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It’s not the best time to be a speculative home builder.

Justin Wood, director of government affairs for the , and the vice president of construction for Fish Construction Northwest 鈥� a small, speculative builder 鈥� knows it firsthand.

Five to six years ago, his company was building 25 to 30 homes a year with five different lenders. A year ago, the company had just one lender and that was tenuous at best.

That was a tough stint, but in the past six months some of the financial doors that seemed to close following the recession have begun to open back up. Wood said two lenders recently contacted him to express their interest in loaning money again.

鈥淲e now have three lenders that we’re working with that weren’t available to us six months ago,鈥� he said.

Across the board, residential construction is picking up and building permits are on the rise, implying that more home builders are getting loans. But industry professionals say access to credit is still a problem and that lending requirements haven’t eased 鈥� it’s just a healthier market makes it appear that way.

鈥淭he absorption rates have improved and inventories have declined,鈥� said Rich Hubbard, Northwest division manager of commercial real estate at . 鈥淪o we’re seeing better metrics in the business these days, which allows for having the perception that it’s easier to get a loan. But it just works better these days because the market has more health.鈥�

According to ‘s third quarter report, the number of building permits issued for single family homes has increased 47 percent over the past year in the Portland metropolitan area 鈥� the second highest jump in building permits behind Corvallis, which has seen a yearly increase of 167 percent.

Meanwhile, a relatively low inventory of existing homes for sale is putting upward pressure on home prices while mortgage rates are hovering at near 60-year lows. In July, the national average commitment rate for a 30-year fixed-rate mortgage was 3.55 percent 鈥� a full percent lower than a year ago.

Hubbard said that since it takes less time to sell out a subdivision today than it did in 2010, the bank can assign stricter timeframes to loans. That makes them easier to manage.

That’s been helpful on the commercial loan front, but for individual, speculative deals the metrics are still questionable. Jeff Miller, mortgage department manager with Rivermark Community Credit Union said his credit union is not currently lending for home construction.

鈥淲e still believe, based on what we’re seeing from purchase prices, loan amounts, borrower activity, and what we’re seeing coming in with appraisals, we’re not as optimistic as a lot of other folks may be or media outlets,鈥� Miller said.

One main reason is that the cost of construction for most projects exceeds the resulting appraised value of the home, Miller said. He said the properties that tend to be moving are those priced between $160,000 and $210,000, while the typical cost to build a new home is higher than that.

The regulatory powers that be are not showing optimism in the market either. On Sept. 13, the Federal Reserve made an unprecedented announcement that it would be using reserves to purchase $40 billion-worth of agency mortgage-backed securities, per month, for an indefinite amount of time.

鈥淭he Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions,鈥� the Fed said in its announcement. 鈥淔urthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.鈥�

While significant, the Fed’s move is unlikely to have any effect on home sales or construction, said David Crowe, chief economist for the National Association of Home Builders.

鈥淭heir actions will likely reduce mortgage rates a small amount 鈥� I say small because the rates are simply so low already,鈥� he said. 鈥淏ut it is unlikely to have much impact on home purchases. The reason for that is that the impediments are not the cost to credit but the availability of credit.鈥�

The Fed’s strategy will likely have a stimulative effect on refinancing for those who already own a home, but it won’t impact home purchases or home construction, Crowe said. Underwriting standards, he said, are still tight across the nation and until that changes, the home building front will remain tepid.

, for example, is lending for custom home projects but not for speculative deals.

Gary Duffy, senior vice president and residential production manager for Umpqua, said speculative deals are still too risky because there is no buyer lined up at the project’s completion. Custom projects for individual home owners are seen as being safer because the borrower is the home owner.

Duffy said Umpqua has seen an uptick in demand for custom construction loans and is interested in lending this type of money to qualified borrowers.

For Wells Fargo’s part, Hubbard said underwriting standards haven’t changed as a result of the recession, but the bank is putting a lot of emphasis on character, experience and credit history these days. That is to say, it’s choosing its customers carefully.

鈥淚 would say that it’s important for somebody to have a clean past, a clean history,鈥� Hubbard said, 鈥渁nd a balance sheet strong enough to accommodate the risk they’re accepting and a project that has fundamentals strong enough that it has a strong probability of working.鈥�

Wood has seen those sentiments reflected in his line of work as well. While it’s not as plentiful as it was five years ago, he said builders with good credit can find money for speculative projects.

鈥淚t’s better for people that are in good shape,鈥� he said. 鈥淏ut that said, it’s still tough.鈥