sep-40    3,375,000       3,370,386       2,864,000
Casa Ramon           Orange County,  C, F          07/11/00 7.500%    Oct-15    Sep-35    4,744,000       4,736,948       4,736,000
                     CA
Cedar Creek          McKinney, TX    U, V          12/29/86 7.430%    Oct-10    Oct-20    8,100,000       8,284,586       8,011,000
Cedarbrook           Hanford, CA     C             04/28/98 7.125%    May-17    May-40    2,840,000       2,832,556       2,691,000
Chapel Ridge at
 Little Rock         Little Rock, AR C, G, H, J    08/12/99 7.125%    Aug-15    Aug-39    5,600,000       5,591,034       5,311,000
Chapel Ridge at
 Texarkana           Texarkana, AR   C             09/29/99 7.375%    Oct-16    Sep-41    5,800,000       5,800,000       5,694,000
College Park         Naples, FL      O             07/15/98 7.250%    Jul-25    Jul-40   10,100,000      10,081,853       9,748,000
Columbia at
 Bells Ferry         Cherokee Co., GAG, H, J       04/19/00 7.400%    Apr-17    Apr-42   13,000,000      13,000,000      12,806,000
Country Lake         W. Palm Beach,  M, F          11/08/99 6.000%    Jun-00    Jun-00    6,255,000       6,255,000       6,255,000
                     FL
Crowne Pointe        Olympia, WA     JJ            12/31/86 7.250%    Dec-98    Aug-29    5,075,000       5,054,000       4,898,000
Falcon Creek         Indianapolis, INC, R          09/14/98 7.250%    Sep-16    Aug-38    6,144,600       6,135,794       5,930,000
Gulfstream           Dania, FL       C             07/22/98 7.250%    Apr-16    Jul-38    3,500,000       3,486,977       3,371,000
Highland Ridge       St. Paul, MN                  12/31/86 7.250%    Jun-10    Jun-18   15,000,000      14,400,000      14,477,000
Jubilee Courtyards   Florida City, FLC, S          09/15/98 7.125%    Oct-25    Sep-40    4,150,000       4,145,394       3,867,000
King's Village       Pasadena, CA    C, F, Y       07/26/00 8.500%    Dec-16    Dec-36   17,650,000      17,650,000      17,622,000
Madalyn Landing      Palm Bay, FL    C             11/13/98 7.000%    Dec-17    Nov-40   14,000,000      13,994,666      13,046,000
Mansions, The        Independence, MO              05/13/86 7.250%    Jan-11    Apr-25   19,450,000      18,295,732      19,124,000
Marsh Landing        Portsmouth, VA  C, F          05/20/98 7.250%    Jul-17    Jul-30    6,050,000       6,021,250       5,834,000
Newport Village      Tacoma, WA      JJ            02/02/87 7.250%    Jan-99    Aug-29   13,000,000      12,946,000      12,546,000
North Glen           Atlanta, GA     K, W          09/30/86 7.500%    Jul-05    Jun-17   12,400,000      11,421,853      12,380,000
Northpointe Village  Fresno, CA      C, Q          08/25/98 7.500%    Sep-17    Aug-40   13,250,000      13,232,307      13,229,000
Ocean Air            Norfolk, VA     C, I, J       04/20/98 7.250%    Jan-16    Nov-30   10,000,000      10,000,000       9,651,000
Orchard Hills        Tacoma, WA      JJ            12/31/86 7.250%    Dec-98    Aug-29    5,650,000       5,627,000       5,453,000
Orchard Mill         Atlanta, GA     C             05/01/89 7.500%    Jul-05    Jun-17   10,500,000       8,730,239      10,483,000
Park Sequoia         San Jose, CA    C, F, BB      10/17/00 8.500%    Mar-17    Mar-37    6,740,000       6,740,000       6,740,000
Pelican Cove         St. Louis, MO   U, V          02/12/87 7.250%    Oct-10    Oct-20   18,000,000      17,600,000      17,372,000
Phoenix              Stockton, CA    C             04/28/98 7.125%    Nov-16    Oct-29    3,250,000       3,212,177       3,055,000
River Run            Miami, FL       C, JJ         08/07/87 8.000%    Aug-99    Aug-07    7,200,000       7,200,000       7,668,000
Silvercrest          Clovis, CA      C             09/24/98 7.125%    Oct-17    Sep-40    2,275,000       2,272,474       2,158,000
South Congress       Austin, TX      C, F          05/04/00 7.500%    Sep-16    Sep-36    6,300,000       6,300,000       6,290,000
Stonecreek           Clovis, CA      C             04/28/98 7.125%    May-17    Apr-40    8,820,000       8,793,502       8,350,000
Thomas Lake          Eagan, MN                     09/02/86 7.500%    Jan-10    Dec-27   12,975,000      13,424,239      12,954,000
Village Green        Merced, CA      C, F, AA      08/14/00 8.500%        -     Aug-14      503,528         503,528         503,000
Village Green        Merced, CA      C, F, AA      08/14/00 8.500%    Jan-17    Jan-37    3,078,000       3,078,000       3,073,000
Walnut Creek         Austin, TX      F             05/04/00 7.500%        -     May-00      360,000         341,753         349,000
Walnut Creek         Austin, TX      F             05/04/00 7.500%    Sep-16    Sep-36    3,240,000       3,240,000       3,235,000
Walnut Park Plaza    Philadelphia, PAC, F          04/11/00 7.500%    Apr-10    May-30    5,500,000       5,475,000       5,491,000
Willow Creek         Ames, IA                      02/27/87 7.250%    Jul-08    Jun-22    6,100,000       6,100,000       5,887,000
                                                                                       ------------- --------------- ---------------

     Subtotal - CharterMac Owner Trust I                                                 $326,279,358    $321,678,478   $319,600,000
                                                                                        ------------- --------------- --------------

     Subtotal - Tax-Exempt First Mortgage Bonds                                          $870,045,793    $846,633,392   $823,392,000
                                                                                        ------------- --------------- --------------

Taxable Revenue Bonds
   Owned by the Company (not including its consolidated subsidiaries)
   ------------------------------------------------------------------

Chandler Creek       Round Rock, TX  G, H, J, DD   10/31/00 9.750%              Dec-42    $ 350,000       $ 350,000      $  350,000
Greenbriar           Concord, T       X  C, F      05/05/99 9.000%              May-36    2,015,000       2,015,000       2,015,000
Greenbridge at
 Buckingham          Richardson, TX               11/07/00 10.000%             Feb-07      350,000         350,000         350,000
Lake Park            Turlock Park, CA              06/08/99 9.000%              Sep-35      375,000         369,663         375,000
Lakes Edge at Walden Miami, FL       F             06/30/99 11.000%             Aug-10    1,400,000       1,355,436       1,711,111
Oaks at Hampton      Dallas, TX      C, G, H, J    04/27/00 9.000%              May-10      525,000         525,000         525,000
Parks at
 Westmoreland        DeSoto, TX      G, H, J       07/17/00 9.000%              Nov-09      455,000         455,000         455,000
Princess Anne House  Virginia Beach, C, G, H, J    04/06/00 9.500%              Jan-06      125,000         125,000         131,945
                     VA
Red Hill Villas      Round Rock, TX  C, G          12/12/00 9.500%              Jul-01      400,000         400,000         400,000
Williams Run         Dallas, TX                    12/06/00 9.250%              Jul-04      200,000         200,000         200,000
                                                                                       ------------- --------------- ---------------

     Subtotal - Taxable Revenue Bonds                                                    $ 6,195,000      $6,145,099    $ 6,513,056
                                                                                       ------------- --------------- --------------

Tax-Exempt Subordinate Bonds
   Owned by CharterMac Equity Issuer Trust (3)

Museum Tower         Philadelphia, PAB             11/00    8.250%    -         -       $ 6,000,000     $ 6,000,000     $ 6,000,000
Park at Landmark     Alexandria, VA  B             09/00    8.750%    -         -         9,500,000       9,500,000       9,500,000
                                                                                       ------------- --------------- ---------------

     Subtotal - Tax-Exempt Subordinate Bonds                                              $15,500,000     $15,500,000    $15,500,000
                                                                                        ------------- --------------- --------------

     Total Revenue Bonds                                                                 $891,740,793    $868,278,491   $845,405,056
                                                                                        ------------- --------------- --------------
</TABLE>



<PAGE>


         CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) The Revenue Bonds are deemed to be  available-for-sale  debt securities and,
accordingly, are carried at their estimated fair values at December 31, 2000.

(2) The stated  interest rate  represents the coupon rate of the Revenue Bond at
December 31, 2000.

(3) This entity is a consolidated subsidiary of the Company (see Merger).

(4) The Revenue Bonds are held as  collateral  in  connection  with the TOP (see
Private Label Tender Option Program below).

(5) These  Revenue  Bonds have been  transferred  to  CharterMac  Owner Trust in
connection  with the Company's  Private Label Tender Option Program (see Private
Label Tender Option Program below).

A Held by Merrill Lynch as collateral for secured borrowings (see Securitization
Transactions below).

B These Revenue  Bonds are held as  collateral  in  connection  with the Merrill
Lynch RITES/P-FLOATS Program (see Securitization Transactions below).

C The obligors of these Revenue Bonds are  partnerships  in which  affiliates of
the Manager are partners that own a controlling interest.

D The original  owners of the  Underlying  Properties  and the obligors of these
Revenue Bonds have been replaced with affiliates of the Manager.

E The minimum pay rate is the current cash flow of the property.

F The Underlying Property is undergoing substantial rehabilitation.

G The Underlying Property is in the construction phase as of December 31, 2000.

H The Underlying  Property is under  construction.  In the event construction is
not completed in a timely manner,  the Company may "put" the Revenue Bond to the
construction lender at par.

I The Underlying Property is undergoing substantial rehabilitation. In the event
it is not completed in a timely  manner,  the Company may "put" the Revenue Bond
to the construction lender at par.

J All of the "puts"  (see (H) and (I)  above) are  secured by a letter of credit
issued by the construction lender to the Company.

K Pursuant to a bond  modification  as of October 1, 1997,  the stated  interest
rate was lowered to 7% through June 30, 2000, and 7.5% thereafter.

L Pursuant to a bond  modification  as of October 1, 1997,  the stated  interest
rate was lowered to 6% through July 31, 2000, and 7% thereafter.

M The interest rate for this Revenue Bond is 6% until expected  refunding in 2nd
quarter 2001.

N The  interest  rate for this Revenue  Bond is 7.625%  during the  construction
period and 7.125% thereafter.

O The interest rate for this Revenue Bond is 7% during the  construction  period
and 7.25% thereafter.

P The interest rate for this Revenue Bond is 7% during the  construction  period
and 6.375% thereafter.

Q The interest rate for this Revenue Bond is 7.965% through  September 23, 1998,
8.125% for the remainder of the construction period and 7.5% thereafter.


R The  interest  rate for this  Revenue  Bond is 7% through  August 31, 2000 and
7.25% thereafter.

S The interest  rate for this Revenue Bond is 7% through  September 30, 2000 and
7.125% thereafter.

T The interest  rate for this Revenue Bond is 6.75%  through May 31, 2001 and 7%
thereafter.

