SECOND AMENDED AND RESTATED 2003 NONEMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN

1.            Purpose

The purpose of the Plan is to provide Nonemployee Directors of the Corporation with an opportunity to defer 100% or 50% of their Compensation while at the same time aligning their interests more closely with the interests of the stockholders of the Corporation.  This Plan is an amendment and complete restatement of the Amended and Restated 2003 Nonemployee Directors’ Deferred Compensation Plan.

2.            Effective Date

This Plan shall become effective on the Effective Date.

3.            Definitions

In this Plan, the following definitions shall apply:

“ Account ” - the account maintained by the Corporation for Deferred Stock Units credited in accordance with Section 6 of the Plan.

“ Administrator ” - the person, persons or entity appointed by the Board from time to time to manage and administer the Plan.

“ Board ” - the Board of Directors of the Corporation.

“Code” - the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

“ Common Stock ” - the Corporation’s common stock, $0.01 par value per share.

“ Compensation ” - the aggregate value of all annual compensation payable to a Nonemployee Director for service on the Board (exclusive of any reimbursable expenses relating to such Nonemployee Director’s service on the Board).

“ Corporation ” - MFA Mortgage Investments, Inc., a Maryland corporation, and its successors.

“ Deferral Period ” - the five-year period, if so elected, during which Compensation for a particular year is to be deferred.  At the conclusion of the Deferral Period, such deferred Compensation will be paid out in a lump sum or, if so elected, in a specified number of annual installments not to exceed five years.  If the deferred Compensation is paid out in annual installments, such installment payments shall be treated as a series of separate payments for purposes of Section 409A of the Code.  Except as otherwise provided in Section 8(a) of the Plan, payment(s) will commence, or be made in a lump sum, no earlier than January 15 of the year first following the five-year anniversary of the applicable election date.  For example, if during 2002 a Participant elects the Deferral Period (i.e., 5 years) for Compensation deferred in 2003, the payment(s) shall be made/commence on or about January 15, 2008.

“ Deferred Stock Unit ” - a credit to a Participant’s Account under Section 6(c) that represents the right to receive a cash payment equal to the Fair Market Value of one Share on settlement of the Account.

“ Effective Date ” - December 19, 2002, the date the Plan was adopted.

“ Fair Market Value ” - for any date, the average of the high and low sales prices for Shares of the Corporation’s Common Stock, as reported by the New York Stock Exchange or such other relevant exchange on which the Corporation’s Common Stock is traded.

“ Nonemployee Director ” - a member of the Board who is not also an employee of the Corporation and/or an employee of any affiliate of the Corporation.

“ Participant ” - each Nonemployee Director who elects to defer 100% or 50% of his or her Compensation under this Plan.

“ Plan ” - MFA Mortgage Investments, Inc. Second Amended and Restated 2003 Nonemployee Directors’ Deferred Compensation Plan, as it may be amended from time to time.

“Second Election” -  an election pursuant to Section 5(c)(4) of the Plan which changes the Nonemployee Director’s prior deferral election.

 “ Share ” - a share of Common Stock of the Corporation.

“Termination of Service” - termination of service with the Corporation, which shall be interpreted in a manner that is consistent with the definition of a “separation from service” under Section 409A of the Code and Treasury Regulation 1.409A-1(h).

4.            Administration

(a)           Subject to the oversight of the Board, the Administrator shall have authority to administer the Plan, including conclusive authority to construe and interpret the Plan, to establish rules, policies, procedures, forms and notices for use in carrying out the Plan, and to make all other determinations necessary or desirable for administration of the Plan.  The Administrator may delegate some or all of its functions to another person(s) as it may deem appropriate.

(b)           Notwithstanding any other provision herein to the contrary, the Administrator shall administer the Plan and exercise authority and discretion under the Plan, to satisfy the requirements of Section 409A of the Code or any exemption thereto.

5.            Election to Defer Compensation

(a)            Amount of Deferral .  A Nonemployee Director may elect to defer receipt of 50% or 100% of such Nonemployee Director’s Compensation otherwise thereafter payable to such Nonemployee Director.

(b)            Manner of Electing Deferral .  An election to defer Compensation shall be made by each Participant by giving written notice to the Administrator in the form approved by the Administrator.  Such notice shall address, without limitation:

(1)           the percentage of Compensation for the next calendar year to be deferred;

(2)           if applicable, an election for the Account to be settled following a five-year Deferral Period; and

(3)           an election for the Account to be settled in either a lump-sum payment or in a specified number of annual installments (not to exceed five).

(c)            Time of Election; Effectiveness; Change of Election .

(1)           An election to defer Compensation shall be made by a Nonemployee Director no later than the end of the taxable year preceding the year for which the Compensation was earned.  Notwithstanding the foregoing, a Nonemployee Director who first becomes eligible to participate in the Plan may make an election to defer any future Compensation within 30 days after the date of such eligibility; provided, however, that such deferral election shall only apply to the pro rata portion of the Compensation that is earned from the date of such election through the remainder of the year.

(2)           An election shall be irrevocable as of the last day of the calendar year in which the election is made and shall continue in effect until the end of the calendar year for which Compensation is earned.

(3)           A Nonemployee Director may change a deferral election annually by making different elections in the Annual Participant Election Form provided by the Administrator; all such changes shall only be effective prospectively for subsequent calendar years commencing at or after the time of such notice.

(4)           Notwithstanding the foregoing, with respect to any previously deferred amounts, a Nonemployee Director m