CRIIMI MAE INC, 10-K, 1996-02-22

CRIIMI MAE INC
10-K, 1996-02-22
ASSET-BACKED SECURITIES

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<PAGE>1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

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

For the fiscal year ended December 31, 1995
------------------

Commission file number 1-10360
-----------------

CRIIMI MAE INC.
- -----------------------------------------------------------------
(Exact name of registrant as specified in charter)

Maryland 52-1622022
- ------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

11200 Rockville Pike, Rockville, Maryland 20852
- ----------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)

(301) 816-2300
- -----------------------------------------------------------------
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class which registered
- -------------------------------- ---------------------------
Common Stock New York Stock Exchange, Inc.

Securities registered pursuant to Section 12(g) of the Act:

NONE
- -----------------------------------------------------------------
(Title of class)

<PAGE>2

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]

As of February 21, 1996, 30,407,024 shares of common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
- -----------------------------------------------------------------

Form 10-K Parts Document
---------------- ---------

I, II, III and IV 1995 Annual Report to Shareholders
III 1996 Notice of Annual Meeting of
Shareholders and Proxy Statement

<PAGE>3
CRIIMI MAE INC.

1995 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

PART I
------

Page
----

Item 1. Business . . . . . . . . . . . . . . . . . 5
Item 2. Properties . . . . . . . . . . . . . . . . . 5
Item 3. Legal Proceedings . . . . . . . . . . . . . . 5
Item 4. Submission of Matters to a Vote
of Security Holders . . . . . . . . . . . . 6

PART II
-------
Item 5. Market for the Registrant's Common Stock
and Related Stockholder Matters . . . . . . 6
Item 6. Selected Financial Data . . . . . . . . . . . 6
Item 7. Management's Discussion and Analysis
of Financial Condition and Results
of Operations . . . . . . . . . . . . . . . 6
Item 8. Financial Statements and Supplementary Data . 6
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . 6

PART III
--------
Item 10. Directors and Executive Officers
of the Registrant . . . . . . . . . . . . . 7
Item 11. Executive Compensation . . . . . . . . . . . 7
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . 7
Item 13. Certain Relationships and Related
Transactions . . . . . . . . . . . . . . . 7

<PAGE>4
PART IV
-------
Page
----

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

Signatures . . . . . . . . . . . . . . . . . . . . . . 19

Cross Reference Sheet . . . . . . . . . . . . . . . . . 21

Exhibit Index . . . . . . . . . . . . . . . . . . . . . 22

<PAGE>5

PART I

ITEM 1. BUSINESS

Development and Description of Business
- ---------------------------------------
Information concerning the business of CRIIMI MAE Inc. (CRIIMI MAE) is
contained in Part II, Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations, and in Notes 1, 3, 6, 7, and 9 of the notes
to the consolidated financial statements of CRIIMI MAE contained in Part IV
(filed in response to Item 8 hereof), which is incorporated herein by reference.

Employees
- ---------
CRIIMI MAE has 50 employees.

ITEM 2. PROPERTIES

CRIIMI MAE maintains its corporate offices at 11200 Rockville Pike,
Rockville, Maryland. These offices occupy approximately 22,400 square feet.
The space is subleased from C.R.I., Inc. (CRI) (see Note 4 in the notes to the
consolidated financial statements for further discussion) for a term running
concurrently with CRI's lease and expires on October 31, 1997.

ITEM 3. LEGAL PROCEEDINGS

Reference is made to Note 14 of the notes to the consolidated
financial statements on pages 92 through 93 of the 1995 Annual Report to
Shareholders, which is incorporated herein by reference.

<PAGE>6

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to the security holders to be voted on
during the fourth quarter of 1995.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS

(a), (b) and (c) Reference is made to the Selected Consolidated
Financial Data on pages 30 through 31 of the 1995 Annual Report to Shareholders,
which section is incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

Reference is made to Selected Consolidated Financial Data on pages 27
through 30 of the 1995 Annual Report to Shareholders, which section is
incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Reference is made to Management's Discussion and Analysis of Financial
Condition and Results of Operations on pages 32 through 46 of the 1995 Annual
Report to Shareholders, which section is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to pages 48 through 51 of the 1995 Annual Report to
Shareholders for the consolidated financial statements of CRIIMI MAE, which are
incorporated herein by reference. See also Item 14 of this report for
information concerning financial statements and financial statement schedules.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

<PAGE>7

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a), (b), (c) and (e)

The information required by Item 10 (a), (b), (c) and (e) with regard
to directors and executive officers of the registrant is incorporated
herein by reference to CRIIMI MAE's 1996 Notice of Annual Meeting of
Shareholders and Proxy Statement to be filed with the Securities and
Exchange Commission no later than April 29, 1996.

(d) There is no family relationship between any of the directors and
executive officers.

(f) Involvement in certain legal proceedings.

The information required by Item 10(f) is incorporated herein by
reference to Note 14 of the notes to the consolidated financial
statements included in the 1995 Annual Report to Shareholders.

(g) Promoters and control persons.

Not applicable.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is incorporated herein by
reference to CRIIMI MAE's 1996 Notice of Annual Meeting of Shareholders and
Proxy Statement to be filed with the Commission no later than April 29, 1996,
and Note 4 of the notes to the consolidated financial statements included in the
1995 Annual Report to Shareholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The information required by Item 12 is incorporated herein by
reference to CRIIMI MAE's 1996 Notice of Annual Meeting of Shareholders and
Proxy Statement to be filed with the Commission no later than April 29, 1996.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a) Transactions with management and others.

The information required by Item 13 is incorporated herein by
reference to CRIIMI MAE's 1996 Notice of Annual Meeting of
Shareholders and Proxy Statement to be filed with the Commission no
later than April 29, 1996, and Note 4 of the notes to the consolidated
financial statements, included in the 1995 Annual Report to
Shareholders, which contain a discussion of the amounts, fees and
other compensation paid or accrued by CRIIMI MAE to the directors and
executive officers and their affiliates.

(b) Certain business relationships.

CRIIMI MAE has no business relationship with entities of which the
directors or officers of CRIIMI MAE are officers, directors or equity
owners other than as set forth in CRIIMI MAE's 1996 Notice of Annual
Meeting of Shareholders and Proxy Statement to be filed with the
Commission no later than April 29, 1996, which is incorporated herein
by reference.

<PAGE>8

None.

(d) Transactions with promoters.

Not applicable.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K

(a) List of documents filed as part of this report:

1 and 2. Financial Statements and Financial Statement Schedules

The following financial statements are incorporated herein by
reference in Item 8 from the indicated pages of the 1995 Annual Report
to Shareholders:

Page
Description Number(s)
- ----------- --------------
Consolidated Balance Sheets as of December 31,
1995 and 1994 48

Consolidated Statements of Income for the
years ended December 31, 1995, 1994 and 1993 49

Consolidated Statements of Changes in
Shareholders' Equity for the years ended
December 31, 1995, 1994 and 1993 50

Consolidated Statements of Cash Flows for the
years ended December 31, 1995, 1994 and 1993 51

Notes to Consolidated Financial Statements 52 through 94

The report of CRIIMI MAE's independent accountants with respect to the above
listed consolidated financial statements appears on page 47 of the 1995 Annual
Report to Shareholders.

All other financial statements and financial statement schedules have been
omitted since the required information is included in the financial statements
or the notes thereto, or is not applicable or required.

(a) 3. Exhibits (listed according to the number assigned in the table in
Item 601 of Regulation S-K)

Exhibit No. 3 - Articles of incorporation and bylaws.

d. Articles of Incorporation of CRIIMI MAE Inc. (Incorporated
by reference from Exhibit 3(d) to the Quarterly Report on
Form 10-Q for the quarter ended June 30, 1993).

e. Bylaws of CRIIMI MAE Inc. (Incorporated by reference from
Exhibit 3(e) to the Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993).

f. Agreement and Articles of Merger between CRIIMI MAE Inc. and
CRI Insured Mortgage Association, Inc. as filed with the
Office of the Secretary of the State of Delaware
(Incorporated by reference from Exhibit 3(f) to the
Quarterly Report on Form 10-Q for the quarter ended June 30,
1993).

<PAGE>9

g. Agreement and Articles of Merger between CRIIMI MAE Inc. and
CRI Insured Mortgage Association, Inc. as filed with the
State Department of Assessment and Taxation for the State of
Maryland (Incorporated by reference from Exhibit 3(g) to the
Quarterly Report on Form 10-Q for the quarter ended June 30,
1993).

h. Articles of Incorporation of CRIIMI MAE Management, Inc.
(filed herewith).

i. Bylaws of CRIIMI MAE Management, Inc. (filed herewith).

j. Articles of Incorporation of CRIIMI MAE Services, Inc. as a
Maryland Close Corporation (filed herewith).

k. Bylaws of CRIIMI MAE Services, Inc. (filed herewith).

l. Third Amendment to Agreement of Limited Partnership of
CRI/AIM Investment Limited Partnership dated as of June 30,
1995 between CRIIMI MAE Inc. and CRIIMI MAE Management, Inc.
(filed herewith).

m. Fourth Amendment to Agreement of Limited Partnership of
CRI/AIM Investment Limited Partnership as of June 30, 1995
between CRIIMI MAE Inc. and CRIIMI MAE Management, Inc.
(filed herewith).

n. Limited Partnership Agreement of CRIIMI MAE Services Limited
Partnership effective as of June 1, 1995 between CRIIMI MAE
Management, Inc. and CRIIMI MAE Services, Inc. (filed
herewith).

o. Articles of Incorporation of CRIIMI MAE Financial
Corporation (Incorporated by reference from Exhibit 3.1 to
the Form S-3 Registration Statement filed with the
Securities and Exchange Commission on September 12, 1995).

p. By-laws of CRIIMI MAE Financial Corporation (Incorporated by
reference from Exhibit 3.2 to the Form S-3 Registration
Statement Filed with the Securities and Exchange Commission
on September 12, 1995).

q. Articles of Incorporation of CRIIMI MAE Financial
Corporation II (filed herewith).

r. Bylaws of CRIIMI MAE Financial Corporation II (filed
herewith).

s. Articles of Incorporation of CRIIMI MAE Financial
Corporation III (filed herewith).

t. Bylaws of CRIIMI MAE Financial Corporation III (filed
herewith).

Exhibit No. 4 - Instruments defining the rights of security holders,
including indentures.

a. $85,000,000 Credit Agreement, and the exhibits thereto,
dated as of October 23, 1991, between CRI Insured Mortgage
Association, Inc., Signet Bank/Virginia and Westpac Banking
Corporation (Incorporated by reference from Exhibit 4(g) to
the Annual Report on Form 10-K for 1991).

b. Collateral Pledge Agreement, and the exhibits thereto,

<PAGE>10

dated as of December 31, 1991, between CRI Insured Mortgage
Association, Inc., Signet Bank/Virginia, Westpac Banking
Corporation and Chemical Bank (Incorporated by reference
from Exhibit 4(h) to the Annual Report on Form 10-K for
1991).

<PAGE>11

c. Temporary Global Note, dated as of December 31, 1991, in the
aggregate amount of $19,190,625 issued by the registrant
(Incorporated by reference from Exhibit 4(i) to the Annual
Report on Form 10-K for 1991).

d. $100,000,000 Amended and Restated Credit Agreement, and the
exhibits thereto, dated as of October 23, 1991 and Amended
December 22, 1992, between CRI Insured Mortgage Association,
Inc., Signet Bank/Virginia and Westpac Banking Corporation
(Incorporated by reference from Exhibit 4(d) to the Annual
Report on Form 10-K for 1992).

e. Amended and Restated Collateral Pledge Agreement, and the
exhibits thereto, dated as of December 31, 1991 and amended
and restated as of December 29, 1992, between CRI Insured
Mortgage Association, Inc. and Chemical Bank (Incorporated
by reference from Exhibit 4(e) to the Annual Report on Form
10-K for 1992).

f. Amended and Restated Letter of Credit and Reimbursement
Agreement and the exhibits thereto, dated as of February 9,
1993 between CRI Funding Corporation, Canadian Imperial Bank
of Commerce New York Agency and National Australia Bank
Limited, New York Branch (Incorporated by reference from
Exhibit 4(f) to the Annual Report on Form 10-K for 1992).

g. Amended and Restated Guaranty, dated as of February 9, 1993
between CRI Insured Mortgage Association, Inc., Canadian
Imperial Bank of Commerce New York Agency and National
Australia Bank Limited, New York Branch (Incorporated by
reference from Exhibit 4(g) to the Annual Report on Form 10-
K for 1992).

h. Amended and Restated Loan Agreement and the exhibits
thereto, dated as of February 9, 1993 between CRI Insured
Mortgage Association, Inc. and CRI Funding Corporation
(Incorporated by reference from Exhibit 4(h) to the Annual
Report on Form 10-K for 1992).

i. Second Amended and Restated Security Agreement and the
exhibits thereto, dated as of February 9, 1993 between CRI
Insured Mortgage Association, Inc., Canadian Imperial Bank
of Commerce New York Agency and Chemical Bank (Incorporated
by reference from Exhibit 4(i) to the Annual Report on Form
10-K for 1992).

j. Committed Master Repurchase Agreement between Nomura
Securities International, Inc. and CRI Insured Mortgage
Association, Inc. dated April 30, 1993 (Incorporated by
reference from Exhibit 4(j) to the Quarterly Report on Form
10-Q for the quarter ended June 30, 1993).

k. Committed Master Repurchase Agreement Governing Purchases
and Sales of Participation Certificates between Nomura Asset
Capital Corporation and CRI Insured Mortgage Association,
Inc. dated April 30, 1993 (Incorporated by reference from
Exhibit 4(k) to the Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993).

l. Committed Master Repurchase Agreement between Nomura
Securities International, Inc. and CRIIMI MAE Inc. dated
November 30, 1993 (incorporated by reference from Exhibit
4(j) to the Annual Report on Form 10-K for the year ended
December 31, 1993).

<PAGE>12

m. Committed Master Repurchase Agreement Governing Purchases
and Sales of Participation Certificates between Nomura Asset
Capital Corporation and CRIIMI MAE Inc. dated November 30,
1993 (incorporated by reference from Exhibit 4(m) to the
Annual Report on Form 10-K for the year ended December 31,
1993).

n. Extension and Amendment Agreement between CRI Funding
Corporation, CRIIMI MAE Inc., Canadian Imperial Bank of
Commerce New York Agency, National Australia Bank Limited,
New York Branch, and The Fuji Bank, Ltd., New York Branch
dated January 25, 1994 (incorporated by reference from
Exhibit 4(n) to the Annual Report on Form 10-K for the year
ended December 31, 1993).

o. Settlement Agreement between Alex J. Meloy, Trustee of the
Harry Meloy Family Trust and Alan J. Hunken, Trustee of the
Alan J. Hunken Retirement Plan, individually and in their
capacities as representatives of certain plaintiff classes
in Alex J. Meloy, et al., v. CRI Liquidating REIT, Inc., et
al., and (ii) CRI Liquidating REIT, Inc.; CRIIMI MAE Inc.;
C.R.I., Inc.; William B. Dockser; Martin C. Schwartzberg,
and H. William Willoughby dated September 24, 1993
(incorporated by reference from Exhibit 4(o) to the Annual
Report on Form 10-K for the year ended December 31, 1993).

p. Dividend Reinvestment and Stock Purchase Plan between CRIIMI
MAE Inc. and shareholders (incorporated by reference from
the registration statement on Form S-3 filed September 22,
1994).

q. Revolving Credit Facility between CRIIMI MAE Inc. and CIBC,
Inc. dated February 28, 1994 (Incorporated by reference from
Exhibit 4(q) to the Annual Report on Form 10-K for the year
ending December 31, 1994).

r. Amendment Agreement No. 1 to the Revolving Credit Facility
among CRIIMI MAE Inc., CIBC, Inc., National Australia Bank
Limited, Signet Bank, The Fuji Bank, Bank Hapoalim and
Canadian Imperial Bank of Commerce dated June 1, 1994
(Incorporated by reference from Exhibit 4(r) to the Annual
Report on Form 10-K for the year ending December 31, 1994).

s. Amendment Agreement No. 2 to the Revolving Credit Facility
among CRIIMI MAE Inc., CIBC, Inc., National Australia Bank
Limited, Signet Bank, The Fuji Bank, Bank Hapoalim and
Canadian Imperial Bank of Commerce dated December 9, 1994
(Incorporated by reference from Exhibit 4(s) to the Annual
Report on Form 10-K for the year ending December 31, 1994).

t. Amendment Terminating Intercreditor Agreement, dated as of
February 28, 1994 among Canadian Imperial Bank of Commerce,
National Australia Bank Limited, The Fuji Bank, Limited, CRI
Funding Corporation, Nomura Asset Capital Corporation,
Nomura Securities International, Signet Bank, Westpac
Banking Corporation, ASLK-CGER Bank and CRIIMI MAE Inc.
(Incorporated by reference from Exhibit 4(t) to the Annual
Report on Form 10-K for the year ending December 31, 1994).

u. Amendment to the committed Master Repurchase Agreement among
Nomura Securities International, Inc., Nomura Asset Capital
Corporation and CRIIMI MAE Inc. dated December 12, 1994
(Incorporated by reference from Exhibit 4(u) to the Annual
Report on Form 10-K for the year ending December 31, 1994).

<PAGE>13

v. Master Collateral Security and Netting Agreement dated as of
December 12, 1994 among Nomura Securities International,
Inc., Nomura Asset Capital Corporation, and CRIIMI MAE Inc.
(Incorporated by reference from Exhibit 4(v) to the Annual
Report on Form 10-K for the year ending December 31, 1994).

w. Amendment to the committed Master Repurchase Agreement among
Nomura Securities International, Inc., Nomura Asset Capital
Corporation and CRIIMI MAE Inc. dated January 19, 1995
(Incorporated by reference from Exhibit 4(x) to the Annual
Report on Form 10-K for the year ending December 31, 1994).

x. Letter Agreement among Nomura Securities International,
Inc., Nomura Asset Capital Corporation and CRIIMI MAE Inc.
dated as of December 20, 1994 (Incorporated by reference
from Exhibit 4(w) to the Annual Report on Form 10-K for the
year ending December 31, 1994).

y. Side letter to the Master Repurchase Agreement dated as of
January 27, 1995 between CRIIMI MAE Inc. and German American
Capital Corporation (Incorporated by reference from Exhibit
4(ll) to the Annual Report on Form 10-K for the year ending
December 31, 1994).

z. Amendment 4 to the $100,000,000 Amended and Restated Credit
Agreement dated April 28, 1994 among CRIIMI MAE Inc., Signet
Bank and ASLK-CGER Bank (Incorporated by reference from
Exhibit 4(dd) to the Annual Report on Form 10-K for the year
ending December 31, 1994).

aa. Amendment 5 to the $100,000,000 Amended and Restated Credit
Agreement dated December 9, 1994 among CRIIMI MAE Inc.,
Signet Bank and ASLK-CGER Bank (Incorporated by reference
from Exhibit 4(ee) to the Annual Report on Form 10-K for the
year ending December 31, 1994).

bb. Commitment letter between CRIIMI MAE Inc. and German
American Capital Corporation dated January 19, 1995
(Incorporated by reference from Exhibit 4(hh) to the Annual
Report on Form 10-K for the year ending December 31, 1994).

cc. Committed Master Repurchase Agreement covering Purchases and
Sales of Participation Certificates between German American
Capital Corporation and CRIIMI MAE Inc. dated January 23,
1995 (Incorporated by reference from Exhibit 4(ii) to the
Annual Report on Form 10-K for the year ending December 31,
1994).

dd. Committed Master Repurchase Agreement between German
American Capital Corporation and CRIIMI MAE Inc. dated
January 23, 1995 (Incorporated by reference from Exhibit
4(jj) to the Annual Report on Form 10-K for the year ending
December 31, 1994).

ee. Amendment dated January 24, 1995 to the Commitment Letters
between CRIIMI MAE Inc., Nomura Securities International,
Inc. and Nomura Asset Capital Corporation (Incorporated by
reference from Exhibit 4(y) to the Annual Report on Form 10-
K for the year ending December 31, 1994).

ff. Side letter to the Master Repurchase Agreement dated as of
January 23, 1995 between CRIIMI MAE Inc. and German American
Capital Corporation (Incorporated by reference from Exhibit
4(kk) to the Annual Report on Form 10-K for the year ending

<PAGE>14

December 31, 1994).

gg. First Amendment to Amended and Restated Credit Agreement
dated as of April 29, 1993 among CRIIMI MAE Inc., Signet
Bank and WESTPAC Banking Corporation (Incorporated by
reference from Exhibit 4(z) to the Annual Report on Form 10-
K for the year ending December 31, 1994).

hh. Second Amendment to Amended and Restated Credit Agreement
dated as of June 30, 1993 among CRIIMI MAE Inc., Signet Bank
and WESTPAC Banking Corporation (Incorporated by reference
from Exhibit 4(aa) to the Annual Report on Form 10-K for the
year ending December 31, 1994).

ii. Third Amendment to Amended and Restated Credit Agreement
dated as of September 14, 1993 between CRIIMI MAE Inc.,
Signet Bank and WESTPAC Banking Corporation (Incorporated by
reference from Exhibit 4(bb) to the Annual Report on Form
10-K for the year ending December 31, 1994).

jj. Credit Agreement dated as of February 24, 1995 between
CRIIMI MAE Inc. and The Riggs National Bank of Washington,
D.C. (filed herewith).

kk. Collateral Pledge Agreement dated as of February 24, 1995
between CRIIMI MAE Inc. and The Riggs National Bank of
Washington, D.C. (filed herewith).

ll. Letter of Agreement dated March 30, 1995 concerning the
Amended and Restated Credit Agreement among CRIIMI MAE Inc.,
Signet Bank/Virginia and ASLK-CGER Bank, Grand Cayman Branch
(filed herewith).

mm. Sixth Amendment dated March 31, 1995 to the Amended and
Restated Credit Agreement among CRIIMI MAE Inc. and Signet
Bank/Virginia and the First Amendment dated March 31, 1995
to the Amended and Restated Collateral Pledge Agreement
(filed herewith).

nn. Amendment Agreement Number Three dated June 5, 1995 among
CRIIMI MAE Inc., CIBC, Inc., National Australia Bank
Limited, New York Branch, Signet Bank/Virginia, The Fuji
Bank, LTD., New York Branch, Bank Hapoalim B.M. and Canadian
Imperial Bank of Commerce, New York Agency (filed herewith).

oo. Installment Note dated June 30, 1995 between CRIIMI MAE
Services, Inc. and CRI/AIM Management, Inc. (filed
herewith).

pp. Installment Note dated June 30, 1995 between CRIIMI MAE
Services, Inc. and CRICO Mortgage Company, Inc. (filed
herewith).

qq. $9,100,000 Credit Agreement dated as of June 30, 1995
between CRIIMI MAE Management, Inc. and Signet Bank/Virginia
(filed herewith).

rr. Loan Note dated June 30, 1995 between CRIIMI MAE Management,
Inc. and Signet Bank/Virginia (filed herewith).

ss. Modification of Interest Rate dated August 22, 1995 for the
Credit Agreement Dated as of June 30, 1995 between CRIIMI
MAE Management, Inc. and Signet Bank/Virginia (filed
herewith).

<PAGE>15

tt. Guaranty dated June 30, 1995 entered into by CRIIMI MAE Inc.
in favor of and for the benefit of Signet Bank/Virginia
(filed herewith).

uu. Form of Underwriting Agreement for Bonds (Incorporated by
reference from Exhibit 1 to the S-3 Registration Statement
filed with the Securities and Exchange Commission on
September 12, 1995).

vv. Form of Indenture between CRIIMI MAE Financial Corporation
and the trustee (Incorporated by reference from Exhibit 4.1
to the S-3 Registration Statement filed with the Securities
and Exchange Commission on September 12, 1995).

ww. Form of Bond (Incorporated by reference to Exhibit 4.2 to
the S-3 Registration Statement filed with the Securities and
Exchange Commission on September 12, 1995).

xx. Amendment Agreement Number Four dated September 20, 1995
among CRIIMI MAE Inc., CIBC, Inc., National Australia Bank
Limited, New York Branch, Signet Bank/Virginia, The Fuji
Bank, LTD., New York Branch, Bank Hapoalim B.M. and Canadian
Imperial Bank of Commerce, New York Agency (filed herewith).

yy. First Amendment to Guaranty dated September 21, 1995 entered
into by CRIIMI MAE Inc., in favor of and for the benefit of
Signet Bank/ Virginia (filed herewith).

zz. Second Amendment to Guaranty dated September 21, 1995
entered into by CRIIMI MAE Inc., in favor of and for the
benefit of Signet Bank/ Virginia (filed herewith).

aaa. Seventh Amendment to the Amended and Restated Credit
Agreement dated September 21, 1995 among CRIIMI MAE Inc. and
Signet Bank/Virginia (filed herewith).

bbb. Seven Percent Funding Note due September 17, 2031 dated
September 22, 1995 between CRIIMI MAE Financial Corporation
II and the Federal Home Loan Mortgage Corporation (filed
herewith).

ccc. Funding Note Purchase and Security Agreement dated as of
September 22, 1995 among the Federal Home Loan Mortgage
Corporation, CRIIMI MAE Inc. and CRIIMI MAE Financial
Corporation II (filed herewith).

ddd. Assignment and Agreement dated as of September 22, 1995
between CRIIMI MAE Inc. and CRIIMI MAE Financial Corporation
II (filed herewith).

eee. Second Amendment to Credit Agreement dated as of September
22, 1995 between CRIIMI MAE Inc. and The Riggs National Bank
of Washington, D.C. (filed herewith).

fff. Eighth Amendment to the Amended and Restated Credit
Agreement dated December 5, 1995 among CRIIMI MAE Inc. and
Signet Bank/Virginia (filed herewith).

ggg. Third Amendment to Credit Agreement dated as of December 7,
1995 between CRIIMI MAE Inc. and The Riggs National Bank of
Washington, D.C. (filed herewith).
hhh. Amendment to the Commitment Letter dated as of March 28,
1995 by and among Nomura Securities International, Inc.,
Nomura Asset Capital Corporation and CRIIMI MAE Inc. (filed

<PAGE>16

herewith).

iii. Amendment to the Commitment Letter dated as of June 14, 1995
by and among Nomura Securities International, Inc., Nomura
Asset Capital Corporation and CRIIMI MAE Inc. (filed
herewith).

jjj. Amendment to the Commitment letter dated as of September 20,
1995 by and among Nomura Securities International, Inc.,
Nomura Asset Capital Corporation and CRIIMI MAE Inc. (filed
herewith).

kkk. Amendment to the Commitment Letter dated as of December 1,
1995 by and among Nomura Securities International, Inc.,
Nomura Asset Capital Corporation and CRIIMI MAE Inc. (filed
herewith).

lll. Funding Note dated December 15, 1995 between CRIIMI MAE
Financial Corporation III and the Federal National Mortgage
Association (filed herewith).

mmm. Assignment and agreement dated as of the 15th day of
December, 1995, by and between CRIIMI MAE Inc. and CRIIMI
MAE Financial Corporation III (filed herewith).

nnn. Funding Note Issuance and Security Agreement dated as of
December 15, 1995 among Federal National Mortgage
Association, CRIIMI MAE Inc. and CRIIMI MAE Financial
Corporation III (filed herewith).

ooo. First Amendment to Commitment Letter between German American
Capital Corporation and CRIIMI MAE Inc. as of June 20, 1995
(filed herewith).

ppp. Letter of Consent to the proposed merger from German
American Capital Corporation to CRIIMI MAE Inc. dated June
20, 1995 (filed herewith).

qqq. Letter of compliance waiver from German American Capital
Corporation to CRIIMI MAE Inc. dated September 19, 1995
(filed herewith).

rrr. Letter of consent to asset pledge by CRIIMI MAE Inc. from
German American Capital Corporation dated December 13, 1995
(filed herewith).

sss. Option agreement between CRIIMI MAE Inc. and William B.
Dockser (Incorporated by reference from Exhibit No. 4(a) to
the registration statement on Form S-8 filed January 16,
1996).

ttt. Option agreement between CRIIMI MAE Inc. and H. William
Willoughby (Incorporated by reference from Exhibit No. 4(b)
to the registration statement on Form S-8 filed January 16,
1996).

uuu. CRIIMI MAE's Amended and Restated Stock Option Plan for key
employees (Incorporated by reference from Exhibit No. 4(c)
to the registration statement on Form S-8 filed January 16,
1996).

vvv. Form of Option Agreement for Cynthia O. Azzara, Frederick J.
Burchill, Jay R. Cohen and Deborah A. Linn (Incorporated by
reference from Exhibit No. 4(d) to the registration

<PAGE>17

statement on Form S-8 filed January 16, 1996).

www. Form of Option Agreement for other key employees
(Incorporated by reference from Exhibit No. 4(e) to the
registration statement on Form S-8 filed January 16, 1996).

Exhibit No. 10 - Material contracts.

a. Revised Form of Advisory Agreement. (Incorporated by
reference from Exhibit No. 10.2 to the Registration
Statement).

b. Employment and Non-Competition Agreement dated April 20,
1995 between CRIIMI MAE Management, Inc. and William B.
Dockser (filed herewith).

c. Allonge to Amended and Restated Promissory Note dated as of
June 23, 1995 between C.R.I., Inc and CRI/AIM Management,
Inc. (filed herewith).

d. Administrative Services Agreement dated June 30, 1995
between CRIIMI MAE Inc. and C.R.I., Inc. (filed herewith).

e. Asset Purchase Agreement dated as of June 30, 1995 among
CRICO Mortgage Company, Inc., CRIIMI MAE Services, Inc.,
William B. Dockser and H. William Willoughby (filed
herewith).

f. Asset Purchase Agreement dated as of June 30, 1995 among
CRI/AIM Management, Inc., CRIIMI MAE Services, Inc., William
B. Dockser and H. William Willoughby (filed herewith).

g. The CRIIMI MAE Management, Inc. Executive Deferred
Compensation Trust Agreement dated June 30, 1995 between
CRIIMI MAE Management, Inc. and Richard J. Palmer (filed
herewith).

h. Sublease dated June 30, 1995 between C.R.I., Inc. and CRIIMI
MAE Inc. (filed herewith).

i. Articles of Merger merging CRI Acquisition, Inc., CRICO
Mortgage Company, Inc. and CRI/AIM Management, Inc. into
CRIIMI MAE Management, Inc. (filed herewith).

j. Reimbursement Agreement dated as of June 30, 1995 between
CRIIMI MAE Management, Inc. and C.R.I., Inc. (filed
herewith).

k. Certificate of Merger dated June 30, 1995 merging CRICO
Mortgage Company, Inc., CRI/AIM Management, Inc. and CRI
Acquisition, Inc. into CRIIMI MAE Management, Inc. (filed
herewith).

l. Asset Purchase Agreement dated as of June 30, 1995 among
C.R.I., Inc., CRI Acquisition, Inc. and William B.
Dockser and H. William Willoughby (filed herewith).

m. Employment and Non-Competition Agreement dated June 30, 1995
between CRIIMI MAE Management, Inc. and Cynthia O. Azzara
(filed herewith).

n. Employment and Non-Competition Agreement dated June 30, 1995
between CRIIMI MAE Management, Inc. and Frederick J.
Burchill (filed herewith).

<PAGE>18

o. Employment and Non-Competition Agreement dated June 30, 1995
between CRIIMI MAE Management, Inc. and Jay R. Cohen (filed
herewith).

p. Employment and Non-Competition Agreement dated June 30, 1995
between CRIIMI MAE Management, Inc. and Deborah A. Linn
(filed herewith).

q. Employment and Non-Competition Agreement dated June 30, 1995
between CRIIMI MAE Management, Inc. and H. William
Willoughby (filed herewith).

Exhibit No. 13 - Annual Report to security holders, Form 10-Q or
Quarterly Report to security holders.

a. 1995 Annual Report to Shareholders.

Exhibit No. 21 - Subsidiaries of the registrant.

a. CRI Liquidating REIT, Inc., incorporated in the state of
Maryland.

b. CRIIMI, Inc., incorporated in the state of Maryland.

c. CRIIMI MAE Financial Corporation, incorporated in the state
of Maryland.

d. CRIIMI MAE Financial Corporation II, incorporated in the
state of Maryland.

e. CRIIMI MAE Financial Corporation III, incorporated in the
state of Maryland.

f. CRIIMI MAE Management, Inc., incorporated in the state of
Maryland.

Exhibit No. 27 - Financial Data Schedule

a. Financial Data Schedule (filed herewith).

(b) Reports on Form 8-K

No reports on Form 8-K were filed by the registrant during
the fourth quarter of 1995.

The list of Exhibits required by Item 601 of Regulation S-K is
included in Item (a)(3) above.

(d) Financial Statement Schedules

See Item (a) 1 and 2 above.

<PAGE>19

SIGNATURES

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

CRIIMI MAE INC.

February 21, 1996 /s/ William B. Dockser
- ------------------------- -----------------------
DATE William B. Dockser
Chairman of the Board and
Principal Executive Officer

<PAGE>20

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

February 21, 1996 /s/ William B. Dockser
- ------------------------- -------------------------
William B. Dockser
Chairman of the Board and
Principal Executive Officer

February 21, 1996 /s/ H. William Willoughby
- ------------------------- -------------------------
DATE H. William Willoughby
Director, President and
Secretary

February 21, 1996 /s/ Cynthia O. Azzara
- ------------------------- -------------------------
DATE Cynthia O. Azzara
Senior Vice President, Chief
Financial Officer and Principal
Accounting Officer

February 21, 1996 /s/ Garrett G. Carlson, Sr.
- ------------------------- ---------------------------
DATE Garrett G. Carlson, Sr.
Director

February 21, 1996 /s/ Larry H. Dale
- ----------------- -------------------------
DATE Larry H. Dale
Director

February 21, 1996 /s/ G. Richard Dunnells
- ------------------------- -------------------------
DATE G. Richard Dunnells
Director

February 21, 1996 /s/ Robert F. Tardio
- ------------------------- -------------------------
DATE Robert F. Tardio
Director

<PAGE>21

CROSS REFERENCE SHEET

The item numbers and captions in Parts I, II, III and IV hereof and the
page and/or pages in the referenced materials where the corresponding
information appears are as follows:
<TABLE><CAPTION>

Item Referenced Materials Page
- ---- -------------------- ---------------
<S> <C> <C>
3. Legal Proceedings 1995 Annual Report 92 through 93

5. Market for the Registrant's 1995 Annual Report 30 through 31
Common Stock and Related
Stockholder Matters

6. Selected Financial Data 1995 Annual Report 27 through 30

7. Management's Discussion and 1995 Annual Report 32 through 46
Analysis of Financial
Condition and Results of
Operations

8. Financial Statements, 1995 Annual Report 47 through 94
including Auditors'
Report, and Supplementary
Data

11. Executive Compensation 1995 Annual Report 63 through 66

13. Certain Relationships and 1995 Annual Report 63 through 66
Related Transactions

14. Exhibits, Financial State- 1995 Annual Report
ment Schedules, and Reports
on Form 8-K
</TABLE>

<PAGE>22

EXHIBIT INDEX

Exhibit
-------

(3)h Articles of Incorporation of CRIIMI MAE Management, Inc.

(3)i Bylaws of CRIIMI MAE Management, Inc.

(3)j Articles of Incorporation of CRIIMI MAE Services, Inc. as a
Maryland Close Corporation.

(3)k Bylaws of CRIIMI MAE Services, Inc.

(3)l Third Amendment to Agreement of Limited Partnership of CRI/AIM
Investment Limited Partnership.

(3)m Fourth Amendment to Agreement of Limited Partnership of CRI/AIM
Investment Limited Partnership between CRIIMI MAE Inc. and
CRIIMI MAE Management, Inc.

(3)n Limited Partnership Agreement of CRIIMI MAE Services Limited
Partnership.

(3)q Articles of Incorporation of CRIIMI MAE Financial Corporation II.

(3)r Bylaws of CRIIMI MAE Financial Corporation II.

(3)s Articles of Incorporation of CRIIMI MAE Financial Corporation
III.

(3)t Bylaws of CRIIMI MAE Financial Corporation III.

(4)jj Credit Agreement between CRIIMI MAE Inc. and The Riggs National
Bank of Washington, D.C.

(4)kk Collateral Pledge Agreement between CRIIMI MAE Inc. and The Riggs
National Bank of Washington, D.C.

(4)ll Letter of Agreement concerning the Amended and Restated Credit
Agreement among CRIIMI MAE Inc., Signet Bank/Virginia and ASLK-
CGER Bank, Grand Cayman Branch.

(4)mm Sixth Amendment to the Amended and Restated Credit Agreement
among CRIIMI MAE Inc. and Signet Bank/Virginia and the First
Amendment to the Amended and Restated Collateral Pledge
Agreement.

(4)nn Amendment Agreement Number Three among CRIIMI MAE Inc., CIBC,
Inc., National Australia Bank Limited, New York Branch, Signet
Bank/Virginia, The Fuji Bank, LTD., New York Branch, Bank
Hapoalim B.M. and Canadian Imperial Bank of Commerce, New York
Agency.

(4)oo Installment Note between CRIIMI MAE Services, Inc. and CRI/AIM
Management, Inc.

(4)pp Installment Note between CRIIMI MAE Services, Inc. and CRICO
Mortgage Company, Inc.

(4)qq $9,100,000 Credit Agreement between CRIIMI MAE Management,
Inc. and Signet Bank/Virginia.

<PAGE>23

(4)rr Loan Note between CRIIMI MAE Management, Inc. and Signet
Bank/Virginia.

(4)ss Modification of Interest Rate for the Credit Agreement between
CRIIMI MAE Management, Inc. and Signet Bank/Virginia.

(4)tt Guaranty entered into by CRIIMI MAE Inc. in favor of and for the
benefit of Signet Bank/Virginia.

(4)xx Amendment Agreement Number Four among CRIIMI MAE Inc., CIBC,
Inc., National Australia Bank Limited, New York Branch, Signet
Bank/Virginia, The Fuji Bank, LTD., New York Branch, Bank
Hapoalim B.M. and Canadian Imperial Bank of Commerce, New York
Agency.

(4)yy First Amendment to Guaranty entered into by CRIIMI MAE Inc., in
favor of and for the benefit of Signet Bank/ Virginia.

(4)zz Second Amendment to Guaranty entered into by CRIIMI MAE Inc., in
favor of and for the benefit of Signet Bank/ Virginia.

(4)aaa Seventh Amendment to the Amended and Restated Credit Agreement
among CRIIMI MAE Inc. and Signet Bank/Virginia.

(4)bbb Seven Percent Funding Note due September 17, 2031 between CRIIMI
MAE Financial Corporation II and the Federal Home Loan Mortgage
Corporation.

(4)ccc Funding Note Purchase and Security Agreement dated as of
September 22, 1995 among the Federal Home Loan Mortgage
Corporation, CRIIMI MAE Inc. and CRIIMI MAE Financial Corporation
II.

(4)ddd Assignment and Agreement between CRIIMI MAE Inc. and CRIIMI MAE
Financial Corporation II.

(4)eee Second Amendment to Credit Agreement between CRIIMI MAE Inc. and
The Riggs National Bank of Washington, D.C.

(4)fff Eighth Amendment to the Amended and Restated Credit Agreement
among CRIIMI MAE Inc. and Signet Bank/Virginia.

(4)ggg Third Amendment to Credit Agreement between CRIIMI MAE Inc. and
The Riggs National Bank of Washington, D.C.

(4)hhh Amendment to the Commitment Letter by and among Nomura Securities
International, Inc., Nomura Asset Capital Corporation and CRIIMI
MAE Inc.

(4)iii Amendment to the Commitment Letter by and among Nomura Securities
International, Inc., Nomura Asset Capital Corporation and CRIIMI
MAE Inc.

(4)jjj Amendment to the Commitment letter by and among Nomura Securities
International, Inc., Nomura Asset Capital Corporation and CRIIMI
MAE Inc.

(4)kkk Amendment to the Commitment Letter by and among Nomura Securities
International, Inc., Nomura Asset Capital Corporation and CRIIMI
MAE Inc.

(4)lll Funding Note between CRIIMI MAE Financial Corporation III and the
Federal National Mortgage Association.

(4)mmm Assignment and agreement by and between CRIIMI MAE Inc. and

<PAGE>24

CRIIMI MAE Financial Corporation III.

(4)nnn Funding Note Issuance and Security Agreement among Federal
National Mortgage Association, CRIIMI MAE Inc. and CRIIMI MAE
Financial Corporation III.

(4)ooo First Amendment to Commitment Letter between German American
Capital Corporation and CRIIMI MAE Inc.

(4)ppp Letter of Consent to the proposed merger from German American
Capital Corporation to CRIIMI MAE Inc.

(4)qqq Letter of compliance waiver from German American Capital
Corporation to CRIIMI MAE Inc.

(4)rrr Letter of consent to asset pledge by CRIIMI MAE Inc. from German
American Capital Corporation.

(10)b Employment and Non-Competition Agreement between CRIIMI MAE
Management, Inc. and William B. Dockser.

(10)c Allonge to Amended and Restated Promissory Note between C.R.I.,
Inc. and CRI/AIM Management, Inc.

(10)d Administrative Services Agreement between CRIIMI MAE Inc. and
C.R.I., Inc.

(10)e Asset Purchase Agreement among CRICO Mortgage Company, Inc.,
CRIIMI MAE Services, Inc., William B. Dockser and H. William
Willoughby.

(10)f Asset Purchase Agreement among CRI/AIM Management, Inc., CRIIMI
MAE Services, Inc., William B. Dockser and H. William Willoughby.

(10)g The CRIIMI MAE Management, Inc. Executive Deferred Compensation
Trust Agreement between CRIIMI MAE Management, Inc. and Richard
J. Palmer.

(10)h Sublease between C.R.I., Inc. and CRIIMI MAE Inc.

(10)i Articles of Merger merging CRI Acquisition, Inc., CRICO Mortgage
Company, Inc. and CRI/AIM Management, Inc. into CRIIMI MAE
Management, Inc.

(10)j Reimbursement Agreement between CRIIMI MAE Management, Inc.
and C.R.I., Inc.

(10)k Certificate of Merger merging CRICO Mortgage Company, Inc.,
CRI/AIM Management, Inc. and CRI Acquisition, Inc. into CRIIMI
MAE Management, Inc.

(10)l Asset Purchase Agreement among C.R.I., Inc., CRI Acquisition,
Inc. and William B. Dockser and H. William Willoughby.

(10)m Employment and Non-Competition Agreement between CRIIMI MAE
Management, Inc. and Cynthia O. Azzara.

(10)n Employment and Non-Competition Agreement between CRIIMI MAE
Management, Inc. and Frederick J. Burchill.

(10)o Employment and Non-Competition Agreement between CRIIMI MAE
Management, Inc. and Jay R. Cohen.

(10)p Employment and Non-Competition Agreement between CRIIMI MAE

<PAGE>25

Management, Inc. and Deborah A. Linn.

(10)q Employment and Non-Competition Agreement between CRIIMI MAE
Management, Inc. and H. William Willoughby.

27. Financial Data Schedule

<PAGE>26

CRIIMI MAE INC.

ANNUAL REPORT TO SHAREHOLDERS

<PAGE>27

CRIIMI MAE INC.

Selected Consolidated Financial Data
<TABLE><CAPTION>
For the years ended December 31,
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
(In thousands, except per share data)
TAX BASIS ACCOUNTING

Income:
Mortgage investment income $ 62,020 $ 60,622 $ 42,684 $ 38,297 $ 40,140
Income from subordinated
securities 11,846 1,163 -- -- --
Other income 4,938 3,160 7,750 5,510 4,268
-------- --------- -------- -------- --------
78,804 64,945 50,434 43,807 44,408
-------- --------- -------- -------- --------

Expenses:
Interest expense 52,231 39,077 27,516 24,137 25,791
Other expenses (including fees to
related party) 6,727 7,285 6,232 4,632 4,767
-------- -------- -------- -------- --------
58,958 46,362 33,748 28,769 30,558
-------- -------- -------- -------- --------

Ordinary income 19,846 18,583 16,686 15,038 13,850
Capital gains 5,442 11,023 6,329 6,588 8,187
-------- -------- -------- -------- --------
Tax basis income $ 25,288 $ 29,606 $ 23,015 $ 21,626 $ 22,037
======== ======== ======== ======== ========

Tax basis income per share:
Ordinary income $ 0.70 $ 0.73 $ 0.83 $ 0.74 $ 0.68
Capital gains 0.19 0.44 0.31 0.33 0.41
-------- -------- -------- -------- --------
Total tax basis income per share $ 0.89 $ 1.17 $ 1.14 $ 1.07 $ 1.09
======== ======== ======== ======== ========

Dividends per share $ 0.92 $ 1.16 $ 1.12 $ 1.08 $ 1.08
======== ======== ======== ======== ========

<PAGE>28

CRIIMI MAE INC.

