Credit crunch, what credit crunch?

Great Florida Bank announced it recently hired 32 new associates who will dive into residential lending to capitalize on the bank's newly obtained approval to make Federal Housing Administration loans.

''We're taking this opportunity to get into residential lending when everybody else is getting out,'' said Ed Wilburn, a managing director in the new residential lending division at the Coral Gables-based community bank. ``The loans being made today are better. The documentation is better. The credit standards are tighter.''

Many banks in Florida and around the country have pulled back on residential lending in the wake of the subprime mortgage crisis that has sent aftershocks around the globe. Falling home values have made lenders especially reluctant to lend, with many demanding large down payments that most would-be home buyers can't swing. Indeed, Realtors point to a scarcity of mortgage loans as a top hurdle to completing real estate transactions.

Great Florida, as an authorized FHA lender, now is able to make home mortgage loans to customers with a lower down payment requirement than conventional loans. FHA home loans are especially helpful for first-time homebuyers who have difficulty coming up with a substantial down payment. Some popular FHA loans provide up to 97 percent of a home's value to qualified applicants.

FHA loans are typically originated by an institutions and then sold and packaged into securities. The U.S. Department of Housing and Urban Development insures the loans against loss to the lender, so they are considered safe.

Great Florida, which is well capitalized and has 28 offices in Miami-Dade, Broward and Palm Beach counties, plans to originate, underwrite, close and sell the FHA loans. At least for the first year, it also will give up the servicing rights, Wilburn said.

Wilburn joined the bank in July when it began its residential lending strategy. He was previously with Capital Mortgage, an independent mortgage firm in Miami, and with Bank of America's mortgage operations.

Bill Glavin, special assistant to the FHA commissioner, said the agency is getting about 350 applications a month from institutions seeking to become FHA-approved lenders. That's more than double the rate last year.

''We're seeing more and more interest in FHA and we're happy to see the increased volume,'' Glavin said.

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