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                                                              W INTER 2011/2012
                      President’s Report
                      March 2012
                      2011 was CDT’s most successful year ever. For the calendar year just ended, CDT added
                      more affordable housing loans to our books than in any previous year. Our financial
                      performance reached an all-time high, and our existing debt and equity portfolios performed
                      well ahead of plan. In light of the slow economic recovery in the U.S., 2011 was an
                      extremely gratifying year for CDT.
                       In 2011, we identified new sources of financing which allowed for our acquisition of two
                       loan portfolios from nationally recognized CDFIs. These portfolio acquisitions helped those
organizations generate liquidity, which will allow them to continue the important work they do to meet local market
needs for long-term affordable housing financing. The acquisition of these portfolios increased the number of
affordable housing units in our debt portfolio to over 17,000. Our commitment to purchase a 200-unit Section 8
property for seniors and disabled adults just south of Boston, will increase the number of units in our equity
portfolio to nearly 5,000. The combined portfolios now consist of debt and equity assets with a total market value
of more than $675 million.
CDT’s financial performance for 2011 was, by far, the strongest in our history. Operating Funds From Operations
(Operating FFO) and Funds Available for Distribution (FAD) both reached all-time highs of $1.19 and $1.01 per
share, respectively. As a result of CDT’s steadily improving performance, our Board has approved an increase in
the quarterly dividend on our common stock to $0.17 per share, up from $0.15 per share, a 13% increase.
With a market net worth now approaching $140 million, CDT is well-positioned for continued growth in 2012. We
are adding staff to handle both our growing pipeline of loan originations and our increased asset management
responsibilities. In 2012, we will continue to explore additional loan portfolio acquisition opportunities, and we are
actively analyzing a solid pipeline of equity investment opportunities as well.
2012 is already presenting opportunities for CDT to continue its mission of providing debt and equity financing for
affordable housing across the country. We look forward to continued growth throughout 2012.

Joseph F. Reilly
President & CEO

New Investment Profiles:
In the past two years, CDT has increased its portfolio purchase
activities by working with community development financial
institutions (CDFIs). This includes supporting CDFIs looking for
greater liquidity, managing borrower concentrations and other capital
needs. In the fall of 2011, CDT purchased two portfolios of first
mortgages from two experienced CDFIs totaling $71 million.
These portfolios consisted primarily of first mortgages on properties
in seasoned affordable communities financed with low income
housing tax credits. The properties in these communities are located
in California, Idaho, Utah and Wyoming. The following profiles
include highlights from 4 of the 34 loans purchased by CDT:
                     NEW INVESTMENTS                              (CONTINUED…)
Hayward Senior Housing - Hayward, California
CDT purchased a $1,455,593 first mortgage on Hayward Senior Housing, a 60-
unit seniors community located in Hayward, California. The community was
newly constructed and completed in 2008. The property includes one-bedroom
units affordable to seniors with incomes ranging from 30% to 50% of the area
median income (AMI). Hayward Senior was developed by Eden Housing. Since
its formation, Eden has acquired or developed over 6,300 units of affordable
housing throughout northern California. Eden is one of the leading nonprofit
housing providers in the state. Eden specializes in “service-enhanced” properties,
providing supportive services to its residents through its affiliate Eden Housing
Resident Services, Inc. Eden is also a full-service property manager.

Andalucia Senior Apartments - Van Nuys, California
CDT purchased a $5,770,842 first mortgage on Andalucia Senior Apartments, a
newly constructed 94-unit seniors community located in Van Nuys, California.
The development was completed in 2010. The property includes one- and two-
bedroom units affordable to seniors with incomes ranging from 30% to 60% of
AMI. Andalucia Senior was developed by Meta Housing Corporation. Meta is an
active affordable housing developer with extensive experience creating family
and seniors communities in Southern California. Since 1969, Meta has developed
more than 12,000 residential units.

Pine Valley – Washington City, Utah
CDT purchased three first mortgages totaling $2,559,851 on Pine Valley I, II and
III, a three-phase affordable community located in Washington City, Utah. This
148-unit development consists of 50 units in Pine Valley I, 66 units in Pine
Valley II, and 32 units in Pine Valley III. Developed for large families, each unit
in this phased community is a 3-bedroom home, located in adjoined duplexes,
with two-car garages and backyards. Eligible families earn between 35% and
50% AMI. Pine Valley was developed by Adams Construction and Management
Company, Inc., an active developer and manager of apartment rental
communities. In operation since 1967, Adams has extensive experience utilizing
LIHTC and HUD programs to develop affordable housing. Adams currently
managing 756 units in 15 properties located in Southern Utah and Arizona.

Spring Hollow - West Jordan, Utah
CDT purchased a $1,453,907 first mortgage on Spring Hollow in West Jordan,
Utah. Spring Hollow is a 44-unit family rental community completed in 2005.
The property includes two- and three-bedroom units affordable to families
earning between 35 % and 55% of AMI. The units are distributed among four
buildings. Spring Hollow was developed by J. Allred Investments, L.C, a Utah-
based real estate firm which provides a full range of services including
architecture, urban design, land planning and civil engineering – all supporting
the development of apartment communities, single-family subdivisions, public
facilities and condominium projects. The property is managed by Millwood
Management, a local firm with extensive management experience.
                                                   F I N A N C I A L S U M M A RY
 Operations - Operating FFO for the year ended December 31, 2011 was $1.19 per share, which is $0.34 per
 share above the results a year ago. The annual Operating FFO is the highest amount since CDT’s inception.
 These strong results were from a combination of the following: recognition of grant income from our CDFI
 Awards; steady equity portfolio returns; increased interest on our mortgage loan portfolio; and reduced
 operating costs.