ACCOUNTING UNDER GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES

Statement of Income Data:
For the years ended December 31,
1995 1994 1993 1992 1991
Income: -------- --------- -------- -------- --------
Mortgage investment income $ 66,115 $ 67,043 $ 50,270 $ 45,931 $ 49,323
Income from subordinated securities 11,105 976 -- -- --
Other income 4,848 3,423 6,180 4,771 4,995
-------- --------- -------- -------- --------
Total income 82,068 71,442 56,450 50,702 54,318
-------- --------- -------- -------- --------
Expenses:
Interest expense 49,853 39,245 28,008 24,392 25,791
Other operating expenses (including
fees to related party) 7,190 8,040 7,354 5,743 6,077
Amortization of assets acquired
in the Merger 1,435 -- -- -- --
Adjustment to hedges for valuation
and sales(1) 2,393 -- -- -- --
Termination of interest rate swap -- -- 4,890 -- --
Provision for settlement of litigation (656) (557) 1,500 -- --
-------- --------- -------- -------- --------
Total expenses 60,215 46,728 41,752 30,135 31,868
-------- --------- -------- -------- --------

Operating income 21,853 24,714 14,698 20,567 22,450
Net gains from mortgage dispositions 1,502 12,999 7,358 5,733 4,048
Gain on sale of shares of subsidiary -- -- 3,281 -- --
Loss on investment in limited
partnership -- -- -- (732) --
Minority interests (4,821) (11,703) (9,580) (9,527) (10,855)
-------- --------- -------- -------- --------
Income before extraordinary loss 18,534 26,010 15,757 16,041 15,643
Extraordinary loss from
extinguishment of debt -- -- -- -- (6,642)
-------- --------- -------- -------- --------
Net income $ 18,534 $ 26,010 $ 15,757 $ 16,041 $ 9,001
======== ========= ======== ======== ========

Net income per share $ 0.65 $ 1.07 $ 0.78 $ 0.79 $ 0.45
======== ========= ======== ======== ========
Weighted average
shares outstanding 28,414 24,249 20,184 20,184 20,184
======== ========= ======== ======== ========

(1) In connection with the 1995 refinancings of a significant portion of CRIIMI MAE's short-term, floating-rate debt with long-
term, fixed-rate debt, which resulted in a better match of the maturities of CRIIMI MAE's assets and liabilities and reduced CRIIMI
MAE's exposure to fluctuations in short-term interest rates, CRIIMI MAE was required to adjust the carrying value of certain
interest rate caps to fair value for financial statement purposes. Additionally, in connection with these refinancings, during 1995
two interest rate caps, with a notional amount of $100 million were sold, resulting in a loss and a portion of the deferred
financing fees were written off.

</TABLE>

<PAGE>29

CRIIMI MAE INC.

<TABLE><CAPTION>
As of December 31,
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data: (In thousands)
Investment in mortgages and
mortgage security collateral $ 807,113(a) $857,589(a) $730,265(a) $448,319 $446,703
Investment in subordinated securities 278,401 38,858 -- -- --
Total assets 1,203,303 955,050 808,701 526,667 546,054
Total debt 854,436 627,248 479,045 247,968 245,555
Shareholders' equity 285,704(b) 250,042(b) 215,289(b) 193,109 198,397

(a) Includes net unrealized gains on mortgage investments of CRI Liquidating of approximately $28 million in 1995, $18 million in
1994 and $51 million in 1993 and net unrealized gains on CRIIMI MAE's mortgage investments of approximately $300,000 in 1995
due to the implementation of Statement of Financial Accounting Standards No. 115.

<PAGE>30

CRIIMI MAE INC.

(b) Includes net unrealized gains on CRIIMI MAE's share of CRI Liquidating's mortgage investments (net of minority interests) of
approximately $16 million in 1995, $10 million in 1994 and $29 million in 1993 and net unrealized gains on CRIIMI MAE's
mortgage investments of approximately $300,000 due to the implementation of Statement of Financial Accounting Standards No.
115.
</TABLE>

The selected consolidated statement of income data presented above for the
years ended December 31, 1995, 1994 and 1993, and the consolidated balance sheet
data as of December 31, 1995 and 1994, were derived from and are qualified by
reference to CRIIMI MAE's consolidated financial statements which have been
included elsewhere in this Annual Report to Shareholders. The consolidated
statement of income data for the years ended December 31, 1992 and 1991 and the
consolidated balance sheet data as of December 31, 1993, 1992 and 1991 were
derived from audited financial statements not included in this Annual Report to
Shareholders. This data should be read in conjunction with the consolidated
financial statements and the notes thereto.

Market Data
- -----------
CRIIMI MAE is listed on the New York Stock Exchange (Symbol CMM). As of
December 31, 1995 and 1994, there were 30,407,024 and 25,725,979 shares of
common stock issued and outstanding, respectively, held by approximately 24,600
and 23,900 investors, respectively. The following table sets forth the high and
low closing sales prices and the dividends per share for CRIIMI MAE shares
during the periods indicated:

<PAGE>31

CRIIMI MAE INC.

1995
----------------------------------
Sales Price Dividends
Quarter Ended High Low per Share
------------- -------- ------- ---------
March 31, $8 3/8 $6 3/4 $ .225
June 30, 8 3/4 7 1/8 .225
September 30, 8 1/2 7 3/4 .235
December 31, 9 1/4 8 1/8 .235
---------
$ .920
=========

1994
----------------------------------
Sales Price Dividends
Quarter Ended High Low per Share
------------- -------- ------- ---------
March 31, $12 $ 9 3/8 $ .29
June 30, 11 1/8 9 3/4 .29
September 30, 11 1/4 9 3/8 .29
December 31, 9 1/2 6 5/8 .29
--------
$ 1.16
========

<PAGE>32

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Introduction and Business Strategy
- ----------------------------------

Overview and Significant 1995 Activities
- ----------------------------------------
CRIIMI MAE Inc. (CRIIMI MAE), a full service commercial mortgage company
structured as a self-administered real estate investment trust (REIT), uses a
combination of debt and equity to invest in government insured and guaranteed
mortgages secured by multifamily housing complexes located throughout the United
States (Government Insured Multifamily Mortgages) and in uninsured mortgage and
mortgage-related investments backed by multifamily and other commercial
mortgages, such as higher yielding, higher risk, subordinated securities.
CRIIMI MAE's principal objectives are to provide increasing dividends to its
shareholders and to enhance the value of CRIIMI MAE's common stock.

As a result of a shareholder-approved merger transaction (the Merger)
with certain mortgage businesses affiliated with C.R.I., Inc. (CRI) on June 30,
1995, CRIIMI MAE expanded its lines of business to include mortgage advisory
services, mortgage servicing and mortgage origination. Through the Merger and
as a result of employee additions, CRIIMI MAE has a team of mortgage, real
estate and financial professionals to take advantage of the opportunities
available for expanded investments in uninsured mortgage-related products and
services. For further information with respect to the Merger, reference is made
to Note 3 to the accompanying consolidated financial statements.

Since the Merger, through its affiliate CRIIMI MAE Services Limited
Partnership (the Services Partnership), CRIIMI MAE has increased its mortgage
advisory and servicing activities in conjunction with its purchases of
subordinated securities by acquiring servicing rights for the mortgage loans
collateralizing those securities. These servicing rights allow CRIIMI MAE to
closely monitor the performance of its subordinated security investments. As of
February 1, 1996, the Services Partnership provided a variety of servicing
functions on a mortgage portfolio of approximately $2.7 billion.

During the second half of 1995, CRIIMI MAE refinanced (through three
separate transactions) a significant portion of its floating-rate debt with
match-funded, fixed-rate debt that resulted in a better matching of the
maturities of the assets financed and the related liabilities and largely
reduced the impact of short-term interest rate fluctuations on earnings. In
addition to reducing floating-rate debt, the refinancings provided CRIIMI MAE
with additional net proceeds of approximately $80 million which, except for
approximately $10 million, were used primarily for acquiring subordinated
securities. The remaining $10 million is expected to be invested in
subordinated securities in March 1996. As of February 1, 1996, approximately
76% of CRIIMI MAE's total debt had long-term, fixed-rates and 24% had short-
term, floating rates. The floating-rate debt is hedged with interest rate caps.
CRIIMI MAE is actively exploring options to refinance substantially all of its
remaining floating-rate debt.

Change in Investment Policy
- ---------------------------
In order to help CRIIMI MAE increase its income and stabilize earnings,
and to allow it to take advantage of current opportunities in the marketplace,
particularly with respect to uninsured investments, the Board of Directors
adopted a new investment policy in January 1996. This policy is designed to
monitor and direct how CRIIMI MAE funds its investments in order to try to
minimize the risk of loss by evaluating the perceived levels of risk associated
with various investment types. The policy is also designed to permit a
broad range of types of investments by CRIIMI MAE.

The policy states that CRIIMI MAE may invest in government insured or

<PAGE>33

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

uninsured assets backed by multifamily and other commercial mortgages. However,
the majority of investments must remain, on an overall basis, in mortgages and
mortgage-related assets backed by multifamily housing.

Specific investment limitations include:

o CRIIMI MAE's overall debt to equity ratio may not
exceed 5 to 1.

o Certain specific asset types will have maximum debt
to equity ratios.

o At least 75% of CRIIMI MAE's floating-rate debt must
be hedged.

As of December 31, 1995, CRIIMI MAE's overall debt to equity ratio was 3
to 1 and all of its floating rate debt was hedged. Total assets approximated
$1.2 billion, 82% of which was invested in mortgages and mortgage-related assets
backed by multifamily housing.

1996 Strategies
- ---------------
For 1996 and beyond, CRIIMI MAE's business strategies are designed to
increase recurring earnings. Management believes the development of CRIIMI MAE
into a full-service commercial mortgage company during 1995 -- with mortgage
servicing and loan origination capabilities -- has strengthened CRIIMI MAE's
ability to keep growing.

Specific strategies for 1996 are summarized below:

o Issue additional equity, and invest the proceeds
primarily in uninsured assets, including
subordinated securities.

<PAGE>34

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

o Begin originating uninsured multifamily and
commercial mortgages -- a process that is now
underway.

o Begin assembling loan pools for securitization,
using mortgages CRIIMI MAE originates and/or
acquires. CRIIMI MAE anticipates retaining the
subordinated securities backed by these pools and
servicing the underlying loans. The senior
securities would be placed with other investors.

o Build CRIIMI MAE's servicing business as it
originates, acquires, and securitizes assets.

o Continue to explore alternatives to replace the
short-term, floating-rate debt with longer-term
financing.

CRIIMI MAE's management believes that continued growth in income from
uninsured mortgages and mortgage-related investments, such as subordinated
securities, net of related interest expense, as well as growth from its other
lines of business - mortgage origination and mortgage servicing - will increase
the tax basis income and financial statement net income even though the
contribution of its subsidiary, CRI Liquidating REIT, Inc. (CRI Liquidating)
(as discussed further below), will terminate after 1997 in accordance
with CRI Liquidating's business plan. This growth in income is based on
CRIIMI MAE's business strategies, as previously discussed. As future events
may alter these assumptions, no assurance be given that the business plan
results will be achieved.

Corporate Structure
- -------------------
CRIIMI MAE owns 100% of CRIIMI MAE Financial Corporation, CRIIMI MAE
Financial Corporation II and CRIIMI MAE Financial Corporation III, wholly owned
financing subsidiaries formed in the second half of 1995 for the purpose of
refinancing short-term, floating-rate debt with long-term, fixed-rate debt.
CRIIMI MAE also owns 100% of CRIIMI MAE Management, Inc. (CRIIMI Management) and
equity interests in the Services Partnership and CRIIMI MAE Services, Inc. (the
Services Corporation), all of which were formed in connection with the Merger,
as more fully discussed in Note 3 to the accompanying consolidated financial
statements.

In addition to the above entities, CRIIMI MAE owns 100% of CRIIMI, Inc.
which holds general partnership interests ranging from 2.9% to 4.9% in the four
publicly held limited partnerships known as the American Insured Mortgage
Investors Funds (the AIM Funds). Additionally, CRIIMI MAE owns approximately 57%
of the issued and outstanding common stock of CRI Liquidating, a finite-life,
self-liquidating REIT which owns Government Insured Multifamily Mortgages and
which is expected liquidate its assets by the end of 1997. All of the above-
mentioned entities are Maryland corporations, or in the case of the Services
Partnership, a Maryland limited partnership.

<PAGE>35

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

Results of Operations
- ---------------------
1995 versus 1994
- ----------------
Tax Basis Income
----------------
CRIIMI MAE earned approximately $25.3 million in tax basis income during
1995 as compared to approximately $29.6 million during 1994. On a per share
basis, tax basis income decreased to $0.89 per weighted average share in 1995
from $1.17 in 1994. Although ordinary income increased from approximately
$18.6 million in 1994 to approximately $19.8 million in 1995, on a per share
basis ordinary income decreased from $0.73 per weighted average share in 1994 to
$0.70 per weighted average share in 1995, as a result of a 13% increase in the
weighted average shares outstanding during 1995 resulting from equity issuances
during 1994 and 1995. The primary factors resulting in the increase in ordinary
income were as follows: Mortgage investment income and income from investments
in subordinated securities increased as a result of additional investments made
during 1994 and 1995, although these items were partially offset by a decrease
in mortgage investment income earned on CRI Liquidating's mortgage investments
due to mortgage dispositions during 1994 and 1995 in accordance with CRI
Liquidating's business plan. Additionally, equity in earnings from investments
and other investment income increased as a result of the mortgage servicing and
advisory revenue streams acquired in the Merger during 1995 and an increase in
short-term investment income. Partially offsetting the increases in income from
these revenue streams was an increase in interest expense as a result of
additional amounts borrowed under debt facilities to acquire mortgages and
subordinated securities, as well as an increase in short-term interest rates
during 1994 and 1995. Additionally, annual and incentive fees paid to CRIIMI
MAE's and CRI Liquidating's Adviser decreased as a result of the termination of
the advisory agreement in connection with the Merger and due to CRI
Liquidating's reduced asset base during 1994 and 1995. The decrease in CRIIMI
MAE's annual and incentive fees was partially offset by an increase in general
and administrative expenses as a result of the Merger and CRIIMI MAE's growth
during 1995. Net capital gains decreased from approximately $11.0 million in
1994 to approximately $5.4 million in 1995. On a per share basis, net capital
gains decreased from $0.44 per weighted average share in 1994 to $0.19 per
weighted average share in 1995. The decrease in net capital gains was primarily
attributable to a decrease in net gains from the disposition of CRI
Liquidating's assets, as discussed below. The non-cash purchase accounting
amortization expense and the adjustment to hedges described below do not impact
tax basis income.

Financial Statement Net Income
------------------------------
Net income for financial statement purposes was approximately $18.5
million for 1995, a 29% decrease from approximately $26.0 million for 1994. On
a per share basis, financial statement net income decreased to $0.65 per
weighted average share for 1995 from $1.07 for 1994. The factors described in
the preceding paragraph also impacted net income for financial statement
purposes except for the following: (1) Mortgage investment income decreased
slightly for financial statement purposes as compared to an increase for tax
purposes due to the difference in mortgage income earned on CRI Liquidating's
mortgage investments for financial statement purposes versus tax basis income
and (2) During 1995, non-cash amortization of assets acquired in the Merger and
an adjustment to hedges for valuation and sales in connection with the
refinancings completed during the second half of 1995 was required for financial
statement purposes, but was not a component of tax basis income. Descriptions
of the changes in financial statement net income are discussed below.

Mortgage Investment Income
- --------------------------

<PAGE>36

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

Mortgage investment income on an aggregate basis did not vary materially
during 1995 as compared to 1994. The increase in income from mortgage
investments, resulting from 1994 acquisitions of Government Insured Multifamily
Mortgages held directly by CRIIMI MAE, was offset by a decrease in mortgage
investment income as a result of CRI Liquidating's reduced asset base during
1994 and 1995.

For purposes of refinancing short-term, floating-rate debt into long-
term, fixed-rate debt, CRIIMI MAE transferred or pledged Government Insured
Multifamily Mortgages in three separate financing transactions. The following
transfers to wholly-owned financing subsidiaries occurred during the third and
fourth quarters:

<PAGE>37

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

<TABLE>
<CAPTION>
Mortgage Information
------------------------------

Amortized Effective
Number Cost Wtd Avg Interest
Subsidiary of Mortgages (as of 12/31/95) Rem Term Rate
- ---------- ------------ ---------------- -------- -----------
<S> <C> <C> <C> <C>
CRIIMI MAE Financial
Corporation 57 $ 222,533,271 33 years 8.45%

CRIIMI MAE Financial
Corporation II 59 252,152,518 31 years 7.19%

CRIIMI MAE Financial
Corporation III 46 199,603,985 32 years 8.36%

</TABLE>

These assets are included in mortgage security collateral on the
consolidated balance sheet as of December 31, 1995.

On a consolidated basis, as of December 31, 1995 and December 31, 1994,
CRIIMI MAE or its subsidiaries owned, directly or indirectly, 190 and 217
Government Insured Multifamily Mortgages and construction loans, respectively.
As of December 31, 1995, these investments had a weighted average net effective
interest rate of approximately 8.26%, a weighted average remaining term of
approximately 31 years and an aggregate fair value of approximately $818
million. These amounts compare to a weighted average net effective interest
rate of approximately 8.33%, a weighted average remaining term of approximately
32 years and an aggregate fair value of approximately $807 million, as of
December 31, 1994. In addition, as of December 31, 1995, CRIIMI MAE had
committed approximately $900,000 for advances on Government Insured Construction
Mortgages.

While CRIIMI MAE and its financing subsidiaries do not intend to sell any
of their mortgage investments, CRI Liquidating's business plan calls for an
orderly liquidation of its portfolio by the end of 1997. In accordance with CRI
Liquidating's business plan, in January 1996, 11 mortgages were disposed of
generating net proceeds of approximately $57 million, representing approximately
52% of the December 31, 1995 tax basis portfolio balance. The remaining
portfolio is expected to be disposed of through sales during 1997 or prepayments
or other dispositions during the remainder of 1996 and 1997.

Income from Investments in Subordinated Securities
- --------------------------------------------------
Income from investments in subordinated securities increased by
approximately $10.1 million during 1995 as compared to 1994. This increase was
a result of the acquisition of subordinated securities at purchase prices
aggregating approximately $38.9 million during the second half of 1994, and
approximately $239.2 million during 1995, as discussed in Note 7 of the notes to
the consolidated financial statements.

CRIIMI MAE's Board of Directors has authorized CRIIMI MAE to invest in
other mortgage investments which are not federally insured or guaranteed
provided that specific funding requirements are met based on management's
perceived level of risk of the investment. CRIIMI MAE has reviewed
opportunities for investment in other real estate securities which complement
CRIIMI MAE's existing holdings and in the current investment climate, CRIIMI

<PAGE>38

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

MAE's management believes that investments in uninsured mortgages and mortgage-
related investments, such as higher yielding, higher risk subordinated
securities, represent attractive investment opportunities and, as such, are
expected to represent a significant component of CRIIMI MAE's new business
activity for the foreseeable future.

Based on the timing and amount of future credit losses and prepayments
estimated by management, the anticipated yield over the expected weighted
average life for the investments in subordinated securities as of December 31,
1995 is approximately 12%. The accounting treatment required under generally
accepted accounting principles requires that the income on these investments be
recorded on a level yield basis given the anticipated yield on these
investments. This currently results in income which is lower for financial
statement purposes than for tax purposes. The leveraged tax basis return on
these investments was approximately 26% for 1995. This return was based on cash
basis interest income, no defaults or unrecoverable losses, net of interest
expense attributable to the financing of the rated tranches at current interest
rates and adjusted for amortization of original issue discount related to these
securities. CRIIMI MAE anticipates the leveraged return on these investments
for financial statement purposes will approximate 22% over the life of the
investments. This return was determined based on the anticipated yield over the
expected weighted average life of the investments, which considers anticipated
losses, net of interest expense attributable to the financing of the rated
tranches at current interest rates.

Management's anticipated returns on these investments are based upon a
number of assumptions that are currently subject to certain business and
economic uncertainties and contingencies, including, without limitation, the
potential lack of a liquid secondary market for these securities, prevailing
interest rates on the current floating-rate debt financing, renewal of the
repurchase agreements (which provided financing toward the purchase of the rated
tranches of the subordinated securities) at similar terms or the availability of
alternative financing, and the timing and magnitude of credit losses on the
underlying mortgages collateralizing the securities that are a result of the
general condition of the real estate market, including competition for tenants
and changes in market rental rates. As these uncertainties and contingencies
are difficult to predict and are subject to future events that may alter these
assumptions, no assurance can be given that the anticipated yields will be
achieved.

In making investments in subordinated securities, CRIIMI MAE and its
affiliates apply their knowledge of multifamily and other commercial mortgages
to perform due diligence on the mortgage investments collateralizing the
securities. This analysis may include reviewing the operating records of the
underlying real estate assets, appraisals, environmental studies, market studies
and architectural and engineering studies, and where deemed necessary,
independently developing projected operating budgets. In addition, site visits
are conducted at a substantial portion of the properties. In addition to
performing these steps in connection with the due diligence, CRIIMI MAE also
reviews the servicing terms of the transactions. CRIIMI MAE will generally make
investments of this type when satisfactory arrangements exist whereby CRIIMI MAE
can closely monitor the collateral of the pool. CRIIMI MAE believes that all
transactions entered into to date have had such satisfactory arrangements.

Equity in Earnings from Investments
- -----------------------------------
Equity in earnings from investments increased by approximately $395,000 or
17% during 1995 as compared to 1994 primarily due to increases in earnings from
the Services Partnership and the Services Corporation as a result of additional
revenue streams acquired in the Merger.

Other Investment Income

<PAGE>39

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

- -----------------------
Other investment income increased by approximately $1.0 million in 1995 as
compared to 1994. This increase was primarily attributable to income earned
from the short term investment of CRI Liquidating's mortgage disposition
proceeds received in January 1995 pending the distribution to shareholders on
March 31, 1995. Also contributing to this increase was the recognition of
interest income on the note receivable from CRI which was acquired by CRIIMI MAE
in connection with the Merger and fees recognized related to the setup of
servicing assets during the third and fourth quarters of 1995.

Interest Expense
- ----------------
Interest expense increased by approximately $10.6 million or 27% to
approximately $49.9 million for 1995 from approximately $39.2 million for 1994.
This increase was principally a result of additional amounts borrowed in
connection with the acquisition of subordinated securities and mortgage
investments during 1995 and 1994, the higher rate on the long-term, fixed-rate
financings and an increase in short-term interest rates on floating-rate
borrowings. Partially offsetting these increases was a decrease in interest
expense as a result of the expiration of CRIIMI MAE's interest rate collars
during the first and third quarters of 1995.

Adjustment to Hedges for Valuation and Sales
- -------------------------------------------
In connection with the refinancings during the second half of 1995, which
resulted in a better match of the maturities of CRIIMI MAE's assets and
liabilities and reduced CRIIMI MAE's exposure to fluctuations in short-term
interest rates, CRIIMI MAE was required to adjust the carrying value of certain
interest rate caps to fair value for financial statement purposes.
Additionally, in connection with these refinancings, in September 1995, two
interest rate caps, with a notional amount of $100 million were sold, resulting
in a loss.

Fees to Related Party
- ---------------------
Total fees to related party are comprised of annual fees and incentive fees
paid to the Adviser. From inception through June 30, 1995, the Adviser received
certain fees for managing CRIIMI MAE's portfolio. In connection with the
Merger, effective June 30, 1995, CRIIMI MAE was no longer required to pay any
fees to the Adviser. The Adviser continues to receive fees for managing CRI
Liquidating's portfolio.

Total fees to related party decreased by approximately $1.9 million or 49%
to approximately $1.9 million for 1995 from approximately $3.8 million for 1994
primarily as a result of the termination of the Advisory Agreement in connection
with the Merger. Contributing to the decrease in fees to related party was a
reduction in the annual fees payable by CRI Liquidating resulting from its
reduced asset base during 1994 and 1995.

General and Administrative Expenses
- -----------------------------------
General and administrative expenses increased by approximately $1.0 million
during 1995 as compared to 1994. This increase was primarily due to increases
in payroll and related costs, rent and professional fees as a result of the
Merger and the increasing size and complexity of CRIIMI MAE's operations.

Amortization of Assets Acquired in the Merger
- ---------------------------------------------
In connection with the Merger, CRIIMI MAE acquired certain assets, $28.9
million of which are being amortized using the straight line method over 10
years beginning June 30, 1995. Since the Merger was accounted for under the

<PAGE>40

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

purchase method of accounting, which resulted in recording the purchased assets
at fair value, there are significant non-cash amortization expenses related to
these assets. As a result, amortization of assets acquired in the Merger was
approximately $1.4 million during 1995.

Adjustment to Provision to Settlement of Litigation
- ---------------------------------------------------
In connection with the settlement of certain class action litigation
involving CRIIMI MAE and certain of its affiliates, CRIIMI MAE accrued a total
provision of $1.5 million during 1993. Because the actual number of warrants
issued pursuant to the settlement agreement was significantly lower than the
initial estimate, CRIIMI MAE reduced this provision in June 1994 to
approximately $943,000, resulting in an adjustment of approximately $557,000
during 1994.

Through December 29, 1995, the expiration date of the warrants, none of the
warrants had been exercised. Accordingly, an adjustment was recognized to
reverse into income the remaining obligation related to the warrants of
approximately $656,000 during 1995.

Gains/Losses on Mortgage Dispositions
- -------------------------------------
Net gains on mortgage dispositions decreased by approximately $11.5 million
or 88% to approximately $1.5 million for 1995 from approximately $13.0 million
for 1994. Gains or losses on mortgage dispositions are based on the number,
carrying amounts, and proceeds of mortgage investments disposed of during the
period. During 1995, 22 CRI Liquidating mortgage investments representing 33%
of the tax basis carrying value of the portfolio as of December 31, 1994 were
disposed of resulting in net financial statement gains of approximately $1.6
million and tax basis gains of approximately $9.5 million. This compares to the
disposition of 19 CRI Liquidating mortgage investments during 1994 representing
25% of the tax basis carrying value of the portfolio as of December 31, 1993
that generated net financial statement gains of approximately $12.5 million and
tax basis gains of approximately $18.3 million. Additionally, during 1994,
seven CRIIMI MAE mortgage investments were disposed of resulting in net
financial statement gains of approximately $446,000 and net tax basis gains of
approximately $646,000.

Results of Operations
- ---------------------
1994 versus 1993
- ----------------
Tax Basis Income
----------------
CRIIMI MAE earned approximately $29.6 million in tax basis income for
1994, a 29% increase from approximately $23.0 million for 1993. On a per share
basis, tax basis income for 1994 increased to $1.17 per weighted average share
from $1.14 per weighted average share for 1993. The primary factors resulting
in the increase in tax basis income were as follows: Income from investments in
mortgages and subordinated securities increased as a result of additional
purchases made during 1993 and 1994. These increases were partially offset by a
decrease in mortgage investment income earned on CRI Liquidating's assets as a
result of mortgage dispositions during 1993 and 1994. Also contributing to the
increase in tax basis income was an increase in net capital gains on mortgage
dispositions, as discussed below. Partially offsetting these items were
increases in interest expense and annual and incentive fees paid to CRIIMI MAE's
Adviser resulting from the growth of CRIIMI MAE. The increase in interest
expense resulted from additional amounts borrowed during 1993 and 1994 in
connection with the acquisition of mortgage investments and subordinated
securities, as well as an increase in short-term interest rates; although the
increase in interest rates was partially offset by interest savings as a result

<PAGE>41

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

of the termination of the interest rate swap during 1993. Additionally, during
1993, CRIIMI MAE recognized a non-recurring loss on the termination of an
interest rate swap of approximately $4.9 million, as discussed below, which was
offset by non-recurring gains on the sale of shares of CRI Liquidating and the
sale of short term investments.

Financial Statement Net Income
------------------------------
Net income for financial statement purposes was approximately $26.0
million for 1994, a 65% increase from approximately $15.8 million for 1993. On
a per share basis, financial statement net income for 1994 increased to $1.07
per weighted average share from $0.78 per weighted average share for 1993.
Virtually all of the factors described above impacted net income for financial
statement purposes. Additionally, during 1993, the non-recurring loss on the
termination of the interest rate swap was partially offset by non-recurring
capital gains on the sale of shares of CRI Liquidating.

Total income increased by approximately $15.0 million or 27% to
approximately $71.4 million for 1994 from approximately $56.5 million for 1993
primarily due the to growth in mortgage investment income which CRIIMI MAE
experienced during 1993 and 1994, resulting from acquisitions of mortgage
investments and, to a lesser degree, subordinated securities, during this
period.

Other investment income decreased by approximately $2.5 million or 69% to
approximately $1.1 million for 1994 from approximately $3.6 million for 1993.
This decrease was primarily attributable to investment income earned in 1993 on
approximately $175 million in other short-term investments acquired by CRIIMI
MAE and CRI Liquidating during 1993, all of which were disposed of by December
31, 1993.

Interest expense increased by approximately $11.2 million or 40% to
approximately $39.2 million for 1994 from approximately $28.0 million for 1993.
This increase was principally a result of additional amounts borrowed during
1993 and 1994 under CRIIMI MAE's financing facilities and an increase in short
term interest rates. This increase was partially offset by interest savings due
to the termination of the interest rate swap and the buyout of the floor on a
$25 million notional amount collar during 1993.

Other operating expenses decreased to approximately $7.5 million for 1994
from approximately $13.7 million for 1993. This decrease was primarily
attributable to the expense related to the termination of an interest rate swap
in 1993. Also contributing to this decrease was a reduction in general and
administrative expenses and an adjustment to the provision for settlement of
litigation, as discussed below. Partially offsetting these amounts was an
increase in fees paid to related party.

Total fees to related party increased by approximately $1.0 million or 39%
to approximately $3.8 million for 1994 from approximately $2.7 million for 1993.
Annual fees increased by approximately $763,000 or 31% to approximately $3.3
million for 1994 from approximately $2.5 million for 1993 primarily due to
additional mortgage investments made during this period. Partially offsetting
this increase was a reduction in the base component of the annual fees payable
by CRI Liquidating resulting from mortgage dispositions during 1994 and 1993, as
well as a reduction in the annual fee rate for certain of CRI Liquidating's
mortgage investments. Also offsetting the increase in annual fees was a
reduction in the deferred component of the CRI Liquidating annual fee.

The CRIIMI MAE incentive fee increased by approximately $284,000 or 133% to
approximately $498,000 for 1994 from approximately $214,000 for 1993. This
increase was primarily attributable to growth in CRIIMI MAE's net income from

<PAGE>42

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

additional mortgage investments during 1994 and the decrease in other operating
expenses, as discussed above. Also contributing to the increase in the incentive
fee was the recognition of a tax basis gain of approximately $937,000 in
connection with the prepayment of the mortgage on Williamstown Apartments.

General and administrative expenses decreased by approximately $360,000 or
8% to approximately $4.3 million in 1994 from approximately $4.6 million in
1993. This decrease was primarily attributable to a decrease in professional
services as a result of the settlement of litigation, as discussed below, offset
by an increase in mortgage servicing fees.

Provision for settlement of litigation decreased by approximately $2.1
million or 137% in 1994 from $1.5 million in 1993. This decrease is
attributable to an adjustment in the number of warrants issued in connection
with the settlement of litigation.

Net gains on mortgage dispositions increased by approximately $5.6 million
or 77% to approximately $13.0 million in 1994 from approximately $7.4 million in
1993. This increase was primarily due to the sale of 19 CRI Liquidating
Mortgages during 1994 which resulted in financial statement gains of
approximately $12.5 million and tax basis gains of approximately $18.3 million.
This compares to the disposition of 10 CRI Liquidating mortgages during 1993
that generated financial statement gains of approximately $8.1 million and tax
basis gains of approximately $14.9 million.

Cash Flow
- ---------
1995 versus 1994
- ----------------
Net cash provided by operating activities decreased for 1995 as compared to
1994 primarily from an increase in receivables and other assets as a result of
the assignment of a mortgage to HUD during the fourth quarter of 1995, resulting
in accrued assignment proceeds receivable of approximately $2.4 million. The
increase in accrued interest receivable was also attributable to acquisitions of
subordinated securities during 1995. Also contributing to the decrease in net
cash provided by operating activities was an increase in the amount and
frequency of interest payments as a result of additional borrowings during 1995.
The decrease in net income, as previously discussed, also contributed to the
decrease in net cash provided in operating activities.

Net cash used in investing activities increased by an insignificant amount
for 1995 as compared to 1994. Although mortgage acquisitions and advances on
construction loans decreased during 1995 as compared to 1994 this decrease was
offset by increases in subordinated securities acquisitions and a decrease in
proceeds from the disposition of CRI Liquidating's mortgage investments.

Net cash provided by financing activities increased for 1995 as compared to
1994 primarily due to an increase in proceeds from debt issuances to
approximately $1.2 billion in 1995 from approximately $311 million in 1994 as a
result of the refinancings discussed above. This increase was partially offset
by an increase in principal payments on debt obligations to approximately $941.7
million in 1995 from approximately $162.4 million in 1994 as a result of the
paydown of CRIIMI MAE's floating-rate debt. Also contributing to the decrease
in net cash provided by financing activities was a decrease in net proceeds from
the issuance of common stock to approximately $14.0 million in 1995 from
approximately $56.8 million in 1994.

Cash Flow
- ---------
1994 versus 1993
- ----------------

<PAGE>43

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

Net cash provided by operating activities increased in 1994 as compared to
1993 principally due to an increase in net income, as previously discussed.
Also contributing to the increase in net cash provided by operating activities
was an increase in interest payable as a result of additional borrowings during
1994. Partially offsetting the increase in net cash provided by operating
activities was a decrease in payables and accrued expenses arising
primarily from the payment of costs incurred in connection with an equity
offering of common stock.

Net cash used in investing activities decreased in 1994 as compared to
1993. This decrease was principally due to the purchase of mortgages and
subordinated securities totalling approximately $274.6 million in 1994 as
compared to $312.7 million in 1993. Also contributing to the decrease in net
cash used in investing activities was the receipt of net proceeds during 1993
from the sale of shares of CRIIMI MAE's subsidiary of approximately $26.4
million and from the redemption and sale of HUD debentures of approximately $6.1
million.

Net cash provided by financing activities decreased in 1994 as compared to
1993 primarily due to a reduction in debt issuances from $462.3 million in 1993
to $310.6 million in 1994 and an increase in dividends paid from $53.7 million
in 1993 to $65.5 million in 1994. Partially offsetting these amounts was a
reduction in the paydown of debt obligations to approximately $162.4 million
during 1994 as compared to $230.9 million during 1993 and the receipt of
proceeds from share issuances of approximately $56.8 million in 1994.

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

Financial Flexibility
- --------------------
CRIIMI MAE uses proceeds from long-term, fixed-rate debt refinancings,
repurchase agreements, other borrowings, a working capital line of credit,
return of capital from its investment in CRI Liquidating and issuances of common
stock to meet its capital requirements. As previously discussed, CRIIMI MAE
substantially reduced the impact of changing interest rates on its financial
results through three separate refinancings during the second half of 1995.
Changes in interest rates will have no impact on the cost of funds or the
collateral requirements of approximately 76% of the debt outstanding as of
February 1, 1996. CRIIMI MAE has a series of interest rate cap agreements in
place in order to partially limit the adverse effects of rising interest rates
on the remaining floating-rate debt. The caps have an aggregate notional amount
which currently exceeds the amount of floating-rate debt outstanding. When
CRIIMI MAE's cap agreements expire, CRIIMI MAE will have interest rate risk to
the extent interest rates increase on any remaining floating-rate borrowings
unless the caps are replaced or other steps are taken to mitigate this risk.
CRIIMI MAE's investment policy requires that at least 75% of floating-rate debt
be hedged.

Fluctuations in interest rates will continue to impact the value on that
portion of CRIIMI MAE's investments which are not match-funded and could impact
potential returns to shareholders through increased cost of funds on the
floating-rate debt in place. In certain circumstances, including, among other
things, increases in interest rates or decreases in credit quality of the
underlying asset, CRIIMI MAE would be required to pledge additional collateral
in connection with its short-term, floating-rate borrowing facilities. If
CRIIMI MAE did not have adequate collateral to meet these requirements, it could
be forced to sell assets to pay down such debt. If such assets were unavailable
or inadequate to pay down the debt, there could be a substantial impact on
CRIIMI MAE. However, management is continually monitoring the levels of
unencumbered collateral and is exploring options to refinance the existing

<PAGE>44

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

repurchase agreements which are secured, generally, by holdings of rated
subordinated securities.

The flexibility in CRIIMI MAE's leverage is dependent upon, among other
things, compliance with debt covenants and the levels of unencumbered assets.
CRIIMI MAE had adequate unencumbered assets to meet contractual requirements
during 1995 and 1994 and expects to have adequate unencumbered assets as
required under the financing facilities during 1996. CRIIMI MAE's ability to
extend or refinance debt facilities upon maturity will depend on a number of
variables, including, among other things, CRIIMI MAE's financial condition and
its current and projected results from operations which are impacted by changes
in interest rates. Under certain existing debt facilities (which had
outstanding borrowings of approximately $13 million as of December 31, 1995),
CRIIMI MAE's debt-to-equity ratio may not exceed 3.0 to 1. As previously
mentioned, as of December 31, 1995, CRIIMI MAE was in compliance with this
requirement. CRIIMI MAE is in the process of negotiating a revised debt-to-
equity requirement with its lenders to bring this requirement in line with the
recently approved investment policy which allows a 5.0 to 1 debt-to-equity
ratio. Management anticipates that CRIIMI MAE's lenders will approve a change
in this ratio. Management continuously monitors CRIIMI MAE's overall financing
and hedging strategy in an effort to ensure that CRIIMI MAE is making optimal
use of its borrowing ability based on market conditions and opportunities.

Management believes that the long-term, fixed-rate refinancings discussed
above and the Merger have created the basis for an overall return to CRIIMI
MAE's shareholders that is less interest rate sensitive. The income which has
been derived from the Merger is primarily fee-based, in the form of servicing
fees and advisory fees. While origination fees may decline in a rising interest
rate environment, servicing fees are expected to become more stable in a rising
interest rate environment as the likelihood of prepayments or refinancings
decreases with higher rates. The potential loss of servicing fees as loans
prepay or refinance in a period of declining interest rates is expected to be
partly offset by the savings CRIIMI MAE would have on its cost of borrowing on
floating-rate debt.

Dividends
- ---------
CRIIMI MAE's principal objectives are to provide increasing dividends to
its shareholders and to enhance the value of CRIIMI MAE's common stock.
However, as previously discussed, tax basis income decreased in 1995 as compared
to 1994 and, as a result, total dividends decreased. Specifically, during the
first six months of 1995, CRIIMI MAE decreased its quarterly dividend to $0.225
per share, but increased its quarterly dividend to $0.235 per share for each of
the third and fourth quarters of 1995. This compares to dividends of $0.29 per
share paid for each quarter of 1994.

Based on certain assumptions, management expects to increase CRIIMI MAE's
dividend for 1996 to $1.16 per share or better, for a quarterly dividend of 29
cents per share. The base dividend estimate includes no anticipated earnings
from new business in 1996. It includes, among other things, estimated earnings
only on investments owned as of December 31, 1995 and first quarter 1996 net
gains from mortgage dispositions, including the disposition of half of CRI
Liquidating's remaining portfolio which occurred in January 1996. The
disposition of these mortgages by CRI Liquidating generated capital gains on a
tax basis for CRIIMI MAE of approximately 27 cents per share for 1996 based on
the number of shares currently outstanding.

The base dividend estimate assumes that no losses on subordinated
securities occur in 1996. However, such losses may occur in the event of
defaults on mortgage loans, although at this time no defaults resulting in
losses are anticipated. Additionally, no dispositions of CRIIMI MAE's

<PAGE>45

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

Government Insured Multifamily Mortgages (other than mortgage prepayments to-
date and dispositions of CRI Liquidating's mortgages) are assumed to occur in
1996. However, such dispositions may occur through additional prepayments, for
example, and could result in losses and a reduction in mortgage income. The
base dividend estimate also assumes that interest rates and CRIIMI MAE's debt
levels remain constant throughout 1996. Higher short-term interest rates would
increase borrowing costs on CRIIMI MAE's floating-rate debt. However, such
increased costs of funds would be limited due to CRIIMI MAE's interest rate cap
agreements, which hedge exposure on CRIIMI MAE's short-term floating-rate debt.

Additionally, if the terms of certain of the short-term, floating-rate debt
are not extended or alternative financing is unavailable, CRIIMI MAE could be
forced to sell assets at a loss to pay off such debt or if such assets were
unavailable or inadequate to pay off the debt, there could be a substantial
impact on CRIIMI MAE. However, as previously stated, CRIIMI MAE is actively
exploring options to refinance this debt. As previously discussed in 1996
Strategies, CRIIMI MAE plans to issue additional equity. However, for purposes
of determining the 1996 base dividend estimate, no adjustment has been made with
respect to any equity raised in 1996. While management expects the annual
dividend to be at least $1.16 per share, there is no assurance as to the actual
dividend. The Board of Directors is expected to declare the first quarter's
dividend in early March, basing the exact amount on conditions at that time.
This estimate is based on certain assumptions regarding future events which
CRIIMI MAE cannot predict or control.

Although the mortgage investments held by CRIIMI MAE and its subsidiaries
yield a fixed monthly mortgage payment once purchased, the cash dividends paid
by CRIIMI MAE and by its subsidiaries may vary during each period due to several
factors. The factors which impact CRIIMI MAE's dividend include (i) the
distributions which CRIIMI MAE receives on its CRI Liquidating shares, (ii) the
level of income earned on CRIIMI MAE's or its subsidiaries' mortgage investments
depending on prepayments, defaults, etc., (iii) the level of income earned on
uninsured investments, such as subordinated securities, which varies depending
on prepayments, defaults, etc. (iv) the fluctuating yields on short-term debt
and the rate at which CRIIMI MAE's LIBOR-based debt is priced, (v) the
fluctuating yields in the short-term money market where the monthly mortgage
payments received are temporarily invested prior to the payment of quarterly
dividends, (vi) the yield at which principal from scheduled monthly mortgage
payments, mortgage dispositions and distributions from the AIM Funds and from
CRI Liquidating can be reinvested, (vii) variations in the cash flow received
from the AIM Funds, and (viii) changes in operating expenses. CRIIMI MAE's
dividends will also be impacted by the timing and amounts of cash flows
attributable to its new lines of business - mortgage servicing, advisory and
origination services.

The factors which impact CRI Liquidating's dividend include (i) gains or
losses on dispositions of CRI Liquidating's mortgage investments, (ii) the
reduction in the monthly mortgage payments due to mortgage dispositions, (iii)
changes in interest rates which impact the gain or loss from dispositions, (iv)
the fluctuating yields in the short-term money market where the monthly mortgage
payments received are temporarily invested prior to the payment of quarterly
dividends and (v) changes in operating expenses. Additionally, mortgage
dispositions may increase the return to the shareholders for a period, although
neither the timing nor the amount can be predicted.

REIT STATUS
- -----------
CRIIMI MAE and CRI Liquidating have qualified and intend to continue to
qualify as REITs under Sections 856-860 of the Internal Revenue Code. As REITs,
CRIIMI MAE and CRI Liquidating do not pay taxes at the corporate level.

<PAGE>46

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued

Qualification for treatment as REITs requires CRIIMI MAE and CRI Liquidating to
meet certain criteria, including certain requirements regarding the nature of
their ownership, assets, income and distributions of taxable income. CRIIMI MAE
and CRI Liquidating, however, may be subject to tax at normal corporate rates on
net income or capital gains not distributed.

OTHER EVENTS
- ------------
In June 1995, Edge Partners, L.P. filed a complaint in the United States
District Court for the District of Maryland against CRIIMI MAE's directors. The
complaint purports to be a derivative action on behalf of CRIIMI MAE and alleges
breach of fiduciary duty by the directors and a misleading proxy statement in
connection with the Merger. The plaintiff seeks unspecified damages, a
determination that the shareholder vote in favor of the Merger should be set
aside and other relief.

The defendants filed a motion to dismiss and on December 18, 1995, the case
was dismissed with leave to refile within 30 days of receipt of a transcript of
the order. The refiling is due on or before February 23, 1996. Management does
not expect the case to have a material financial impact on CRIIMI MAE.

<PAGE>47

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of
CRIIMI MAE Inc.

We have audited the accompanying consolidated balance sheets of CRIIMI MAE
Inc. (CRIIMI MAE) and its subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of income, changes in shareholders' equity and
cash flows for the years ended December 31, 1995, 1994 and 1993. These
financial statements are the responsibility of CRIIMI MAE's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of CRIIMI MAE and
its subsidiaries as of December 31, 1995 and 1994, and the consolidated results
of their operations and their cash flows for the years ended December 31, 1995,
1994 and 1993, in conformity with generally accepted accounting principles.

As explained in Note 2 of the notes to the consolidated financial
statements, effective December 31, 1993, CRIIMI MAE and its subsidiaries changed
their method of accounting for their investment in mortgages.

