Nearly two-thirds of single-family home builders are reporting a "severe lack of credit" for housing production, according to a builder survey of acquisition, development and construction financing from the National Association of Home Builders.
"Across the country, home builders and developers are reporting a deterioration in credit availability and intensifying pressure on borrowers with outstanding loans," NAHB Chairman Joe Robson. Robson is a homebuilder in Tulsa, OK.
He said lenders are cutting off loans for housing projects and "producing unnecessary foreclosures and losses on AD&C loans. In the survey, 63% of builders said that the availability of credit worsened in the second quarter 2009.
Builders reporting deteriorating credit conditions cited the following reasons: 80% said lenders are lowering the allowable loan-to-value ratio; 76% reported lenders are not making new loans; 75% said lenders are reducing amount they are willing to lend; and 62% said lenders are requiring personal guarantees or collateral not related to the project.
As a result, two-thirds of respondents plan to put single-family construction on hold.
