PROFESSIONAL MORTGAGE SERVICES, INC.MORTGAGE BANKERS 10031 OLD OCEAN CITY BLVD., SUITE 216

BERLIN, MARYLAND 21811(410)641-4300 FAX (410)641-3022

Ineligible ProjectsThe following are Ineligible Project Types regardless of the characteristics of the individual unit in certain types of condos orPUDs.

• Projects that are operated and managed as a hotel or motel (for example: Condominium hotels, Condo-tels, etc.) eventhough the units are individually owned. All FannieMae and FreddieMac lenders follow this guideline.

Hotel or motel conversions (or conversions of other similar transient properties). Not all lenders follow this guideline.

Projects with names that include "hotel" or "motel". Most lenders follow this guideline.••• Projects that include registration services or offer rentals of units on a daily basis.

Projects that restrict the owner's ability to occupy the unit.

Projects with mandatory rental pooling agreements that require unit owners to either rent their units or give amanagement firm control over occupancy of the units. This makes the property a condo hotel.

o Note: These formal agreements between the developer, homeowners' association, and/or the individual unitowners, obligate the unit owner to rent the property on a seasonal, monthly, weekly or daily basis. In manycases, the agreements include blackout dates, continuous occupancy limitations, and other such use restrictions.In return, the unit owner receives a share of the revenue generated from the rental of the unit.

Co-operative Projects

Investment securities (for example projects that have documents on file with the Securities and Exchange Commissionor projects where unit ownership is characterized or promoted as an investment opportunity).

Projects with non-incidental business operations owned by the HOA such as, but not limited to, a restaurant, a spa, ahealth club, etc. Most lenders follow this guideline.

Timeshare or segmented ownership projects.

Houseboat projects.

Multi-dwelling unit condominiumslPUDs.

New condominium projects that contain one or more units with less than 400 square feet of space. Some follow this.The mortgage is secured by a manufactured home.

Projects where more than 20% of the total space is used for non-residential purposes.

Projects where a single entity (the same individual, investor group, partnership, or corporation) owns more than 10% ofthe total units in the project.

Condominiums or PUDs that represent a legal, but non-conforming use of the land, if the zoning regulations prohibitrebuilding the improvements to current density in the event of their full or partial destruction.

Newly converted, non-gut rehabilitation projects. Most lenders follow this guideline.

Common interest apartments or community apartment projects, are projects or buildings that are owned by severalowners as tenants-in-common or by an HOA in which individuals have an undivided interest in a residential apartmentbuilding and land, and have a right of exclusive occupancy of a specific apartment in the building.

Any project for which the Homeowners' Association or developer (if the project has not been turned over to the ownersassociation) is named as a party to pending litigation, that relates to the safety, structural soundness, habitability orfunctional use of the project: There is some flexibility depending on the lender.

o Pending litigation against the Homeowners' Association or developer that involves minor matters are eligible asdefined below:

••

••

•

• •••••••

•

••

•

• Non-Monetary litigation involving neighbor disputes or rights of quiet environment.

• Litigation for which the claim amount is known, the insurance carrier has agreed to provide the defenseand the amount is covered by the association's insurance.

• The Homeowners' Association is named as the plaintiff in a foreclosure action, or as a plaintiff in anaction for past due Homeowners' Association dues

PROFESSIONAL MORTGAGE SERVICES, INC.MORTGAGE BANKERS 10031 OLD OCEAN CITY BLVD., SUITE 216

BERLIN, MARYLAND 21811(410)641-4300 FAX (410)641-3022

Identification of Condo-hotels

A careful analysis of the project is necessary to determine the project's eligibility. Available resources include,but are not limited to, the appraisal, the contract for sale and the Internet.

The appraiser is expected to provide an accurate description of the project to include any characteristics thatmay be an indication that the project is ineligible.The appraisal report may identify project characteristics that do not definitively determine the project is acondo-hotel; however the report may provide evidence that would require additional research. Such projectcharacteristics include but are not limited to:

• Central telephone system,• Room service,• Units that do not contain full-sized kitchen appliances,• Daily cleaning service,• Advertising of rental rates,• Registration service,• Restrictions on interior decorating,• Franchise agreements,• Central key systems,• Location of project in a resort area,• Owner-occupancy density -- the project may have few or even no owner occupants,• Projects converted from a hotel or motel, or• Interior doors that adjoin other units

A thorough examination of the appraisal and contract of sale should be used to determine if there are guaranteedrent-backs, references to rental pooling or management agreements and SEC filing references and/or prospectusdocuments.