                                                                      Operating FFO
                       Per Share



                                                         Dec‐07   Dec‐08      Dec‐09    Dec‐10      Dec‐11
                                                                           Year Ended

 Dividends - The Board of Directors declared a quarterly dividend of $0.17 per share on the Class B common
 shares, payable on March 7, 2012, to all common stockholders of record as of March 2, 2012. The Board of
 Directors also approved a regular quarterly dividend of $0.53125 per share on the 4.25% convertible preferred
 shares, payable on February 29, 2012, to all preferred stockholders of record as of February 22, 2012.

                                               PORTFOLIO PERFORMANCE
Equity Portfolio:
 CDT’s equity portfolio reported improved operations for 2011. Economic occupancy has remained at
 approximately 93% over the past year which helped to generate FFO for the entire portfolio which was 6% higher
 than our plan. During the year, we completed a restructuring of four of our equity investments, which we believe
 will provide for their improved operations in the future. Furthermore, the size of the CDT’s Watch List
 decreased, primarily due to improvement in operations of the majority of our extended use LIHTC properties,
 which is a result of a strengthening in their local economies.

                              Occupancy Rate




                                                         Dec-10   Mar-11      Jun-11       Sep-11    Dec-11
                                                                           Quarter Ended
Debt Portfolio:
The overall debt portfolio showed continued strength as the weighted average DCR at December 31, 2011
reached 1.43 versus 1.36 a year ago. The percentage of loans on CDT’s Watch List also showed a significant
improvement declining to 16% from 27% a year ago. Part of the improvement was due to the growth in the
portfolio, while the remainder was a result of loans being removed based upon their improved operations.
Lastly, the weighted average occupancy has remained stable throughout the year at approximately 95%.
                                        THE COMMUNITY DEVELOPMENT TRUST, INC.
                                                 F I N A N C I A L S U M M A RY
Preserving America’s
                                                                        (in thousands, except per share data)
                                                                                 Balance Sheet
CDT is the country's only                                                                              December 31,                 December 31,
                                                                                                           2011                         2010
private real estate investment
trust with a public purpose.       Cash and cash equivalents                           $                          4,684              $         2,740
Working with local and             Restricted cash                                                                2,942                        2,066
                                   Investments                                                                    2,014                        3,627
national partners, our             Real estate, including investments in joint venture                           51,944                       35,531
organization makes long-           Subordinate mortgage loans, net                                               30,040                       28,826
                                   Mortgage loans, net                                                           79,246                       16,181
term equity investments in
                                   Loan participations                                                            4,000                        4,000
affordable communities and         Other assets                                                                   3,119                        1,681
serves as a secondary market          Total Assets                                     $                        177,989              $        94,652

provider for low-income            Liabilities and Equity
                                   Mortgages payable                                                    $        22,560              $         7,194
multifamily mortgages.             Loans payable                                                                 57,259                          -
After more than twelve years       Secured revolving credit facilities                                           10,000                        1,400
                                   Other liabilities                                                              8,064                        8,050
of operations, CDT has
                                      Total Liabilities                                                          97,883                       16,644
invested or committed
                                   Commitments and Contingencies
approximately $836 million
                                   Company stockholders' equity                                                  79,837                       77,868
in debt and equity capital to      Noncontrolling interests                                                         269                          140
properties in 42 states and           Total Equity                                                               80,106                       78,008
regions—helping to preserve            Total Liabilities and Equity                                     $       177,989              $        94,652

or add approximately                                                         Income Statement
31,000 units to the nation's                                                                                 For the year ended
affordable housing stock.                                                                         December 31, 2011       December 31, 2010
                                                                                                 Amount        Per share        Amount        Per share
                                   Total revenues                                               $ 20,980                       $ 10,193
                                   Total expenses                                                 12,812                         12,166
 Visit Our Website!                Consolidated net income (loss)                               $ 8,168                        $ (1,973)
                                   Net income applicable to noncontrolling interests                 230                            220                    Preferred stock dividend                                       (2,720)                        (2,720)
                                   Net income (loss) applicable to common stock                 $ 5,218         $ 1.01         $ (4,913)       $ (0.94)
                                   Add property depreciation                                       4,778                          5,417
                                   Adjustment for (gain)/loss on sale of investments, net         (5,032)                           736
    1350 Broadway, Suite 700       Impairment loss on real estate joint venture                      -                              558
      New York, NY 10018           Other GAAP adjustments, net                                       445                            258
      Phone: 212-271-5080          Funds from operations                                        $ 5,409         $ 1.04         $ 2,056         $ 0.39
       Fax: 212-271-5079           Add write-off of deferred investment expenses                     780                             49
     Email:        Add restructuring charge                                          -                              417
                                   Add loss on loan impairment                                       -                            1,917
                                   Operating funds from operations                              $ 6,189         $ 1.19         $ 4,439         $ 0.85
For additional information on
CDT’s programs and invest-         Common dividends paid                                        $ 3,110         $ 0.60         $ 3,150         $ 0.60
ments, please visit our website.
                                   Weighted average number of shares
                                   outstanding - Basic                                                             5,182                          5,247

                                   Neither the information in this report nor any opinion expressed herein constitutes an offer, or an invitation to make
                                   an offer, to buy or sell any securities. Statements regarding future prospects may not be realized. Past performance
                                   is not necessarily a guide to future performance.

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