Given today’s housing market conditions, it was probably inevitable that the mortgage credit crunch would spill over into lending for land acquisition, land development, and construction (AD&C).

But that doesn’t mean we have to like it, and it doesn’t mean the NAHB is going to just sit on the sidelines and watch as lenders tighten credit for acquisition and development of land and construction of new homes.

Even in a slow market, reasonably priced and readily available credit is the lifeblood of the home building industry, and we are working hard to make sure that banks and regulators don’t overreact and worsen an already difficult situation.

In recent weeks, we have met with Ben Bernanke, chairman of the Federal Reserve Board, and with the heads of the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. Our message has been the same: that the credit squeeze on builder loans threatens to prolong the housing downturn and that we need these agencies to work with us to ensure that AD&C loans for builders remain available at a reasonable cost.

In addition to urging a balanced approach to AD&C lending, we have testified before Congress and called on it to consider several ways to broaden sources of AD&C credit. We are also calling on Fannie Mae to ramp up activity in its AD&C loan purchase program and for Freddie Mac to create a similar program. The FHA can also help by insuring the construction portion of these loans in order to attract new loan originators.

Because this is such a serious concern, the NAHB is closely monitoring the AD&C lending situation, and a recent survey of builders and developers revealed the scope of the problem.

More than 80 percent of all respondents reported that the availability of new credit for land acquisition and land development had tightened this year compared to the second half of 2007.

Sixty-nine percent of those surveyed said that credit has become more constricted over that time for single-family construction loans, and 29 percent responded that loan availability remained about the same.

Among multifamily builders, 78 percent reported worsening conditions for construction loans, and 20 percent said they had seen no change.

As we have learned, unnecessary tightening of AD&C lending and unreasonably tight mortgage credit for our customers can have a devastating impact on our industry. Ensuring that builders have ready access to reasonably priced AD&C funding and increasing liquidity in the mortgage market are top NAHB priorities as we work to minimize the effects of the housing market crisis and get the home building industry back on its feet.