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EXHIBIT 10.4.1

THORNBURG MORTGAGE, INC.

AMENDMENT NO. 1
TO
AMENDED AND RESTATED
2002 LONG-TERM INCENTIVE PLAN

DATED as of October 21, 2003

Pursuant to Section 8.2 of the Amended and Restated 2002 Long-Term
Incentive Plan (the Plan), the Board of Directors of Thornburg Mortgage, Inc.
(the Company) hereby revises and amends the terms of the Plan as follows,
effective October 21, 2003:



|1. |  | Section 2.14 of the Plan shall be deleted in its entirety and replaced with
the following:
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| |  |  | DRSPP: shall mean the Dividend Reinvestment and Stock
Purchase Plan of the Company, or any successor program.
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|   |  | All references to the DRP in the Plan shall be replaced with references to
the DRSPP.
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|  
|2. |  | Section 2.15 of the Plan:                                                            



| |  |  | Effective Date: shall mean September 29, 2002, the original
Effective Date of the Plan. All Grants shall be effective on the date
awarded by the Committee. Grants awarded under the Prior Plan shall
not be subject to the terms of the Plan and shall be administered in
accordance with the Prior Plan.
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|3. |  | Section 2.20 of the Plan shall be deleted in its entirety and replaced with
the following:
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| |  |  | Formula Grants: shall mean the award of PSRs under Section
3.2 on a quarterly basis calculated according to the number
of shares of Common Stock or preferred stock sold by the
Company during the quarter just ended or at such other
periods or intervals as the Committee may determine.
Formula Grants shall not be awarded based on Shares sold
under the dividend reinvestment or the non-waiver optional
cash purchase provisions of the DRSPP but shall be awarded
based on Shares sold under the waiver provisions of the
optional cash purchase feature of the DRSPP.
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|4. |  | Section 2.30 shall be amended by adding the sentences below at the end of
the Section:
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| |  |  | For Grants of PSRs awarded after October 20, 2003, the
recipients right to receive distributions under (ii) above,
either in the form of cash or additional PSRs, shall begin
to accrue upon the vesting of such PSR.
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|5. |  | Section 2.36 shall be amended by amending the first sentence to read as
follows:
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| |  |  | Termination of Employment: shall mean the time when the
employee-employer relationship or directorship between the
Participant and the Company, the Manager or a Subsidiary is
terminated for any reason, with or without Cause, including
but not limited to any termination by resignation,
discharge, death or retirement; provided, however,
Termination of Employment shall not include a termination
where there is a simultaneous reemployment of the
Participant by the Company, the Manager or a Subsidiary or
where the Participant simultaneously begins or continues
service on the Advisory Board.
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|6. |  | Section 3.1 shall be amended by amending the last sentence to read as
follows:
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| |  |  | The Committee shall have the authority to award individual
Grants to Eligible Persons from time to time in addition to
the Formula Grants prescribed in Section 3.2 below.
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|7. |  | Section 3.2(a) of the Plan shall be deleted in its entirety and replaced
with the following:
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| |  |  | Each non-employee Director and the Companys corporate
secretary shall receive individual Grants in the form of
PSRs having the Fair Market Value of Notional Options to
purchase 0.1% of the total number of shares of Common Stock
and preferred stock sold by the Company in any public
offering or private or direct placement.
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|8.  |  | Section 3.2(c) of the Plan shall be amended by deleting the words and 3.3.             
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|   
|9.  |  | Section 3.3 of the Plan shall be deleted in its entirety.                                
|   
|10. |  | Section 3.4 of the Plan shall be deleted in its entirety and replaced with
the following:



| |  |  | Initial Awards. Whenever an outside Director is initially
appointed to the Board, such outside Director shall
automatically be granted (i) 10,000 PSRs and (ii) 15,000
DERs. The vesting schedule for the PSRs and DERs shall be
as specified by the Committee.
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|11. |  | Section 3.6.1 shall be amended by amending the last sentence to read as
follows:
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| |  |  | While serving on the Advisory Board, he or she shall not be
eligible to receive new Grants; however, such Participant
shall continue to receive the benefits on all existing
vested Grants, on unvested Grants issued prior to October
21, 2003, and on Grants issued after October 21, 2003, as
they become vested, pursuant to subsection 3.6.2 below until
such time as the Participant enters Retirement or otherwise
terminates service for the Company or the Manager.
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|12. |  | Section 4.2.3 shall be deleted in its entirety and replaced with the
following:
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| |  |  | Grants shall vest in accordance with the terms of the
Agreements pursuant to which they are made, unless otherwise
specified by the Committee.
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|13. |  | Section 4.10 of the Plan shall be deleted in its entirety and replaced with
the following:
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| |  |  | Term of Plan. Subject to Section 8.3, Grants may be
awarded pursuant to the Plan until the expiration of ten
(10) years from the Effective Date of the Plan.
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|14. |  | Section 7.2 of the Plan shall be deleted in its entirety and replaced with
the following:
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| |  |  | A recipient may elect to have such tax withholding
satisfied, in whole or in part, by (1) transferring to the
Company Shares owned by the recipient with a Fair Market
Value equal to the amount of the legally required minimum
withholding tax, or (2) in the case of a recipient who is an
employee of the Company at the time such withholding is
effected, by withholding from the recipients cash
compensation.
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|15. |  | Section 7.3 of the Plan shall be deleted in its entirety and replaced with
the following:
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| |  |  | A recipient who is an employee of the Manager or another
Affiliate of the Company shall also reimburse his employer,
if an Affiliate of the Company, for the tax on any
additional amount of income deemed recognized by such
recipients employer from the Company, reduced by the amount
of the compensation deduction permitted such recipients
employer as a result of such employees receipt or exercise
of the Grant.
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The Plan, as amended herein, is in all respects ratified and affirmed on
behalf of the Company by its Board of Directors, including a majority of its
non-employee Directors.

The Company has caused this Amendment No. 1 to the Plan to be executed in
the name and on behalf of the Company by an officer of the Company thereunto
duly authorized as of the date written above.

| |  |                          |  |                                      
| |  | ------------------------ |  | -------------------------------------
| |  | THORNBURG MORTGAGE, INC.
| |  | a Maryland corporation  
| |  |                          |  |                                      
| |  | By:                      |  |                                      
| |  |                          |  | Larry A. Goldstone                   
| |  |                          |  | President and Chief Operating Officer