First time home buyers sitting around and twiddling their thumbs waiting for the lending market to improve may finally be getting a reprieve. Thanks in large part to loosening government standards, the Mortgage Credit Availability Index (MCAI) loosened last month for the second consecutive month, increasing by 0.5 percent to 122 in April according to a recent Mortgage Bankers Association (MBA) report on real estate trends.

The MCAI is a summary measure of the availability of mortgage credit at a point in time. Declines indicate tightened purse strings, while increases indicate the credit piggy bank opening just a little wider. The index was benchmarked to 100 in March 2012.

Who should realtors thank?
Mortgage credit rose thanks to Fannie and Freddie Mac’s introduction of 97% loan-to-value loan programs, continued expansion of the FHA streamline refinance, the FHA’s 203K home improvement program, new VA offerings, and new jumbo products, among other recent government offerings.

Technical jargon:
The MCAI is calculated using several factors of eligibility from metric and underwriting criteria from more than 95 lenders and investors, including credit score, loan type, and loan-to-value ratio among others. April’s increases include…

  • Government MCAI
    Measures FHA, VA, and USDA loan programs. It rose 1.1 percent in April, driving much of the overall increase.
  • Jumbo MCAI
    Ginormous loans above conforming limits. Climbed 0.8 percent in April.
  • Conforming MCAI
    Loans that fall under conforming loan limits. Increased slightly, 0.2 percent in April.
  • Conventional MCAI
    Non-government loan programs fell 0.6 percent in April.

As good as it ever was?
Not so much. While the Mortgage Credit Availability Index rose again in April, credit is still far less available than it was in the run-up to the infamous real estate bubble burst.

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