####### MI AN No. 863 (1930-C)

####### Page 1 -- Attachment A

DUTIES & RESPONSIBILITIES OF MANAGEMENT AGENT AND RESIDENT MANAGER AND
ALLOCATION OF COSTS TO MANAGEMENT AGENT AND PROJECT

NOTE: All management fees will be based on the information provided by
Michigan State Housing Development Authority and will be published in a
Michigan AN annually prior to October 1.

All agents under contract to manage Rural Development financed housing
developments may negotiate a base management fee with the development's
owner. This fee cannot exceed the approved maximum fee. The base
management fee can be divided by 12 and collected on a monthly basis any
time after the last day of the month for which the fee was earned. The
fee is not based upon a percentage of collections.

This attachment is intended to magnify and further explain the duties
and responsibilities of Management and to clarify the division of costs
incurred in the operation of a rental housing project. This is to be
considered as a supplement to the Management Agreement, not a
replacement of any of the duties defined therein.

+-----------------------------------------------------------------------+
| #####  Section A                                                      |
+-----------------------------------------------------------------------+

### Management Agent shall provide the following listed services to the project and shall receive a "Management Fee" as compensation. The Management Agent is responsible for its own salaries, fringe benefits, office overhead including its office space and utilities, clerical staff and training, agent's office bookkeeping, office supplies and equipment, transportation and telephone calls to the project and office data processing systems.

1.  Supervision of the project's overall operations and capital
    improvements.

2.  Meeting with owners, investors, and Rural Development as required to
    carry out the business of the project.

3.  Develop, prepare and revise as required, the Management Plan,
    Management Agreement, and Affirmative Fair Housing Marketing Plan.

4.  Hire, train, supervise and dismiss as necessary, and monitor the
    performance of the project caretaker and any other on-site
    personnel.

5.  Establish and maintain a system to keep project books, reports,
    financial records and accounts.

6.  Prepare and distribute monthly/quarterly reports if required.

MI AN No. 863 (1930-C)

Page 2 - Attachment A

7.  Prepare and distribute annual reports.

8.  Prepare and submit requests for Reserve Account withdrawals, Rent
    Changes, and Rehabilitation and Energy Conservation audits,
    proposals, plans and specifications.

9.  Prepare and submit monthly Project Worksheet for Interest Credit and
    Rental Assistance together with loan payment, overages, and
    occupancy surcharge collections.

10. Assure protection for project receipts.

11. Make the required deposits to the Tax and Insurance Escrow Account
    and to the project Reserve Account monthly.

12. Issue checks to pay all project expenses and debts and monitor
    accounts receivable/payable to keep accounts and debt payments
    current.

13\. Monitor project income and expenses to assure adherence to the
approved budget.

14\. Hire an independent auditor or person to audit or review the
financial records of the project in accordance with Rural Development
regulations, the cost of which will accrue to the project.

15. Provide a Position Fidelity Bond or Blanket Crime Policy to the
    owner and Rural Development as specified in the Management Agreement
    and in accordance with Rural Development requirements. The Fidelity
    Bond or Blanket Crime Policy is a management agent expense. Do not
    include this expense on the project budget.

```{=html}
<!-- -->
```
16. Maintain property insurance, liability insurance, and workman's
    compensation coverage (for on-site personnel) on the project, the
    cost of which accrues to the project.

+-----------------------------------------------------------------------+
| #####  Section B                                                      |
+-----------------------------------------------------------------------+

The Management Agent and Owner agree that the following listed front
line day to day management tasks are assigned to the Management Agent
and Resident Manager (if applicable) as indicated. The amount paid to
the Resident Manager will be shown on the project operating budget as a
project expense, and will include the value of the free apartment if
applicable.

> MI AN No. 863 (1930-C)

Page 3 - Attachment A

+-----------+-----------+---+--------------------------------------------+
| M         | Resident  |   | Front Line, Day-to-Day Management Tasks    |
| anagement |           |   |                                            |
|           | Manager   |   |                                            |
| Agent     |           |   |                                            |
+-----------+-----------+---+--------------------------------------------+

