ARTICLES OF AMENDMENT

                         PILGRIM GNMA INCOME FUND, INC.

         Pilgrim GNMA Income Fund,  Inc.,  a Maryland  corporation  (hereinafter
called  the  "Corporation"),   hereby  certifies  to  the  State  Department  of
Assessments and Taxation of Maryland that:

         FIRST:  The  Corporation  is  authorized  to issue one hundred  million
(100,000,000) shares of Common Stock, one cent ($0.01) par value per share, with
an aggregate par value of one million  dollars  ($1,000,000),  all of which have
been previously classified as one series and one class of shares.

         SECOND: The Board of Directors of the Corporation,  by resolution dated
July 26, 2000, increased the number of authorized shares of the Corporation from
100,000,000 shares to 1,000,000,000  shares, and classified the shares as shares
of Common Stock.

         THIRD: The Board of Directors  hereby  redesignates one hundred million
(100,000,000)  shares (including all issued shares) of Pilgrim GNMA Income Fund,
Inc. Common Stock as Pilgrim GNMA Income Fund, Inc. Class A Common Stock.

         FOURTH:  The  shares  of  Class  A  Common  Stock  of  the  Corporation
redesignated  hereby shall have the  preferences,  conversion  and other rights,
voting powers,  restrictions,  limitations as to dividends,  qualifications  and
terms and  conditions  of  redemption as currently set forth in Article FIFTH of
the charter of the Corporation.

         FIFTH:  The Board of Directors of the  Corporation  has  classified and
designated the shares  described  above  pursuant to authority  contained in the
Corporation's charter.

         SIXTH: The foregoing  amendments to the charter of the Corporation were
approved by a majority of the entire Board of Directors of the Corporation;  the
charter  amendments are limited to changes expressly  permitted by Section 2-605
of Title 2 of  Subtitle 6 of the  Maryland  General  Corporation  Law to be made
without action by the stockholders.

         The undersigned  Senior Vice President of the Corporation  acknowledges
these  Articles of  Amendment to be the  corporate  act of the  Corporation  and
states that to the best of his knowledge,  information  and belief,  the matters
and facts set forth in these Articles with respect to authorization and approval
are  true in all  material  respects  and  that  this  statement  is made  under
penalties of perjury.

         IN WITNESS  WHEREOF,  Pilgrim GNMA Income  Fund,  Inc. has caused these
Articles  of  Amendment  to be signed and filed in its name and on its behalf by
its Senior Vice President, and witnessed by its Secretary on July 26th, 2000.


                                                  PILGRIM GNMA INCOME FUND, INC.



                                                  By: /s/ Michael J. Roland
                                                      --------------------------
                                                      By: Michael J. Roland
                                                      Senior Vice President


ATTEST:

/s/ James M. Hennessy
----------------------------
By: James M. Hennessy
    Secretary