BANKING/FINANCE : Rule Change Would Ease Credit Crunch on Home Builders

Federal savings and loan regulators are expected to ease one of their tough new rules soon to allow S&Ls; to increase fourfold the amount that can be lent to one borrower.

The current limit--15% of an institution’s capital--would be increased to 60% for home builders. The change would be intended to ease the credit crunch on builders, who were left without financing for worthwhile projects under strict rules imposed as a result of last year’s drastic thrift industry restructuring law.

The change in the loan limit comes as Laguna Hills developer Barry G. Hon awaits regulatory approval of his $275-million offer to by a 6,700-acre Riverside County parcel from the Landmark Land Co. thrift subsidiary, Oak Tree Savings Bank in New Orleans.

Regulators had earlier thwarted Hon’s attempt to buy Oak Tree’s big-name golf and resort properties for $967 million because the deal called for the thrift to finance it. Regulators said that even with a 25% down payment, Oak Tree would be lending too much to one borrower.