Credit Conditions Ease For AD&C Loans

According to NAHB, builders and developers reported easier credit conditions for acquisition, development, and single-family construction (AD&C) loans in the first quarter of 2017.

The most recent AD&C Financing Survey found that the overall net tightening index was -25.0 in Q1, down from -7.3 in Q4 2016 and -13.3 at the same time last year. Negative numbers indicate the easing of credit.

Loans for land development and single-family construction eased the most over the first quarter.

Commercial banks are still the primary source of credit for AD&C.

In the fourth quarter of 2016, 89 percent said commercial banks were the primary source of loans for land development, 84% for single-family speculative construction, 80% for land acquisition and 79% for single-family pre-sold construction.

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