Access Capital Strategies Community Investment Fund 10-Q 2006 Q3 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10–Q

þ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended February 28, 2006

Or

o Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from______________to______________

Commission File No. 814–00143

Access Capital Strategies Community Investment Fund, Inc.

(Exact name of registrant as specified in its charter)

Maryland	04–3369393
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
419 Boylston Street, Suite 501	Boston, MA 02116
(Address of principal executive offices)	(Zip Code)

617–236-7274
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant has been required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filero           Accelerated filerþ           Non-accelerated filero

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Noþ

The registrant had 127 shareholders and 47,432,560 shares of common stock outstanding as of February 28, 2006.

Access Capital Strategies Community Investment Fund, Inc.
February 28, 2006 Form 10–Q Quarterly Report

TABLE OF CONTENTS

	PAGE
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Condensed Statements of Assets and Liabilities February 28, 2006 (unaudited), May 31, 2005 and February 28, 2005 (unaudited)		3
Condensed Statements of Operations (unaudited)
Three months ended February 28, 2006 and February 28, 2005; and Nine months ended February 28, 2006 and February 28, 2005		4
Condensed Statements of Changes in Net Assets (unaudited)
Three months ended February 28, 2006 and February 28, 2005; and Nine months ended February 28, 2006 and February 28, 2005		5
Condensed Statements of Cash Flows (unaudited)
Nine months ended February 28, 2006 and 2005		6
Financial Highlights (unaudited)
Three months ended February 28, 2006 and February 28, 2005; and Nine months ended February 28, 2006 and February 28, 2005		7
Schedule of Investments February 28, 2006 (unaudited)		8
Notes to Condensed Financial Statements (unaudited)		11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3. Quantitative and Qualitative Disclosures about Market Risk		19
Item 4. Controls and Procedures		20
PART II. OTHER INFORMATION		21
Item 1. Legal Proceedings		21
Item 1A. Risk Factors		21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		21
Item 3. Defaults Upon Senior Securities		21
Item 4. Submission of Matters to a Vote of Security Holders		21
Item 5. Other Information		21
Item 6. Exhibits		21
Signatures		22

2

Access Capital Strategies Community Investment Fund, Inc.

PART I — FINANCIAL INFORMATION

Item 1:

Condensed Financial Statements

CONDENSED STATEMENTS OF ASSETS AND LIABILITIES

	February 28, 2006
	(unaudited)			May 31, 2005			February 28, 2005
							(unaudited)
Assets:
Investments in unaffiliated securities, at value*	$	514,944,932		$	457,698,912		$	440,421,850
Cash		—			1,094,568			1,187,871
Receivables:
Interest		2,396,726			2,134,375			1,996,883
Principal paydowns		596,103			260,794			380,102
Capital shares sold		505,000			1,895,289			1,600,000
Securities sold		—			—			5,599,987
Variation margin		—			—			181,250
Prepaid expenses		561			561			270
Total assets		518,443,322			463,084,499			451,368,213
Liabilities:
Payables:
Reverse repurchase agreements (including accrued interest of $111,525, $83,779 and $50,224, respectively)		60,560,525			68,596,779			64,050,224
Securities purchased		2,632,293			4,337,013			4,084,819
Dividends to shareholders		1,265,840			1,488,313			1,216,615
Custodian		338,945			—			—
Investment advisor		159,917			141,417			173,915
Variation margin		129,637			132,813			—
Other affiliates		3,390			3,318			3,235
Accrued expenses and other liabilities		72,400			85,906			82,271
Total liabilities		65,162,947			74,785,559			69,611,079
Net Assets:
Net Assets	$	453,280,375		$	388,298,940		$	381,757,134
Net Assets Consist of:
Paid-in capital	$	469,459,120		$	394,186,630		$	390,245,109
Accumulated distributions in excess of investment income — net		(1,310,503	)		(1,310,503	)		(1,291,491	)
Accumulated realized capital losses — net		(9,588,412	)		(10,407,517	)		(9,280,661	)
Unrealized appreciation (depreciation) — net		(5,279,830	)		5,830,330			2,084,177
Total accumulated losses — net		(16,178,745	)		(5,887,690	)		(8,487,975	)
Net Assets	$	453,280,375		$	388,298,940		$	381,757,134
Net Asset Value Per Share	$	9.56		$	9.82		$	9.75
* Identified cost	$	520,110,139		$	451,642,590		$	438,510,238
Shares issued and outstanding, $.0000001 par value, 100,000,000 shares authorized		47,432,560			39,552,378			39,149,040

     See Notes to Condensed Financial Statements.

3

Access Capital Strategies Community Investment Fund, Inc.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended						Nine Months Ended
	February 28,			February 28,			February 28,			February 28,
	2006			2005			2006			2005
Investment Income:
Interest	$	6,689,261		$	5,922,281		$	18,813,838		$	16,888,029
Expenses:
Management fees		625,918			569,693			1,788,489			1,626,322
Interest expense		572,809			469,567			1,785,521			987,870
Professional fees		87,632			35,606			171,584			108,332
Accounting services		31,459			36,211			99,139			97,893
Pricing fees		13,369			14,939			41,531			39,194
Custodian fees		13,308			14,783			40,141			39,659
Transfer agent fees		11,823			5,181			33,503			14,478
Director’s fees and expenses		6,540			7,771			20,537			21,717
Other		6,677			10,756			19,012			23,728
Total expenses before reimbursement		1,369,535			1,164,507			3,999,457			2,959,193
Reimbursement of expenses		—			159,599			42,408			468,161
Total expenses after reimbursement		1,369,535			1,324,106			4,041,865			3,427,354
Investment income — net		5,319,726			4,598,175			14,771,973			13,460,675
Realized & Unrealized Gain (Loss) — Net:
Realized gain (loss) on:
Investments — net		(102,696	)		(155,326	)		(341,863	)		(57,010	)
Financial futures contracts — net		210,180			(137,102	)		1,160,968			(1,861,996	)
Change in unrealized appreciation/depreciation on:
Investments — net		2,929,156			(1,655,218	)		(11,221,529	)		6,574,502
Financial futures contracts — net		(132,540	)		47,207			111,369			2,539
Total realized and unrealized gain (loss) — net		2,904,100			(1,900,439	)		(10,291,055	)		4,658,035
Net Increase in Net Assets Resulting from Operations	$	8,223,826		$	2,697,736		$	4,480,918		$	18,118,710

     See Notes to Condensed Financial Statements.

