CharterMac and Subsidiaries Complete Over $2 Billion in Multifamily Financing in 2003.

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 26, 2004

CharterMac (AMEX:CHC) (the "Company") and its subsidiaries, Related Capital Company ("RCC") and PW Funding Inc. ("PWF"), today announced the completion of over $2 billion of multifamily financing during 2003.

"CharterMac had a monumental year in 2003," commented Stuart J. Boesky, Chief Executive Officer of CharterMac. "I am pleased to report that, during this past year, CharterMac continued to successfully execute its plan to expand its operating platform and diversify its revenue sources. With the completion of the acquisition of RCC in November, CharterMac has become one of the strongest multifamily finance companies in the nation. As we enter 2004, CharterMac is well positioned to gain market share in its four core businesses: portfolio investing, mortgage banking, credit enhancement, and, with the acquisition of RCC, real estate fund management. We will also continue to look for opportunities to add complimentary lines of business to our platform and to diversify our products to better serve the developer and investor community."

Marc D. Schnitzer, President of CharterMac, added, "In addition to last year's operating success, we continue to find new and better ways to finance our business activities to lower our cost of capital and increase our operating margins. Lastly, we are pleased to report that the total return on CharterMac common shares (inclusive of dividends), on a tax-equivalent basis, was approximately 33.6% for the year ended December 31, 2003, and approximately 17.0% on a compounded annual basis since CharterMac's listing on the American Stock Exchange in October 1997."

The following is a summary of the business activities in 2003 for CharterMac and its subsidiaries.

Dividend Highlights

CharterMac increased its quarterly distribution three times during 2003, resulting in a total annual distribution increase of approximately 15.6%. CharterMac's annualized distribution of $1.48 per share represents a 7.0% yield based upon the $21.13 per share closing price on December 31, 2003. For the year ended December 31, 2003, CharterMac estimates that approximately 92% of its distributions to common shareholders will be federally tax-exempt, resulting in a taxable equivalent yield of approximately 10.5% for a shareholder in a 35% tax bracket.

Portfolio Investing

CharterMac had a record year for revenue bond acquisitions. During 2003, CharterMac acquired revenue bonds, provided additional fundings, and issued forward commitments aggregating approximately $517.7 million, secured by over 10,700 units of multifamily housing located in 17 states. CharterMac's investment activity during 2003 represents a 3.0% increase over the Company's investment activity in 2002. The tax-exempt first mortgage bonds funded in 2003 have a weighted average interest rate of 6.55%, a weighted average maturity of 38 years, and a weighted average prepayment lockout of 14 years.

Credit Enhancement

In a continuing effort to diversify its revenue sources while taking advantage of the Company's industry expertise, in 2003 CharterMac closed its second and third transactions to guarantee tax benefits to investors in partnerships benefiting from federal low-income housing tax credits. In the transactions, CharterMac agreed to back-up the guarantee of an agreed upon internal rate of return ("IRR") by an investment grade-rated financial institution to the investors in Related Capital Guaranteed Corporate Partners II, L.P. - Series B and Related Capital Guaranteed Corporate Partners II, L.P. - Series C. Both transactions were structured with two distinct phases: one to guarantee the IRR through the lease-up phase of the respective properties and the second to guarantee the IRR until the end of the respective tax credit compliance periods, which is estimated to be approximately 17 years from closing. CharterMac received a total of approximately $5.6 million of guarantee fees at the closings and will receive fees aggregating approximately $3.6 million through April 2005, according to the contracted payment schedules.

Fund Management Business

The year 2003 was a record year for CharterMac's new subsidiary, RCC, with the company raising approximately $890.4 million in equity from institutional investors for its investment funds. This represents RCC's strongest year since its inception and signifies a 14% increase over the company's previous record of $778.7 million in 2002.

"As a result of welcoming several new investors to our multi-investor fund product line in 2003 and establishing a new proprietary fund, RCC had an exceptionally strong year," noted Mr. Schnitzer. "In addition, working with CharterMac we were able to increase the volume of our guaranteed fund sales by over 100%."

Mortgage Banking

PW Funding Inc., CharterMac's mortgage banking subsidiary, originated approximately $604.8 million in loans during 2003. PWF originates and services loans on behalf of Fannie Mae, Freddie Mac, the FHA, and insurance companies. In addition, PWF took on the day-to-day responsibility of a $598 million portfolio of loans subserviced by CreditRe Mortgage Servicing Company, L.L.C., an affiliate of The Related Companies L.P.

