As a result of the NAHB's ongoing effort to promote the development of a secondary market for acquisition, development and construction loans, the Department of Housing and Urban Development has granted Fannie Mae permanent program authority to purchase residential AD&C loans.

This is the first step toward fundamental changes in the way we do business. Hopefully the rest of the financial world will note what housing lenders long have known: Housing production lending offers greater rewards and fewer risks than many other types of lending.

A secondary market for AD&C loans will make funds more readily available from a broader range of lenders, and fees and interest rates will drop. This will translate into more affordable housing.

Now that HUD has provided the first step, the NAHB looks forward to working with Congress, the administration and Wall Street to evolve residential AD&C financing into a viable, reliable secondary market.