U. S. Department of Housing and Urban Development
                   Washington, D.C. 20410-MO
 
                        August 14, 1997
 
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
 
                                                  TI-457
 
TO:  ALL APPROVED TITLE I LENDERS
 
SUBJECT:  Special Title I Assistance to Victims in Presidentially
          Declared Major Disaster Area - Colorado
 
     This Title I Letter is to advise you of recent Presidential
declaration of a major disaster area which allows you to provide
special assistance to current Title I borrowers in this area as
well as potential borrowers.  This declaration was issued to
assist victims of storms and flooding in Colorado.  The
President's declaration of a major disaster area in Colorado was
signed on August 1, 1997 and includes Larimer, Logan and Morgan
counties.
 
     The following are the special provisions of the Title I
Property Improvement Loan program for borrowers in these
localities:
 
     Existing Title I Loans: Lenders with existing loans in the
above areas are encouraged to use all available forbearance
measures to assist Tide I borrowers who have "perienced a loss of
income or other financial difficulties resulting from the major
disaster.  Section 201.54 of the Title I regulations was modified
in 1996 to provide that the Secretary may "tend the claim filing
period if the borrower has experienced a loss of income or other
financial difficulties directly attributable to a major disaster
declared by the President, and additional time is needed to
provide forbearance on a property improvement loan.  Accordingly,
the claim filing period for such cases attributable to this
disaster is extended to 12 months.
 
     New Title I Loans: In the case of Title I lenders accepting
new Tide I loan applications in these disaster areas, Section
201.20(b)(3) of the Title I regulations was modified in 1996 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 must 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 this
declaration 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 this disaster area.
 
                                                  Page 2
 
     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
contact the branch at 202-708-6396 or email to homeimpr@hud.gov.
 
                              Sincerely,
 
                              Nicolas P. Restinas
                              Assistant Secretary for Housing-
                                Federal Housing Commissioner