The National Association of Home Builders (NAHB) recently applauded Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.) for introducing bipartisan legislation to encourage residential construction lending, spur job growth and keep the housing and economic recovery on track.
"Sens. Menendez and Isakson know that a robust housing market is vital to generate jobs and maintain a vibrant economy," said NAHB Chairman Rick Judson, a home builder and developer from Charlotte, N.C. "This bill will help builders access the credit they need to construct new homes in a growing number of markets that need and want them."
S. 1002, the Home Building Lending Improvement Act of 2013, would discourage lenders from calling construction loans where payments are current and establish regulatory guidelines to allow the banking industry to restore lending for viable home building projects.
The legislation to resolve the ongoing credit problems for home builders is similar to House bill H.R. 1255, the Home Construction Lending Regulatory Improvement Act of 2013, which was introduced earlier this year by Reps. Gary Miller (R-Calif.) and Carolyn McCarthy (D-N.Y.).
The nationwide inventory of completed newly built homes is extremely low due to the limited amount of new home construction that took place during the economic recession. During this time, college graduates were forced to move back in with their parents and others doubled or tripled up in residences rather than renting separate apartments.
It is estimated that roughly 2 million household formations were delayed as a result of recent economic conditions.
Housing stands ready to serve as an engine of economic job, Judson said, noting that whenever new homes are built, new jobs are created and a permanent source of ongoing revenue for local, state and federal government spring to life.
NAHB estimates that constructing 100 new single-family homes generates more than 300 full-time jobs and $8.9 million in federal, state and local tax revenues.
"With housing and the economy now on the mend, there is pent up demand for homes in many parts of the country," said Judson. "By helping to restore the flow of credit to home builders, S. 1002 will help meet this growing demand, put Americans back to work and strengthen our communities by increasing the property tax base that supports local schools, teachers, police, firefighters and public services."