+-----------+-----------+---+--------------------------------------------+
|           |           |   | 1\. Collect and deposit rents              |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 2\. Collect and deposit other project      |
|           |           |   | income                                     |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 3\. Advertise to fill vacant units         |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | . 4. Handle inquiries from potential       |
|           |           |   | tenants, provide                           |
|           |           |   |                                            |
|           |           |   | application and related forms, and         |
|           |           |   | guidance for                               |
|           |           |   |                                            |
|           |           |   | completion to applicant.                   |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 5\. Receive applications for occupancy,    |
|           |           |   | interview applicant,                       |
|           |           |   |                                            |
|           |           |   | and verify information (other than income) |
|           |           |   | to aid in                                  |
|           |           |   |                                            |
|           |           |   | tenant selection.                          |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 6\. Verify income data provided by         |
|           |           |   | applicant through third                    |
|           |           |   |                                            |
|           |           |   | party verification                         |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 7\. Show apartments to interested          |
|           |           |   | applicants                                 |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 8\. Determine eligibility of applicant and |
|           |           |   | notify applicant                           |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 9.  Prepare initial lease, obtain          |
|           |           |   |     applicant's signature and              |
|           |           |   |                                            |
|           |           |   | > review Tenant Rules and Regulations with |
|           |           |   | > new tenant                               |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 10. Re-certify tenant's income annually or |
|           |           |   |     as adjustments                         |
|           |           |   |                                            |
|           |           |   | are warranted in accordance with Rural     |
|           |           |   | Development                                |
|           |           |   |                                            |
|           |           |   | guidelines and prepare lease addendum or   |
|           |           |   | new lease                                  |
|           |           |   |                                            |
|           |           |   | as appropriate                             |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 11. Review Tenant Certifications for       |
|           |           |   |     accuracy and                           |
|           |           |   |                                            |
|           |           |   | compliance with Rural Development          |
|           |           |   | regulations                                |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 12. Monitor and enforce tenant compliance  |
|           |           |   |     with Tenant                            |
|           |           |   |                                            |
|           |           |   | Rules and Regulations                      |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 13. Issue eviction notices when            |
|           |           |   |     appropriate                            |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 14. Monitor need for and make plans for    |
|           |           |   |     project                                |
|           |           |   |                                            |
|           |           |   | maintenance and capital improvements       |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 15. Maintain tenant files                  |
+-----------+-----------+---+--------------------------------------------+
|           |           |   | 16. Perform inspections of the property    |
|           |           |   |     and each apartment                     |
|           |           |   |                                            |
|           |           |   | annually or more frequently if necessary   |
|           |           |   | to oversee                                 |
|           |           |   |                                            |
|           |           |   | project maintenance                        |
+-----------+-----------+---+--------------------------------------------+

MI AN No. 863 (1930-C)

Page 4 - Attachment A

+-----------------------------------------------------------------------+
| #####  Section C                                                      |
+-----------------------------------------------------------------------+

The Management Agent and Owner agree that only the costs specifically
identified as project costs, without interpretation, on the approved
project operating budget Form RD 1930-7, will accrue to the project.
Costs such as those in the category "Other Administrative Costs", which
need further interpretation or explanation, are identified and listed
below, and they will accrue to the management agent and the project as
indicated. Additional items, if any, are listed subject to approval by
Rural Development. It is agreed by the owner and the management agent
that only those costs specifically identified by the approved project
operating budget, together with those listed below as accruing to the
project, will be authorized project expenses. Any costs not identified
will accrue to the management agent.

> PLEASE NOTE: IF THE MANAGEMENT AGENT DETERMINES THAT CERTAIN
> RESPONSIBILITIES ARE TO BE PERFORMED AT THE MANAGEMENT AGENT'S OFFICE,
> EVEN THOUGH TYPICALLY PERFORMED AT THE PROJECT SITE, THE COST OF
> PERFORMING THESE RESPONSIBILITIES IS PART OF THE MANAGEMENT AGENT FEE.
> Line 32, Other Administrative on Form RD1930-7, should include the
> actual cost of energy audits and credit reports. Any other items
> budgeted on this line must be detailed to inform the Agency Servicing
> Official what "Other Administrative Expenses" are being charged to
> project operations. The Agency will consider picnics, gifts to project
> site employees and/or tenants for special occasions, donations to
> charities or local community charitable causes, small appliances and
> kitchen utensils for community rooms, and grills for picnics as
> allowable "Other Administrative Expenses" not to exceed the total cost
> of items purchased, or \$15.00 per unit per year.

  -------------- --------- -- ---------------------------------------------
  Management     Project      Budget Line Item
  Agent                       

  -------------- --------- -- ---------------------------------------------

+-----------------------------------------------------------------------+
| # Project Bookkeeping and Accounting                                  |
+-----------------------------------------------------------------------+

+-------------+-------+---+---------------------------------------------+
| ##  X       |       |   | 1\. Maintenance of financial records        |
+-------------+-------+---+---------------------------------------------+
| X           |       |   | 2\. Financial Record Forms, other than RD   |
|             |       |   | forms                                       |
+-------------+-------+---+---------------------------------------------+
|             |       |   | NOTE: If project bookkeeping and accounting |
|             |       |   | will be a project                           |
|             |       |   |                                             |
|             |       |   | expense, the management fee for Section A   |
|             |       |   | of this attach-                             |
|             |       |   |                                             |
|             |       |   | ment will be reduced by the cost of this    |
|             |       |   | item.                                       |
+-------------+-------+---+---------------------------------------------+

> MI AN No. 863 (1930-C)

Page 5 - Attachment A

+-----------------------------------------------------------------------+
| #  Legal Expenses                                                     |
+-----------------------------------------------------------------------+

+-------------+-------+---+---------------------------------------------+
|             | #  X  |   | 1\. Legal fees relative to administration   |
|             |       |   | of leases                                   |
+-------------+-------+---+---------------------------------------------+

+-----------------------------------------------------------------------+
| #  Telephone and Answering Services                                   |
+-----------------------------------------------------------------------+

+-------------+-------+---+---------------------------------------------+
| ##          | X     |   | 1\. Telephone at Resident Manager Office    |
+-------------+-------+---+---------------------------------------------+
| X           |       |   | 2\. Telephone toll charges made from        |
|             |       |   | Management Agent office                     |
+-------------+-------+---+---------------------------------------------+
|             |       |   | NOTE: The management agent must obtain      |
|             |       |   | approval from the                           |
|             |       |   |                                             |
|             |       |   | agency to provide a toll-free line for      |
|             |       |   | tenants' and appli-                         |
|             |       |   |                                             |
|             |       |   | cants' use and charge the cost to project   |
|             |       |   | operations.                                 |
+-------------+-------+---+---------------------------------------------+

