More options for homebuyers and refinancers with good credit
Mortgage credit availability experienced a modest increase in December, according to the latest Mortgage Credit Availability Index (MCAI) report released by the Mortgage Bankers Association (MBA). The index rose 0.7% to 96.6, reflecting a slight loosening of lending standards, driven by specific offerings for borrowers with stronger credit profiles.
The MCAI measures credit availability, with higher index values indicating easier access to mortgage credit and lower values signaling tighter standards. The index is benchmarked to a value of 100 as of March 2012.
Conventional credit leads gains
The growth in credit availability was primarily attributed to an increase in the Conventional MCAI, which climbed 1.3% in December. Within this segment, the Jumbo MCAI, representing loan programs outside conforming limits, rose 2.3% to its highest level since August 2024. In contrast, the Conforming MCAI, covering loans within conforming limits, declined by 0.7%.
Meanwhile, the Government MCAI, which tracks credit access for FHA, VA, and USDA loans, remained unchanged.
“Credit availability increased slightly in December, driven by more offerings for ARMs (adjustable-rate mortgages) and cash-out refinances that are primarily for borrowers with better credit,” said Joel Kan, MBA’s vice president and deputy chief economist. “These factors led to a slight rebound in conventional credit compared to the previous month.”
The MCAI encompasses four key indices:
- Conventional MCAI: Tracks non-government loan programs.
- Government MCAI: Covers FHA, VA, and USDA loan programs.
- Jumbo MCAI: A subset of the Conventional MCAI, focusing on loans exceeding conforming limits.
- Conforming MCAI: Also a subset of the Conventional MCAI, examining loans within conforming limits.
Each index highlights relative credit risk and availability for its respective category. Unlike the Total MCAI, which aggregates these components, the Government and Conventional indices are calibrated with adjusted benchmarks.
The MCAI also features an expanded historical series that spans data from 2004 through 2010. This extended dataset reveals significant fluctuations in credit availability, measured through less frequent and interpolated data points before 2011.
The MCAI is a proprietary metric combining data from more than 95 lenders using ICE Mortgage Technology. It evaluates factors like credit scores, loan types, and loan-to-value ratios to gauge the ease of mortgage credit access.
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