U These  Revenue  Bonds are  currently  awaiting  approval  from the  Issuer for
modification.  The Company is confident that the modification will occur and has
therefore  shown the terms of the Revenue  Bond as per a  forbearance  agreement
which mirrors the terms of the bond modification.

V Due to the sale of the Underlying Property, the Company received deferred Base
Interest from the sales proceeds.

W The Company received participating interest during 2000.

X The interest  rate for this Revenue Bond is 8.5% through  October 31, 2001 and
7.5% therafter.

Y The interest  rate for this Revenue Bond is 8.5% through  October 31, 2001 and
7.5% thereafter.

Z The  interest  rate for this  Revenue  Bond is 8.0%  through July 31, 2001 and
7.65% thereafter.

AA The  interest  rate for this  Revenue  Bond is 8.5% through June 30, 2001 and
7.5% thereafter.

BB The interest  rate for this Revenue Bond is 8.5% through  August 31, 2001 and
7.5% thereafter.

CC The interest rate for this Revenue Bond is 8.5% through November 30, 2002 and
7.6% thereafter.

DD The interest  rate for this Revenue Bond is 9.75%  through  November 30, 2002
and 9.25% thereafter

EE The interest rate for this Revenue Bond is 7.8% through November 30, 2002 and
7.5% thereafter.

FF The interest rate for this Revenue Bond is 8.4% through December 31, 2002 and
7.4% thereafter.

GG The interest rate for this Revenue Bond is 8.5% through  January 31, 2003 and
7.5% thereafter.

HH The interest  rate for this Revenue Bond is 8.55%  through  November 30, 2001
and 7.55% thereafter.

II A third party has the option to acquire  these Revenue Bonds for an aggregate
of $35,250,000.  The right to exercise the option commenced  January 1, 2001 and
shall  continue  as long as these  bonds  are  outstanding.  JJ The  Company  is
permitted to call the Revenue Bond with six months written notice.


<TABLE>
<CAPTION>



Reconciliation of Revenue Bonds:                               2000                   1999                  1998
--------------------------------                               ----                   ----                  ----


<S>                                                     <C>                   <C>                    <C>
Balance at beginning of period                          $587,892,000          $458,662,600           $346,300,000
  Acquisitions                                           304,740,265           165,355,500            117,596,600
  Proceeds from repayments of bonds                      (22,400,000)          (21,395,213)                     0
  Periodic principal repayments of bonds                    (378,563)                    0                      0
  Carrying  amount of bonds in excess of  proceeds                                                              0
    from the repayment                                       719,308              (256,000)
  Loss on impairment of assets                                     0            (1,859,042)                     0
  Net change in fair value of bonds                      (25,291,326)          (12,642,300)            (5,260,455)
  Accretion   of  deferred   income  and  purchase
    accounting adjustment                                    123,372                26,455                 26,455
                                                      --------------       ---------------        ---------------
Balance at close of period                              $845,405,056          $587,892,000           $458,662,600
                                                         ===========           ===========            ===========

</TABLE>

The  weighted  average  interest  rates  recognized  on the face  amount  of the
portfolio of Revenue Bonds for the years ended December 31, 2000,  1999 and 1998
were  7.74%,  7.26% and 6.94%,  respectively,  based on  weighted  average  face
amounts  of   approximately   $710,544,000,   $525,092,000   and   $394,079,000,
respectively.

The amortized cost basis of the Company's portfolio of Revenue Bonds at December
31,  2000 and 1999 was  $868,278,491  and  $585,474,109,  respectively.  The net
unrealized  loss on Revenue Bonds in the amount of  $22,873,435  at December 31,
2000  consisted  of  gross   unrealized  gains  and  losses  of  $6,835,510  and
$29,708,945,  respectively.  The net  unrealized  gain on  Revenue  Bonds in the
amount of $2,417,891 at December 31, 1999  consisted of gross  unrealized  gains
and losses of $16,484,461 and $14,066,570, respectively.

The principal  and interest  payments on each Revenue Bond are payable only from
the cash flows of the Underlying  Properties,  including proceeds from a sale of
an  Underlying  Property or the  refinancing  of the mortgage loan securing such
Revenue Bonds (the  "Mortgage  Loans").  None of the Revenue Bonds  constitute a
general  obligation of any state or local government,  agency or authority.  The
structure  of each  Mortgage  Loan mirrors the  structure  of the  corresponding
Revenue Bond that it secures.  In order to protect the tax-exempt  status of the
Revenue  Bonds,  the owners of the  Underlying  Properties are required to enter
into certain agreements to own, manage and operate such Underlying Properties in
accordance with requirements of the Internal Revenue Code of 1986, as amended.

No single  Revenue  Bond  provided  interest  income  that  exceeded  10% of the
Company's  total  revenue for the years ended  December 31, 2000,  1999 or 1998.
Based on the face amount of Revenue  Bonds at December 31,  2000,  approximately
23.1% of the Underlying Properties are located in California,  13.6% are located
in Florida,  and 17.2% are located in Texas.  No other state comprises more than
10% of the total face amount at December 31,  2000.  Based on the face amount of
Revenue  Bonds  at  December  31,  1999,  approximately  26% of  the  Underlying
Properties  were located in  California,  14% were located in Florida,  10% were
located in Missouri,  and 10% were located in Georgia.  No other state comprised
more than 10% of the total face amount at December 31, 1999.

Revenue  Bonds  generally  bear a fixed base  interest  rate and,  to the extent
permitted by existing  regulations,  may or may not also provide for  contingent
interest and other features. Terms are expected to be five to 35 years, although
the Company may have the right to cause  repayment  prior to maturity  through a
mandatory  redemption  feature  (five  to  seven  years  with up to six  month's
notice).  In some  cases,  the bonds call for  amortization  or  "sinking  fund"
payments,  generally at the completion of  rehabilitation  or  construction,  of
principal  based on  thirty  to  forty  year  level  debt  service  amortization
schedules.

Revenue Bonds are generally not subject to optional  prepayment during the first
5-10  years of the  Company's  ownership  of the bonds and may carry  prepayment
penalties  thereafter  beginning  at 5% of the  outstanding  principal  balance,
declining by 1% per annum.  Certain Revenue Bonds may be purchased at a discount
from their face value.  Up to 15% of the Total  Market  Value of the Company (as
defined in its trust  agreement)  may be  invested in Revenue  Bonds  secured by
Underlying  Properties  in which  affiliates  of the Manager have a  controlling
interest,  equity interest or security interest. The 15% limit is not applicable
to  properties to which the Manager or its  affiliates  have taken title for the
benefit of the  Company and only  applies to Revenue  Bonds  acquired  after the
Merger.  In selected  circumstances  and generally  only in connection  with the
acquisition of tax-exempt  Revenue Bonds, the Company may acquire a small amount
of taxable  bonds (i) which the  Company  may be required to acquire in order to
satisfy state  regulations  with respect to the issuance of tax-exempt bonds and
(ii) to fund certain costs  associated with the issuance of Revenue Bonds,  that
under current law cannot be funded by the Revenue Bond itself.

Certain Revenue Bonds provide for  "participating  interest" which is equal to a
percentage  of net property cash flow of the net sale or  refinancing  proceeds.
Both the stated and participating  interest on the Revenue Bonds are exempt from
federal  income  taxation.  During the years ended  December 31, 2000,  1999 and
1998,   participating   interest  was  collected   amounting  to   approximately
$1,716,000,  $728,000 and  $960,000,  respectively.  Revenue  Bonds that contain
provisions for contingent interest are referred to as  "participating";  Revenue
Bonds lacking this provision are "non-participating".

From time to time the Company has advanced funds to owners of certain Underlying
Properties in order to preserve the  underlying  asset  including  completion of
construction  and/or  when  Underlying  Properties  have  experienced  operating
difficulties  including past due real estate taxes and/or deferred  maintenance.
Promissory notes and/or second mortgages  typically secure such advances.  As of
December 31, 2000, the face amount of such advances was $15,165,389,  with rates
ranging  from 8% to 13% and a carrying  value of  $9,909,933,  (net of  purchase
accounting adjustments),  and a reserve for collectibility of $138,000. Included
in such amounts were advances to obligors which are affiliates of the Manager at
an aggregate face amount of $5,028,812, rates ranging from 8% to 10%.

2000 Transactions
-----------------

Revenue Bonds acquired, including those in the ATEBT merger (see Note 9), during
2000 are summarized below:
<TABLE>
<CAPTION>


                                                                 Aggregate        Weighted      Weighted Average
                                                                  Purchase        Average           Permanent
                                                 Face Amount       Price        Construction      Interest Rate
                                                                                    Rate
  ---------------------------------------------- -------------- -------------- ---------------- ----------------
<S>                                              <C>            <C>                 <C>             <C>
Participating Revenue Bonds
    Stabilized properties                        $  15,625,000  $  18,880,000       N/A             9.000%
  Non-participating Revenue Bonds
    Stabilized properties                          31,219,000    23,575,084         N/A             7.964%
    Construction/rehabilitation properties        237,467,265   242,453,590           7.837%        7.461%
  Subordinating    non-participating   Revenue     15,000,000   $  15,810,000       N/A             8.460%
  Bonds

(a)  Includes bonds acquired as part of the ATEBT merger.
</TABLE>



Revenue  Bonds  repaid  and  RITES  (see  Note 4)  terminated  during  2000  are
summarized below:

                                          Face                  Realized Gains /
                                         Amount       Cost         (Losses)
    -------------------------------- ------------- -------------- -------------
    Participating Revenue Bonds

      Stabilized                      $22,400,000   $21,719,635        $680,365
    Non-participating Revenue bonds
      Construction/rehabilitation         10,000        10,000         (35,214)
      (RITES)

In connection with these dispositions, the Company recognized $645,151 in net
realized gains and $1,941,703 in accrued but unpaid interest.

2000 Bond Modifications
-----------------------

In connection with the sale of two of the Underlying Properties, Cedar Creek and
Pelican  Cove,  the  Company  has agreed to a  modification  of the terms of the
respective Revenue Bonds.  Subject to Issuer approval,  the stated interest rate
of the Cedar Creek and Pelican Cove  Revenue  Bonds will be modified to a stated
interest rate of 7.43% and 7.25%, respectively,  and the maturity and call dates
will be extended to October 1, 2010 and October 1, 2020, respectively.

The  original  obligors  and owners of the  Underlying  Properties  of the Cedar
Creek,  Highpointe,  Pelican Cove and  Loveridge  Revenue Bonds were replaced in
prior years with affiliates of the Manager who did not make equity  investments.
These affiliates assumed the day-to-day  responsibilities and obligations of the
Underlying Properties. On September 29, 2000, the affiliates of the Manager sold
49% of the Pelican Cove and Cedar Creek  Underlying  Properties,  with an option
from the buyers to purchase the remaining  51% in 2001.  These two Revenue Bonds
were also modified. Under the modified terms, the interest rates were reduced to
7.25% and 7.43%,  respectively.  Buyers are being sought for the  remaining  two
Underlying  Properties,  who would make  equity  investments  in the  Underlying
Properties and assume the nonrecourse  obligations of these Revenue Bonds. These
properties are generally paying as interest an amount equal to the net cash flow
generated by operations, which in some cases is less than the stated rate of the
Revenue Bond. The Company has no present intention of declaring default on these
Revenue Bonds. The aggregate  carrying value of these remaining Revenue Bonds at
December  31, 2000 and  December  31,  1999 was  approximately  $11,282,000  and
$12,280,000, and the income earned from them for 2000 and 1999 was approximately
$849,000 and $847,500, respectively.


