EXHIBIT 99.1
 
TO THE STOCKHOLDERS:
 
  Attached is the Impac Mortgage Holdings, Inc. Dividend Reinvestment and
Stock Purchase Plan (the "Plan"). This Plan provides the stockholders of Impac
Mortgage Holdings, Inc. (the "Company") a simple and convenient method of
investing cash dividends in additional shares of Common Stock of the Company
at a market discount or to make additional cash investments in new shares each
month. Carefully read the attached Prospectus for more information about the
Dividend Reinvestment and Stock Purchase Plan.
 
  PARTICIPATION IS EASY AND FLEXIBLE. You can reinvest all or just a portion
of your dividend income each quarter. And you can make additional cash
investments in Impac Mortgage Holdings, Inc. Common Stock--from a minimum of
$50 up to $10,000 each month (or more pursuant to the Company's consent)--
whether or not you're currently reinvesting dividends. Either option is
available once you enroll in the Plan.
 
  DISCOUNTED PURCHASE PRICES ARE AVAILABLE ON REINVESTED DIVIDENDS. As of the
date of the Company's Prospectus, common shares you purchase from Impac
Mortgage Holdings, Inc. under this Plan with reinvested dividends that are
newly issued will be priced at a 3% discount. Common shares you purchase with
additional cash investments (that do not exceed $10,000) and that are
purchased directly from the Company will be priced at 99% (subject to change)
of the average of the high and low sales prices of the Common Stock as
reported on the American Stock Exchange for the three trading days immediately
preceding the Investment Date (as described in the Plan).
 
  PURCHASES ARE FREE OF NORMAL TRADING COMMISSIONS AND FEES. As long as shares
are issued by Impac Mortgage Holdings, Inc., there will be no brokerage
commissions to pay. Currently, brokerage commissions apply to open market
transactions.
 
  THE PLAN ADMINISTRATOR HANDLES ALL THE PAPER WORK SO RECORD-KEEPING IS
EASY. Once you enroll, the Plan Administrator will send you regular account
statements and provide free custodial services for all shares purchased under
the Plan, protecting you against loss, theft or destruction of stock
certificates.
 
  ENROLLING IN THE PLAN IS SIMPLE. This Prospectus provides a detailed
description of the Plan and all of your participation options. If you are
presently enrolled in the existing Impac Mortgage Holdings, Inc. Dividend
Reinvestment and Stock Purchase Plan, then you will continue to be enrolled in
the Plan unless you notify the Company otherwise. After reviewing the Plan,
just complete the attached Authorization Form and return it in the postage-
paid envelope provided, or, if your stock is registered in the name of a
nominee, contact your bank or broker for further information. Your
participation can begin with the Company's next dividend payment, as long as
we receive your written authorization by the next Record Date (as described in
the Plan).