4

Access Capital Strategies Community Investment Fund, Inc.

CONDENSED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

	Three Months Ended						Nine Months Ended
	February 28,			February 28,			February 28,			February 28,
Increase (Decrease) in Net Assets:	2006			2005			2006			2005
Operations:
Investment income—net	$	5,319,726		$	4,598,175		$	14,771,973		$	13,460,675
Realized gain (loss) — net		107,484			(292,428	)		819,105			(1,919,006	)
Change in unrealized appreciation/depreciation – net		2,796,616			(1,608,011	)		(11,110,160	)		6,577,041
Net increase in net assets resulting from operations		8,223,826			2,697,736			4,480,918			18,118,710
Dividends to Shareholders:
Dividends to shareholders from investment income–net		(5,319,726	)		(4,583,271	)		(14,771,973	)		(13,441,663	)
Capital Share Transactions:
Proceeds from sale of shares		9,075,000			11,500,000			84,105,000			37,975,000
Value of shares issued to shareholders in reinvestment of dividends		1,622,130			956,948			3,822,530			2,883,380
Total issued		10,697,130			12,456,948			87,927,530			40,858,380
Cost of shares redeemed		(10,707,512	)		(5,350,175	)		(12,655,040	)		(10,345,493	)
Net increase (decrease) in net assets resulting from capital share transactions		(10,382	)		7,106,773			75,272,490			30,512,887
Net Assets:
Total increase in net assets		2,893,718			5,221,238			64,981,435			35,189,934
Beginning of period		450,386,657			376,535,896			388,298,940			346,567,200
End of period*	$	453,280,375		$	381,757,134		$	453,280,375		$	381,757,134
* Accumulated distributions in excess of investment income– net	$	(1,310,503	)	$	(1,291,491	)	$	(1,310,503	)	$	(1,291,491	)

See Notes to Condensed Financial Statements.

5

Access Capital Strategies Community Investment Fund, Inc.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months Ended
	February 28,			February 28,
	2006			2005*
Cash Used For Operating Activities:
Net increase in net assets resulting from operations	$	4,480,918		$	18,118,710
Adjustments to reconcile net increase in net assets resulting from operations to net cash used for operating activities:
Increase in receivables		(262,351	)		(210,468	)
Increase (decrease) in other liabilities		29,636			(917,637	)
Realized and unrealized loss (gain) — net		10,291,055			(4,658,035	)
Realized and unrealized gain on financial futures contracts — net		1,272,337			(1,859,457	)
Amortization of premium and discount		63,228			2,578
Proceeds from paydowns and sales of long—term investments		82,525,049			107,082,354
Proceeds on other investment-related transactions		930,152			—
Purchases of long—term investments		(154,367,870	)		(159,432,761	)
Net cash used for operating activities		(55,037,846	)		(41,874,716	)
Cash Provided By Financing Activities:
Cash receipts from issuance of common stock		85,495,289			51,160,251
Cash receipts from reverse repurchase agreements — net		(8,064,000	)		12,900,000
Cash payments on capital shares redeemed		(12,655,040	)		(10,345,493	)
Dividends paid to shareholders		(11,171,916	)		(10,652,171	)
Increase in custodian bank payable		338,945			—
Net cash provided by financing activities		53,943,278			43,062,587
Cash:
Net increase (decrease) in cash		(1,094,568	)		1,187,871
Cash at beginning of period		1,094,568			—
Cash at end of period	$	—		$	1,187,871
Cash Flow Information:
Cash paid for interest	$	1,757,775		$	954,826
Non–Cash Financing Activities:
Capital shares issued in reinvestment of dividends to shareholders	$	3,822,530		$	2,883,380

* Certain prior period amounts have been reclassified to conform to current period presentation.

See Notes to Condensed Financial Statements.

6

Access Capital Strategies Community Investment Fund, Inc.

FINANCIAL HIGHLIGHTS (UNAUDITED)

The following per share data and ratios have been derived from information provided in the financial statements.

	Three Months Ended						Nine Months Ended
	February 28,			February 28,			February 28,			February 28,
	2006			2005			2006			2005
Per Share Operating Performance:
Net asset value, beginning of period	$	9.49		$	9.80		$	9.82		$	9.62
Investment income–net##		.11			.12			.34			.36
Realized and unrealized gain (loss) — net		.07			(.05	)		(.26	)		.13
Total from investment operations		.18			.07			.08			.49
Less dividends from investment income — net		(.11	)		(.12	)		(.34	)		(.36	)
Net asset value, end of period	$	9.56		$	9.75		$	9.56		$	9.75
Total Investment Return:**
Based on net asset value per share		1.92	%#		.67	%#		.86	%#		5.11	%#
Ratios to Average Net Assets:
Expenses, net of reimbursement and excluding interest expense		.71	%*		.91	%*		.72	%*		.89	%*
Expenses, excluding interest expense		.71	%*		.74	%*		.71	%*		.72	%*
Expenses		1.22	%*		1.23	%*		1.28	%*		1.08	%*
Investment income — net		4.74	%*		4.87	%*		4.74	%*		4.90	%*
Ratios to Average Net Assets, plus Average Borrowings:
Expenses, net of reimbursement and excluding interest expense		.64	%*		.75	%*		.63	%*		.75	%*
Expenses, excluding interest expense		.64	%*		.61	%*		.62	%*		.61	%*
Expenses		1.09	%*		1.02	%*		1.12	%*		.91	%*
Investment income — net		4.25	%*		4.04	%*		4.13	%*		4.14	%*
Supplemental Data:
Net assets, end of period (in thousands)	$	453,280		$	381,757		$	453,280		$	381,757

