LAS VEGAS—Home builders in some of the nation's hardest-hit housing markets are going to work directly for banks, in a little-used arrangement that is helping to ameliorate conditions in some battered local economies. The builders traditionally got loans from banks to build homes, but that credit has largely dried up. The contract work builders are getting is welcome as many of them struggle to stay afloat. Rebuilding an Industry View Slideshow Isaac Brekken for The Wall Street Journal Workers carried supplies through the Liberty Hill housing development in Las Vegas Wednesday. More photos and interactive graphics Randy Schaefer, who has been building homes in this city since 1981, recently began working for a bank for the first time. In September, construction lender Housing Capital Co. hired him to help finish a subdivision of 170 homes in the desert outskirts here. While Mr. Schaefer is only being paid a flat fee instead of any profit on the three to four homes a month he has agreed to build, it enables him to keep his eight workers employed.[Read more...]