An Internet search should also be performed to obtain project and unit-specific information. The applicableproject's website may contain information on the project name, amenities and the availability of units for rent. Adue diligence review of various websites must be performed, including but not limited to:

• Internet search engines to search for the project name and the project name in conjunction with

the subject's property address.

• If the project can be found on the Internet, look for photos and written descriptions that would

indicate the property has "condo-hotel like" amenities.• If the project is found on a Property Management's website, evaluate all of the following:

o Details found that may indicate the property has "condo-hotel like" amenities.o Details found that the rentals of units are managed by the HOA, third party, or by theowner of the unit.

• If the project is found on a "Hotel booking type" website attempt to book a room on a nightly

basis.

Condo Project Manager (CPM)HOA Certification

1. Legal Project Name:

2. Phase: Unit Number(s):

3. Project type: OCondominium OPUD

4. Address:

5. Is the project a condominium hotel? 0 YES 0 NO6. Is the project a timeshare or a segmented ownership project? DYES 0 NO7. Is the project a houseboat project? 0 YES 0 NO8. Is the project a multi-dwelling unit condominium (in which ownership of multiple units is evidenced by a

single deed and mortgage)? 0 YES ONO9. Does the condominium represent a legal, but nonconforming use of the land (if zoning regulations prohibit

rebuilding to current density in the event of destruction)? 0 YES 0 NO10. Is the project an investment security? DYES D NO11. Is the project a common interest apartment or community apartment project? DYES D NO12. Does the project have any non-incidental business operation owned or operated by the Homeowner's

Association? 0 YES 0 NO13. Is the HOA a party to Litigation? DYES 0 NO If yes, describe: I'--__ --:--:--_--:-_~-_:_:_:------'14. Is the project the subject of current litigation in which the homeowners association or developer, if the

project has not been turned over to the HOA, is named as a party to the litigation? You may answer NOto this question if the association or developer is named solely as a plaintiff in either a foreclosure actionor an action for past due association dues. DYES D NO . I

15. Does the projectcontain commercial space? DYES D NO If yes, what is the total % of sq. ft.? -:-:-=-_You may answer NO if: (1) the commercial space comprises no more than 20% of the total space, AND(2) the commercial use is compatible with the residential nature of the property.

Subject Phase/Entire Phase:

16. Subject Phase Entire ProjectPhase Name or Number Number of phases# of Units # of units# complete # complete# for sale # for sale# sold # sold# investors # investors# owner occupied or 2na Home # owner occupied or 2na Home

17. A) Does any single owner (other than developer) hold title to more than 10% of the units? (If the projecthas fewer than 10 units, does any single entity own more than 1 unit?) DYES D NO8) If yes, how many units are owned the single entity? __

Condominium Documents:

18. Complete the table to the right for allrecorded phases/bldgs (list on attachment ifmore than four legal phases+

19. Are there any developer resale or affordablehousing deed restrictions? 0YES 0 NO

20. Project is 0 fee simple, OLeasehold

Document Phase Date County Record #DeclarationAmendmentAmendmentAmendment

Control of HOA:21. Has control of the HOA been turned over to unit owners? 0 YES 0 NO22. A) How many unit owners are 30 days or more past due on their condominium/association fee

payments? __B) Does this represent more than 15% of the total number of units? DYES D NO

Construction:. 23. Project consists of 0 detached units, Dattached units, 0 combination of attached and detached24. Are the common elements and recreational facilities in the subject phase substantially complete?

DYES 0 NO25. The project is: 0 new project 0 a conversion 0 not a conversion.

a. If a conversion, what type of conversion? D gut & rehab 0 non-gut & rehab

26. What is the year built? 1'--- --'27. Are there any units in the project with less than 400 square feet? 0 no D yes, if yes, how many __28. Is the property affected by known environmental hazards including but not limited to: mold, asbestos,

PCBs, lead paint, soil contamination etc.? DYES D NO If yes, state specific hazard & attachexplanation I ...

29. Property zoning is 0 conforming, D legal nonconforming, 0 nonconforming

Budget:30. Does the project's budget appear to be adequate (Le., includes allocations for line items pertinent to the

type of condominium), including providing for the funding of replacement reserves for capital expendituresand deferred maintenance (at least 10% of the budget) and adequate funding for insurance deductibleamounts? DYES 0 NO .

