Which Mortgage Credit Is Most Available to Borrowers in May?

The Mortgage Bankers Association (MBA) released the results of its report measuring the level of mortgage credit availability for the month of May.

There was an overall decline in mortgage credit availability index (MCAI) as lending standards tightened last month. The side of government mortgages showed the biggest drop in availability while access to jumbo mortgages continued to expand.

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May Mortgage Credit Availability Index

The total mortgage credit availability index fell by 1.1 percent to 181.0 in May. The Index has four components, as defined by the MBA, whose drop in availability last month is shown as follows:

ComponentAccessibility Score
Government MCAI (FHA/VA/USDA Loans)Down 1.9%
Conforming MCAI (Non-Government, Subset of Conventional Loans)Down 0.3%
Conventional MCAI (Non-Government Loans)Up 0.2%
Jumbo MCAI (Non-Government, Subset of Conventional Loans)Up 0.8%

Lynn Fisher, vice president of Research and Economics with the MBA, offered this explanation for the mortgage credit trends found in May, “Credit availability slipped in May, primarily driven by investors consolidating their offerings for government insured loans.”

“These decreases,” continued Ms. Fisher, “were partially offset by continued expansion among jumbo loan programs. The Jumbo MCAI has increased in 13 of the last 15 months.”

Jumbo Loans More Accessible

Indeed, both jumbo and conventional loan indexes posted an increase in May from a month ago.

While total MCAI slightly declined in April, jumbo loans showed the least drop in accessibility among the four components of the MCAI.

Back in March, jumbo loans were the primary reason behind the loosening of mortgage credit.

The MBA uses data from Ellie Mae’s AllRegs® Clarity business tool solutions and calculates them using a proprietary formula to arrive at the MCAI. The MCAI uses a base period of 31 March 2012 and a base value of 100 for the total index.

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Justin

Justin McHood is a managing partner at Suited Connector and has been recognized by national media outlets as a financial expert for more than a decade.

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