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Creation of Secondary AD&C Market Discussed at Treasury

In its ongoing efforts to build support and momentum for the creation of a secondary market for acquisition, development and construction (AD&C) loans for new housing, NAHB advocates met on March 26 with U.S. Treasury officials and economists.

NAHB President Kent Conine asked Greg Zerzan, deputy assistant secretary for financial institutions and government-sponsored enterprise policy, to support NAHB’s goal of establishing a secondary AD&C market, particularly in regard to getting improved data on the performance of those loans from bank regulators.

Conine also discussed industry concerns over the impact of an impending overhaul of bank capital rules on the cost and availability of residential AD&C loans and on the competitive position of community-based institutions.

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NAHB has provided Zerzan with data the association compiled from the Office of Thrift Supervision showing the favorable performance of AD&C loans, Conine said.

NAHB is pushing hard for the creation of a secondary AD&C market because it would help ensure a steady, reliable flow of funds for new home construction and would lower the cost of housing production financing.

“Ultimately, this secondary market would help buyers contain costs and would help promote housing affordability and homeownership,” said Conine. “Equally important, a secondary market for AD&C loans could help builders better withstand the credit crunches that periodically affect the housing industry.”

For more information, e-mail David Ledford or call him at 800-368-5242 x8265, or e-mail Michelle Hamecs or call her at x8425.

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