+-----------------------------------------------------------------------+
| #  Training Expense                                                   |
+-----------------------------------------------------------------------+

+-------------+-------+---+---------------------------------------------+
| ##          | X     |   | 1.  Tuition of Resident Manager (if         |
|             |       |   |     applicable). Per diem and               |
|             |       |   |                                             |
|             |       |   | > mileage of Resident Manager in connection |
|             |       |   | > with authorized                           |
|             |       |   | >                                           |
|             |       |   | > training (if applicable)                  |
+-------------+-------+---+---------------------------------------------+
|             | X     |   | 2\. Rural Development provided and/or       |
|             |       |   | approved training                           |
+-------------+-------+---+---------------------------------------------+
| X           |       |   | 3.  Training expenses of Management Agent's |
|             |       |   |     Central Office                          |
|             |       |   |                                             |
|             |       |   | > employees                                 |
+-------------+-------+---+---------------------------------------------+

MI AN No. 863 (1930-C)

Page 6 - Attachment A

+-----------------------------------------------------------------------+
| #  Insurance                                                          |
+-----------------------------------------------------------------------+

+-------------+-------+---+---------------------------------------------+
| ##          | X     |   | 1\. Health Insurance and other employee     |
|             |       |   | benefits                                    |
+-------------+-------+---+---------------------------------------------+
|             | X     |   | 2\. Workman's Compensation                  |
+-------------+-------+---+---------------------------------------------+
|             |       |   | NOTE: For on-site personnel only            |
+-------------+-------+---+---------------------------------------------+

+-----------------------------------------------------------------------+
| #  Other Administrative Expenses                                      |
+-----------------------------------------------------------------------+

+-------------+-------+---+---------------------------------------------+
| ##          | X     |   | 1.  Forms and reproduction expenses         |
|             |       |   |     associated with leases,                 |
|             |       |   |                                             |
|             |       |   | > reference forms, etc. regarding tenants   |
+-------------+-------+---+---------------------------------------------+
|             | X     |   | 2\. Resident Manager office supplies and    |
|             |       |   | project-related postage                     |
+-------------+-------+---+---------------------------------------------+
|             | X     |   | 3\. On-site manager's mileage for trips to  |
|             |       |   | bank, post office, etc.                     |
+-------------+-------+---+---------------------------------------------+

MI AN No. 863 (1930-C)

Page 1 - Attachment B

####### 

#### PREMIUM MANAGEMENT FEE

Agents will be allowed to negotiate a premium management fee with the
development's owner based on

compliance with Rural Development's premium management fee guidelines.
The premium management

fee is defined as any management fee amount negotiated between the owner
and the agent which exceeds

the basic management fee. Payment of Premium Management Fees must not be
paid until approved by

Rural Development.

The premium management fee can only be taken for a calendar year after
year-end and only with

written approval of the Rural Development Servicing Official.
Additionally, while an agent may be eligible

to receive a premium management fee beginning at the cutoff date, the
premium management fee will not be

approved for payment until the development has provided the required
year end audits and reports. In order

to qualify for a premium management fee, the fee must have been budgeted
for (page 1, line 9, column 3),

approved and specified in the approved Management Agreement or an
approved addendum to the Management Agreement.

Additionally, the premium management fee can only be earned based upon
year end information. Sufficient

funds to pay the requested premium management fee must be available in
the property general operating account

less any trade payables due and payable (not including property taxes
and insurance as these are paid from the

T & I account) and add any subsidy receivable (HUD/RA) payments due. If
the balance in the general

operating account is not sufficient to pay the requested PMF, the
request will be rejected due to insufficient

funds. Request for PMF from property reserve account funds are not
allowed and will be rejected.

Premium management fees will not be allowed to be carried forward as a
project payable from year to year.

Premium management fees, once approved, must be paid by fiscal year end.

Since the premium management fee is not considered to be earned until
Rural Development approves the

disbursement, it should not be shown on the MONTHLY REPORT or the Annual
Certified Audit for the

calendar year which is being evaluated.

Minimum qualifications to be eligible for a premium management fee will
be based on the following:

1\. Project must receive a Classification Rating of Class A or Class B,
based upon the Rural Development

Classification System (Attachment C) AND;

2\. An approved Management Plan and Management Agreement must be in
place in the servicing office

AND;

3\. No late payments or late fees charged; AND

4.  Compliance Review (Form RD 400-8) must show that project is in
    compliance with Civil Rights Act

AND;

MI AN No. 863 (1930-C)

Page 2 - Attachment B

5.  Year-end reports and request for PMF must be submitted to Servicing
    Official within 90 days of fiscal

year end.

6\. Real Estate taxes and insurance have not been paid from Reserve
Account.

The Servicing Official may approve a premium management fee for any
development which meets the

minimum requirements above. Each management agent should evaluate
themselves on each of the factors

outlined herein (Attachment B). If, after this evaluation, it is
determined that the minimum qualifications

have not been met, an application [should not]{.underline} be submitted
to the Servicing Official. All requests for Premium

Management Fees must be submitted to the servicing office with year-end
reports. Payment of Premium Management Fees must not paid until approved
by Rural Development.