Arthur Andersen LLP
Washington, D.C.
February 14, 1996

<PAGE>48

CRIIMI MAE INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31,
1995 1994
------------ ------------
<S> <C> <C>
Assets:
Interest Bearing Investments
Mortgage security collateral, at
amortized cost $ 674,289,774 $703,215,753
Subordinated securities,
at amortized cost 278,400,699 38,858,349
Mortgages, at fair value 132,823,515 154,373,576

Equity Investments 37,137,786 29,923,240

Other Assets
Assets acquired in the Merger 27,425,483 --
Deferred costs 16,072,517 14,438,832
Receivables and other assets 20,575,725 9,097,080
Cash and cash equivalents 16,577,407 5,143,171
-------------- ------------
Total assets $1,203,302,906 $955,050,001
============== ============

Liabilities:
Securitized Mortgage Obligations $ 645,260,921 $ --
Other Repurchase Agreements 187,947,276 24,891,783
Master Repurchase Agreements -- 456,984,347
Revolving Credit Facility -- 115,000,000
Bank Term Loans 21,227,880 30,371,800
Payables and accrued expenses 10,929,366 8,142,966
-------------- ------------
Total liabilities 865,365,443 635,390,896
-------------- ------------
Minority interests in
consolidated subsidiary 52,233,520 69,617,184
-------------- ------------
Commitments and contingencies

Shareholders' equity:
Preferred stock -- --
Common stock 309,356 262,272
Net unrealized gains on mortgage
investments 16,138,649 10,316,768
Additional paid-in capital 274,226,356 244,224,984
-------------- ------------
290,674,361 254,804,024

Less treasury stock, at cost-
528,594 and 501,274 shares, respectively (4,970,418) (4,762,103)
-------------- ------------
Total shareholders' equity 285,703,943 250,041,921
-------------- ------------
Total liabilities and shareholders'
equity $1,203,302,906 $955,050,001
============== ============
</TABLE>

The accompanying notes are an integral part
of these consolidated financial statements.

<PAGE>49

CRIIMI MAE INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the years ended December 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>

Income:
Mortgage investment income $ 66,114,642 $ 67,043,342 $ 50,269,572
Income from investments in
subordinated securities 11,104,576 975,835 --
Equity in earnings from investments 2,704,846 2,309,685 2,534,459
Other investment income 2,144,287 1,112,938 3,646,224
------------ ------------ ------------
82,068,351 71,441,800 56,450,255
------------ ------------ ------------
Expenses:
Interest expense 49,852,672 39,244,621 28,008,282
Fees to related party 1,909,304 3,761,118 2,714,757
General and administrative 5,280,281 4,279,489 4,639,206
Amortization of assets acquired in the Merger 1,435,356 -- --
Adjustment to hedges for valuation and sales 2,393,106 -- --
Termination of interest rate swap -- -- 4,890,234
Provision for settlement of litigation (656,127) (557,340) 1,500,000
------------ ------------ ------------
60,214,592 46,727,888 41,752,479
------------ ------------ ------------
Income before mortgage dispositions and gain
on sale of shares of subsidiary 21,853,759 24,713,912 14,697,776

Mortgage dispositions:
Gains 1,819,176 13,482,665 8,116,948
Losses (317,578) (483,357) (759,203)

Gain on sale of shares of subsidiary -- -- 3,281,750
------------ ------------ ------------
Income before minority interests 23,355,357 37,713,220 25,337,271

Minority interests in net income of
consolidated subsidiary (4,821,268) (11,703,101) (9,579,766)
------------ ------------ ------------

Net income $ 18,534,089 $ 26,010,119 $ 15,757,505
============ ============ ============
Per share data:
Net income per share $ 0.65 $ 1.07 $ 0.78
============ ============ ============

Weighted average shares outstanding,
exclusive of shares held in treasury 28,414,266 24,249,403 20,183,533
============ ============ ============
</TABLE>

The accompanying notes are an integral part
of these consolidated financial statements.

<PAGE>50

CRIIMI MAE INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the years ended December 31, 1993, 1994 and 1995
<TABLE>
<CAPTION>

Net
Unrealized
Common Stock Gains on Additional Total
Par Mortgage Paid-in Undistributed Treasury Shareholders'
Value Investments Capital Net Income Stock Equity
------------ ------------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1992 $ 211,848 $ -- $202,409,067 $ -- $(9,512,103) $ 193,108,812

Net income -- -- -- 15,757,505 -- 15,757,505
Dividends of $0.78 per share -- -- -- (15,757,505) -- (15,757,505)
Return of capital of $0.34
per share -- -- (6,848,052) -- -- (6,848,052)
Net unrealized gains on
mortgage investments -- 29,028,019 -- -- -- 29,028,019
------------ ------------- ------------ -------------- ------------ -------------
Balance, December 31, 1993 211,848 29,028,019 195,561,015 -- (9,512,103) 215,288,779

Net income -- -- -- 26,010,119 -- 26,010,119
Dividends of $1.07 per weighted
average share -- -- -- (26,010,119) -- (26,010,119)
Return of capital of $0.14
per weighted average share -- -- (3,347,781) -- -- (3,347,781)
Adjustment to net unrealized
gains on mortgage investments -- (18,711,251) -- -- -- (18,711,251)
Shares issued 50,424 -- 52,011,750 -- 4,750,000 56,812,174
------------ ------------- ------------ -------------- ------------ -------------
Balance, December 31, 1994 262,272 10,316,768 244,224,984 -- (4,762,103) 250,041,921

Net income -- -- -- 18,534,089 -- 18,534,089
Dividends of $0.65 per weighted
average share -- -- -- (18,534,089) -- (18,534,089)
Return of capital of $0.27
per weighted average share -- -- (7,742,508) -- -- (7,742,508)
Adjustment to net unrealized
gains on mortgage investments -- 5,821,881 -- -- 5,821,881
Shares issued 47,084 -- 37,743,880 -- -- 37,790,964
Shares repurchased -- -- -- -- (208,315) (208,315)
------------ ------------- ------------ -------------- ------------ -------------
Balance, December 31, 1995 $ 309,356 $ 16,138,649 $274,226,356 $ -- $ (4,970,418) $ 285,703,943
============ ============= ============ ============== ============ =============

The accompanying notes are an integral part
of these consolidated financial statements.
</TABLE>

<PAGE>51

CRIIMI MAE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION> For the years ended December 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Income $ 18,534,089 $ 26,010,119 $ 15,757,505
Adjustments to reconcile net income to net cash
provided by operating activities
Amortization of discount and deferred financing
costs on debt 3,796,743 5,483,786 4,209,980
Amortization of assets acquired in the Merger 1,435,356 -- --
Depreciation and other amortization 690,056 579,194 567,935
Discount/Premium amortization on investments (1,482,052) (985,369) 6,461,334
Net gains on mortgage dispositions (1,501,598) (12,999,308) (7,357,745)
Gain on sale of shares of subsidiary -- -- (3,281,750)
Equity in (earnings)/loss from investments 33,943 49,032 (43,605)
Adjustment to hedges for valuation and sales 2,393,106 -- --
Minority interests in earnings of consolidated subsidiary 4,821,268 11,703,101 9,579,766
Other operating activities -- -- 308,093
Changes in assets and liabilities:
Increase in receivables and other assets (6,802,887) (1,362,585) (1,800,610)
(Decrease) increase in payables and
accrued expenses (2,416,667) (1,894,121) 2,789,560
(Decrease) increase in interest payable (1,880,727) 4,069,697 1,576,692
------------- ------------ ------------
Net cash provided by operating activities 17,620,630 30,653,546 28,767,155
------------- ------------ ------------
Cash flows from investing activities:
Purchase of mortgages and advances on construction loans (7,858,922) (235,758,541) (312,654,818)
Purchase of subordinated securities (239,211,572) (38,848,431) --
Proceeds from mortgage dispositions 64,451,314 94,436,841 93,437,842
Purchase of other short-term investments -- -- (175,300,539)
Proceeds from sale of other short-term investments -- -- 167,111,884
Net proceeds from sale of shares of subsidiary -- -- 26,431,250
Receipt of principal payments 6,961,291 6,938,687 4,974,555
Payment of deferred costs (1,139,725) (1,319,201) (2,653,930)
Proceeds from redemption/sale of HUD debentures -- -- 6,062,502
Other investing activities (74,012) 253,292 253,292
------------- ------------ ------------
Net cash used in investing activities (176,871,626) (174,297,353) (192,337,962)
------------- ------------ ------------

Cash flows from financing activities:
Proceeds from debt issuances 1,159,487,990 310,618,324 462,344,165
Principal payments on debt obligations (941,677,058) (162,415,442) (230,859,621)
Increase in deferred financing costs (8,222,044) (4,370,145) (7,260,655)
Dividends (including return of capital) paid to
shareholders, including minority interests (52,723,404) (65,457,793) (53,653,356)
Repurchase of common stock (208,315) -- --
Proceeds from the issuance of common stock 14,028,063 56,812,174 --
------------- ------------ ------------
Net cash provided by financing activities 170,685,232 135,187,118 170,570,533
------------- ------------ ------------
Net increase (decrease) in cash and cash equivalents 11,434,236 (8,456,689) 6,999,726

Cash and cash equivalents, beginning of year 5,143,171 13,599,860 6,600,134
------------- ------------ ------------
Cash and cash equivalents, end of year $ 16,577,407 $ 5,143,171 $ 13,599,860
============= ============ ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>52

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization

CRIIMI MAE Inc. (CRIIMI MAE), a full service commercial mortgage company
structured as a self-administered real estate investment trust (REIT), invests
in government insured and guaranteed mortgages secured by multifamily housing
complexes located throughout the United States (Government Insured Multifamily
Mortgages) and in uninsured mortgage and mortgage-related investments backed by
multifamily and other commercial mortgages, such as higher yielding, higher
risk, subordinated securities, using a combination of debt and equity. CRIIMI
MAE's principal objectives are to provide increasing dividends to its
shareholders and to enhance the value of CRIIMI MAE's common stock.

In connection with a shareholder-approved merger transaction on June 30,
1995 (the Merger), as further described in Note 3, certain affiliates of C.R.I.,
Inc. (CRI) (collectively, the CRI Mortgage Businesses) were merged with and into
CRIIMI MAE Management, Inc. (CRIIMI Management), a newly-formed, wholly owned
subsidiary of CRIIMI MAE. In connection with the Merger, on June 30, 1995, all
of the employees of the CRI Mortgage Businesses became employees of CRIIMI
Management and the advisory agreement between CRIIMI MAE, and its adviser, CRI
Insured Mortgage Associates Adviser Limited Partnership (the Adviser), was
terminated. Immediately prior to the Merger, the CRI Mortgage Businesses sold
the sub-advisory contracts related to four publicly held limited partnerships
known as the American Insured Mortgage Investors Funds (the AIM Funds) and
certain mortgage servicing contracts to CRIIMI MAE Services, Inc. (the Services
Corporation), a newly-formed Maryland corporation, in exchange for 15-year
interest bearing installment notes in the aggregate principal amount of
$6,586,000. The Services Corporation immediately contributed these assets to
CRIIMI MAE Services Limited Partnership (the Services Partnership), a newly-
formed Maryland limited partnership, in exchange for an initial 92% sole limited
partnership interest. The remaining mortgage servicing contracts acquired by
CRIIMI Management in the Merger were immediately contributed to the Services
Partnership in exchange for an initial 8% sole general partnership interest.
Additionally, on June 30, 1995, CRIIMI MAE contributed $285,000 to the Services
Corporation in exchange for 100% of the non-voting common stock (which shares
are entitled to 95% of the dividends) of the Services Corporation and certain
directors and officers of CRIIMI MAE collectively contributed $15,000 to the
Services Corporation in exchange for 100% of the voting common stock (which
shares are entitled to 5% of the dividends) of the Services Corporation. It is
anticipated that substantially all of the economic benefits of ownership of the
Services Corporation will inure to the benefit of CRIIMI MAE by virtue of its
debt and equity interests therein.

CRIIMI MAE owns 100% of CRIIMI MAE Financial Corporation, CRIIMI MAE
Financial Corporation II and CRIIMI MAE Financial Corporation III which are
wholly owned financing subsidiaries (discussed in Notes 6 and 9), 100% of CRIIMI
Management and approximately 57% of CRI Liquidating REIT, Inc. (CRI
Liquidating), a finite-life, self-liquidating REIT which owns Government Insured
Multifamily Mortgages. Additionally, CRIIMI, Inc., a wholly owned subsidiary of
CRIIMI MAE, owns all of the general partnership interests in the AIM Funds. The
AIM Funds own mortgage investments which are substantially similar to those
owned by CRIIMI MAE and CRI Liquidating. CRIIMI, Inc. receives the general
partner's share of income, loss and distributions (which ranges among the AIM
Funds from 2.9% to 4.9%) from each of the AIM Funds. In addition, CRIIMI MAE
indirectly owns a limited partnership interest in the adviser to the AIM Funds.

2. Summary of Significant Accounting Policies

Method of Accounting
--------------------

<PAGE>53

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies - Continued

The consolidated financial statements of CRIIMI MAE are prepared on
the accrual basis of accounting in accordance with generally accepted
accounting principles. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Reclassifications
-----------------
Certain amounts in the consolidated financial statements for the years
ended December 31, 1994 and December 31, 1993 have been reclassified to
conform to the 1995 presentation.

Consolidation and Minority Interests
------------------------------------
The consolidated financial statements reflect the financial position,
results of operations, and cash flows of CRIIMI MAE, CRI Liquidating,
CRIIMI, Inc., CRIIMI Management, CRIIMI MAE Financial Corporation, CRIIMI
MAE Financial Corporation II and CRIIMI MAE Financial Corporation III for
all periods presented. All intercompany accounts and transactions have
been eliminated in consolidation.

Since CRIIMI MAE owned approximately 57% of CRI Liquidating as of
December 31, 1995, 1994 and 1993, respectively, the ownership interests of
the other shareholders in the equity and net income of CRI Liquidating are
reflected as minority interests in the accompanying consolidated financial
statements.

<PAGE>54

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies - Continued

Assets Acquired in the Merger
-----------------------------
Assets acquired and costs incurred in connection with the Merger were
recorded using the purchase method of accounting. The amounts allocated to
the assets acquired were based on management's estimate of their fair
values with the excess of purchase price over fair value allocated to
goodwill.

The AIM sub-advisory contracts and the mortgage servicing contracts
transferred to the Services Partnership are amortized using the effective
interest method over 10 years. This amortization is reflected through
CRIIMI MAE's equity in earnings of the Services Partnership and the
Services Corporation. The remaining assets acquired by CRIIMI MAE,
including goodwill, are amortized using the straight-line method over ten
years.

Cash and Cash Equivalents
-------------------------
Cash and cash equivalents consist of money market funds, time and
demand deposits and repurchase agreements with original maturities of three
months or less.

Investment in Mortgages and Mortgage Security Collateral
--------------------------------------------------------
CRIIMI MAE's consolidated investment in mortgages and mortgage
security collateral is comprised of participation certificates evidencing a
100% undivided beneficial interest in Government Insured Multifamily
Mortgages issued or sold pursuant to programs of the Federal Housing
Administration (FHA) (FHA-Insured Loans) and mortgage-backed securities
guaranteed by the Government National Mortgage Association (GNMA) (GNMA
Mortgage-Backed Securities). Payment of principal and interest on
FHA-Insured Loans is insured by the United States Department of Housing and
Urban Development (HUD) pursuant to Title 2 of the National Housing Act.
Payment of principal and interest on GNMA Mortgage-Backed Securities is
guaranteed by GNMA pursuant to Title 3 of the National Housing Act.

In May 1993, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 115 "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS 115). This statement
requires that most investments in debt and equity securities be classified
into one of the following investment categories based upon the
circumstances under which such securities might be sold: Held to Maturity,
Available for Sale, and Trading. Generally, certain debt securities for
which an enterprise has both the ability and intent to hold to maturity
should be accounted for using the amortized cost method and all other
securities must be recorded at their fair values. This statement was
adopted for the year ended December 31, 1993.

CRIIMI MAE Financial Corporation, CRIIMI MAE Financial Corporation II
and CRIIMI MAE Financial Corporation III have the intent and ability to
hold their mortgage investments until maturity. Consequently, all of their
mortgage investments have been classified as Held to Maturity and continue
to be recorded at amortized cost as of December 31, 1995. Upon
implementation of SFAS 115, CRIIMI MAE's mortgage investments (except for
CRI Liquidating's mortgage investments) were classified as Held to Maturity
based on CRIIMI MAE's intent and ability to hold such mortgage investments
to maturity. However, during the fourth quarter of 1995, approximately
$17.8 million, at amortized cost, of CRIIMI MAE's mortgage investments (not

<PAGE>55

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies - Continued

included in the financing subsidiaries) were reclassified to the Available
for Sale category in accordance with the FASB publication, "A Guide to
Implementation of Statement 115," resulting in unrealized gains of
approximately $305,000.

CRI Liquidating intends to dispose of its existing Government Insured
Multifamily Mortgages by the end of 1997 through an orderly liquidation.
In order to achieve this objective, CRI Liquidating will sell certain of
its mortgage investments in addition to mortgages that are assigned to HUD.
Accordingly, as of December 31, 1995, $17.8 million of CRIIMI MAE's
mortgage investments and all of CRI Liquidating's mortgage investments are
recorded at fair value with the unrealized gains on those CRIIMI MAE
mortgage investments and CRIIMI MAE's share of the net unrealized gains on
CRI Liquidating's mortgage investments reported as a separate component of
shareholders' equity. As of December 31, 1994, all of CRI Liquidating's
mortgage investments are recorded at fair value and all of CRIIMI MAE's
mortgage investments are recorded at amortized cost. Subsequent increases
or decreases in the fair value of mortgage investments classified as
Available for Sale will be included as a separate component of
shareholders' equity. Realized gains and losses for mortgage investments
classified as Available for Sale will continue to be reported in earnings,
as discussed below.

The difference between the cost and the unpaid principal balance at
the time of purchase is carried as a discount or premium and amortized over
the remaining contractual life of the mortgage using the effective interest
method. The effective interest method provides a constant yield of income
over the term of the mortgage.

Mortgage investment income is comprised of amortization of the
discount plus the stated mortgage interest payments received or accrued
less amortization of the premium.

<PAGE>56

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies - Continued

Investment in Subordinated Securities
-------------------------------------
CRIIMI MAE has the intent and ability to hold its investments in
subordinated securities until maturity. Consequently, these investments
are classified as Held to Maturity and are carried at amortized cost as of
December 31, 1995 and 1994.

Income on investments in subordinated securities is recognized on the
effective interest method using the anticipated yield over the expected
life of these investments. Impairment adjustments are made if the
projected yield of an investment tranche is less than the risk-free rate of
return on an investment with similar duration. Such projected yields are
based upon management's estimate of future cash flows after consideration
for estimates of the amount and timing of collateral losses.

Equity Investments
------------------
The acquisition of certain interests in the AIM Funds in September
1991, including certain acquisition costs aggregating approximately $7.7
million, have been recorded under the purchase method of accounting, which
provides that the investment be recorded at cost, including the acquisition
costs. CRIIMI MAE is utilizing the equity method of accounting for its
investment in the AIM Funds and advisory partnership, which provides for
recording CRIIMI MAE's share of net earnings or losses in the AIM Funds and
advisory partnership reduced by distributions from the limited partnerships
and adjusted for purchase accounting amortization. The purchase price,
including the deferred acquisition costs, was allocated among the general
partner interests and the advisory partnership interest based on the
partnerships' and advisory contracts' estimated fair values. The general
partnership and advisory interests were assigned a total value of
approximately $27 million and $5 million, respectively. In connection with
the Merger, discussed below in Note 3, CRIIMI MAE acquired an additional
10% interest in the adviser to the AIM Funds.

CRIIMI MAE accounts for its investment in the Services Corporation
under the equity method because the voting common stock of the Services
Corporation is owned by directors and officers of CRIIMI MAE and because
CRIIMI MAE is entitled to substantially all of the economic benefits of
ownership of the Services Corporation.

CRIIMI MAE's investment in the Services Partnership is accounted for
under the equity method since the limited partner has the right to approve
any significant actions that are required to manage the Services
Partnership.

<PAGE>57

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies - Continued

Deferred Costs
--------------
Costs incurred in connection with the establishment of CRIIMI MAE's
financing facilities are amortized using the effective interest method over
the terms of the borrowings. Also included in deferred costs are mortgage
selection fees, which were paid to the Adviser or were paid to the former
general partners or adviser to the predecessor entities to CRI Liquidating
(collectively, the CRIIMI Funds). These deferred costs are being amortized
using the effective interest method on a specific mortgage basis from the
date of the acquisition of the related mortgage to the expected dissolution
date of CRI Liquidating or over the term of the mortgage for CRIIMI MAE.
Upon disposition of a mortgage, the related unamortized fee is treated as
part of the mortgage investment carrying value in order to measure the gain
or loss on the disposition.

Discount on Securitized Mortgage Obligations
--------------------------------------------
Discounts incurred in connection with the issuance of debt are
amortized using the effective interest method over the projected term of
the related debt which is based on management's estimate of prepayments on
the underlying collateral and are included as a component of interest
expense.

Interest Rate Hedge Agreements
------------------------------
CRIIMI MAE acquires interest rate hedge agreements to reduce its
exposure to interest rate risk. The costs of such agreements which qualify
for hedge accounting are amortized over the interest rate agreement term.
In the event that interest rate hedge agreements are terminated, the
associated gain or loss is deferred over the remaining term of the
agreement, provided that the underlying hedged asset or liability still
exists. Amounts to be paid or received under interest rate hedge
agreements are accrued currently and are netted with interest expense for
financial statement presentation purposes. Additionally, in the event that
interest rate hedge agreements do not qualify as hedges, such agreements
are reclassified to be investments accounted for at fair value, with any
gain or loss included as a component of income.

Shareholders' Equity
--------------------
CRIIMI MAE has authorized 60,000,000 shares of $.01 par value common
stock and has issued 30,935,618 and 26,227,253 shares as of December 31,
1995 and 1994, respectively. All shares issued, exclusive of the shares
held in treasury, are outstanding. As of December 31, 1995 and 1994, 7,421
shares were held for issuance pending presentation of predecessor units and
were considered outstanding. Additionally, 25,000,000 shares of $.01 par
value preferred stock are authorized; however, no shares are issued or
outstanding.

Income Taxes
------------
CRIIMI MAE and CRI Liquidating have qualified and intend to continue
to qualify as REITs under Sections 856-860 of the Internal Revenue Code.
As REITs, CRIIMI MAE and CRI Liquidating do not pay taxes at the corporate
level. Qualification for treatment as REITs requires CRIIMI MAE and CRI
Liquidating to meet certain criteria, including certain requirements
regarding the nature of their ownership, assets, income and distributions
of taxable income. CRIIMI MAE and CRI Liquidating intend to distribute

<PAGE>58

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies - Continued

substantially all of their taxable income and, accordingly, no provision
for income taxes has been made in the accompanying consolidated financial
statements. CRIIMI MAE and CRI Liquidating, however, may be subject to tax
at normal corporate rates on net income or capital gains not distributed.

Per Share Amounts
-----------------
Net income, dividends and return of capital per share amounts for
1995, 1994 and 1993 represent net income, dividends and return of capital,
respectively, divided by the weighted average shares outstanding during
each year. The weighted average shares outstanding include shares held for
issuance pending presentation of predecessor units in the CRIIMI Funds.

Consolidated Statements of Cash Flows
-------------------------------------
Since the consolidated statements of cash flows are intended to
reflect only cash receipt and cash payment activity, the consolidated
statements of cash flows do not reflect investing and financing activities
that affect recognized assets and liabilities while not resulting in cash
receipts or cash payments.

Cash payments made for interest for the years ended December 31, 1995,
1994 and 1993 were $47,936,656, $29,691,138, and $22,448,356, respectively.

In connection with the Merger, the following significant non-cash
investing and financing activities were recorded upon consummation of the
Merger on June 30, 1995:

<PAGE>59

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies - Continued

Assets Acquired
- ---------------
<S> <C>
Investment in Services Corporation $ 6,871,000(1)
Investment in Services Partnership 538,000(1)
Note receivable 5,002,183(2)
Terminated contract and workforce 23,900,000(3)
Mortgage servicing assets 881,000(3)
Goodwill 4,079,839(3)
Fixed assets 212,484(2)
Decrease in deferred costs (1,162,756)
Decrease in receivables and other
assets (250,000)
-----------
Total assets acquired $40,071,750
===========

Liabilities assumed and stock issued
- ------------------------------------
Bank term loan $ 9,100,000
Deferred compensation payable 5,002,183
Merger costs payable 2,206,666
Common stock issued 22,262,901
Value of stock options issued 1,500,000
-----------
Liabilities assumed and stock issued $40,071,750
===========

(1) Included in Equity Investments on the accompanying consolidated balance sheet as of
December 31, 1995.
(2) Included in Receivables and other assets on the accompanying consolidated balance sheet as
of December 31, 1995.
(3) Included in Assets acquired in the Merger on the accompanying consolidated balance sheet as
of December 31, 1995.

</TABLE>

New Accounting Statements
- -------------------------
During 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This
statement requires that impairment losses for such assets be based upon the fair
value of the asset. This statement is not applicable to investments accounted
for on either the cost or equity basis. The statement, applicable to fiscal
years beginning after December 15, 1995, will not have a material impact on
CRIIMI MAE as the impairment measure for the majority of CRIIMI MAE's assets is
based upon other accounting pronouncements.

During 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights," an Amendment of SFAS No. 65. This statement requires
enterprises to recognize as separate assets the right to service mortgage assets
for others. Additionally, the statement requires that mortgage servicing rights
be assessed for impairment based on the fair value of those rights. Adoption of
this statement is required on a prospective basis in fiscal years beginning
after December 15, 1995. Management intends to adopt the statement in the
fiscal year ending December 31, 1996 and does not believe that the impact of
such adoption will be material to the financial statements.

Also during 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation." This statement encourages, but does not require, a fair value
based method of accounting for employee stock options or similar equity

<PAGE>60

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies - Continued

instruments. Entities which elect not to adopt the fair value method of
accounting are required to make pro forma disclosures of net income and earnings
per share as if the fair value method were adopted. This statement is also
required for fiscal years beginning after December 15, 1995. Management does
not intend to adopt the fair value method of accounting. Accordingly, adoption
of the statement in the fiscal year ending December 31, 1996 will only impact
the Company's disclosures.

3. Merger of CRI Mortgage Businesses

On September 29, 1994, a special committee (the Special Committee)
consisting of the independent directors of the board of directors (the Board of
Directors) was appointed by the Board of Directors to consider whether, and on
what basis, CRIIMI MAE should become self-administered and self-managed. The
members of the Special Committee are not and have not been affiliates of CRI or
the CRI Mortgage Businesses nor officers or employees of CRIIMI MAE.

The consideration paid by CRIIMI MAE in connection with the Merger was
determined in negotiations between William B. Dockser and H. William Willoughby
(collectively, the Principals) and the Special Committee. In the negotiations,
the Special Committee was assisted by Duff & Phelps Capital Markets Co. (Duff &
Phelps) and considered the views of Merrill Lynch, Pierce, Fenner & Smith,
Incorporated, the financial adviser to CRIIMI MAE with respect to the merger
proposal. Duff & Phelps rendered an opinion to the effect that the merger
proposal was fair to CRIIMI MAE and its stockholders, other than the Principals,
from a financial point of view.

The Special Committee unanimously recommended the merger proposal to the
Board of Directors. The Board of Directors (with the Principals abstaining)
unanimously approved the merger proposal and recommended that the stockholders
of CRIIMI MAE vote for the merger proposal. The merger proposal was approved by
the stockholders of CRIIMI MAE at a meeting held on June 21, 1995. Holders of
approximately fifty six percent of the 26,888,456 shares outstanding as of the
April 24, 1995 record date voted in favor of the Merger. Of the shares voted,
the margin was 8.5 to 1 in favor of the Merger.

The Merger became effective on June 30, 1995 (the Closing Date) at which
time certain assets and liabilities of the CRI Mortgage Businesses were merged
with and into CRIIMI Management. The CRI Mortgage Businesses were affiliates of
CRI. CRI and its affiliates had been involved in mortgage origination,
underwriting, investment and related activities for over 20 years.

CRI/AIM Management, Inc. (CRI/AIM Management) was formed in 1991 to act as
sub-advisor to the AIM Funds. CRI/AIM Management provided origination,
servicing, and loan management services on behalf of the AIM Funds pursuant to
its advisory agreements.

As discussed in Note 4, through June 30, 1995, the Adviser provided
advisory services to CRIIMI MAE pursuant to an advisory agreement. Immediately
prior to the Merger, the advisory agreement between CRIIMI MAE and the Adviser
was sold to CRI Acquisition, Inc., a newly formed entity which was then merged
into CRIIMI MAE.

The consideration paid by CRIIMI MAE (measured on the Closing Date) for the
CRI Mortgage Businesses was approximately $32.9 million. Additionally, CRIIMI
MAE incurred costs of approximately $3.3 million to execute the Merger. As part
of the consideration paid in the Merger, CRIIMI MAE issued, on the Closing Date,
1,325,419 shares of common stock (Common Shares), which vested immediately, to

<PAGE>61

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. Merger of CRI Mortgage Businesses - Continued

each of the Principals. On the Closing Date, CRIIMI MAE issued, for services
rendered in connection with the Merger, to certain executive officers
(collectively, the Executive Officers) a total of 110,452 Common Shares. The
Common Shares issued to the Executive Officers will vest in three equal
installments on the first three anniversaries of the Closing Date. As a result
of these transactions, the Principals and Executive Officers held approximately
10% of the 30,407,024 Common Shares issued and outstanding as of December 31,
1995.

Registration Rights and Lock-up Agreement - The Common Shares received by
the Principals and the Executive Officers in connection with the Merger (the
Restricted Shares) are "restricted securities" within the meaning of Rule 144
under the Securities Act of 1933, as amended (the Securities Act), and may be
sold only pursuant to an effective registration statement under the Securities
Act or an applicable exemption, including an exemption under Rule 144. On June
30, 1995, the Principals and the Executive Officers entered into an agreement
with CRIIMI MAE pursuant to which those persons are not permitted to offer,
sell, contract to sell or otherwise dispose of any Restricted Shares for 36
months after the Closing Date, except for gifts to relatives and charitable
contributions. Each Principal is prohibited from making such gifts in excess of
662,709 Common Shares during such period. After expiration of the lock-up
period, the holders of the Restricted Shares, after notifying CRIIMI MAE of
their intention, will be permitted, subject to certain procedural requirements,
to sell Restricted Shares. If an exemption from the registration requirements
is not available, the Principals and Executive Officers may exercise piggyback
registration rights, may utilize any available shelf registration and, if the
aggregate number of Common Shares to be registered exceeds 50,000 Common Shares,
exercise demand registration rights; provided that a maximum of two demand
registration statements may be required and a second notice demanding
registration must be at least a year after the first. Under the agreements
providing for such registration rights, CRIIMI MAE will pay all expenses, other
than underwriting discounts, in connection with any registration.

Pursuant to the Merger Agreement, CRIIMI Management became liable for
certain debt of the CRI Mortgage Businesses in the principal amount of $9.1
million, as discussed in Note 9, below.

CRIIMI MAE allocated the purchase price to the fair value of the assets
acquired and the excess of the purchase price over the fair value of the net
assets acquired is allocated to goodwill. CRIIMI MAE determined the fair values
based on the present value of the cash flow streams discounted at a rate
commensurate with the associated risk of investing in and owning those assets.
The allocation of the purchase price is as follows:

<PAGE>62

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. Merger of CRI Mortgage Businesses - Continued

<TABLE>
<CAPTION> Amortization
Period
Note Amount (Years)
---- ----------- -------------
<S> <C> <C> <C>
AIM subadvisory contracts and certain
mortgage servicing contracts 1 $ 7,409,000 10
Mortgage servicing assets 2 881,000 10
Terminated contract and workforce 3 23,900,000 10
Goodwill 4 4,079,839 10

(1) The fair value of the AIM subadvisory contracts and certain mortgage servicing contracts were determined based on the projected
discounted cash flows over the estimated life of the assets. These assets have been contributed to the Services Corporation
and the Services Partnership as follows:
Services Corporation - CRIIMI MAE made an investment in the Services Corporation which is represented by 100% of the non-
voting common stock. The Services Corporation issued installment notes to purchase certain intangible assets. The Services
Corporation contributed those intangible assets to the Services Partnership for an initial 92% limited partnership interest.
These intangible assets consisted of the AIM subadvisory contracts and certain other mortgage servicing contracts valued at
$6,871,000.

Services Partnership - CRIIMI MAE also made an investment in the Services Partnership by contributing certain mortgage
servicing contracts valued at $538,000 for an initial 8% general partnership interest.

(2) Represents the fair value of the remaining intangible assets that CRIIMI MAE acquired from the CRI Mortgage Businesses.

(3) Represents CRIIMI MAE's acquisition of the workforce and intellectual property of the CRI Mortgage Businesses. The benefits of
these services were previously provided to CRIIMI MAE through the Adviser. The expected future benefit of such services was
the basis for the determination of the fair value.

(4) Reflects the allocation of the purchase price to goodwill. Goodwill is represented by the excess of purchase price over the
fair value of the net assets acquired.
</TABLE>

Following is certain pro forma financial information of CRIIMI MAE as
though the acquisition had occurred on January 1, 1994:

<TABLE>
For the years ended December 31,
1995 1994
----------------- -----------------
<S> <C> <C>
Income $ 83,166,704 $ 73,376,345
Net Income $ 18,765,271 $ 26,717,690
Earnings per share $ 0.63 $ 0.99

</TABLE>

The Principals and the Executive Officers entered into employment and non-
competition agreements with CRIIMI Management for terms of five years and three
years, respectively. The agreements require each Principal to devote a
substantial portion of his time to the affairs of CRIIMI MAE and its affiliated
entities, except that each of them may devote time to his other existing
business activities; provided that the time devoted to such other existing
business activities does not interfere with the performance of his duties to
CRIIMI MAE and its affiliated entities. The Principal's agreements define the
phrase "substantial portion" to mean all of the time required to perform the
services necessary and appropriate for the conduct of the businesses of CRIIMI
MAE and its affiliated entities.

<PAGE>63

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. Merger of CRI Mortgage Businesses - Continued

The employment agreements include provisions prohibiting the Principals
from competing with CRIIMI Management, CRIIMI MAE
or CRIIMI MAE's affiliated entities for at least six years after the Closing
Date, unless the Principal's employment is terminated other than for "cause" or
pursuant to an "involuntary resignation" (as such terms are defined in the
employment agreements). However, subsequent to the Merger, the Principals
continue to have a substantial economic interest in, and control over, CRI and
its affiliates, which will continue to (1) be a general partner in, and have
minority economic interests in, certain existing partnerships which, directly or
indirectly, own equity or debt investments in multifamily or commercial
properties, (2) engage in and manage trading operations in
multifamily and related mortgages, and (3) through the Adviser, which is an
affiliate of CRI, serve as the adviser to CRI Liquidating.

In addition to the Common Shares received, each of the Principals received
from CRIIMI MAE options to purchase one million Common Shares at an exercise
price equal to $1.50 per share more than the aggregate average of the high and
low sale prices of Common Shares on the New York Stock Exchange during the ten
trading days preceding the Closing Date, which average sale price was calculated
at $8.27 per share (the Trading Price) and 500,000 Common Shares at an exercise
price equal to $4.00 per share more than the Trading Price. The options vest in
equal installments on the first five anniversaries of the Closing Date. The
Executive Officers received options to purchase a total of 180,000 Common Shares
at an exercise price equal to $1.50 per share more than the Trading Price. In
addition, certain other officers (the Other Officers) of CRIIMI MAE received
options to purchase a total of 50,000 Common Shares at an exercise price of
$1.50 per share more than the Trading Price. These options vest in equal
installments on the first three anniversaries of the Closing Date. The
Principals', Executive Officers' and Other Officers' options expire on the
eighth anniversary of the Closing Date.

As discussed in Note 14, in June 1995, a complaint was filed in the United
States District Court for the District of Maryland against CRIIMI MAE's
directors in connection with the Merger.

4. Transactions with Related Parties

Below is a summary of the related party transactions which occurred during
the years ended December 31, 1995, 1994 and 1993. These items are described
further in the text which follows:

<PAGE>64

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. Transactions with Related Parties - Continued

<TABLE>
<CAPTION>
For the years ended December 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>

PAYMENTS TO THE ADVISER:
- ------------------------
Annual fee - CRIIMI MAE (a)(h) $ 1,493,297 $ 2,567,101 $ 1,266,494
Annual fee - CRI Liquidating (a) 416,007(g) 696,342(g) 1,234,291(g)
Incentive fee - CRIIMI MAE (a) -- 497,675 213,972
Incentive fee - CRI Liquidating (f) -- 394,812 256,290
Mortgage selection fees - CRIIMI MAE (b) 212,909 1,570,415 2,416,253
------------ ------------ ------------
Total $ 2,122,213 $ 5,726,345 $ 5,387,300
============ ============ ============
PAYMENTS TO CRI:
- ----------------
Expense reimbursement - CRIIMI MAE (c)(i) $ 1,302,074 $ 1,524,440 $ 707,110
Expense reimbursement - CRI Liquidating (c)(j) 125,482 285,423 254,039
------------ ------------ ------------
Total $ 1,427,556 $ 1,809,863 $ 961,149
============ ============ ============
AMOUNTS RECEIVED OR ACCRUED FROM RELATED PARTIES:
CRIIMI, Inc.
- ------------------------------------------------
Income (d) $ 1,953,835 $ 1,905,074 $ 2,015,861
Return of capital (e) 261,364 737,560 13,108
------------ ------------- ------------
Total $ 2,215,199 $ 2,642,634 $ 2,028,969
============ ============= ============

CRI/AIM Investment Limited Partnership (d)(h) $ 738,362 $ 700,000 $ 700,000
============ ============= ============
Expense Reimbursements to CRIIMI Management
- -------------------------------------------
CRI Liquidating and the AIM Funds (c)(j) $ 183,650 $ -- $ --
Services Partnership (c)(j) 576,483 -- --
------------ ------------- ------------
$ 760,133 $ -- $ --
============ ============= ============
<FN>
(a) Included in the accompanying consolidated statements of income.
(b) Included as deferred costs on the accompanying consolidated balance sheets and amortized over the expected mortgage life.
(c) Included as general and administrative expenses on the accompanying consolidated statements of income.
(d) Included as equity in earnings from investments on the accompanying consolidated statements of income.
(e) Included as a reduction of equity investments on the accompanying consolidated balance sheets.
(f) Netted with gains on mortgage dispositions on the accompanying consolidated statements of income.
(g) As a result of reaching the carryover CRI Insured Mortgage Investments Limited Partnership (CRIIMI I) target yield during the
first quarter of 1995, CRI Liquidating paid deferred annual fees of $28,467. The carryover CRIIMI I target yield was not
achieved during the second, third or fourth quarters of 1995. As a result of reaching the carryover CRIIMI I target yield
during 1994 and 1993, CRI Liquidating paid deferred annual fees of $118,659 and $330,087, respectively. The amount paid in
1993 included deferred annual fees of $86,395 from 1992.
(h) As of June 1, 1993, pursuant to the First Amendment to the CRI Insured Mortgage Association, Inc. advisory agreement (the
Advisory Agreement), CRI guaranteed that CRIIMI MAE would receive an annual distribution from CRI/AIM Investment Limited
Partnership of $700,000. CRIIMI MAE was granted the right to reduce the amounts paid to the Adviser by the difference between
the guaranteed $700,000 distribution and the amount actually paid to CRIIMI MAE by CRI/AIM Investment Limited Partnership. As

<PAGE>65

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. Transactions with Related Parties - Continued

such, the amounts paid to the Adviser for the year ended December 31, 1995 were reduced by $158,811, which represents the
difference between the guaranteed distribution for the six months ended June 30, 1995 and the amount actually paid to CRIIMI
MAE. The amounts paid to the Adviser for the years ended December 31, 1994 and 1993, were reduced by $312,222 and $101,859,
respectively, which represents the difference between the guaranteed distribution for the period and the amount actually paid
to CRIIMI MAE. Additionally, during 1993, CRIIMI MAE was paid $199,805 by CRI in connection with the guaranteed distribution.
This guarantee was terminated effective June 30, 1995 in connection with the transaction in which CRIIMI MAE acquired the CRI
Mortgage Businesses and became self-managed and self-administered, as discussed in Notes 1 and 3.
(i) Prior to CRIIMI MAE becoming a self-managed and self-administered REIT, amounts were paid to CRI as reimbursement for expenses
incurred by the Adviser on behalf of CRIIMI MAE. In connection with the Merger, CRIIMI MAE is no longer required to reimburse
the Adviser, as these expenses are now directly incurred by CRIIMI MAE. However, pursuant to an agreement between CRIIMI MAE
and CRI (the CRI Administrative Services Agreement), CRI provides CRIIMI MAE with certain administrative and office facility
services and other services, at cost, with respect to certain aspects of CRIIMI MAE's business. CRIIMI MAE uses the services
provided under the CRI Administrative Services Agreement to the extent such services are not performed by CRIIMI Management or
provided by another service provider. The CRI Administrative Services Agreement is terminable on 30 days notice at any time by
CRIIMI MAE.
(j) Prior to CRIIMI MAE becoming a self-managed and self-administered REIT, amounts were paid to CRI as reimbursement for expenses
incurred by the Adviser on behalf of CRI Liquidating and the AIM Funds. As discussed in Note 3, the transaction in which
CRIIMI MAE became a self-administered and self-managed REIT has no impact on CRI Liquidating's or the AIM Funds' financial
statements except that the expense reimbursements previously paid to CRI, are, effective June 30, 1995, paid to CRIIMI
Management. Additionally, effective June 30, 1995, CRIIMI Management is reimbursed for its employees' time and expenses
incurred on behalf of the Services Partnership. The amounts paid by CRI Liquidating to CRI during the year ended December 31,
1995, represent the reimbursement of expenses incurred prior to June 30, 1995.
</TABLE>

CRIIMI MAE's Advisory Agreement
- -------------------------------
CRIIMI MAE is governed by the Board of Directors, a majority of whom are
independent directors. From inception through June 30, 1995, the Board of
Directors engaged the Adviser, an affiliate of CRI, to act in the capacity of
adviser to CRIIMI MAE. Prior to June 30, 1995, the Adviser conducted CRIIMI
MAE's day-to-day operations and managed CRIIMI MAE's assets with the goal of
maximizing CRIIMI MAE's value. Under the Advisory Agreement between CRIIMI MAE
and the Adviser, the Adviser and its affiliates received certain fees and
expense reimbursements from CRIIMI MAE through June 30, 1995. However, as
discussed in Note 3, effective June 30, 1995, CRIIMI MAE became a self-
administered REIT and, pursuant to the Merger, the Advisory Agreement was
terminated. Accordingly, the Adviser no longer manages CRIIMI MAE's operations
and is, thus, not entitled to receive fees and expense reimbursements from
CRIIMI MAE.

Under the Advisory Agreement (through June 30, 1995), the Adviser received
compensation from CRIIMI MAE as follows:

o An annual fee (the Annual Fee) for managing and master servicing
CRIIMI MAE's portfolio of mortgages. The Annual Fee was equal to 0.40%
of average invested assets invested in certain mortgage investments,
payable quarterly. Such fee was subject to reduction if the spread
between the yield on investments declined below the portfolio's cost
of funds by greater than 0.40%.

o An incentive fee, equal to 25% of the amount by which tax basis net
income from Additional Mortgage Investments (as defined in the
Advisory Agreement) exceeded the annual target return on equity, was
payable quarterly, subject to year-end adjustment. The target return
on equity was determined on a quarterly basis and equalled 1% over the
average yield on Treasury Bonds maturing nearest to ten years from
such quarter.

<PAGE>66

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. Transactions with Related Parties - Continued

o A mortgage selection fee (the Mortgage Selection Fee) for analyzing,
evaluating and structuring mortgage investments. The Mortgage
Selection Fee was equal to 0.75% of amounts invested in Additional
Mortgage Investments.

CRI Liquidating Advisory Agreement
- ----------------------------------
CRI Liquidating has also entered into an agreement with the Adviser (CRI
Liquidating Advisory Agreement) under which the Adviser is obligated to evaluate
and negotiate voluntary mortgage dispositions, provide administrative services
to CRI Liquidating and conduct CRI Liquidating's day-to-day affairs.

Under the CRI Liquidating Advisory Agreement, the Adviser receives
compensation from CRI Liquidating as follows:

o An annual fee (the CRI Liquidating Annual Fee) for managing CRI
Liquidating's portfolio of mortgages. The CRI Liquidating Annual Fee
is calculated separately based on specific criteria for each of the
remaining mortgage pools from the former CRIIMI Funds.

o The Adviser is also entitled to certain incentive fees (the CRI
Liquidating Incentive Fees) in connection with the disposition of
certain mortgage investments. Like the CRI Liquidating Annual Fee, the
CRI Liquidating Incentive Fees are calculated separately with respect
to mortgage investments in each of the mortgage pools from the former
CRIIMI Funds.

The Merger has no impact on the payments required to be made by CRI
Liquidating, except that the expense reimbursements previously paid by CRI
Liquidating to CRI in connection with the provision of services by its Adviser
are paid to CRIIMI Management subsequent to June 30, 1995.

