The Mortgage Bankers Association Mortgage Credit Availability Index inched down in August indicating lending standards tightened for most mortgage product categories, except for home improvement and new construction loans.
The index, which analyzes data provided by AllRegs’ Market Clarity, decreased by 0.3 percentage points to 116.1 in August compared with July.
MCAI measures mortgage credit availability using borrower eligibility metrics, such as credit score, loan type and loan-to-value ratio, and underwriting criteria from roughly 85 lenders and investors. The index is benchmarked to 100 in March 2012, and when it increases that indicates a loosening of credit standards.
“While overall access to credit tightened in August, we did see some loosening in certain segments of the purchase market,” such as Federal Housing Administration 203(k) home improvement loans that allow borrowers to include renovation expenses in their loan amount, and one-time-close new construction lending, Michael Fratantoni, MBA’s chief economist said in a press release Thursday.
The MBA also said it is now reporting on two additional measures of credit availability as part of its monthly MCAI release: the Conventional Mortgage Credit Availability Index and the Government Mortgage Credit Availability Index, which are based on aggregate data starting in 2011, according to the release. (By comparison, the expanded, historical series Total MCAI is based on credit availability data from 2004 through 2010 which includes the housing crisis and the recession.)
In August both the conventional MCAI and the government MCAI, designed to assess credit availability of FHA, VA and USDA loans, decreased less than one percentage point compared to the previous month.