The Rural Development Servicing Official shall consider the following
factors to determine the amount

of a premium management fee:

1\. Reserve Account/Tax and Insurance Escrow Account, Security Deposit
Account and General Operating

Accounts must be properly funded at 12/31.

2\. Tenant Certifications.

3\. Monthly Reports/Quarterly Reports.

4\. Audit Compliance.

5\. Fidelity Bond and Liability, Property and Umbrella/Excess Umbrella,
Worker's Compensation Insurance.

6\. Budget/Utility Allowance.

7.  Physical Inspection Response.

8.  Energy Audit.

9.  Affirmative Fair Housing Marketing Plan.

10. Laundry Leases.

11. Real Estate Taxes.

12. Self-Evaluation/504 Transition Plan.

> MI AN No. 863 (1930-C)

########  Page 3 - Attachment B

+-----------------------------------------------------------------------+
| #####  FACTOR DESCRIPTIONS                                            |
+-----------------------------------------------------------------------+

+-------------------+-------------+---+---------------------------------+
| 1\. Project       |             |   | 4 Points                        |
| Accounts          |             |   |                                 |
+-------------------+-------------+---+---------------------------------+
|                   | Based on    |   |                                 |
|                   | review of   |   |                                 |
|                   | year-end    |   |                                 |
|                   | reports.    |   |                                 |
|                   | All         |   |                                 |
|                   | accounts    |   |                                 |
|                   | must be     |   |                                 |
|                   |             |   |                                 |
|                   | funded to   |   |                                 |
|                   | their       |   |                                 |
|                   | proper      |   |                                 |
|                   | levels.     |   |                                 |
+-------------------+-------------+---+---------------------------------+

  -------------------- ---------------- -- ----------------------------------
  2\. Tenant                               1 Point
  Certifications                           

                       No more than 3      
                       tenant              
                       certifications      
                       submitted late.     
  -------------------- ---------------- -- ----------------------------------

+-------------------+-------------+---+---------------------------------+
| 3\. Monthly       |             |   | 1 Point                         |
| Reports/Quarterly |             |   |                                 |
| Reports           |             |   |                                 |
+-------------------+-------------+---+---------------------------------+
|                   | The reports |   |                                 |
|                   | must be     |   |                                 |
|                   | received in |   |                                 |
|                   | the         |   |                                 |
|                   | Servicing   |   |                                 |
|                   | Office by   |   |                                 |
|                   | the 20th    |   |                                 |
|                   |             |   |                                 |
|                   | of the      |   |                                 |
|                   | month       |   |                                 |
|                   | following   |   |                                 |
|                   | the         |   |                                 |
|                   | reporting   |   |                                 |
|                   | period in   |   |                                 |
|                   | which they  |   |                                 |
|                   | are         |   |                                 |
|                   |             |   |                                 |
|                   | paid. Minor |   |                                 |
|                   | errors in   |   |                                 |
|                   | the         |   |                                 |
|                   | preparation |   |                                 |
|                   | of the      |   |                                 |
|                   | report will |   |                                 |
|                   | not         |   |                                 |
|                   |             |   |                                 |
|                   | cause an    |   |                                 |
|                   | u           |   |                                 |
|                   | nacceptable |   |                                 |
|                   | rating.     |   |                                 |
|                   | However,    |   |                                 |
|                   | the         |   |                                 |
|                   | submission  |   |                                 |
|                   | of any      |   |                                 |
|                   |             |   |                                 |
|                   | inaccurate  |   |                                 |
|                   | reports     |   |                                 |
|                   | after a     |   |                                 |
|                   | written     |   |                                 |
|                   | notice will |   |                                 |
|                   | result in   |   |                                 |
|                   | an          |   |                                 |
|                   |             |   |                                 |
|                   | u           |   |                                 |
|                   | nacceptable |   |                                 |
|                   | rating. If  |   |                                 |
|                   | the reports |   |                                 |
|                   | have been   |   |                                 |
|                   | waived in   |   |                                 |
|                   |             |   |                                 |
|                   | writing by  |   |                                 |
|                   | the         |   |                                 |
|                   | Servicing   |   |                                 |
|                   | Official,   |   |                                 |
|                   | you         |   |                                 |
|                   | au          |   |                                 |
|                   | tomatically |   |                                 |
|                   | earn the    |   |                                 |
|                   |             |   |                                 |
|                   | point for   |   |                                 |
|                   | this        |   |                                 |
|                   | factor.     |   |                                 |
+-------------------+-------------+---+---------------------------------+

+-------------------+-------------+---+---------------------------------+
| 4\. Audit         |             |   | 1 Point                         |
| Compliance/Year   |             |   |                                 |
| end Reports       |             |   |                                 |
+-------------------+-------------+---+---------------------------------+
|                   | The         |   |                                 |
|                   | Certified   |   |                                 |
|                   | Audit/Year  |   |                                 |
|                   | End Report  |   |                                 |
|                   | for the     |   |                                 |
|                   | previous    |   |                                 |
|                   | year must   |   |                                 |
|                   |             |   |                                 |
|                   | have been   |   |                                 |
|                   | submitted   |   |                                 |
|                   | to the      |   |                                 |
|                   | Rural       |   |                                 |
|                   | Development |   |                                 |
|                   | Servicing   |   |                                 |
|                   | Office      |   |                                 |
|                   |             |   |                                 |
|                   | in an       |   |                                 |
|                   | acceptable  |   |                                 |
|                   | form, no    |   |                                 |
|                   | later than  |   |                                 |
|                   | 90 days     |   |                                 |
|                   | following   |   |                                 |
|                   | the close   |   |                                 |
|                   |             |   |                                 |
|                   | of the      |   |                                 |
|                   | fiscal year |   |                                 |
|                   | just ended  |   |                                 |
|                   | to be       |   |                                 |
|                   | acceptable. |   |                                 |
+-------------------+-------------+---+---------------------------------+