CRI sublease - CRIIMI MAE has entered into agreements with CRI to sublease
approximately 22,400 square feet of office space leased by CRI, at a total
annual rent of approximately $450,000. This amount reflects prevailing market
rates. All increases in lease occupancy charges, including inflation
adjustments and expense reimbursements, will be passed through to CRIIMI MAE on
a per square foot basis. The term of the sublease runs concurrently with CRI's
lease, which expires on October 31, 1997. CRIIMI MAE may lease additional
space, on an as needed basis. During the six months ended December 31, 1995,
CRIIMI MAE incurred rent charges of approximately $141,000, which is included in
general and administrative expenses on the accompanying consolidated statements
of operations.

Since the Merger, through the Services Partnership, CRIIMI MAE has
increased its mortgage advisory and servicing activities in conjunction with its
purchases of subordinated securities by acquiring servicing rights for the
mortgage loans collateralizing these securities. These servicing rights allow
CRIIMI MAE to closely monitor the performance of its subordinated security
investments. As of February 1, 1996, the Services Partnership provided a
variety of servicing functions on a mortgage portfolio of approximately $2.7
billion. The servicing contracts are contributed to the Services Partnership
and increase CRIIMI MAE's interest in that partnership. The Services
Partnership provides mortgage servicing and advisory services to third parties,
CRIIMI MAE, certain affiliates of CRI and the AIM Funds on a fee basis. CRIIMI
MAE, through CRIIMI Management, manages the Services Partnership as general
partner.

<PAGE>67

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. Fair Value of Financial Instruments

The following estimated fair values of CRIIMI MAE's consolidated financial
instruments are presented in accordance with generally accepted accounting
principles which define fair value as the amount at which a financial instrument
could be exchanged in a current transaction between willing parties, other than
in a forced or liquidation sale. These estimated fair values, however, do not
represent the liquidation value or the market value of CRIIMI MAE.

<PAGE>68

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. Fair Value of Financial Instruments - Continued

<TABLE><CAPTION>
As of December 31, 1995 As of December 31, 1994
Amortized Cost Fair Value Amortized Cost Fair Value
-------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>

ASSETS
Mortgage security collateral $ 674,289,774 $685,141,970 $ 703,215,753 $ 653,062,381

Mortgages 104,507,083 132,823,515 136,120,900 154,373,576

Subordinated securities 278,400,699 284,717,422 38,858,349 38,353,226

Cash and cash equivalents 16,577,407 16,577,407 5,143,171 5,143,171

Accrued interest receivable 9,446,229 9,446,229 7,130,597 7,130,597

LIABILITIES

OBLIGATIONS UNDER FINANCING FACILITIES
Securitized Mortgage Obligations 645,260,921 662,602,136 -- --
Other Repurchase Agreements 187,947,276 187,947,276 24,891,783 24,891,783
Master Repurchase Agreements -- -- 456,984,347 456,984,347
Revolving Credit Facility -- -- 115,000,000 115,000,000
Bank Term Loans 21,227,880 21,227,880 30,371,800 30,371,800
------------ ------------ ------------ ------------
$854,436,077 $871,777,292 $627,247,930 $627,247,930
============ ============ ============ ============
OFF BALANCE SHEET
Interest rate cap
agreements-asset $ 2,492,986 $ 1,112,804 $ 6,053,163 $ 21,438,096
</TABLE>

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

Investment in Mortgage Security Collateral and Mortgages
- --------------------------------------------------------
The fair value of the Government Insured Multifamily Mortgages is based on
the quoted market price from an investment banking institution which trades
these instruments as part of its day-to-day activities.

Investment in Subordinated Securities
- -------------------------------------
The fair value of the subordinated securities is based on the price
obtained from an investment banking institution which trades subordinated
securities. The estimates of fair value presented herein are not necessarily
indicative of the amounts CRIIMI MAE could realize in a current market
exchange. The use of different market assumptions, valuation methodologies or
both may have a material effect on the estimates of fair value. The fair
value estimates presented herein are based on pertinent information available
as of December 31, 1995.

Cash and Cash Equivalents and Accrued Interest Receivable
- ---------------------------------------------------------
The carrying amount approximates fair value because of the short maturity
of these instruments.

<PAGE>69

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. Fair Value of Financial Instruments - Continued

Obligations Under Financing Facilities
- --------------------------------------
The fair value of the Securitized Mortgage Obligations is based on the
quoted market price from an investment banking institution which trades these
instruments as part of its day-to-day activities. The carrying amount of the
other obligations under financing facilities approximates fair value because the
current rate on the debt is generally reset monthly based on market rates.

Interest Rate Cap Agreements
- ----------------------------
The fair value of interest rate cap agreements (used to hedge CRIIMI MAE's
floating-rate debt) is the estimated amount that CRIIMI MAE would receive to
terminate the agreements as of December 31, 1995 and 1994, taking into account
current interest rates and the current creditworthiness of the counterparties.
The amount was determined based on the quote received from a financial
institution which enters into these types of transactions as part of its
day-to-day activities.

6. Mortgage Security Collateral and Mortgages

CRIIMI MAE's consolidated investment in mortgage security collateral and
mortgages is comprised of FHA-Insured Loans, GNMA Mortgage-Backed Securities
and, to a lesser extent, GNMA- guaranteed or HUD-insured non-amortizing
construction loans. Such construction loans are intended to be converted to
permanent, amortizing insured loans upon completion of construction.
Additionally, mortgage security collateral includes Federal Home Loan Mortgage
Corporation (Freddie Mac) participation certificates which are collateralized by
FHA-Insured Loans and GNMA Mortgage Backed Securities, as discussed below. As
of December 31, 1995, 33% of CRIIMI MAE's investment in mortgage security
collateral and mortgages were FHA-Insured Loans, 66% were GNMA Mortgage-backed
securities and 1% were construction loans (including loans which collateralize
Freddie Mac participation certificates). FHA-Insured loans and GNMA Mortgage-
backed securities are collectively referred to as mortgages herein.

During 1995, CRIIMI MAE funded advances of approximately $7.6 million on
Government Insured Construction Mortgages with a weighted average net effective
interest rate of approximately 8.2%. These loans are anticipated to convert to
permanent loans over the next 3 months with an anticipated maturity of 39.5
years.

During 1995, CRIIMI MAE consummated three financing transactions which
transferred 97% of its directly owned mortgages into wholly-owned financing
corporations for financing purposes as follows:

o During September 1995, CRIIMI MAE transferred 59 GNMA Mortgage-Backed
Securities with an aggregate face value of $251 million to Freddie Mac
in exchange for Freddie Mac participation certificates evidencing 100%
beneficial interests in the mortgages transferred (Freddie Mac Giant
Participation Certificates). CRIIMI MAE immediately transferred the
Freddie Mac Giant Participation Certificates to its wholly owned
financing subsidiary, CRIIMI MAE Financial Corporation II, in
conjunction with the issuance of a fixed-rate $249 million Funding
Note payable to Freddie Mac (FHLMC Funding Note).

o During October 1995, CRIIMI MAE transferred 40 FHA-Insured Loans and
17 GNMA Mortgage-Backed Securities with an aggregate face value of
$223 million to its wholly-owned financing subsidiary, CRIIMI MAE
Financial Corporation, in conjunction with the issuance of $216

<PAGE>70

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Mortgage Security Collateral and Mortgages - Continued

million of fixed rate collateralized mortgage obligations (CMOs).

o During December 1995, CRIIMI MAE transferred 46 GNMA Mortgage-Backed
Securities with an aggregate face value of $198 million to its wholly-
owned financing subsidiary, CRIIMI MAE Financial Corporation III, in
conjunction with the issuance of a $193 million Funding Note payable
to the Federal National Mortgage Association (FNMA Funding Note).

CRI Liquidating's mortgage investments consist solely of the Government
Insured Multifamily Mortgages it acquired from the CRIIMI Funds. The CRIIMI
Funds invested primarily in Government Insured Multifamily Mortgages issued or
sold pursuant to programs of GNMA and FHA.

As a result of these transfers, through its wholly owned subsidiaries and
CRI Liquidating, CRIIMI MAE owns the following mortgages directly and
indirectly:

<PAGE>71

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Mortgage Security Collateral and Mortgages - Continued

As of December 31, 1995
-----------------------

Number of Carrying Effective Weighted Average
Mortgages Value Interest Rate Remaining Term
--------- ------------ ------------- ----------------
<S> <C> <C> <C> <C>
CRIIMI MAE 6 $ 18,138,311 8.16% 36 years
CRIIMI MAE Financial Corporation 57 222,533,271 8.45% 33 years
CRIIMI MAE Financial Corporation II 59 252,152,518 7.19% 31 years
CRIIMI MAE Financial Corporation III 46 199,603,985 8.36% 32 years
CRI Liquidating 22 114,685,204 10.67% 27 years
--------- ------------
190 $807,113,289
========= ============

As of December 31, 1994
-----------------------

Number of Carrying Effective Weighted Average
Mortgages Value Interest Rate Remaining Term
--------- ------------ ------------- ----------------
<S> <C> <C> <C> <C>
CRIIMI MAE 173 $703,215,753 8.00% 33 years
CRI Liquidating 44 154,373,576 10.02% 26 years
--------- ------------
217 $857,589,329
========= ============

</TABLE>

In accordance with SFAS 115 (see Note 2), CRIIMI MAE Financial
Corporation's, CRIIMI MAE Financial Corporation II's, and CRIIMI MAE Financial
Corporation III's investments in mortgage security collateral are recorded at
amortized cost; however, CRIIMI MAE's remaining mortgage investments
(approximately $18 million) and CRI Liquidating's mortgage investments are
recorded at fair value as of December 31, 1995. CRIIMI MAE's mortgage
investments are recorded at amortized cost as of December 31, 1994 and CRI
Liquidating's mortgage investments are recorded at fair value as of December 31,
1994. The difference between the amortized cost and the fair value of mortgage
investments recorded at fair value represents the net unrealized gains on those
mortgage investments, which is reported as a separate component of shareholders'
equity as of December 31, 1995 and 1994.

Descriptions of the mortgage investments owned, directly or indirectly by
CRIIMI MAE which exceed 3% of the total carrying value of the consolidated
mortgage investments as of December 31, 1995, summarized information regarding
other mortgage investments and mortgage investment income earned in 1995, 1994
and 1993, including interest earned on the disposed mortgage investments, are as
follows:

<PAGE>72

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Mortgage Security Collateral and Mortgages - Continued

(3 mortgages) $ 6,028,102 $ 6,230,404 8.654%- $ 561,758 $ 369,990 $ 75,326 March 2020 -
10.700 May 2028
CONSTRUCTION
LOANS
Other
(2 loans) 11,075,557 11,207,079 7.75%- 1,994,627** 4,145,462** 5,099,429** *
8.40%
GNMA Mortgage-
Backed Securities
- -----------------
Other
(1 mortgage) 689,181 700,828 7.046% 46,786 39,641 -- February 2029
------------ ------------- ------------ ------------ ------------
Sub-Total 17,792,840 18,138,311 2,603,171 4,555,093 5,174,755
------------ ------------ ------------ ------------ ------------
CRIIMI MAE Financial
Corporation
- --------------------
FHA-Insured Loans
- -----------------
Other
(40 mortgages) 144,762,766 144,478,663 7.345%- 12,604,103 10,343,783 4,145,045 May 1999 -
11.000% April 2034
GNMA Mortgage-
Backed Securities
- -----------------
Other
(17 mortgages) 77,638,141 78,054,608 7.929%- 6,372,047 4,473,431 1,590,942 June 2018 -
------------ ------------ 9.750% ------------ ------------ ------------ April 2035
Sub-total 222,400,907 222,533,271 18,976,150 14,817,214 5,735,987
------------ ------------ ------------ ------------ ------------
</TABLE>

<PAGE>73

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Mortgage Security Collateral and Mortgages - Continued

<TABLE>
<CAPTION>
Mortgage Mortgage Mortgage
Carrying Effective Investment Investment Investment Final
Face Value of Interest Income Income Income Maturity
Value of Mortgages Rate Earned Earned Earned Date
Mortgages(B) (A),(C),(D) Range in 1995 in 1994 in 1993 Range
------------- ------------- --------- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
CRIIMI MAE Financial
Corporation II
- --------------------
GNMA Mortgage-
Backed Securities
- -----------------
San Jose South 29,419,288 29,675,405 7.656% 2,136,701 2,157,217 11,479 October 2023
Somerset Park 29,790,350 30,351,884 7.407% 2,182,221 2,197,079 734,515 July 2028
Other
(57 mortgages) 190,694,287 192,125,229 7.135%- 13,894,693 13,177,809 3,824,070 June 2018 -
8.015% July 2031
----------- ----------- ---------- ---------- ---------
Sub-total 249,903,925 252,152,518 18,213,615 17,532,105 4,570,064
----------- ----------- ---------- ---------- ---------

CRIIMI MAE Financial
Corporation III
- --------------------
GNMA Mortgage-
Backed Securities
- -----------------
Other
(46 mortgages) 198,845,183 199,603,985 7.114%- 15,772,887 12,405,931 7,951,248 August 2015 -
10.935% February 2035
----------- ----------- ---------- ---------- ---------
Sub-total 198,845,183 199,603,985 15,772,887 12,405,931 7,951,248
----------- ----------- ---------- ---------- ---------
</TABLE>

<PAGE>74

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Mortgage Security Collateral and Mortgages - Continued

<TABLE><CAPTION>
Mortgage Mortgage Mortgage
Carrying Effective Investment Investment Investment Final
Face Value of Interest Income Income Income Maturity
Value of Mortgages Rate Earned Earned Earned Date
Mortgages(B) (A),(C),(D) Range in 1995 in 1994 in 1993 Range
------------- ------------- --------- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
CRI Liquidating
- ---------------
FHA-Insured Loans
- -----------------
Other
(21 mortgages) 106,750,190 111,528,786 8.805%- 9,045,103 9,100,507 9,150,361 November 2017 -
12.483% June 2025
GNMA Mortgage-
Backed Securities
- -----------------
Other (1 mortgage) 2,975,895 3,156,418 10.14% 292,094 294,014 295,749 September 2022
------------ ------------ ------------ ------------ ------------
Sub-total 109,726,085 114,685,204 9,337,197 9,394,521 9,446,110
------------ ------------ ------------ ------------ ------------
Total investment in
mortgages and mortgage
security collateral 798,668,940 807,113,289 64,903,020 58,704,864 32,878,164
------------ ------------ ------------ ------------ ------------

Less CRI Liquidating's
share of mortgage interest
relating to investment in
limited partnerships
accounted for under the -- -- (308,093)
equity method

</TABLE>

<PAGE>75

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Mortgage Security Collateral and Mortgages - Continued

<TABLE><CAPTION>
Mortgage Mortgage Mortgage
Carrying Investment Investment Investment
Face Value of Effective Income Income Income
Value of Mortgages Interest Earned Earned Earned
Mortgages(B) (A),(C),(D) Rate in 1995 in 1994 in 1993
------------- ------------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mortgage Dispositions:

1995 -- -- 8.35%- 1,211,622 5,702,303 5,682,301
11.00%

1994 -- -- 8.44%- 2,636,175 7,775,872
12.12%

1993 -- -- 8.00%- -- 4,241,328
11.79%
------------ ------------ ----------- ----------- -----------
Investment in
mortgages and
mortgage security
collateral $798,668,940 $807,113,289 $66,114,642 $67,043,342 $50,269,572
============ ============ =========== =========== ===========
Investment in
Limited Partner-
ships $ -- $ 119,526 $ (49,032) $ 43,605
============ =========== =========== ===========

* Construction draws are part of a short-term financing process and are funded to cover construction costs. The construction
draws are converted into a long-term permanent loan generally within a 24-month period from the initial endorsement by HUD.
** Includes mortgage investment income earned on construction loans that converted to permanent loans during 1995 (6 loans), 1994
(10 loans) and 1993 (15 loans).

</TABLE>

<PAGE>76

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Mortgage Security Collateral and Mortgages - Continued

(A) All mortgages are collateralized by first or second liens on residential
apartment, retirement home, nursing home or townhouse complexes which have
diverse geographic locations and are FHA-Insured Loans or GNMA Mortgage-Backed
Securities. Payment of the principal and interest on FHA-Insured Loans is
insured by HUD pursuant to Title 2 of the National Housing Act. Payment of the
principal and interest on GNMA Mortgage-Backed Securities is guaranteed by GNMA
pursuant to Title 3 of the National Housing Act. The investment in limited
partnerships is not federally insured or guaranteed.

(B) Principal and interest on permanent mortgages is payable at level amounts
over the life of the mortgage investment. Total annual debt service payable to
CRIIMI MAE, its financing subsidiaries and CRI Liquidating for the mortgage
investments held as of December 31, 1995 is approximately $64 million.

(C) Reconciliations of the carrying amount of CRIIMI MAE's consolidated
mortgage investments for the years ended December 31, 1995 and 1994 follow:

<PAGE>77

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Mortgage Security Collateral and Mortgages - Continued

<TABLE><CAPTION>
For the year ended For the year ended
December 31, 1995 December 31, 1994
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Balance at beginning of year $857,589,329 $741,591,085

Additions during the year:
Purchases and advances on construction
loans 7,858,922 235,758,541
Amortization of discount 675,834 979,054
Adjustment to net unrealized gains
on mortgage investments 10,063,756 --
Deductions during the year:
Principal payments $ 6,015,172 $ 6,107,350
Mortgage dispositions 62,949,716 81,437,533

Adjustment to net unrealized
gains on mortgage investments -- 33,097,088
Accretion of premium 109,664 69,074,552 97,380 120,739,351
------------ ------------ ------------ ------------
Balance at end of year $807,113,289 $857,589,329
============ ============
</TABLE>

(D) Principal Amount of Loans Subject to Delinquent Principal or Interest is
not presented since all required payments with respect to CRIIMI MAE's
consolidated mortgage investments are current and none of these mortgage
investments is delinquent as of December 31, 1995.

7. Investment in Subordinated Securities

In addition to investing in Government Insured Multifamily Mortgages, the
Board of Directors has authorized CRIIMI MAE to invest in other mortgage
investments which are not federally insured or guaranteed provided that specific
equity requirements are met based on management's perceived level of risk of the
investment.

The following table summarizes information related to these investments on
an aggregate basis by pool:

<PAGE>78

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. Investment in Subordinated Securities - Continued

<TABLE>
<CAPTION>
Coupon Amortized Amortized
Date Face Rate Weighted Cost Cost
Pool Acquired Amount (as of 12/31/95) Average Life(1) (as of 12/31/95) (as of 12/31/94))
------------ ------------ ---------------- --------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Mortgage Capital
Funding, Inc.
Series 1993-C1 Dec 1994 $ 19,678,873 8.7% 3 years $ 17,369,966 $ 16,843,667
Series 1994-MC1 Jul-Dec 1994 34,404,344 8.7% 8 years 22,109,527 22,014,682
Series 1995-MC1 Aug 1995 33,174,998 9.6% 22 years 25,517,298 --

Nomura Asset Securities
Series 1994-C3 April-Aug 1995 25,177,237 9.4% 16 years 22,046,894 --

Structured Mortgage
Securities Corp.
Series 1995-M1 May 1995 15,204,614 9.0% 18 years 9,835,280 --

Asset Securitization Corp.
Series 1995-D1 Aug 1995 30,575,983 7.6% 20 years 20,205,692 --

Lehman Pass-Through
Securities Inc.
Series 1994-A Oct 1995 10,284,271 8.6% 9 years 6,084,922 --

LB Commercial Conduit
Series 1995-C2 Nov 1995 42,878,739 9.5% 15 years 35,501,330 --

DLJ Mortgage Acceptance
Corporation
Series 1995-CF2 Dec 1995 61,000,000 8.8% 13 years 50,730,005 --

Merrill Lynch Mortgage
Investors, Inc.
Series 1995-C3 Dec 1995 90,105,863 8.5% 15 years 68,999,785 --
------------ ------------ ------------
Total $362,484,922 $278,400,699 $ 38,858,349
============ ============ ============

(1) Weighted average life represents the weighted average expected life of the securities prior to consideration of losses,
extensions or prepayments other than those factored in the assumed constant prepayment rate used at closing which ranged from 0% -
4% depending upon the portfolio.

</TABLE>

<PAGE>79

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. Investment in Subordinated Securities - Continued

The aggregate investment by the underlying rating of the securities is as]
follows:

<TABLE>
Amortized Cost as of
Security Rating Face Amount % December 31, 1995 December 31, 1994
- --------------- ------------ -------- ----------------- -----------------
<S> <C> <C> <C> <C>
BBB Rated $ 4,000,000 1.1% $ 3,980,991 $ --

BB Rated 173,076,601 47.7% 155,251,834 19,149,299

B Rated 118,725,728 32.8% 91,664,602 15,166,842

Unrated 66,682,593 18.4% 27,503,272 4,542,208
------------ ----- ------------ ------------
Total $362,484,922 100.0% $278,400,699 $ 38,858,349
============ ===== ============ ============

</TABLE>

CRIIMI MAE's investment in the lower rated and unrated tranches provides
credit support to the more senior bond classes of the related commercial
securitization. The REMICs allocate the cash flow from the underlying mortgages
to the securitized tranches, with the investment grade or higher rated tranches
having a priority right to the cash flow until their investment returns are met.
Then, any remaining cash flow is allocated among the other tranches in order of
their relative seniority. To the extent there are defaults and unrecoverable
losses on the underlying mortgages, resulting in reduced cash flows, the unrated
tranche will bear this loss first. To the extent there are losses in excess of
the unrated tranche's stated right to principal and interest, then the most
subordinated rated tranches will begin absorbing losses.

Based on the timing and amount of future credit losses and prepayments
estimated by management, the weighted average anticipated yield over the
expected average life for the investments in subordinated securities as of
December 31, 1995 is approximately 12%. The accounting treatment required under
generally accepted accounting principles requires that the income on these
investments be recorded on a level yield basis given the anticipated yield to
maturity on these investments. This currently results in income which is lower
for financial statement purposes than for tax purposes. CRIIMI MAE anticipates
the leveraged return on these investments will approximately 22% over the life
of the investments. This return was determined based on the anticipated yield
over the expected weighted average life of the investments, which considers
anticipated losses, net of interest expense attributable to the financing of the
rated tranches at current interest rates.

<PAGE>80

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. Investment in Subordinated Securities - Continued

assumptions, no assurance can be given that the anticipated yields to maturity
will be achieved.

In making these investments, CRIIMI MAE and its affiliates apply their
knowledge of multifamily and other commercial mortgages to perform due diligence
on the mortgage investments collateralizing the securities. This analysis may
include reviewing, to the extent available, the operating records of the
underlying real estate assets, appraisals, environmental studies, market studies
and architectural and engineering studies, and where deemed necessary,
independently developing projected operating budgets. In addition, site visits
are conducted at a majority of the properties. In addition to performing these
steps in connection with the due diligence, CRIIMI MAE also reviews the
servicing terms of the transactions. CRIIMI MAE will generally make investments
of this type when satisfactory arrangements exist whereby CRIIMI MAE can closely
monitor the performance of the collateral. CRIIMI MAE believes that all
transactions entered into to date have had such satisfactory arrangements.

The underlying mortgages supporting CRIIMI MAE's investment in subordinated
securities (aggregate) made to date are concentrated as follows as of December
31, 1995:

Property Type
-------------
Multifamily 57%
Retail 20%
Hotel 10%
Other 13%

Geographic
----------
Texas 20%
California 9%
Florida 7%
Other 64% (1)

(1) No other individual state makes up more than 5% of the total.

Investments in uninsured mortgage and mortgage-related investments, such as
subordinated securities, are expected to represent a significant component of
CRIIMI MAE's new business activity for the foreseeable future. As described in
Note 9, upon closing on the purchase of the subordinated securities, CRIIMI MAE
entered into a series of repurchase agreements which provided financing to
purchase the rated tranches of the subordinated securities (the unrated tranches
were purchased with equity or available cash). As of December 31, 1995, between
65% and 80% of the respective purchase prices were financed, resulting in
aggregate borrowings of approximately $188 million. See Note 9 for a further
discussion of these repurchase agreements.

8. Reconciliation of Financial Statement Net Income to Tax
Basis Income

Reconciliations of the financial statement net income to the tax basis
income for the years ended December 31, 1995, 1994 and 1993 are as follows:

<PAGE>81

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. Reconciliation of Financial Statement Net Income to Tax
Basis Income - Continued

1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Consolidated financial statement
net income $18,534,089 $26,010,119 $15,757,505

Adjustment due to accounting for subsidiary
as a pooling for financial statement
purposes and a purchase for tax purposes 4,466,852 3,610,806 4,412,645
Mortgage dispositions 53,740 200,195 81,756
Reamortization of investments in
subordinated securities 741,391 187,305 --
Interest income - U.S. Treasuries 714,599 860,202 973,619
Interest expense - defeased notes (1,005,382) (1,198,027) (1,390,672)
Interest expense - amortization of
deferred financing and debt issue costs (2,087,222) (290,158) 366,093
Interest expense - write-off of deferred
financing costs and adjustment to
valuation of hedges 2,393,106 795,614 (280,683)
Gain on sale of shares of subsidiary -- -- 1,581,247
Provision for settlement of litigation (656,127) (557,340) 1,250,000
Equity in earnings from investments 514,773 (7,462) 87,341
Amortization of assets acquired in the Merger 1,435,356 -- --
Other 182,639 (4,831) 176,387
----------- ----------- -----------
Tax basis income $25,287,814 $29,606,423 $23,015,238
=========== =========== ===========

Tax basis income per share $ 0.89 $ 1.17 $ 1.14
=========== =========== ===========

Weighted average number
of shares outstanding (for tax purposes) 28,536,557 25,309,560 20,183,533
=========== =========== ==========

</TABLE>

Differences in the financial statement net income and the tax basis income
principally relate to differences in the methods of accounting for the Merger,
mortgage investments, subordinated securities, long-term debt, deferred
financing costs, U.S. Treasury Securities, partnership investments and the
merger of the CRIIMI Funds.

As a result of the foregoing, the nature of the dividends for income tax
purposes on a per share basis is as follows:

1995 1994 1993
------ ------ ------
Ordinary income $ 0.73 $ 0.72 $ 0.81
Long-term capital gains 0.19 0.44 0.31
------ ------ ------
$ 0.92 $ 1.16 $ 1.12
====== ====== ======

<PAGE>82

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. Obligations under Financing Facilities

The following table summarizes CRIIMI MAE's debt outstanding as of
December 31, 1995 and 1994:
<TABLE>
<CAPTION>

Year ended December 31, 1995 Year ended December 31, 1994
-------------------------------------------------------------- ------------------------------------
- -----------
Balance Eff. Rate Average Average Maturity Balance Average Average
Type of Debt at year end at year end Balance Eff. Rate Date at year end Balance Eff. Rate
- ------------ ------------ ----------- ------------ --------- ---------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
FHLMC Funding Note (1) $239,485,471 7.4% $ 66,000,000 7.4% Sept 2031 $ -- $ -- --

FNMA Funding Note (2) 195,501,376 7.4% 8,700,000 7.4% March 2035 -- -- --

CMOs (3) 210,274,074 7.3% 47,300,000 7.3% Jan 2033 -- -- --

Master Repurchase Agreements
-- N/A 408,700,000 6.7% April 1996 456,984,347 410,200,000 5.1%

Other Repurchase Agreements 187,947,276 7.0% 56,500,000 7.3% March 1996 - 24,891,783 2,500,000 6.9%
Dec 1996

Revolving Credit Facility/
Commercial Paper -- N/A 49,400,000 6.6% N/A 115,000,000 107,200,000 5.0%

Bank Term Loans 21,227,880 5.2%(4) 21,600,000 6.6%(4) April 1997 - 30,371,800 40,000,000 5.4%
Dec 1998

Working Capital Line of
Credit -- N/A 400,000 6.6% May 1996 -- -- --
------------ ------------
Total $854,436,077 $627,247,930
============ ============

(1) As of December 31, 1995, the face amount of the note was $248,821,009 with unamortized discount of $9,335,538. During 1995,
discount amortization of $88,599 was recorded as interest expense.

(2) As of December 31, 1995, the face amount of the note was $198,394,480 with unamortized discount of $2,893,104. During 1995,
discount amortization of $20,815 was recorded as interest expense.

(3) As of December 31, 1995, the face amount of the note was $215,766,328 with unamortized discount of $5,492,254. During 1995,
discount amortization of $42,746 was recorded as interest expense.

(4) The average effective interest rate for 1995 includes the impact of a rate reduction agreement which was in place from July
1995 through December 1995, providing for a reduction in the rate on a portion of the loan based on balances maintained at the bank.

</TABLE>

<PAGE>83

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. Obligations under Financing Facilities - Continued

CRIIMI MAE's debt matures as follows:

1996 $200,277,276
1997 5,647,880
1998 3,250,000
1999-2000 --
Beyond 645,260,921
------------
Total $854,436,077
============

Securitized Mortgage Obligations
- --------------------------------
CRIIMI MAE through three wholly owned financing subsidiaries issued
approximately $664 million (face amount) of long-term fixed-rate debt in order
to refinance short-term, floating-rate debt during the third and fourth quarters
of 1995. Changes in interest rates will have no impact on the cost of funds or
the collateral requirements on this debt. Proceeds from the issuance of this
long-term debt, net of original issue discount, were applied as follows: $557
million was used to pay down short-term debt facilities, approximately $8.0
million was used to pay transaction costs and approximately $80 million was
available for investments in subordinated securities. As of December 31, 1995,
approximately $10 million remains available for investment, which will likely be
invested in additional subordinated securities in March 1996.

As discussed further in Note 6, the refinancings were completed through
three separate transactions. GNMA Mortgage- Backed Securities with a fair value
of approximately $254 million as of December 31, 1995 are pledged as security
for the FHLMC Funding Note. The CMOs are collateralized by FHA-Insured Loans
and GNMA Mortgage-Backed Securities with a fair value of approximately $228
million as of December 31, 1995. GNMA Mortgage-Backed Securities with a fair
value of approximately $203 million as of December 31, 1995 are pledged as
security for the FNMA Funding Note.

Each of the above-mentioned transactions has been accounted for as a
financing in accordance with FASB Technical Bulletin 85-2. The discount on
the CMOs and the Funding Notes is being amortized on a level yield basis.
Transaction costs were capitalized and are included in deferred costs on the
accompanying balance sheet as of December 31, 1995.

Master Repurchase Agreements and Revolving Credit Facility
- ----------------------------------------------------------
Prior to the refinancings described above, CRIIMI MAE financed the purchase
of FHA-Insured Loans and GNMA Mortgage-Backed Securities through the use of two
separate Master Repurchase Facilities with two separate lenders and a Revolving
Credit Facility. As of December 31, 1995, no amounts were outstanding under
these facilities. The Master Repurchase Facility with one lender and the
Revolving Credit Facility were both terminated upon the completion of the
refinancings described above. An outstanding commitment of $300 million is
available under one of the Master Repurchase Facilities; however, CRIIMI MAE
anticipates that the utilization of this commitment would not currently exceed
$20 million. Any borrowings under the Master Repurchase Facility would be
required to be secured by FHA-Insured Loans or GNMA Mortgage-Backed Securities.
This facility terminates on April 1, 1996.

Other Repurchase Agreements
- ---------------------------

<PAGE>84

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. Obligations under Financing Facilities - Continued

As of December 31, 1995 and 1994, CRIIMI MAE had financed through other
repurchase agreements between 65% and 80% of the purchase price of each of the
BBB, BB and B rated tranches of subordinated securities. The interest rates are
generally based on one-month LIBOR, plus a spread ranging from 1.0% to 1.5%.
The repurchase agreements are secured, generally, by the rated tranches with an
aggregate fair value of approximately $260 million and $34 million as of
December 31, 1995 and 1994, respectively. These agreements mature between March
1996 and December 1996. CRIIMI MAE expects to renew each of the outstanding
agreements or replace these agreements with alternative financing.

Bank Term Loans
- ---------------
CRIIMI MAE has two reducing term loans (Bank Term Loans) with a lender. As
of December 31, 1995 and 1994, Bank Term Loan I was secured by the value of
6,950,000 and 13,124,000 CRI Liquidating shares owned by CRIIMI MAE,
respectively, based on a current requirement that collateral valued at 175% of
the outstanding balance secure the loan. Bank Term Loan I was refinanced
effective March 31, 1995 providing for a reduced interest rate spread, CRIIMI
MAE's choice of one, two or three-month LIBOR and collateral requirements of
175% of the outstanding loan amount. Bank Term Loan I requires a quarterly
principal payment based on the greater of (i) the return of capital portion of
the dividend received by CRIIMI MAE on its CRI Liquidating shares securing Bank
Term Loan I or (ii) the amount necessary to bring Bank Term Loan I to its
scheduled outstanding balance at the end of such quarter. Any remaining amounts
outstanding are due by April 1, 1997.

In connection with the Merger of the CRI Mortgage Businesses into CRIIMI
MAE, as discussed in Note 3, CRIIMI Management assumed certain debt of the CRI
Mortgage Businesses in the principal amount of $9,100,000 (Bank Term Loan II).
Simultaneous with the closing of the Merger, this debt was refinanced. Bank
Term Loan II is secured by certain cash flows generated by CRIIMI MAE's direct
and indirect interests in the AIM Funds and is guaranteed by CRIIMI MAE. The
loan requires quarterly principal payments of $650,000 and matures on December
31, 1998. Interest on the loan is based on CRIIMI MAE's choice of one, two or
three-month LIBOR, plus a spread of 1.25%.

Working Capital Line of Credit
- ------------------------------
CRIIMI MAE executed a $10 million working capital line of credit with a
lender during February 1995, which matures May 31, 1996. Outstanding borrowings
under the line of credit will be secured by shares of CRI Liquidating valued at
approximately 175% of any outstanding borrowings. CRIIMI MAE expects to renew
this line of credit.

During September 1995, $7 million was borrowed under the working capital
line of credit on an interim basis until the proceeds from the FHLMC Funding
Note were received, at which time the working capital line of credit was paid in
full.

Other Debt Related Information
- ------------------------------
During January 1996, CRIIMI MAE's management adopted and the Board of
Directors approved a change in its investment policy requiring, among other
things,: (1) A maximum overall debt-to- equity ratio of 5 to 1, (2) Maximum
debt-to-equity ratios for specific asset types based on management's perceived
risk of those investments and the related funding, and (3) Interest rate hedge
agreements in a notional amount of at least 75% of the outstanding floating-rate
debt. This policy will enable CRIIMI MAE to continue to utilize leverage in

<PAGE>85

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. Obligations under Financing Facilities - Continued

taking advantage of investment opportunities in the marketplace while directing
and monitoring how CRIIMI MAE funds these investments.

As previously stated, changes in interest rates will have no impact on the
cost of funds or the collateral requirements on CRIIMI MAE's fixed-rate debt,
which approximates 76% of CRIIMI MAE's current consolidated debt. Fluctuations
in interest rates will continue to impact the value on that portion of CRIIMI
MAE's investments which are not match-funded and could impact potential returns
to shareholders through increased cost of funds on the floating-rate debt in
place. In certain circumstances, including, among other things, increases in
interest rates or decreases in credit quality of the underlying asset, CRIIMI
MAE would be required to pledge additional collateral in connection with its
short-term, floating-rate borrowing facilities. If CRIIMI MAE did not have
adequate collateral to meet these requirements, it could be forced to sell
assets to pay down such debt. However, management is continually monitoring the
levels of unencumbered collateral and is exploring options to refinance the
existing repurchase agreements which are secured, generally, by holdings of
rated subordinated securities.

CRIIMI MAE's use of leverage carries with it the risk that the cost of
borrowing could increase without a corresponding increase in the return on its
investments, which could result in reduced net income and thereby reduce the
return to shareholders. This risk has been substantially reduced with the
refinancings discussed above. The flexibility in CRIIMI MAE's leverage is
dependent upon, among other things, the levels of unencumbered assets, which are
inherently linked to prevailing interest rates and changes in the credit of the
underlying asset. CRIIMI MAE had adequate unencumbered assets to meet
requirements during 1995 and 1994 and expects to have adequate unencumbered
assets as required under its financing facilities during 1996. CRIIMI MAE's
ability to extend or refinance debt facilities upon maturity will depend on a
number of variables including, among other things, CRIIMI MAE's financial
condition and its current and projected results from operations which are
impacted by a number of variables, including changes in interest rates.
Management continuously monitors CRIIMI MAE's overall financing and hedging
strategy in an effort to ensure that CRIIMI MAE is making optimal use of its
borrowing ability based on market conditions and opportunities.

For the year ended December 31, 1995, the weighted average cost of
borrowing on all of CRIIMI MAE's borrowings, including amortization of discounts
and deferred financing fees of $3.8 million, was approximately 7.5%. This cost
does not include the impact of the adjustment to hedges for valuation and sales
(see Note 10 for further discussion). As of December 31, 1995, CRIIMI MAE's
debt-to-equity ratio was approximately 3.0 to 1.0. Under certain of CRIIMI
MAE's existing debt facilities, CRIIMI MAE's debt-to-equity ratio, as defined,
may not exceed 3.0 to 1.0. CRIIMI MAE is in the process of negotiating a
revised debt-to- equity requirement with its lenders to bring this requirement
in line with the recently approved investment policy which allows a 5.0 to 1.0
debt to equity ratio. Management anticipates that CRIIMI MAE's lenders will
approve a change in this ratio.

10. Interest Rate Hedge Agreements

CRIIMI MAE has entered into interest rate hedging agreements to partially
limit the adverse effects of rising interest rates on its floating-rate
borrowings. Interest rate caps provide protection to CRIIMI MAE to the extent
interest rates, based on a readily determinable interest rate index, increase
above the stated interest rate cap, in which case, CRIIMI MAE will receive
payments based on the difference between the index and the cap. The following

<PAGE>86

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Interest Rate Hedge Agreements - Continued

hedge agreements were in place at December 31, 1995:

<PAGE>87

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Interest Rate Hedge Agreements - Continued

Notional
Amount Effective Date Maturity Date(c) Cap Index
- ------------ -------------------- ----------------- ------ -------
<S> <C> <C> <C> <C>
$ 50,000,000 June 25, 1993 June 25, 1998 6.5000% 3M LIBOR
50,000,000 July 20, 1993 July 20, 1998 6.2500% 3M LIBOR
35,000,000(a) February 2, 1994 February 2, 1999 6.1250% 1M LIBOR
50,000,000(a) March 25, 1994 March 25, 1998 6.5000% 3M LIBOR
50,000,000 August 27, 1993 August 27, 1997 6.1250% 3M LIBOR
- ------------
$235,000,000(b)
==============
<FN>
(a) Approximately $1.7 million of costs were incurred during 1994 in connection with the purchase of interest rate hedge
agreements. These costs are being amortized using the effective interest method over the term of the interest rate hedge
agreements for financial statement purposes and in accordance with the regulations under Internal Revenue Code Section 446 with
respect to notional principal contracts for tax purposes. No new hedge agreements were entered into during 1995.
(b) CRIIMI MAE's designated interest rate hedge agreements hedge CRIIMI MAE's floating-rate borrowing costs. As of December 31,
1995, total borrowings of approximately $209 million are hedged by the interest rate hedge agreements. CRIIMI MAE expects the
balance of its floating-rate debt to increase during the first half of 1996 in line with the balance of its interest rate caps
treated as hedge agreements.
(c) The weighted average remaining term for these interest rate cap agreements is approximately 2.4 years.
</FN>
</TABLE>

In addition to the above interest rate cap agreements which are treated as hedges against rising interest rates, CRIIMI MAE
holds the following additional interest rate caps:

Notional
Amount Effective Date Maturity Date Cap Index
- ------------ -------------------- ----------------- ------ -------
<S> <C> <C> <C> <C>
$ 50,000,000 November 10, 1993 November 10, 1997 6.0000% 3M LIBOR
50,000,000 August 10, 1993 August 10, 1997 6.0000% 3M LIBOR
25,000,000 May 24, 1991 May 24, 1996 9.0000% CP
25,000,000 June 17, 1991 June 17, 1996 8.4500% CP
50,000,000 July 1, 1993 June 3, 1996 6.5000% 3M LIBOR
22,892,124(a) December 31, 1991 March 31, 1996 6.5000% 3M LIBOR
2,316,806(a) January 15, 1993 March 29, 1996 6.5000% 3M LIBOR
17,107,876(a) December 31, 1991 March 31, 1996 10.500% 3M LIBOR
1,433,194(a) March 31, 1993 December 31, 1996 10.500% 3M LIBOR
- ------------
$243,750,000
============
<FN>
(a) The notional amounts of these hedges amortize based on the expected pay down schedule of Bank Term Loan I.
</FN>
</TABLE>

Due to the refinancings completed during 1995 these interest rate cap
agreements are no longer needed to hedge interest rate changes. These

<PAGE>88

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Interest Rate Hedge Agreements - Continued

agreements have been accounted for at fair value, resulting in a charge to
income of approximately $1.2 million for the year ended December 31, 1995, which
is included in adjustment to hedges for valuation and sales on the accompanying
consolidated statement of income. Management expects to hold these caps and
continue to account for them at fair value until their expiration dates, or
until such time as they are needed to hedge against increases in interest rates
on additional floating-rate debt. Additionally, in connection with these
refinancings, two interest rate caps, with a notional amount of $100 million,
were sold in September 1995, resulting in a loss.

During 1995, interest rate collars with an aggregate notional amount of
$115 million matured. No collars remain outstanding at December 31, 1995.
During 1995 and 1994, the CP Index was below the floor on all of the collars in
place, resulting in CRIIMI MAE making payments to the counterparties. Total
payments to the counterparties on the interest rate collars during the years
ended December 31, 1995, 1994 and 1993 amounted to approximately $825,000, $5.0
million and $8.2 million, respectively, which are included in interest expense
on the accompanying consolidated statements of income.

CRIIMI MAE is exposed to credit loss in the event of nonperformance by the
counterparties to the interest rate hedge agreements should interest rates
exceed the caps. However, management does not anticipate nonperformance by any
of the counterparties. All of the counterparties have long-term debt ratings of
A+ or above by Standard and Poor's and A1 or above by Moody's. Management
believes that these hedge instruments are highly liquid. The hedges could be
sold or transferred with the consent of the counterparties. Management does not
believe that this consent would be withheld. Although none of CRIIMI MAE's
hedge instruments are exchange-traded, there are a number of financial
institutions which enter into these types of transactions as part of their day-
to-day activities.

11. Deferred Compensation Payable and Note Receivable

In connection with the Merger discussed in Note 3, CRIIMI MAE has entered
into a deferred compensation arrangement with the Principals in the aggregate
amount of $5,002,183 pursuant to which CRIIMI MAE agreed to pay each of the
Principals for services performed in connection with structuring the Merger.
CRIIMI MAE's obligation to pay the deferred compensation is limited, with
certain exceptions, to the creation of an irrevocable grantor trust for the
benefit of the Principals and to the transfer to such trust of the right to
receive such deferred compensation (the Note Receivable) in the amount of
$5,002,183. The deferred compensation is fully vested and payable only to the
extent that CRI continues to make principal payments on the Note Receivable.
However, in the event of bankruptcy or a similar event affecting CRIIMI MAE, the
remaining trust corpus would revert back to CRIIMI MAE, and the Principals would
become unsecured creditors of CRIIMI MAE. Payments of principal and interest on
the Note Receivable and the deferred compensation are payable quarterly and
terminate in 10 years. Both the Note Receivable and the deferred compensation
obligation bear interest at the prime rate (8.5% as of December 31, 1995) plus
2% per annum.

During 1995, CRIIMI MAE, through CRIIMI Management, recognized interest
income of approximately $267,000 on the Note Receivable, which is included in
other investment income on the accompanying consolidated statements of income,
and recognized interest expense of approximately $267,000 on the deferred
compensation obligation, which is included in interest expense on the
accompanying consolidated statements of income. The Deferred Compensation

<PAGE>89

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Payable and Note Receivable are included in Payables and accrued expenses and
Receivables and other assets, respectively, on the accompanying consolidated
balance sheet as of December 31, 1995.

12. Issuance of Stock

In March 1994, CRIIMI MAE completed a public offering of 5,000,000 shares
of common stock at a price to the public of $11.25 per share (the Equity
Offering). The net proceeds of the Equity Offering totaled approximately $52.2
million, which CRIIMI MAE used primarily to acquire Government Insured
Multifamily Mortgages. The costs of the Equity Offering, including professional
fees, filing fees, printing costs and other items, approximated $.7 million.
Additionally, underwriting fees in an amount which approximated 6.0% of the
gross offering proceeds were incurred. These costs were netted against the
offering proceeds.

On June 23, 1994, CRIIMI MAE filed with the SEC a Shelf Registration
Statement on Form S-3 (Commission File No. 33-54267) in order to register for
sale Debt Securities, Preferred Shares and Common Shares of CRIIMI MAE to the
public in the aggregate principal amount of up to $200 million. CRIIMI MAE may
from time to time offer in one or more series the securities in amounts, at
prices and on terms to be set forth in supplements to the registration
statement. During the fourth quarter of 1994, CRIIMI MAE sold 500,000 shares of
common stock, which were formerly held in treasury, under the shelf registration
statement for net proceeds of approximately $4.3 million. During 1995, CRIIMI
MAE sold an aggregate 1,875,000 shares of common stock under the shelf
registration statement for net proceeds of approximately $13.5 million.
Additionally, in October 1995 CRIIMI MAE repurchased 27,320 shares for
approximately $208,000.