*	Annualized.
**	Total investment returns exclude the effects of sales charges.
#	Aggregate total investment return.
##	Based on average shares outstanding.

     See Notes to Condensed Financial Statements.

7

Access Capital Strategies Community Investment Fund, Inc.

SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2006 (UNAUDITED)

	Face Amount		Market Value
MORTGAGE-BACKED SECURITIES (111.1%):
Federal National Mortgage Association (FNMA)(73.8%):
15 Year Fixed Rate Single Family Mortgage-Backed Securities
4.50%, 6/1/18 – 11/1/20 (b)	$	12,777,857	$	12,504,556
5.00%, 12/1/17 – 2/1/21		8,260,655		8,204,781
5.50%, 3/1/16 – 7/1/19		1,320,030		1,333,426
7.00%, 1/1/15		71,413		74,056
30 Year Fixed Rate Single Family Mortgage-Backed Securities
4.50%, 5/1/33 – 8/1/35 (b)		16,266,224		15,447,472
5.00%, 7/1/32 – 1/1/36 (b)		125,653,961		122,963,126
5.50%, 9/1/32 – 3/15/36 (b)		103,806,275		103,507,867
6.00%, 7/1/29 – 2/1/36 (b)		25,515,328		25,909,717
6.50%, 3/1/31 – 8/1/34		12,542,055		12,936,329
7.00%, 6/1/29 – 3/1/31		525,709		547,534
7.25%, 12/1/29		29,233		30,587
7.50%, 12/1/29 – 1/1/31		490,268		516,111
8.00%, 2/1/30 – 4/1/30		200,928		215,691
Total Single Family Mortgage-Backed Securities				304,191,253
Multi Family Mortgage-Backed Securities
4.66%, 10/1/13		969,987		947,553
4.78%, 5/1/14		487,965		477,273
4.89%, 6/1/15		991,569		973,106
4.90%, 9/1/15		9,952,640		9,795,285
4.93%, 10/1/12		968,661		956,409
5.22%, 6/1/20		2,471,158		2,451,510
5.23%, 4/1/21		1,933,585		1,919,055
5.37%, 11/1/21		4,984,620		5,072,513
5.41%, 2/1/21		1,045,449		1,066,693
5.51%, 11/1/21		755,932		763,828
5.79%, 12/1/15		868,647		906,478
6.38%, 5/1/11		1,185,367		1,247,476
6.50%, 5/1/17		1,250,108		1,315,630
6.70%, 6/1/19		647,014		696,315
6.85%, 8/1/09		276,924		288,500
7.58%, 5/1/18		601,663		699,037
7.97%, 9/1/17		710,355		828,187
Total Multi Family Mortgage-Backed Securities				30,404,848
Total Federal National Mortgage Association Securities				334,596,101
Federal Home Loan Mortgage Corporation (29.6%):
15 Year Fixed Rate Single Family Mortgage-Backed Securities
4.50%, 1/1/19 – 11/1/19		1,511,797		1,473,107
5.00%, 11/1/18 – 1/1/21		3,556,864		3,530,978
5.50%, 9/1/19 – 11/1/19		1,283,048		1,295,160

8

	Face Amount		Market Value
30 Year Fixed Rate Single Family Mortgage-Backed Securities
4.50%, 8/1/33 – 9/1/33	$	1,979,020	$	1,881,940
5.00%, 6/1/33 – 2/1/36 (b)		41,866,312		40,852,421
5.50%, 11/1/32 – 2/1/36 (b)		63,593,464		63,449,058
6.00%, 3/1/31 – 2/1/36		15,296,748		15,536,975
6.50%, 3/1/31 – 8/1/32		4,697,132		4,841,914
7.00%, 11/1/29 – 4/1/31		778,592		809,945
7.50%, 12/1/29 – 2/1/30		610,615		642,978
Total Federal Home Loan Mortgage Corporation				134,314,476
GNMA Pool (1.7%):
30 Year Fixed Rate Single Family Mortage-Backed Securities
5.50%, 1/15/36		2,996,584		3,020,229
6.00%, 12/15/31		699,267		717,585
6.50%, 4/15/32 – 4/20/32		164,060		171,185
7.00%, 4/15/32		173,641		182,314
Multi Family Mortgage-Backed Securities
5.125%, 3/15/34		620,502		617,761
5.75%, 9/15/23		718,938		728,903
6.25%, 9/15/32		517,764		543,071
8.25%, 12/15/32		1,433,988		1,508,805
Total GNMA Pool				7,489,853
Community Reinvestment Revenue Notes (0.6%)
4.21%, 9/1/19		3,000,000		2,899,023
Total Community Reinvestment Revenue Notes				2,899,023
Small Business Administration (5.4%) (c):
4.05%, 4/25/28 (a)		1,197,099		1,189,436
4.05%, 3/25/29		2,871,673		2,853,522
4.10%, 3/25/28		1,259,453		1,253,782
4.10%, 9/25/29		1,321,626		1,315,893
4.10%, 11/25/29		2,025,861		2,017,110
4.10%, 4/25/30		1,741,948		1,734,502
4.125%, 6/25/18 (a)		571,880		569,007
4.15%, 10/25/10		466,236		463,085
4.15%, 3/25/14		1,683,581		1,674,532
4.55%, 9/25/30		2,603,462		2,603,462
6.625%, 10/25/15		1,769,988		1,909,375
6.875%, 10/25/15		2,982,536		3,239,780
6.875%, 5/25/16		1,287,941		1,366,622
7.375%, 1/25/09		504,276		515,286
7.58%, 12/25/15		1,484,172		1,625,168
Total Small Business Administration Securities				24,330,562
Total Mortgage-Backed Securities				503,630,015

