Capital Alliance Income Trust Ltd. Announces New Term Credit Facility.

SAN FRANCISCO -- Capital Alliance Income Trust Ltd. ("CAIT") (AMEX:CAA), a specialty, residential mortgage finance company organized as a real estate investment trust, announced that it has negotiated a $7,000,000 term credit facility with Franklin Bank SSB, (NASDAQ:FBTX) of Houston, Texas. The two year facility, which matures November 2007, also has a one year extension option.

Richard Wrensen, Executive Vice-President and Chief Financial Officer of CAIT, stated that, "We hope that this facility is the beginning of a successful long term relationship. The Franklin Bank facility will enable CAIT to pledge its core mortgage portfolio and obtain increased interest rate spreads of approximately 300 basis points over the trust's currently existing financing. CAIT will also continue to seek additional, competitively priced credit commitments from Franklin Bank and other lenders. Our current balance sheet is significantly underleveraged as outstanding borrowings, including the Franklin Bank borrowing, are less than two times equity capital. Most mortgage REITs borrow six to eight or more times their equity capital."

CAIT, a specialty residential lender, invests in conforming and high-yielding, non-conforming residential mortgage loans on one-to-four-unit-residential properties located primarily in California and other western states. Only loans with a combined loan-to-value ratio of not more than 75% at the time of funding comprise CAIT's core mortgage investment portfolio.

This document contains "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) that inherently involve risks and uncertainties. CAIT's actual results and liquidity can differ materially from those anticipated in these forward-looking statements because of changes in the level and composition of CAIT's investments and unforeseen factors. As discussed in CAIT's filings with the Securities and Exchange Commission, these factors may include, but are not limited to, changes in general economic conditions, the availability of suitable investments, fluctuations in and market expectations for fluctuations in interest rates and levels of mortgage prepayments, deterioration in credit quality and ratings, the effectiveness of risk management strategies, the impact of leverage, the liquidity of secondary markets and credit markets, increases in costs and other general competitive factors.