The National Association of Home Builders said banks and other lenders are continuing to squeeze builders denying loan extensions and requiring more equity than what has historically been needed.

With many construction companies struggling, one of the country’s largest contractor organizations is asking Congress for help.

The National Association of Home Builders chairman testified before a U.S. House subcommittee last week looking into credit problems. He asked Congress to improve access to credit for builders and consumers.

"With the spigot for housing production loans cut off, and the threat that the uncertainty from new rule-making under the Dodd-Frank financial services law will further impact the ability of small community lenders to service the credit needs of our industry, it is clear that congressional action is needed to help open the flow of credit to home builders," said NAHB Chairman Bob Nielsen, a builder from Reno, Nev.

"Without such action, there can be no housing recovery, which has major implications for our nation's ability to recover from the current economic downturn."

Nielsen said banks and other lenders are continuing to squeeze builders denying loan extensions and requiring more equity than what has historically been needed.

"While federal bank regulators maintain that they are not encouraging institutions to stop making loans or to indiscriminately liquidate outstanding loans, reports from my fellow members and their lenders across the nation suggest that bank examiners in the field are adopting a much more aggressive posture," he added.