One of the most serious and intractable problems our industry has faced in decades is the shortage of funding for AD&C financing of new homes.
Consequently, getting funds flowing to new construction has been the NAHB’s No. 1 priority since early 2008, a priority that the board of directors reaffirmed at its meeting on Jan. 14. And although we have knocked on virtually every door in Washington and taken our concerns to legislators, regulators, the media, the public, the Federal Reserve Board, and even the White House, we have seen limited progress to date.
That’s why we were very pleased recently when the FDIC opened a new toll-free telephone hotline to allow small business owners to weigh in directly with the FDIC about the scarcity of credit and problems they have had with specific lenders.
The bulk of the NAHB’s membership is comprised of small businesses. I urge any home builder, developer, or associate who cannot obtain financing, is having a hard time with an outstanding AD&C loan, or feels that they have been treated unfairly by their lender to alert the FDIC. You can call the hotline at 866-924-6242 from 8 a.m. to 8 p.m. EST Monday through Friday to speak with a representative. If you prefer not to speak with a representative, you can go to www.FDIC.gov/SmallBusiness and fill out the Business Assistance form at the bottom of the page.
We hope that the FDIC will follow through and respond to any inquiries it receives about specific issues pertaining to the lending institutions that it regulates.
The NAHB is launching new initiatives to combat the AD&C credit crisis, and a strong member response to the FDIC hotline will help raise greater awareness of the problem and support our efforts to restore the flow of credit to our industry.
Another way we can raise greater awareness of the AD&C credit crunch is through first-person case studies that we can share with regulators, legislators, and the public. Please go to www.NAHB.org/ADCcasestudy and share your story with us if you are unable to obtain financing, are having a hard time with an outstanding AD&C loan, or your bottom line is affected by the AD&C credit crunch.
Even as we work to free up AD&C financing from traditional sources, we are also helping members identify alternative sources of financing, keeping them informed, and providing them with resources to help them cope with this unprecedented situation.
We introduced the Finance Pavilion at IBS 2010 to provide members with the opportunity to meet with representatives from non-traditional lenders. The Pavilion made a very successful return appearance at this year’s show where more than 200 meetings occurred between NAHB members and potential financing sources.
This exclusive networking opportunity is also available to members year round at www.NAHB.org/FinanceForum. For other AD&C resources and information on the closely related issue of appraisals that do not accurately reflect new-home values, please visit www.NAHB.org/ADC.
Restoring the flow of credit for AD&C financing is a complex problem, but it can be solved, and eventually, funding will be readily available to credit-worthy projects throughout the nation. Until that day, AD&C will be the NAHB’s top priority.