Insurance:31. What is the name of the insured on the condominium policy?

a. Expiration Date: I I32. Is hazard insurance in place to cover 100% of the insurable replacement cost of the project

improvements, including the individual units? (The deductible amount must not exceed 5% of the policy'sface amount.) Also answer yes if the individual units are not fully covered by the master policy but aresupplemented by a 'walls-in' or H06 policy in an amount that is not less than 20% of each unit'sappraised value. 0 YES 0 NO

33. Is liability insurance in place providing at least $1 million of coverage for bodily injury and propertydamage per occurrence? DYES D NO

34. Is flood insurance (if required) in place providing coverage at least equal to the lesser of 100% of theinsurable value of each building, including all common elements and property or the maximum coverageavailable under the National Flood Insurance Program? Answer YES if the project is not in a flood zone.(Answer NO if the maximum deductible is more than the maximum deductible available under theNational Flood Insurance Program - currently $25,000 for a project and $5,000 for one-to-four familyunits). 0 YES 0 NO

35. If the project has 21 or more units, is fidelity insurance in place covering the maximum amount of fundsthat will be in the custody of the owners' association or management company at any time? If the projecthas 20 or fewer units, fidelity insurance is not required and you may answer yes to this question.DYES 0 NO

Homeowner's Association (HOA) Certification·Full Condo Questionnaire

Date:

LOAN INFORMATION

Project Name:

Property Address:

City:

IMC Loan #: _

Lender Contact: ----------Lender Contact #: _State: Zip:

HOA QUESTIONNAIRE

1. Are all common elements, and/or facilities substantially complete?

• If no, are all the common elements and/or recreational facilities associatedwith the subject phase complete?

2. Is the project subject to additional phasing and add-ons?

• If yes, specify number of additional units to be built:

3. Is the project a conversion of an existing building?

• If yes, specify the year converted:

4. Date control of the HOA transferred from the developer to unit owner:

Entire Project Subject Phase

DYes

DYes

DYes

DYes

5. Date when first units made available for sale:6. Total number of units in project:7. Number of units sold and closed:8. Number of units under contract:9. Number of units rented:10. Number of sales in last 90 days:

11. Does anyone person or entity own more than one unit?

• If yes, list how many each own:

DIYes

12. How many units are over 30 days delinquent?

13. Are there any pending special assessments?

14. Is the HOA involved in any litigation, arbitration, mediation or other dispute resolutionprocess?

• If yes, explain:

15. Are there any adverse environmental factors affecting the project as a whole or theindividual units?

16. Does the owner's association have a reserve fund separate from the operating account?

• If yes, is it adequate to prevent deferred maintenance?

• Current amount in fund:

17. Totals budget for this year:

• Income: Reserves:

L:'IYes

DYes

t..-.J Yes

DYes

D~Yes

DNa

DNa

DNaDNa

1",J No

DNa

DNa

L-I NoDNa

HOA Certification: Full Condo Questionnaire (Cont.)18. Do the project legal documents include any restrictions on sale which would limit the free

transferability of title? (i.e. Age Restrictions, First Right of Refusal, other deedlincome restrictions)

19. Is the unit part of a legally established condominium project, in which common areasare owned jointly by unit owners?

20. Are the units owned in fee simple or leasehold? I.J Fee Simple [) Leasehold

21. Are the amenities I recreational facilities owned by the HOA?

22. If a unit is taken over in foreclosure or deed-in-lieu, is the mortgagee responsible fordelinquent HOA dues?

• If yes, are they responsible for: LJ 0-6 months Ln. II 7+ months

23. Does the property operate as a resort hotel; renting units on a daily basis?

• If yes, number of years in operation:• What percentage of square footage? %

• Please check all applicable services:D Restaurant I Food Service .D Check-in Rental DeskD Commercial (boutiques, etc.) D Time Share

24. Is any part of the project used for commercial purposes?

• If yes, what percentage of square footage? %

25. Do the project legal documents or local zoning limit the amount of time the owner can livein their unit?

26. HOA is named insured on master insurance policy?

27. Are common elements I limited common elements insured to 100% replacement cost?

28. Coverage: $ Deductible: $ Expiration Date: _

29. Are units or common improvements located in a flood zone?

• If yes, is flood insurance in force?

• Does this cover at least 80% replacement?• Or, is this the coverage maximum available per federal flood program?

30. Is HOA insured for general liability?• If yes, amount per occurrence: $ _

31. Is HOA insured for Fidelity Bond?

• If yes, amount: $ Amount carried by mgmt co.: $ _

32. Minimum number of days required for written notification to be given to HOA or insurancetrustee before any substantial changes or cancellation of the project coverage?

