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

                           March 19, 1997

OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER

                                                              TI-445

TO:  ALL APPROVED TITLE I LENDERS

SUBJECT: Special Title I Assistance to Victims in Presidentially Declared Major
     Disaster Areas - Indiana, Tennessee, West Virginia and additional counties
     added to Previous Disaster Declarations for Kentucky, Ohio and Arkansas

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:

Indiana:  The counties of Clark, Crawford, Dearborn, Floyd, Harrison, Jefferson,
Ohio, Perry, Posey, Spencer, Switzerland, Vanderburgh and Warrick, effective
March 6, 1997.

Tennessee:  The counties of Carroll, Cheatham, Dyer, Madison, McNairy,
Montgomery and Obion, effective March 7, 1997.

West Virginia: The counties of Braxton, Cabell, Calhoun, Clay, Gilmer, Jackson,
Kanawha, Lincoln, Mason, Putnam, Roane, Tyler, Wayne, Wetzel, Wirt and Wood,
effective March 7, 1997.

Kentucky: The additional counties of Breckenridge, Campbell, Carroll, Christian,
Daviess, Henry, Gallatin, Kenton, Lewis, McLean, Meade, Nelson, Oldham, Owen and
Trimble, effective March 6, 1997.

Ohio: The additional counties of Clermont and Hamilton, effective March 6, 1997.

Arkansas:  The additional counties of Hot Springs, Mississippi, Poinsett and
White, effective March 5, 1997.

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

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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 borrower(s) 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 a 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 the 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. Restinas
                                        Assistant Secretary for Housing-
                                        Federal Housing Commissioner