Industry News

HUD extends special home loan program to hurricane areas

Action aims to encourage lending in Louisiana, Mississippi

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Housing and Urban Development Secretary Alphonso Jackson on Thursday announced that Ginnie Mae, a government-owned corporation located within HUD, will extend its Targeted Lending Initiative (TLI) to the areas hardest hit by Hurricane Katrina. The TLI is a program that encourages lenders to finance housing in underserved areas. Under the TLI, Ginnie Mae will reduce its guarantee fee by as much as 50 percent when approved issuers originate or purchase mortgage loans in the hardest hit hurricane disaster areas. Reducing the guaranty fee lowers the lender's expenses and provides an incentive to make more loans. Ultimately, this disaster relief aims to make more money available for affordable housing in the areas devastated by Hurricane Katrina, HUD said. "Using the TLI program to stimulate financing for affordable housing in the devastated areas will provide lasting relief for hurricane victims," Jackson said. The TLI program is already used to encourage mortgage lending in many unde...