> MI AN No. 863 (1930-C)

Page 4 - Attachment B

+-------------------+-------------+---+---------------------------------+
| 6.  5\. Fidelity  |             |   | 3 Points                        |
|     Bonds,        |             |   |                                 |
|     Li            |             |   |                                 |
| ability/Property/ |             |   |                                 |
|                   |             |   |                                 |
| 7.  Umbrella and  |             |   |                                 |
|     Worker's      |             |   |                                 |
|     Compensation  |             |   |                                 |
|                   |             |   |                                 |
| 8.  Insurance     |             |   |                                 |
+-------------------+-------------+---+---------------------------------+
|                   | Coverage    |   |                                 |
|                   | must be     |   |                                 |
|                   | acceptable  |   |                                 |
|                   | according   |   |                                 |
|                   | to Rural    |   |                                 |
|                   | Development |   |                                 |
|                   |             |   |                                 |
|                   | policy and  |   |                                 |
|                   | in effect   |   |                                 |
|                   | for the     |   |                                 |
|                   | entire year |   |                                 |
|                   | in          |   |                                 |
|                   | question.   |   |                                 |
|                   | F           |   |                                 |
|                   | urthermore, |   |                                 |
|                   |             |   |                                 |
|                   | the policy  |   |                                 |
|                   | or a binder |   |                                 |
|                   | for         |   |                                 |
|                   | Fidelity    |   |                                 |
|                   | Bonds and   |   |                                 |
|                   | Liability,  |   |                                 |
|                   | Property    |   |                                 |
|                   |             |   |                                 |
|                   | and         |   |                                 |
|                   | Umbr        |   |                                 |
|                   | ella/Excess |   |                                 |
|                   | Umbrella    |   |                                 |
|                   | Insurance   |   |                                 |
|                   | must be on  |   |                                 |
|                   | file with   |   |                                 |
|                   |             |   |                                 |
|                   | the         |   |                                 |
|                   | Servicing   |   |                                 |
|                   | Office      |   |                                 |
|                   | before the  |   |                                 |
|                   | existing    |   |                                 |
|                   | policy's    |   |                                 |
|                   | expiration  |   |                                 |
|                   | date.       |   |                                 |
+-------------------+-------------+---+---------------------------------+

+-------------------+-------------+---+---------------------------------+
| 6\.               |             |   | 5 Points                        |
| Budget/Utility    |             |   |                                 |
| Allowance         |             |   |                                 |
+-------------------+-------------+---+---------------------------------+
|                   | The         |   |                                 |
|                   | de          |   |                                 |
|                   | velopment's |   |                                 |
|                   | budget for  |   |                                 |
|                   | the         |   |                                 |
|                   | proposed    |   |                                 |
|                   | year must   |   |                                 |
|                   | have been   |   |                                 |
|                   |             |   |                                 |
|                   | submitted   |   |                                 |
|                   | to the      |   |                                 |
|                   | Servicing   |   |                                 |
|                   | Office in   |   |                                 |
|                   | the last    |   |                                 |
|                   | quarter of  |   |                                 |
|                   | fiscal      |   |                                 |
|                   |             |   |                                 |
|                   | year in     |   |                                 |
|                   | time for    |   |                                 |
|                   | approval    |   |                                 |
|                   | before the  |   |                                 |
|                   | start of    |   |                                 |
|                   | the next    |   |                                 |
|                   | fiscal      |   |                                 |
|                   |             |   |                                 |
|                   | year.       |   |                                 |
|                   |             |   |                                 |
|                   | The utility |   |                                 |
|                   | consumption |   |                                 |
|                   | survey      |   |                                 |
|                   | information |   |                                 |
|                   | is to be    |   |                                 |
|                   | submitted   |   |                                 |
|                   |             |   |                                 |
|                   | prior to    |   |                                 |
|                   | start of    |   |                                 |
|                   | next fiscal |   |                                 |
|                   | year .      |   |                                 |
+-------------------+-------------+---+---------------------------------+