9

FLOATING RATE NOTES (2.1%) (c):

	Face Amount		Market Value
Massachusetts Housing Investment Corporation Term Loan, due 4/1/35, initial coupon 6.67% (d)	$	9,375,000	$	9,649,084
Total Floating Rate Notes				9,649,084
MUNICIPAL BONDS (0.4%):
Guam Power Authority Revenue Bonds, Series A, 5% due 10/01/2024		140,000		145,978
Utah Housing Corporation Single Family Mortgage Revenue Bonds, 3.36% due 7/1/2014		725,000		697,363
Utah Housing Corporation Single Family Mortgage Revenue Bonds, 3.48% due 7/1/2014		835,000		822,492
Total Municipal Bonds				1,665,833
Total investments (cost – $520,110,139*) – 113.6%				514,944,932
Liabilities in excess of other assets – (13.6%)				(61,664,557	)
Net assets – 100.0%			$	453,280,375

* The cost and unrealized appreciation (depreciation) of investments as of February 28, 2006, as computed for federal income tax purposes, were as follows:

Aggregate cost	$	520,110,139
Gross unrealized appreciation	$	1,986,986
Gross unrealized depreciation		(7,152,193	)
Net unrealized depreciation	$	(5,165,207	)

(a)	All or a portion held as collateral in connection with open financial futures contracts.
(b)	All or a portion held as collateral in connection with open reverse repurchase agreements.
(c)	Floating rate note.
(d)	Restricted securities as to resale, representing approximately 2.1% of net assets, were as follows:

	Acquisition
Issue	Date		Cost		Value
Massachusetts Housing Investment Corporation, due 4/1/35, initial coupon 6.67%		3/29/05	$	9,375,000	$	9,649,084

• Pursuant to the financial futures contracts, the Fund agrees to receive from or pay to the broker an amount equal to the daily fluctuation in values of the contract. Such receipts or payments, which are settled the following business day, are known as variation margin and are recorded by the Fund as unrealized gains or losses. Financial futures contracts sold as of February 28, 2006 were as follows:

Number of		Expiration	Face		Unrealized
Contracts	Issue	Date	Value		Depreciation
300	U.S. Five–Year Treasury Notes	June 2006	$	31,491,119	$	(65,131	)
170	U.S. Ten–Year Treasury Notes	June 2006	$	18,294,570		(49,492	)
Total Unrealized Depreciation					$	(114,623	)

See Notes to Condensed Financial Statements.

10

Access Capital Strategies Community Investment Fund, Inc.

     NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

The accompanying unaudited condensed interim financial statements and financial highlights reflect the results of operations for Access Capital Strategies Community Investment Fund, Inc. (the “Fund”) and have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. The results of operations and other data for the nine months and quarter ended February 28, 2006 are not necessarily indicative of the results that may be expected for any other future interim period or the fiscal year ending May 31, 2006. The information in this report should be read in conjunction with the financial statements and accompanying notes included in the May 31, 2005 Annual Report on Form 10-K. The Fund has not changed its accounting and reporting policies from those disclosed in its May 31, 2005 financial statements.

In preparing the condensed interim financial statements and financial highlights, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of assets and liabilities, and revenue and expenses for the period. Actual results could differ from those estimates; any such differences are expected to be immaterial to the net assets of the Fund.

This report covers the activity from June 1, 2005 to February 28, 2006.

11

Item 2:

Management’s Discussion and Analysis of Financial Condition and
Results of Operations

This quarterly report contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The Fund’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in interest rates, fluctuations in assets under management and other sources of fee income, and changes in assumptions used in making such forward-looking statements. The Fund’s investment objective is to invest in geographically specific private placement debt securities located in portions of the United States designated by Fund investors.

Overview

The Fund is a non-diversified, closed-end management investment company electing status as a business development company. The Fund’s investment objective is to invest in geographically specific private placement debt securities located in portions of the United States designated by Fund investors. The Fund invests primarily in private placement debt securities specifically designed to support underlying community development activities targeted to low- and moderate-income individuals such as affordable housing, education, small business lending, and job-creating activities in areas of the United States designated by Fund investors.

Investors in the Fund must designate a particular geographic area or region within the United States as part of their agreement to purchase Fund shares. The Fund invests only in areas where Fund shareholders have made targeted designations.

In addition to their geographic specificity, Fund investments must carry a AAA credit rating or carry credit enhancement from a AAA-rated credit enhancer or be issued or guaranteed by the U.S. Government, government agencies or government-sponsored enterprises. The Fund expects (but cannot guarantee) that all investments made by the Fund will be considered eligible for regulatory credit under the Community Reinvestment Act (“CRA”).