1999 Transactions
-----------------

In 1999, the Company acquired $165.3 million in Revenue Bonds  collateralized by
multifamily  apartment  communities.  The  break-down  of these  acquisitons  is
summarized below:
<TABLE>
<CAPTION>


                                                                                                      Weighted
                                                                                       Weighted        Average
                                                                                       Average        Permanent
                                                  Face Amount          Cost          Construction   Interest Rate
                                                                                         Rate
    -------------------------------------------- --------------- ------------------- -------------- ------------
    Non-participating Revenue Bonds
<S>                                              <C>             <C>                        <C>        <C>
      Stabilized                                 $  13,860,000   $  14,165,958              N/A        7.640%
      Construction/rehabilitation properties       151,445,500     154,819,946               7.047%      7.320%
    RITES                                               15,000         579,119
</TABLE>

In 1999,  $22,200,000 in tax-exempt  mortgage  revenue bonds  collateralized  by
multifamily apartment communities were repaid. These dispositions are summarized
below:



                                                         Amortized      Realized
                                      Face Amount          Cost           Gains
                                                                        (Losses)
    ------------------------------ ---------------    ------------   - --------
    Participating Revenue Bonds
      Stabilized                      $22,200,000     $22,557,353     $(463,147)


In connection with these dispositions, the Company recognized $35,000 in accrued
but unpaid interest,  and $100,000 for prepayment  penalties.  In addition,  the
Players Club and Suntree Obligor also repaid  promissory note obligations in the
amounts of $472,000 and $89,000 in 1999.


1999 Bond Modifications
-----------------------

During 1999, the Company  presented  modified terms on five of its Revenue bonds
to their respective  issuers and is currently  waiting for their approval of the
following:

<TABLE>
<CAPTION>



  Project                 Bond Par Amount           Stated Interest Rate         Call Date        Maturity Date
  ------------------- -------------------------- ----------------------------- ---------------- ----------------
<S>                           <C>                            <C>                     <C>               <C>
  Cypress Run               $15,402,428          5.5%     with      incremental       N/A          Dec-2029
                                                 adjustments up to 7.0%
  Sunset Creek                8,275,000                      5.477%              Dec-2009          Dec-2019
  Sunset Downs               15,000,000                      5.477%              Dec-2009          Dec-2019
  Sunset Terrace             10,350,000                      5.477%              Dec-2009          Dec-2019
  Sunset Village             11,375,000                      5.477%              Dec-2009          Dec-2019

</TABLE>

In addition to the Revenue Bonds, modified in 1999 and 2000, as discussed above,
ten of the  Company's  other  Revenue  Bonds,  with an aggregate  face amount of
$126,025,000,  have previously been modified. These modifications have generally
encompassed  an extension of the maturity  together  with a prepayment  lock out
feature and/or prepayment  penalties together with an extension of the mandatory
redemption  feature (5-10 years from  modification).  Stated interest rates have
also been adjusted  together with a change in the  participation  and contingent
interest  features.  Base  interest  rates,   contingent  interest,   prepayment
lock-outs,  mandatory  redemption  and maturity  features vary  dependent on the
facts of a particular  Revenue Bond,  the developer,  the Underlying  Property's
performance and requirements of bond counsel and local issuers.  The Company may
agree to the  modification  of other Revenue Bonds to generally  reflect similar
terms  as those  modified  previously,  where  and as  appropriate.  Significant
modifications to interest rates and maturity dates are subject to final approval
of the local issuers, bond counsel and indenture trustees.

NOTE 3 - Deferred Costs

The components of deferred costs are as follows:
<TABLE>
<CAPTION>

                                                                    December 31,
                                                          ---------------------------
                                                              2000           1999
                                                          -------------  ------------

<S>                                                       <C>            <C>
Deferred bond selection costs                             $16,260,545    $9,904,683
Deferred costs relating to the Private Label Tender Option
  Program (see Note 5)                                      5,915,266     3,614,627
Deferred costs relating to the issuance of preferred shares
  of subsidiary (see Note 6)                                6,490,989     3,605,331
Other                                                               0       172,039
                                                         ------------  ------------
                                                           28,666,800    17,296,680

Less:  Accumulated amortization                            (4,465,458)   (3,074,229)
                                                          -----------    -----------

                                                          $24,201,342   $14,222,451
                                                           ==========    ==========
</TABLE>

NOTE 4 - Secured Borrowings

To  raise  additional   capital  to  acquire  Revenue  Bonds,  the  Company  has
securitized  certain  Revenue  Bonds  through the Merrill  Lynch Pierce Fenner &
Smith Incorporated ("Merrill Lynch") P-FLOATS/RITES program. Under this program,
the Company  transfers  certain  Revenue Bonds to Merrill  Lynch.  Merrill Lynch
deposits each Revenue Bond into an  individual  special  purpose trust  together
with a credit enhancement guarantee  ("Guarantee").  Two types of securities are
then issued by each trust,  (1) Puttable  Floating  Option  Tax-Exempt  Receipts
("P-FLOATS"),  a short-term  senior  security which bears interest at a floating
rate that is reset  weekly  and (2)  Residual  Interest  Tax  Exempt  Securities
("RITES"),  a subordinate  security which receives the residual interest payment
after payment of P-FLOAT interest and ongoing transaction fees. The P-FLOATS are
sold to third  party  investors  and the  RITES are  generally  sold back to the
Company.  The Company  has the right,  with 14 days  notice to the  trustee,  to
purchase the outstanding P-FLOATS and withdraw the underlying Revenue Bonds from
the trust.  When the Revenue Bonds are  deposited  into the P-FLOAT  Trust,  the
Company  receives  the  proceeds  from the  sale of the  P-FLOATS  less  certain
transaction  costs.  In certain other cases,  Merrill Lynch may directly buy the
Revenue Bonds from local  issuers,  deposit them in the trust,  sell the P-FLOAT
security to investors and then the RITES to the Company.

For financial  reporting  purposes,  due to the  repurchase  right,  the Company
accounts for the net proceeds  received  upon the transfer of its Revenue  Bonds
through  the  P-FLOATS/RITES  program as secured  borrowings  and,  accordingly,
continues  to account  for the  Revenue  Bonds as  assets.  When  Merrill  Lynch
purchases  Revenue Bonds directly and sells the RITES to the Company,  the RITES
are   included   in  other   assets   and   accounted   for  at  fair  value  as
available-for-sale debt secutities.

In order to  facilitate  the  securitization,  the Company  has pledged  certain
additional Revenue Bonds as collateral for the benefit of the credit enhancer or
liquidity  provider.  At December 31, 2000,  the total  carrying  amount of such
additional  Revenue Bonds,  cash and cash equivalents and temporary  investments
pledged as collateral was $120,058,000.

During  the year 2000,  the  Company  transferred  three  Revenue  Bonds with an
aggregate face amount of $30,800,000 to the P-FLOATS/RITES  program and received
proceeds of $29,348,725.

The Company's cost of funds relating to its secured borrowings under the Merrill
Lynch P-FLOATS/RITES  program (calculated as interest expense as a percentage of
the weighted average amount of the secured  borrowings) was approximately  4.96%
and 4.8%,  annualized,  for the year ended December 31, 2000 and the period June
29, 1999 (inception of this program) through December 31, 1999, respectively.


NOTE 5 - Minority Interest In Subsidiary

The Company also  utilitzes its Private Label Tender Option  Program  ("TOP") to
raise additional  capital to acquire Revenue Bonds. As of December 31, 1999, the
maximum  amount of capital that could be raised under the TOP was  $400,000,000.
On  December  7, 2000,  the Company  refined  the  structure  of the TOP for the
primary purpose of segregating Revenue Bonds issued by governmental  entities in
California from the remainder of the Revenue Bonds under the TOP and to increase
the maximum amount of capital available under the program to $500,000,000.

As of December 31, 2000, the Company has  contributed 53 issues of Revenue Bonds
in the  aggregate  par  amount of  approximately  $473,000,000  to  Charter  Mac
Origination  Trust  I  (the  "Origination  Trust"),  a  wholly  owned,  indirect
subsidiary of the Company.  The  Origination  Trust then  contributed  40 of its
Revenue Bonds,  with an aggregate par amount of approximately  $326,000,000,  to
Charter  Mac  Owner  Trust I (the  "Owner  Trust")  which is  controlled  by the
Company.  The Owner Trust contributes selected bonds to specific "Series Trusts"
in order to segregate Revenue Bonds issued by governmental  entities selected by
state of origin. As of December 31, 2000, two such Series Trusts were created: a
California only series and a National (non-state specific) series.

Each Series  Trust  issues two equity  certificates:  (i) a Senior  Certificate,
which has been deposited into another  Delaware  business trust (a  "Certificate
Trust")  which  issued  and sold  certificates  with a  floating  interest  rate
("Floater  Certificates")  representing  proportional  interests  in the  Senior
Certificate to new investors and (ii) a Residual  Certificate  representing  the
remaining  beneficial  ownership  interest in each Series Trust,  which has been
issued to the  Origination  Trust. At December 31, 2000, the California only and
National Series Trusts had Floater  Certificates  with an outstanding  amount of
$70,000,000 and $205,000,000, respectively.

The Revenue Bonds remaining in the Origination Trust (aggregate principal amount
of approximately  $147,000,000) are an additional  collateral pool for the Owner
Trust's obligations under the Senior Certificate.  In addition,  the Owner Trust
obtained  a  municipal  bond  insurance  policy  from  MBIA  to  credit  enhance
Certificate  distributions  for  the  benefit  of the  holders  of  the  Floater
Certificates  and has  also  arranged  for a  liquidity  facility,  issued  by a
consortium  of  highly  rated  European  banks,  with  respect  to  the  Floater
Certificates.  The Company owns no beneficial interest in, and does not control,
the Certificate Trusts.

The effect of the TOP  structure is that a portion of the  interest  received by
the Owner Trust on the Revenue Bonds it holds is distributed  through the Senior
Certificate  to the  holders  of the  Floater  Certificates  with  the  residual
interest  remitted  to the  Origination  Trust  (and thus to the  benefit of the
Company)  via the  Residual  Certificate.  The effect of the  December  7, 2000,
refinement of the TOP structure was to segregate the California  related Floater
Certificates  as they  generally  will pay  distributions  at lower  rates  than
National  (non-state  specific)  Floater  Certificates and thus the yield on the
Residual Certificates owned by the Origination Trust is increased.

For financial  accounting  and  reporting  purposes,  the Owner Trust,  which is
controlled  by the  Company,  is  consolidated.  The equity in the Owner  Trust,
represented by the Senior  Certificate,  is classified as "minority  interest in
subsidiary (subject to mandatory  redemption)" in the accompanying  consolidated
balance  sheets.  Income  earned by the Owner Trust is allocated to the minority
interest in an amount equal to the distributions  through the Senior Certificate
to the  holders  of the  Floater  Certificates.  Such  allocation  of  income is
classified as "minority  interest in income of subsidiary"  in the  accompanying
consolidated statements of income.