IJ Yes

tpJ Yes

DYes

LJYesDYes

D Daily Maid ServiceD Mandatory Rental Pool

LIYes

LmJ Yes

tmJ Yes. L-J Yes

DYesDYesDYesDYes

DYes

DYes

DNoDNo

DNoDNa

ACKNOWLEDGMENT

HOA RepresentativeName:Position I Title: _

Date:

Phone #:

ReviewerName:

Signature:

Date:

Phone #:

Datil I Ll?an# I Branch Contact Nama & Phone

Project Noms and Address

1. Are all Common elements and/or facilities substantially complete? 0 Yes DNo

If no. are all common elements and/or recreational facilities associated with the subject phase complete? 0 Yes 0No

2. Is the project subject to additional phasing and add-ons? 0 Yes 0 NoIf yes. number of additional phases and units to be built: Phases:~~~------~~----------Units:

If yes. what was original buildingpurpose.: _3. Is the project a conversion of an existing building? 0 Yes 0 No

If yes. was conversion afoll gut-rehabilitation? . 0 Yes 0 No

4. Date control of the HOA. transferred from the develope!' to unit owners.Entire Project Subject Phase

5. Date when first units made available for sale

6.. Total number of units

7. Number of residential units sold and closed:

8. Number of units under contract:

9. A. Number of units owned as second/vacation homesB. Number of units owned as investment properties

(not occupiedfor personal use)c.Number of rented units owned by the developer/association

10. Number of sales in last 90 days:

11. DoesanyonepersoriorentityOlmmorethanoneunit? 0 Yes ONo If yes. list haw many each OWIt:

12. How many units are over 30 days delinquent?

13. Are there any pending special assessments? 0 Yes 0 NoIf yes, explain:

14. Is the HOA involved in any litigation, mediation, arbitration or other dispute resolution process? 0 Yes 0 NoIf yes, explain:'

15. Are there any adverse environmental factors affecting the project as a whole or as individual units? 0 Yes DNo

16. Does the owner's association have a reserve fond separate from the operating account? 0 Yes DNoIf yes. is it adequate toprevent deferred maintenance? 0 Yes 0No CII1Tentamount infund .

Total Reserves budgetedfor the year17. Total income budgetfor this year:

18. Do the project legal documents include any restrictions on sale which would limit thefree transferability of title?(i.e. Age Restrictions, First Right of Refusal; other deed/income restrictions) 0 Yes 0No

19. Is the unit part of a legally established condominium project, in which common areas areownedjointlybYllnitowners? Dyes ONo

20. Are the units owned infee simple or leasehold? DFee Simple 0 Leasehold

21. A"e the amenities/recreational facilities owned by the HOA? OYes ONo

22. If a unit is taken over inforeclosure or deed-in-lieu, is the mortgagee (lender) responsible for delinquent HOA dues? DYes 0 No'If yeS. are they responsible for 0-6 months or 7 + months

23: Do~ the property operate as a resort hotel; Tenting units on a doily basis? 0 Yes 0NoIf yes, number of years in operation:Please check applicable services: 0 Check-in rental desko Restaurant Ifood service 0 Time shareo Commercial (boutiques, etc.) percentage of square footage

o Daily maid serviceo Mandatory rental pool

%

24. 13rmypartoftheprojectusedforcommercialpurposes? 0 Yes DNaIf yes, what percentage of square footage? %

25 Do the project legal documents or local zoning limit the amount of time the Ulmer can live in their unit?

26. HOA is named insured on master insurance policy? _

27. Are common elements/limited common elements insured ta 100% replacement cost?Deductible $

o Yes ONoExpiration date:

28. Coverage $

29. Are units or common improvements located in aflood zone? 0 Yes 0 NoIf yes, isflood insurance inforce 0 Yes 0 NoDoes this cover at least 100% replacement 0 Yes 0NoOr, is this the covlI1'agemaximum available per condomtnium federal flood program? 0 Yes 0 No

30. 13 the HOA insured for general liability o Yes 0 No If yes, amount per occurrence S

31. Does th« HOApruvide hazard insurance coverage for the interior (walls-in) of the condominium unit? 0 Yes 0No

32. Is the HOA insured for Fidelity BondAmount carried by management Co.:

o Yes 0No If yes, amount

33. Mini~UJ1Inumber of days required for written notification to be given to HOA or insurance trustee before any substantialchanges or cancellation of the project coverage? _

The above information was obtained from thefollowing representative of the project's Homeowners Association:#1-13 must be completed for the Homeowner's Association re-certification

Name Phone

PosilionlIida Data

Pilon.