Compliance

To qualify as a Regulated Investment Company (“RIC”), the Fund must, among other things, satisfy a diversification standard under the Internal Revenue Code (the “Code”) such that, at the close of each quarter of the Fund’s taxable year, (i) not more than 25% of the value of its total assets is invested in the securities (other than government securities (including its agencies and instrumentalities) or securities of other RICs) of a single issuer, or two or more issuers which the Fund controls (under a 20% test) and which are engaged in the same or similar trades or business or related trades or businesses, and (ii) at least 50% of the market value of its total assets is represented by cash, cash items, government securities, securities of other RICs and other securities (with each investment in such other securities limited so that not more than 5% of the value of the Fund’s total assets is invested in the securities of a single issuer and the Fund does not own more than 10% of the outstanding voting securities of a single issuer).

Management believes the Fund was in compliance with the above requirements for the quarter ended February 28, 2006.

The Board of Directors of the Fund has recommended to shareholders that the Fund voluntarily withdraw its election as a business development company and continue operations as a closed-end investment company. A meeting of shareholders was held with respect to this recommendation on March 28, 2006, where shareholders endorsed the Board’s recommendation.

Fund Operations

Investment Activity

Purchases

During the quarter ended February 28, 2006, the Fund purchased $42.8 million aggregate amount of new community development securities. During the quarter ended February 28, 2005, the Fund had purchased $38.2 million aggregate amount of new community development securities.

During the nine months ended February 28, 2006, the Fund purchased $152.7 million aggregate amount of new community development securities. During the nine months ended February 28, 2005, the Fund had purchased $148.0 million aggregate amount of new community development securities.

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Sales

During the quarter ended February 28, 2006, the Fund sold $32.7 million aggregate amount of securities (including principal paydowns, but excluding sales of short-term securities). During the quarter ended February 28, 2005, the Fund had sold $50.2 million aggregate amount of securities (including principal paydowns, but excluding sales of short-term securities).

During the nine months ended February 28, 2006, the Fund sold $82.9 million aggregate amount of securities (including principal paydowns, but excluding sales of short-term securities). During the nine months ended February 28, 2005, the Fund had sold $112.7 million aggregate amount of securities (including principal paydowns, but excluding sales of short-term securities).

Borrowings

The Fund is permitted to use leverage in its investment program, subject to certain restrictions set forth in its Private Offering Memorandum and the Investment Company Act of 1940 (the “1940 Act”).

For the quarter ended February 28, 2006, the Fund averaged approximately $52.2 million in borrowings at an average rate of approximately 4.39% compared to the quarter ended February 28, 2005 when the Fund averaged approximately $79.5 million in borrowings at an average rate of approximately 2.39%.

For the nine months ended February 28, 2006, the Fund averaged approximately $61.3 million in borrowings at an average rate of approximately 3.84% compared to the nine months ended February 28, 2005 when the Fund averaged approximately $67.7 million in borrowings at an average rate of approximately 1.95%.

In each of the above referenced periods, the total proceeds from borrowings were primarily used to support additional investments in the Fund’s Designated Target Regions.

Net Assets and Fund Holdings at February 28, 2006

At February 28, 2006, the Fund’s Net Asset Value was $453.3 million, or $9.56 per share. At the end of the prior fiscal quarter, November 30, 2005, the Fund’s Net Asset Value was $450.4 million, or $9.49 per share. At the end of the most recent fiscal year, May 31, 2005, the Net Asset Value was $388.3 million, or $9.82 per share. At February 28, 2005, the Fund’s Net Asset Value was $381.8 million, or $9.75 per share.

The $2.9 million, or 0.6%, quarter-to-quarter increase in net assets from $450.4 million to $453.3 million was primarily attributable to the positive Fund performance. The $65.0 million, or 16.7%, year-to-date increase in net assets was primarily attributable to the sale of new shares in the Fund.

The Fund’s primary investments are listed on the Schedule of Investments included with this report.

Investment Income

The Fund had investment income net of all fees and expenses (as discussed below) of $5.3 million for the quarter ended February 28, 2006, an increase of approximately $.5 million, or 9.9%, from net investment income of $4.8 million for the prior fiscal quarter, which ended November 30, 2005, and an increase of approximately $.7 million, or 15.7%, from net investment income of $4.6 million for the fiscal quarter ended February 28, 2005. The increases were each largely due to an increase in the average net assets of the Fund, the increased income attributable to larger asset size was partially offset by higher interest expense on borrowings.

The Fund had investment income net of all fees and expenses (as discussed below) of $14.8 million for the nine months ended February 28, 2006, an increase of approximately $1.3 million, or 9.7% from net investment income of $13.5 million for the nine months ended February 28, 2005. The increase is largely due to an increase in average net assets of the Fund, the increased income attributable to larger asset size was partially offset by higher interest expense on borrowings.

Management Fees & Expenses

Access Capital Strategies LLC (“Access”), the Fund’s Manager, is paid an annual management fee, paid monthly, of fifty basis points (.50%) of the Fund’s average monthly gross assets less accrued liabilities, other than indebtedness for borrowing. Merrill Lynch Investment Managers, L.P. (“MLIM”) receives from Access an annual sub-management fee, paid monthly, of twenty-five basis points (.25%) of the Fund’s average gross monthly assets less accrued liabilities, other than indebtedness for borrowings.

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For the quarter ended February 28, 2006, the management fees expense of the Fund was $625,918. For the nine months ended February 28, 2006 the management fees expense of the Fund was $1,788,489. For the quarter and nine months ended February 28, 2005, the management fees expense of the Fund was $569,693 and $1,626,322, respectively. The increases were primarily due to increases in the net assets of the Fund.

The Fund’s private offering memorandum provides for reimbursement of expenses relating to the Fund paid by Access and MLIM. Total unreimbursed expenses as of February 28, 2006 amounted to $0 compared to $15,213 at February 28, 2005.

