U.S. Department of Housing and Urban Development Washington, D.C. 20410-8000 February 20, 1998 OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER TI-464 TO: ALL APPROVED TITLE I LENDERS SUBJECT: Special Title I Assistance to Victims in Presidentially Declared Major Disaster Areas - California, New Mexico and Additional Counties Added to the Previous North Carolina, Tennessee and New York Declarations 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 flooding in California, North Carolina, Tennessee and New York and of winter storms in New Mexico. The President's declaration of a major disaster area for California was signed on February 9, 1998 and includes Alameda, Butte, Calaveras, Colusa, Contra Costa, Glenn, Humboldt, Lake, Marin, Mendocino, Merced, Monterey, Napa, San Benito, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Sonoma, Sutter, Tehama, Ventura, Yolo and Yuba counties. The President's declaration of a major disaster area for New Mexico was signed on January 29, 1998 and includes Chaves, DeBaca, Eddy, Guadalupe, Lincoln, Mora, Quay, Torrance and Union counties. The President's declaration of a major disaster area for North Carolina was signed on January 28th, 1998. TI-463 lists the counties eligible for assistance. On February 6th, 1998, Ashe, Transylvania and Watauga counties were added to the declaration. The President's declaration of a major disaster area for Tennessee was signed on January 13th, 1998. TI-461 lists the county eligible for assistance. On January 13th, 1998 Jackson, Cumberland and Johnson counties were later added to the 2 declaration. On January 23rd, 1998, Van Buren county was added to the declaration. On January 29th, 1998, Chester, Gibson, Madison, Crockett, Haywood and Tipton counties were added to the declaration. Finally, on February 5th, 1998, Cocke, Greene, Hawkins, Sevier, Sullivan Unicoi and Washington counties were added to this declaration. The President's declaration of a major disaster area for New York was signed on January 10th, 1998. TI-461 lists the counties eligible for assistance. On January 12th, 1998, an additional county was added to this declaration and it is listed in TI-463 Letter 98-8. On January 21, 1998, Monroe, Genesee, Niagara and Saratoga counties were also added to this declaration. 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 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 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. 3 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