U. S. Department of Housing and Urban Development
                  Washington, D.C. 20410-8000
 
                        January 15, 1998
 
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
 
                                                       TI-461
 
TO:  ALL APPROVED TITLE I LENDERS
 
SUBJECT:  Special Title I Assistance to Victims in Presidentially
Declared Major Disaster Areas - Maine, Tennessee, New York,
Florida, Guam, and the Commonwealth of the Northern Mariana
Islands
 
     This Title I Letter is to advise you of recent Presidential
declarations of major disaster areas which allow you to provide
special assistance to current Title I borrowers in these areas as
well as potential borrowers.  These declarations were issued to
assist victims of winter storms in Maine, Tennessee and New York,
of tornadoes and storms in Florida, and of Typhoon Paka in Guam
and the Commonwealth of the Northern Mariana Islands.
 
     The President's declaration of a major disaster area for
Maine was signed on January 13, 1998 and includes Androscoggin,
Cumberland, Franklin, Hancock, Kennebec, Knox, Lincoln,
Penobscot, Piscataquis, Oxford, Sagadahoc, Somerset, Waldo,
Washington and York counties.
 
     The President's declaration of a major disaster area for
Tennessee was signed on January 13, 1998 and includes Carter
county.
 
     The President's declaration of a major disaster area for New
York was signed on January 10, 1998 and includes Clinton, Essex,
Franklin, Jefferson and St. Lawrence counties.
 
     The President's declaration of a major disaster area for
Florida was signed on January 6, 1998 and includes Hernando,
Hillsborough, Osceola and Polk counties.
 
     The President's declaration of a major disaster area for
Guam was signed on December 17, 1997 and covers the entire
island.
 
     The President's declaration of a major disaster area for the
Commonwealth of the Northern Mariana Islands was signed on
December 24, 1997 and includes the island of Rota.
 
     The following are the special provisions of the Title I
Property Improvement Loan program for borrowers in these
localities:
                                                       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.  Section 201.54 of the Title I regulations was
modified in 1996 to provide that the Secretary may extend 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 Title 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 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 contact the branch at 202-708-6396 or email to
homeimpr@hud.gov.
 
                              Sincerely,
 
                              Nicolas P. Retsinas
                              Assistant Secretary for Housing-
                              Federal Housing Commissioner