In addition to its achievements from an originations perspective, PWF also expanded its product offerings and distinguished itself from its peers on a number of occasions throughout 2003. During the year, PWF closed its first transaction under Fannie Mae's recently launched Delegated Underwriting and Servicing ("DUS(TM)") Early Rate Lock program, which had been enhanced to reduce interest rate risk to owners during the financing process. Additionally, PWF was the first DUS(TM) lender to rate-lock a loan under Fannie Mae's new "Extended Maturity Option" for conventional DUS(TM) fixed-rate balloon mortgages, or "Extended Maturity Loans," a program which provides for more efficient pricing of a standard fixed-rate term loan with an optional one-year floating rate period, during which there is no prepayment premium. As a result of its efforts and accomplishments, PWF was recognized during 2003 with the Excellence in Operations Award for 2002 at Fannie Mae's annual DUS(TM) conference.

The year was also characterized as a growing year for PWF, with the company making strides to expand its national presence. During 2003, PWF's recently opened New Orleans office was approved by Freddie Mac as a regional Program Plus lender. Subsequently, PWF was selected as one of an exclusive group of four Freddie Mac Seller/Servicers approved to originate targeted affordable housing loans for Freddie Mac on a national basis. Most recently, PWF opened a new office in Kansas City, Missouri, expanding the company's regional presence in the mid-west. "We feel that PWF represents a significant growth opportunity for CharterMac. Fannie Mae and Freddie Mac participated in over 39% of all multifamily financings during the first nine months of 2003, and PWF originated approximately 3% of Fannie Mae and Freddie Mac's multifamily originations. We are committed to aggressively grow our market share as an agency lender," said Mr. Boesky.

Capital Markets Activities

The Company was particularly active from a capital markets perspective during the year, completing four offerings of its Series A Convertible Community Reinvestment Act Preferred Shares to a total of 26 financial institutions. Through the issuance of 5,738,053 shares, the Company raised gross proceeds through this unique security of approximately $107.5 million.

From a debt capital perspective, CharterMac closed a two-year, $75 million Secured Revolving Tax-Exempt Bond Warehouse Line of Credit with Fleet National Bank and Wachovia Bank, N. A. The interest rate on the facility is floating and is based on the London Inter-Bank Offer Rate ("LIBOR") plus 1.50% or the Prime Rate plus 0.25%.

CharterMac pursued additional efforts to further diversify the Company's sources of debt financing during the year, including closing a $100 million bond securitization transaction with the sale of Tax-Exempt Multifamily Housing Trust Certificates Series 2003A (the "Trust") through Merrill Lynch, Pierce, Fenner & Smith Incorporated. Pursuant to the terms of the Trust, CharterMac contributed 19 fixed-rate, tax-exempt multifamily housing and senior housing revenue bonds totaling approximately $196.8 million in aggregate principal into a trust, which in turn sold $100 million in Class A Certificates to various institutional investors. Interest on these certificates is fixed at 3.25% for two years.

CharterMac also redeemed $118 million of low-floater certificates outstanding under its Private Label Tender Option Program Nat-1 Series. Certain bonds were then removed from the Nat-1 Series Trust and redeposited, along with additional bonds, into CharterMac Auction Rate Certificate Trust I, which in turn issued $100 million of auction rate certificates. The $100 million tranche of auction rate certificates, which are auctioned through UBS Financial Services Inc. primarily to corporations as a tax-exempt money market alternative and which were divided into two $50 million sub-series, are reset every 35 days through a dutch auction process.

Commenting on CharterMac's achievements, Alan P. Hirmes, Chief Operating Officer, noted: "CharterMac was well received by debt and equity capital providers during 2003, and the Company's active and efficient participation in the capital markets allowed us to meet the capital needs of our growing business."

Interest Rate Swap 

In an effort to mitigate the effects of future interest rate fluctuations, the Company entered into two interest rate swaps with Fleet National Bank at the end of 2003. In the first swap, CharterMac has agreed to pay a fixed rate of 2.56% on a $100 million notional amount, beginning in January 2005 and through December 2007. The second swap, a three-year swap in the amount of $50 million, will also go into effect in January 2005. This second swap is structured with a step-up feature, with CharterMac paying a 2.0% interest rate through January 2006, a 2.78% interest rate through January 2007, and a 3.27% interest rate through January 2008.

About the Company

CharterMac is one of the nation's leading full-service multifamily finance companies, providing capital solutions to developers and owners of multifamily rental housing throughout the country and offering quality investment products to institutional and retail investors. Collectively, the Company and its subsidiaries provide financing for every part of a multifamily property's capital structure. For more information, please visit CharterMac's website at http://www.chartermac.com or contact the Shareholder Services Department directly at 800/831-4826.

Certain statements in this press release may constitute forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements speak only as of the date of this press release. CharterMac expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in CharterMac's expectations with regard thereto or change in events, conditions, or circumstances on which any such statement is based.