The National Association of Home Builders last month said it approved a decision by federal regulators that will require banks to provide more detailed data on residential and commercial construction lending when reporting on their quarterly activities.
“This action will allow federal banking regulatory agencies to differentiate the disparate risks posed by residential versus commercial lending activities,” said NAHB President David Pressly, a home builder from Statesville, N.C. “Providing data on one-to-four family residential construction is an important step in developing a secondary market for single-family housing production.”
As a result of the regulatory changes, large banks and banks with a high volume of residential production loans on their books will be required to break out their one-to-four family housing production data in their quarterly Bank Call Report effective on March 31, 2007. All other banks will begin reporting the breakdown of their construction loans as of March 31, 2008.
“The bottom line is that more residential-specific data will be reported on loan volume and loan performance, which will invite market analysts and investors to treat housing production loans more favorably. This information will help build a secondary market for construction financing,” said Pressly.