This document has been prepared by Hamilton Securities Advisory Services, Inc., as Financial Advisor to the Federal Housing Administration an organizational unit within the United States Department of Housing and Urban Development (collectively referred to herein as "FHA"). The information set forth herein is derived from materials available to prospective bidders or that will be made available to prospective bidders prior to the Bid Date and is not represented as all of the information which may be material to a prospective bidder's decision to purchase any Mortgage Loan.

Neither FHA, Hamilton Securities Advisory Services, Inc., nor any of their respective officers, directors, employees, contractors or agents make any representation or warranty, either express or implied, as to the accuracy and/or completeness of this document or any of its contents, and no legal liability with respect thereto is assumed or may be implied.

Except as otherwise expressly provided in the Loan Sale Agreement, the Mortgage Loans, are being sold and transferred "as is", "where is", "with all faults" and without any recourse whatsoever.

The purchase of a Mortgage Loan involves risks. Bidders should, along with their advisors, carefully review the information set forth herein and any additional information made available by FHA, as well as undertake such additional investigations, as they deem advisable, of the Mortgage Loans and the underlying collateral to evaluate the risks associated with a purchase.

Questions and comments concerning these materials may be directed to Henry Fan, Hamilton Securities Advisory Services, Inc., 7 Dupont Circle, N.W., Washington, D.C. 20037; telephone number: (202) 496-6700; facsimile: (202) 496-6777; and Internet address: hfan@alexham.com.

FHA, an organizational unit within HUD, is soliciting bids to purchase selected Mortgage Loans at a sealed bid to be held on March 20, 1996 ("FHA National Single Family Mortgage Loan Sale"), all as further described in this Bid Package (including all Exhibits and Attachments hereto). Persons that have knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of acquiring the Mortgage Loans and servicing the Mortgage Loans after acquisition ("Bidders"), and who are not otherwise Ineligible Bidders, are invited to bid on the Mortgage Loans.

This Bid Package contains the following:

1. Introduction;

2. Executive Summary;

3. Bid Instructions;

4. Survey Regarding Placed-Based Bidding Strategies;

5. Background - HUD Programs;

6. CRA Eligibility

7. Servicing Requirements - Post Sale;

8. Due Diligence;

9. Closing Instructions;

10. The Mortgage Loans;

11. Due Diligence Exception Reports;

12. Description of the Data Fields;

13. Credit Scores;

14. Loan Sale Agreement to be executed by each Bidder;

The terms and conditions of the Loan Sale Agreement shall govern the sale of any Mortgage Loans to a Successful Bidder.

The Loan Sale Agreement contains representations and warranties that are strictly limited in scope and duration. In the event of a breach of any representation or warranty or any other default by FHA, the Successful Bidder may exercise only those rights and remedies, if any, expressly set forth in the Loan Sale Agreement.

Initially capitalized terms used but not defined in this Bid Package have the meanings given them in the Loan Sale Agreement.

