“Some of the data that we have been able to collect from the Office of Thrift Supervision suggests that a construction loan on a single-family house is no riskier than the permanent mortgage on that house. Yet we are paying very large premiums to those banks and savings and loans for the ability to borrow the money.
“If we had a secondary market for construction loans, smaller banks and even mortgage companies could make them just like they make permanent loans and they would be able to sell those off to the secondary market so that the source of capital would always be there and we wouldn’t have to rely upon pools of money scattered around the country.”
He added that, “If we can encourage the Federal Home Loan Bank System, Fannie Mae and Freddie Mac to participate in this secondary market, then I’m confident we can get the price down and ultimately save consumers money on building their homes.”
For more information, at NAHB contact David Ledford via e-mail or at 800-368-5242 x8265, or Michelle Hamecs at 800-368-5242 x8425.
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