The Company's cost of funds relating to the TOP (calculated as income  allocated
to the minority  interest  plus  recurring  fees as a percentage of the weighted
average amount of the outstanding  Senior  Certificate) was approximately  5.4%,
4.5% and 4.9% for the years ended December 31, 2000, 1999 and the period May 21,
1998 (inception) through December 31, 1998, respectively.


NOTE 6 - Preferred Shares of Subsidiary

Since June 1999,  the Company,  through a  consolidated  subsidiary,  has issued
multiple series of "Cumulative Preferred Shares".  Proceeds from these offerings
were used to acquire additional Revenue Bonds.
<TABLE>
<CAPTION>


Preferred        Date of     Mandatory       Mandatory    Number       Liquidation       Total Face    Dividend
Series          Issuance      Tender        Repurchase   of SharesPreference per Share     Amount      Rate
---------------------------------------------------------------------------------------------------------------

<S>              <C>          <C>             <C>            <C>        <C>             <C>              <C>
Series A         6/29/99      6/30/09         6/30/49        45         $2,000,000      $90,000,000      6.625%
Series A-1       7/21/00      6/30/09         6/30/49        48            500,000       24,000,000      7.100%
Series B         7/21/00     11/30/10        11/30/50       110            500,000       55,000,000      7.600%
</TABLE>

In  connection  with the offerings of these  Cumulative  Preferred  Shares,  the
Company caused 100% of the ownership of the Origination  Trust to be transferred
to Charter Mac Equity  Issuer  Trust (the  "Issuer"),  a newly  formed  Delaware
business trust and an indirectly-owned subsidiary in which the Company owns 100%
of the common  equity.  The Issuer then issues the Cumulative  Preferred  Shares
and, as a result,  the Issuer became the direct and indirect owner of the entire
outstanding issue of Revenue Bonds held by the Origination Trust and Owner Trust
and its  directly-owned  and  indirectly-owned  subsidiaries  (see discussion of
Private Label Tender Option Program,  above).  In addition to  contributing  the
ownership  of the  Origination  Trust,  the  Company  also  contributed  certain
additional Revenue Bonds to the Issuer.

Each series of  Cumulative  Preferred  Shares has an annual  preferred  dividend
payable quarterly in arrears upon declaration  thereof by the Board of Trustees,
but only to the extent of tax-exempt net income for the particular quarter.  All
series of Cumulative  Preferred Company's Shares are subject to mandatory tender
by the  holders  thereof  for  remarketing  and  purchase  on  their  respective
mandatory  tender dates and each remarketing date thereafter at their respective
liquidation  preference  per  share  plus an amount  equal to all  distributions
accrued but unpaid.

Holders of  Cumulative  Preferred  Shares may elect to retain  their shares upon
remarketing,  with a distribution rate to be determined immediately prior to the
remarketing date by the remarketing  agent. Each holder of Cumulative  Preferred
Shares  will be  required  to tender  its  shares to the  Issuer  for  mandatory
repurchase  on the  mandatory  repurchase  date,  unless the Company  decides to
remarket  the  shares  on  such  date.   Cumulative  Preferred  Shares  are  not
convertible into Common Shares of the Company.

The Series A and A-1 Cumulative  Preferred  Shares rank, with respect to payment
of distributions and amounts upon liquidation,  dissolution or winding-up of the
Company,  senior to all classes or series of  Convertible  CRA Shares,  Series B
Cumulative  Preferred Shares and Common Shares of the of the Company. The Series
B  Subordinate  Cumulative  Preferred  Shares  rank,  with respect to payment of
distributions  and amounts upon  liquidation,  dissolution  or winding-up of the
Company, senior to the Company's Common Shares and the Company's Convertible CRA
Shares and junior to the Issuer's Series A and A-1 Cumulative Preferred Shares.

Since issuance of the Cumulative  Preferred Shares, all quarterly  distributions
have been declared at each stated  annualized  dividend rate for each respective
series and all distributions due have been paid.

For financial accounting and reporting purposes, Cumulative Preferred Shares are
classified as "Preferred shares of subsidiary (subject to mandatory repurchase)"
in the accompanying consolidated balance sheets. Net income earned by the Issuer
and its two  subsidiaries  is allocated to the holders of  Cumulative  Preferred
Shares in an amount equal to the distributions to such holders.  Such allocation
of income is  classified  as "Income  allocated  to  preferred  shareholders  of
subsidiary" in the accompanying consolidated statements of income.


NOTE 7 - Convertible Community Reinvestment Act Preferred Share Offerings

On May 10,  2000,  the Company  completed a  $27,497,000  private  placement  of
Convertible  Community  Reinvestment  Act  Preferred  Shares  ("Convertible  CRA
Shares")  to three  financial  institutions  (1,946,000  Convertible  CRA Shares
priced at $14.13 per share).  On December  14,  2000,  the Company  completed an
additional  $9,100,000  private  placement  of  Convertible  CRA Shares to three
additional  financial  institutions  (644,000  Convertible  CRA Shares priced at
$14.13 per share).

The  Convertible  CRA Shares enable  financial  institutions  to receive certain
regulatory  benefits  in  connection  with their  investment.  The  Company  has
developed  a  proprietary  method  for  specially  allocating  these  regulatory
benefits to specific  financial  institutions that invest in the Convertible CRA
Shares.  Other  than  the  preferred  allocation  of  regulatory  benefits,  the
investors  receive  the same  economic  benefits as Common  Shareholders  of the
Company,  including  receipt  of the same  dividends  per share as those paid to
Common  Shareholders.  The  Company's  earnings are allocated pro rata among the
Common Shares and the  Convertible  CRA Shares,  and the  Convertible CRA Shares
rank on parity with the Common  Shares with respect to rights upon  liquidation,
dissolution or winding up of the Company.

The investors,  at their option,  have the ability to convert their  Convertible
CRA  Shares  into  Common  Shares  at a  predetermined  conversion  price.  Upon
conversion,  the investors will no longer be entitled to a special allocation of
the regulatory benefit. The conversion price is the greater of (i) the Company's
book value per Common Share as set forth in the Company's  most recently  issued
annual  or  quarterly  report  filed  with  the  SEC  prior  to  the  respective
Convertible  CRA Shares  issuance  date or (ii) 110% of the  closing  price of a
Common  Share  on the  respective  Convertible  CRA  Shares  pricing  date.  The
conversion  price for each  Convertible  CRA Share  offering is indicated on the
following table:


      Issuance Date          Conversion Price           Conversion Ratio

      May 10, 2000                $15.33                      0.9217
      December 20, 2000           $14.60                      0.9678


NOTE 8 - Related Parties

Pursuant  to the  Management  Agreement  and  other  servicing  agreements  with
subsidiaries,  the  Manager  receives  (inclusive  of fees paid  directly to the
Manager by subsidiaries of the Company) certain fees for its ongoing  management
and operations of the Company:

 Fees                     Computation
 ----                     -----------
I. Bond  selection    2% of the  principal  amount of each  Revenue Bond
   fees               or other instrument upon acquisition
II.Special            equal to .375% per annum of the total invested assets of
   distributions      the Company
III.Bond  servicing   equal to .25% per annum of the outstanding  principal
    fees              amount of Revenue Bonds held by the Company
IV. Liquidation       1.5% based on the gross sales price of assets sold by the
    fees              Company
V.  Expense           reimbursement  of certain  administrative costs incurred
    reimbursement     by the Manager and its affiliates on behalf of the Company

Fees  payable to the Manager  which are based on Revenue  Bonds or assets of the
Company  include such Revenue  Bonds or assets which are either held directly by
the Company or held by other entities to whom the Company has  transferred  such
Revenue  Bonds or assets to  facilitate  financing.  In  addition,  the  Manager
receives bond placement fees directly from the borrower in an amount equal to 1%
to  1.5% of the  principal  amount  of each  Revenue  Bond or  other  instrument
acquired or invested in by the Company.  In addition,  affiliates of the Manager
are part of a joint venture that has a development  services  agreement with the
owners of certain Underlying Properties.

The  Management  Agreement will  terminate on October 1, 2001.  Thereafter,  the
Management  Agreement  will be  renewed  annually  by the  Company,  subject  to
majority approval of the Company's Board of Trustees.  The Management  Agreement
cannot be  terminated  by the Company  prior to October 1, 2001,  other than for
gross negligence or willful  misconduct of the Manager and by a majority vote of
the Company's independent  trustees.  The Management Agreement may be terminated
without cause by a majority vote of the Company's independent trustees following
October 1, 2001 or by the Manager at any time.

The costs,  expenses and the special  distributions  incurred to the Manager and
its  affiliates  for the years ended  December 31,  2000,  1999 and 1998 were as
follows:

                              Year               Year             Year
                              Ended              Ended            Ended
                          December 31,       December 31,     December 31,
                              2000               1999             1998
                          ------------       ----------      ------------

Bond selection fees       $  5,995,724       $3,806,510      $  2,351,932
Special distribution         2,743,465        2,018,822         1,477,797
Bond servicing fees          1,809,638        1,337,738           985,198
Expense reimbursement          578,191          384,231           374,315
                          ------------      -----------      ------------

                           $11,127,018       $7,547,301      $  5,189,242
                            ==========        =========       ===========



As of December 31, 2000,  the obligors of certain  Revenue Bonds (see footnote C
to table in Note 2) are local  partnerships  in which  investment  partnerships,
whose  general  partners  are  affiliates  of  the  Manager,  own a  controlling
partnership  interest.  With  respect  to one of the above  Revenue  Bonds,  the
Company  owns the RITES  (see  Note 4).  These  affiliate  entities  could  have
interests that do not coincide with, and may be adverse to, the interests of the
Company.  Negotiations,  if any, with respect to  modifications of Revenue Bonds
between the Company and  obligors  who are  affiliates  may be affected by these
conflicts as the Manager  determines  the  appropriate  terms and  conditions of
modifications or otherwise opts for some other remedy including foreclosure.

As of December 31, 2000, the owners of the Underlying Properties and obligors of
the  Highpointe,  and Loveridge  Revenue Bonds are affiliates of the Manager who
have not made equity  investments.  These  entities have assumed the  day-to-day
responsibilities and obligations of the Underlying Properties.  Buyers are being
sought who would make equity investments in the Underlying Properties and assume
the  nonrecourse  obligations for the Revenue Bond or otherwise buy the property
and payoff all or most of the Revenue Bond obligation.


NOTE 9 - ATEBT Merger

On November 2, 1999,  the Company and ATEBT,  whose  manager was an affiliate of
the  Manager  of the  Company,  entered  into an  Agreement  and Plan of  Merger
providing  for the  merger of ATEBT into and with the  Company as the  surviving
trust in the merger (the "ATEBT  Merger").  The ATEBT Merger was approved by the
ATEBT shareholders on September 27, 2000 and consummated on November 14, 2000.

On the ATEBT Merger  consummation  date, ATEBT had total assets of approximately
$29,700,000 and net assets of approximately $28,300,000.  ATEBT had four Revenue
Bonds financing  properties in four states,  with an aggregate  outstanding face
amount of $23,775,000, and with individual interest rates of 9.0%.

