U.S. Department of Housing and Urban Development
                   Washington, D.C.  20410-8000
                           May 16, 1997
 
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
 
                                                           TI-452
 
TO:  ALL TITLE I LENDING INSTITUTIONS
 
SUBJECT:  Mandate for Electronic Funds Transfer (EFT) for Title I
          Claims
 
     Effective July 1, 1997, all payments for Title I Insurance
Benefits will be made via Electronic Funds Transfer (EFT) through
the Automated Clearing Housing (ACH) network.  This mandate
enforces the Debt Collection Improvement Act of 1996, Section
31001(x) which directs agencies to make all Federal payments by
EFT.  Lenders who are not currently receiving Title I Insurance
claim payments via EFT must have an ACH Vendor/Miscellaneous
Payment Enrollment Form (SF 3881) on file at HUD no later than
May 30, 1997.
 
     HUD began payment of claims for insurance benefits through
the ACH network in June 1993.  The payment system is called
Vendor Express and offers the following benefits:
 
     -    No deposit delays
 
     -    Prompt availability of funds
 
     -    Better cash management
 
     -    No lost or stolen checks
 
     -    Fully traceable payments
 
     To assist your company in identifying payments, an addendum
record will be included with each payment issued to your bank.
This includes the case number, your company's reference number,
and the disbursement schedule number.  HUD will use the Cash
Concentration or Disbursement Plus (CCD+) ACH payment format to
transmit your payments and addendum records to your bank.
Although you will continue to receive an advice of payment
notification letter for each payment, you should discuss with
your bank how and when the addendum data furnished by HUD will be
provided to your company.
     ACH enrollment forms were previously sent to lenders.
However, if you need an enrollment form or have questions, please
contact Hameeda Smith or LaVerne Edmondson on (202) 755-7540.
 
                              Sincerely yours,
 
                              Nicolas P. Retsinas
                              Assistant Secretary for Housing-
                                Federal Housing Commissioner