U.S. Department of Housing and Urban Development Washington, D.C. 20410-8000 February 10, 1997 OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER TI-443 TO: ALL APPROVED TITLE I LENDERS SUBJECT: Special Title I Assistance to Victims in Presidentially Declared Major Disaster Areas The Department is interested in Title I lenders providing special assistance to victims in Presidentially declared major disaster areas. The following areas have recently been declared major disaster areas by the President: Nevada: The counties of Douglas, Lyon, Storey and Washoe and the independent city of Carson City, effective January 3, 1997. Idaho: The counties of Adams, Boundary, Bonner, Boise, Clearwater, Elmore Gem, Idaho, Latah, Payette, Shoshone, Valley and Washington, effective January 4, 1997. California: The counties of Alpine, Amador, Butte, Calavaras, Colusa, Del Norte, El Dorado, Glenn, Humboldt, Lake, Lassen, Madera, Mendocino, Modoc, Mono, Monterey, Napa, Nevada, Placer, Plumas, Sacramento, San Benito, San Joaquin, San Mateo, Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tuolumne, Yolo and Yuba, effective January 4, 1997. South Dakoka: All counties effective January 10, 1997. North Dakota: All counties effective January 12, 1997. Minnesota: The counties of Becker, Big Stone, Blue Earth, Brown, Chippewa, Clay, Clearwater, Cottonwood, Douglas, Faribault, Grant, Jackson, Kandiyohi, Kittson, Lac qui Parle, Lincoln, Lyon, Mahnomen, Marshall, Martin, Murray, Nocollet, Nobles, Norman, Otter Tail, Pennington, Pipestone, Polk, Pope, Red Lake, Redwood, Renville, Rock, Roseau, Stevens, Swift, Traverse, Watonwan, Wilkin and Yellow Medicine, effective January 16, 1997. Washington: The counties of King and Snohomish, effective January 17, 1997. Oregon: The counties of Jackson, Josephine and Klamath, effective January 23, 1997. Page 2 Existing Title I Loans: Lenders with existing loans in the above areas are encouraged to use all available forbearance measures to assist Title I borrowers who have experienced a loss of income or other financial difficulties resulting from the major disaster. In recognition that it may take additional time for a borrower to bring a defaulted loan current, the Department will extend the 9 month claim filing period to 12 months. This waiver of Section 201.54(b) of the Title I regulations is available when the lender documents the loan file to show that the borrowers experienced a loss of income or other financial difficulties directly attributable to the disaster, and that additional time to provide forbearance was required. New Title I Loans: In the case of Title I lenders accepting new Title I loan applications in these disaster areas, Section 201.20(b)(3) of the Title I regulations was recently modified to add a new provision that allows lenders to approve the use of loan proceeds to pay for emergency repairs made before final loan approval when the property is located in an Presidentially declared disaster area.' The lender needs to document the loan file that the repair work needed to be done before the loan was approved. The most common reasons are to protect a structure from additional damage from the elements or to stabilize the structure until the replacement building materials can be installed. These provisions apply for one year from the effective date of each Presidential declaration. Any areas added to these declarations will also be eligible for this disaster relief under the same conditions. The Department appreciates any assistance Title I lenders can provide to victims in these disaster areas. If you have any questions about this letter, please write to Maurice D. Gulledge, Chief, Home Improvement Insurance Branch, 451 Seventh Street, S. W., Room 9272, Washington, D.C. 20410, or call 202-708-6396. Sincerely, Nicolas P. Retsinas Assistant Secretary for Housing- Federal Housing Commission