+-------------------+-------------+---+---------------------------------+
| 7.  Physical      |             |   | 4 Points                        |
|     Inspection    |             |   |                                 |
|     Response and  |             |   |                                 |
|                   |             |   |                                 |
| Completion        |             |   |                                 |
+-------------------+-------------+---+---------------------------------+
|                   | An          |   |                                 |
|                   | acceptable  |   |                                 |
|                   | written     |   |                                 |
|                   | response to |   |                                 |
|                   | the         |   |                                 |
|                   | de          |   |                                 |
|                   | velopment's |   |                                 |
|                   | annual      |   |                                 |
|                   |             |   |                                 |
|                   | or          |   |                                 |
|                   | follow-up   |   |                                 |
|                   | inspection  |   |                                 |
|                   | reports     |   |                                 |
|                   | must be     |   |                                 |
|                   | provided to |   |                                 |
|                   | the         |   |                                 |
|                   |             |   |                                 |
|                   | Servicing   |   |                                 |
|                   | Office no   |   |                                 |
|                   | later than  |   |                                 |
|                   | 30 days     |   |                                 |
|                   | after the   |   |                                 |
|                   | report was  |   |                                 |
|                   | mailed      |   |                                 |
|                   |             |   |                                 |
|                   | from the    |   |                                 |
|                   | Servicing   |   |                                 |
|                   | Office, and |   |                                 |
|                   | the repairs |   |                                 |
|                   | must be     |   |                                 |
|                   | completed   |   |                                 |
|                   | by          |   |                                 |
|                   |             |   |                                 |
|                   | the due     |   |                                 |
|                   | dates       |   |                                 |
|                   | outlined in |   |                                 |
|                   | the written |   |                                 |
|                   | response    |   |                                 |
|                   | provided by |   |                                 |
|                   |             |   |                                 |
|                   | Management  |   |                                 |
|                   | to receive  |   |                                 |
|                   | an          |   |                                 |
|                   | acceptable  |   |                                 |
|                   | rating.     |   |                                 |
+-------------------+-------------+---+---------------------------------+

> MI AN No. 863 (1930-C)

Page 5 - Attachment B

  -------------------- -------------- -- ----------------------------------
  8\. Energy Audit                       2 Points

                       Energy Audit      
                       must be           
                       current and       
                       not expired.      
  -------------------- -------------- -- ----------------------------------

+-------------------+-------------+---+---------------------------------+
| 9.  9\.           |             |   | 2 Points                        |
|     Affirmative   |             |   |                                 |
|     Fair Housing  |             |   |                                 |
|     Marketing     |             |   |                                 |
|                   |             |   |                                 |
| Plan              |             |   |                                 |
+-------------------+-------------+---+---------------------------------+
|                   | A current   |   |                                 |
|                   | and         |   |                                 |
|                   | approved    |   |                                 |
|                   | AFHMP must  |   |                                 |
|                   | be on file  |   |                                 |
|                   | with RD.    |   |                                 |
+-------------------+-------------+---+---------------------------------+

  -------------------- -------------- -- ----------------------------------
  10\. Laundry Leases                    2 Points

                       A current and     
                       approved          
                       Laundry Lease     
                       must be on        
                       file with RD.     
  -------------------- -------------- -- ----------------------------------

+-------------------+-------------+---+---------------------------------+
| 11\. Real Estate  |             |   | 5 Points                        |
| Taxes             |             |   |                                 |
+-------------------+-------------+---+---------------------------------+
|                   | All project |   |                                 |
|                   | real estate |   |                                 |
|                   | property    |   |                                 |
|                   | taxes,      |   |                                 |
|                   | current     |   |                                 |
|                   | year and    |   |                                 |
|                   | prior       |   |                                 |
|                   |             |   |                                 |
|                   | year(s)     |   |                                 |
|                   | must be     |   |                                 |
|                   | paid        |   |                                 |
|                   | current and |   |                                 |
|                   | proper      |   |                                 |
|                   | do          |   |                                 |
|                   | cumentation |   |                                 |
|                   | from        |   |                                 |
|                   |             |   |                                 |
|                   | taxing      |   |                                 |
|                   | authority   |   |                                 |
|                   | must be     |   |                                 |
|                   | provided to |   |                                 |
|                   | RD          |   |                                 |
|                   | Servicing   |   |                                 |
|                   | Office.     |   |                                 |
+-------------------+-------------+---+---------------------------------+

> MI AN No. 863 (1930-C)

