Mortgage credit availability increased slightly in February, according to data released by the Mortgage Bankers Association Thursday.
The MBA's Mortgage Credit Availability Index increased by 0.7% to 118.6 in February, indicating a loosening of credit. The improvement was fueled by increases in jumbo loan programs and more lenders adding Fannie Mae’s 97% loan-to-value ratio program, MBA chief economist Mike Fratantoni said in a news release accompanying the data.
"More than half of investors are now offering a 97 LTV program, and Freddie Mac announced that their program will be available in mid-March," Fratantoni said. Conforming credit, one of the four component indices of the MCAI, was hit with tighter restraints on cash-out loans and investors with multiple financed properties, he added. The component decreased slightly to 113.4 in February from 113.6 the month prior.
The other components all rose: the jumbo MCA increased by 1.4% and both the conventional and government MCAI, which examine nongovernmental and FHA/VA/USDA loans, respectively, went up 0.6%.
The MCAI is created with a proprietary formula derived by the MBA. The index takes into account several factors related to borrower eligibility and underwriting criteria for more than 95 lenders/investors, using data obtained through the AllRegs Market Clarity product.