On June 30, 1995, in conjunction with the Merger, CRIIMI MAE issued
2,761,290 shares, as discussed in Note 3.

Beginning in the third quarter of 1994, CRIIMI MAE implemented a dividend
reinvestment and stock purchase plan (the Plan) which allows shareholders who
elect to participate in the Plan (Participants) to purchase additional CRIIMI
MAE shares at a 2% discount through the reinvestment of CRIIMI MAE's dividends
and through optional cash payments. Common shares purchased under the Plan may
be, at CRIIMI MAE's option, newly issued common shares or common shares
purchased for Participants in the open market. The price of common shares
purchased from CRIIMI MAE with reinvested dividends will be 98% of the average
of the closing sales prices of the common shares as reported on the New York
Stock Exchange Composite Tape on the five trading days prior to the date on
which dividends are paid subject to any threshold price restrictions, as more
fully described in the Registration Statement on Form S-3 filed with the SEC
covering the shares to be issued under the Plan. The price to Participants of
common shares purchased in the open market with reinvested dividends will be 98%
of the average price of common shares purchased for the Plan by the Agent over
the period during which such common shares are purchased, exclusive of taxes and
commissions. CRIIMI MAE reserves the right to modify the pricing or any other
provision of the Plan at any time. Participants in the Plan may have cash
dividends on all or a portion of their common shares automatically reinvested.
Participants may terminate their accounts at any time in the manner provided for
in the Plan. During the year ended December 31, 1995 and 1994, 72,075 and
42,446 shares, respectively, were issued under the Plan.

13. Equity Investments

CRIIMI MAE, through CRIIMI, Inc., receives the general partner's share of

<PAGE>90

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Equity Investments - Continued

income, loss and distributions (which ranges from 2.9% to 4.9%) from each of the
AIM Funds.

Combined summarized financial information for the AIM Funds as of December
31, 1995 and 1994 and for the years ended December 31, 1995, 1994 and 1993 in
which CRIIMI MAE's equity in the net income exceeds 10 percent of CRIIMI MAE's
net income, is as follows:

<PAGE>91

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Equity Investments - Continued

Combined Summarized Financial Information
(Unaudited)

Balance Sheets

December 31,
1995 1994
------------ ------------
<S> <C> <C>
Investment in mortgages (including
mortgages held for disposition) $574,583,301 $547,499,911
Cash and cash equivalents 15,698,625 12,383,886
Receivables and other assets 9,765,317 13,599,061
------------ ------------
Total assets $600,047,243 $573,482,858
============ ============

Accounts payable $ 1,374,647 $ 1,743,001
Distributions payable 11,633,808 12,845,178
Partners' equity 587,038,788 558,894,679
------------ ------------
Total liabilities and partners' equity $600,047,243 $573,482,858
============ ============

<PAGE>92

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Equity Investments - Continued

Statements of Income

</TABLE>
<TABLE>
<CAPTION>
For the years ended December 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Income
Mortgage investment income $ 48,289,732 $ 48,166,672 $ 49,381,861
Other income 1,060,861 1,712,752 2,381,912
------------ ------------ ------------
Total income 49,350,593 49,879,424 51,763,773

Expenses:
Management fees 5,520,165 5,498,319 5,648,028
Other expenses 1,971,808 2,994,222 2,180,705
------------ ------------ ------------
Total expenses 7,491,973 8,492,541 7,828,733
------------ ------------ ------------
Income before mortgage dispositions 41,858,620 41,386,883 43,935,040

Gains from mortgage dispositions 2,510,159 2,346,586 3,931,650
Losses from mortgage dispositions (16,665) (309,143) (1,569,003)
------------ ------------ ------------
Net income $ 44,352,114 $ 43,424,326 $ 46,297,687
============ ============ ============

14. Litigation

In connection with the settlement of certain class action litigation
involving CRIIMI MAE and certain of its affiliates, CRIIMI MAE entered into a
settlement agreement, which was approved by the Court in November 1993,
providing, among other things, for the issuance of up to 2.5 million warrants,
exercisable for 18 months after issuance. Based on the Adviser's initial
estimate of the number of warrants to be issued, CRIIMI MAE accrued a total
provision of $1.5 million in its consolidated statement of income for the year
ended December 31, 1993. Because the actual number of warrants issued pursuant
to the Settlement Agreement was significantly lower than the initial estimate,
CRIIMI MAE reduced this provision in June 1994 to approximately $943,000,
resulting in an adjustment of approximately $557,000 during 1994. Through
December 29, 1995, the expiration date of the warrants, none of the warrants had
been exercised. Accordingly, an adjustment of approximately $656,000 was
recognized during 1995 to reverse into income the remaining obligation related
to the warrants.

In June 1995, Edge Partners, L.P. filed a complaint in the United States
District Court for the District of Maryland against CRIIMI MAE's directors. The
complaint purports to be a derivative action on behalf of CRIIMI MAE and alleges
breach of fiduciary duty by the directors and a misleading proxy statement in
connection with the Merger. The plaintiff seeks unspecified damages, a
determination that the shareholder vote in favor of the Merger should be set
aside and other relief.

The defendant's filed a motion to dismiss and on December 18, 1995, the
case was dismissed with leave to refile within 30 days of receipt of a

<PAGE>93

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. Litigation - Continued

transcript of the order. The refiling is due on or before February 23, 1996.
Management does not expect the case to have a material financial impact on
CRIIMI MAE.

<PAGE>94

CRIIMI MAE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. Summary of Quarterly Results of Operations (Unaudited)

The following is a summary of unaudited quarterly results of operations for the years ended December 31, 1995, 1994 and 1993:

</TABLE>
<TABLE>
<CAPTION>
1995
Quarter ended
March 31 June 30 September 30 December 31
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Income (principally
mortgage investment
income and income from
subordinated securities) $ 19,501,446 $ 19,381,933 $ 20,421,498 $ 22,763,474
Net gain (loss) on mortgage
dispositions 1,567,346 66,933 (9,409) (123,272)
Net income 4,915,397 4,609,412 3,237,359 5,771,921
Net income per share .19 .17 .11 .19
</TABLE>
<TABLE>
<CAPTION>
1994
Quarter ended
March 31 June 30 September 30 December 31
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Income (principally
mortgage investment
income) $ 15,918,972 $ 17,184,041 $ 19,164,345 $ 19,174,442
Net gain on mortgage
dispositions 11,627,196 445,747 724,439 201,926
Net income 9,982,050 6,076,374 5,449,251 4,502,444
Net income per share .47 .24 .22 .18
</TABLE>
<TABLE>
<CAPTION>
1993
Quarter ended
March 31 June 30 September 30 December 31
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Income (principally
mortgage investment
income) $ 12,892,685 $ 12,912,261 $ 15,199,422 $ 15,445,887
Net gain on mortgage
dispositions 1,522,785 284,274 489,171 5,061,515
Net income 4,431,388 3,490,212 3,800,643 4,035,262
Net income per share .22 .17 .19 .20
</TABLE>

<PAGE>95

Directors and Executive Officers
- --------------------------------

<TABLE><CAPTION>
CRIIMI MAE
Name Position Principal Occupation
- ------------------ --------------------- ------------------------------
<S> <C> <C>
William B. Dockser Chairman of the Board Chairman of the Board

H. William Willoughby President President and Secretary
and Secretary

Garrett G. Carlson, Sr. Director Chairman of the Board-SCA Realty Holdings, Inc.;
President - Can-American Realty
Corporation and Canadian Financial
Corporation

Larry H. Dale Director Senior Adviser, Fannie Mae Housing
Investment Fund

G. Richard Dunnells Director Partner - Holland & Knight

Robert F. Tardio Director Independent Financial Consultant

Frederick J. Burchill Executive Vice President Executive Vice President

Jay R. Cohen Executive Vice Executive Vice President and Treasurer
President and
Treasurer

Cynthia O. Azzara Senior Vice President and Senior Vice President and Chief Financial Officer
Chief Financial Officer

Deborah A. Linn General Counsel General Counsel

</TABLE>
<PAGE>96

The Annual Report to the Securities and Exchange Commission on Form 10-K is
available to Shareholders and may be obtained by writing:

Investor Services/CRIIMI MAE Inc.
CRIIMI MAE Inc.
The CRI Building
11200 Rockville Pike
Rockville, Maryland 20852

CRIIMI MAE Inc. shares are traded on the New York Stock Exchange under the
symbol CMM.<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE ANNUAL REPORT FORM ON 10-K AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT ON FORM 10-K.
</LEGEND>
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<S> <C>
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<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
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<SECURITIES> 1,085,514
<RECEIVABLES> 20,576
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0
0
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<SALES> 0
<TOTAL-REVENUES> 83,888
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<OTHER-EXPENSES> 15,183
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</TABLE>

EXHIBIT 4(hhh)

Amendment to the Commitment Letter by and among Nomura Securities
International, Inc., Nomura Asset Capital Corporation and CRIIMI MAE Inc.

<PAGE>
AMENDMENT

This amendment is dated as March 28, 1995. Reference is made to (i) the
Commitment Letter dated as of April 30, 1993 (the "April Commitment Letter") by
and among Nomura Securities International, Inc. ("NSI"), Nomura Asset Capital
Corporation ("NACC") and CRI Insured Mortgage Association, Inc. (now known as
CRIIMI MAE INC.) ("Criimi Mae"), as amended and (ii) the Commitment Letter dated
as of October 27, 1993 (the "October Commitment Letter" and together with the
April Commitment Letter, the "Commitment Letters") by and among NSI, NACC, and
Criimi Mae, as amended and (iii) each of the Committed Repurchase Agreements
subject to the Commitment Letters, as amended. Terms not otherwise defined
herein shall have the meanings set forth in the Commitment Letters.

1. Section 4(b) of each of Committed Repurchase Agreements subject to the
Commitment Letters are hereby deleted.

2. Section 13(a)(xv) of each of the Committed Repurchase Agreements shall be
deleted in their entirety and replaced with the following:

"Seller pledges, directly or indirectly, hypothecates or encumbers any of
its assets or engages in repurchase transactions or similar transactions
with any of its assets (excluding (i) assets already pledged under existing
facilities, (ii) any assets required to be pledged for purposes of
collateral maintenance under such facilities, (iii) subordinated debt
securities subject to master repurchase agreements with financial
institutions, and (iv) (A) Participation Certificates representing 100%
interests in FHA-insured Mortgage Loans formerly pledged to NACC and (B)
GNMA Securities formerly pledged to Canadian Imperial Bank of Commerce,
purchased by German American Capital Corporation (or one of its
affiliates), provided that (A) the aggregate indebtedness pursuant to (iii)
above shall not exceed $100,000,000, (B) Seller has raised additional
equity in an amount equal to no less than the initial margin amount for
each transaction subject to (iii), provided, however, that Buyer
acknowledges that Seller has, as of the date hereof, sufficient equity to
invest in such transactions which incur up to an aggregate indebtedness of
$50,000,000; (C) the pledge of any other assets of Seller pursuant to (iii)
or (iv) above shall not cause an Event of Default hereunder, and (D) any
equity that the Seller retains in any transaction set forth in (iii) above
shall not be included in the calculations set forth in Section 13(a)(xiv)
above), before notification to and written approval by Buyer, which
approval shall not be unreasonably withheld."

3. Except as amended herein, all other terms and conditions of the Commitment
Letters and the Facility Agreements, including amendments thereto, shall remain
in full force and effect.

IN WITNESS WHEREOF, the parties hereto execute this amendment to the
Commitment Letters.

CRIIMI MAE Inc. Nomura Securities International,
Inc.

By:/s/ William B. Dockser By:/s/ William Rooney
---------------------- ------------------
Chairman
Nomura Asset Capital Corporation

By:/s/ William Rooney
------------------

EXIBIT 4(yy)

First Amendment to Guaranty entered into by CRIIMI MAE Inc., in
favor of and for the benefit of Signet Bank/Virginia

September 21, 1995

Signet Bank/Virginia
7799 Leesburg Pike
Falls Church, Virginia 22043

Re: First Amendment to Guaranty

Ladies and Gentlemen:

Reference is made to the Guaranty, dated as of June 30, 1995 by CRIIMI MAE Inc.
(the "Guarantor") in favor of and for the benefit of Signet Bank/Virginia (the
"Bank") relating to the Credit Agreement dated as of June 30, 1995 between
CRIIMI MAE Management, Inc. (the "Borrower") and the Bank. Except as otherwise
provided, capitalized terms used herein and not defined shall have the meanings
set forth in the Guaranty.

The Guarantor has requested that the Guaranty be amended as set forth herein.
The Bank is willing to agree to such request, subject to the terms and
conditions contained herein.

Accordingly, upon the acceptance of this First Amendment by the Bank in the
space provided for that purpose below, the parties hereto agree as follows:

I. Amendments to the Credit Agreement.

a. Sections 9(f)(iii) and 9(f)(iv) of the Guaranty are hereby amended to
read as follows:

(iii) Debt of the Guarantor in place as of the date of this Agreement
as detailed in Schedule II attached hereto and other subsequent Debt of the
Guarantor, provided that the aggregate amount of all said Debt shall at no
time exceed $800,000,000

(iv) Debt of the Guarantor for the financing of mortgage investments
(other than insured mortgage investments) up to a maximum amount of Debt
for such purpose of $200,000,000;

II. Representations, Warranties and Covenants

a. The Guarantor represents and warrants that, (i) all representations
and warranties made in or in connection with the Guaranty and this First
Amendment thereto are true, correct and complete on and as of the date hereof
and (ii) no event which would constitute a Default under the Guaranty, as
amended hereby, has occurred and is continuing.

b. The Guarantor shall cause all obligations under the CIBC Credit
Agreement (as defined in the Seventh Amendment to Credit Agreement between the
Guarantor and the Bank dated as of the date hereof (the "Seventh Amendment")) to
be paid in full, and shall cause the CIBC Credit Agreement to be terminated and
of no further force and effect, on or before October 31, 1995.

c. The Guarantor shall deliver to the Bank true and correct copies of all
documents governing the CMO Facilities, as defined in Seventh Amendment,
promptly upon their execution and delivery by the Guarantor.

III. Conditions of Amendment. The agreement of the Bank set forth in Paragraph
1 of this First Amendment is subject to the satisfaction of the following
conditions precedent:

a. The Bank shall have received the following, all of which must be
satisfactory in form and substance to the Bank, in its discretion:

(1) this First Amendment to the Credit Agreement, duly executed by
the Guarantor, the Borrower, the Pledgors and the Bank; and

(2) any additional agreements, opinions, certifications, instruments
and other documents relating to this First Amendment or the Guaranty that the
Bank may reasonably deem necessary or desirable.

b. All representations and warranties made in or in connection with the
Guaranty and this First Amendment, shall be true, correct and complete on and as
of the date hereof.

c. No Default shall have occurred and be continuing

IV. No Claims or Defenses. The Guarantor acknowledges and agrees that its
obligations under the Guaranty are its valid obligations and, as of the date
hereof, there are no claims, setoffs or defenses to the payment or performance
by the Guarantor of such obligations, and that the Bank may enforce the payment
and performance of such obligations as set forth in the Guaranty.

V. Counterpart Execution. This First Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

VI. GOVERNING LAW. THIS FIRST AMENDMENT TO THE CREDIT AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
VIRGINIA WITHOUT GIVING EFFECT TO THE CHOICE OF LAW RULES THEREOF.

VII. References to Guaranty. Except as herein specifically amended, the Guaranty
shall remain in full force and effect in accordance with its terms. Whenever
reference is made in any note, document, letter or conversation, such reference
shall, without more, be deemed to refer to the Credit Agreement as amended
hereby.

CRIIMI MAE INC.

By: /s/ Jay R. Cohen
-------------------------
Jay R. Cohen
Executive Vice President
& Treasurer

Accepted and agreed to as of
the date first written above:

BANK:

SIGNET BANK/VIRGINIA

By: /s/ Barry E. Cooper
-------------------------------
Barry E. Cooper, Vice President

BORROWER:

CRIIMI MAE MANAGEMENT, INC.

By: /s/ Jay R. Cohen
------------------------
Jay R. Cohen
Executive Vice President
& Treasurer

PLEDGORS:

CRIIMI, INC.

By: /s/ Jay R. Cohen
------------------------
Jay R. Cohen
Executive Vice President
& Treasurer

CRIIMI MAE SERVICES LIMITED PARTNERSHIP

By: CRIIMI MAE MANAGEMENT, INC.,
General Partner

By: /s/ Jay R. Cohen
-------------------------
Jay R. Cohen
Executive Vice President
& Treasurer<PAGE>

EXHIBIT 3(h)

Articles of Incorporation CRIIMI MAE Management, Inc.

Articles of Incorporation
of
CRIIMI MAE Management, Inc.

FIRST: The undersigned, James B. Halpern, whose post office address is 1050
Connecticut Ave., N.W., Washington, DC 20036-5339, being at least eighteen (18)
years of age, does hereby form a corporation under the General Corporation Law
of the State of Maryland.

SECOND: The name of the Corporation (hereinafter the Corporation) is:

CRIIMI MAE Management, Inc.

THIRD: The purposes for which the Corporation is organized are to provide
loan origination, servicing and advisory services and any and all lawful acts or
activities.

FOURTH: The address of the initial resident office of the Corporation in the
State of Maryland is 11200 Rockville Pike, Rockville, Maryland 20852. The name
of the Corporation's resident agent at such address is CRICO Services
Corporation, Inc. Said resident agent is a Maryland corporation.

FIFTH: The address of the principal office of the Corporation in the State of
Maryland is 11200 Rockville Pike, Rockville, Maryland 20852.

SIXTH: The number of directors of the Corporation shall be fixed pursuant to
the Bylaws of the Corporation and the General Corporation Law of the State of
Maryland, but shall not be fewer than three, unless there are fewer than three
stockholders, in which case the number of directors may be fewer than three but
not fewer than the number of stockholders. The names of the persons who are to
serve as the initial directors until the first annual meeting of the
stockholders and until their successors have been duly elected and shall qualify
are:

William B. Dockser
H. William Willoughby

SEVENTH: The total number of shares of stock which the Corporation shall have
authority to issue is One Thousand (1,000) shares of common stock with One
Dollar ($1.00) par value.

EIGHTH: The provisions for the regulation of the internal affairs of the
Corporation shall be stated in the Bylaws of the Corporation, as amended from
time to time.

NINTH: A director or officer of the Corporation shall not be personally
liable to the Corporation or its stockholders for money damages, except (1) to
the extent that it is proved that the person actually received an improper
benefit or profit in money, property, or services, or (2) to the extent that a
judgment or other final adjudication adverse to the person is entered in a
proceeding based on a finding in the proceeding that the person s action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. If the General
Corporation Law of the State of Maryland is subsequently amended to further
eliminate or limit the liability of a director or officer, then a director or
officer of the Corporation, in addition to the circumstances in which a director
or officer is not personally liable as set forth in the preceding sentence,
shall not be liable to the fullest extent permitted by the amended General
Corporation Law of the State of Maryland.

TENTH: The Corporation shall indemnify each of the directors and officers of
the Corporation and may indemnify any individual who may be indemnified to the
fullest extent permitted by Section 2-418 of the General Corporation Law of the
State of Maryland, as it may be amended from time to time (hereinafter Section
2-418), in each and every situation where, under Section 2-418, the Corporation
is permitted or empowered, to make such indemnification. The Corporation shall
promptly make or cause to be made any determination which Section 2-418
requires. Any repeal or modification of the foregoing provisions of this
Article TENTH by the stockholders of the Corporation shall not adversely affect
any right or protection of an officer or director of this Corporation existing
at the time of such repeal or modification.

I have signed these Articles of Incorporation on February 14, 1995,
acknowledging them to be my act and that the matters and facts set forth herein
are true in all material respects.

By: /s/ James B. Halpern
-----------------------
James B. Halpern<PAGE>

EXHIBIT 3(i)

Bylaws of CRIIMI MAE Management, Inc.

Exhibit A

BYLAWS

CRIIMI MAE MANAGEMENT, INC.

ARTICLE I

OFFICES

Section 1.01. Registered Office. The registered office of CRIIMI MAE
Management, Inc. (hereinafter referred to as the "corporation") shall be in the
City of Rockville, County of Montgomery, State of Maryland. The name of the
registered agent is CRICO Services Corporation.

Section 1.02. Additional Offices. The corporation may also have offices
at such other places, both within and without the State of Maryland, as the
Board of Directors may from time to time determine or as the business of the
corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 2.01. Time and Place. All meetings of stockholders for the
election of directors shall be held at such time and place, either within or
without the State of Maryland, as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice of the meeting. Meetings of stockholders for any other purpose
may be held at such time and place either within or without the State of
Maryland as shall be stated in the notice of the meeting or in a duly executed
waiver of notice of the meeting.

Section 2.02. Annual Meeting. Annual meetings of stockholders shall be
held for the purpose of electing a board of directors and transacting such other
business as may properly be brought before the meeting.

Section 2.03. Notice of Annual Meeting. Written notice of the annual
meeting, stating the place, date and time of such annual meeting, shall be given
to each stockholder entitled to vote at such meeting not less than ten (10)
(unless a longer period is required by law) nor more than fifty (50) days prior
to the meeting.

Section 2.04. Special Meeting. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the Chairperson of the Board, if
any, or if the Chairperson is not present (or, if there is none), by the
President and shall be called by the President or Secretary at the request in
writing of a majority of the Board of Directors, or at the request in writing of
the stockholders owning a majority of the shares of capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting. The person calling such
meeting shall cause notice of the meeting to be given in accordance with the
provisions of Section 2.05 of this Article II and of Article V.

Section 2.05. Notice of Special Meeting. Written notice of a special
meeting, stating the place, date and time of such special meeting and the
purpose or purposes for which the meeting is called, shall be given to each
stockholder not less than ten (10) (unless a longer period is required by law)
nor more than fifty (50) days prior to the meeting.

Section 2.06. List of Stockholders. The officer in charge of the stock
ledger of the corporation or the transfer agent shall prepare and make, at least
ten (10) days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of a least ten (10) days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or if not so specified, at the
place where the meeting is to be held. The list shall also be produced and kept
at the time and place of the meeting during the whole time of the meeting and
may be inspected by any stockholder who is present.

Section 2.07. Presiding Officer. Meetings of stockholders shall be
presided over by the Chairperson of the Board, if any, or if the Chairperson is
not present (or, if there is none), by the President, or, if the President is
not present, by a Vice President, or, if a Vice President is not present, by
such person who may have been chosen by the Board of Directors, or, if none of
such persons is present, by a chairperson to be chosen by the stockholders
owning a majority of the shares of capital stock of the corporation issued and
outstanding and entitled to vote at the meeting and who are present in person or
represented by proxy. The Secretary of the corporation, or, if the Secretary is
not present, an Assistant Secretary, or, if an Assistant Secretary is not
present, such person as may be chosen by the Board of Directors, shall act as
secretary of meetings of stockholders, or, if none of such persons is present,
the stockholders owning a majority of the shares of capital stock of the
corporation issued and outstanding and entitled to vote at the meeting and who
are present in person or represented by proxy shall choose any person present to
act as secretary of the meeting.

Section 2.08. Quorum and Adjournments. The holders of a majority of the
shares of capital stock of the corporation issued and outstanding and entitled
to vote at stockholders meetings shall constitute a quorum for the transaction
of business at all meetings of the stockholders, except as otherwise provided by
statute or by the certificate of incorporation. The stockholders present at a
duly organized meeting may continue to do business until final adjournment of
such meeting whether on the same day or on a later day, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum. If a meeting
cannot be organized because a quorum has not attended, those present in person
or represented by proxy may adjourn the meeting from time to time, without
notice of the adjourned meeting if the time and place of the adjourned meeting
are announced at the meeting at which the adjournment is taken, until a quorum
shall be present or represented. Even if a quorum shall be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote at such meeting, present in person or represented by proxy, may adjourn the
meeting from time to time without notice of the adjourned meeting if the time
and place of the adjourned meeting are announced at the meeting at which the
adjournment is taken, until a date which is not more than thirty (30) days after
the date of the original meeting. At any adjourned meeting at which a quorum is
present in person or represented by proxy, any business may be transacted which
might have been transacted at the meeting as originally called. If the
adjournment is for more than thirty (30) days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at such
meeting.

Section 2.09. Voting.

(a) At any meeting of stockholders, every stockholder having the right to
vote shall be entitled to vote in person or by proxy, but no such proxy shall be
voted or acted upon after three (3) years from its date, unless the proxy
provides for a longer period. Except as otherwise provided by law or the
certificate of incorporation, each stockholder of record shall be entitled to
one (1) vote for each share of capital stock registered in his name on the books
of the corporation.

(b) At a meeting at which a quorum is present, all elections of directors
shall be determined by a plurality vote, and, except as otherwise provided by
law or the certificate of incorporation, all other matters shall be determined
by a vote of a majority of the shares present in person or represented by proxy
and voting on such other matters.

Section 2.10. Consent. Unless otherwise provided in the certificate of
incorporation, any action required or permitted by law or the certificate of
incorporation to be taken at any meeting of the stockholders may be taken
without a meeting, without prior notice and without a vote, if a written
consent, setting forth the action so taken, shall be signed by the holders of
all of the outstanding stock. Such written consent shall be filed with the
minutes of meetings of stockholders. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not so consented in writing.

ARTICLE III

DIRECTORS

Section 3.01. Number and Tenure. There shall be such number of directors,
not less than one (1), as shall from time to time be fixed by the Board pursuant
to a resolution adopted by a majority of the total number of authorized
directors. The directors shall be elected at the annual meeting of the
stockholders, except for initial directors named in the certificate of
incorporation and except as provided in Section 3.02 of this Article, and each
director elected shall hold office until his successor is elected and shall
qualify. Directors need not be stockholders.

Section 3.02. Vacancies. If any vacancies occur in the Board of
Directors, or if any new directorships are created, they shall be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director. Each director so chosen shall hold office until the
next annual election of directors and until his successor is duly elected and
shall qualify. If there are no directors in office, any officer or stockholder
may call a special meeting of stockholders in accordance with the provisions of
the certificate of incorporation or these bylaws, at which meeting such
vacancies shall be filled.

Section 3.03. Resignation. Any director may resign at any time by giving
written notice to the Chairperson of the Board, the President or the Secretary
of the corporation, or, in the absence of all of the foregoing, by notice to any
other director or officer of the corporation. Unless otherwise specified in
such written notice, a resignation shall take effect upon delivery to the
designated director or officer. It shall not be necessary for a resignation to
be accepted before it becomes effective.

Section 3.04. Place of Meetings. The Board of Directors may hold
meetings, both regular and special, either within or without the State of
Maryland.

Section 3.05. Annual Meeting. Unless otherwise agreed by the newly
elected directors, the annual meeting of each newly elected Board of Directors
shall be held immediately following the annual meeting of stockholders, and no
notice of such meeting to either incumbent or newly elected directors shall be
necessary.

Section 3.06. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice, at such time and place as may from time to
time be determined by the Board of Directors.

Section 3.07. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairperson of the Board or the President on two
(2) days' notice to each director, if such notice is delivered personally or
sent by telegram, or on five (5) days' notice if sent by mail. Special meetings
shall be called by the Chairperson of the Board or the President in like manner
and on like notice on the written request of one-half or more of the number of
directors then in office. The purpose of a special meeting of the Board of
Directors need not be stated in the notice of such meeting.

Section 3.08. Quorum and Adjournments. Unless otherwise provided by the
certificate of incorporation, at all meetings of the Board of Directors,
one-half of the total number of directors then in office shall constitute a
quorum for the transaction of business; provided, however, that when the Board
consists of one (1) director, then one (1) director shall constitute a quorum
and when the Board consists of two (2) or three (3) directors, then two (2)
directors shall constitute a quorum. If a quorum is not present at any meeting
of the Board of Directors, the directors present may adjourn the meeting, from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present.

Section 3.09. Presiding Officer. Meetings of the Board of Directors shall
be presided over by the Chairperson of the Board, if any, or, if the Chairperson
is not present (or if there is none), by the President, or, if the President is
not present, by such person as the Board may appoint for the purpose of
presiding at the meeting from which the President is absent.

Section 3.10 Books of Account, Reports and Records. A member of the
Board of Directors, or a member of any committee designated by the Board of
Directors shall, in the performance of his duties, be fully protected in relying
in good faith upon the books of account or reports made to the corporation by
any of its officers, or by an independent certified public accountant, or by an
appraiser selected with reasonable care by the Board of Directors or by any such
committee, or in relying in good faith upon other records of the corporation.

Section 3.11. Action by Consent. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board or committee, as
the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board or committee.

Section 3.12. Telephone Meetings. Members of the Board of Directors, or
any committee designated by the Board of Directors, may participate in a meeting
of the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.

ARTICLE IV

COMMITTEES

Section 4.01. Committees of Directors. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one (1) or more
committees, each committee to consist of one (1) or more of the directors of the
corporation. The Board of Directors may designate two (2) or more persons who
are not directors as additional members of any committee, but such persons shall
be non-voting members of such committee. In the absence or disqualification of
a member of a committee, the member or members of the committee present at any
meeting and not disqualified from voting, whether or not such member or members
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent permitted by law and to the extent
provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation, and may authorize the
seal of the corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority to amend the certificate of
incorporation (except that a committee may, to the extent authorized in the
resolution or resolutions providing for the issuance of shares of stock adopted
by the Board of Directors, fix any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of assets of
the corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation), adopt an agreement of
merger or consolidation, recommend to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
recommend to the stockholders a dissolution of the corporation or a revocation
of a dissolution, elect or remove officers or directors, or amend the by-laws of
the corporation. Such committee or committees shall have such name or names as
may be determined from time to time by resolution adopted by the Board of
Directors.

Section 4.02. Minutes of Committee Meetings. Unless otherwise provided in
the resolution of the Board of Directors establishing such committee, each
committee shall keep minutes of action taken by it and file the same with the
Secretary of the corporation.

Section 4.03. Quorum. A majority of the number of directors constituting
any committee shall constitute a quorum for the transaction of business, and the
affirmative vote of such directors present at the meeting shall be required for
any action of the committee.

Section 4.04. Vacancies, Changes, and Discharge. The Board of Directors
shall have the power at any time to fill vacancies in, to change the membership
of, and to discharge any committee.

Section 4.05. Compensation. The Board of Directors, by the affirmative
vote of a majority of the directors then in office and irrespective of the
personal interest of any director, shall have authority to establish reasonable
compensation for committee members for their services as such and may, in
addition, authorize reimbursement of any reasonable expenses incurred by
committee members in connection with their duties.

ARTICLE V

NOTICES

Section 5.01. Form and Delivery.

(a) Whenever, under the provisions of law, the certificate of
incorporation or these by-laws, notice is required to be given to any
stockholder, it shall not be construed to mean personal notice unless otherwise
specifically provided, but such notice may be given in writing, by mail,
addressed to such stockholder, at his address as it appears on the records of
the corporation. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, with postage prepaid.

(b) Whenever, under the provisions of law, the certificate of
incorporation, or these by-laws, notice is required to be given to any director,
it shall not be construed to mean personal notice unless otherwise specifically
provided, but such notice may be given in writing, by mail, addressed to such
director at the usual place of residence or business of such director as in the
discretion of the person giving such notice will be likely to be received most
expeditiously by such director. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, with postage prepaid.
Notice to a director may also be given personally or be sent to such address.

Section 5.02. Waiver. Whenever any notice is required to be given under
the provisions of law, the certificate of incorporation or these by-laws, a
written waiver of notice, signed by the person or persons entitled to said
notice, whether before or after the time for the meeting stated in such notice,
shall be deemed equivalent to such notice.

ARTICLE VI

OFFICERS

Section 6.01. Designations. The officers of the corporation shall be
chosen by the Board of Directors and shall be a President and a Secretary. The
Board of Directors may also choose a Chairperson of the Board, a Vice President
or Vice Presidents, a Treasurer, one (1) or more Assistant Secretaries and one
(1) or more Assistant Treasurers and other officers and agents as it shall deem
necessary or appropriate. All officers and agents of the corporation shall
exercise such powers and perform such duties as shall from time to time be
determined by the Board of Directors.

Section 6.02. Term of Office and Removal. The Board of Directors at its
annual meeting after each annual meeting of stockholders or at a meeting called
for that purpose shall choose officers and agents, if any, in accordance with
the provisions of Section 6.01. Each officer of the corporation shall hold
office until his successor is elected and shall qualify. Any officer or agent
elected or appointed by the Board of Directors may be removed, with or without
cause, at any time by the affirmative vote of a majority of the directors then
in office. Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise, may be filled for the unexpired portion of
the term by the Board of Directors.

Section 6.03. Compensation. The salaries of all officers and agents, if
any, of the corporation shall be fixed from time to time by the Board of
Directors, and no officer or agent shall be prevented from receiving such salary
by reason of the fact that he is also a director of the corporation.

Section 6.04. The Chairperson of the Board and the President.

(a) The Chairperson of the Board shall be the chief executive officer of
the corporation. If there is no Chairperson of the Board, the President shall
be the chief executive officer of the corporation. The duties of the
Chairperson of the Board, and of the President at the direction of the
Chairperson of the Board or if there is no Chairperson of the Board, shall be
the following:

(i) Subject to the direction of the Board of Directors, to have
general charge of the business, affairs and property of the corporation and
general supervision over its other officers and agents and, in general, to
perform all duties incident to the office of Chairperson of the Board (or
President, as the case may be) and to see that all orders and resolutions
of the Board of Directors are carried into effect.

(ii) Unless otherwise prescribed by the Board of Directors, to have
full power and authority on behalf of the corporation to attend, act and
vote at any meeting of security holders of other corporations in which the
corporation may hold securities. At such meeting the Chairperson of the
Board (or the President, as the case may be) shall possess and may exercise
any and all rights and powers incident to the ownership of such securities
which the corporation might have possessed and exercised if it had been
present. The Board of Directors may from time to time confer like powers
upon any other person or persons.

(iii) To preside over meetings of the stockholders and of the Board
of Directors, to call special meetings of stockholders, to be an ex officio
member of all committees of the Board, and to have such other duties as may
from time to time be prescribed by the Board of Directors.

(b) When the position of Chairperson is held by a man, the title shall be
read Chairman; and when held by a woman, read to be Chairwoman.

Section 6.05. The Vice President. The Vice President, if any (or in the
event there be more than one (1), the Vice Presidents in the order designated,
or in the absence of any designation, in the order of their election), shall, in
the absence of the President or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the President and shall generally
assist the President and perform such other duties and have such other powers as
may from time to time be prescribed by the Board of Directors.

Section 6.06. The Secretary. The Secretary shall attend all meetings of
the Board of Directors and all meetings of stockholders and record all votes and
the proceedings of the meetings in a book to be kept for that purpose and shall
perform like duties for any committees of the Board of Directors, if requested
by such committee. He shall give, or cause to be given, notice of all meetings
of stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may from time to time be prescribed by the Board of
Directors, the Chairperson of the Board or the President, under whose
supervision he shall act. He shall have custody of the seal of the corporation,
and he, or an Assistant Secretary, shall have authority to affix the same to any
instrument requiring it, and, when so affixed, the seal may be attested by his
signature or by the signature of such Assistant Secretary. The Board of
Directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing of the seal by his signature.

Section 6.07. The Assistant Secretary. The Assistant Secretary, if any
(or in the event there be more than one (1), the Assistant Secretaries in the
order designated, or in the absence of any designation, in the order of their
election), shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as may
from time to time be prescribed by the Board of Directors.

Section 6.08. The Treasurer. The Treasurer, if any, shall have the
custody of the corporate funds and other valuable effects, including securities,
and shall keep full and accurate accounts of receipts and disbursements in books
belonging to the corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the corporation in such depositories as
may from time to time be designated by the Board of Directors. He shall
disburse the funds of the corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the Chairperson of the Board, the President and the Board of Directors, at
regular meetings of the Board, or whenever they may require it, an account of
all his transactions as Treasurer and of the financial condition of the
corporation.

Section 6.09. The Assistant Treasurer. The Assistant Treasurer, if any
(or in the event there be more than one (1)) the Assistant Treasurers in the
order designated, or in the absence of any designation, in the order of their
election), shall, in the absence of the Treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as may
from time to time be prescribed by the Board of Directors.

Section 6.10. Transfer of Authority. In case of the absence of any
officer or for any other reason that the Board of Directors deems sufficient,
the Board of Directors may transfer the powers or duties of that officer to any
other officer or to any director or employee of the corporation, provided a
majority of the full Board of Directors concurs.

ARTICLE VII

STOCK CERTIFICATES

Section 7.01. Form and Signatures. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by or in the name of
the corporation, by the Chairperson of the Board, the President or a Vice
President and the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the corporation, certifying the number and class (and
series, if any) of shares owned by him, and bearing the seal of the corporation.
Such seal and any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent, or registrar who has signed, or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent, or registrar at the date of issue.

Section 7.02. Registration of Transfer. Upon surrender to the corporation
or any transfer agent of the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation or its transfer
agent to issue a new certificate to the person entitled thereto, to cancel the
old certificate and to record the transaction upon its books.

Section 7.03. Registered Stockholders. Except as otherwise provided by
law, the corporation shall be entitled to recognize the exclusive right of a
person who is registered on its books as the owner of shares of its capital
stock to receive dividends or other distributions and to vote as such owner, a
person who is registered on its books as the owner of shares of its capital
stock. The corporation shall not be bound to recognize any equitable, legal, or
other claim to or interest in such share or shares on the part of any other
person whether or not it shall have express or other notice thereof, except as
otherwise provided by law.

Section 7.04. Issuance of Certificate. No certificate shall be issued for any
share until (i) consideration for such share in the form of cash, services
rendered, personal or real property, leases of real property or a combination
thereof in an amount not less than the par value or stated capital of such share
has been received by the corporation and (ii) the corporation has received a
binding obligation of the subscriber or purchaser to pay the balance, if any, of
the subscription or purchase price.

Section 7.05. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate to be issued in place of any certificate
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen, or destroyed. When authorizing
such issue of a new certificate, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate, or his legal representative, to advertise
the same in such manner as it shall require, and to give the corporation a bond
in such sum, or other security in such form as it may direct, as indemnity
against any claim that may be made against the corporation on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.

ARTICLE VIII

INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS

Section 8.01. (a) Right to Indemnification. Each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative, arbitrative
or investigative ("Proceeding"), by reason of the fact that he, or a person of
whom he is the legal representative, is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or of a partnership,
trust or other enterprise, including service with respect to an employee benefit
plan, whether the basis of such Proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be indemnified
and held harmless by the corporation to the fullest extent permitted by the
Maryland General Corporation Law, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the corporation to provide broader indemnification rights than said Law
permitted the corporation to provide prior to such amendment) against all
expenses, liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith. Such
right shall include the right to be paid by the corporation expenses incurred in
defending any such Proceeding in advance of its final disposition; provided,
however, that the payment of such expenses incurred by a director or officer in
his capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of such Proceeding, shall be made only upon delivery to
the corporation of an undertaking by or on behalf of such director or officer to
repay all amounts so advanced if it should be determined ultimately that such
director or officer is not entitled to be indemnified under this section or
otherwise.

(b) Right of Claimant to Bring Suit. If a claim under paragraph (a)
of this article is not paid in full by the corporation within 90 days after a
written claim has been received by the corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending a Proceeding in advance of its final disposition where the
required undertaking has been tendered to the corporation) that the claimant has
not met the standards of conduct which make it permissible under the Maryland
General Corporation Law for the corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met the applicable
standard of conduct set forth in the Maryland General Corporation Law, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that claimant had not met the applicable standard of conduct.

(c) Non-Exclusivity of Rights. The rights conferred on a person by
paragraphs (a) and (b) of this article shall not be exclusive of any other right
which such person may have or hereafter acquire under any statute, provision of
the certificate of incorporation, by-laws, agreement, vote of stockholders or
disinterested directors or otherwise.

(d) Insurance. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, trust or other enterprise
against any such expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against such expense, liability or
loss under the Maryland General Corporation Law.

ARTICLE IX

GENERAL PROVISIONS

Section 9.01. Fiscal Year. The fiscal year of the
corporation shall be as determined from time to time by the
Board of Directors.

Section 9.02. Seal. The corporate seal shall have
inscribed thereon the name of the corporation, the year of its
incorporation and the words "Corporate Seal" and "Maryland."

ARTICLE X

AMENDMENTS

Section 10.01. These by-laws may be altered, amended or
repealed or new by-laws may be adopted by the stockholders or
by the Board of Directors, to the extent that such power is
conferred upon the Board of Directors by the certificate of
incorporation, at any regular meeting of the stockholders or
of the Board of Directors or at any special meeting of the
stockholders or of the Board of Directors if notice of such
proposed alteration, amendment, repeal or adoption of new
by-laws be contained in the notice of such special meeting.

By: /s/ Susan B. Railey
-------------------
Assistant Secretary <PAGE>

EXHIBIT 3(j)

Articles of Incorporation of CRIIMI MAE Services, Inc.
as a Maryland Close Corporation

<PAGE>
Articles of Incorporation
of
CRIIMI MAE Services, Inc.
as a
Maryland Close Corporation

SECOND: The name of the Corporation (hereinafter the Corporation) is:

CRIIMI MAE Services, Inc.

THIRD: The corporation shall be a close corporation as authorized by Title 4
of the Corporations and Associations Article of the Annotated Code of Maryland.

FOURTH: The purposes for which the Corporation is organized are to provide
loan origination, servicing and advisory services and any and all lawful acts or
activities.

FIFTH: The address of the initial resident office of the Corporation in the
State of Maryland is 11200 Rockville Pike, Rockville, Maryland 20852. The name
of the Corporation's resident agent at such address is CRICO Services
Corporation, Inc. Said resident agent is a Maryland corporation.

SIXTH: The address of the principal office of the Corporation in the State of
Maryland is 11200 Rockville Pike, Rockville, Maryland 20852.

SEVENTH: The number of directors of the Corporation shall be fixed pursuant to
the Bylaws of the Corporation and the General Corporation Law of the State of
Maryland, but shall be at least one. The names of the persons who are to serve
as the initial directors until the first annual meeting of the stockholders and
until their successors have been duly elected and shall qualify are:

William B. Dockser
H. William Willoughby

EIGHTH: The preferences, qualifications, limitations, restrictions and special
or relative rights in respect of the shares of each class of capital stock are
as follows:

(A) General. The total number of shares of stock which the Corporation
has authority to issue is One Thousand (1,000) shares of common stock, One
Dollar ($1.00) par value per share, consisting of Fifty (50) shares of Class A
common stock ("Class A Stock") and Nine Hundred Fifty (950) shares of Class B
common stock ("Class B Stock", and togeth
er with Class A stock, the "Common Stock").

(B) Equivalent Rights. Except as set forth herein, all shares of the
Class A Stock and Class B Stock shall have identical powers, preferences,
rights, qualifications, limitations and restrictions.

(C) Dividends. The holders of shares of the Class A Stock and Class B
Stock shall be entitled to receive dividends out of funds legally available
therefor, in an amount equal to 5% of such funds and 95% of such funds,
respectively.

(D) Voting. The holders of the Class A Stock shall be entitled to one
vote in person or by proxy for each share of stock held. The holders of Class B
Stock shall have no right to vote on any matter submitted to the stockholders
for consideration, except as required under the Maryland General Corporation
Law, as amended from time to time. No action may be taken by the stockholders
of the Corporation without the favorable vote of the holders of a majority of
the outstanding Class A Stock.

(E) Dissolution, etc. In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, and after payment or provision for
payment of the debts and other liabilities of the Corporation, the holders of
the Class A Stock and Class B Stock shall be entitled to receive 5% and 95%,
respectively, of the remaining net assets of the Corporation. The consolidation
or merger of the Corporation with or into any other corporation, or any sale,
lease, exchange or conveyance of all or any part of the property, assets or
business of the Corporation, shall not be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this
paragraph.

NINTH: The provisions for the regulation of the internal affairs of the
Corporation shall be stated in the Bylaws of the Corporation, as amended from
time to time.

TENTH: A director or officer of the Corporation shall not be personally
liable to the Corporation or its stockholders for money damages, except (1) to
the extent that it is proved that the person actually received an improper
benefit or profit in money, property, or services, or (2) to the extent that a
judgment or other final adjudication adverse to the person is entered in a
proceeding based on a finding in the proceeding that the person s action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. If the General
Corporation Law of the State of Maryland is subsequently amended to further
eliminate or limit the liability of a director or officer, then a director or
officer of the Corporation, in addition to the circumstances in which a director
or officer is not personally liable as set forth in the preceding sentence,
shall not be liable to the fullest extent permitted by the amended General
Corporation Law of the State of Maryland.

