Exhibit 3.7


ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DYNEX CAPITAL, INC.


1. The name of the Corporation is Dynex Capital, Inc.

2. Article VI of the Corporation's Articles of Incorporation shall be
amended by deleting paragraph (7) in its entirety and substituting
therefor the following:

"(7) Application of Article. Nothing contained in this Article
or in any other provision hereof shall limit the authority of
the Board of Directors to take any and all other action as it
in its sole discretion deems necessary or advisable to protect
the Corporation and the interests of its shareholders by
maintaining the Corporation's eligibility to be, and
preserving the Corporation's status as, a qualified real
estate investment trust under the Code, provided, however,
that nothing in this Article VI or elsewhere in these Articles
shall preclude settlement of any transaction entered into or
through the facilities of the New York Stock Exchange or any
other exchange on which the Corporation's common shares may be
listed from time to time."

3. This amendment to the Articles of Incorporation was proposed by the
Board of Directors and submitted to the shareholders for approval in
accordance with Section 13.1-707 of the Virginia Stock Corporation Act
at the annual meeting on May 19, 1998.

4. The designation, number of outstanding shares and number of votes
entitled to be cast by each voting group entitled to vote separately on
the amendment are as follows: