U. S. Department of Housing and Urban Development
                                Washington, D.C. 20410-8000

                                      October 26, 1992

OFFICE OF THE ASSISTANT SECRETARY                                    TI-420
FOR HOUSING-FEDERAL HOUSING COMMISSIONER

    MEMORANDUM FOR:  ALL TITLE I LENDING INSTITUTIONS
                     Attn:  Installment Loan Department
    SUBJECT:  Waiver of the Title I Regulations to Benefit Victims of
              Hurricanes Andrew and Iniki
 
           The Department is very interested in making Title I property
    improvement and manufactured home loans available to help the victims
    of Hurricanes Andrew and Iniki in repairing, rebuilding or replacing
    their homes.  Title I loan proceeds can be used alone or in combination
    with other funding sources such as hazard insurance benefits, Federal
    or State disaster loans and grants, and conventional loans.
 
           To reduce the initial cost of Title I loans to borrowers in
    hurricane impact areas, the Department has agreed to waive some of the
    provisions of §201.25(c), to permit the financing of certain fees and
    charges which the lender normally collects from the borrower as part of
    the borrower's initial payment on a Title I loan.
 
    Waiver to Permit Financing of Certain Fees and Charges
 
           Section 201.25(c) of the Title I regulations lists certain fees
    and charges which may not be included in the loan amount or otherwise
    financed or advanced by other parties to the loan transaction.  The
    Department has agreed to waive § 201.25(c) to permit the following fees
    and charges to be financed in the Title I loan, as long as the maximum
    loan amounts in §201.10 are not exceeded and the conditions outlined
    below are met:
 
           o      An origination fee, not to exceed one percent of the loan
                  amount (§201.25(c)(1));
 
           o      Recording fees, recording taxes, and filing fees
                  (§201.25(c)(3));
 
           o      Documentary stamp taxes (§201.25(c)(4)); and
 
           o      Appraisal fees that are not normally eligible for
                  financing (§201.25(c)(8)).
 
           Other fees and charges listed in §201.25(c) may not be financed
    under any circumstances.
 
_____________________________________________________________________
                                     2
 
  Conditions on the Waiver
 
         This waiver of the Title I regulations is applicable only under
  the following conditions:
 
         1.     Borrowers must be able to demonstrate to the satisfaction
                of the lender that they are victims of Hurricane Andrew or
                Hurricane Iniki.
 
         2.     These fees and charges may be financed only in connection
                with a loan for the alteration, repair or improvement of
                property located in one of the following areas, or for the
                purchase of a manufactured home to be sited in one the
                following areas:
 
                a.     Dade, Broward, and Monroe counties in Florida.
 
                b.     Terrebonne, Lafourche, St. Martin, Assumption,
                       Iberia, St. John the Baptist, Iberville, and St.
                       Mary parishes in Louisiana.
 
                c.     The State of Hawaii.
 
         3.     This waiver is applicable only to loans for which the
                credit application is received on or before June 30, 1993,
                unless the waiver is extended prior to that date.
 
  For Further Information
 
         If you have any questions about this letter, please write to
  Robert J. Coyle, Director, Title I Insurance Division, Room 9158, 451
  Seventh Street, S.W., Washington, D.C. 20410, or call the Department
  toll-free at 1-800-733-HOME (1-800-733-4663).
 
                                       Sincerely yours,
 
                                       Arthur J. Hill
                                       Assistant Secretary for
                                       Housing-Federal Housing Commissioner
 
*U.S. Government Printing Office: 1992 - 342-362/60322