U.S. Department of Housing and Urban Development
                  Washington, D.C. 20410-8000
 
                             April 17, 1998
 
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
 
                                                        TI-466
 
TO:  ALL APPROVED TITLE I LENDERS
 
SUBJECT:  Special Title I Assistance to Victims in Presidentially
          Declared Major Disaster Areas - Minnesota, North
          Carolina, Georgia, New Jersey, Alabama and Kentucky
 
     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 tornadoes in Minnesota and North Carolina; of
flooding in Georgia, New Jersey and Alabama; and of winter storms
in Kentucky.
 
     The President's declaration of a major disaster area for
Minnesota was signed on April 1, 1998 and includes Brown, LeSuer,
Nicollet and Rice counties.
 
     The President's declaration of a major disaster area for
North Carolina was signed on March 22, 1998 and includes
Rockingham county.
 
     The President's declaration of a major disaster area for
Georgia was signed on March 11, 1998 and includes Baker,
Dougherty, Irwin, Miller, Montgomery and Seminole counties.  As
of March 31, 1998, an additional seventy (70) counties have been
added to this declaration.  These counties are:
Appling, Atkinson, Bacon, Ben Hill, Berrien, Bibb, Bleckley,
Brantley, Brooks, Bulloch, Burke, Calhoun, Candler, Carroll,
Charlton, Clay, Clinch, Coffee, Colquitt, Cook, Crawford, Crisp,
Dawson, Decatur, Dodge, Dooly, Douglas, Early, Emanuel, Evans,
Glynn, Grady, Habersham, Hall, Haralson, Heard, Jeff Davis,
Jefferson, Jenkins, Johnson, Lamar, Laurens, Lee, Macon,
McIntosh, Mitchell, Monroe, Pike, Pulaski, Quitman, Rabun,
Randolph, Screven, Stewart, Sumter, Talbot, Tattnall, Telfair,
Terrell, Thomas, Tift, Toombs, Treutlen, Ware, Webster, Wheeler,
White, Wilcox, Wilkinson and Worth.  Lenders should consult with
the Federal Emergency Management Agency (FEMA) in their area to
obtain the declaration date of the counties declared between
March 12th and March 31st, 1998.
                                                            2
 
     The President's declaration of a major disaster area for New
Jersey was signed on March 10, 1998 and includes Atlantic and
Cape May counties.
 
    The President's declaration of a major disaster area for
Alabama was signed on March 9, 1998 and includes Coffee, Dale,
Escambia, Geneva and Houston counties.
 
    The President's declaration of a major disaster area for
Kentucky was signed on March 3, 1998 and includes Bath, Estill,
Jackson, Laurel, Lewis, McCreary, Powell, Rockcastle and Wayne
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 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 yours,
 
                           Art Agnos
                           Acting General Deputy Assistant
                             Secretary for Housing-Federal
                             Housing Commissioner