Jumbo and Conventional Loans Easier to Obtain in November

Access to jumbo mortgage credit continued

to increase in November, but the Mortgage Bankers Association (MBA) says it is

still down significantly from pre-pandemic levels. Overall access fell during

the month according to MBA’s Mortgage Credit Availability Index (MCAI) which

dipped by 0.6 percent. The decrease, however, was due solely to a constriction

on the government loan side.

The MCAI was at 124.9 in November. In February

2020, as the pandemic was taking hold, it had a reading of 181.3. A decline in

the index is indicative of tightening credit.

The index has four

components. The Conventional MCAI

increased 1.9 percent last month, while the Government MCAI decreased by 2.7

percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI

increased by 3.0 percent, and the Conforming MCAI rose by 0.2 percent.

Joel Kan, MBA’s Associate Vice President of

Economic and Industry Forecasting commented, “Credit availability in November

was down slightly, even as the housing market continues to thrive amidst the

improving job market. However, the picture was different depending on the market

segment. An increase in conventional credit availability was offset by a

decrease in government credit, as lenders reduced their offerings of government

loan programs with lower credit scores, as well as those for investment homes.

“Credit supply for jumbo loans increased for the

fifth straight month. Lenders scaled back on jumbo supply at the onset of the

pandemic, and even with the recent growth in credit availability, the jumbo

index remains more than 40 percent below February 2020 levels. As home-price

growth continues, and mortgage rates creep higher, increased credit

availability is needed for qualified borrowers looking to purchase a home –

especially for first-time homebuyers, who rely heavily on government mortage

programs,” Kan said.

The MCAI and each of its components are calculated

using several factors related to borrower eligibility (credit score, loan type,

loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95

lenders/investors are combined by MBA using data made available via a

proprietary product from Ellie Mae. The resulting calculations are summary

measures which indicate the availability of mortgage credit at a point in time.

Base period and values for total index is March 31, 2012=100; Conventional March

31, 2012=73.5; Government March 31, 2012=183.5.