Pursuant to the Merger  Agreement,  each share of beneficial  ownership in ATEBT
issued and  outstanding was converted into 1.43112 Common Shares of the Company.
Following the ATEBT Merger,  previous ATEBT  shareholders  own 2,115,722  Common
Shares  (representing  approximately 9.3% of the then outstanding Common Shares)
of the Company.

The  ATEBT  Merger  was  accounted  for as a  purchase,  with  the  value of the
Company's  Common Shares issued,  plus  transaction  costs  allocated to the net
assets acquired, based on their relative fair values. The excess of the purchase
price over the fair value of the net assets acquired,  $1,482,986,  was recorded
as goodwill.  Interest income on the acquired Revenue Bonds is recorded from the
acquisition date.


NOTE 10 - Earnings Per Share, Profit and Loss Allocations and Distributions


Pursuant to the Company's Trust Agreement and the Management  Agreement with the
Manager, the Manager is entitled,  in its capacity as the general partner of the
Company,  to a special  distribution  equal to .375% per annum of the  Company's
total  invested  assets  (which  equals the face amount of the  Revenue  Bonds),
payable quarterly. After payment of the special distribution,  distributions are
made to the shareholders in accordance with their percentage interests.

Income is  allocated  first to the  Manager  in an amount  equal to the  special
distribution. The net remaining profits or losses, after a special allocation of
1% to the Manager,  are then allocated to  shareholders in accordance with their
percentage interests.

Net income per share is computed  in  accordance  with  Statement  of  Financial
Accounting  Standards  ("SFAS") No. 128,  Earnings  Per Share.  Basic income per
share is calculated by dividing  income  allocated to Common and Convertible CRA
Shareholders  ("Shareholders")  (See Note 7) by the weighted  average  number of
Common and Convertible CRA Shares outstanding during the period. The Convertible
CRA shareholders  are included in the calculation of shares  outstanding as they
share the same economic  benefits as Common  Shareholders,  including receipt of
the same dividends per share as Common Shareholders. Diluted income per share is
calculated  using the weighted average number of shares  outstanding  during the
period plus the  additional  dilutive  effect of common stock  equivalents.  The
dilutive  effect of outstanding  stock options is calculated  using the treasury
stock method.  Because each  Convertible CRA Share is convertible into less than
one common share, the potential conversion would be antidilutive.

<TABLE>
<CAPTION>


                                                                    For the Year Ended December 31, 2000
                                                                  Income           Shares*         Per Share
                                                                 Numerator       Denominator        Amount

<S>                                                            <C>               <C>                 <C>
    Net income allocable to shareholders (Basic EPS)           $27,074,115       22,140,576          $1.22
                                                                                                      ====
      Effect of Dilutive securities
         297,830 stock options
                                                                         -           11,663           -
                                                                ----------           ------         ------
    Diluted net income  allocable to  shareholders  (Diluted   $27,074,115       22,152,239          $1.22
    EPS)                                                        ==========       ==========           ====

    *includes Convertible CRA Shares
</TABLE>
<TABLE>
<CAPTION>

                                                                    For the Year Ended December 31, 1999
                                                                  Income           Shares          Per Share
                                                                 Numerator       Denominator        Amount

<S>                                                            <C>               <C>                 <C>
    Net income allocable to shareholders (Basic EPS)           $20,951,366       20,580,756          $1.02
                                                                                                      ====
      Effect of Dilutive securities- None
    Diluted net income  allocable to  shareholders  (Diluted   $20,951,366       20,580,756          $1.02
    EPS)                                                        ==========       ==========           ====
</TABLE>
<TABLE>
<CAPTION>



                                                                    For the Year Ended December 31, 1998
                                                                  Income           Shares          Per Share
                                                                 Numerator       Denominator        Amount

<S>                                                            <C>               <C>                <C>
    Net income allocable to shareholders (Basic EPS)           $20,342,594       20,587,151         $  .99
                                                                                                     =====
      Effect of Dilutive securities - None
    Diluted net income  allocable to  shareholders  (Diluted   $20,342,594       20,740,641         $  .98
    EPS)                                                        ==========       ==========          =====
</TABLE>

NOTE 11 - Capital Stock and Share Option Plan

The Company has adopted an  incentive  share option plan (the  "Incentive  Share
Option  Plan"),  the  purpose of which is to (i)  attract  and retain  qualified
persons as trustees and officers and (ii) to provide  incentive and more closely
align the financial interests of the Manager and its employees and officers with
the  interests of the  shareholders  by providing  the Manager with  substantial
financial interest in the Company's success.  The Compensation  Committee of the
Company's  Board of  Trustees  administers  the  Incentive  Share  Option  Plan.
Pursuant to the Incentive Share Option Plan, if the Company's  distributions per
Common  Share in the  immediately  preceding  calendar  year exceed  $0.9517 per
Common Share, the  Compensation  Committee has the authority to issue options to
purchase, in the aggregate, that number of Common Shares which is equal to three
percent of the shares  (including  common  shares and  Convertible  CRA  Shares)
outstanding  as of  December  31 of the  immediately  preceding  calendar  year,
provided  that the  Compensation  Committee  may only issue,  in the  aggregate,
options  to  purchase  a maximum  number of Common  Shares  over the life of the
Incentive  Shares Option Plan equal to 10% of the Common Shares  outstanding  on
October 1, 1997 (2,058,748 Common Shares).

Subject  to  the  limitations  described  in  the  preceding  paragraph,  if the
Compensation Committee does not grant the maximum number of options in any year,
then the excess of the number of  authorized  options over the number of options
granted  in such year will be added to the number of  authorized  options in the
next  succeeding  year  and will be  available  for  grant  by the  Compensation
Committee in such succeeding year.

All options granted by the  Compensation  Committee have an exercise price equal
to or greater than the fair market value of the Common Shares on the date of the
grant.  The maximum option term is ten years from the date of grant.  All Common
Share  options  granted  pursuant to the  Incentive  Share  Option Plan may vest
immediately  upon  issuance  or in  accordance  with  the  determination  of the
Compensation  Committee.  For 1998 the  Company did not grant any options as its
distributions  per Share did not exceed the  minimum  threshold  of $0.9517  per
share.  In 1999,  the Company  distributed  $.995 per Share,  thus  enabling the
Compensation Committee, at their discretion,  to issue options. Three percent of
the Common  Shares  outstanding  as of December  31, 1999 and 2000 is equal to a
maximum option grant of 617,430 and 680,950 Common Shares,  respectively,  for a
total possible option grant of 1,298,380.

On May 1, 2000,  options to  purchase  297,830  Common  Shares  were  granted to
officers of the Company and certain  employees  of an  affiliate of the Manager,
none of whom are employees of the Company.  The exercise price of each option is
$11.5625 per share with a term of ten years,  and vesting in equal  installments
on May 1, 2001,  2002 and 2003.  The Company has adopted the  provisions of SFAS
No. 123, "Accounting for Stock-Based  Compensation" for its share options issued
to  non-employees.  Accordingly,  compensation  cost  is  accrued  based  on the
estimated  fair value of the  options  issued,  and  amortized  over the vesting
period.  Because  vesting  of the  options  is  contingent  upon  the  recipient
continuing  to provide  services to the  Company  until the  vesting  date,  the
Company estimates the fair value of the non-employee  options at each period end
up to the vesting date, and adjusts  expensed amounts  accordingly.  The 297,830
options  granted on May 1, 2000 had an estimated fair value at December 31, 2000
of $.90 per option grant, or a total of $268,047.  The fair value of each option
grant  is  estimated  using  the  Black-Scholes  option-pricing  model  with the
following weighted average  assumptions used for grants in 2000:  dividend yield
of 8.18%,  expected  volatility of 18%, and expected lives of ten years. None of
the options granted during 2000 were exercised or expired.  The Company recorded
compensation  cost of $109,952 for the year ended  December 31, 2000 relating to
these option grants.

Through  calendar year 1999,  each  independent  trustee was entitled to receive
annual  compensation for serving as a trustee in the aggregate amount of $15,000
payable in cash  (maximum of $5,000 per year) and/or  Common Shares based on the
fair market value at the date of issuance.  Beginning in calendar year 2000, the
annual compensation for the two original independent trustees was increased from
$15,000 to $17,500 and the maximum  payable in cash was increased from $5,000 to
$7,500. In 2000, a third independent trustee was appointed and such trustee will
receive annual  compensation in the aggregate  amount of $30,000 payable in cash
(maximum of $20,000 per year) and/or Common Shares.  As of December 31, 2000 and
1999, 3,552 and 1,910 Common Shares, respectively,  having an aggregate value at
the date of issuance of $45,000 and $25,000,  respectively,  have been issued to
the independent trustees. An additional 2,001 shares, with an aggregate value of
$30,000 at issuance, were issued to the independent trustees in January, 2001 as
compensation for their 2000 service.

Effective  May 3, 2000,  the Company  implemented  a dividend  reinvestment  and
Common Share purchase plan (the "Plan"). Under the Plan, Common Shareholders may
elect to have their distributions from the Company  automatically  reinvested in
additional  Common  Shares at a purchase  price equal to the average of the high
and low market price from the previous  day's trading.  If a Common  Shareholder
participates in the Plan, such shareholder may also purchase  additional  Common
Shares through quarterly voluntary cash payments with a minimum  contribution of
$500.  There are no  commissions  for Common  Shares  purchased  under the Plan.
Participation  in the Plan is  voluntary  and a Common  Shareholder  may join or
withdraw at any time. The opportunity for  participation  in the Plan began with
the distributions paid in August 2000.

On October 9, 1998,  the Board of Trustees  authorized the  implementation  of a
Common Share repurchase plan,  enabling the Company to repurchase,  from time to
time, up to 1,500,000 of its Common Shares.  The repurchases will be made in the
open market and the timing is dependant on the availability of Common Shares and
other market conditions.  As of both December 31, 2000 and 1999, the Company had
acquired 8,400 of its Common Shares for an aggregate  purchase price of $103,359
(including  commissions  and service  charges).  Repurchased  Common  Shares are
accounted for as treasury Shares of beneficial interest.