Page 6 - Attachment B

+-------------------+-------------+---+---------------------------------+
| 12\.              |             |   | 5 Points                        |
| Se                |             |   |                                 |
| lf-Evaluation/504 |             |   |                                 |
| Transition Plan   |             |   |                                 |
+-------------------+-------------+---+---------------------------------+
|                   | As outlined |   |                                 |
|                   | in RD AN    |   |                                 |
|                   | 3780        |   |                                 |
|                   | (1930-C),   |   |                                 |
|                   | dated       |   |                                 |
|                   | August 20,  |   |                                 |
|                   | 2002        |   |                                 |
|                   |             |   |                                 |
|                   | **[Self     |   |                                 |
|                   | Evalu       |   |                                 |
|                   | ation]{.und |   |                                 |
|                   | erline}** - |   |                                 |
|                   | Evaluate,   |   |                                 |
|                   | Modify and  |   |                                 |
|                   | Maintain    |   |                                 |
|                   | sufficient  |   |                                 |
|                   |             |   |                                 |
|                   | records for |   |                                 |
|                   | at least 3  |   |                                 |
|                   | years. A    |   |                                 |
|                   | copy must   |   |                                 |
|                   | be provided |   |                                 |
|                   | to RD.      |   |                                 |
|                   |             |   |                                 |
|                   | The         |   |                                 |
|                   | Self        |   |                                 |
|                   | -Evaluation |   |                                 |
|                   | Record must |   |                                 |
|                   | contain as  |   |                                 |
|                   | a minimum:  |   |                                 |
|                   |             |   |                                 |
|                   | a.  a list  |   |                                 |
|                   |     of the  |   |                                 |
|                   |             |   |                                 |
|                   |  interested |   |                                 |
|                   |     persons |   |                                 |
|                   |             |   |                                 |
|                   |  consulted, |   |                                 |
|                   |             |   |                                 |
|                   | b.  a       |   |                                 |
|                   |             |   |                                 |
|                   | description |   |                                 |
|                   |     of area |   |                                 |
|                   |             |   |                                 |
|                   |    examined |   |                                 |
|                   |     and any |   |                                 |
|                   |             |   |                                 |
|                   |    problems |   |                                 |
|                   |             |   |                                 |
|                   | identified, |   |                                 |
|                   |             |   |                                 |
|                   | > and,      |   |                                 |
|                   |             |   |                                 |
|                   | c.  a       |   |                                 |
|                   |             |   |                                 |
|                   | description |   |                                 |
|                   |     of any  |   |                                 |
|                   |     mo      |   |                                 |
|                   | difications |   |                                 |
|                   |     made    |   |                                 |
|                   |     and of  |   |                                 |
|                   |     any     |   |                                 |
|                   |             |   |                                 |
|                   |    remedial |   |                                 |
|                   |             |   |                                 |
|                   | > steps     |   |                                 |
|                   | > taken     |   |                                 |
|                   | >           |   |                                 |
|                   | > **        |   |                                 |
|                   | [Transition |   |                                 |
|                   | > Plans]{.u |   |                                 |
|                   | nderline}** |   |                                 |
|                   | > -- At a   |   |                                 |
|                   | > minimum,  |   |                                 |
|                   | > the plans |   |                                 |
|                   | > may not   |   |                                 |
|                   | > exceed a  |   |                                 |
|                   | >           |   |                                 |
|                   | > 3 year    |   |                                 |
|                   | > period    |   |                                 |
|                   | > and are   |   |                                 |
|                   | > required  |   |                                 |
|                   | > to:       |   |                                 |
|                   |             |   |                                 |
|                   | to the      |   |                                 |
|                   |             |   |                                 |
|                   | a           |   |                                 |
|                   | .  Identify |   |                                 |
|                   |             |   |                                 |
|                   |    physical |   |                                 |
|                   |             |   |                                 |
|                   |  obstacles, |   |                                 |
|                   |             |   |                                 |
|                   | b.          |   |                                 |
|                   |   Describe, |   |                                 |
|                   |     in      |   |                                 |
|                   |     detail  |   |                                 |
|                   |     the     |   |                                 |
|                   |     methods |   |                                 |
|                   |     that    |   |                                 |
|                   |     would   |   |                                 |
|                   |     be used |   |                                 |
|                   |     to make |   |                                 |
|                   |             |   |                                 |
|                   | > the       |   |                                 |
|                   | >           |   |                                 |
|                   |  facilities |   |                                 |
|                   | >           |   |                                 |
|                   | accessible, |   |                                 |
|                   |             |   |                                 |
|                   | c.  Specify |   |                                 |
|                   |     the     |   |                                 |
|                   |             |   |                                 |
|                   |    schedule |   |                                 |
|                   |     for     |   |                                 |
|                   |     taking  |   |                                 |
|                   |     the     |   |                                 |
|                   |     steps   |   |                                 |
|                   |             |   |                                 |
|                   |   necessary |   |                                 |
|                   |     to      |   |                                 |
|                   |     achieve |   |                                 |
|                   |             |   |                                 |
|                   | > full      |   |                                 |
|                   | > program   |   |                                 |
|                   | > acc       |   |                                 |
|                   | essibility. |   |                                 |
|                   | > If        |   |                                 |
|                   | >           |   |                                 |
|                   |  transition |   |                                 |
|                   | > plan is   |   |                                 |
|                   | > longer    |   |                                 |
|                   | > than 1    |   |                                 |
|                   | >           |   |                                 |
|                   | > year,     |   |                                 |
|                   | > identify  |   |                                 |
|                   | > steps     |   |                                 |
|                   | > that will |   |                                 |
|                   | > be taken  |   |                                 |
|                   | > during    |   |                                 |
|                   | > each year |   |                                 |
|                   | > of the    |   |                                 |
|                   | >           |   |                                 |
|                   | >           |   |                                 |
|                   |  transition |   |                                 |
|                   | > period,   |   |                                 |
|                   | > and       |   |                                 |
|                   |             |   |                                 |
|                   | d           |   |                                 |
|                   | .  Identify |   |                                 |
|                   |     the     |   |                                 |
|                   |     person  |   |                                 |
|                   |             |   |                                 |
|                   | responsible |   |                                 |
|                   |     for     |   |                                 |
|                   |     imp     |   |                                 |
|                   | lementation |   |                                 |
|                   |     of the  |   |                                 |
|                   |     plan.   |   |                                 |
|                   |             |   |                                 |
|                   | > When      |   |                                 |
|                   | >           |   |                                 |
|                   |  structural |   |                                 |
|                   | > changes   |   |                                 |
|                   | > are       |   |                                 |
|                   | >           |   |                                 |
|                   |  necessary, |   |                                 |
|                   | > such      |   |                                 |
|                   | > changes   |   |                                 |
|                   | > shall be  |   |                                 |
|                   | >           |   |                                 |
|                   | > made      |   |                                 |
|                   | > within    |   |                                 |
|                   | > three (3) |   |                                 |
|                   | > years and |   |                                 |
|                   | > as        |   |                                 |
|                   | > ex        |   |                                 |
|                   | peditiously |   |                                 |
|                   | > as        |   |                                 |
|                   | > possible. |   |                                 |
|                   |             |   |                                 |
|                   | In summary, |   |                                 |
|                   | AN 3780     |   |                                 |
|                   | must be     |   |                                 |
|                   | adhered to  |   |                                 |
|                   | in all      |   |                                 |
|                   | aspects.    |   |                                 |
+-------------------+-------------+---+---------------------------------+