EXECUTIVE SUMMARY
GENERAL
Loans Offered	The portfolio of loans being offered consists of approximately 16,500 residential, 1-4 family mortgage loans and servicing ("Mortgage Loans"). The properties securing the Mortgage Loans are located throughout the United States. Bidders will have the option of purchasing pools of Mortgage Loan Blocks which they create. Although a Mortgage Loan may be withdrawn from the FHA National Single Family Mortgage Loan Sale prior to the Bid Date by FHA for any reason, Mortgage Loans will not be withdrawn after that date, except as provided in the Loan Sale Agreement.
CRA Eligible	The Mortgage Loans have been identified as potentially CRA eligible by all four bank regulators (the Office of Thrift Supervision (OTS), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve).
Due Diligence	In previous sales of government owned assets, investors incurred significant costs in performing due diligence, including traveling to war rooms, obtaining Broker's Price Opinions (BPO's), credit reports and other costs. In this sale, through the use of cutting edge technology, any investor with a PC and CD ROM can obtain substantial due diligence materials which they can evaluate in the comfort of their own office. (See Tab 8 herein) These materials are available for purchase by Bidders on CD ROM discs which contain: BPO's; Pictures of the subject property; A summary of the payment histories and information previously provided on the Mortgage Loan Information Diskette; Credit reports; Detailed payment histories for the past 36 months; and Sample loan documents. In addition, for this sale HUD has enhanced the ability of Bidders to obtain information on the Mortgage Loans by utilizing a document imaging process. For the convenience of Bidders, instead of reviewing hard copies of Asset Review Files, all such files have been imaged onto a database. This database, which contains all information that previously would have been available in hard copy, will facilitate a more efficient review of the Mortgage Loans at the Due Diligence Facility. Bidders can also review this database for a limited number of Mortgage Loans (identified by the Bidder) by accessing the database via modem. Investors who are interested in viewing the database in its entirety can do so by visiting the Due Diligence Facility beginning on February 12, 1996 through and including March 15, 1996.
Loan Stratification	The Mortgage Loans have been grouped into Mortgage Loan Blocks of approximately $1,000,000 each. These blocks were created by stratifying the Mortgage Loans based upon performance and then, for similarly performing loans, upon geography.
Warranties	All Mortgage Loans are being sold on an "as is," "where is" and "with all faults" non-recourse basis and without warranty or representation of any nature whatsoever, except as expressly provided in the Loan Sale Agreement.
Asset Data	Preliminary data on the Mortgage Loans is provided in tab 10 herein, including a diskette containing certain data. This as well as other information provided may not be accurate or complete. Accordingly, Bidders should conduct their own investigation and due diligence on the Mortgage Loans. The Cut-Off Date (February 29) mortgage loan data upon which Bidders will base their bid will be sent out in a supplement on or about March 11th.
Insurance	The Mortgage Loans are being sold without FHA insurance.
Servicing	All Mortgage Loans will be sold with servicing released. Mortgage Loans must be serviced by a FHA Approved Mortgagee for the remaining life of the mortgages, unless the mortgagor consents to a modification releasing this requirement or the mortgage is refinanced.
Service Charge	Some of the Mortgage Loans currently require mortgagors to pay to HUD a "Service Charge," over and above the stated interest rate on the note. After the Closing Date, the Service Charge will not be chargeable by the Purchaser of the Mortgage Loans.
Closing Fees	Successful Bidders will be required to pay, at Closing, a Closing Fee equal to five hundred dollars ($500) per Mortgage Loan Block. Such Closing Fee will be capped at fifty thousand dollars ($50,000) per Successful Bidder.
Survey Re. Placed Based Bidding Strategies	FHA has traditionally confined its origination, asset management and disposition strategies to individual asset types: single family, multifamily, co-ops, etc. Increasingly, the Department is being encouraged to explore the relationship between different parts of its portfolio and across asset types so as to maximize portfolio performance and the return on the taxpayers investment. In an effort to tap bidders' knowledge, for this transaction, FHA has designated special pools in three places (New Orleans, Los Angeles, and Washington, D.C. (specific pool numbers will follow in a supplement on or about 2/9). Bidders are requested to provide information (see Tab 4) to assist FHA in the development of Placed Based bidding strategies. The submission of this information is completely voluntary and will not be used for the purpose of determining winning bidders.
BID PROCEDURES
Bid Time/Date	Bids must be received during the period from 9:00 a.m. through 3:30 p.m. ET on March 20, 1996 in accordance with the Bid Instructions contained in the Bid Package.
Form of Sale	Sealed Bid.
Eligible Bidders	Persons who have executed a Confidentiality Statement, a satisfactory Qualification Statement and who are not otherwise ineligible, as defined below.
Ineligible Bidders	The following persons are not eligible to bid: (i) a person or entity debarred from doing business with HUD pursuant to Title 24 of the Code of Federal Regulations, Part 24; (ii) an employee of HUD; (iii) a contractor, subcontractor and/or consultant (including any agent of the foregoing) who performed services for, or on behalf of, HUD in connection with this FHA National Single Family Mortgage Loan Sale; and (iv) an individual that was a principal and/or employee of any entity or individual described in (iii) above at any time during which the entity or individual performed services for, or on behalf of, HUD in connection with this FHA National Single Family Mortgage Loan Sale.
Settlement Expenses	Successful Bidders will be required to perform and pay all costs and expenses that they incur in connection with the purchase of any Mortgage Loan Pool, including without limitation those relating to (i) delivery; (ii) any taxes, transfer or recordation or filing fees; (iii) any title commitment and/or title insurance costs; (iv) transferring the servicing of the loans which they purchase; and (v) closing fees.