The  Company  was  created  as part of the  settlement  in 1997 of class  action
litigation  against,  among others,  the sponsors of the Partnerships which were
consolidated to form the Company.  As part of that  settlement,  counsel ("Class
Counsel")  for the  partners of the  Partnerships  had the right to petition the
United States District Court for the Southern District of New York (the "Court")
for  additional  attorneys'  fees  ("Counsel's  Fee  Shares") in an amount to be
determined in the Court's sole  discretion.  The Counsel's Fee Shares were based
upon a percentage  (which Class  Counsel  proposed to be 25%) of the increase in
value of the  Company,  ("the Added  Value") if any, as of October 1, 1998 based
upon the  difference  between (i) the  trading  prices of the  Company's  Common
Shares of beneficial  interest during the six month period ended October 1, 1998
and (ii) the  trading  prices  of the  limited  partnership  units and the asset
values of the Partnerships  prior to October 1, 1997. As of October 1, 1998, 25%
of the Added Value amounted to $7,788,536  and, in accordance  with an Order and
Stipulation of Settlement by the Court on February 18, 1999 (the "Order"), Class
Counsel was entitled to receive 608,955 Common Shares of beneficial  interest in
the Company. On April 15, 1999, the Company successfully negotiated a discounted
cash  settlement  (the  "Discounted  Cash  Settlement") of $6,089,550 with Class
Counsel in lieu of the issuance of Common  Shares.  On April 26, 1999, the Board
of Trustees  approved the Discounted  Cash  Settlement and it was paid on May 3,
1999.
<TABLE>
<CAPTION>


NOTE 12 - Selected Quarterly Financial Data (unaudited)

                                                                    2000 Quarter Ended
                                            -----------------------------------------------------------------------
                                               March 31          June 30     September 30      December 31
                                            --------------      -----------  ------------     -----------
Revenues:

  Interest income:
<S>                                         <C>               <C>            <C>                 <C>
   Revenue bonds                            $11,341,104       $12,554,464    $14,392,775         $17,420,561
   Temporary investments                        467,654           656,738        861,495             394,089
   Promissory notes                             242,211           240,633        266,637             252,200
                                            -----------      ------------   ------------        ------------

   Total revenues                            12,050,969        13,451,835     15,520,907          18,066,850
                                             ----------        ----------     ----------          ----------

Expenses:

  Interest expense                              914,275         1,063,484        998,044           1,240,357
  Recurring fees relating to the Private
   Label Tender Option Program                  426,978           529,478        619,086             622,015
  Bond servicing                                396,504           429,305        468,980             522,481
  General and administrative                    448,199           472,187        684,689             562,787
  Amortization                                  110,699           126,230        139,650             200,809
                                           ------------      ------------   ------------        ------------

   Total expenses                             2,296,655         2,620,684      2,910,449           3,148,449
                                            -----------       -----------    -----------         -----------

Income before gain on repayment of
  revenue bonds                               9,754,314        10,831,151     12,610,458          14,918,401

Gain on repayment of revenue bonds                    0                 0               0            645,151
                                             ----------       -----------    ------------        -----------

Income before minority interests              9,754,314        10,831,151     12,610,458          15,563,552

Income allocated to preferred shareholders
  of subsidiary                              (1,490,625)       (1,490,625)    (2,651,081)         (2,961,625)
Minority interest in income of subsidiary    (1,693,300)       (2,718,458)    (2,742,145)         (2,920,560)
                                             ----------        ----------     ----------          ----------

   Net income                               $ 6,570,389       $ 6,622,068    $ 7,217,232         $ 9,681,367
                                             ==========        ==========     ==========          ==========

Allocation of net income to:

Special distribution to Manager             $   594,756       $   641,425   $    706,000        $    801,281
                                             ==========        ==========    ===========         ===========

Manager                                    $     59,756      $     59,806  $      65,112        $     88,802
                                            ===========       ===========   ============         ===========

Common shareholders                           5,915,877         5,626,157      5,889,308           8,083,605

Convertible CRA Shareholders                          0           294,680        556,809             707,680
                                            ------------       -----------     ----------          ----------

Total for shareholders                      $ 5,915,877       $ 5,920,837    $ 6,446,117         $ 8,791,284
                                             ==========        ==========     ==========          ==========

Net income per share
  (basic and diluted)                       $     .29         $     .27      $       .29         $     .37
                                             ==========       =========       ==========          ========
</TABLE>
<TABLE>
<CAPTION>

The results for the quarter ended December 31, 2000 reflect net gains totaling
$645,151 resulting from the repayment of Revenue Bonds (see Note 2).
                                                                   2000 Quarter Ended
                                            ----------------------------------------------------------------
                                               March 31          June 30     September 30      December 31
                                            --------------      -----------  ------------     -----------
Revenues:

  Interest income:
<S>                                            <C>             <C>            <C>             <C>
   Revenue bonds                               $7,921,003      $8,522,319     $10,200,640     $11,800,568
   Temporary investments                          102,522         155,475         556,614         475,058
   Promissory notes                               165,159         166,654         164,792         206,386
                                             ------------    ------------    ------------    ------------

   Total revenues                               8,188,684       8,844,448      10,922,046      12,482,012
                                             ------------    ------------    ------------    ------------

Expenses:

  Interest expense                                  8,368         365,110         558,758         816,989
  Recurring fees relating to the Private
   Label Tender Option Program                    319,750         348,919         364,265         383,822
  Bond servicing                                  287,749         307,107         352,300         390,582
  General and administrative                      335,069         342,407         389,990         363,332
  Amortization                                     78,512          85,814         105,944         111,757
  Loss on impairment of assets                          0               0               0       1,859,042
                                             ------------    ------------    ------------    ------------

   Total expenses                               1,029,448       1,449,357       1,771,257       3,925,524
                                             ------------    ------------    ------------    ------------

Income before loss on repayment of
  revenue bonds                                 7,159,236       7,395,091       9,150,789       8,556,488

Loss on repayment of revenue bonds                (25,493)              0               0        (437,654)
                                             ------------    ------------    ------------    ------------

Income before minority interests                7,133,743       7,395,091       9,150,789       8,118,834

Income allocated to preferred shareholders
  of subsidiary                                         0         (33,125)     (1,490,625)     (1,490,625)
Minority interest in income of subsidiary      (1,128,221)     (1,409,729)     (1,388,095)     (1,676,219)
                                             ------------    ------------    ------------    ------------

   Net income                                  $6,005,522      $5,952,237      $6,272,069      $4,951,990
                                             ============    ============    ============    ============

Allocation of net income to:

Special distribution to Manager                  $431,623        $462,618        $540,172        $584,409
                                             ============    ============    ============    ============

Manager                                           $55,739         $54,896         $57,319         $43,676
                                             ============    ============    ============    ============

Common shareholders                            $5,518,160      $5,434,723      $5,674,578      $4,323,905
                                             ============    ============    ============    ============

Net income per share
  (basic and diluted)                                $.27            $.26            $.28            $.21
                                             ============    ============    ============    ============
</TABLE>
The results for the quarter ended December 31, 1999 reflect losses on impairment
of assets,  totaling  $1,859,042  relating to certain  Revenue Bonds whose terms
were  modified and losses  totaling  $437,654  resulting  from the  repayment of
certain other Revenue Bonds.


NOTE 13 - Commitments and Contingencies

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


NOTE 14 - Financial Risk Management and Derivatives

The Company's  Revenue Bonds generally bear fixed rates of interest income,  but
the P-FLOATS and TOP financing programs incur interest expense at variable rates
reset  weekly,  so the  Company is  exposed  to  interest  rate  risks.  Various
financial  vehicles exist which would allow Company  management to hedge against
the  impact of  interest  rate  fluctuations  on the  Company's  cash  flows and
earnings. Prior to December 31, 2000, the Company, upon management's analysis of
the interest rate  environment and the costs and risks of such  strategies,  has
not engaged in any of these hedging strategies.

Subsequent to December 31, 2000, the Company entered into interest rate swaps in
order to reduce the  Company's  growing  exposure to  increases  in the floating
interest  rate on its TOP and P-FLOATS  programs.  Under such interest rate swap
agreements,  the Company is required to pay Merrill Lynch Capital  Services (the
"Counterparty")  a fixed  rate on a  notional  amount of debt.  In  return,  the
Counterparty  will  pay  the  Company  a  floating  rate  equivalent  to the BMA
Municipal  Swap Index,  an index of weekly  tax-exempt  variable  rate issues on
which the Company's  variable rate financing  programs are based.  On January 5,
2001, the Company entered into a five-year interest rate swap that fixes the BMA
index to 3.98% on a notional  amount of $50.0 million.  On February 5, 2001, the
Company entered into a three-year interest rate swap that fixes the BMA index to
3.64% on an additional notional amount of $100.0 million.

The  average BMA rate for 2000 and 1999 was 4.12% and 3.29%,  respectively.  Net
swap payments  received by the Company,  if any,  will be taxable  income to the
Company and any resultant  dividends  paid to  shareholders.  A possible risk of
such swap agreements is the possible  inability of the  Counterparty to meet the
terms of the contracts with the Company; however, there is no current indication
of such an inability.

Under SFAS No. 133, as amended,  the Company has designated  these interest rate
swaps as cash flow hedges on the variable interest payments on its floating rate
financing.  Accordingly,  the interest rate swaps will be recorded at their fair
market  values each  accounting  period,  with  changes in market  values  being
recorded in other comprehensive income to the extent that the hedge is effective
in  achieving   offsetting  cash  flows.  Any  ineffectiveness  in  the  hedging
relationship  will be  recorded in  earnings.  The  Company  expects  that these
hedging  relationships will be highly effective in achieving  offsetting changes
in cash flow throughout their terms.


NOTE 15 - Subsequent Events

On February 28, 2001,  the Company sold the Greenway  Manor Revenue Bond for the
par amount of $12,850,000, in connection with a sale of the Underlying Property.
Net sales  proceeds  were  sufficient  to provide for the payment of accrued and
unpaid Base Interest in the amount of $857,800.  The Company  expects to receive
payment  of  participating  interest  upon  final  reconciliation  of net  sales
proceeds.

On February  28, 2001 and March 30, 2001,  the Company  funded a Revenue Bond in
the amounts of $9,500,000  and  $1,500,000,  respectively,  not  including  bond
selection  fees and expenses of  approximately  $190,000  and  $30,000,  bearing
interest  at 10% per  annum,  secured  by a  third  mortgage  on the  Underlying
Property,  Draper Lane. Maturity Date for this Revenue Bond is March 1, 2040 and
the Call Date is March 1, 2006. The Underlying  Property is a 406 unit apartment
complex located in Silver Spring, MD.

On March 21, 2001, the Company filed a shelf registration  statement on Form S-3
with the  Securities  and  Exchange  Commission,  in the amount of  $250,000,000
pursuant to which the Company will be able to offer securities from time to time
following effectiveness of such registration statement.


<PAGE>

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

None.
                                    PART III

Item 10.  Directors and Executive Officers of the Company.

Incorporated by reference to the Company's definitive proxy statement to be
filed pursuant to Regulation  14A under the Securities  Exchange Act of 1934, as
amended (the "Exchange Act").

Item 11.  Executive Compensation.

Incorporated  by reference to the  Company's  definitive  proxy  statement to be
filed pursuant to Regulation 14A under the Exchange Act.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

Incorporated  by reference to the  Company's  definitive  proxy  statement to be
filed pursuant to Regulation 14A under the Exchange Act.

Item 13.  Certain Relationships and Related Transactions.

Incorporated  by reference to the  Company's  definitive  proxy  statement to be
filed pursuant to Regulation 14A under the Exchange Act.



<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
                                                                      Sequential
                                                                          Page
                                                                     -----------

(a) 1.     Financial Statements

           Independent Auditors' Report                                       31

           Consolidated Balance Sheets as of December 31, 2000 and 1999       32

           Consolidated Statements of Income for the years ended December 31,
           2000, 1999 and 1998                                                33

           Consolidated  Statements  of Changes in  Shareholders'  Equity/
           Partners'  Capital  (Deficit) for the years ended
           December 31, 2000, 1999 and 1998                                   34

           Consolidated Statements of Cash Flows for the years ended December
           31, 2000, 1999 and 1998                                            36

           Notes to Consolidated Financial Statements                         38

(a) 2.     Financial Statement Schedules

           Schedule I - Condensed Financial Information of Registrant         68

           All other schedules have been omitted because they are not applicable
           or the required information is included in the financial statements
           and the notes thereto.