> MI AN No. 863 (1930-C)

Page 7 - Attachment B

+-------------------------------------+---+----------------------------+
| ######  TOTAL POINTS                |   | 35                         |
+-------------------------------------+---+----------------------------+

  ------------------------------------- --- -----------------------------
  1 - 7                                     20%

  8 --14                                    40%

  15 -- 21                                  60%

  22 -- 28                                  80%

  29 - 35                                   100%
  ------------------------------------- --- -----------------------------

The above percentage will be applied to the annual allowable fee as
provided by the State Office.

The request for the Premium Management Fee must include the following:

Attachment A - Duties and Responsibilities of Management Agent and
Resident Manager

And Allocation of Costs to Management Agent and Project

Attachment B -- Premium Management Fee outlines qualifications and
factors.

Additional verification of compliance with the factors may be attached.

Attachment C -- Project Classification

Attachment D - Self-Rating Form

Attachment E - Request for Premium Management Fee signed by Owner and
Management Agent.

After written approval is received from the Servicing Official, the
premium management fee can be paid

to the agent from the excess cash from the development's Operating
Account.

#######  MI AN No. 863 (1930-C)

Page 1 - Attachment D

####### 

SELF-RATING FORM

515 OPERATIONAL PROJECT RATING SYSTEM

Fiscal Year:

Project Name:

Management Company:

Premium Management Fee:

+-----------------------------------------------+---+----------+---------+
| ##  **FACTOR DESCRIPTIONS**                   |   | Self     | RD      |
|                                               |   | Ranking  | Ranking |
|                                               |   |          |         |
|                                               |   | #        | #       |
|                                               |   |   Points |  Points |
+-----------------------------------------------+---+----------+---------+
| 1\. Project Account Balances as of 12/31 (4)  |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 2\. Tenant Certifications (1)                 |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 3\. Monthly Reports/Quarterly Reports (1)     |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 4\. Audit Compliance (1)                      |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 5\. Fidelity Bond,                            |   |          |         |
| Liability/Property/Umbrella                   |   |          |         |
|                                               |   |          |         |
| and Worker's Compensation Insurance (3)       |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 6\. Budget/ Utility Allowance (5)             |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 7\. Physical Inspection Response (4)          |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 8\. Energy Audit (2)                          |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 9\. Affirmative Fair Housing Marketing Plan   |   |          |         |
| (2)                                           |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 10\. Laundry Leases (2)                       |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 11\. Real Estate Taxes (5)                    |   |          |         |
+-----------------------------------------------+---+----------+---------+
| 12\. Self-Evaluation/504 Transition Plan (5)  |   |          |         |
+-----------------------------------------------+---+----------+---------+

+-----------------------------------------------------------------------+
| NOTE: All information required to meet the premium management fee     |
| factors and all premium                                               |
|                                                                       |
| management fee requests must be submitted to the Rural Development    |
| Servicing Office,                                                     |
|                                                                       |
| at the appropriate area office within 90 days of fiscal year end.     |
+-----------------------------------------------------------------------+

REVIEWED BY:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date

> MI AN No. 863 (1930-C)

Page 1 - Attachment E

####### 

U.S.D.A., RURAL DEVELOPMENT

Address of A/O

City, Michigan 00000

REQUEST FOR PREMIUM MANAGEMENT FEE

**Development Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Case Number:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**Amount of Premium Management Fee Requested [per unit]{.underline}:
\$\_\_\_\_\_\_\_\_\_\_ Project Number:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**[Number of Units]{.underline} Premium Management Fee is being
requested for: \_\_\_\_\_\_\_\_ Total Premium Fee Requested:
\$\_\_\_\_\_\_\_\_\_\_\_**

**Calendar Year Beginning:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, 20\_\_\_\_\_
Ending: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
20\_\_\_\_\_\_\_\_**

**Management Agent:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

As the authorized representative of the Ownership entity (Borrower) of
the above referenced housing development , I am hereby requesting that
the Premium Management Fee be paid to the Management Agent identified
above. Furthermore, I hereby certify that I am authorized to approve the
payment of the Premium Management Fee on behalf of the Borrower, and
that U.S.D.A., Rural Development can rely on this certification without
further inquiry. I further acknowledge that payment will be approved
only if the requirements established by Rural Development have been met.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_­­­­­­­­­­\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Borrower Name (Typed) Management Agent Name (Typed)

By:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
By:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Its:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Its:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Date:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**[Rural Development]{.underline}**

Your request for a Premium Management Fee has been reviewed and is
hereby: APPROVED

By:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
DISAPPROVED

Its:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Comments: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_