Item 6. Indemnification of Directors and Officers.

Under the Maryland General Corporation Law (the "MGCL"), each director of the Registrant is required to perform his duties as a director in good faith, in a manner he believes to be in the best interest of the Registrant and with the care than an ordinary prudent person in a like position would use under similar circumstances. Acts or omissions of a director not amounting to a violation of this statutory standard may not be the basis for imposition of any liability of the director, either for legal or equitable relief. The MGCL permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (i) actual receipt of an improper benefit or profit in money, property or services or
(ii) active and deliberate dishonesty established by a final judgment as being material to the cause of action. The Amended and Restated Articles of Incorporation (the "Articles") contain such a provision which eliminates such liability to the maximum extent permitted by the MGCL. The Articles (i) require the Registrant, to the maximum extent permitted by Maryland law, to indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to its directors and officers, whether serving the Registrant, or at its request, any other entity and (ii) authorize the Registrant, to the maximum extent permitted by Maryland law, to indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to other employees and agents, whether serving the Registrant, or

at its request, any other entity. The MGCL requires a corporation (unless its charter provides otherwise, which the Registrant's Articles do not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he is made a party by reason of his service in that capacity.

The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation, or in a suit claiming improper benefit, except for expenses ordered by a court. In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation's receipt of (a) a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation as authorized by the Bylaws and (b) a written statement by or on his behalf to repay the amount paid or reimbursed by the corporation if it shall ultimately be determined that the standard of conduct was not met.

Stewart Zimmerman, the President and Chief Executive Officer of the Registrant, William Gorin, the Executive Vice President and Secretary of the Registrant, and Ronald Freydberg, the Senior Vice President of the Registrant, are each employed by America First Mortgage Advisor Corporation, an advisor to the Registrant (the "Advisor"). Under their employment agreements with the Advisor, the Advisor is required to indemnify such officers to the fullest extent permitted by New York law in effect as of the date of each respective employment contract against all costs, expenses, liabilities and losses (including, without limitation, attorneys' fees, judgments, fines, penalties, ERISA excise taxes and amounts paid in settlement) reasonably incurred by such officers in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative, in which such officer is made, or threatened to be made, a party to, or a witness in, such action, suit or proceeding by reason of the fact that he is or was an officer, director or employee of the Advisor, as the case may be, or is or was serving as an officer, director, member, employee, trustee or agent of any other entity (including the Registrant) at the request of the Advisor.

Section 722 of the New York Business Corporation Law ("NYBCL") provides that a corporation may indemnify a director or officer of the corporation under certain circumstances.

A director or officer of the corporation who is made, or is threatened to be made, a party to an action or proceeding other than one by or in the right of the corporation to procure a judgment in its favor, may be indemnified by the corporation against judgments, fines, amounts paid in settlement and reasonable expenses (including attorney's fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein). Such director or officer must have acted in good faith and for a purpose which he reasonably believed to be in the best interests of the corporation in order to be indemnified. Additionally, in order to be indemnified in a criminal action or proceeding as described in this paragraph, such director or officer must have had no reasonable cause to believe that his conduct was unlawful.

A corporation may also indemnify a director or officer of the corporation who is made, or threatened to be made, a party to an action by or in the right of the corporation to procure a judgment in its favor, against amounts paid in settlement and reasonable expenses (including attorney's fees actually and necessarily incurred by him in connection with the defense or settlement of such action) or in connection with an appeal therein. In order to be indemnified in such actions or proceedings, the director or officer must have acted in good faith, for a purpose he reasonably believed to be in the best interests of the corporation. However, a director or officer may not be indemnified if (1) a threatened action, or a pending action is settled or otherwise disposed of, or (2) such officer or director is adjudged liable to the corporation, unless a court of competent jurisdiction determines that, in

view of all the circumstances of the case, the director or officer is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses as the court deems proper.

Under the NYBCL, the termination of any such civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, does not in itself create a presumption that any such director or officer did not act in good faith, for a purpose which he reasonably believed to be in the best interests of the corporation or that he had reasonable cause to believe that his conduct was unlawful.

Additionally, the directors and officers of the Registrant may be indemnified pursuant to the terms of a Directors and Officers Liability insurance policy maintained by the parent company of the Advisor.

To the extent that the foregoing provisions concerning indemnification apply to actions arising under the Securities Act, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such provisions are contrary to public policy and therefore are not enforceable.