Thanks to an NAHB-supported amendment approved just before the legislation was passed by the House of Representatives on June 17, builders will have the same access as other small businesses to loans from a $30 billion program created by H.R. 5297, the Small Business Lending Fund Act of 2010.

The House measure would provide $30 billion in capital to community banks to expand small business lending. Of particular interest to NAHB members, the last-minute change to the legislation allows the fund to be used to help ease the severe shortage of acquisition, development and construction (AD&C) loans for small building firms.

NAHB was deeply engaged throughout the legislative process to ensure that this crucial language was included in the bill, and NAHB Chairman Bob Jones issued a press statement applauding the efforts of Reps. Brad Miller (D-N.C.), Joe Baca (D-Calif.) and Majority Leader Steny Hoyer (D-Md.) in accomplishing this goal and calling for prompt Senate action on the bill.

The amendment referencing residential construction passed by a vote of 418 to three, demonstrating that lawmakers understand the importance of restoring health to the housing industry in order to promote economic recovery. ...... Read More

Multifamily builders are looking to the Department of Housing and Urban Development and the Congress for important news related to the cost and availability of financing the production of rental apartments.

At the end of this month, HUD is expected to issue a mortgagee letter making changes to the underwriting requirements for construction and substantial rehabilitation of market-rate and affordable rental housing under the Federal Housing Administration's Section 221(d)(4) mortgage insurance program and the refinancing and rehab of existing projects under Section 223(f).

Concerned about rising defaults in the FHA multifamily portfolio, HUD’s Office of Multifamily Housing in January announced changes to these programs that would discourage builders from moving forward on new construction and cause many borrowers to return their properties to the current lender. ...... Read More

In recent appearances in the national media, NAHB leaders have been warning that builders remain in the deep freeze of an unprecedented credit crunch for the finance they need to produce housing. Until the flow of credit for residential acquisition, development and construction (AD&C) loans is restored, they have been saying, the strength of the housing recovery now underway remains in doubt, with serious implications for the U.S. economy and job growth.

With the new housing inventory at a 42-year low and household formations poised for considerable growth as the economy improves, the slow pace of housing production could be leading to significant housing shortages, particularly in markets that saw their construction levels remain at more moderate levels during the housing boom and the ensuing housing downturn. ...... Read More

NAHB continues to meet with federal banking regulators to urge them to curb overly restrictive actions by bank examiners, support the extension of loans to viable projects, encourage flexibility in workouts of outstanding loans and provide relief from loan concentration limits.

The latest round of discussions occurred immediately after the NAHB spring board meeting in April, when the Senior Officers met with Federal Reserve Chairman Ben Bernanke and the other Fed governors, including Elizabeth Duke, who has oversight on credit availability issues; Federal Deposit Insurance Corporation Chairman Sheila Bair; and Comptroller of the Currency John Dugan.

In a tough and frank dialogue, NAHB raised specific complaints and followed up with case studies detailing how many lenders are refusing to make loans for viable new housing projects and, under pressure from federal banking regulators, even calling in performing loans.

Taking housing industry concerns to the upper echelons of the Obama Administration, the NAHB leadership also met at the White House with Lawrence Summers, director of the National Economic Council, to alert him to the severity of the lending crisis and explain why action must be taken to expand the flow of credit to residential builders on competitive terms to promote sustained economic growth.

Serious difficulties with the credit crunch and new home appraisals were at the top of the agenda when the NAHB Senior Officers met with Housing and Urban Development Secretary Shaun Donovan on April 20. NAHB leaders emphasized how important it was for Donovan to raise housing credit problems in discussions with other members of the Administration's economic team. ...... Read More

Home builders have recently seen some encouraging progress on residential real estate appraisal issues and concerns — including guidance on how builders can communicate with appraisers and what they can do in response to faulty valuations of their homes.

Appraisals remain a major problem for the industry, particularly the inappropriate use of foreclosed and distressed properties as comparables, which has negatively affected property values and remains an obstacle to the recovery of the housing market. ...... Read More

The ongoing crisis in acquisition, development and construction lending has choked off credit for home building and is taking an enormous toll on the nation’s economic activity and the health of its job market, NAHB told a May 18 hearing before the House Financial Services Committee on initiatives to promote small business lending, jobs and economic growth.

“The problems in the housing sector have had a significant impact on the nation’s economy,” NAHB said. “The sharp decline in home building from the 2005 peak — a drop of one million units — has translated into 1.4 million lost jobs for construction workers and the loss of $70 billion in wages. ...... Read More

Available at www.nahb.org/adcresources, NAHB has compiled resources designed to help association members find acquisition, development and construction (AD&C) financing and work out financing problems with their lenders.

The site includes information on the latest regulatory developments, accounting and appraisal issues and the results of NAHB’s AD&C Financing Survey. ...... Read More