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DISASTERS SPUR HUD TO INCREASE TITLE I LIMITS, EXTEND TERMS

 DISASTERS SPUR HUD TO INCREASE TITLE I LIMITS, EXTEND TERMS
 WASHINGTON, Oct. 28 /PRNewswire/ -- Ill winds blew homeowners good fortune recently when federal regulators increased the loan amounts available under FHA Title I.
 Encouraged to move swiftly in the wake of the hurricanes that ravaged parts of Florida and Hawaii this summer, the U.S. Department of Housing and Urban Development (HUD) raised the ceiling for the popular home improvement loans to $25,000 for single family residences and $60,000 for multi-family units.
 The previous limits were $17,500 and $43,750 respectively. The new rule, which became effective Sept. 30, also allows repayment terms of 20 years, up from the previous 15.
 According to Peter Bell, executive director of the Title One Home Improvement Lenders Association (TOHILA) this is good news for homeowners everywhere, not just in the disaster areas. "The expanded Title I program will help people who need extensive repairs, but also those who are planning room additions or major remodeling," he said.
 The longer repayment terms should also be welcomed, as they make loan payments more affordable. Also, lower payments enable borrowers to qualify for larger loans.
 The higher ceilings were also applauded by home improvement contractors, who will once again be able to help homeowners finance major projects through FHA. Under the old regulations, many remodeling jobs had grown in cost to the point where they were out of reach with a Title I loan.
 The FHA Title I program was established during the Great Depression to help homeowners with little or no equity -- or less than spotless credit -- repair and maintain their major family asset.
 At TOHILA's urging, Congress enacted the higher limits in October 1990. Nevertheless, implementation had been held up by President Bush's moratorium on new regulations, as well as bureaucratic inertia, according to Bell.
 "But Hurricanes Andrew and Iniki blew away the red tape with remarkable ease," he said, "because the Administration realized the valuable contribution Title I could make in the recovery process."
 Last year HUD reported that Title I, a government-backed loan insurance program funded by a one-half percent mortgage insurance premium on loans, actually made money for Uncle Sam. "It's one of those rare occasions in government where everybody wins," Bell said, "even the taxpayers."
 TOHILA is a trade association of financial institutions which originate Title I loans, either direct to consumers or through home improvement contractors.
 -0- 10/28/92
 /CONTACT: Peter Bell of TOHILA, 202-328-9171/ CO: TOHILA; U.S. Department of Housing and Urban Development ST: California IN: SU:


ML-TM -- SF001 -- 5917 10/28/92 11:01 EST
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Publication:PR Newswire
Date:Oct 28, 1992
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