People are generally familiar with the fact that Wall Street and the largest financial institutions got hurt by toxic mortgage-related securities, but they sometimes forget that Main Street and the smaller regional and local community banks remain stuck with the hard assets of incomplete housing and other community-related construction projects.

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The biggest monthly increases came in private single-family and multi-family housing categories, and in public office, health care and power construction projects.

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Known as the Section 8 New Construction Projects grants, the U.S. Department of Housing and Urban Development struck them as they became politically untenable.

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Meanwhile, the housing market continues to slump, with home-builders sharply cutting back on construction projects.

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Few signs of life yet, however, for the dead-in-the-water housing market despite a jump in housing starts during June when good weather inspired construction companied to catch-up on previously stalled projects.

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Brian Allen, 38, an unemployed construction worker, said he's glad the projects are filling vacant lots and providing housing.

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However, Mr. Leggett expects to see construction lending begin to rise in the next few quarters as an improving housing market spurs more developers to build new projects.

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