Mortgage Credit Crunch Stymies AD&C Lending
The mortgage credit crunch has spilled over into AD&C lending for new residential construction, thereby increasing the many challenges faced by builders in the current housing downturn, said Past NAHB President Bob Mitchell, in testimony before the Senate Small Business Committee on April 16.
 Reporting on the topic of "The Impacts of the Credit Crunch on Small Firms," Bob told lawmakers that, while tighter mortgage lending terms have made it difficult for home buyers to obtain financing to purchase new homes, "Likewise, there have been dramatic adverse swings in the cost and availability of acquisition, land development and home construction (AD&C) loans for home builders."
He noted that the current situation "vividly illustrates the importance of developing additional sources of AD&C credit." He pointed out that currently there is no secondary market for residential AD&C loans where community banks could turn to help manage their balance sheets and obtain liquidity for additional lending.
View the full press release here.
For more information, e-mail Donna Reichle, or contact her at 800-368-5242 x8473.
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