(a) 3.     Exhibits

3.1(a)  Certificate of Business Trust dated as of August 12, 1996  (incorporated
by  reference  to the  Company's  Registration  Statement  on Form 10,  File No.
001-13237)

3.1(b)  Certificate  of Amendment of  Certificate  of Business Trust dated as of
April  30,  1997  (incorporated  by  reference  to  the  Company's  Registration
Statement on Form 10, File No. 001-13237)

3.1(c) Trust Agreement dated as of August 12, 1996 (incorporated by reference to
the Company's Registration Statement on Form 10, File No. 001-13237)

3.1(d)  Amendment  No.  1  to  Trust  Agreement  dated  as  of  April  30,  1997
(incorporated by reference to the Company's  Registration  Statement on Form 10,
File No. 001-13237)

3.1(e)  Amended and Restated  Trust  Agreement  dated as of  September  30, 1997
(incorporated  by reference to the Company's  Current  Report on Form 8-K, filed
with the Commission on March 19, 1998)

3.2        Amended and Restated Bylaws (filed herewith)

4.1 Specimen Copy of Share Certificate for shares of beneficial  interest of the
Company (incorporated by reference to the Company's Amendment No. 1 on Form 10/A
to the Company's Registration Statement on Form 10, File No. 001-13237)

10(a) Management  Agreement dated as of October 1, 1997, between the Company and
Related Charter L.P.  (incorporated by reference to the Company's Current Report
on Form 8-K, filed with the Commission on March 19, 1998)

10(b) Agreement and Plan of Merger dated as of October 1, 1997, by and among the
Company, Summit Tax Exempt Bond Fund, L.P., Summit Tax Exempt L.P. II and Summit
Tax Exempt L.P. III  (incorporated by reference to the Company's  Current Report
on Form 8-K, filed with the Commission on March 19, 1998)

10(c)  Incentive Share Option Plan  (incorporated  by reference to the Company's
Current Report on Form 8-K, filed with the Commission on March 19, 1998)

10(d) Contribution Agreement between CharterMac and CharterMac Origination Trust
("Origination  Trust")  dated as of May 21, 1998  (incorporated  by reference to
Exhibit 10 (aaaw) in the Company's June 30, 1998 Quarterly Report on Form 10-Q)

10(e)  Contribution  Agreement  between  Origination  Trust and CharterMac Owner
Trust  ("Owner  Trust") dated as of May 21, 1998  (incorporated  by reference to
Exhibit 10 (aaax) in the Company's June 30, 1998 Quarterly Report on Form 10-Q)

10(f)  Insurance  Agreement among MBIA,  CharterMac,  Origination  Trust,  Owner
Trust, CharterMac Floater Certificate Trust ("Floater Certificate Trust"), First
Tennessee Bank National Association ("First Tennessee"), Related Charter LP, and
Bayerische Landesbank  Girozentrale,  New York Branch ("Bayerische") dated as of
May 21, 1998  (incorporated  by reference to Exhibit 10 (aaay) in the  Company's
June 30, 1998 Quarterly Report on Form 10-Q)

10(g) Liquidity  Agreement among Owner Trust,  Floater  Certificate Trust, First
Tennessee,  MBIA  and  Bayerische  dated  as of May 21,  1998  (incorporated  by
reference to Exhibit 10 (aaaz) in the Company's June 30, 1998  Quarterly  Report
on Form 10-Q)

10(h) Liquidity Pledge and Security  Agreement among  Origination  Trust,  Owner
Trust,  Floater Certificate Trust, MBIA, First Tennessee and Bayerische dated as
of May 21,  1998  (incorporated  by  reference  to  Exhibit  10  (aaaaa)  in the
Company's June 30, 1998 Quarterly Report on Form 10-Q)

10(i) Fee Agreement among Wilmington Trust Company,  Floater  Certificate  Trust
and CharterMac dated as of May 21, 1998 (incorporated by reference to Exhibit 10
(aaaab) in the Company's June 30, 1998 Quarterly Report on Form 10-Q)

10(j) Certificate  Placement Agreement  (incorporated by reference to Exhibit 10
(aaaac) in the Company's June 30, 1998 Quarterly Report on Form 10-Q)

10(k) Remarketing Agreement  (incorporated by reference to Exhibit 10 (aaaad) in
the Company's June 30, 1998 Quarterly Report on Form 10-Q)

10(l)  Charter Mac Equity  Issuer  Trust,  6 5/8% Series A Cumulative  Preferred
Shares,  Purchase  Agreement,  dated June 14, 1999 (incorporated by reference to
Exhibit 10 (aaaaz) in the Company's June 30, 1999 Quarterly Report on Form 10-Q)

10(m)  Agreement  and Plan of  Merger by and among  Charter  Municipal  Mortgage
Acceptance Company, CM Holding Trust and American Tax Exempt Bond Trust dated as
of November 2, 1999  (incorporated by reference to Exhibit 99.2 in the Company's
Current Report on Form 8-K dated November 2, 1999)

12         Ratio of earnings to fixed charges and preferred
           share dividends of subsidiary                                      73

21         Subsidiaries of the Company (filed herewith)                       74

99.1 Amended and Restated Trust Agreement by and among J. Michael Fried,  Stuart
J. Boesky, Alan P. Hirmes,  Robert W. Grier and Andrew T. Panaccione as Managing
Trustees,  Charter Municipal  Mortgage  Acceptance  Company and Wilmington Trust
Company,  as  Registered  Trustee  dated June 22,  1999  relating to Charter Mac
Equity  Issuer Trust  (incorporated  by reference to Exhibit 99 in the Company's
June 30, 1999 Quarterly Report on Form 10-Q)

99.2 Agreement  dated as of April 15, 1999 between  Charter  Municipal  Mortgage
Acceptance Company and Melvyn I. Weiss, Esq. and Lawrence A. Sucharow,  Esq., as
Class Counsel  co-chairmen  (incorporated by reference to the Company's  current
report on Form 8-K filed with the Commission on April 29, 1999)

(b)        Reports on Form 8-K

           Current report on Form 8-K relating to the approval by a majority of
            the shareholders of American Tax Exempt Bond Trust to the terms of
            the Merger Agreement with CM Holding Trust, the Company's
            subsidiary, as the surviving trust was dated October 13, 2000 and
            was filed on October 13, 2000.

           Current report on Form 8-K relating to the merger of American Tax
            Exempt Bond Trust into CM Holding Trust was dated November 29, 2000
            and was filed on November 29, 2000.



<PAGE>

                                   SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                    (COMPANY)




Date:  March 30, 2001                   By: ________________________________
                                            Stuart J. Boesky
                                            Managing Trustee, President
                                            and Chief Executive Officer



<PAGE>


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed by the following persons on behalf of the Company
and in the capacities and on the dates indicated:


         Signature                      Title                     Date
--------------------------   ----------------------------     ----------------




____________________         Managing Trustee, President
Stuart J. Boesky             and Chief Executive Officer         March 30, 2001



____________________         Managing Trustee and
Stephen M. Ross              Chairman of the Board               March 30, 2001



--------------------
Michael J. Brenner           Managing Trustee                    March 30, 2001



____________________         Managing Trustee, Executive
Alan P. Hirmes               Vice President,
                             and Secretary                       March 30, 2001



--------------------
Michael I. Wirth             Senior Vice President and Chief Financial
                             Officer                             March 30, 2001



--------------------
Peter T. Allen               Managing Trustee                    March 30, 2001



--------------------
Arthur P. Fisch              Managing Trustee                    March 30, 2001



--------------------
Thomas W. White              Managing Trustee                    March 30, 2001




<PAGE>


                                   SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                    (COMPANY)




Date:  March 30, 2001                   By: /s/ Stuart J. Boesky
                                            --------------------
                                            Stuart J. Boesky
                                            Managing Trustee, President
                                            and Chief Executive Officer



<PAGE>


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed by the following persons on behalf of the Company
and in the capacities and on the dates indicated:

         Signature                      Title                     Date
--------------------------   ----------------------------     ----------------

/s/ Stuart J. Boesky         Managing Trustee, President
--------------------
Stuart J. Boesky             and Chief Executive Officer         March 30, 2001



/s/ Stephen M. Ross          Managing Trustee and
-------------------
Stephen M. Ross              Chairman of the Board               March 30, 2001



/s/ Michael J. Brenner
Michael J. Brenner           Managing Trustee                    March 30, 2001



/s/ Alan P. Hirmes           Managing Trustee, Executive
------------------
Alan P. Hirmes               Vice President,
                             and Secretary                       March 30, 2001

/s/ Michael I. Wirth         Senior Vice President and
--------------------
Michael I. Wirth             Chief Financial Officer             March 30, 2001



/s/ Peter T. Allen
------------------
Peter T. Allen               Managing Trustee                    March 30, 2001



/s/ Arthur P. Fisch
-------------------
Arthur P. Fisch              Managing Trustee                    March 30, 2001



/s/ Thomas M. White
-------------------
Thomas M. White              Managing Trustee                    March 30, 2001





<PAGE>
<TABLE>
<CAPTION>



                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Summarized  condensed  financial  information  of registrant  (not including its
consolidated subsidiaries) CONDENSED BALANCE SHEETS

                                                                    December 31,
                                                             ------------------------------
                                                                 2000                1999
                                                             --------------    --------------
                                     ASSETS
<S>                                                             <C>               <C>
Revenue bonds-at fair value                                     $12,104,055       $9,559,000
Temporary investments                                                     0       19,790,000
Cash and cash equivalents                                         9,952,594        3,523,956
Cash and cash equivalents-restricted                                      0          971,758
Interest receivable, net                                            165,759          199,548
Promissory notes receivable                                       9,909,933       10,148,060
Due from subsidiaries                                                     0          439,108
Investment in subsidiaries                                      319,712,285      260,089,698
Deferred costs, net                                              17,845,534       10,653,865
Goodwill, net                                                     2,329,422        2,674,626
Other assets                                                        409,595          262,344
                                                              -------------    -------------

Total assets                                                   $372,429,177     $318,311,963
                                                              =============    =============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
  Accounts payable, accrued expenses and other liabilities$         827,280         $423,540
  Due to Manager and affiliates                                   1,025,210          838,567
  Due to subsidiaries                                             6,762,543          155,717
  Distributions payable to common shareholders                    6,242,046        5,453,971
  Distributions payable to Convertible CRA Shareholders             558,250                0
                                                              -------------    -------------

Total liabilities                                                15,415,329        6,871,795
                                                              -------------    -------------

Commitments and contingencies

Shareholders' equity:
Beneficial owners' equity - Convertible CRA share-
  holders (2,590,000 shares issued and outstanding)              34,397,168                0
Beneficial owner's equity-manager                                   715,342          441,878
Beneficial owners' equity-other common shareholders
  (50,000,000 shares authorized; 22,706,739 issued and
   22,698,339 outstanding and 20,589,375 issued and
   20,580,975 outstanding in 2000 and 1999, respectively)       323,206,288      312,800,380
Treasury shares of beneficial interest (8,400 shares)              (103,359)        (103,359)
Accumulated other comprehensive loss                             (1,201,591)      (1,698,731)
                                                              -------------    -------------