SUMMARY INVESTOR DUE DILIGENCE AND BID PROCEDURES
A. TO OBTAIN A BID PACKAGE
Step 1	Fax the Confidentiality Agreement and the Qualification Statement (fully executed and unmodified) to the FHA Sales Representative at 203-584-4759. The Bid Package will be made available only to those entities that properly complete and execute the Confidentiality Agreement and the Qualification Statement and who are qualified to bid.
B. TO REVIEW OR OBTAIN ASSET REVIEW FILES FOR DUE DILIGENCE
Step 1	Bidders should select one or more of the methods available to review the Mortgage Loan information (CD ROM, limited review via modem or visiting the Due Diligence Facility). CD ROM discs may be ordered for a one time non-refundable charge of $500. Bidders can access the Mortgage Loan database either via modem or by visiting the Due Diligence Facility for an additional non-refundable charge of $500. To select one or more of the methods for reviewing the Mortgage Loan information, Bidders should contact Ron Hughes at (202) 496-1170. Bidders interested in reviewing the Mortgage Loan database either via modem or by visiting the Due Diligence Facility must schedule their review in advance. Bidders who elect to review the database either via modem or by visiting the Due Diligence Facility are encouraged to schedule such review early as FHA reserves the right to place reasonable restrictions on the time to access the database via modem and/or the number of people and the time frame allowed in the Due Diligence Facility.
C. TO BID
Step 1	A Deposit in an amount equal to 10% of the Bid Price in the case of an individual Bid or, in the case of Multiple Bids, an amount equal to 10% of the highest of the Bid Prices included in the Bidder's Multiple Bids, must be received by FHA during the period from 9:00 a.m. ET, Tuesday March 19, through 3:30 p.m. ET, Wednesday March 20, 1996. The Deposit shall be in the form of immediately available funds and must be sent in accordance with the Wire Transfer Instructions provided in Tab 3.
Step 2	Between 9:00 a.m. through 3:30 p.m. ET on March 20, 1996, submit the following original forms and documents (completed and fully executed) to Henry Fan at the address shown on page 1 of Tab 3 herein: Bid Form and Bid Diskette(s). Two (2) completed and executed originals of the Loan Sale Agreement. Power of Attorney, if applicable, for any agent or broker bidding on another entity's behalf. Updated Qualification Statement and Confidentiality Agreement All Bids must be submitted in a sealed envelope. If Multiple Bids are submitted, all such Bids must be submitted in a single sealed envelope or package.
Note: Each of the foregoing documents, the Confidentiality Statement, the Qualification Statement, the Bid Form and Bid Diskette(s), two (2) completed and executed originals of the Loans Sale Agreement and a Power of Attorney, if applicable, must be submitted by or on behalf of the same individual or entity who is submitting a Bid.

SUMMARY SCHEDULE

FHA is selling the Mortgage Loans on an "as is", "where is" and "with all faults" basis, subject only to the limited representations and warranties expressly provided in the Loan Sale Agreement. FHA reserves the right, in its sole discretion, to terminate this offering in whole or in part at any time preceding the Bid Date.