ELEVENTH: The Corporation shall indemnify each of the directors and officers of
the Corporation and may indemnify any individual who may be indemnified to the
fullest extent permitted by Section 2-418 of the General Corporation Law of the
State of Maryland, as it may be amended from time to time (hereinafter Section
2-418), in each and every situation where, under Section 2-418, the Corporation
is permitted or empowered, to make such indemnification. The Corporation shall
promptly make or cause to be made any determination which Section 2-418
requires. Any repeal or modification of the foregoing provisions of this
Article ELEVENTH by the stockholders of the Corporation shall not adversely
affect any right or protection of an officer or director of this Corporation
existing at the time of such repeal or modification.

I have signed these Articles of Incorporation on February 15, 1995,
acknowledging them to be my act and that the matters and facts set forth herein
are true in all material respects.

By: /s/ James B. Halpern
--------------------
James B. Halpern<PAGE>

EXHIBIT 3(k)

Bylaws CRIIMI MAE Services, Inc. <PAGE>

Bylaws

CRIIMI MAE Services, Inc.

(the Corporation)

ARTICLE I
OFFICES

The Corporation may have such offices at such places, both within and
outside the State of Maryland, as the Board of Directors from time to time
determines or as the business of the Corporation from time to time requires.

ARTICLE II
MEETINGS OF THE STOCKHOLDERS

Section 1. Annual Meetings. Annual meetings of the stockholders shall be
held on the fifteenth day of June beginning in 1995 or at such other date and
time and at such place (within or outside the State of Maryland) as is
designated from time to time bythe Board of Directors and stated in the notice
of the meeting. At each annual meeting the stockholders shall elect a Board of
Directors and shall transact such other business as may properly be brought
before the meeting.

Section 2. Special Meetings. Unless otherwise prescribed by law, the
Articles of Incorporation or these Bylaws, special meetings of the stockholders
for any purpose or purposes may be called by the President or the Board of
Directors, and shall be called by the Secretary upon the written request of
stockholders entitled to cast at least 25 percent of all the votes entitled to
be cast at the meeting. Requests for special meetings shall state the purpose
or purposes of the proposed meeting and the matters proposed to be acted on at
it.

Section 3. Notices of Annual and Special Meetings. Except as otherwise
provided by law, the Articles of Incorporation or these Bylaws, written notice
of any annual or special meeting of the stockholders shall state the place, date
and time thereof and shall be given to each stockholder of record entitled to
vote at such meeting and to each other stockholder entitled to notice of such
meeting not less than ten (10) nor more than ninety (90) days prior to the
meeting. In the case of a special meeting or if otherwise required by law, the
notice shall state the purpose or purposes for which the meeting is called.

Section 4. List of Stockholders. At least ten (10) days (but not more
than ninety (90) days) before any meeting of the stockholders, the officer or
transfer agent in charge of the stock transfer books of the Corporation shall
prepare and make a complete alphabetical list of the stockholders entitled to
vote at such meeting, which list shows the address of each stockholder and the
number of shares registered in the name of each stockholder. The list so
prepared shall be maintained at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held, and shall be open
to inspection by any stockholder, for any purpose germane to the meeting, during
ordinary business hours during a period of no less than ten (10) days prior to
the meeting. The list also shall be produced and kept open at the meeting
(during the entire duration thereof) and, except as otherwise provided by law,
may be inspected by any stockholder or proxy of a stockholder who is present in
person at such meeting.

Section 5. Presiding Officers; Order of Business.<PAGE>

(a) Meetings of the stockholders shall be presided over by the
President, or, if the President is not present, by a Vice President, if any, or,
if a Vice President is not present, by such person who is chosen by the Board of
Directors, or, if none, by a chairperson to be chosen at the meeting by
stockholders present in person or by proxy who own a majority of the shares of
capital stock of the Corporation entitled to vote and represented at such
meeting. The secretary of meetings shall be the Secretary of the Corporation,
or, if the Secretary is not present, an Assistant Secretary, if any, or, if an
Assistant Secretary is not present, such person as may be chosen by the Board of
Directors, or, if none, by such person who is chosen by the chairperson at the
meeting.

(b) The following order of business, unless otherwise ordered at the
meeting by the chairperson thereof, shall be observed as far as practicable and
consistent with the purposes of the meeting:

(1) Call of the meeting to order.

(2) Presentation of proof of mailing of notice of the meeting
and, if the meeting is a special meeting, the call thereof.

(3) Presentation of proxies.

(4) Determination and announcement that a quorum is present.

(5) Reading and approval (or waiver thereof) of the minutes of the
previous meeting.

(6) Reports, if any, of officers.

(7) Election of directors, if the meeting is an annual meeting or
a meeting called for such purpose.

(8) Consideration of the specific purpose or purposes for which
the meeting has been called (other than the election of directors).

(9) Transaction of such other business as may properly come before
the meeting.

(10) Adjournment.

Section 6. Quorum; Adjournments.

(a) The holders of a majority of the voting common stock of the
Corporation issued and outstanding shall be necessary to and shall constitute a
quorum for the transaction of business at all meetings of the stockholders,
except as otherwise provided by law or by the Articles of Incorporation.

(b) A meeting of stockholders convened on the date for which it was
called may be adjourned from time to time without further notice to a date not
more than one hundred twenty (120) days after the original record date set by
the directors for the purpose of determining which stockholders are entitled to
notice of the meeting and which stockholders are entitled to vote at the
meeting.

(c) Any business which might have been transacted at a meeting as
originally called may be transacted at any meeting held after adjournment as
provided in this Section 6 at which reconvened meeting a quorum is present in
person or by proxy.

Section 7. Voting.<PAGE>

(a) At any meeting of stockholders every stockholder having the right
to vote shall be entitled to vote in person or by proxy. Except as otherwise
provided by law or by the Articles of Incorporation, each holder of voting
common stock of record shall be entitled to one vote (on each matter submitted
to a vote) for each share of capital stock registered in his, her or its name on
the books of the Corporation.

(b) All elections of directors and, except as otherwise provided by
law or by the Articles of Incorporation, all other matters, shall be determined
by a vote of a majority of the outstanding shares of voting common stock present
in person or represented by proxy and voting on such matters.

Section 8. Action by Consent. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if the
following are filed with the records of stockholders meetings:

(a) An unanimous written consent which sets forth the action and is
signed by each stockholder entitled to vote on the matter; and

(b) A written waiver of any right to dissent signed by each
stockholder entitled to notice of the meeting but not entitled to vote at it.

ARTICLE III
DIRECTORS

Section 1. General Powers; Number; Tenure. The business and affairs of
the Corporation shall be managed under the direction of its Board of Directors,
which may exercise all powers of the Corporation and perform or authorize the
performance of all lawful acts and things which are not by law, the Articles of
Incorporation or these Bylaws directed or required to be exercised or performed
by the stockholders. The number of directors of the Corporation shall be two
(2). The directors shall be elected at the annual meeting of the stockholders
(except as otherwise provided in Section 2 of this Article III,) and, except as
provided in Section 3 (b) of this Article III, each director elected shall hold
office until the next succeeding annual meeting of the stockholders and until
his or her successor has been elected and has qualified. Directors need not be
stockholders nor residents of the State of Maryland.

Section 2. Vacancies. The holders of voting common stock may elect a
successor to fill a vacancy on the Board of Directors which results from the
removal of a director. A majority of the remaining directors, whether or not
sufficient to constitute a quorum, may fill a vacancy on the Board of Directors
which results from any cause except an increase in the number of directors.

A majority of the entire Board of Directors may fill a vacancy which
results from an increase in the number of directors. Every director chosen to
fill a vacancy as provided in this Section 2 shall hold office until the next
annual meeting of the stockholders and until his or her successor has been
elected and has qualified.

Section 3. Removal; Resignation.

(a) Except as otherwise provided by law, the Articles of
Incorporation or these Bylaws, at any meeting of the stockholders called
expressly for such purpose, any director may be removed, with or without cause,
by a vote of stockholders holding a majority of the shares issued and
outstanding and entitled to vote at an election of directors.

(b) Any director may resign at any time by giving written notice to
the Board of Directors, the President, or the Secretary of the Corporation.
Unless otherwise specified in such written notice, a resignation shall take

effect upon delivery thereof to the Board of Directors or the designated
officer. A resignation need not be accepted in order for it to be effective.

Section 4. Place of Meetings; Notice. The Board of Directors may hold
both regular and special meetings either within or outside the State of
Maryland, at such place as the Board from time to time deems advisable. Notice
of each regular or special meeting shall be given as provided in Article V and
need not state the business to be transacted at or the purpose of the meeting.

Section 5. Annual Meeting. The annual meeting of each newly elected Board
of Directors shall be held as soon as is practicable (but in no event more than
ten (10) days) following the annual meeting of the stockholders.

Section 6. Regular Meetings. Regular meetings of the Board of Directors
may be held at such time and place as from time to time may be determined by the
Board of Directors.

Section 7. Special Meetings. Special meetings of the Board of Directors
may be called by the President or by any two (2) directors upon two (2) days'
notice to each director if such notice is delivered personally or sent by
telecopy, or upon five (5) days' notice if sent by mail.

Section 8. Quorum; Adjournments. A majority of the entire Board of
Directors shall constitute a quorum for the transaction of business at each and
every meeting of the Board of Directors, and the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors, except as may otherwise specifically be provided by
law, the Articles of Incorporation or these Bylaws.

Section 9. Compensation. Directors shall be entitled to such compensation
for their services as directors as from time to time may be fixed by the Board
of Directors and in any event shall be entitled to reimbursement of all
reasonable expenses incurred by them in attending directors' meetings. Any
director may waive compensation for any meeting. No director who receives
compensation as a director shall be barred from serving the Corporation in any
other capacity or from receiving compensation and reimbursement of reasonable
expenses for any or all such other services.

Section 10. Action by Consent. Any action required or permitted to be
taken at any meeting of the Board of Directors may be taken without a meeting if
an unanimous written consent which sets forth the action is (i) signed by each
member of the Board of Directors, and (ii) filed with the minutes of proceedings
of the Board of Directors.

Section 11. Meetings by Telephone or Similar Communications. The Board of
Directors may participate in meetings by means of conference telephone or
similar communications equipment, whereby all directors participating in the
meeting can hear each other at the same time, and participation in any such
meeting shall constitute presence in person by such director at such meeting. A
written record shall be made of all actions taken at any meeting conducted by
means of a conference telephone or similar communications equipment.

ARTICLE IV
OFFICERS

Section 1. Positions. The officers of the Corporation shall be chosen by
the Board of Directors and shall consist of a President, a Secretary and a
Treasurer. The Board of Directors also may choose one or more Vice Presidents,
Assistant Secretaries and/or Assistant Treasurers and such other officers and/or
agents as the Board from time to time deems necessary or appropriate. The
Board of Directors may delegate to the President of the Corporation the
authority to appoint any officer or agent of the Corporation and to fill a
vacancy other than the President, Secretary or Treasurer. The election or
appointment of any officer of the Corporation in itself shall not create
contract rights for any such officer. All officers of the Corporation shall
exercise such powers and perform such duties as from time to time shall be
determined by the Board of Directors. Any two or more offices may be held by
the same person except the offices of President and Vice President, if any.

Section 2. Term of Office; Removal. Each officer of the Corporation shall
hold office at the pleasure of the Board and any officer may be removed, with or
without cause, at any time by the affirmative vote of a majority of the
directors then in office, provided that any officer appointed by the President
pursuant to authority delegated to the President by the Board of Directors may
be removed, with or without cause, at any time whenever the President in his or
her absolute discretion shall consider that the best interests of the
Corporation shall be served by such removal. Removal of an officer by the Board
or by the President, as the case may be, shall not prejudice the contract
rights, if any, of the person so removed. Vacancies (however caused) in any
office may be filled for the unexpired portion of the term by the Board of
Directors (or by the President in the case of a vacancy occurring in an office
to which the President has been delegated the authority to make appointments).

Section 3. Compensation. The salaries of all officers of the Corporation
shall be fixed from time to time by the Board of Directors, and no officer shall
be prevented from receiving a salary by reason of the fact that he or she also
receives from the Corporation compensation in any other capacity.

Section 4. President. The President shall be the chief executive officer
of the Corporation and, subject to the direction of the Board of Directors,
shall have general charge of the business, affairs and property of the
Corporation and general supervision over its other officers and agents. In
general, the President shall perform all duties incident to the office of
President of a stock corporation and shall see that all orders and resolutions
of the Board of Directors are carried into effect. Unless otherwise prescribed
by the Board of Directors, the President shall have full power and authority on
behalf of the Corporation to attend, act and vote at any meeting of security
holders of other corporations in which the Corporation may hold securities. At
any such meeting the President shall possess and may exercise any and all rights
and powers incident to the ownership of such securities which the Corporation
possesses and has the power to exercise. The Board of Directors from time to
time may confer like powers upon any other person or persons.

Section 5. Vice Presidents. In the absence or disability of the
President, one of the Vice Presidents, if any, as designated by the Board of
Directors, shall perform the duties and exercise the powers of the President.
The Vice Presidents, if any, also generally shall assist the President and shall
perform such other duties and have such other powers as from time to time may be
prescribed by the Board of Directors.

Section 6. Secretary. The Secretary shall attend all meetings of the
Board of Directors and of the stockholders and shall record all votes and the
proceedings of all meetings in a book to be kept for such purposes. The
Secretary shall give (or cause to be given) notice of all meetings of the
stockholders and all special meetings of the Board of Directors and shall
perform such other duties as from time to time may be prescribed by the Board of
Directors or the President. The Secretary shall have custody of the seal of the
Corporation, shall have authority (as shall any Assistant Secretary) to affix
the same to any instrument requiring it, and to attest the seal by his or her
signature. The Board of Directors may give general authority to officers other
than the Secretary or any Assistant Secretary to affix the seal of the
Corporation and to attest the affixing thereof by his or her signature.

Section 7. Assistant Secretary. The Assistant Secretary, if any (or in
the event there is more than one, the Assistant Secretaries in the order
designated, or in the absence of any designation, in the order of their
election), in the absence or disability of the Secretary, shall perform the
duties and exercise the powers of the Secretary. The Assistant Secretary(ies)
shall perform such other duties and have such other powers as from time to time
may be prescribed by the Board of Directors.

Section 8. Treasurer. The Treasurer shall have the custody of the
corporate funds, securities, other similar valuable effects, and evidences of
indebtedness, shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as from time to time may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation in such
manner as may be ordered by the Board of Directors from time to time and shall
render to the President and the Board of Directors, at regular meetings of the
Board or whenever any of them may so require, an account of all transactions and
of the financial condition of the Corporation.

Section 9. Assistant Treasurer. The Assistant Treasurer, if any (or in
the event there is more than one, the Assistant Treasurers in the order
designated, or in the absence of any designation, in the order of their
election), in the absence or disability of the Treasurer, shall perform the
duties and exercise the powers of the Treasurer. The Assistant Treasurer(s)
shall perform such other duties and have such other powers as from time to time
may be prescribed by the Board of Directors.

ARTICLE V
NOTICES

Section 1. Form; Delivery. Any notice required or permitted to be given
to any director, officer, or stockholder shall be given in writing, either
personally, by telecopier or by first-class mail with postage prepaid, in any
case addressed to the recipient at his or her address as it appears in the
records of the Corporation. Personally delivered and telecopied notices shall
be deemed to be given at the time they are delivered at the address of the named
recipient as it appears in the records of the Corporation, and mailed notices
shall be deemed to be given at the time they are deposited in the United States
mail.

Section 2. Waiver; Effect of Attendance. Whenever any notice is required
to be given by law, the Articles of Incorporation or these Bylaws, a written
waiver thereof, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be the equivalent of the giving
of such notice. In addition, any stockholder who attends a meeting of
stockholders in person, or who is represented at such meeting by a proxy, or any
director who attends a meeting of the Board of Directors shall be deemed to have
had timely and proper notice of the meeting, unless such stockholder (or his or
her proxy) or director attends for the express purpose of objecting to the
transaction of any business on the grounds that the meeting is not lawfully
called or convened.

ARTICLE VI
INDEMNIFICATION AND EXCULPATION;
TRANSACTIONS WITH AFFILIATED PERSONS

Section 1. Indemnification and Exculpation. Reference is hereby made to
Section 2-418 of the General Corporation Law of the State of Maryland (or any

successor provision thereto). The Corporation shall indemnify each person who
may be indemnified (the "Indemnitees") pursuant to such section, to the fullest
extent permitted thereby. In each and every situation where the Corporation may
do so under such section, the Corporation hereby obligates itself to so
indemnify the Indemnitees, and in each case, if any, where the Corporation must
make certain investigations on a case-by-case basis prior to indemnification,
the Corporation hereby obligates itself to pursue such investigation diligently,
it being the specific intention of these Bylaws to obligate the Corporation to
indemnify each person whom it may indemnify to the fullest extent permitted by
law at any time and from time to time. To the extent not prohibited by Section
2-418 of the General Corporation Law of the State of Maryland (or any other
provision of the General Corporation Law of the State of Maryland), the
Indemnitees shall not be liable to the Corporation except for their own
individual willful misconduct or actions taken in bad faith.

Section 2. Common or Interested Directors. The officers and directors
shall exercise their powers and duties in good faith and with a view to the best
interests of the Corporation. No contract or other transaction between the
Corporation and any of its directors, or between the Corporation and any other
corporation, firm, or other entity in which any of its directors is a director
or has a material financial interest, shall be either void or voidable solely
because of such common directorship or interest, because such director was
present at the meeting of the Board of Directors which authorized, approved or
ratified the contract or transaction, or because such director's vote was
counted for such authorization, approval or ratification of the contract or
transaction, if (unless otherwise prohibited by law) any of the conditions
specified in the following paragraphs exist:

(a) the facts of the common directorship are disclosed or known to
the Board of Directors and the Board authorizes, approves or ratifies the
contract or transaction by the affirmative vote of a majority of disinterested
directors, even though the disinterested directors constitute less than a
quorum; or

(b) the facts of the common directorship or interest are disclosed or
known to the stockholders entitled to vote, and the contract or transaction is
authorized, approved, or ratified by a majority of the votes cast by the
stockholders entitled to vote other than the votes of shares owned of record or
beneficially by the interested director or corporation, firm, or other entity;
or

Common or interested directors or the stock owned by them or by an interested
corporation, firm or other entity may be counted in determining the presence of
a quorum at a meeting of the Board of Directors or at a meeting of the
stockholders, as the case may be, at which the contract or transaction is
authorized, approved, or ratified.

ARTICLE VII
STOCK CERTIFICATES

Section 1. Form; Signatures. Each stockholder who has fully paid for any
stock of the Corporation shall be entitled to receive a certificate representing
such shares, and such certificate shall be signed by the President or a Vice
President, if any, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Corporation. Signatures on the
certificate may be facsimile, in the manner prescribed by law. Each certificate
shall exhibit on its face the number and class (and series, if any) of the
shares it represents. Each certificate also shall state upon its face the name
of the person to whom it is issued and that the Corporation is organized under
the laws of the State of Maryland. Each certificate may (but need not) be
sealed with the seal of the Corporation or facsimile thereof. In the event any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate ceases to be such officer, transfer agent or
registrar before the certificate is issued, the certificate nevertheless may be
issued by the Corporation with the same effect as if such person were such
officer at the date of issue of the certificate. All stock certificates
representing shares of capital stock which are subject to restrictions on
transfer or to other restrictions may have imprinted thereon a notation of such
restriction.

Section 2. Registration of Transfer. Upon surrender to the Corporation or
to any transfer agent of the Corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, the Corporation, or its transfer agent, shall issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon the Corporation's books, provided that the
transaction is not in violation of applicable law or an agreement known to the
Corporation.

Section 3. Registered Stockholders. Except as otherwise provided by law,
the Corporation shall be entitled to recognize the exclusive right of a person
who is registered on its books as the owner of shares of its capital stock to
receive dividends or other distributions (to the extent otherwise distributable
or distributed) and to vote (in the case of voting stock) as such owner a person
who is registered on its books as the owner of shares of its capital stock. The
Corporation shall not be bound to recognize any equitable or legal claim to or
interest in such shares on the part of any other person. The Corporation (or
its transfer agent) shall not be required to send notices or dividends to a name
or address other than the name or address of the stockholders appearing on the
stock ledger maintained by the Corporation (or by the transfer agent or
registrar, if any), unless any such stockholder shall have notified the
Corporation (or the transfer agent or registrar, if any), in writing, of another
name or address at least ten (10) days prior to the mailing of such notice or
dividend.

Section 4. Record Date. In order that the Corporation may determine the
stockholders of record who are entitled (i) to notice of or to vote at any
meeting of stockholders or any adjournment thereof, (ii) to express written
consent to corporate action in lieu of a meeting, (iii) to receive payment of
any dividend or other distribution, or allotment of any rights, or (iv) to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board of Directors, in
advance, may fix a date as the record date for any such determination. Such
date shall not be more than ninety (90) days nor less than ten (10) days before
the date of such meeting, nor more than ninety (90) days prior to the date of
any other action.

Section 5. Lost, Stolen or Destroyed Certificate. The Board of Directors
may direct a new certificate to be issued in place of any certificate
theretofore issued by the Corporation which is claimed to have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen or destroyed. When authorizing such
issue of a new certificate, the Board of Directors, in its discretion, may
require as a condition precedent to issuance that the owner of such lost, stolen
or destroyed certificate, or his or her legal representative, advertise the same
in such manner as the Board shall require and/or to give the Corporation a bond
in such sum, or other security in such form, as the Board may direct, as
indemnity against any claim that may be made against the Corporation with
respect to the certificate claimed to have been lost, stolen or destroyed.

ARTICLE VIII
CONTRACTS, LOANS, CHECKS AND DEPOSITS

Section 1. Contracts. The President or a Vice President, may enter into
any contract or execute and deliver any instrument in the name of and on behalf
of the Corporation, except as otherwise provided by law, the Articles of
Incorporation, these Bylaws or a duly adopted resolution of the Board of
Directors.

Section 2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name without
the endorsement of the President or a Vice President unless expressly authorized
by resolution of the Board of Directors. The Corporation shall have the power
to borrow funds on the personal credit of its officers and directors if
authorized by a resolution of the directors and shall be empowered to lend funds
to its officers and directors upon an appropriate resolution.

Section 3. Checks, Drafts, etc. All checks, drafts, or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be signed by the President or a Vice President
unless and until specifically changed by a resolution of the Board of Directors.

Section 4. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the President or a Vice
President may select, except as otherwise specified by resolution of the Board
of Directors.

ARTICLE IX
GENERAL PROVISIONS

Section 1. Dividends. Subject to the General Corporation Law of the State
of Maryland and to any provisions of the Articles of Incorporation relating to
dividends, dividends upon the outstanding capital stock of the Corporation may
be declared by the Board of Directors at any annual, regular or special meeting
and may be paid in cash, in property or in shares of the Corporation's capital
stock.

Section 2. Reserves. The Board of Directors, in its sole discretion, may
fix a sum which may be set aside or reserved over and above the paid-in capital
of the Corporation for working capital or as a reserve for any proper purpose,
and from time to time may increase, diminish or vary such fund or funds.

Section 3. Fiscal Year. The fiscal year of the Corporation shall be the
calendar year.

Section 4. Seal. The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its incorporation and the words "Corporate Seal"
and "Maryland".

Section 5. Amendment of the Bylaws. To the extent not prohibited by law,
the Board of Directors shall have the power to make, alter and repeal these
Bylaws, and to adopt new bylaws, in all cases by an affirmative vote of a
majority of the whole Board, provided that notice of the proposal to make, alter
or repeal these Bylaws, or to adopt new bylaws, is included in the notice of the
meeting of the Board of Directors at which such action takes place.<PAGE>

Secretary's Certification

I hereby certify that these twelve (12) pages of Bylaws were adopted by this
Corporation by unanimous written consent of the Board of Directors, effective as
of the 16 day of February, 1995.

By: /s/ H. William Willoughby
---------------------------
H. William Willoughby, Secretary <PAGE>

EXHIBIT 3(l)

Third Amendment to Agreement of Limited Partnership of
CRI/AIM Investment Limited Partnership

THIRD AMENDMENT
TO
AGREEMENT OF LIMITED PARTNERSHIP
OF
CRI/AIM INVESTMENT LIMITED PARTNERSHIP

This THIRD AMENDMENT (the "Third Amendment") is entered into effective as
of 11:58 p.m. on June 30, 1995 by and between C.R.I., Inc., a Delaware
corporation ("CRI" or "Withdrawing General Partner"), CRIIMI MAE Inc., a
Delaware corporation ("CRIIMI") and CRI Acquisition, Inc., a Maryland
corporation ("CRI Acquisition" or "Substitute General Partner").

RECITALS

1. CRI is the General Partner of CRI/AIM Investment Limited Partnership (the
"Partnership"). CRIIMI is the Limited Partner in the Partnership.

2. The Agreement of Limited Partnership for the Partnership was entered into
as of March 1, 1991. A First Amendment to Agreement of Limited Partnership of
the Partnership was entered into as of June 1, 1993. A Second Amendment to
Agreement of Limited Partnership of the Partnership was entered into as of
August 31, 1993. (The Agreement of Limited Partnership, First Amendment thereto
and Second Amendment thereto are hereinafter referred to collectively as the
"Partnership Agreement".)

3. CRI desires to withdraw as General Partner of the Partnership and transfer
its General Partner interest to CRI Acquisition as Substitute General Partner
and CRIIMI has consented to such transfer.

NOW, THEREFORE, in consideration of the recitals and the mutual covenants
and agreements hereinafter set forth, the parties have agreed to modify the
terms of the Partnership Agreement as follows:

1. CRI hereby withdraws as general partner of the Partnership and CRI
Acquisition is admitted as Substitute General Partner and agrees to assume all
obligations of the General Partner under the Partnership Agreement and to be
bound by the terms thereof. In connection therewith the first half of the table
in Paragraph 6(a) of the Partnership Agreement is amended as follows:

NAME AND ADDRESS PERCENTAGE CAPITAL
INTEREST COMMITMENT

CRI Acquisition, Inc. 50% $1,100,000.00
The CRI Building
11200 Rockville Pike
Rockville, MD 20852

3. Except as specifically set forth in this Third Amendment, all terms of the
Partnership Agreement shall remain in full force and effect as written.

IN WITNESS WHEREOF, CRI, CRIIMI and CRI Acquisition have executed this
Third Amendment as of the day and year first above written.

WITHDRAWING GENERAL PARTNER:

C.R.I., Inc.

By: /s/ H. William Willoughby
-------------------------
Its: President

GENERAL PARTNER:

CRI Acquisition, Inc.

By: /s/ H. William Willoughby
-------------------------
Its: President

LIMITED PARTNER:

CRIIMI MAE Inc.

By: /s/ H. William Willoughby
-------------------------
Its: President <PAGE>

EXHIBIT 3(m)

Fourth Amendment to Agreement of Limited Partnership of
CRI/AIM Investment Limited Partnership

FOURTH AMENDMENT
TO
AGREEMENT OF LIMITED PARTNERSHIP
OF
CRI/AIM INVESTMENT LIMITED PARTNERSHIP

This FOURTH AMENDMENT (the "Fourth Amendment") is entered into effective
as of 11:59 p.m. on June 30, 1995 by and between, CRIIMI MAE Inc., a Maryland
corporation ("CRIIMI") and CRIIMI MAE Management, Inc., a Maryland corporation
("CRIIMI Management".)

RECITALS

1. CRI Acquisition, Inc. ("CRI Acquisition")was the General Partner of CRI/AIM
Investment Limited Partnership (the "Partnership"). CRIIMI is the Limited
Partner in the Partnership.

2. The Agreement of Limited Partnership for the Partnership was entered into
as of March 1, 1991. A First Amendment to Agreement of Limited Partnership of
the Partnership was entered into as of June 1, 1993. A Second Amendment to
Agreement of Limited Partnership of the Partnership was entered into as of
August 31, 1993. A Third Amendment to Agreement of Limited Partnership was
entered into as of 11:58 p.m. on June 30, 1995. (The Agreement of Limited
Partnership, First Amendment thereto, Second Amendment thereto and Third
Amendment thereto are hereinafter referred to collectively as the "Partnership
Agreement").

3. CRI Acquisition has merged into CRIIMI Management.

NOW, THEREFORE, in consideration of the recitals and the mutual covenants
and agreements hereinafter set forth, the parties have agreed to modify the
terms of the Partnership Agreement as follows:

1. CRI Acquisition has merged into CRIIMI Management and CRIIMI Management is
the Substitute General Partner and agrees to assume all obligations of the
General Partner under the Partnership Agreement and to be bound by the terms
thereof. In connection therewith, the first half of the table in Paragraph 6(a)
of the Partnership Agreement is amended as follows:

NAME AND ADDRESS PERCENTAGE CAPITAL
INTEREST COMMITMENT

General Partner
CRIIMI MAE Management, 50% $1,100,000.00
Inc.
The CRI Building
11200 Rockville Pike
Rockville, MD 20852

2. Section 25, ADDITIONAL UNDERTAKINGS OF CRI is hereby deleted in its
entirety.

3. The blank in Section 5 of the Partnership Agreement is hereby completed by
inserting "February 28, 2031" therein.

4. Except as specifically set forth in this Fourth Amendment, all terms of the
Partnership Agreement shall remain in full force and effect as written.

IN WITNESS WHEREOF, CRI and CRIIMI have executed this Fourth Amendment as
of the day and year first above written.

SUBSTITUTE GENERAL PARTNER:

CRIIMI MAE Management, Inc.

By: /s/ H. Willliam Willoughby
--------------------------
Its: President

LIMITED PARTNER:

CRIIMI MAE Inc.

By: /s/ H. William Willoughby
-------------------------
Its: President

EXHIBIT 3(n)

Limited Partnership Agreement ofCRIIMI MAE Services
Limited Partnership

LIMITED PARTNERSHIP AGREEMENT OF
CRIIMI MAE SERVICES LIMITED PARTNERSHIP

THIS LIMITED PARTNERSHIP AGREEMENT ("Agreement") of CRIIMI MAE Services
Limited Partnership (the "Partnership") shall be effective as of June 1, 1995,
between CRIIMI MAE Management, Inc., a Maryland corporation (the "General
Partner"), and CRIIMI MAE Services, Inc., a Maryland corporation (the "Limited
Partner").

ARTICLE I

1.1 Definitions. In addition to the defined terms set forth herein, the
capitalized terms set forth in Appendix A shall have the meanings set forth in
Appendix A.

ARTICLE II

FORMATION, NAME, PURPOSES AND OFFICES

2.1 Organization. The Partners hereby confirm and ratify the organization
and formation of the Partnership as a limited partnership pursuant to the
provisions of the Act for the limited purposes set forth in Section 2.3 below
and upon the terms and conditions set forth in this Agreement.

2.2 Partnership Name. The name of the Partnership shall be CRIIMI MAE
Services Limited Partnership, and all business of the Partnership shall be
conducted in such name or such other name as the General Partner shall select.

2.3 Purposes. The purposes and business of the Partnership shall be to
(a) perform any and all activities related to the origination, management,
servicing, holding and/or disposition of real estate loans, (b) provide real
estate advisory, asset management, and other services to commercial entities,
and (c) engage in any and all activities related or incidental to the foregoing.

2.4 Registered Office. The registered office of the Partnership in the
State of Maryland is The CRI Building, 11200 Rockville Pike, Rockville, Maryland
20852 and the name of the registered agent for service of process is CRICO
Services Corporation. The General Partner may change the registered office of
the Partnership to any other place within the State of Maryland upon ten (10)
days' written notice to the Limited Partners and the preparation and filing of
an amendment of the Certificate of Limited Partnership of the Partnership
reflecting such change, if required. The principal office of the Partnership
shall be located at The CRI Building, 11200 Rockville Pike, Rockville, Maryland
20852. The Partnership may maintain other offices at such other locations as
the General Partner shall determine from time to time.

2.5 Term. The term of the Partnership shall commence on the filing of a
Certificate of Limited Partnership in the State of Maryland, and shall continue
until the earlier of (i) December 31, 2034; or (ii) the winding up and
liquidation of the Partnership and its business following an event of
dissolution as described in Section 9.1 hereof.

2.6 Filings.

(a) The General Partner shall take any and all actions reasonably
necessary to perfect and maintain the status of the Partnership as a limited
partnership under the laws of the State of Maryland and any other states or
jurisdictions in which the Partnership engages in business. The General Partner
shall cause amendments to the Certificate to be filed whenever required by the
Act and/or such other laws. Such amendments may be executed by the General
Partner on behalf of the Partnership and the Limited Partners.

(b) Upon the dissolution of the Partnership, the General Partner
shall promptly execute and cause to be filed a certificate of cancellation in
accordance with the Act and other filings required under the laws of any other
states or jurisdictions in which the Partnership conducts business.

(c) The General Partner shall promptly deliver copies of all filings
made on behalf of the Partnership in accordance with this Section to the Limited
Partners.

2.7 Independent Activities. Except as otherwise agreed to in writing,
each of the Partners and any Affiliates shall be free to engage in, to conduct
or to participate in any business or activity whatsoever, including, without
limitation, the ownership and/or servicing of real estate mortgages. The
General Partner, in the exercise of its rights, powers and authority under this
Agreement, may contract or otherwise deal with or otherwise obligate the
Partnership to entities in which the General Partner or any one or more of its
or any Affiliate's, officers, directors, employees, agents, stockholders or
partners may have a direct or indirect ownership or other financial interest.
Neither this Agreement nor any activity undertaken pursuant hereto shall prevent
any Partner from engaging in the activities specified above, or require any
Partner to permit the Partnership or any Partner to participate in any such
activities, and as a material part of the consideration for the execution of
this Agreement by each Partner, each Partner hereby waives, relinquishes and
renounces any such right or claim of participation.

ARTICLE III

PARTNER'S CAPITAL CONTRIBUTIONS AND LOANS

3.1 Capital Contributions of the Partners. Each Partner shall make
initial Capital Contributions as set forth below which Capital Contributions are
agreed to have the values set forth to the immediate right of the Partner's name
on Exhibit A hereto. The Partners shall not be required to make any Additional
Capital Contribution to the Partnership.

(a) The General Partner will contribute the following assets to the
Partnership together with any and all rights which the General Partner may have
with respect to such assets:

Asset Value

Pooling and Servicing $538,000
Agreement and Subservicing
Agreement with Respect to
Series 1994-MC1

Software License Agreement $0
dated November 12, 1992, between
Financial Industry Computer
Systems, Inc. and C.R.I., Inc.

(b) The Limited Partner will contribute the following assets to the
Partnership together with any and all rights which the Limited Partner may have
to such assets including, but not limited to, all rights of the Limited Partner
under the agreements pursuant to which the Limited Partner acquired such assets:

Assets Value

Four separate Submanagement Agreements $5,198,418
each dated as of March 1, 1991 between
AIM Acquisition Partners, L.P. and
CRI/AIM Management, Inc. dealing,
respectively, with respect to American
Insured Mortgage Investors, Integrated
Resources American Insured Mortgage Investors
- Series 85, American Insured Mortgage
Investors - Series 86, and American Insured
Mortgage Investors L.P. - Series 88.

Servicing Agreements previously held $1,387,546
by CRICO Mortgage Company, Inc., being
listed on the attached Appendix B.

(c) Each Partner warrants that it has full power and authority to
assign the assets being contributed by it. Each Partner will hold the
Partnership harmless from any claim that such Partner lacks the authority to
assign the assets being contributed by it.

(d) The Partnership will assume all of the obligations under each
agreement contributed to it except that the contributing Partner will hold the
Partnership harmless from any and all liabilities which accrued prior to, or are
the result of events which occurred prior to, the effective date of the
contribution.

3.2 Additional Capital Contributions; Loans. With the consent of the
General Partner, any Partner may from time to time make Additional Capital
Contributions or loans to the Partnership. The General Partner shall give to
the Limited Partners prompt written notice of the making of any Additional
Capital Contribution or loan. Any such loan made to the Partnership shall be
evidenced by a promissory note, which promissory note shall bear interest at the
lesser of (x) the highest rate permit by applicable law, or (y) the Prime Rate
plus two percent. The General Partner shall be entitled to use its discretion
and judgment in determining when Additional Capital Contributions or loans are
desirable.

3.3 Capital Accounts. A separate Capital Account shall be established for
each Partner (each a "Capital Account") on the books of the Partnership on the
date on which such Partner makes its initial Capital Contribution, as provided
herein, and maintained in the manner set out in Appendix A. The foregoing
provisions and other provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Section 1.704-1(b) and 1.704-2 of
the Regulations and shall be interpreted and applied in a manner consistent with
such Regulations.

3.4 Other Matters.

(a) Except as otherwise provided in Section 4.1 and 10.1 of this
Agreement, no Partner shall demand or
receive a return of its Capital Contribution. Under circumstances requiring a
return of any Capital Contribution, no Partner shall have the right to receive
property other than cash except as may be specifically provided herein or as
agreed to by the General Partner and a Majority in Interest of the Limited
Partners.

(b) No Partner shall receive any interest with respect to its Capital
Contribution or its Capital Account, except as otherwise provided in this
Agreement.

(c) The Limited Partners shall not be personally liable for the
debts, liabilities, contracts or any other obligations of the Partnership.

ARTICLE IV

DISTRIBUTIONS

4.1 Distributions of Net Cash Flow. The Partnership shall distribute to
the Partners any Net Cash Flow at such times as the General Partner shall
reasonably determine to be appropriate, but not less frequently than quarterly;
provided, however, to the extent a distribution or payment of cash would, with
the passage of time or the giving of notice or both, become an event of default
under any Partnership contract or obligation, the distribution or payment of Net
Cash Flow shall be limited to such amount that would not precipitate such an
event of default. Distributions of Net Cash Flow shall be made proportionately
to all Partners in accordance with their percentages of Partnership Interest as
such percentages may change from time to time.

ARTICLE V

ALLOCATIONS

5.1 Allocation of Profits. After giving effect to the special allocations
set forth in Sections 5.3 and 5.4 hereof, Profits for any Fiscal Year shall be
allocated to the Partners in the following order:

(a) first, to the Partners having deficit balances in their Capital
Accounts (computed after taking into account any other Profits or Losses
for the Fiscal Year and all distributions pursuant to Article IV with
respect to such Fiscal Year and after adding back each Partner's share, if
any, of Partner Nonrecourse Debt Minimum Gain or Partnership Minimum Gain)
in proportion to such deficits until the deficits are eliminated; and

(b) any remaining such Profits shall be allocated proportionately to
all Partners in accordance with their percentages of Partnership Interest
as such percentages may change from time to time.

5.2 Allocations of Losses. After giving effect to the special allocations
set forth in Section 5.3 and 5.4 hereof, Losses for any Fiscal Year shall be
allocated as set forth in Section 5.2(a) below, subject to the limitation of
Section 5.2(b) below.

(a) Losses for any Fiscal Year shall be allocated among the Partners
so as to produce balances in the Capital Accounts (computed as described in
clause (a) of Section 5.1) after the allocation of Profits pursuant to this
clause (a) for the Partners such that a distribution of an amount of cash
equal to such Capital Account Balances at the end of the Fiscal Year in
accordance with such Capital Account balances would be in the amounts,
sequences and priority set forth in Article IV.

(b) The Losses allocated pursuant to Section 5.2(a) hereof shall not
exceed the maximum amount of Losses that can be so allocated without
causing any Limited Partner to have an Adjusted Capital Account Deficit
(determined after all cash distributions for the Fiscal Year) at the end of
the Fiscal Year for which the allocation relates. All Losses in excess of
the limitation set forth in the preceding sentence shall be allocated among
those Limited Partners which will not have an Adjusted Capital Account
Deficit at the end of the Fiscal Year in the ratio of their relative
Partnership Interests. In any Fiscal Year in which all the Limited
Partners will have an Adjusted Capital Account Deficit, all Losses in
excess of the limitations described in the first two sentences of this
Section 5.2(b) shall be allocated to the General Partner.

5.3 Special Allocations. The following special allocations shall be made
in the following order:

(a) Minimum Gain Chargeback. Notwithstanding any other provisions of
this Article V, except as provided in Regulation Section 1.704-2(f), if
there is a net decrease in Partnership Minimum Gain during any Fiscal Year,
each Partner shall be allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain, determined
in accordance with Regulations Section 1.704-2(g). Allocations pursuant to
the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Partner pursuant thereto. The items to be
so allocated shall be determined in accordance with Sections 1.704-2(f)(6)
and 1.704-2(j)(2) of the Regulations. This Section 5.3(a) is intended to
comply with the minimum gain chargeback requirement in Section 1.704-2(f)
of the Regulations and shall be interpreted consistently therewith.

(b) Chargeback of Partner Nonrecourse Debt Minimum Gain.
Notwithstanding the other provisions of this Article V (other than Section
5.3(a), except as provided in Regulation Section 1.704-2(i)(4)), if there
is a net decrease in Partner Nonrecourse Debt Minimum Gain during any
Partnership Fiscal Year, any Partner with a share of Partner Nonrecourse
Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(5) of
the Regulations, shall be allocated items of Partnership income and gain
for such period (and if necessary, subsequent periods) in an amount equal
to such Partner's share of the net decrease in Partner Nonrecourse Debt
Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to
the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Partner pursuant thereto. The items to be
so allocated shall be determined in accordance with Section 1.704-2(i)(4)
and 1.704-2(j)(2) of the Regulations. This Section 5.3(b) is intended to
comply with the minimum gain chargeback requirement in Section 1.704(i)(4)
of the Regulations and shall be interpreted consistently therewith.

(c) Qualified Income Offset. In the event any Limited Partner
unexpectedly receives any adjustments, allocations, or distributions
described in Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of Partnership income and
gain shall be specially allocated to each such Limited Partner in an amount
and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of such Limited Partner
as quickly as possible, provided that an allocation pursuant to this
Section 5.3(c) shall be made only if and to the extent that such Limited
Partner would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Article V have been tentatively made as if
this Section 5.3(c) were not in this Agreement. This Section 5.3(c) is
intended to constitute a "qualified income offset" within the meaning of
Regulations Section 1.704-1(b)(2)(ii), and shall be interpreted
consistently therewith.

(d) Gross Income Allocation. In the event any Limited Partner has a
deficit Capital Account at the end of any Fiscal Year which is in excess of
the sum of (i) the amount such Limited Partner is obligated to restore
pursuant to any provision of this Agreement and (ii) the amount such
Limited Partner is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Section 1.704-2(g)(1) and 1.704-
2(i)(5), each such Limited Partner shall be specially allocated items of
Partnership income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section 5.3(d) shall
be made only if and to the extent that such Limited Partner would have a
deficit Capital Account in excess of such sum after all other allocations
provided for in this Article V have been made as if Section 5.3(c) and
Section 5.3(d) were not in this Agreement.

(e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal
Year shall be allocated to the Partners in accordance with their
Partnership Interests.

(f) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Fiscal Year or other period shall be specifically
allocated to the Partner who bears the economic risk of loss with respect
to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable in accordance with Regulations Section 1.704-
2(i)(1).

(g) Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Code Section 734(b)
or Code Section 743(b) is required, pursuant to Regulations Sections 1.704-
1(b)(2)(iv)(m)(2) or (4), to be taken into account in determining Capital
Accounts, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases such basis) and such gain or
loss shall be specially allocated to the partners in a manner consistent
with the manner in which their Capital Accounts are required to be adjusted
pursuant to such Section of the Regulations.

(h) Allocation of Self Charged Interest. If a Partner makes a loan
to the Partnership, to the extent permitted under Regulations Section
1.469-7, the Partnership shall allocate to such Partner any interest
deduction specially incurred by the Partnership as a result of such loan;
provided, however, that this Section 5.3(h) shall not affect the amount of
income or loss otherwise allocable to such Partner.

5.4 Curative Allocations. The allocations set forth in Section 5.2(b),
5.3(a), 5.3(c), 5.3(d), 5.3(e), 5.3(f) and 5.3(g) hereof (the "Regulatory
Allocations") are intended to comply with certain requirements of the
Regulations. It is the intent of the Partners that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory Allocations
or with special allocations of other items of Partnership income, gain, loss or
deduction pursuant to this Section 5.4. Therefore, notwithstanding any other
provision of this Article V (other than the Regulatory Allocations and the
following sentence), the General Partner shall make such offsetting special
allocations of Partnership income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made, each
Partner's Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Partner would have had if the Regulatory
Allocations were not part of this Agreement and all Partnership items were
allocated pursuant to Section 5.1, 5.2(a), 5.3(h) and 5.5 hereof.
Notwithstanding the previous sentence, the General Partner shall not be required
to make special allocations to income or gain under this Section 5.4 to offset
Regulatory Allocations previously made under Sections 5.3(e) and 5.3(f) hereof.

5.5 Other Allocation Rules.

(a) For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other items shall
be determined on a daily, monthly, or other basis, as determined by the General
Partner using any permissible method under Code Section 706 and the Regulations
thereunder.

(b) All allocations to the Limited Partners pursuant to this Article
V shall, except as otherwise expressly provided, be divided among them in
proportion to the Partnership Interests held by each. In the event there is
more than one General Partner, all such allocations to the General Partner shall
be divided among them as they may agree.