Total shareholders' equity                                      357,013,848      311,440,168
                                                              -------------    -------------

Total liabilities and shareholders' equity                     $372,429,177     $318,311,963
                                                              =============    =============

</TABLE>
<PAGE>



                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                       CONDENSED STATEMENTS OF OPERATIONS

                                              Years Ended December 31,
                                          2000           1999        1998
                                       -----------    -----------  ----------
Revenues:
  Interest income:
   Revenue bonds                     $  2,972,386  $  6,050,931   $20,287,754
   Temporary investments                  451,768       662,728       213,138
   Promissory notes                     1,001,681       702,991       594,183
   Income from subsidiaries            28,307,718    18,177,128     4,570,337
                                       ----------    ----------   -----------
   Total revenues                      32,733,553    25,593,778    25,665,412
                                       ----------    ----------    ----------

Expenses:
  Interest expense                         21,887       417,263     1,504,334
  Bond servicing                           33,694       135,767       729,840
  General and administrative            2,062,719     1,406,501     1,246,794
  Amortization                            478,951       345,282       158,572
                                     ------------  ------------  ------------
   Total expenses                       2,597,251     2,304,813     3,639,540
                                      -----------   -----------   -----------

Income before loss on repayment of revenue
  bonds                                 30,136,302    23,288,965    22,025,872
Loss on repayment of revenue bonds          45,246       107,147            0
                                       -----------  -------------   ----------

   Net income                          $30,091,056   $23,181,818   $22,025,872
                                        ==========    ==========    ==========

Allocation of net income:

  Special distribution to Manager     $  2,743,477  $  2,018,822  $  1,477,797
                                       ===========   ===========   ===========
  Manager                            $     273,464 $     211,630 $     205,481
                                      ============  ============  ============
  Common shareholders                  $25,500,984   $20,951,366   $20,342,594
  Convertible CRA Shareholders           1,573,131             0             0
                                       ------------  -----------    ---------
   Total for Shareholders              $27,074,115   $20,951,366   $20,342,594
                                        ==========    ==========    ==========



<PAGE>
<TABLE>
<CAPTION>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                       CONDENSED STATEMENTS OF CASH FLOWS

                                                   Years Ended December 31,
                                                2000         1999          1998
                                            ----------    ----------    ----------

Cash flows from operating activities:
<S>                                         <C>           <C>           <C>
  Net income                                $30,091,056   $23,181,818   $22,025,872
                                             ----------    ----------    ----------
  Adjustments to reconcile net income to net cash
   provided by operating activities:
  Loss on repayments of revenue bonds            45,245       107,147             0
  Amortization                                  478,951       345,282       158,572
  Amortization of goodwill                      345,204       297,623       134,593
  Amortization of bond selection costs          935,380       450,743       238,928
  Accretion of excess of acquired net
   assets over cost                                   0             0      (248,559)
  Accretion of deferred income                        0             0       (39,753)
   Income from investment in subsidiaries   (28,307,718)  (18,177,128)   (4,570,337)
   Distributions from subsidiaries                    0    16,467,319   151,538,426
  Changes in operating assets and liabilities:
   Interest receivable                           33,789       105,165       574,806
   Other assets                                  20,323           656        29,971
   Accounts payable, accrued expenses and
    other liabilities                           403,740    (5,918,615)       70,457
   Due from subsidiaries                        116,180      (208,887)     (230,221)
   Due to subsidiaries                        7,575,386    (1,328,176)    1,483,893
   Due to Manager and affiliates                114,771      (343,960)      278,751
                                          -------------  ------------  ------------
  Total adjustments                         (18,238,749)   (8,202,831)  149,419,527
                                            -----------    ----------   -----------
Net cash provided by operating activities    11,852,307    14,978,987   171,445,399
                                            -----------    ----------   -----------

Cash flows from investing activities:
  Proceeds from repayments of revenue bonds      49,901     5,100,000             0
  Purchase of revenue bonds                  (2,405,000)  (44,770,162) (117,596,600)
  Proceeds from secured borrowings                    0    52,807,000             0
  Investment in subsidiaries                (23,824,693)            0             0
  Contribution of revenue bonds to subsidiaries       0    13,507,000             0
  Increase in deferred bond selection costs  (6,499,035)   (3,906,784)   (2,598,288)
  Net sale (purchase) of temporary investments19,790,000  (19,790,000)    3,500,000
  Increase in other assets                       (9,000)     (251,500)            0
  Increase in deferred costs                   (545,632)     (100,000)            0
  Loans made to properties                     (200,000)   (2,847,185)   (1,055,695)
  Principal payments received from loans made to
   properties                                   438,127       328,045        507,040
                                              ---------   -----------    -----------
Net cash provided by (used in)
  investing activities                      (13,205,332)        76,414  (117,243,543)
                                             -----------  -----------    ----------
</TABLE>

                                                                  (continued)


<PAGE>
<TABLE>
<CAPTION>


                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                       CONDENSED STATEMENTS OF CASH FLOWS

                                                                     Years Ended December 31,
                                                          2000                 1999           1998
                                                        ------------     -------------     ------------
<S>                                                      <C>              <C>              <C>
Cash flows from financing activities:
  Proceeds from note payable                                       0                0       96,039,231
  Repayments of note payable                                       0                0     (117,484,571)
  Increase in cash and cash equivalents-restricted           971,758         (971,758)               0
  Distributions paid to the Manager and
   shareholders of the Company                           (24,343,782)     (21,815,252)     (20,331,395)
  Distributions paid to Convertible CRA Shareholders        (810,370)               0                0
  Increase in deferred costs relating to the Private
   Label Tender Option Program                            (2,300,639)        (559,632)      (2,512,768)
  Increase in other deferred costs                            72,039          (72,039)               0
  Purchase of treasury shares of beneficial interest               0                0         (103,359)
  Issuance of Convertible CRA Shares                      34,192,657                0                0
  Merger costs                                                     0                0         (218,657)
                                                       -------------    -------------    -------------

Net cash provided by (used in) financing activities        7,781,663      (23,418,681)     (44,611,519)
                                                       -------------    -------------    -------------


Net increase (decrease) in cash and
  cash equivalents                                         6,428,638       (8,363,280)       9,590,337
Cash and cash equivalents at the
  beginning of the year                                    3,523,956       11,887,236        2,296,899
                                                       -------------    -------------    -------------
Cash and cash equivalents at the
  end of the year                                      $   9,952,594    $   3,523,956    $  11,887,236
                                                       =============    =============    =============

Supplemental information:
  Interest paid                                        $      21,887    $     417,263    $   1,507,871
                                                       =============    =============    =============

</TABLE>



<PAGE>




                  CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                     NOTES TO CONDENSED FINANCIAL STATEMENTS


1. Introduction and Basis of Presentation

Basis of Financial Information

The accompanying  condensed financial  statements (the "Parent Company Financial
Statements")  are  for  Charter  Municipal  Mortgage   Acceptance  Company  (not
including its consolidated subsidiaries).

The Parent Company Financial Statements,  including the notes thereto, should be
read in conjunction  with the consolidated  financial  statements of the Company
and the notes thereto which are included in this Form 10-K.

2. Transactions with Subsidiaries

The Company received  distributions from its consolidated  subsidiaries totaling
approximately $16,467,000 during the year ended December 31, 1999.

During the years  ended  December  31, 1999 and 1998,  the  Company  contributed
revenue bonds with aggregate  carrying value of  approximately  $115,567,000 and
$361,686,000, respectively, to its subsidiaries.

During 2000, in  connection  with the ATEBT  merger,  the Company  issued common
shares valued,  at the date of issuance,  at $29,154,649 and contributed the net
assets from the merger to one of its subsidiaries.



<PAGE>
<TABLE>
<CAPTION>



                                                                     Exhibit 12

Ratio of Earnings to Combined Fixed Charges and Preference Dividends




                                                                       2000             1999          1998
                                                                  ------------       ----------      ------------

<S>                                                                <C>             <C>             <C>
Interest expense                                                   $  4,216,160    $  1,749,225    $  1,504,334
Minority interest in income of subsidiary                            10,074,463       5,602,264       1,563,999
Recurring fees related to TOPs program                                2,197,557       1,416,756         454,919
Amortized capitalized costs related to indebtedness                     478,951         345,282         158,572
Preference security dividend requirements of consolidated
  subsidiaries                                                        8,593,956       3,014,375               -
                                                                   ------------    ------------    ------------

  Total fixed charges                                              $ 25,561,087    $ 12,127,902    $  3,681,824
                                                                   ============    ============    ============


Net income before minority interest                                $ 48,759,475    $ 31,798,457    $ 23,589,871
Add:  Total fixed charges                                            25,561,087      12,127,902       3,681,824
Less:  Preference security dividend requirements of consolidated
  subsidiaries                                                       (8,593,956)     (3,014,375)              -
                                                                   ------------    ------------    ------------
Earnings                                                           $ 65,726,606    $ 40,911,984    $ 27,271,695
                                                                   ============    ============    ============

Ratio of Earnings to Combined Fixed Charges and
  Preference Dividends                                                      3:1             3:1             7:1

For the  purposes  of  computing  the ratio of  earnings  to fixed  charges  and
preference  dividends,  earnings were  calculated  using income before  minority
interest  adding back total fixed  charges  less  preference  security  dividend
requirements  of  consolidated  subsidiaries.  Fixed charges consist of interest
expense,  minority  interest  in  income  of  subsidiary,   recurring  fees  and
amortization  of  capitalized  costs  related  to  indebtedness  and  preference
security  dividend  requirements  of  consolidated  subsidiaries.  There were no
periods in which earnings were  insufficient to cover combined fixed charges and
preference dividends.
</TABLE>


<PAGE>



                                                                     Exhibit 21



                           Subsidiaries of the Company

CM Holding Trust, a Delaware business trust

Charter Mac Equity Issuer Trust, a Delaware business trust

        Subsidiary of Charter Mac Equity Issuer Trust, a Delaware business trust
        ------------------------------------------------------------------------

CharterMac Origination Trust I, a Delaware business trust

CharterMac Owner Trust I, a Delaware business trust



<PAGE>



                                                                    Exhibit 23.1



INDEPENDENT AUDITORS CONSENT

We consent to the  incorporation  by reference  in  Registration  Statement  No.
333-54802  of Charter  Municipal  Mortgage  Acceptance  Company on Form S-3,  in
Registration  Statement No. 333-57384 of Charter Municipal  Mortgage  Acceptance
Company  on Form  S-3,  in  Registration  Statement  No.  333-36192  of  Charter
Municipal Mortgage Acceptance Company on Form S-3, and in Registration Statement
No. 333-55957 of Charter Municipal  Mortgage  Acceptance  Company on Form S-8 of
our report dated March 12, 2001, appearing in this Annual Report on Form 10-K of
Charter Municipal  Mortgage  Acceptance  Company for the year ended December 31,
2000.


DELOITTE & TOUCHE LLP

New York, New York
March 30, 2001