Friday, May 28, 2010

Residential Construction Lending Act Introduced

Reps. Brad Miller (D-N.C.) and original co-sponsors Carolyn Maloney (D-N.Y.) and Joe Baca (D-Calif.) have introduced legislation to create the Residential Construction Lending Act, an attempt to address the severe lack of credit for acquisition, development and construction (AD&C) financing in the new home construction industry.

H.R. 5409, the Residential Construction Lending Act, would create a new residential construction loan guarantee program, within the Department of Treasury, to provide loans 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.

During the last couple of years, many lenders have refused loans for new housing projects and cut off funding for performing loans.  While not a new procedure - used in past periods of troubled banks - performing loans have been reappraised, reducing the value of the collateral, and borrowers been told to come up with large amounts of cash to keep their loans current.  This has added to the country's foreclosure problems.

The National Association of Home Builders (NAHB) asks you to contact your senators and representatives in support of this legislation.

Joe Giancarli, Sales Associate

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