(c) Except as otherwise provided in this Agreement, all items of
Partnership income, gain, loss, deduction, and any other allocations not
otherwise provided for shall be divided among the Partners in the same
proportions as they share Profits or Losses, as the case may be. However,
notwithstanding any other provision of this Agreement other than Section 5.6
below, the General Partner shall be allocated not less than 1% of each item of
Partnership income gain, loss, deduction or credit, except to the extent such an
allocation would be contrary to the provisions of Section 704(b) or (c) of the
related income tax regulations.

(d) The Partners are aware of the income tax consequences of the
allocations made by this Article V and hereby agree to be bound by the
provisions of this Article V in reporting their shares of Partnership.

(e) Solely for purposes of determining a Partner's proportionate
share of the "excess nonrecourse liabilities" of the Partnership within the
meaning of Regulations Section 1.752-3(a), the Partners' interests in
Partnership profits shall be determined by the General Partner.

(f) To the extent permitted by Sections 1.704-2(h) and 1.704-2(i)(6)
of the Regulations, the General Partner shall endeavor to treat distributions as
having been made from the proceeds of a Nonrecourse Liability or a Partner
Nonrecourse Debt only to the extent that any such distribution would cause or
increase an Adjusted Capital Account deficit for any Limited Partner.

5.6 Tax Allocations: Code Section 704(c). In accordance with Code
Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction
with respect to any property contributed to the capital of the Partnership
shall, solely for tax purposes, be allocated among the Partners so as to take
account of any variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial Gross Asset Value
(computed in accordance with subparagraph (i) of the definition of Gross Asset
Value). In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to subparagraph (ii) of the definition of Gross Asset Value, subsequent
allocations of income, gain, loss, and deduction with respect to such asset
shall take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the Regulations thereunder. Any elections or
other decisions relating to such allocations shall be made by the General
Partner in any manner that reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Section 5.6 are solely for purposes of
federal, state, and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner's Capital Account or share of Profits,
Losses, other items, or distributions pursuant to any provision of this
Agreement.

ARTICLE VI

MANAGEMENT OF THE PARTNERSHIP; OPTIONS

6.1 Management.

(a) Except as otherwise expressly set forth herein, the management
and control of the business and affairs of the Partnership shall be exclusively
vested in the General Partner who shall have the sole and exclusive right to
manage the business of the Partnership and shall have all of the rights and
powers which may be possessed by general partners under the Act. The General
Partner agrees to carry out the purposes and business of the Partnership in
accordance with this Agreement; to devote to the Partnership's business such
time as reasonably shall be required; to perform, or cause and supervise the
performance of, all supervisory, management and operational services and
functions of the Partnership; and to conduct the affairs of the Partnership in
the best interest of the Partnership and the Partners.

(b) Except as otherwise permitted by this Agreement or applicable
law, the Limited Partners acting in their capacity as Limited Partners shall not
have any right to participate in the management or control of the Partnership or
its business and affairs, to bring an action for partition or sale in connection
with the property or assets of the Partnership, whether real or personal, or to
act for or bind the Partnership in any way.

6.2 Restrictions on Authority of General Partner. Notwithstanding Section
6.1, the General Partner shall not have the authority to do any of the following
without the prior written consent of all of the Limited Partners:

(i) do any act which would make it impossible to carry on
the ordinary business of the Partnership, except as otherwise specifically
permitted by this Agreement, including, without limitation, Section 6.1 hereof;

(ii) do any act in contravention of this Agreement;

(iii) extend the term of the Partnership; or

(iv) perform any act that would subject any Limited Partner
to liability as a general partner.

6.3 Indemnification of the General Partner.

(a) THE PARTNERSHIP, ITS RECEIVER, OR ITS TRUSTEE SHALL INDEMNIFY,
SAVE HARMLESS, AND PAY ALL JUDGMENTS AND CLAIMS AGAINST THE GENERAL PARTNER
RELATING TO ANY LIABILITY OR DAMAGE INCURRED BY REASON OF ANY ACT PERFORMED OR
OMITTED TO BE PERFORMED BY THE GENERAL PARTNER IN CONNECTION WITH THE BUSINESS
OF THE PARTNERSHIP, INCLUDING ATTORNEYS' FEES INCURRED BY THE GENERAL PARTNER IN
CONNECTION WITH THE DEFENSE OF ANY ACTION BASED ON SUCH ACT OR OMISSION,
INCLUDING ANY ACT OR OMISSION WHICH CONSTITUTES NEGLIGENCE.

(b) IN THE EVENT OF ANY ACTION BY A LIMITED PARTNER AGAINST THE
GENERAL PARTNER, INCLUDING A PARTNERSHIP DERIVATIVE SUIT, THE PARTNERSHIP SHALL
INDEMNIFY, SAVE HARMLESS, AND PAY ALL EXPENSES OF THE GENERAL PARTNER, INCLUDING
ATTORNEYS' FEES, INCURRED IN THE DEFENSE OF SUCH ACTION, BUT ONLY IF THE GENERAL
PARTNER IS SUCCESSFUL IN SUCH ACTION.

(c) NOTWITHSTANDING THE PROVISIONS OF SECTIONS 6.3(a) AND (b) ABOVE,
THE GENERAL PARTNER SHALL NOT BE INDEMNIFIED FROM ANY LIABILITY, CLAIM, COST OR
EXPENSE RESULTING FROM THE FRAUD, BAD FAITH, GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE GENERAL PARTNER OR A BREACH OF THIS AGREEMENT BY THE GENERAL
PARTNER WHICH CONSTITUTES FRAUD, BAD FAITH, GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.

6.4 Partnership Expenses. All reasonable third party expenses incurred by
the General Partner (or any third party hired by the General Partner) for
performing the services described in Article VI hereof shall constitute
Operating Expenses. The General Partner shall not be required to use its own
funds in carrying out any of its responsibilities under this Agreement. In the
event that the General Partner uses its own funds to pay for Operating Expenses,
the Partnership shall reimburse the General Partner within ten (10) days
following receipt of evidence of such expenditure made by the General Partner
out of its own funds.

6.5 Insurance. The General Partner shall cause the Partnership to obtain
and keep in force, or cause to be obtained and kept in force, during the term
hereof, all insurance necessary or appropriate for entities operating in the
Partnership's line of business, and the cost thereof shall be considered an
Operating Expense.

6.6 Partnership Accounts. The General Partner shall establish and
maintain one or more depository accounts ("Partnership Accounts") for funds of
the Partnership at depositories selected by the General Partner. The
Partnership Accounts shall be administered in accordance with any contractual
agreements to which the Partnership is a party or by which it is bound, and
subject thereto, in accordance with the business judgment of the General
Partner. The General Partner shall notify the Limited Partners in writing of
the location and account numbers of all Partnership Accounts. All funds of the
Partnership shall be deposited in one of the Partnership Accounts and used
exclusively for Partnership purposes. No Partner shall commingle any other
funds with the funds of the Partnership in the Partnership Accounts.

6.7 Approval of Limited Partners. Unless a different percentage vote is
expressly indicated, all actions taken or approvals given by Limited Partners
shall require the approval of a Majority in Interest of the Limited Partners.

6.8 Reliance by Third Parties. Notwithstanding any other provision of
this Agreement to the contrary, no lender, purchaser or other Person, including
any purchaser of Property from the Partnership or any other Person dealing with
the Partnership, shall be required to verify any representation by the General
Partner as to its authority to encumber, sell, or otherwise use or deal with any
assets or properties of the Partnership, and any such lender, purchaser, or
other Person shall be entitled to rely exclusively on such representation and
shall be entitled to deal with the General Partner as if it were the sole party
in interest therein, both legally and beneficially.

ARTICLE VII

BOOKS AND RECORDS

7.1 Books and Records; Periodic Reporting.

(a) The Partnership shall keep accurate and complete books of account
and records on an accrual basis showing the assets and liabilities, operations,
transactions and financial condition of the Partnership in accordance with the
accounting principles used by the Partnership for federal income tax purposes.
All financial statements shall be accurate and in all material respects shall
present fairly the financial position and results of operation of the
Partnership. The books of account and records of the Partnership shall at all
times be maintained at the principal office of the Partnership.

(b) No later than one hundred twenty (120) days after the end of each
Fiscal Year, the General Partner shall furnish the Limited Partners with
financial statements of the Partnership, including balance sheets and income
statements. If the General Partner causes financial statements to be prepared
for periods other than annual periods, the General Partner shall furnish the
Limited Partners with such financial statements within a reasonable time after
such financial statements are prepared and received by the General Partner.

(c) The Partnership's federal, state and local income and other tax
returns shall be prepared, at the expense of the Partnership, by a firm of
certified public accountants selected by the General Partner (the "Partnership
Accountants"). All tax returns shall be signed on behalf of the Partnership and
filed by the General Partner.

7.2 Right to Inspection. Each Limited Partner shall have the right at all
reasonable times upon reasonable notice to examine and copy at its expense the
books and records of the Partnership, which books and records shall be
maintained in the State of Maryland.

7.3 Tax Matters Partner. The General Partner is hereby designated as the
tax matters partner of the Partnership.

7.4 Tax Elections. The Partnership shall be treated, and shall file its
tax returns, as a partnership for federal, state and local income and other tax
purposes. If any Partner receives notice of a tax examination of the
Partnership by any federal, state or local authority, it shall promptly give
notice thereof to the other Partners. All elections permitted to be made by the
Partnership under the Code shall be made by the General Partner. At the
discretion of the General Partner, the Partnership may make an election under
754 of the Code.

ARTICLE VIII

ADMISSION AND WITHDRAWAL OF PARTNERS; ASSIGNMENT

8.1 Admission of New Limited Partners.

(a) Subject to Section 8.1(b) and (c) below, with the written consent
of the General Partner, which consent may be arbitrarily withheld in the sole
discretion of the General Partner, the Partnership may admit one or more new
Limited Partners. Any Limited Partner so admitted shall (i) make a Capital
Contribution, and (ii) have a Partnership Interest, in such amounts as shall be
determined by the General Partner.

(b) No new Partner shall be admitted to the Partnership (i) if the
effect of such admission would be the termination of the Partnership pursuant to
Code Section 708(b)(1)(B); or (ii) if such admission would, with the giving of
notice, the passage of time or both, render untrue any representation or
warranty made by the Partnership in, or violate the terms of, or constitute a
breach of or a default under, this Agreement, or any other agreement, document,
contract or instrument to which the Partnership is a party or by which the
Partnership or its assets is bound.

(c) The admission of any new Partner to the Partnership (i) may be
conditioned on the receipt by the Partnership of opinions of counsel acceptable
to the General Partner with respect to compliance by the Partnership and the new
Partner with securities, tax and other laws and such other matters as the
General Partner may deem appropriate; and (ii) shall be conditioned on the
confirmation by the new Partner of the accuracy of the representations and
warranties, and the agreement of such new Partner to be bound by the covenants
contained in Article XI of this Agreement, insofar as such representations,
warranties and covenants pertain to such new Partner.

8.2 Withdrawal of a Partner.

(a) The General Partner may not withdraw from the Partnership.

(b) Except for removals contemplated in Section 8.3, no Limited
Partner may withdraw from the Partnership without the written consent of the
General Partner. In granting such consent, the General Partner shall condition
the withdrawal of the withdrawing Limited Partner on such matters as the General
Partner may deem appropriate, and, in granting such consents, shall determine
(i) the extent, if any, to which such withdrawing Partner shall retain an
interest in the Partnership; (ii) the terms and conditions on and timing of the
return of such withdrawing Partner's capital; and (iii) the extent, if any, to
which such withdrawing Partner shall remain obligated or liable for obligations
and liabilities of the Partnership and/or at risk with respect to ongoing
Partnership operations.

(c) No Limited Partner may withdraw from the Partnership if the
effect of such withdrawal would, with the giving of notice, the passage of time,
or both, render untrue any representation or warranty made by the Partnership
in, or violate the terms of or constitute a breach of or a default under this
Agreement, the Purchase Agreement, the Contribution Agreement or any other
agreement, document, contract or instrument to which the Partnership is a party
or by which the Partnership or its assets is bound.

(d) On the withdrawal of a Limited Partner from the Partnership in
accordance with this Section, such Limited Partner shall cease to be a Partner
for all purposes.

8.3 Assignment.

(a) No Partner nor any assignee or successor in interest of a Partner
may, without the prior written consent of the General Partner, assign, pledge,
hypothecate, encumber or otherwise transfer all or any portion of its
Partnership Interest or rights and/or obligations hereunder (an "Assignment").
Such consent may be arbitrarily withheld in the sole discretion of the General
Partner. Without the written consent of the other Partners, which consents may
be arbitrarily withheld in the sole discretion of such Partner, an assignee
shall not become a Partner, and, in any event, each assignee shall execute an
instrument in form and substance satisfactory to the General Partner agreeing to
be bound by this Section 8.3 and any other appropriate provisions of this
Agreement. Notwithstanding anything contained in this Agreement to the
contrary, in no event may a Partner, an assignee of a Partner or a successor in
interest of a Partner make an Assignment or otherwise transfer all or any
portion of its Partnership Interest if such action would with the giving of
notice, the passage of time or both, render untrue any representation or
warranty made by the Partnership in, or violate the terms of, or constitute a
breach of or a default under this Agreement, the Purchase Agreement, the
Contribution Agreement or any other agreement, document, contract or instrument
to which the Partnership is a party, or by which the Partnership or its assets
is bound. The Partnership may condition any such Assignment, including an
Assignment not requiring the consent of the Partners, on the receipt by the
Partnership of opinions of counsel acceptable to the Partnership with respect to
compliance by the Partnership and the assigning Partner with securities, tax and
other laws and such other matters as the General Partner may deem appropriate.

(b) Any Partner that has assigned all of its Partnership Interest
shall cease to be a Partner for purposes of this Agreement; provided, however,
that such Partner shall remain liable for its obligations under this Agreement
incurred prior to the Assignment of its Partnership Interest, and shall remain
liable to the Partnership and the other Partners for the actions and omissions
of such Partner prior to the Assignment of its Partnership Interest.

(d) Notwithstanding the foregoing, in no event may the provisions of
this Section be initiated if the operation of this Section could, with the
giving of notice, the passage of time or both, violate the terms of, or
constitute a breach of or a default under, any agreement, document, contract or
instrument to which the Partnership is a party to or by which the Partnership or
its assets is bound.

ARTICLE IX

DISSOLUTION OF PARTNERSHIP

9.1 Dissolution Events. The Partnership shall be dissolved upon the
occurrence of any of the following events:

(a) The voluntary agreement of all Partners to dissolve the
Partnership;

(b) The expiration of the term specified in Section 2.5;

(d) Any other act by or with respect to the Partnership or any
Partner constituting a dissolution under applicable law.

9.2 Notice of Dissolution. In the event of the occurrence of any of the
events described in Section 9.1(c) with respect to a Defaulting Partner, the
Non-Defaulting Partners shall have the right and option, exercisable unanimously
at any time thereafter (until all of such events have been fully cured) by
notice (the "Dissolution Notice") to the Defaulting Partner, to dissolve and
wind up the Partnership; and any such termination, dissolution and winding up
shall take effect immediately upon the giving of such Dissolution Notice and
pursuant to Article X.

9.3 Reconstitution of the Partnership. On the occurrence of an event
described in Section 9.1(a) or (b), the Partnership shall be liquidated, and the
affairs of the Partnership shall be wound up in accordance with the provisions
of Article X. On the occurrence of an event described in Section 9.1(d), upon
the unanimous consent within ninety days after such event of all of the Partners
not causing the dissolution of the Partnership, the Partnership shall continue
the business of the Partnership without interruption to the extent permitted
under applicable law.

ARTICLE X

LIQUIDATION OF THE PARTNERSHIP

10.1 Liquidation. In the event of dissolution of the Partnership where the
business of the Partnership shall not be continued, liquidation shall occur.
The General Partner shall supervise the liquidation of the Partnership unless a
wrongful act of the General Partner dissolved the Partnership or the Limited
Partners elect another Partner to do so. In the event of any liquidation of the
Partnership under this Agreement or the Act, except as otherwise provided
herein, the proceeds of liquidating the Partnership shall be applied and
distributed in the following order of priority (each time to be satisfied in
full in the order listed below before any of such proceeds are allocated to the
subsequent item):

(a) First, to creditors, including Partners who are creditors (to the
extent not otherwise prohibited by law), in satisfaction of liabilities of
the Partnership (whether by payment or the making of reasonable provision
for payment therefor), other than liabilities for which reasonable
provision for payment has been made and liabilities for interim
distributions to Partners and distributions to Partners on withdrawal; then

(b) Second, to the setting up of any reserves which the supervising
Partner (or, if applicable, the liquidating trustee) determines to be
reasonably necessary for any contingent liabilities of the Partnership or
of any Partner arising out of, or in connection with, a Partnership
liability; then

10.2 Compliance with Timing Requirements of Regulations. In the event the
Partnership is "liquidated" within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g):

(i) distributions shall be made pursuant to this Article X to
the Partners who have positive Capital Accounts in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(2);

(ii) if the General Partner's Capital Account has a deficit
balance (after giving effect to all contributions, distributions, and
allocations for all taxable years, including the year during which
such liquidation occurs), the General Partner shall contribute to the
capital of the Partnership the amount necessary to restore such
deficit balance to zero in compliance with Regulations Section 1.704-
1(b)(2)(ii)(b)(3);

(iii) if any Limited Partner has a deficit balance in its
Capital Account (after giving effect to all contributions,
distributions, and allocations for all taxable years, including the
year during which such liquidation occurs), such Limited Partner shall
have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not
be considered a debt owed to the Partnership or to any other person
for any purpose whatsoever.

10.3 Deemed Distribution and Reconstitution. Notwithstanding any other
provision of this Article X, in the event the Partnership is liquidated within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but the Partnership is
not liquidated under this Article X, the property of the Partnership shall not
be liquidated, the Partnership's liabilities shall not be paid or discharged,
and the Partnership's affairs shall not be wound up. Instead, the Partnership
shall be deemed to have distributed the assets of the Partnership in kind to the
Partners, who shall be deemed to have assumed and taken subject to all
Partnership liabilities, all in accordance with their respective Capital
Accounts. Immediately thereafter, the Partners shall be deemed to have
recontributed the Property in kind to the Partnership, which shall be deemed to
have assumed and taken subject to all such liabilities.

10.4 Rights of Limited Partners. Except as otherwise provided in this
Agreement, each Limited Partner shall look solely to the assets of the
Partnership for the return of its Capital Contribution and shall have no right
or power to demand or receive property other than cash from the Partnership. No
Limited Partner shall have priority over any other Limited Partner as to the
return of its Capital Contributions, distributions, or allocations.

ARTICLE XI

MISCELLANEOUS

11.1 Additional Documents and Acts. In connection with this Agreement, as
well as all transactions contemplated by this Agreement, each Partner agrees to
execute and deliver such reasonable additional documents and instruments, and to
perform such reasonable additional acts, as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions and conditions of
this Agreement, and all such transactions. All approvals of a Partner shall be
in writing.

11.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD TO
CONFLICTS OF LAW.

11.3 Severability. If this Agreement or any portion thereof is, or the
operations contemplated hereby are, found to be inconsistent with or contrary to
any valid applicable laws or official orders, rules and regulations, the
inconsistent or contrary provisions of this Agreement shall be null and void and
such laws, orders, rules and regulations shall control and, as so modified,
shall continue in full force and effect; provided, however, that nothing
contained herein shall be construed as a waiver of any right to question or
contest any such law, order, rule or regulation in any forum having
jurisdiction.

11.4 Binding Effect. Except as herein otherwise expressly stipulated to
the contrary, this Agreement shall be binding upon and inure to the benefit of
the parties signatory hereto, and their respective successors and assigns.

11.5 Agreement Restricted to Partners. This Agreement is solely for the
parties hereto and no covenant or other provision herein shall create any rights
in, or give rise to any obligation to or cause of action by, any Person not a
party hereto.

11.6 Counterparts. This Agreement may be executed in a number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement.

11.7 Power of Attorney; Amendments. Each of the Limited Partners hereby
makes, constitutes and appoints the General Partner as its true and lawful
attorney, to make, sign, execute, acknowledge and file with respect to the
Partnership:

(a) such Certificates of Limited Partnership and such amended
Certificates of Limited Partnership and such assumed name certificates and
amendments thereto as may be required by law or pursuant to the provisions
of this Agreement;

(b) all documents required to qualify the Partnership to do business
in other states;

(c) documents of transfer of Partnership Interests and all other
instruments to effect such transfers in the event the provisions of this
Agreement have been complied with;

(d) all documents required to reflect the dissolution and termination
of the Partnership after it has been dissolved or terminated in accordance
herewith; and

(e) any amendment to this Agreement that the General Partner shall
determine to be desirable or appropriate; provided, that any amendment to
this Agreement that would adversely affect any right or interest of any
Limited Partner may only be made with the written consent of such Limited
Partner.

The foregoing power of attorney is hereby declared to be irrevocable and is
a power coupled with an interest, and it shall survive and not be affected by
the subsequent death, incompetency, legal disability, withdrawal, dissolution,
bankruptcy, insolvency or termination of any Partner or the transfer of all or
any portion of a Partnership Interest, and shall extend to each Partner's heirs,
legal representatives, successors and assigns.

11.8 Notices. All notices and demands provided for in this Agreement shall
be in writing and shall be given to the other Partners by hand, by telegram (or
telefax), or by United States Registered or Certified Mail, postage prepaid,
return receipt requested, to the addresses set forth below or to such other
addresses as any Partner hereto may be hereafter specify in writing:

(a) If to a Limited Partner:

To the address or fax number
set forth beneath the Limited Partner's
name on Exhibit A hereto

(b) If to the General Partner:

To the address or fax number
set beneath the General Partner's
name on Exhibit A hereto

Each notice or demand given by hand shall be effective as of its delivery
to the other Partners as so provided. Each notice given by telecopy or telefax
shall be effective as of the date on which such telegram or telefax is
transmitted and confirmation of delivery, or attempted delivery, thereof is
received. Each notice or demand given by mail shall be deemed delivered and
effective on the earlier to occur of (a) the date of delivery as shown by the
return receipt or (b) three (3) business days after the mailing thereof in
accordance with the provisions hereof. Any Partner may change its address for
purposes of receiving notices by giving notice thereof to the other Partner as
provided in this Article XI.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

"GENERAL PARTNER"

CRIIMI MAE Management, Inc.

By: /s/ H. William Willoughby
---------------------------
H. William Willoughby
President

"LIMITED PARTNER"

CRIIMI MAE Services, Inc.

By: /s/ William B. Dockser
-------------------------
William B. Dockser
Chairman of the Board

EXHIBIT A

LIMITED PARTNERSHIP AGREEMENT OF CRIIMI MAE
SERVICES LIMITED PARTNERSHIP

Name and Address Initial Contribution Partnership
Interest
GENERAL PARTNER
CRIIMI MAE Management, Inc. $ 538,000.00 8%
11200 Rockville Pike
Rockville, Maryland 20852
Attention: H. William Willoughby,
President

with a copy to:

Office of General Counsel
C.R.I., Inc.
11200 Rockville Pike
Rockville, Maryland 20852
Facsimile Number: 301/468-3150

LIMITED PARTNER
CRIIMI MAE Services, Inc. $6,585,964.00 92%
11200 Rockville Pike
Rockville, Maryland 20852
Attention: H. William Willoughby,
President
with a copy to:

Office of General Counsel
C.R.I., Inc.
11200 Rockville Pike
Rockville, Maryland 20852
Facsimile Number: 301/468-3150

APPENDIX A

DEFINED TERMS

"Act" means the Maryland Revised Uniform Limited Partnership Act, as
amended from time to time (or any corresponding provisions of succeeding
law).

"Additional Capital Contribution" means any Capital Contribution by a
Partner other than its initial Capital Contributions.

"Adjusted Capital Account Deficit" means, with respect to any Limited
Partner, the deficit balance, if any, in such Limited Partner's Capital
Account as of the end of the relevant Fiscal Year, after giving effect to
the following adjustments:

(i) Credit to such Capital Account any amounts which such
Limited Partner is obligated to restore pursuant to any provision of
this Agreement or is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Section 1.704-2(g)(1) and 1.704-
2(i)(5);

(ii) Debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704(b)(2)(ii)(d)(6) of the Regulations.

The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-(b)(2)(ii)(d) of the
Regulations and shall be interpreted consistently therewith.

"Affiliate" means, with respect to any Person, any Person controlling,
controlled by or under common control with such Person, with the concept of
control in such context meaning the possession, directly or indirectly, of
the power to direct the management and policies of another, whether through
the ownership of voting securities, by contract or otherwise. "Affiliate"
shall also include direct lineal ancestors and descendants of a natural
Person and others related to such natural Person no more distantly than
first cousin.

"Capital Account" means, with respect to any Partner, the Capital
Account maintained for such Partner in accordance with the following
provisions:

(i) To each Partner's Capital Account there shall be credited
such Partner's Capital Contributions, such Partner's distributive
share of Profits and any items in the nature of income or gain which
are specially allocated pursuant to Section 5.3 or Section 5.4 hereof,
and the amount of any Partnership liabilities assumed by such Partner
or which are secured by any asset of the Partnership distributed to
such Partner;

(ii) To each Partner's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any Partnership asset
distributed to such Partner pursuant to any provision of this
Agreement, such Partner's distributive share of Losses and any items
in the nature of expenses or losses which are specially allocated
pursuant to Section 5.3 or Section 5.4, and the amount of any
liabilities of such Partner assumed by the Partnership or which are
secured by any property contributed by such Partner to the
Partnership;

(iii) In the event all or a portion of an interest in the
Partnership is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred interest; and

(iv) In determining the amount of any credit or debit for
purposes of subparagraph (i) and (ii) of this definition, there shall
be taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations.

The foregoing provisions and other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b) and 1.704-2 and shall be interpreted and applied in a
manner consistent with such Regulations. In the event the General Partner
shall determine that it is prudent to modify the manner in which the
Capital Accounts, or any debits or credits thereto (including, without
limitation, debits or credits relating to liabilities which are secured by
contributed or distributed property or which are assumed by the Partnership
or a Partner), are computed in order to comply with such Regulations, the
General Partner may make such modification, provided that it is not likely
to have a material effect on the amounts distributable to any Partner
pursuant to Section 10.1 hereof upon the dissolution and liquidation of the
Partnership. The General Partner may also (a) make any adjustments that
are necessary or appropriate to maintain equality between the Capital
Accounts of the Partners and the amount of Partnership capital reflected on
the Partnership's balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) make any
appropriate modifications in the event unanticipated events might otherwise
cause this Agreement not to comply with Regulations Sections 1.704-1 and
1.704-2.

"Capital Contributions" means, with respect to any Partner, the amount
of money, in cash or from the proceeds of a draw on a letter of credit, and
the initial Gross Asset Value of any property (other than money)
contributed to the Partnership with respect to the interest in the
Partnership held by such Partner. Loans to the Partnership shall not be
considered Capital Contributions or included in the Capital Account of any
Partner. The principal amount of a promissory note which is not readily
traded on an established securities market and which is contributed to the
Partnership by the maker of the note (or a Partner related to the maker of
the note within the meaning of Regulations Section 1.704-1(b)(2)(ii)(c))
shall not be included in the Capital Account of any Partner until the
Partnership makes a taxable disposition of the note or until (and to the
extent) principal payments are made on the note, all in accordance with
Regulations Section 1.704-1(b)(2)(iv)(d)(2). Except as provided herein,
without the consent of the General Partner, no Capital Contributions will
be made by any Partner other than in cash.

"Certificate" means the Certificate of Limited Partnership of the
Partnership filed in the State Department of Assessments and Taxation of
the State of Maryland.

"Code" means the Internal Revenue Code of 1986, as amended from time
to time (or any corresponding provisions of succeeding law).

"Depreciation" means, for each Fiscal Year or other period, an amount
equal to the depreciation, amortization, or other cost recovery deduction
allowable for U.S. federal income tax purposes with respect to an asset for
such year or other period, except that if the Gross Asset Value of an asset
differs from its adjusted basis for U.S. federal income tax purposes at the
beginning of such year or other period, Depreciation shall be an amount
which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization, or other cost recovery
deduction for such year or other period bears to such beginning adjusted
tax basis, provided, however, that if the federal income tax depreciation,
amortization, or other cost recovery deduction for such year is zero,
Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner.

"Distribution" means any distribution of Net Cash Flow pursuant to
Section 4.1. "Fiscal Year" means (i) the period commencing on the date
hereof and ending December 31, 1995, and (ii) any subsequent twelve (12)
month period commencing on January 1 and ending on the earlier to occur of
(A) the next December 31 or (B) the date on which all assets of the
Partnership are distributed pursuant to Section 10.1 hereof and the
Certificate has been cancelled pursuant to the Act.

"Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

(i) The initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market value of
such asset, as agreed by the contributing Partner and the Partnership;

(ii) The Gross Asset Value of each Partnership asset shall be
adjusted to equal its respective gross fair market value, as
determined by the General Partner, as of the following times: (a) the
acquisition of an additional interest in the Partnership by any new or
existing Partner in exchange for more than a de minimis Capital
Contribution; (b) the distribution by the Partnership to a Partner of
more than a de minimis amount of Partnership assets in liquidation of
this interest in the Partnership within the meaning of Regulations
Section 1.704-(b)(2)(ii)(g); and (c) the liquidation of the
Partnership within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g); provided, however, that adjustments pursuant to
clauses (a) and (b) above shall be made only if the General Partner
determines that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Partners in the
Partnership;

(iii) The Gross Asset Value of any Partnership asset distributed
to any Partner shall be adjusted to equal the gross fair market value
of such asset on the date of distribution; and

(iv) The Gross Asset Value of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m) and Section 5.3(g) hereof; provided,
however, that Gross Asset Values shall not be adjusted pursuant to
this subparagraph (iv) to the extent that General Partner determines
that an adjustment pursuant to subparagraph (ii) above is necessary or
appropriate in connection with a transaction that would otherwise
result in an adjustment pursuant to this subparagraph (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (i), subparagraph (ii), or subparagraph (iv) above, such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Profits and Losses.

"Gross Receipts" means all cash receipts of any kind received by the
Partnership.

"Interest" means the ownership interest of a Partner in the
Partnership and the obligations attendant thereto, all as governed by this
Agreement.

"Limited Partner" means CRIIMI MAE Services, Inc. and each Person who
becomes a limited partner pursuant to the terms of this Agreement.

"Liquidating Capital Transaction Proceeds" shall mean all cash and
other assets of the Partnership following a Liquidating Capital Transaction
and after satisfaction or creditors and creation of reserves pursuant to
Sections 10.1(a) and (b). "Majority in Interest of the Limited Partners"
means those Limited Partners holding an aggregate of 51% or more of all of
the Partnership Interests eligible to vote on a matter owned by the Limited
Partners as a group.

"Management Business" shall have the meaning specified in the
Contribution Agreement.

"Net Cash Flow" means the excess of Gross Receipts over the sum of the
amounts of (i) expenditures by the Partnership, (ii) Distributions, an
(iii) the amount of any reasonable reserves then maintained by the General
Partner, all such amounts to be determined for the period beginning on the
date hereof and ending on the last day of the quarter immediately prior to,
or which ends on, the date of a distribution of Net Cash Flow pursuant to
Section 4.1 hereof.

"Nonrecourse Deductions" has the meaning set forth in Section 1.704-
2(b)(1) of the Regulations.

"Nonrecourse Liability" has the meaning set forth in Section 1.704-
2(b)(3) of the Regulations.

"Partner Nonrecourse Debt" has the meaning set forth in Section 1.704-
2(b)(4) of the Regulations.

"Partner Nonrecourse Debt Minimum Gain" means that amount, with
respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum
Gain that would result if such Partner Nonrecourse Debt were treated as a
Nonrecourse Liability, determined in accordance with the principles of
Regulations Section 1.704-2(i)(3).

"Partner Nonrecourse Deductions" means any and all items of loss,
deduction or expenditure (including any expenditure described in Section
705(g)(2)(B) of the Code) that, in accordance with the principles of
Regulations Sections 1.704-2(i)(1) and (2), are attributable to a Partner
Nonrecourse Debt.

"Partners" means the General Partner and the Limited Partners, where
no distinction is required by the context in which the term is used herein.
"Partner" means any of the Partners.

"Partnership" means CRIIMI MAE Services Limited Partnership.

"Partnership Account(s)" has the meaning assigned to such term in
Section 6.6.

"Partnership Interest" means the respective percentage interest of a
Partner in the Partnership, provided, however, that at all times the
General Partner shall have a Partnership Interest of not less than 1%. The
initial Partnership Interests of the Partners are set forth on Exhibit A.

"Partnership Minimum Gain" has the meaning set forth in Sections
1.704-2(b)(2) and (d) of the Regulations.

"Person" means any individual, partnership, corporation, trust, or
other entity.

"Prime Rate" means the prime or base rate of interest listed in the
Wall Street Journal as such rate may change from time to time. If a range
of rates is quoted, it shall be the lowest rate so quoted.

"Profits" and "Losses" mean, for each Fiscal Year or other period, an
amount equal to the Partnership's taxable income or loss or such year or
period, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

(i) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Profits
or Losses pursuant to this definition shall be added to such taxable
income or loss;

(ii) Any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and
not otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be subtracted from such taxable
income or loss;

(iii) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to subparagraphs (ii) or (iii) of the
definition of Gross Asset Value, the amount of such adjustment shall
be taken into account as gain or loss from the disposition of such
asset for purposes of computing Profits or Losses;

(iv) Gain or loss resulting from any disposition of Partnership
assets with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset
Value of the property disposed of, notwithstanding that the adjusted
tax basis of such property differs from its Gross Asset Value;

(v) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for
such Fiscal Year or other period, computed in accordance with the
definition of Depreciation;

(vi) To the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section
743(b) is required pursuant to Regulations Section 1.704-
(b)(2)(iv)(m)(4) to be taken into account in determining Capital
Accounts as a result of a distribution other than in liquidation of a
Partner's interest in the Partnership, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of
the asset) from the disposition of the asset and shall be taken into
account for purposes of computing Profits or Losses; and

(vii) Notwithstanding any other provision of this definition,
any items which are specially allocated pursuant to Section 5.3 or
Section 5.4 hereof shall not be taken into account in computing
Profits or Losses.

"Property" means all real and personal property (including tangible
and intangible property) or interests therein acquired by the Partnership
pursuant to or on account of the Contribution Agreement and any other real
or personal property or interests therein appropriate in the judgment of
the General Partner.

"Regulations" means the Income Tax Regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

APPENDIX B

LIST OF CRICO MORTGAGE COMPANY, INC. SERVICING AGREEMENTS

1. Sub-Servicing Agreement dated as of September 1, 1993 between
Citibank, N.A. as master servicer and CRICO Mortgage Company, Inc. as
sub-servicer, together with First Amendment to Subservicing Agreement
dated as of October 15, 1993.

2. Pooling and Servicing Agreement dated as of September 1, 1993 among
Mortgage Capital Funding, Inc. as sponsor, Citibank, N.A. as mortgage
asset seller, master servicer and REMIC administrator, CRICO Mortgage
Company, Inc. as special servicer, and The Bank of New York, as
Trustee.

3. Servicing Agreement dated as of February 10, 1994 between Citibank,
N.A. and CRICO Mortgage Company, Inc.

4. Servicing Agreement made as of April 15, 1994 among The Bank of New
York, Aurora Capital, Inc. and CRICO Mortgage Company, Inc.

5. Delegation Agreement (Coinsurance), dated as of January 11,
1993, by and between Integrated Funding, Inc. and CRICO
Mortgage Company, Inc. as amended by First Amendment to
Delegation Agreement dated April 1, 1995.

6. Loan Agreement dated as of December 1, 1986 among the City
of Burnsville, Minnesota, Greenhaven Village Apartments of
Burnsville Phase II Limited Partnership and Capitol Realty
Investors Tax Exempt Fund Limited Partnership executed by
CRICO Mortgage Company, Inc. as Servicer.

7. Escrow Agreement dated as of December 1, 1986 between the
City of Burnsville, as Issuer, Greenhaven Village Apartments
of Burnsville Phase II Limited Partnership, as Developer,
Capital Realty Investors Tax Exempt Fund Limited
Partnership, as Bondowner and CRICO Mortgage Company, Inc.
as Escrow Agent.

8. Loan Agreement dated as of December 1, 1986 among The City
of Eagan, Minnesota, Royal Oak Circle, a Limited Partnership
and Capital Realty Investors Tax Exempt Fund Limited
Partnership executed by CRICO Mortgage Company, Inc. as
Servicer.

9. Escrow Agreement dated as of December 1, 1986 between City
of Eagan, as Issuer, Royal Oak Circle, a Limited
Partnership, as Developer, Capital Realty Investors Tax
Exempt Fund Limited Partnership, as Bondowner and CRICO
Mortgage Company, Inc. as Escrow Agent.

10. Loan Agreement dated as of August 1, 1987 among The City of
Burnsville, Minnesota, Trailway Pond Apartments Limited
Partnership and Capital Realty Investors Tax Exempt Fund
Limited Partnership executed by CRICO Mortgage Company, Inc.
as Servicer.

11. Escrow Agreement dated as of August 1, 1987 between The City
of Burnsville, Minnesota, as Issuer, Trailway Pond
Apartments Limited Partnership, as Developer, Capital Realty
Investors Tax Exempt Fund Limited Partnership, as Bondowner,
and CRICO Mortgage Company, Inc. as Escrow Agent.

12. Loan Agreement dated as of March 1, 1987 among The
Washington County Housing and Redevelopment Authority,
Valley Creek Apartments Limited Partnership and Capital
Realty Investors Tax Exempt Fund Limited Partnership
executed by CRICO Mortgage Company, Inc. as Servicer.

13. Loan Agreement dated as of March 1, 1987 between The
Washington County Housing and Redevelopment Authority, as
Issuer, Valley Creek Apartments Limited Partnership, as
Developer, Capital Realty Investors Tax Exempt Fund Limited
Partnership, as Bondowner and CRICO Mortgage Company, Inc.
as Escrow Agent.

14. Loan Agreement dated as of March 1, 1987 among The City of
White Bear Lake, Minnesota, White Bear Woods Limited
Partnership and Capital Realty Investors Tax Exempt Fund
Limited Partnership executed by CRICO Mortgage Company, Inc.
as Servicer.

15. Loan Agreement dated as of May 1, 1987 among The Industrial
Development Authority of the City of Kansas City, Missouri,
Ethan's Glen Venture and Capital Realty Investors Tax Exempt
Fund Limited Partnership executed by CRICO Mortgage Company,
Inc. as Servicer.

16. Escrow Agreement dated as of May 1, 1987 among The
Industrial Development Authority of the City of Kansas City,
Missouri, the Issuer, Ethan's Glen Venture, the Developer,
Capital Realty Investors Tax Exempt Fund Limited
Partnership, the Bondowner, CRICO Mortgage Company, Inc.,
the Servicer, and The Merchants Bank, the Escrow Agent.

17. Loan Agreement dated as of December 1, 1987 among The City
of Eden Prairie, Minnesota, Fountain Place Apartments
Limited Partnership and Capital Realty Investors Tax Exempt
Fund Limited Partnership executed by CRICO Mortgage Company,
Inc. as Servicer.

18. Escrow Agreement dated as of December 1, 1987 between
Fountain Place Apartments Limited Partnership, as Developer,
Capital Realty Investors Tax Exempt Fund Limited
Partnership, as Bondowner executed by CRICO Mortgage
Company, Inc. as Escrow Agent.

19. Loan Agreement dated as of March 1, 1988 among Washington State
Housing Finance Commission, James Street Crossing Limited Partnership,
Seattle-First National Bank and Capital Realty Investors Tax Exempt
Fund Limited Partnership executed by CRICO Mortgage Company, Inc. as
Servicer, as amended by Amendment to Loan Agreement dated as of
September 1, 1988 among James Street Crossing Limited Partnership, the
Developer, Key Bank of Puget Sound, as Trustee and Capital Realty
Investors Tax Exempt Fund Limited Partnership, the Bondowner.

20. Loan Agreement dated as of August 1, 1987 among The City of
Burnsville, Minnesota, Trailway Pond Apartments Limited
Partnership and Capital Realty Investors Tax Exempt Fund
Limited Partnership executed by CRICO Mortgage Company, Inc.
as Servicer.

21. Escrow Agreement dated as of August 1, 1987 among The City
of Burnsville, Minnesota, as Issuer, Trailway Pond
Apartments Limited Partnership, as Developer, Capital Realty
Investors Tax Exempt Fund Limited Partnership, as Bondowner
and CRICO Mortgage Company, Inc. as Escrow Agent

22. Loan Agreement dated as of October 1, 1988 among The
Industrial Development Authority of the City of Kansas City,
Missouri, TCR-Ethan's Glen Limited Partnership and Capital
Realty Investors Tax Exempt Fund Limited Partnership
executed by CRICO Mortgage Company, Inc. as Servicer.

23. Escrow Agreement dated as of October 1, 1988 between The
Industrial Development Authority of the City of Kansas City,
Missouri, as Issuer, TCR-Ethan's Glen Limited Partnership,
as Developer, Capital Realty Investors Tax Exempt Fund
Limited Partnership, as Bondowner, The Merchants Bank, as
Trustee, as Escrow Agent and CRICO Mortgage Company, Inc.,
as Servicer

24. Loan Agreement dated as of August 1, 1988 among The City and
County of San Francisco, Geary Courtyard Associates, and
Capital Realty Investors Tax Exempt Fund III Limited
Partnership executed by CRICO Mortgage Company, Inc. as
Servicer.

25. The Agency Servicing Agreement dated as of January 1, 1989,
among First Housing Development Corporation of Florida, as
Agency Servicer, Citizens and Southern Trust Company
(Florida), National Association, as Trustee, and the Florida
Housing Finance Agency, as the Agency, Ocean Walk Phase I
Limited Partnership, as Developer, Capital Realty Investors
Tax Exempt Fund III Limited Partnership, as Bondholder and
CRICO Mortgage Company, Inc., as Servicer.

26. Loan Agreement dated as of January 1, 1989 between Ocean
Walk Phase I Limited Partnership and Capital Realty
Investors Tax Exempt Fund III Limited Partnership executed
by CRICO Mortgage Company, Inc. as Servicer.

27. Loan Agreement dated as of January 1, 1990 among Iowa
Finance Authority, Regency Woods Limited Partnership and
Capital Realty Investors Tax Exempt Fund III Limited
Partnership executed by CRICO Mortgage Company, Inc. as
Servicer.

28. Loan Agreement dated as of February 1, 1989 among Washington
County Housing and Redevelopment Authority Valley Creek
Apartments II Limited Partnership and Capital Realty
Investors Tax Exempt Fund III Limited Partnership executed
by CRICO Mortgage Company, Inc. as Servicer.

29. Loan Agreement dated as of September 1, 1988 among The
Washington County Housing and Redevelopment Authority,
Woodlane Place Apartments Limited Partnership and Capital
Realty Investors Tax Exempt Fund III Limited Partnership
executed by CRICO Mortgage Company, Inc. as Servicer.

30. Escrow Agreement dated as of September 1, 1988 between The
Washington County Housing and Redevelopment Authority, as
Issuer, Woodlane Place Apartments Limited Partnership, as
Developer, Capital Realty Investors Tax Exempt Fund III
Limited Partnership, as Bondowner and CRICO Mortgage
Company, Inc., as Escrow Agent

31. Letter Agreement dated February 21, 1995 between Greystone
and CRICO Mortgage Company concerning GNMA Pool #155615,
Silver Hill Apartments.

32. Letter Agreement dated June 22, 1995 by and between CRICO
Mortgage Company, Inc. and Advantage Properties, Inc.
regarding GNMA Pool #155615, Silver Hill Apartments.

33. Letter Agreement dated June 19, 1992 between Reilly Mortgage
Group, Inc. and Daiwa Finance Corp. regarding Evergreen
Retirement Center, Cincinnati, Ohio, FHA Project No. 046-
35589, assigning interest to CRICO Mortgage Company, Inc.

34. Letter Agreement dated June 24, 1992 between CRICO Mortgage
Company, Inc. and PFC Corporation regarding Evergreen
Retirement Community, FHA Project #046-35589.

35. Letter Agreement dated October 6, 1992 between J.D. Burt
Company, Inc. and CRICO Mortgage Company (erroneously
addressed to CRI, Inc.) regarding Hideaway Townhouse
Company, Dublin, Ohio and Hideaway Company, Dublin, Ohio.

36. Letter Agreement dated October 2, 1992 between PFC Corporation and
CRICO Mortgage Company, Inc. regarding Wheelock Apartments, FHA
Project No. 092-11039.

37. Sub-Servicing Agreement dated as of May 24, 1995, by and
between CRICO Mortgage Company, Inc. and Bankers Trust
Company.<PAGE>

EXHIBIT 3(q)

Articles of Incorporation of CRIIMI MAE Financial Corporation II

ARTICLES OF INCORPORATION
OF
CRIIMI MAE FINANCIAL CORPORATION II

THE UNDERSIGNED, being at least eighteen years of age, in order to form a
corporation for the purposes hereinafter stated, under and pursuant to the
provisions of the Maryland General Corporation Law (the "GCL"), does hereby
certify to the State Department of Assessments and Taxation of the State of
Maryland, as follows:

FIRST: The name of the Corporation is CRIIMI MAE FINANCIAL CORPORATION
II.

