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

                                  July 3, 1996

OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
                                                       TI-440-S
                                                       Supplement

TO:  ALL TITLE I LENDING INSTITUTIONS

SUBJECT:  REVISED FEES AND CHARGES FOR TITLE I PROPERTY IMPROVEMENT
          LOANS

     On May 2, 1996, the Department issued Title I Letter TI-440 ,
which, among other things, changed the minimum origination fee that
may be financed in a new property improvement loan from five percent
of the loan amount to five percent of the net proceeds disbursed to
the borrower or other parties to the loan transaction.

     Some lenders raised concerns about this change because it would
require adopting a fee computation method that is different from the
approach used in other residential mortgage loans. They pointed out
that the change would be inconvenient and expensive to implement,
because many lenders use "off-the-shelf" software to compute their
loans, and some of these software programs can only be modified by
the software vendor.

     The Department has decided that the issues raised by these
lenders are valid. Therefore, effective immediately, the first item
in the list of fees and charges that may be financed in a property
improvement loan in TI-440  is revised to read as follows:

          1.   An origination fee, not to exceed five percent of the
               loan amount, on any new property improvement loan.

     If you have questions about this letter, please write to Maurice
Gulledge, Chief, Home Improvement Insurance Branch, 490 L'Enfant
Plaza East, Suite 3214, Washington, D.C. 20024, or call the Title I
staff at 202-755-7400.

                                   Sincerely yours,

                                   Nicolas P. Retsinas
                                   Assistant Secretary for Housing-
                                   Federal Housing Commissioner