PROFESSIONAL MORTGAGE SERVICES, INC. MORTGAGE BANKERS OLD OCEAN CITY BLVD., SUITE 216 BERLIN, MARYLAND (410) FAX (410)

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1 PROFESSIONAL MORTGAGE SERVICES, INC. MORTGAGE BANKERS OLD OCEAN CITY BLVD., SUITE 216 BERLIN, MARYLAND (410) FAX (410) Ineligible Projects The following are Ineligible Project Types regardless of the characteristics PUDs. of the individual unit in certain types of condos or Projects that are operated and managed as a hotel or motel (for example: Condominium hotels, Condo-tels, etc.) even though 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 a management 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 unit owners, obligate the unit owner to rent the property on a seasonal, monthly, weekly or daily basis. In many cases, 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 Commission or 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, a health 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) the total units in the project. owns more than 10% of Condominiums or PUDs that represent a legal, but non-conforming use of the land, if the zoning regulations prohibit rebuilding 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 several owners as tenants-in-common or by an HOA in which individuals have an undivided interest in a residential apartment building 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 owners association) is named as a party to pending litigation, that relates to the safety, structural soundness, habitability or functional 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 as defined 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 defense and 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 an action for past due Homeowners' Association dues

2 PROFESSIONAL MORTGAGE SERVICES, INC. MORTGAGE BANKERS OLD OCEAN CITY BLVD., SUITE 216 BERLIN, MARYLAND (410) FAX (410) 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 that may be an indication that the project is ineligible. The appraisal report may identify project characteristics that do not definitively determine the project is a condo-hotel; however the report may provide evidence that would require additional research. Such project characteristics 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 guaranteed rent-backs, references to rental pooling or management agreements and SEC filing references and/or prospectus documents. An Internet search should also be performed to obtain project and unit-specific information. The applicable project's website may contain information on the project name, amenities and the availability of units for rent. A due 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 the owner of the unit. If the project is found on a "Hotel booking type" website attempt to book a room on a nightly basis.

3 Condo Project Manager HOA Certification (CPM) 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 NO 6. Is the project a timeshare or a segmented ownership project? DYES 0 NO 7. Is the project a houseboat project? 0 YES 0 NO 8. Is the project a multi-dwelling unit condominium (in which ownership of multiple units is evidenced by a single deed and mortgage)? 0 YES ONO 9. 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 NO 10. Is the project an investment security? DYES D NO 11. Is the project a common interest apartment or community apartment project? DYES D NO 12. Does the project have any non-incidental business operation owned or operated by the Homeowner's Association? 0 YES 0 NO 13. 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 NO to this question if the association or developer is named solely as a plaintiff in either a foreclosure action or 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 Project Phase Name or Number Number of phases # of Units # of units # complete # complete # for sale # for sale # sold # sold # investors # investors # owner occupied or 2 na Home # owner occupied or 2 na Home 17. A) Does any single owner (other than developer) hold title to more than 10% of the units? (If the project has fewer than 10 units, does any single entity own more than 1 unit?) DYES D NO 8) If yes, how many units are owned the single entity? Condominium Documents: 18. Complete the table to the right for all recorded phases/bldgs (list on attachment if more than four legal phases+ 19. Are there any developer resale or affordable housing deed restrictions? 0 YES 0 NO 20. Project is 0 fee simple, OLeasehold Document Phase Date County Record # Declaration Amendment Amendment Amendment

4 Control of HOA: 21. Has control of the HOA been turned over to unit owners? 0 YES 0 NO 22. 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 detached 24. Are the common elements and recreational facilities in the subject phase substantially complete? DYES 0 NO 25. 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 & attach explanation I 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 expenditures and deferred maintenance (at least 10% of the budget) and adequate funding for insurance deductible amounts? DYES 0 NO. Insurance: 31. What is the name of the insured on the condominium policy? a. Expiration Date: I I 32. 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's face amount.) Also answer yes if the individual units are not fully covered by the master policy but are supplemented by a 'walls-in' or H06 policy in an amount that is not less than 20% of each unit's appraised value. 0 YES 0 NO 33. Is liability insurance in place providing at least $1 million of coverage for bodily injury and property damage per occurrence? DYES D NO 34. Is flood insurance (if required) in place providing coverage at least equal to the lesser of 100% of the insurable value of each building, including all common elements and property or the maximum coverage available 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 the National Flood Insurance Program - currently $25,000 for a project and $5,000 for one-to-four family units). 0 YES 0 NO 35. If the project has 21 or more units, is fidelity insurance in place covering the maximum amount of funds that will be in the custody of the owners' association or management company at any time? If the project has 20 or fewer units, fidelity insurance is not required and you may answer yes to this question. DYES 0 NO

5 Homeowner's Association (HOA) Certification Full Condo Questionnaire Date: LOAN INFORMATION Project Name: IMC Loan #: _ Property City: Address: State: Zip: Lender Contact: Lender Contact #: _ HOA QUESTIONNAIRE 1. Are all common elements, and/or facilities substantially complete? If no, are all the common elements and/or recreational facilities associated with 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: 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: Entire Project Subject Phase 11. Does anyone person or entity own more than one unit? DIYes If yes, list how many each own: 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 resolution process? If yes, explain: 15. Are there any adverse environmental factors affecting the project as a whole or the individual 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 t.. -.J Yes D~Yes 1",J No L-I No

6 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 areas are 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 for delinquent 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 Desk D 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 live in 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 insurance trustee before any substantial changes or cancellation of the project coverage? ACKNOWLEDGMENT IJ Yes tpj Yes LJYes D Daily Maid Service D Mandatory Rental Pool LIYes LmJ Yes tmj Yes. L-J Yes DNo DNo DNo HOA Representative Name: Position I Title: _ Reviewer Name: Signature: Date: Phone #: Date: Phone #:

7 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 0 No 2. Is the project subject to additional phasing and add-ons? 0 Yes 0 No If yes. number of additional phases and units to be built: 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 Phases: Units: ~~~------~~ If yes. what was original building purpose.: _ 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 homes B. 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 No If yes, explain: 14. Is the HOA involved in any litigation, mediation, arbitration or other dispute resolution process? 0 Yes 0 No If 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 DNo If yes. is it adequate toprevent deferred maintenance? 0 Yes 0No CII1Tentamount infund. Total Reserves budgetedfor the year 17. 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 are ownedjointlybyllnitowners? 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? 0 No' If yes. are they responsible for 0-6 months or 7 + months

8 23: Do~ the property operate as a resort hotel; Tenting units on a doily basis? 0 Yes 0 No If yes, number of years in operation: Please check applicable services: 0 Check-in rental desk Restaurant Ifood service 0 Time share o Commercial (boutiques, etc.) percentage of square footage o Daily maid service o Mandatory rental pool % rmypartoftheprojectusedforcommercialpurposes? 0 Yes If 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? 28. Coverage $ Deductible $ o Yes ONo Expiration date: 29. Are units or common improvements located in aflood zone? 0 Yes 0 No If yes, isflood insurance inforce 0 Yes 0 No Does this cover at least 100% replacement 0 Yes 0 No Or, is this the covli1'agemaximum available per condomtnium federal flood program? 0 Yes 0 No 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 Bond Amount carried by management Co.: o Yes 0 No If yes, amount 33. Mini~UJ1Inumber of days required for written notification to be given to HOA or insurance trustee before any substantial changes 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.