Centex Corp., one of the nation’s largest homebuilders, said Friday that it had secured a new $450 million warehouse line of credit with JPMorgan Chase, along with an “accordion feature,” which allows the company to expand the credit line by another $100 million if needed.
The homebuilder made the move after funding through its previous lender had become more difficult due to secondary mortgage market woes.
Centex previously originated mortgage loans through the sale of loans to Harwood Street Funding I, LLC, but demand for short-term securities had forced the homebuilder to look elsewhere for financing.
The news comes as homebuilders throughout the nation begin to show signs of distress related to the worsening mortgage crisis.
Two weeks ago, NVR Mortgage Finance, the financing arm of homebuilder NVR Inc., disclosed that it had secured a new $125 million line of credit which held restrictions on how the money could be distributed.
And earlier today, Beazer Homes got a notice of default related to its ongoing internal investigation into its mortgage-origination business.
It is believed that lending restrictions have made it very difficult for homebuilders to finance new home sales, a critical part of their business as they tend to finance a large majority of the homes they sell.
Earlier today, sources said Citigroup’s warehouse unit had halted new business.