The credit squeeze has found its way to the market where builders and developers raise money to buy land, develop it, and build houses, according to the latest economic report from the National Association of Home Builders.Two out of every five builders responding to a recent survey said the availability of construction financing for single-family houses has worsened since the middle of the year, with the decline showing up most commonly as a tightening in allowable loan-to-value ratios. About a fifth of the respondents -- most commonly larger builders and those located in the West -- also said they had been asked by their lenders to pay down a portion of their land acquisition loans because the value of the ground had declined since the loans were originated. The NAHB's economists said the stiffer stance taken by land acquisition, development, and construction lenders was not unexpected. "Some tightening in AD&C markets has been virtually inevitable in view of the major downswing in home sales, the major upswing in inventories of unsold homes, and associated weakening in prices of both homes and buildable land in many parts of the country," they said in the latest Eye on the Economy newsletter. The NAHB can be found online at http://www.nahb.com.

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