Bid Date/Time	Bids will be accepted during the period from 9:00 a.m. through 3:30 p.m. ET, March 20, 1996, by: Hamilton Securities Advisory Services, Inc. 7 Dupont Circle, N.W., Washington, D.C. 20037 The outside of the envelope must be marked: FHA National Single Family Mortgage Loan Sale Attention: Henry Fan The delivery of the Bid(s) is the sole responsibility of the Bidder, and neither FHA, nor Hamilton Securities Advisory Services, Inc., nor any of their respective officers, directors, employees, contractors or agents accepts any responsibility for lost, stolen and otherwise undelivered Bids.
Bids on Mortgage Loan Pools	The Mortgage Loans have been grouped into approximately 750 one million dollar Mortgage Loan Blocks. They have been stratified by performance and then, for similarly performing loans, by geography. That is, the stratification looks first to performance when identifying loans for a block by separating the Mortgage Loans into five performance categories: (A) No Forbearance Agreement - Performing, (B) No Forbearance Agreement - Delinquent 90 Days and Less, (C) No Forbearance Agreement - Delinquent Greater Than 90 Days, (D) Forbearance Agreement - Delinquent 90 Days and Less, and (E) Forbearance Agreement - Delinquent Greater Than 90 Days. Then, within each category, the Mortgage Loans were grouped by zip codes. The stratification therefore ensures that each Mortgage Loan Block is composed of Mortgage Loans located in a contiguous geographic area. Qualified Bidders will be allowed to provide Bids on Mortgage Loan Pools which they create from any combination of Mortgage Loan Blocks identified on the Bid Diskette(s) subject only to the following conditions: Minimum pool size is one Mortgage Loan Block Maximum number of Bids per Bidder is ten Bids are to be expressed as a percentage (carried to one hundred thousandth of one percent) of the Aggregate Unpaid Principal Balance of the Mortgage Loan Pool.
Form of Bid	Bidders must submit each of the following with their Bids: (a) An Executed Bid Form. (b) A Bid Diskette identifying each bid. The form of the Bid Diskette with an example and further instructions which will be provided on or about March 11, 1996. Bids must be expressed as a percentage (carried to one hundred thousandth of one percent) of the Aggregate Unpaid Principal Balance of the Mortgage Loan Pool. (c) Deposit of 10% of the highest Bid Price. (d) Two (2) originals of the Loan Sale Agreement (each of which shall be completed and executed by the Bidder). (e) An original executed Power of Attorney, if applicable, for any agent or broker bidding on another entity's behalf. (f) Updated Qualification Statement and Confidentiality Agreement All Bids must be submitted in a sealed envelope. If Multiple Bids are submitted by a Bidder, all Bids must be submitted in a single sealed envelope or package.
Nonconforming Bids	Any Bid received which is conditional or which includes altered or missing documentation, including but not limited to a missing Federal Reference Number, will constitute a nonconforming Bid and may be rejected. Any Bid received after 3:30 p.m. ET on March 20, 1996 will be marked "Late - Not Accepted" and returned to the Bidder.
Deposit	A Deposit of 10% of the Bid Price in the case of an individual Bid or, in the case of Multiple Bids, 10% of the highest Bid Price, must be received by FHA during the period from 9:00 a.m. ET, Tuesday , March 19, through 3:30 p.m. ET, Wednesday, March 20, 1996. The Deposit shall be in the form of immediately available funds and be sent in accordance with the Wire Transfer Instructions provided herein. The amount of the Deposit, the Federal Reference Number and the time the wire transfer was initiated by the sending bank must be included on the Bid Form. Bids submitted without having submitted the required Deposit, the Federal Reference Number or with a Federal Reference Number that does not match a wire deposit may be rejected as nonconforming. Deposits will be refunded without interest to Unsuccessful Bidders via wire transfer within 6 (six) Business Days of the Award Date. If the Bidder becomes a Successful Bidder, THE DEPOSIT WILL BE NON-REFUNDABLE and will be applied toward the Closing Date Payment.
Event of Bid Termination	FHA reserves the right to terminate this FHA National Single Family Loan Sale in whole or in part prior to the Bid Date.
Bid Evaluation	FHA shall use its sole discretion to evaluate bids. Should FHA decide that such action would be in the best interests of the U.S. Government, it may in its sole discretion reject any and all bids. FHA reserves the right to conduct a "best and final" round among the top Bidders (either the highest Bidders or any Bidder within 5% of the highest Bid(s)) for Mortgage Loan Blocks and/or Mortgage Loan Pools which it selects at its sole discretion. Bidders must have an authorized contact person available during the period between 1:30 p.m. ET and 4:30 p.m. ET on Friday, March 22, 1996. During this time period, Hamilton will send notice by facsimile to those Bidders selected for participation in the "best and final" round and present them with the opportunity to increase their Bid(s). Bidders will be given one hour to submit to fax number to: (202) 496-6777 an increased Bid. The conducting of a "best and final" shall not be construed as a rejection of any Bid made by a Bidder or preclude Seller from thereafter accepting any Bid made by a Bidder. In addition, FHA reserves the right to re-offer Mortgage Loan Blocks and/or Mortgage Loan Pools which it selects at its sole discretion. The conducting of a re-offering shall not be construed as a rejection of any Bid made by a Bidder or preclude Seller from thereafter accepting any Bid made by a Bidder.
Withdrawal Of Bids	Bidders may withdraw a previously submitted Bid by faxing a formal withdrawal request to Henry Fan, (202) 496-6777, signed by the Bidder or Bidder's agent under power of attorney, which is received no later than 3:30 p.m. ET on March 20, 1996. Bids become irrevocable at 3:30 p.m. ET on March 20, 1996. Late withdrawals will not be honored.
Award of Bid	FHA will fax notification to Successful Bidders on March 22, 1996. The Successful Bidders will also be sent written notice ("Bid Confirmation Letter") of FHA's acceptance. No verbal or telephonic acceptance by or on behalf of FHA shall have any effect whatsoever, or impose or create any liability on the part of FHA.
Tie Bids	In the event that there is more than one Successful Bidder on a Mortgage Loan Pool, following a "best and final" round, FHA will determine the Successful Bidder by lottery.
Publication of Winning Bids	FHA reserves the right, at its sole discretion, to publish, for each Mortgage Loan Pool sold: (i) the name of the Successful Bidder; and (ii) the amount of the Successful Bid, either in dollar amount or as a percent of the Aggregate Unpaid Principal Balance.
Bids by Brokers or Agents	Any Bid by a broker or other agent for a principal must be in the name of the principal and signed by the broker/agent as attorney-in-fact for the principal. All bid documents must be executed so as to bind the principal by the broker/agent as attorney-in-fact. An original, executed power of attorney satisfactory to FHA, as to form and content, must be submitted with the Bid. No commission or other broker's fees will be paid by FHA.
Terms of Bids	By submitting a Bid, (and assuming the Bid is not withdrawn by 3:30 p.m. ET on March 20, 1996 as set forth herein), the Bidder is making an irrevocable offer to purchase the Mortgage Loans identified on the Bid Diskette.
Execution of the Loan Sale Agreement	The failure to submit two unaltered executed Loan Sale Agreements will render a Bid non-conforming and subject to rejection.
Withdrawal Of Mortgage Loans	FHA reserves the right, in its sole discretion, and for any reason whatsoever, to withdraw Mortgage Loans from the FHA National Single Family Loan Sale at any time prior to the Bid Date. After the Bid Date, FHA may remove a Mortgage Loan only as provided in the Loan Sale Agreement .
Calculation of Closing Date Payment	The calculation of the Closing Date Payment shall be the Bid Price (which is the product of the Bid and the Aggregate Unpaid Principal Balance of the Mortgage Loan Pool) as of the Cut-off Date subject to adjustments as set forth in Loan Sale Agreement.

