Increased Mortgage Credit Availability in April

It became easier for consumers in the United States to obtain a mortgage loan in April 2015, according to the Mortgage Bankers Association. Their Mortgage Credit Availability Index increased for a second consecutive month indicating loosening of the credit standards.

In April, mortgage credit availability rose 0.5% enabling MCAI to reach 122.0. The increase was smaller compared to the previous month. In March, the availability of mortgage credit went up by 2.3% allowing the Index to climb to 121.4. The Index has been increasing steadily since the beginning of the year after a sharp drop experienced in the fourth quarter of 2014. Despite this, it remains much lower than its historic peak level of 900 reach in the middle of 2006. The MCAI was benchmarked to 100 in March 2012.

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Three of the four indexes comprising the Mortgage Credit Availability Index also rose in April. The Government MCAI, which indicates the changes in lending standards for FHA, VA and USDA loans, underwent the largest increase during the month. It rose 1.1 % showing considerable loosening in credit standards for these mortgages. The jumbo MCAI went up by 0.8%. The increase of the conforming MCAI, which measures conforming mortgage loans, was 0.2%. The conventional MCAI, which covers all home loans that are not covered by the government, decreased by 0.6%.

The Chief Economist of the MBA, Mike Fratantoni, said that the net increase of mortgage availability in April had been driven by new offerings of the 203K home improvement program run by the FHA, new VA loans and new jumbo mortgage loans. The increase was brought down to an extent by investors who had tightened the credit criteria for conventional cash out loan products.

The Mortgage Credit Availability Index is based on a set of factors defining mortgage borrower eligibility. These include credit score, loan-to-value ratio and loan type.



Christian Calvin mortgage Christian is a contributing writer for He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.


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