The Official Online Weekly Newspaper of NAHB
NAHB’s work with members of Congress to address the housing production credit crisis led to the introduction of legislation on May 26 by Rep. Brad Miller (N.C.) and original co-sponsors Carolyn Maloney (D-N.Y.) and Joe Baca (D-Calif.) that would help alleviate the severe lack of financing for acquisition, development and construction (AD&C) financing.
H.R. 5409, the Residential Construction Lending Act, would create a new residential construction loan guarantee program within the Department of Treasury to encourage and support lending to builders with viable construction projects. Designed to unfreeze credit for small home building firms, the measure would expand the flow of credit to residential builders on competitive terms.
Under intense pressure from bank examiners to reduce their exposure to development and construction loans to builders and curtail their outstanding portfolios of real estate loans, many lenders have been refusing to make loans for viable new housing projects and have been cutting off the funding for performing loans, or calling them.
This is causing unnecessary foreclosures and losses on these loans. Performing loans are also being reappraised, reducing the value of the collateral and forcing borrowers to come up with large amounts of cash to keep their loans current.
Moving on several fronts, NAHB is urging Congress to act quickly to advance this bill:
- Letters were sent to every member of Congress asking lawmakers to co-sponsor H.R. 5409. Citing the importance of this legislation to the housing industry, NAHB designated support for the bill as a “key co-sponsorship,” the same priority as when the association calls for a “key vote” on other critical housing measures.
- Through BuilderLink, NAHB activated its grassroots. With lawmakers returning to their home districts for the week-long Memorial Day recess, NAHB is urging members to call, visit or e-mail their representatives and tell them that a lack of credit for AD&C financing is threatening their livelihoods and the budding housing recovery. The legislative alert sent out to the grassroots is also urging builders to call on their member of Congress to co-sponsor H.R. 5409 to help restore the flow of credit to housing, provide jobs and give a meaningful lift to the economy.
- NAHB issued a press release in support of the bill. “We applaud these lawmakers (Reps. Miller, Maloney and Baca) for taking the lead to address the housing production credit crisis that is jeopardizing the housing and economic recovery now under way,” said NAHB Chairman Bob Jones.
To view the legislation, click here and type the bill number in the box at the upper center of the page.
For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144.