Restraints on credit for home buyers and home builders alike continue to impede the housing and economic recovery, Federal Reserve Chairman Ben Bernanke said during a speech at the National Association of Home Builders' International Builders' Show in Orlando, Fla.

"Banks remain reluctant to make loans, both to mortgage borrowers and home builders," said Bernanke, who noted that current credit conditions are too tight for the financial system, for the construction industry, and the economy.

Bernanke said that his message to regulators is for them to take a balanced approach and to approve loans for those who meet sound underwriting standards.

"Do not turn away creditworthy borrowers, and that includes home builders," he said.

"Chairman Bernanke understands that today's tight credit conditions are preventing qualified buyers from obtaining home loans and builders from getting financing for the construction of viable new home building projects — and that this is harming the housing market as well as the overall economy," said Barry Rutenberg, the newly-elected chairman of the NAHB and a home builder from Gainesville, Fla.

Noting that many local markets have an overhang of empty and foreclosed homes, the current harsh lending environment, and that the weak housing market is impairing the financial health of home owners, Bernanke said that the "state of the housing market has been a key impediment to a faster recovery."

"For these reasons, and because the troubled housing market depresses construction activity and employment, we need to continue to develop and implement policies that will help the housing sector get back on its feet," the Fed chairman said. "No single solution will be sufficient. But sustained efforts to address the many interlocking factors holding back the housing market will pay dividends in the long run."

He also added that the Fannie Mae and Freddie Mac limits on investor loans are counterproductive in the current economic climate and that policy should be to encourage more loans to help ease the inventory of distressed properties.

Bernanke's remarks on the need to take more aggressive action to support a housing recovery confirms what the nation's home builders have been saying for some time and reiterates similar themes in a Jan. 4 white paper provided to Congress, in which the Federal Reserve noted that "restoring the health of the housing market is a necessary part of a broader strategy for economic recovery."

Fixing the nation's housing woes is taking on a sense of increasing urgency in Washington. In unveiling a new plan last week, President Obama cited the important role that housing plays in the economy.

"A lack of building demand has kept hundreds of thousands of construction workers idle," said Obama. "Everybody involved in the home building business — folks who make windows, folks who make carpets — they've all been impacted. The challenge is massive in size and scope, because we've got a multi-trillion dollar housing industry."

Yesterday, the President reiterated the high value that Americans place on homeownership and the need to help home owners while commenting on the mortgage settlement agreement reached between the states and five major banks.

"We can't wait to get things done and to provide relief to America's home owners," Obama said. "We need to keep doing everything we can to help home owners and our economy."

"You work and you save your entire life to buy a home," Obama added. "That's where you raise your family, that's where your kids' memories are formed. That's your stake, your claim on the American Dream."

With the proper policies in place, housing can serve as an engine of job growth, said Rutenberg, who noted that building 100 homes creates more than 300 full-time jobs and generates $8.9 million in federal, state and local revenues to fund local schools and strengthen communities across the nation.

"In this key election year, the voters are calling on the administration and Congress to take actions to restore the health of the housing industry in order to create jobs, increase household wealth and keep the economy on an upward trajectory," he added.

Read more about building a green home.