News Release

HUD EXTENDS TARGETED LENDING INITIATIVE TO HURRICANE KATRINA DISASTER AREAS

WASHINGTON – Housing and Urban Development Secretary Alphonso Jackson announced today that as part of HUD’s wide ranging hurricane relief effort, Ginnie Mae, a government-owned corporation located within HUD, will extend its Targeted Lending Initiative (TLI) to the areas hardest hit by Hurricane Katrina. The TLI is an innovative program that encourages lenders to finance housing in underserved areas.

“Expanding the TLI program to include areas affected by Hurricane Katrina is just one of the many ways HUD is contributing. We are doing everything we can to help. Using the TLI program to stimulate financing for affordable housing in the devastated areas will provide lasting relief for hurricane victims,” said Jackson.

Under the TLI, Ginnie Mae will reduce its guarantee fee by as much as 50 percent when approved issuers originate or purchase mortgage loans in the hardest hit hurricane disaster areas. Reducing the guaranty fee lowers the lender’s expenses and provides an incentive to make more loans. Ultimately, this disaster relief will make more money available for affordable housing in the areas devastated by Hurricane Katrina.

The TLI program is already used to encourage mortgage lending in many underserved communities. Currently, more than 10,000 census tracts are identified as targeted areas within the TLI program. Additional TLI areas include areas selected by HUD as Urban and Rural Empowerment Zones, Urban and Rural Enterprise Communities, Urban and Renewal Communities, areas defined by HUD as underserved, and census tracts with Native American population greater than 50 percent. Regarding specific hurricane disaster locations, the TLI will be extended to all areas FEMA declares eligible for individual assistance, and this assistance will be available to Hurricane Katrina victims for the next 48 months.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation’s fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.