To:   Hamilton Securities Advisory Services, Inc.
Attn:   Henry Fan
7 Dupont Circle, N.W.
Washington D.C. 20036
Phone: (202)496-6700

From: Bidder Name:                      _______________________________________ 

Address:                                _______________________________________ 

City, State, Zip:                       _______________________________________ 

Authorized Contact Person:              _______________________________________ 

Phone:                                  _______________________________________ 

Fax:                                    _______________________________________ 

{Servicer Information:

FHA Servicer Mortgagee Name:  

FHA Servicer Mortgagee Number:}         __________________________

Serial No(s). on Bid Diskette(s):       __________________________

				        __________________________

				        __________________________

				        __________________________

Wire:     Agent Bank:                   _______________________________________ 

Tracking: Federal Reference Number:     _______________________________________ 

  Dollar Amount Sent:                   _______________________________________ 

  Time Sent:                            _______________________________________ 

The undersigned hereby offers to purchase those Mortgage Loan Blocks identified on the Bidder's Bid Diskette(s) submitted herewith and made a part hereof. The Bid will be that percentage (carried to one hundred thousandth of one percent; for example 99.55555%) as provided on the Bid Diskette(s). This completed form in conjunction with the Bid Diskette(s) constitutes the "Bid Form."

The information contained on the bid diskette shall constitute the Bid or Bids. The risk of any inability to read the Bid Diskette resulting in the Bid being determined to be a non-conforming Bid or any error contained on the Bid Diskette shall be borne by the Bidder.

This Bid Form is submitted along with two (2) originals of the Loan Sale Agreement included in the Bid Package, each of which is executed and completed by the undersigned and neither of which is modified from the form of Loan Sale Agreement included in the Bid Package. The undersigned acknowledges and agrees that, effective at 3:30 p.m. ET on March 20, 1996, it is legally bound by the Loan Sale Agreement and its Bid is irrevocable.

Except as otherwise defined herein, all initially capitalized terms shall have the same meanings given to such terms in the Loan Sale Agreement . The undersigned acknowledges and agrees that the undersigned's Bid shall become irrevocable at 3:30 p.m. ET on March 20, 1996 and that, if the undersigned's Bid is accepted, the Bid Price to be paid by the undersigned, pursuant to the Loan Sale Agreement , shall be adjusted only as provided in the Loan Sale Agreement .

The undersigned further acknowledges that FHA may, subject to FHA's discretion: (i) accept or reject this Bid; and (ii) waive any technical or formal defect relating to the Bidder's bid. The undersigned further acknowledges that the sale of the Mortgage Loans is made on an "as is", "where is" and "with all faults" basis, and without recourse, representation or warranty of any nature whatsoever, whether expressed or implied, except as may be expressly provided in the Loan Sale Agreement . The undersigned represents that the Bidder is not one of the following: (1) A person or entity debarred from doing business with HUD pursuant to 24 Code of Federal Regulations Part 24; (2) An employee of HUD; (3) A contractor, subcontractor and/or consultant (including any agent of the foregoing) who performed services for, or on behalf of, HUD in connection with this FHA National Single Family Mortgage Loan Sale; and (4) An individual that was a principal and/or employee of any entity or individual described in (3) above at any time during which the entity or individual performed services for, or on behalf of, HUD in connection with this FHA National Single Family Mortgage Loan Sale.

The undersigned represents and warrants that the Qualification Statement, previously executed to obtain the Bid Package, continues to be true and correct in every respect.