On February 15, 2006, BlackRock, Inc. (“BlackRock”) and Merrill Lynch & Co. (“ML & Co.”) reached an agreement to contribute the investment management business of MLIM and certain affiliates to BlackRock to create a new asset management firm. The transaction has been approved by the boards of directors of both ML & Co. and BlackRock and is expected to close in the third quarter of 2006. In connection with the transaction, it will be necessary for the Fund’s Board of Directors and shareholders to consider and approve any agreement for the provision of advisory or management services that may be proposed by the combined company.

Yield

At the quarter ended February 28, 2006, the SEC current yield was 4.55%, compared to 5.42% for the quarter ended February 28, 2005.

For the quarter ended February 28, 2006, the ratio of net investment income to average net assets was 4.74% compared to 4.87% for the quarter ended February 28, 2005.

Realized Gain/Loss

For the quarter ended February 28, 2006, the net realized gain was $107,484, compared to a net realized loss of $292,428 for the quarter ended February 28, 2005. The net realized gains or losses were primarily due to the Fund’s hedging activities as the Fund experiences a realized gain or loss on its hedges when the positions are closed or when they are rolled from one expiration cycle to the next.

Dividends Paid

The Fund distributes to shareholders substantially all of its net investment income and net realized capital gains, if any, as determined for income tax purposes. Applicable law, including provisions of the 1940 Act, may limit the amount of dividends and other distributions payable by the Fund. Substantially all of the Fund’s net capital gain (the excess of net long-term capital gain over net short-term capital loss) and the excess of net short-term capital gain over net long-term capital loss, if any, are distributed annually with the Fund’s dividend distribution in December.

The Fund declares and distributes dividends on a monthly basis. The Fund paid total monthly dividends of $.340665 during the nine months ended February 28, 2006. The dividends were paid as follows:

June 2005	$	.038310
July 2005	$	.038598
August 2005	$	.038185
September 2005	$	.040786
October 2005	$	.035454
November 2005	$	.037858
December 2005	$	.039740
January 2006	$	.033949
February 2006	$	.037785

The Fund paid total monthly dividends of $.358601 during the nine months ended February 28, 2005. The dividends were paid as follows:

June 2004	$	.040113
July 2004	$	.041624
August 2004	$	.039350
September 2004	$	.040395
October 2004	$	.039403
November 2004	$	.039947
December 2004	$	.042152
January 2005	$	.036253
February 2005	$	.039364

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The slightly lower dividend in the quarter is attributable to the U.S. Federal Reserve Board’s Federal Open Market Committee raising short-term interest rates by twenty-five basis points in December 2005 and January 2006. An increase in short-term rates elevates the Fund’s cost for borrowings and lowers the net interest income available for dividends.

Total Return

For the quarter ended February 28, 2006, the total return was 1.92%, compared to a total return of 0.67% in the quarter ended February 28, 2005.

For the nine months ended February 28, 2006 the total return was .86%, compared to a total return of 5.11% for the nine months ended February 28, 2005.

The lower total return during the nine months ended February 28, 2006 is attributable to pricing pressure on fixed income assets during a time of interest rate increases.

Fund Designated Target Regions at February 28, 2006

The Fund’s Designated Target Regions (“DTRs”) are provided by Fund shareholders at the time of investment. At February 28, 2006 DTRs were:

DTRs	AMOUNT
California	$	60,668,939
Colorado		1,214,594
Connecticut		13,248,674
Florida		1,500,000
Georgia		500,000
Hawaii		157,830
Illinois		3,695,239
Indiana		1,090,343
Iowa		799,538
Louisiana		5,000,000
Maine		517,872
Maryland		650,000
Massachusetts		130,109,036
Mississippi		513,318
Nebraska		10,000,000
New Jersey		83,673,995
New Mexico		1,156,687
New York		25,597,489
North Carolina		18,373,838
Ohio		12,582,775
Oregon		2,500,000
Pennsylvania		41,547,282
Rhode Island		250,000
South Dakota		5,655,359
Tennessee		2,034,408
Texas		24,964,545
Utah		12,695,228
Vermont		1,707,013
Virginia		3,035,460
Washington		2,000,000
Wisconsin		556,411
TOTAL	$	467,995,873

* All investors are listed by headquarters location

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Fund Impact per the Community Reinvestment Act

The Fund invests in securities that support community development economic activity as defined in the Fund’s Private Offering Memorandum.

At February 28, 2006, the Fund’s investments had outstanding loans to 5,714 homebuyers with incomes below 80% of median income from the following states in the following numbers.

Whole Loans
Alabama	28
Arizona	150
California	442
Colorado	43
Connecticut	117
Delaware	35
Florida	128
Georgia	19
Guam	2
Idaho	4
Illinois	103
Indiana	6
Iowa	31
Kansas	2
Kentucky	16
Louisiana	17
Maine	5
Maryland	6
Massachusetts	1,097
Michigan	21
Minnesota	8
Mississippi	22
Missouri	2
Montana	2
Nebraska	71
Nevada	42
New Hampshire	57
New Jersey	1,061
New Mexico	93
New York	284
North Carolina	35
Ohio	62
Oregon	82
Pennsylvania	432
Rhode Island	19
South Carolina	14
South Dakota	105
Tennessee	26
Texas	533
Utah	381
Vermont	19
Virginia	21
Washington	56
Washington, D.C.	6
Wisconsin	9
	5,714

Many of the above loans were made under targeted homeownership lending initiatives such as Acorn, Mass Housing Partnership and other individual lenders’ tailor-made community development lending programs.

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In addition as of February 28, 2006, the Fund’s investments had outstanding loans to sponsors of 2,638 multi-family, 27 multi-state rural housing, 14 community based non-profit affordable housing rental units, 131 SBA loans and 10 Economic Development loans from the following states in the following amounts.

