Then my follow up questions were ignored for days.

He may have just ignored management's request altogether.  

Do you think offer $120 and work up or would that offer be ignored?

They ignore the MH.  

Most people who are new to renovating make their biggest and most expensive mistakes in choosing the wrong people to do the work and not knowing how to supervise them properly, and being ignorant on how to manage a budget.  

Almost, but not quite.I ignore all the mystics, seers and soothsayers with their tinctures, potions and remedies. 

I suppose this rule is a good thing as it is a protection against ignorance but from FHA's eye's its a protection to them incase the property becomes a REO.

They see you get ahead and they are stuck, so it is easier to just ignore it.

But if you're going to do it anyways and ignore that advice, put both on loan, both on title. 

Also, I'm sure this is an ignorant newbie question, but what are the Levels of alteration you are talking about (2 vs. 3?)