The undersigned represents that it has full authority to deliver this Bid and that the person executing this Bid has full authority to do so on behalf of the undersigned:

_______________________________________________________________

Bidder Signature

_______________________________________________________________

Date

_______________________________________________________________

Bidder's Name

_______________________________________________________________

Name of Individual Signing

_______________________________________________________________

Title of Individual Signing

In the event the undersigned is not a Successful Bidder, the Deposit is to be returned, without interest, pursuant to the following instructions:

[Include wire transfer instructions for return of funds to Bidder]

Deposit Instructions:

All Bidders are required to make an Deposit as described in the Bid Instructions.

This Deposit should be wired to the following:

R & T Number:	061008766
Bank:	FHLB ATL
City/State:	Atlanta, GA
To Credit:	FHA Single Family Account
Account Number:	2997500

Please remember that the Federal Reference Number from this wire transfer MUST be included on the Bid Form provided herein.

Also, please include the attached "Return Wire Transfer Form" with your Bid. This will help expedite the return of the Unsuccessful Bidder's Funds.

To:

The Hamilton Securities Advisory Services, Inc.

Attn. Henry Fan
7 Dupont Circle, N.W.
Washington, D.C. 20036
Phone: (202) 496-6700
Fax: (202) 496-6777

From:

Bidder Name:               _______________________________

Address:                   _______________________________

City, State, Zip Code:     _______________________________

Authorized Contact Person: _______________________________

Phone:                     _______________________________

Fax:                       _______________________________

In the event that the Bidder is not a Successful Bidder, the Bidder's Deposit should be returned according to the following instructions:

Return Wire Instructions:

R & T Number:              _______________________________

Bank:                      _______________________________

City/State:                _______________________________

To Credit:                 _______________________________

Account Number:            _______________________________

Deposit:                   _______________________________

The Federal Housing Administration (FHA) has traditionally confined its origination, asset management, and disposition strategies to individual asset types: single family, multifamily, co-ops, etc. Increasingly, the Department is being encouraged to explore the relationship between different parts of its portfolio and across asset types so as to maximize portfolio performance and the return on the taxpayers investment. For example, to what extent do disposition strategies on the assigned single family mortgages impact the performance of the single family insurance-in-force portfolio? How do single family disposition plans affect the multifamily portfolios?

Linkages Between Portfolio Asset Types

Over the years, FHA has invested substantial resources in communities through its insurance and subsidy programs. The Department thus has a strong economic interest in protecting the health of its insurance funds and reducing losses. Property dispositions and mortgage sales have typically focused only on maximizing the return on individual properties or mortgage portfolios. Anecdotal information suggests that alternate disposition strategies which contemplate the linkages between different parts of the portfolio may offer an opportunity to improve overall portfolio performance. One such strategy could include competitive offerings of multiple asset types organized around "place". Possible structures include packaging:

• Single family mortgages with multifamily mortgages
• Single family properties with multifamily properties
• Single family and multifamily mortgages and properties
• Mortgages and properties with the insured portfolio

Place-Based Asset Sales

"Place-based" asset sales could potentially be of particular value in maximizing the overall return to the FHA Fund in communities that are lagging economically and where FHA has a large financial investment.

"Placed-based" asset sales might include the following features:

• structure the award of bids to consider "two-tests:" (1) the monetary bid for the loans; and (2) other items of value that increase the overall return to the FHA Fund and the taxpayers.

• consider the idea of creating neighborhood community dispositions which auction single family and/or multifamily assets on a competitive placed-based basis.

• offer modified servicing instructions for particular geographic areas or consider other actions that would mitigate losses on mortgage insurance to finance.

Buyers Input on Achieving FHA Disposition Goals

The Department believes it can learn a great deal about optimal disposition methods from those who know best the varying aspects of FHA's portfolio, including asset type, assigned and insured mortgages and real estate owned.

In an effort to tap bidders' knowledge, for this transaction, FHA has designated special pools in three places (New Orleans, Los Angeles, and Washington D.C. - specific pool numbers will follow in a supplement on or about 2/9). We are asking bidders on these pools, on a voluntary basis, to provide the following information on at least one of the places:

• How do you intend to manage and liquidate this portfolio, and what impact are those activities anticipated to have on the community where the specific "pool" is located?

• What impact do you believe your plan will have on the entire FHA portfolio (Insured, Assigned, REO for both SF and MF) in the immediate location of the specific "pool?" [Note: detailed information on the FHA portfolio in this place will be provided in a supplement on or about February 9.]

• Based on the fact that FHA has multiple product types located in communities throughout the country, are there alternative disposition methods (such as disposition on a neighborhood basis as opposed to MF or SF sales) to which your company could provide for a better return on the overall FHA portfolio in that community; and if so, what would they be?