Multi–Family Units
Alabama	52
California	160
Delaware	120
Louisiana	230
Massachusetts	351
Mississippi	47
New Jersey	205
New York	222
South Dakota	48
Texas	994
Utah	209
	2,638
Multi-State Rural Housing Units
Colorado	1
Florida	1
Georgia	1
Indiana	2
Louisiana	3
Massachusetts	1
Minnesota	7
Oregon	1
Tennessee	7
Utah	2
Virginia	1
	27
Affordable Housing
Community Based Non–Profit
Rhode Island	12
Massachusetts	1
Connecticut	1
	14
SBA Loans
California	21
Florida	2
Kentucky	1
Maryland	1
Massachusetts	8
Minnesota	2
New Jersey	20
New York	7
Utah	69
	131
Economic Development Loans
California	4
Massachusetts	5
Texas	1
	10

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Liquidity Discussion

Sale and Redemption of Fund Shares

Fund shares are sold only to qualified investors who complete a Subscription Agreement. All investors in the Fund must provide a Designated Target Region as the desired location for their investment.

During the quarter ended February 28, 2006, new shareholders purchased an additional 950,536 shares of the Fund for total proceeds of $9,075,000. In addition, dividend reinvestments resulted in additional 169,911 new shares being issued by the Fund for total proceeds of $1,622,130. During the quarter ended February 28, 2005, new shareholders purchased an additional 1,171,692 shares of the Fund for total proceeds of $11,500,000 and dividend reinvestments resulted in 97,562 additional new shares being issued by the Fund for total proceeds of $956,948.

During the nine months ended February 28, 2006, new shareholders purchased an additional 8,808,417 shares of the Fund for total proceeds of $84,105,000. In addition, dividend reinvestments resulted in additional 398,320 new shares being issued by the Fund for total proceeds of $3,822,530. During the nine months ended February 28, 2005, new shareholders purchased an additional 3,868,903 shares of the Fund for total proceeds of $37,975,000 and dividend reinvestments resulted in 294,234 additional new shares being issued by the Fund for total proceeds of $2,883,380.

As discussed in the Private Offering Memorandum, the Fund allows shareholders to redeem their shares in accordance with Rule 23c-3 of the 1940 Act.

During the quarter ended February 28, 2006, 1,124,738 shares of the Fund were redeemed for $10,707,512. During the quarter ended February 28, 2005, 541,516 shares of the Fund were redeemed for $5,350,175.

During the nine months ended February 28, 2006, 1,326,555 shares of the Fund were redeemed for $12,655,040. During the nine months ended February 28, 2005, 1,049,687 shares of the Fund were redeemed for $10,345,493.

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Item 3:

Quantitative and Qualitative Disclosures About Market Risk

A full discussion of the risks associated with ownership of Fund shares appears in the Fund’s Private Offering Memorandum. The Fund’s principal market risks may be summarized as follows:

Credit Risk. All investments made by the Fund must be in securities of a U.S. Government Agency or AAA credit quality. Fund investments will typically have one or more forms of credit enhancement.

Liquidity Risk. Securities purchased by the Fund will generally be privately placed debt instruments. The market for resale of these securities may be limited. Furthermore, the Fund may pay a premium for community economic development securities without any assurance that a comparable premium can be received upon sale of the security.

Interest Rate Risk. The Fund will generally invest in fixed rate investments that have their market values directly affected by changes in prevailing interest rates. An increase in interest rates will generally reduce the value of Fund investments and a decline in interest rates will generally increase the value of those investments. There may be exceptions due to shifts in the yield curve, the performance of individual securities, changes in the prepayment rates of mortgages underlying fixed income securities and other market factors.

Most of the Fund’s holdings are in mortgage-backed securities (MBS) that are comprised of pooled mortgages to low and moderate income homebuyers. These homebuyers generally have the right to prepay or refinance their mortgages at anytime making prepayment risk an important component of the market risk for the portfolio. While prepayments can occur for a variety of reasons (e.g., selling a home, death, default) they are most often associated with a consumer refinancing a mortgage to take advantage of lower interest rates. There is, therefore, a structural asymmetry, also known as negative convexity, in the MBS market as lower rates will raise the value of most fixed rate payment streams, but may cause wide scale prepayments for fixed rate MBS due to mortgage refinancing.

An industry standard method for evaluating interest rate risk in a portfolio is to run a scenario analysis that calls for an instantaneous increase or decrease in interest rates across the board. While the scenario is a highly unlikely one, it does produce a widely used measurement for a portfolio’s interest rate convexity and negative convexity.

At February 28, 2006 an instant rate increase of 100 basis points (1.0%) would have caused the Fund’s portfolio to decline in value by –4.73%. An instant rate decrease of 100 basis points (–1.0%) would have caused the Fund’s portfolio to increase in value by +3.55%. At the previous quarter end, November 30, 2005, a 1% rate increase would have produced a –4.88% decrease in value and a 1% rate decrease would have produced a +3.74% increase in value.

Leverage Risk. The Fund may use leverage as part of its investment program. Typically, the Fund will borrow money short term using portions of the portfolio as collateral. The proceeds received from borrowing are invested in additional portfolio securities. Interest income on securities purchased with borrowed funds is usually above the interest expense associated with borrowings although the precise amount is a function of the slope of the yield curve and changes with market conditions. The purchase of additional investments using borrowed funds may increase the portfolio’s interest rate risk. The managers may use derivatives (see below) to hedge the incremental interest rate risk associated with the use of leverage. An important component of a successful leverage strategy is the ability to deleverage without interfering with core portfolio management functions. In the past, the managers have been able to raise and lower the level of leverage in response to changing market conditions. The managers and the Fund’s Board of Directors regularly review the amount of leverage being deployed.