SECOND: The address of the Corporation's principal office in the State of
Maryland is 11200 Rockville Pike, Rockville, Maryland, 20852.

THIRD: The name and address of the Corporation's resident agent is CRICO
Services Corporation, a Maryland corporation, with its registered office at
11200 Rockville Pike, Rockville, Maryland 20852.

FOURTH: The purposes for which the Corporation is organized are: (a) to
accept the transfer to the Corporation from CRIIMI MAE Inc. of certain mortgage-
related securities (the "Securities") to be identified in one or more
assignments from CRIIMI MAE or an affiliate to the Corporation and to issue a
funding note (a "Funding Note") pursuant to a funding note purchase and security
agreement among the Federal Home Loan Mortgage Corporation ("Freddie Mac"),
CRIIMI MAE and the Corporation (the "Agreement")' (b) to execute and deliver and
to perform its obligations under the Agreement and Funding Note and in that
connection to grant a security interest in the Securities for the benefit of
Freddie Mac and any other holder of the Funding Note to the extent set forth in
the applicable Agreement; and (c) to engage in any lawful act or activity and to
exercise any powers permitted to corporations organized under the Maryland
General Corporation Law ("GCL") that in either case are incidental to and
necessary or convenient for the accomplishment of the above-mentioned businesses
and purposes.

FIFTH: The total number of shares of stock that the Corporation shall
have authority to issue is 1,000 shares of Common Stock, $.01 par value and no
classes of preferred stock may be issued by the Corporation. The aggregate par
value of all of the authorized shares of all classes of capital stock having par
value is $10.

SIXTH: The name and address of the Sole Incorporator is as follows:

Name Address

Deborah A. Linn 11200 Rockville Pike, 5th
Floor
Rockville, Maryland 20852

SEVENTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:

(A) The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors.

(B) The number of directors of the Corporation shall be from time to
time fixed by, or in the manner provided in, the Bylaws of the Corporation with
the initial Board of Directors consisting of three members. At least one
director of the Corporation (the "Outside Director") and at least one officer of
the Corporation (the "Outside Officer") shall not be, and for at least eighteen
months prior thereto shall not have been, a director, officer or employee (or
related to any such director, officer or employee) of CRIIMI MAE Inc., a
Maryland corporation ("CRIIMI MAE"), or any affiliate (other than the
Corporation) of CRIIMI MAE or a trustee, conservator or receiver from CRIIMI
MAE or any affiliate of CRIIMI MAE; provided, however, that the Outside Director
and the Outside Officer may be the same person. For the purposes of the
foregoing, an "affiliate" of an entity is an entity controlling, controlled by,
or under common control with such entity. Notwithstanding any other provision
of these Articles of Incorporation or any other provision of law, in the event
of the death, incapacity, or resignation of the Outside Director or the Outside
Officer, or any other vacancy in such position, a successor Outside Director or
Outside Officer, as applicable, shall be appointed by the remaining directors of
the Corporation and, in the case of an Outside Director, no action requiring the
unanimous affirmative vote of the Board of Directors of the Corporation shall be
taken until a successor Outside Director is elected and qualified and approves
such action. Election of directors need not be by written ballot unless the
Bylaws so provide. The following persons initially shall serve as directors of
the Corporation and shall have and exercise any and all rights powers,
privileges and discretionary authority granted or permitted by these Articles of
Incorporation until the first annual meeting of stockholders or until their
successors are duly elected and shall qualify:

William B. Dockser
H. William Willoughby
Debra D. Yogodzinski

(C) The Corporation shall maintain corporate records and books of
account and shall not commingle its corporate records and books of account with
the corporate records and books of account of CRIIMI MAE or any other entity.

(D) The Board of Directors of the Corporation shall hold appropriate
meetings to authorize all of its corporate actions.

(E) The funds and other assets of the Corporation shall not be
commingled with those of any other entity.

(F) The Corporation shall pay its own expenses, including salaries
for its employees, if any, and shall not guarantee or hold itself out as being
liable for the debts of any other party.

(G) The Corporation shall not form, or cause to be formed, any
subsidiaries.

(H) All obligations and indebtedness incurred by the Corporation will
be paid from the assets of the Corporation.

(I) The Corporation shall maintain an arms' length relationship with
CRIIMI MAE and each affiliate of CRIIMI MAE.

(J) The Corporation shall act solely in its corporate name and
through its duly authorized officers or agents in the conduct of its business,
and shall conduct its business so as not to mislead others as to the identity of
the entity with which they are concerned.

(K) Meetings of the stockholders of the Corporation shall be held not
less frequently than one time per annum.

(L) The Corporation shall operate in such a manner that it would not
be substantively consolidated with any other entity.

(M) The Board of Directors shall have the power without the assent or
vote of the stockholders to make, alter, amend, change, add to or repeal the
Bylaws of the Corporation; to fix and vary the amount to be reserved for any
proper purpose; to authorize and cause to be executed mortgages and liens upon
all or any part of the property of the Corporation; to determine the use and
disposition of any surplus or net profits; and to fix the times for the
declaration and payment of dividends.

(N) In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation; subject, nevertheless, to the provisions of the
statutes of Maryland, of these Articles of Incorporation, and to any Bylaw from
time to time made by the stockholders; provided, however, that no Bylaw so made
shall invalidate any prior act of the directors which would have been valid if
such Bylaw had not been made.

EIGHTH: Notwithstanding any provision of these Articles of Incorporation
and any provision of law that otherwise so empowers the Corporation, the
Corporation shall not, without the unanimous approval of the Board of Directors
of the Corporation, being comprised of at least one Outside Director, do any of
the following:

(a) dissolve or liquidate, in whole or in part, provided, that the
Corporation shall not voluntarily liquidate until it has fulfilled its
obligations under the Agreement and outstanding Funding Note;

(b) merge or consolidate with any other corporation other than a
corporation wholly owned, directly or indirectly, by any entity owning
100% of the stock of the Corporation and having articles of
incorporation containing provisions identical to the provisions of
Articles FOURTH and SEVENTH and this Article EIGHTH;

(d) institute proceedings to be adjudicated a bankrupt or insolvent,
or consent to the institution of bankruptcy or insolvency proceedings
against it, or file a petition or answer or consent seeking
reorganization or relief under the Federal bankruptcy laws, or consent
to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, conservator, sequestrator (or
other similar official) of the Corporation or of any substantial part
of the Corporation's property, or make a general assignment for the
benefit of creditors, or admit in writing its inability to pay its
debts generally as they become due, or take corporate action in
furtherance of any such action; or

(e) amend these Articles of Incorporation to alter in any manner or
delete Article FOURTH, Article SEVENTH or this Article EIGHTH.

The Board of Directors shall not approve a consolidation or merger unless
(i) the entity (if other than the Corporation) formed or surviving such
consolidation or merger, or that acquires by conveyance or transfer the
properties and assets of the Corporation substantially or in the entirety, shall
be organized and existing under the laws of the United States of America or any
state thereof or the District of Columbia, and shall expressly assume, by a
supplement to each Agreement, executed and delivered to each holder of an
outstanding Funding Note, in form satisfactory to each such holder, the due and
punctual payment of the principal of and interest on all Funding Notes then
outstanding under each Agreement and the performance of every covenant of each
Agreement on the part of the Corporation to be performed or observed, (ii)
immediately after giving effect to such transaction, no default or event of
default under any Agreement shall have occurred and be continuing and (iii) the
Corporation shall have delivered to each holder of an outstanding Funding Note
an officers' certificate and an opinion of counsel, each stating that such
consolidation, merger, conveyance or transfer and such supplement comply with
the applicable Agreement and that all conditions precedent provided for in each
such Agreement relating to such transaction have been complied with.

NINTH: The Corporation is to have perpetual existence.

TENTH: An officer or director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages, except to
the extent that it can be proven that (i) the officer or director actually
received an improper benefit or profit in money, property, or services (in which
case recovery is limited to the actual amount of such improper benefit or
profit); or (ii) the action or failure to act, by the officer or director, was
the result of active and deliberate dishonesty which was material to the cause
of action adjudicated in the proceeding. If the GCL is hereafter amended to
further eliminate or limit the liability of an officer or director, then an
officer or director of the Corporation, in addition to the circumstances in
which an officer or director is not personally liable as set forth in the
preceding sentence, shall not be liable to the fullest extent permitted by the
amended GCL. Any repeal or modification of the foregoing provisions of this
Article TENTH by the stockholders of the Corporation shall not adversely affect
any right or protection of an officer or director of this Corporation existing
at the time of such repeal or modification.

ELEVENTH: The Corporation shall indemnify each of the directors and
officers of the Corporation and may indemnify any other individual who may be
indemnified to the fullest extent permitted by Section 2-418 of the GCL, as the
same may be amended from time to time ("Section 2-418"), in each and every
situation where, under Section 2-418, the Corporation is permitted or empowered
to make such indemnification. The Corporation shall promptly make or cause to
be made any determination which Section 2-418 requires. Any repeal or
modification of the foregoing provisions of this Article ELEVENTH by the
stockholders of the Corporation shall not adversely affect any right or
protection of an officer or director of this Corporation existing at the time of
such repeal or modification.

TWELFTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in these Articles of Incorporation in the manner
now or hereafter prescribed by law, and all rights and powers conferred herein
on stockholders, directors and officers are subject to this reserved power;
provided, that the Corporation shall not amend, alter, change or repeal any
provision of Article Fourth, Seventh, Eighth or Twelfth without the affirmative
vote of all outside Directors and the prior written consent of the holder of the
Funding Note, if outstanding.

I, THE UNDERSIGNED, being the Sole Incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the GCL, does hereby declare and
certify that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 18 day of September, 1995.

By: /s/ Deborah A. Linn
----------------------
Deborah A. Linn <PAGE>

EXHIBIT 3(r)

Bylaws of CRIIMI MAE Financial Corporation II <PAGE>

BYLAWS

CRIIMI MAE FINANCIAL CORPORATION II*

ARTICLE I

OFFICES

The Corporation may have such office(s) at such place(s), both within and
without the State of Maryland, as the Board of Directors (the "Board") from time
to time determines or as the business of the Corporation from time to time
requires.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Annual Meetings. Annual meetings of the Corporation's
stockholders ("Stockholders") shall be held at such time and place (within or
without the State of Maryland) as shall be designated from time to time by the
Board and stated in the notice of the meeting. Subject to the Articles of
Incorporation, at each annual meeting Stockholders shall elect directors to
succeed those whose terms expire and shall transact such other business as may
properly be brought before the meeting.

Section 2. Special Meetings. Unless otherwise prescribed by law, the
Articles of Incorporation or these bylaws ("Bylaws"), special meetings of
Stockholders for any purpose or purposes may be called by the Board, the
president or by the secretary upon the written request of the holders of shares
entitled to cast not less than 25% of all the votes entitled to be cast at such
meeting. Requests for special meetings shall state the purpose or purposes of
the meeting and the matters proposed to be acted on at such meeting. The
secretary shall inform such requesting Stockholders of the reasonably estimated
cost of preparing and mailing notice of the meeting and, upon payment by such
Stockholders to the Corporation of such costs, the secretary shall give notice
to each Stockholder entitled to notice of the meeting. Unless requested by
Stockholders entitled to cast a majority of all votes entitled to be cast at
such meeting, a special meeting need not be called to consider any matter which
is substantially the same as a matter voted on at any meeting of the
Stockholders held during the preceding twelve months.

- --------------------------
* As adopted by the Board of Directors on September 20, 1995.

Section 3. Notices of Annual and Special Meetings.

(a) Except as otherwise provided by law, the Articles of
Incorporation or these Bylaws, written notice of any annual or special meeting
of Stockholders shall state the place, date and time thereof and, in the case of
a special meeting, the purpose or purposes for which the meeting is called, and
shall be given to each Stockholder of record entitled to vote at such meeting,
and to each other Stockholder entitled to notice of such meeting, not less than
10 nor more than 90 days prior to the meeting.

place shall be specified in the notice of the meeting, or, if not so specified,
at the place where the meeting is to be held, and shall be open to inspection by
any Stockholder, for any purpose germane to the meeting, during ordinary
business hours during a period of no less than 10 days prior to the meeting.
The list also shall be produced and kept open at the meeting (during the entire
duration thereof) and, except as otherwise provided by law, may be inspected by
any Stockholder or proxy of a Stockholder who is present in person at such
meeting.

Section 5. Presiding Officers; Order of Business.

(a) Meetings of Stockholders shall be presided over by the chairman
of the Board, if any, or, if the chairman is not present (or if there is none),
by the president, or, if the president is not present, by a vice president, or,
if a vice president is not present, by such person who is chosen by the Board,
or, if none, by a chairperson to be chosen at the meeting by Stockholders
present in person or by proxy who own a majority of the shares of capital stock
of the Corporation entitled to vote and represented at such meeting. The
secretary of meetings shall be secretary of the Corporation, or, if the
secretary is not present, an assistant secretary, or, if any assistant secretary
is not present, such person as may be chosen by the Board, or, if none, by such
person who is chosen by the chairperson at the meeting.

(b) The following order of business, unless otherwise ordered at the
meeting by the chairperson thereof, shall be observed as far as practicable and
consistent with the purposes of the meeting.

(1) Call of the meeting to order.

(2) Presentation of proof of mailing of notice of the
meeting and, if the meeting is a special meeting, the
call thereof.

(3) Presentation of proxies.

(4) Determination and announcement that a quorum is
present.

(5) Reading and approval (or waiver thereof) of the minutes
of the previous meeting.

(6) Reports, if any, of officers.

(7) Election of directors to succeed those whose terms
expired, if the meeting is an annual meeting or a
meeting called for such purpose.

(8) Transaction of such other business as may properly come
before the meeting.

(9) Adjournment.

Section 6. Quorum; Adjournments.

(a) The holders of a majority of the shares of capital stock of the
Corporation issued and outstanding and entitled to vote at any given meeting
present in person or by proxy shall be necessary to and shall constitute a
quorum for the transaction of business at all meetings of Stockholders, except
as otherwise provided by law or by the Articles of Incorporation.

(b) A meeting of Stockholders convened on the date for which it was
called may be adjourned from time to time without further notice to a date not
more than 120 days after the original record date set by the directors for the
purpose of determining which Stockholders are entitled to notice of the meeting
and which Stockholders are entitled to vote at the meeting.

Section 7. Voting.

(a) At any meeting of Stockholders every Stockholder having the right
to vote shall be entitled to vote in person or by proxy authorized by an
instrument in writing filed in accordance with the procedure established for the
meeting. Except as otherwise provided by law or by the Articles of
Incorporation, each Stockholder of record shall be entitled to one vote (on each
matter submitted to a vote) for each share of capital stock registered in his
name on the books of the Corporation.

(b) All elections of directors, and except as otherwise provided by
law or by the Articles of Incorporation, all other matters, shall be determined
by a vote of a majority of the shares present in person or represented by proxy
and voting on such other matters.

(c) All voting, including on the election of directors but excepting
where otherwise required by law, may be by a voice vote; provided, however, that
upon demand therefor by a Stockholder entitled to vote or his proxy, a share
vote shall be taken. Every share vote shall be taken by ballots, each of which
shall state the name of the Stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
Every vote taken by ballots shall be counted by an inspector or inspectors
appointed by the chairman of the meeting.

Section 8. Notice of Stockholder Business. At any annual or special
meeting of Stockholders, only such business shall be conducted as shall have
been properly brought before a meeting. Business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board, (b) properly brought before the meeting by or at the direction of the
Board, or (c) properly brought before an annual meeting by a Stockholder, and,
if and only if the notice of a special meeting provides for business to be
brought before the special meeting by Stockholders, properly brought before the
special meeting by a Stockholders. For business to be properly brought before a
meeting by a Stockholder, the Stockholder must have given timely notice thereof
in writing to the secretary of the Corporation. To be timely, a Stockholder's
notice must be delivered to or mailed and received at the principal executive
offices of the Corporation not less than 90 days prior to the meeting; provided,
however, that if less than 100 days' notice or prior public disclosure of the
date of the meeting is given or made to Stockholders, notice by the Stockholder
to be timely must be so received not later than the close of business on the
tenth day following the day on which such notice of the date of the meeting was
mailed or such public notice of the date of the meeting was mailed or such
public disclosure was made. Furthermore, Stockholders are not permitted to
nominate individuals to serve as directors, unless notice of such nomination is
given to the Corporation in accordance with Section 13 of Article III of these
Bylaws. A Stockholder's notice to the secretary shall set forth as to each
matter the Stockholder proposes to bring before the meeting (a) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (b) the name and address,
as they appear on the Corporation's books, of the Stockholder proposing such
business, (c) the class and number of shares of the Corporation which are
beneficially owned by the Stockholder and (d) any material interest of the
Stockholder in such business. Notwithstanding anything in the Bylaws to the
contrary, no business shall be conducted at any meeting of Stockholders except
in accordance with the procedures set forth in this Section 8 of Article II.
The chairman of a meeting shall, if the facts warrant, determine and declare to
the meeting that business was not properly brought before the meeting and in
accordance with the provisions of this section, and if he should so determine,
he shall so declare that the meeting and any such business not properly brought
before the meeting shall not be transacted. Notwithstanding anything in the
Bylaws to the contrary, the Corporation shall be under no obligation to submit
for action any Stockholder proposal at any meeting of Stockholders, which
proposal the Corporation would otherwise be permitted to omit in accordance with
Rule 14a-8 under the Securities Exchange Act of 1934, as amended.

Section 9. Action by Consent. Any action required or permitted to be
taken at any meeting of the Stockholders may be taken without a meeting if the
following are filed with the records of Stockholders meetings:

(a) A unanimous written consent which sets forth the action and is
signed by each Stockholder entitled to vote on the matter; and

(b) A written waiver of any right to dissent signed by each
Stockholder entitled to notice of the meeting but not entitled to vote at it.

ARTICLE III

DIRECTORS

Section 1. General Powers; Number; Tenure. The business and affairs of
the Corporation shall be managed under the direction of the Board, which may
exercise all powers of the Corporation and perform or authorize the performance
of all lawful acts and things which are not by law, the Articles of
Incorporation or these Bylaws directed or required to be exercised or performed
by the Stockholders. Subject to the Articles of Incorporation, the number of
directors of the Corporation shall be fixed from time to time exclusively by the
Board pursuant to a resolution adopted by a majority of the total number of
authorized directors (whether or not there exist any vacancies in previously
authorized directorships at the time any such resolution is presented to the
Board for adoption), but shall not at any time be less than 3, or the number of
Stockholders, if less than three. Directors need not be Stockholders of the
Corporation nor residents of the State of Maryland.

Section 2. Vacancies. Subject to the Articles of Incorporation, newly
created directorships resulting from any increase in the authorized number of
directors or any vacancies in the Board resulting from death, resignation,
retirement, disqualification, removal from office or other cause may be filled
(i) by a majority vote of the Stockholders entitled to vote, (ii) by a majority
vote of the directors then in office though less than a quorum, or (iii) by the
sole remaining director. Directors so chosen shall hold office until the next
annual meeting of Stockholders and until their successors have been duly elected
and have qualified, or, where the vacancy results from the removal of a
director, for a term expiring at the annual meeting of Stockholders at which the
term of office of the class to which they have been elected expires. No
decrease in the number of directors constituting the Board shall shorten the
term of any incumbent director. Subject to the Articles of Incorporation, when
one or more directors shall resign from the Board, effective at a future date, a
majority of the directors then in office, including those who have so resigned,
shall have power to fill such vacancy or vacancies, the vote thereon to take
effect when such resignation or resignations shall become effective, and each
director so chosen shall hold office for a term expiring at the annual meeting
of Stockholders at which the term of office of the class to which such director
has been elected expires or until his successor has been elected and has
qualified.

Section 3. Removal; Resignation.

(a) The Stockholders may, at any time, remove any director in the
manner provided in the Articles of Incorporation.

(b) Any director may resign at any time by giving written notice to
the Board, the chairman of the Board, the president, or the secretary of the
Corporation. Unless otherwise specified in such written notice, a resignation
shall take effect upon delivery thereof to the Board or the designated officer.
A resignation need not be accepted in order for it to be effective.

Section 4. Place of Meetings. The Board may hold both regular and special
meetings either within or without the State of Maryland, at such place as the
Board from time to time deems advisable.

Section 5. Annual Meeting. The annual meeting of each newly elected Board
shall be held as soon as is practicable following the annual meeting of
Stockholders, and no notice to the newly elected directors of such meeting shall
be necessary for such meeting to be lawful, provided a quorum is present.

Section 6. Regular Meetings. Additional regular meetings of the Board may
be held without notice, at such time and place as from time to time may be
determined by the Board.

Section 7. Special Meetings. Special meetings of the Board may be called
by the chairman of the Board or by the president or by a majority of the entire
Board upon 24 hours' notice to each director if such notice is delivered
personally or sent by telegram or facsimile, or upon 5 days' notice if sent by
mail, unless such notice is waived. Unless otherwise indicated in the notice
thereof, any and all business may be transacted at a special meeting.

Section 8. Quorum; Adjournments. A majority of the total number of
directors then in office shall constitute a quorum for the transaction of
business at each and every meeting of the Board, and the act of a majority of
the directors present at any meeting at which a quorum is present shall be the
act of the Board, except as may otherwise specifically be provided by law, the
Articles of Incorporation or these Bylaws. If a quorum is not present at any
meeting of the Board, the directors present may adjourn the meeting, from time
to time, without notice other than announcement at the meeting, until a quorum
is present.

Section 9. Approval by Independent Directors. For all purposes, a
transaction which is subject to approval by a majority of the independent
directors shall be approved if such transaction is approved by a majority of the
independent directors present and entitled to vote at a meeting at which a
quorum is present, provided that the independent directors voting to approve the
transaction constitute an absolute majority of all independent directors serving
at such time.

Section 10. Compensation. Directors shall be entitled to such
compensation for their services as directors as from time to time may be fixed
by the Board, including, without limitation, for their services as members of
committees of the Board and in any event shall be entitled to reimbursement of
all reasonable expenses incurred by them in attending directors' meetings. Any
director may waive compensation for any meeting. No director who receives
compensation as a director shall be barred from serving the Corporation in any
other capacity or from receiving compensation and reimbursement of reasonable
expenses for any or all such other services.

Section 11. Action by Consent. Any action required or permitted to be
taken at any meeting of the Board may be taken without a meeting and without
prior notice if a written consent in lieu of such meeting which sets forth the
action so taken is signed either before or after such action by all directors.
All written consents shall be filed with the minutes of the Board's proceedings.

Section 12. Meetings by Telephone or Similar Communications. The
directors may participate in meetings by means of conference telephone or
similar communications equipment, whereby all directors participating in the
meeting can hear each other at the same time, and participation in any such
meeting shall constitute presence in person by such director at such meeting. A
written record shall be made of all actions taken at any meeting conducted by
means of a conference telephone or similar communications equipment.

Section 13. Nomination of Director Candidates. Nominations for the
election of directors may be made by (a) the Board or a proxy committee
appointed by the Board or (b) any Stockholder entitled to vote in the election
of directors generally. However, any Stockholder entitled to vote in the
election of directors generally may nominate one or more persons for election as
directors at a meeting only if timely notice of such Stockholder's intent to
make such nomination or nominations has been given in writing to the secretary
of the Corporation. To be timely, a Stockholder's notice must be delivered to
or mailed and received at the principal executive offices of the Corporation not
fewer than 90 days prior to the meeting; provided, however, that if less than
100 days' notice or prior public disclosure of the date of the meeting is given
or made to Stockholders, notice by the Stockholder to be timely must be so
received not later than the close of business on the tenth day following the day
on which such notice of the date of the meeting was mailed or such public
disclosure was made. Each such notice shall set forth (a) the name and address
of the Stockholder who intends to make the nomination and of the person or
persons to be nominated, (b) a representation that the Stockholder is a holder
of record of stock of the Corporation entitled to vote for the election of
directors on the date of such notice and intends to appear in person or by proxy
at the meeting to nominate the person or persons specified in the notice, (c) a
description of all arrangements or understandings between the Stockholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
Stockholder, (d) such other information regarding each nominee proposed by such
Stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board and (e) the
consent of each nominee to serve as a director of the Corporation if so elected.

If a person is validly designated as a nominee in accordance with this
Section 13 and shall thereafter become unable or unwilling to stand for election
to the Board, the Board or the Stockholder who proposed such nominee, as the
case may be, may designate a substitute nominee upon delivery, not fewer than 20
days prior to the date of the meeting for the election of such nominee, of a
written notice to the secretary setting forth such information regarding such
substitute nominee as would have been required to be delivered to the secretary
pursuant to this Section 13 of Article III had such substitute nominee been
initially proposed as a nominee. Such notice shall include a signed consent to
serve as a director of the Corporation, if elected, of each such substitute
nominee.

If the chairman of the meeting for the election of directors determines
that a nomination of any candidate for election as a director at such meeting
was not made in accordance with the applicable provisions of this Section 13 of
Article III, such nomination shall be void.

ARTICLE IV

COMMITTEES

Section 1. Formation of Committees. The Board may, by resolution passed
by a majority of the entire Board, designate one or more committees, with each
committee consisting of one or more directors of the Corporation. The Board may
designate one or more directors as alternate members of any committee who may
replace any absent or disqualified member at any meeting of the committee.
Except as prohibited by statute and subject to the Articles of Incorporation,
any such committee, to the extent provided in the resolution, shall have and may
exercise the powers of the Board conferred upon such committee by the Board in
the management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it.
Such committee or committees shall have the name or names as may be determined
from time to time by resolution adopted by the Board.

Section 2. Other Provisions Regarding Committees.

(a) Subject to the limitations set forth in Section 1 of this Article
IV, the Board shall have the power at any time to fill vacancies in, change the
membership of, or discharge any committee.

(b) Members of any committee shall be entitled to such compensation
for their services as such as from time to time may be fixed by the Board and in
any event shall be entitled to reimbursement of all reasonable expenses incurred
in attending committee meetings. Any member of a committee may waive
compensation for any meeting. No committee member who receives compensation as
a member of any one or more committees shall be barred from serving the
Corporation in any other capacity or from receiving compensation and
reimbursement of reasonable expenses for any or all such other services.

(c) Unless prohibited by law, the provisions of Section 11 ("Action
by Consent") and Section 12 ("Meetings by Telephone or Similar Communications")
of Article III shall apply to all committees from time to time created by the
Board.

(d) Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third of the authorized members shall
constitute a quorum unless the committee shall consist of one or two members, in
which event one member shall constitute a quorum; and all matters shall be
determined by a majority vote of the members present.

ARTICLE V

OFFICERS

Section 1. Positions. The Corporation's officers shall be chosen by the
Board and shall consist of a president, one or more executive vice presidents,
senior vice presidents and vice presidents (if and to the extent required by law
or if not required, if the Board from time to time appoints any such officers),
a secretary and a treasurer. The Board also may choose a chairman of the Board,
one or more assistant secretaries and/or assistant treasurers and such other
officers and/or agents as the Board from time to time deems necessary or
appropriate. The Board may delegate to the president of the Corporation the
authority to appoint any officer or agent of the Corporation and to fill a
vacancy other than the chairman of the Board, president, executive vice
president, secretary or treasurer. The election or appointment of any officer
of the Corporation in itself shall not create contract rights for any such
officer. All officers of the Corporation shall exercise such powers and perform
such duties as from time to time shall be determined by the Board. Any two or
more officers may be held by the same person, except as otherwise provided by
statute.

Section 2. Term of Office; Removal. Each officer of the Corporation shall
hold office at the pleasure of the Board and any officer may be removed, with or
without cause, at any time by the affirmative vote of a majority of the
directors then in office, provided that any officer appointed by the president
pursuant to authority delegated to the president by the Board may be removed,
with or without cause, at any time whenever the president in his or her absolute
discretion shall consider that the best interests of the Corporation shall be
served by such removal. Removal of an officer by the Board or by the president,
as the case may be, shall not prejudice the contract rights, if any, of the
person so removed. Vacancies (however caused) in any office may be filled for
the unexpired portion of the term by the Board (or by the president in the case
of a vacancy occurring in an office to which the president has been delegated
the authority to make appointments).

Section 3. Compensation. The salaries of all officers of the Corporation
shall be fixed from time to time by the Board, and no officer shall be prevented
from receiving a salary by reason of the fact that he or she also receives from
the Corporation compensation in any other capacity.

Section 4. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board, the president or any officer of the
Corporation authorized by the president shall have power to vote and otherwise
act on behalf of the Corporation, in person or by proxy, at any meeting of
stockholders of or with respect to any action of stockholders of any other
corporation in which this Corporation may hold securities and otherwise to
exercise any and all rights and powers which this Corporation may possess by
reason of its ownership of securities in such other corporation.

Section 5. Chairman of the Board. The chairman of the Board shall be an
agent of the Corporation and, subject to the direction of the Board, shall
perform such functions and duties as from time to time may be assigned to him or
her by the Board. The chairman of the Board, if present, shall preside at all
meetings of the Stockholders and all meetings of the Board.

Section 6. Vice Chairman of the Board. The vice chairman of the Board
shall be an agent of the Corporation and, subject to the direction of the Board,
shall perform such functions and duties as from time to time may be assigned to
him or her by the Board.

Section 7. President. The president shall be the chief executive officer
of the Corporation and, subject to the direction of the Board, shall have
general charge of the business, affairs and property of the Corporation and
general supervision over its other officers and agents. In general, the
president shall perform all duties incident to the office of president of a
stock corporation and shall see that all orders and resolutions of the Board are
carried into effect. Unless otherwise prescribed by the Board, the president
shall have full power and authority on behalf of the Corporation to attend, act
and vote at any meeting of security holders of other corporations in which the
Corporation may hold securities. At any such meeting, the president shall
possess and may exercise any and all rights and powers incident to the ownership
of such securities which the Corporation possesses and has the power to
exercise. The Board from time to time may confer like powers upon any other
person or persons.

Section 8. Executive Vice President. The executive vice president shall
be the chief operating officer of the Corporation and, subject to the direction
of the Board and the president, shall have general charge over the operation of
the business, affairs and property of the Corporation and general supervision
over its other officers and agents. In general, the executive vice president
shall perform all duties incident to the office of chief operating officer of a
stock corporation. In the absence or disability of the president, the executive
vice president, if any (or in the event there is more than one, the executive
vice presidents in the order designated, or in the absence of designation, in
order of their election), shall perform the duties and exercise the powers of
the president.

Section 9. Vice Presidents. In the absence or disability of the president
and the executive vice president, the vice president, if any (or in the event
there is more than one, the vice presidents in the order designated, or in the
absence of any designation, in the order of their election), shall perform the
duties and exercise the powers of the president. The vice president(s) also
generally shall assist the president and any executive vice presidents and shall
perform such other duties and have such other powers as from time to time may be
prescribed by the Board.

Section 10. Secretary. The secretary shall attend all meetings of the
Board and of the Stockholders and shall record all votes and the proceedings of
all meetings in a book to be kept for such purposes. The secretary also shall
perform like duties for the committees, if required by any such committee. The
secretary shall give (or cause to be given) notice of all meetings of
Stockholders and all special meetings of the Board and shall perform such other
duties as from time to time may be prescribed by the Board, the chairman of the
Board or the president. The secretary shall have custody of the seal of the
Corporation, shall have authority (as shall any assistant secretary) to affix
the same to any instrument requiring it, and to attest the seal by his or her
signature. The Board may give general authority to officers other than the
secretary or any assistant secretary to affix the seal of the Corporation and to
attest the affixing thereof by his or her signature.

Section 11. Assistant Secretary. The assistant secretary, if any (or in
the event there is more than one, the assistant secretaries in the order
designated, or in the absence of any designation, in the order of their
election), in the absence or disability of the secretary, shall perform the
duties and exercise the powers of the secretary. The assistant secretary(ies)
shall perform such other duties and have such other powers as from time to time
may be prescribed by the Board.

Section 12. Treasurer/Chief Financial Officer. The treasurer shall have
the custody of the corporate funds, securities, other similar valuable effects,
and evidences of indebtedness, shall keep full and accurate accounts of receipts
and disbursements in books belonging to the Corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as from time to time may be designated by the
Board. The treasurer shall disburse the funds of the Corporation in such manner
as may be ordered by the Board from time to time and shall render to the
chairman of the Board, the president and the Board, at regular meetings of the
Board or whenever any of them may so require, an account of all transactions and
of the financial condition of the Corporation.

Section 13. Assistant Treasurer. The assistant treasurer, if any (or in
the event there is more than one, the assistant treasurers in the order
designated, or in the absence of any designation, in the order of their
election), in the absence or disability of the treasurer, shall perform the
duties and exercise the powers of the treasurer. The assistant treasurer(s)
shall perform such other duties and have such other powers as from time to time
may be prescribed by the Board.

ARTICLE VI

NOTICES

Section 1. Form; Delivery. Any notices required or permitted to be given
to any director, officer, Stockholder or committee member shall be given in
writing, either personally or by first-class mail with postage prepaid, in
either case addressed to the recipient at his or her address as it appears in
the records of the Corporation. Personally delivered notices shall be deemed to
be given at the time they are so delivered, and mailed notices shall be deemed
to be given at the time they are deposited in the United States mail. Notice to
a director also may be given by telegram or telecopy sent to his or her address
as it appears on the records of the Corporation and shall be deemed given at the
time delivered at such address.

Section 2. Waiver; Effect of Attendance. Whenever any notice is required
to be given by law, the Articles of Incorporation or these Bylaws, a written
waiver thereof, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be the equivalent of the giving
of such notice. In addition, any Stockholder who attends a meeting of
Stockholders in person, or who is represented at such meeting by a proxy, or any
director or committee member who attends such meeting of the Board or a
committee thereof shall be deemed to have had timely and proper notice of the
meeting unless such Stockholder (or his or her proxy) or director or committee
member attends such meeting for the express purpose of objecting to the
transaction of any business thereat on the grounds that the meeting was not
lawfully called or convened.

ARTICLE VII

INDEMNIFICATION AND EXCULPATION; TRANSACTIONS
WITH AFFILIATED PERSONS

Section 1. Indemnification and Exculpation.

(a) Reference is hereby made to Section 2-418 of the Maryland General
Corporation Law (or any successor provision thereto) (the "Section"). The
Corporation shall indemnify each director and officer of the Corporation to the
full extent permitted by and in accordance with the terms and conditions
specified in such Section. The Corporation may, in the sole discretion of the
Board, indemnify any other person who may be indemnified pursuant to the Section
to the extent the Board deems advisable, as permitted by the Section. In each
and every situation where the Corporation may do so under the Section, the
Corporation hereby obligates itself to so indemnify the directors and officers
of the Corporation, and in each case, if any, where the Corporation must make
certain investigations on a case-by-case basis prior to indemnification, the
Corporation hereby obligates itself to pursue such investigations diligently.
It is the specific intention of these Bylaws to obligate the Corporation to
indemnify each director and officer of the Corporation to the fullest extent
permitted by the Maryland General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment). The Corporation shall pay expenses incurred by a director or
officer in defending any action, suit or proceedings, whether civil, criminal,
administrative, arbitrative or investigative ("Proceeding"), in advance of its
final disposition; provided, however, that the payment of such expenses incurred
by a director or officer in his capacity as a director or officer (and not in
any other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of such Proceeding, shall be
made only upon delivery to the Corporation of an undertaking by or on behalf of
such director or officer to repay all amounts so advanced if it should be
determined ultimately that such director or officer is not entitled to be
indemnified under this section or otherwise.

(b) The Board is authorized to enter into a contract with any
director, officer, employee or agent of the Corporation, or any person serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including employee benefit plans, providing for indemnification rights
equivalent to or, if the Board so determines, less than or greater than, those
provided for in this Article VII.

Section 2. Insurance. The Corporation shall maintain insurance to the
extent reasonably available, at its expense, to protect itself and any director,
officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the Maryland
General Corporation Law.

Section 3. Effect of Amendment. Any amendment, repeal or modification of
any provision of this Article VII by the Stockholders or the Board shall not
adversely affect any right or protection of a director or officer of the
Corporation existing at the time of such amendment, repeal or modification.

ARTICLE VIII

STOCK CERTIFICATES

Section 1. Form; Signatures. Each Stockholder who has fully paid for any
shares of the Corporation shall be entitled to receive a certificate
representing such shares, which shall be nonassessable, and such certificate
shall be signed by the chairman of the Board or the president or a vice
president and by the treasurer or an assistant treasurer or the secretary or an
assistant secretary of the Corporation. Signatures on the certificate may be
facsimile, in the manner prescribed by law. Each certificate shall exhibit on
its face the name of the Corporation, the number and class (and series, if any)
of the shares it represents, a full statement or summary of the designations and
any preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, the terms and conditions of
redemption of the stock of each such class, the differences in the relative
rights and preferences between the shares of each series to the extent they have
been set, and the authority of the Board to set relative rights and preferences
of subsequent series. Each certificate also shall state upon its face the name
of the person to whom it is issued and that the Corporation is organized under
the laws of the State of Maryland. Each certificate may (but need not) be
sealed with the seal of the Corporation or facsimile thereof. If any officer,
transfer agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate ceases to be such officer, transfer agent or registrar
before the certificate is issued, the certificate nevertheless may be issued by
the Corporation with the same effect as if such person were such officer at the
date of issue of the certificate. All stock certificates representing shares of
capital stock which are subject to restrictions on transfer or to other
restrictions may have imprinted thereon a notation of such restriction.

Section 3. Registered Stockholders. Except as otherwise provided by law,
the Corporation shall be entitled to recognize the exclusive right of a person
who is registered on its books as the owner of shares of its capital stock to
receive dividends or other distributions (to the extent otherwise distributable
or distributed) and to vote (in the case of voting stock) as such owner, and to
hold liable for calls and assessments a person who is registered on its books as
the owner of shares of its capital stock. The Corporation shall not be bound to
recognize any equitable or legal claim to or interest in such shares on the part
of any other person. The Corporation (or its transfer agent) shall not be
required to send notices or dividends to a name or address other than the name
or address of the Stockholders appearing on the stock ledger maintained by the
Corporation (or by the transfer agent or registrar, if any), unless any such
Stockholder shall have notified the Corporation (or the transfer agent or
registrar, if any), in writing, of another name or address at least 10 days
prior to the mailing of such notice or dividend.

Section 4. Record Date. To facilitate the determination of the
Stockholders of record who are entitled (i) to notice of or to vote at any
meeting of Stockholders or any adjournment thereof, (ii) to receive payment of
any dividend or other distribution or allotment of any rights or (iii) to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board, in advance, may fix a
date as the record date for any such determination. Such date shall not be more
than 90 days nor less than 10 days before the date of such meeting, nor more
than 90 days prior to the date of any other action. A determination of
Stockholders of record entitled to notice of or to vote at a meeting of the
Stockholders shall apply to any adjournment of the meeting taken pursuant to
Section 6 of Article II; provided, however, that the Board, in its discretion,
may fix a new record date for the adjourned meeting.

Section 5. Lost, Stolen or Destroyed Certificate. The Board may direct a
new certificate to be issued in place of any certificate theretofore issued by
the Corporation which is claimed to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
to be lost, stolen or destroyed. When authorizing such issue of a new
certificate, the Board, in its discretion, may require as a condition precedent
to issuance that the owner of such lost, stolen or destroyed certificate, or his
or her legal representative, advertise the same in such manner as the Board
shall require and/or to give the Corporation a bond in such sum, or other
security in such form, as the Board may direct, as indemnity against any claim
that may be made against the Corporation with respect to the certificate claimed
to have been lost, stolen or destroyed.

Section 6. Regulations. The issue, transfer, conversion and registration
of certificates of stock shall be governed by such other regulations as the
Board may establish.

ARTICLE IX

GENERAL PROVISIONS

Section 1. Dividends. Subject to the Maryland General Corporation Law and
to any provisions of the Articles of Incorporation relating to dividends,
dividends upon the outstanding capital stock of the Corporation may be declared
by the Board at any annual, regular or special meeting and may be paid in cash,
in property or in shares of the Corporation's capital stock. Any distribution
to Stockholders of income or capital assets of the Corporation will be
accompanied by a written statement disclosing the source of the funds
distributed. If, at the time of distribution, this information is not
available, a written explanation of the relevant circumstances will accompany
the distribution and the written statement disclosing the source of the funds
distributed will be sent to the Stockholders not later than 60 days after the
close of the fiscal year in which the distribution was made.

Section 2. Reserves. The Board, in its sole discretion, may fix a sum
which may be set aside or reserved over and above the paid-in capital of the
Corporation for working capital or as a reserve for any proper purpose, and from
time to time may increase, diminish or vary such fund or funds.

Section 3. Fiscal Year. The fiscal year of the Corporation shall be as
determined from time to time by the Board.

Section 4. Seal. The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its incorporation and the words "Corporate Seal"
and "State of Maryland."

Section 5. Amendment of the Bylaws. The Board is expressly empowered to
adopt, amend or repeal these Bylaws. Any adoption, amendment or repeal of
Bylaws by the Board shall require the approval of a majority of the total number
of authorized directors (whether or not there exist any vacancies in previously
authorized directorships at the time any resolution providing for adoption,
amendment or repeal is presented to the Board) provided, that such majority
shall include a majority of Independent Directors. The Stockholders shall also
have power to adopt, amend or repeal the Bylaws. In addition to any vote of the
holders of any class or series of stock of the Corporation required by law or by
these Bylaws, the affirmative vote of the holders of at least 66-2/3% of the
voting power of all of the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to adopt, amend or repeal any
provisions of the Bylaws.

4051039.1
<PAGE>

EXHIBIT 3(s)

Articles of Incorporation of CRIIMI MAE Financial Corporation III

ARTICLES OF INCORPORATION
OF
CRIIMI MAE FINANCIAL CORPORATION III

FIRST: The name of the Corporation is CRIIMI MAE FINANCIAL CORPORATION
III.

SECOND: The address of the Corporation's principal office in the State of
Maryland is 11200 Rockville Pike, Rockville, Maryland, 20852.

THIRD: The name and address of the Corporation's resident agent is CRICO
Services Corporation, a Maryland corporation, with its registered office at
11200 Rockville Pike, Rockville, Maryland 20852.

FOURTH: The purposes for which the Corporation is organized are: (a) to
accept the transfer to the Corporation from CRIIMI MAE Inc. of certain mortgage-
related securities (the "Securities") to be identified in one or more
assignments from CRIIMI MAE or an affiliate to the Corporation and to issue a
funding note or notes (the "Funding Note") pursuant to a funding note issuance
and security agreement among the Federal National Mortgage Association ("FNMA"),
CRIIMI MAE and the Corporation (the "Agreement"); (b) to execute and deliver and
to perform its obligations under the Agreement and Funding Notes and in that
connection to grant a security interest in the Securities for the benefit of
FNMA and any other holder of the Funding Note to the extent set forth in the
applicable Agreement; and (c) to engage in any lawful act or activity and to
exercise any powers permitted to corporations organized under the Maryland
General Corporation Law ("GCL") that in either case are incidental to and
necessary or convenient for the accomplishment of the above-mentioned businesses
and purposes.

SIXTH: The name and address of the Sole Incorporator is as follows:

Name Address

Deborah A. Linn 11200 Rockville Pike, 5th Floor
Rockville, Maryland 20852

(A) The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors.

(B) The number of directors of the Corporation shall be from time to
time fixed by, or in the manner provided in, the Bylaws of the Corporation with
the initial Board of Directors consisting of three members. At least one
director of the Corporation (the "Outside Director") and at least one officer of
the Corporation (the "Outside Officer") shall not be, and for at least eighteen
months prior thereto shall not have been, a director, officer or employee (or
related to any such director, officer or employee) of CRIIMI MAE Inc., a
Maryland corporation ("CRIIMI MAE"), or any affiliate (other than the
Corporation) of CRIIMI MAE or a trustee, conservator or receiver of CRIIMI MAE
or any affiliate of CRIIMI MAE; provided, however, that the Outside Director and
the Outside Officer may be the same person. For the purposes of the foregoing,
an "affiliate" of an entity is an entity controlling, controlled by, or under
common control with such entity. Notwithstanding any other provision of these
Articles of Incorporation or any other provision of law, in the event of the
death, incapacity, or resignation of the Outside Director or the Outside
Officer, or any other vacancy in such position, a successor Outside Director or
Outside Officer, as applicable, shall be appointed by the remaining directors of
the Corporation and, in the case of an Outside Director, no action requiring the
unanimous affirmative vote of the Board of Directors of the Corporation shall be
taken until a successor Outside Director is elected and qualified and approves
such action. Election of directors need not be by written ballot unless the
Bylaws so provide. The following persons initially shall serve as directors of
the Corporation and shall have and exercise any and all rights powers,
privileges and discretionary authority granted or permitted by these Articles of
Incorporation until the first annual meeting of stockholders or until their
successors are duly elected and shall qualify:

William B. Dockser
H. William Willoughby
Justine W. Wilcox

(C)The Corporation shall maintain corporate records and books of account and
shall not commingle its corporate records and books of account with the
corporate records and books of account of CRIIMI MAE or any other entity.