While the information above is requested on at least one of the aforementioned pools, it will not be used for the purposes of determining the winning bidder, and your submission is voluntary. Pools will be awarded solely based on a financial bid. The Department intends to use the information in developing future loan sales strategies.

The mission of the Federal Housing Administration ("FHA") single family insurance program is to make mortgage credit more readily available to American home buyers, and particularly to those with low or moderate income, by insuring private sector lenders against the risk of default. FHA is a part of the U.S. Department of Housing and Urban Development ("HUD"). The names may, for all practical purposes, be used interchangeably. FHA provides HUD's mortgage insurance services.

Insurance Claims - FHA pays insurance claims for one of three reasons: (i) borrower default (whereby the lender forecloses, obtains title, and conveys title to HUD in exchange for the payment of the mortgage insurance benefits), (ii) automatic assignment (whereby the private sector mortgagee exercises a 20-year "put" to FHA of a performing mortgage), or (iii) mortgage assignment (whereby an eligible borrower's mortgage is assigned to FHA in order to obtain extended forbearance relief to avoid foreclosure.).

Once a claim for FHA insurance benefits is paid and the mortgage and note are assigned, FHA becomes the mortgagee of record and services the loan.

HUD Servicing - All HUD held loans are serviced by field office staff. The Office of Mortgage Insurance Accounting and Servicing ("MIAS") in HUD's central office in Washington, D.C., is responsible for data collection and maintenance on all HUD held notes. Actual billing, collection and data file management functions are handled by private sector contractors.

Loan Programs Involved in This Sale - The Mortgage Loans offered for sale in this Bid Package were originated under various Sections of the National Housing Act. The Section of the National Housing Act under which each Mortgage Loan was originated and the type of Mortgage Loan are indicated by the ADP code. A brief description of the Sections of the National Housing Act, a legend for the ADP codes, and HUD Program Handbooks will be provided at the Due Diligence Facility.

Recent revisions to the Community Reinvestment Act (12 U.S.C. 2901 et seq., "CRA") effective July 1, 1995, are likely to create both needs and opportunities in the lending and investment communities. As is consistent with prior regulations, an institution's CRA rating will reflect the institution's record of helping to meet the credit needs of its entire community, including low-and moderate-income neighborhoods. Under CRA's new regulations banks will continue to be evaluated with respect to their record of helping to meet the credit needs of their Assessment Area(s) through, among other categories, their home mortgage servicing portfolios.

These loans have been identified as potentially CRA eligible by all four federal regulators the Office of Thrift Supervision (OTS), Office of the Controller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve.

Closing Date	April 1- April 12, 1996
Closing Date Payment Notice	No later than three days prior to the Closing Date, HUD shall provide Successful Bidders with a written notice identifying the Closing Date Payment as described in the Loan Sale Agreement.
Closing Date Payment	Closing Date Payments will be accepted during the period from 9:00 a.m. ET through 1:00 p.m. ET on the Closing Date. The Closing Date Payment must be in the form of immediately available funds and sent in accordance with Wire Transfer Instructions.
Legal File Documents	Successful Bidders will be responsible to take delivery of the Mortgage Loan Documents. All costs associated with retrieving the Legal Files will be the responsibility of the Successful Bidders. On the Mortgage Loan Documents Availability Date the Mortgage Loan Documents shall be picked up by Successful Bidders. Successful Bidders must execute and return to HUD five (5) days prior to the Mortgage Loan Documents Availability Date a notice that identifies: (i) the person designated by Successful Bidders to pick up the Mortgage Loan Documents; and (ii) the time that the Successful Bidders intend to retrieve the Mortgage Loan Documents.
Servicing Files	Successful Bidders will be responsible to take delivery of the Servicing Files. All costs associated with retrieving the Servicing Files will be the responsibility of the Successful Bidders. On the Servicing Files Availability Date, the Servicing Files shall be picked up by Successful Bidders. The servicing files will be available for pick up at the Due Diligence Facility no later than May 28, 1996. Successful Bidders must execute and return to HUD five (5) days prior to the Servicing Files Availability Date a notice that identifies: (i) the person designated by Successful Bidders to pick up the Servicing Files; and (ii) the time that the Successful Bidders intend to retrieve the Servicing Files.
The Transfer Documents	Except as set forth in the Loan Sale Agreement, Successful Bidders shall make no modifications to the forms of the Transfer Documents.
Notifications	At HUD's election, a notification shall be given either by the Successful Bidder alone or by HUD and the Successful Bidder jointly to all mortgagors. If HUD elects to have Successful Bidder give the notification alone, Successful Bidder shall, at Successful Bidder's cost and expense and in accordance with 24 Code of Federal Regulations Section 3500.21 (d)(2)(B), send the notification to all Mortgagors by first class mail at the last known mailing address of such Mortgagors . If HUD elects to have the notification given jointly, then: not less than 15 days prior to the Servicing Files Availability Date, HUD shall, at HUD's cost and expense, send the notification to all Mortgagors by first class mail at the last known mailing address of such Mortgagors;
Recordation of Transfer Documnets	Successful Bidders shall, at their own cost and expense, use their best efforts to cause all applicable Transfer Documents with respect to each Mortgage Loan to be recorded or filed in the appropriate land or other records of the appropriate county or other jurisdiction within one hundred and eighty (180) calendar days following the Mortgage Loan Documents Availability Date.