Derivatives Risk. The Fund may use derivative instruments, including futures, forwards, options, indexed securities, and inverse securities for hedging purposes. Hedging is a strategy in which the Fund uses a derivative to offset the risk that other Fund holdings may decrease in value. While hedging can reduce losses, it can also reduce or eliminate gains if the market moves in a different manner than anticipated by the Fund or if the cost of the derivative outweighs the benefit of the hedge. Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by the Fund, in which case any losses on the holdings being hedged may not be reduced. There can be no assurance that the Fund’s hedging strategy will reduce risk or that hedging transactions will be either available or cost effective.

A summary of the Fund’s portfolio holdings as of February 28, 2006 is contained in Item 1 of this report.

As of February 28, 2006, the Fund’s management had not completed its assessment of the effectiveness of the Fund’s internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). The Fund’s management is continuing its Sarbanes-Oxley mandated assessment.* Should any material weakness or significant deficiencies in the effectiveness of internal control over financial reporting be identified, management is prepared to take all reasonable steps necessary pursuant to the requirements of Sarbanes-Oxley and other applicable federal and state law in order to address them.

*In a proxy statement dated February 28, 2006, the Board of Directors recommended to shareholders that the Fund voluntarily withdraw its election as a business development company and continue operations as a closed-end investment company. A majority of the Fund’s shareholders voted in favor of the recommendation at the shareholders’ meeting on March 28, 2006. Once the Fund withdraws its election as a business development company and registers as a closed-end investment company, the Section 404 review requirements will no longer apply to the Fund

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Item 4:

Controls and Procedures

Within the 90–day period prior to the filing of this report, the Fund’s management, including the Chief Executive Officer and principal financial officer, conducted an evaluation of the effectiveness of the design and operation of the Fund’s disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and principal financial officer concluded that, as of the date of the evaluation, the disclosure controls and procedures were effective in alerting them in a timely manner to material information required to be disclosed in the Fund’s periodic reports filed with the SEC. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. There have been no significant changes in internal controls, or in factors that could significantly affect internal controls, subsequent to the date of the most recent evaluation.

As of February 28, 2006, the Fund’s management had not completed its assessment of the effectiveness of the Fund’s internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). The Fund’s management is continuing its Sarbanes-Oxley mandated assessment.* Should any material weakness or significant deficiencies in the effectiveness of internal control over financial reporting be identified, management is prepared to take all reasonable steps necessary pursuant to the requirements of Sarbanes-Oxley and other applicable federal and state law in order to address them.

* In a proxy statement dated February 28, 2006, the Board of Directors recommended to shareholders that the Fund voluntarily withdraw its election as a business development company and continue operations as a closed-end investment company. A majority of the Fund’s shareholders voted in favor of the recommendation at the shareholders’ meeting on March 28, 2006. Once the Fund withdraws its election as a business development company and registers as a closed-end investment company, the Section 404 review requirements will no longer apply to the Fund.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

     The Fund is not involved in any pending legal proceedings.

Item 1A. Risk Factors

     There have been no material changes in the risk factors as previously disclosed in the Fund’s Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     None.

Item 3. Defaults Upon Senior Securities

     None.

Item 4. Submission of Matters to a Vote of Security Holders

     None.

Item 5. Other Information

     None.

Item 6. Exhibits

     The following Exhibits are filed as part of this Report:

(a) (1) N/A

(2) None

(3) (i) Articles of Incorporation are incorporated by reference to the Fund’s Form 10–Q for the period ended August 31, 1998.

(ii) By–Laws are incorporated by reference to the Fund’s Form 10–Q for the period ended August 31, 1998.

(4)	N/A
(5)	N/A
(8)	N/A
(9)	None

(10)	(i)         Private Offering Memorandum dated February 18, 1998, revised as June 1, 2003, is incorporated by reference to the Fund’s Form 10–K filed on August 29, 2004.
	(iii)(A) Management Agreement is incorporated by reference to the Fund’s Form 10–Q for the period ended August 31, 1998.
	(B) Amendment to the Management Agreement dated as of May 23, 2003 is incorporated by reference to the Fund’s Form 10–K filed on August 29, 2004.
	Amendment to the Management Agreement dated as of June 16, 2005 is incorporated by reference to the Fund’s Form 10–K filed on August 13, 2005.
(11)	N/A
(12)	N/A
(13)	N/A
(15)	N/A
(16)	None
(17)	N/A
(18)	N/A
(19)	N/A
(20)	N/A
(21)	None
(22)	N/A
(23)	N/A
(24)	Powers of Attorney incorporated by reference to the Fund’s Form 10–K for the fiscal year ended May 31, 2002 filed on August 29, 2002.
(25)	N/A
(26)	N/A
(27)	Reserved
(28)	Reserved
(29)	Reserved
(30)	Reserved
(31)	Certification required by the Sarbanes–Oxley Act of 2002
(32)	Certification required by the Sarbanes–Oxley Act of 2002

(b)	Reports on Form 8–K
	None.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Access Capital Strategies Community Investment Fund, Inc.
Date: April 7, 2006	/S/ Ronald A. Homer*
	Ronald A. Homer, Chairman
Date: April 7, 2006	/S/ Kevin J. Mulvaney*
	Kevin J. Mulvaney, Director
Date: April 7, 2006	/S/ Peter Blampied*
	Peter Blampied, Director
Date: April 7, 2006	/S/ W. Carl Kester*
	W. Carl Kester, Director
Date: April 7, 2006	/S/ David F. Sand*
	David F. Sand, Chief Executive Officer,
	Principal Accounting Officer, Principal Financial Officer

* By:	/s/ Martin E. Lybecker
	Martin E. Lybecker
	Attorney–in–fact

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