THE INFORMATION REGARDING THE MORTGAGE LOANS IS BEING FURNISHED FOR THE CONVENIENCE OF BIDDERS. THIS INFORMATION DOES NOT PURPORT TO BE ALL-INCLUSIVE OR TO CONTAIN ALL OF THE INFORMATION A BIDDER SHOULD CONSIDER IN EVALUATING A PURCHASE OF ANY OR ALL OF THE MORTGAGE LOANS. NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY OF THE INFORMATION CONTAINED IN THESE MATERIALS IS MADE BY HUD OR FHA, OR ANY OF THEIR RESPECTIVE CONTRACTORS, REPRESENTATIVES OR AGENTS, OR ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT OR REPRESENTATIVE OF ANY OF THE ABOVE. THIS INFORMATION SHALL NOT BE RELIED UPON AS A PROMISE OR REPRESENTATION, WHETHER AS TO THE PAST, PRESENT OR FUTURE. BIDDERS SHOULD CONDUCT THEIR OWN INDEPENDENT INVESTIGATION AND ANALYSIS OF THE MORTGAGE LOANS, INCLUDING WITHOUT LIMITATION THE INFORMATION CONTAINED OR REFERRED TO HEREIN, AND SHOULD CONSULT WITH THEIR OWN ADVISORS REGARDING PURCHASE OF ANY OR ALL OF THE MORTGAGE LOANS. THESE MATERIALS HAVE BEEN COMPILED AS OF THE DATE OF THE BID PACKAGE AND MAY CHANGE WITHOUT NOTICE.

The information in this section summarizes the characteristics of the Mortgage Loans based on the following attributes.

Interest rates on the Mortgage Loans are presented in the chart below.

Coupon	Number of Loans	UBP
0 - 5.99	96	$438,889
6 - 6.99	216	$2,229,450
7 - 7.99	1229	$25,641,297
8 - 8.99	3061	$102,041,165
9 - 9.99	3768	$189,565,210
10 - 10.99	4637	$265,265,798
11 - 11.99	1703	$92,473,603
12 - 12.99	997	$47,690,150
13 - 13.99	530	$22,400,291
14 - 14.99	163	$6,426,405
15 - 15.99	105	$3,309,367
16 - 17.50	38	$1,116,958
Totals	16,543	$758,598,583

Section II: MATURITY DATE

Maturity dates on the Mortgage Loans are presented in the chart below.

Term to Maturity	Number of Loans	UPB
< 60	992	$9,114,314
60 - 89	782	$12,421,426
90 - 119	820	$18,919,184
120 - 149	1388	$30,920,386
150 - 179	1885	$85,222,205
180 - 209	953	$45,189,945
210 - 239	1659	$86,731,017
240 - 270	5164	$308,245,451
> 270	2900	$181,834,656
Total	16,543	$758,598,583

Section III: GEOGRAPHIC LOCATION

The properties securing the Mortgage Loans are located throughout the United States, with concentrations in certain states as presented in the chart below.

State	Number of Loans	UPB
TX	3636	$167,479,562
CA	1422	$92,405,520
CO	1233	$76,406,002
LA	988	$47,158,817
TN	827	$37,739,231
OK	846	$34,583,709
GA	795	$34,292,732
MO	938	$32,282,642
MD	449	$29,935,374
CT	214	$19,431,231
FL	428	$19,311,285
AL	589	$18,753,674
NY	349	$18,084,439
MI	922	$17,692,787
OTHER	2907	$113,01,578
Total	16,543	$758,598,583

Section IV: PERFORMANCE

State	Number of Loans	UPB
A	1375	$33,477,786
B	754	$18,201,809
C	6168	$308,453,008
D	6387	$303,273,943
E	1859	$96,192,036
Total	16,543	$758,598,583