Conventional and jumbo loan programs both contracted in September, with cash-out refinance and investor offerings scaled back
Mortgage credit availability edged lower in September as US lenders narrowed their conventional loan options and trimmed jumbo programs for the second consecutive month, according to new data from the Mortgage Bankers Association (MBA).
The MBA's Mortgage Credit Availability Index (MCAI), which draws on data from ICE Mortgage Technology to track lending conditions across more than 95 institutional investors, fell 0.2% to a reading of 107.1.
The index is benchmarked to 100 as of March 2012, meaning current conditions remain above the post-financial-crisis baseline, though the latest result points to a more cautious posture among lenders heading into the fourth quarter.
Joel Kan, CMB, MBA's Vice President and Deputy Chief Economist, attributed the decline to a narrowing of product options across the conventional market.
"Mortgage credit availability decreased slightly in September, as lenders tightened documentation requirements on conventional loans and reduced offerings of loans that allow for cash-out refinances and investor home purchases," Kan said.
"This tightening in credit supply also impacted jumbo loan programs, which saw credit availability decline for the second consecutive month. However, recent growth in non-agency loan programs continues to support this segment of the market. The government index was unchanged and has remained stable over the past three months."
Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, says higher rates are dampening both refinance and purchase activity, with first-time and FHA borrowers feeling the pressure most. https://t.co/J6NsbEmSbF
— Mortgage Professional America Magazine (@MPAMagazineUS) October 7, 2026
Conventional loans drive the pullback
The Conventional MCAI fell 0.4% in September, the steepest single-month drop among the report's component indices.
Within that category, the Jumbo MCAI declined 0.3%, recording a second straight monthly contraction in a segment that had earlier in the year been among the key drivers of credit expansion, as jumbo loan growth was spurring higher mortgage credit availability across the market.
The Conforming MCAI — covering loans eligible for purchase by Fannie Mae and Freddie Mac — slipped 0.2%.
The Government MCAI, which tracks Federal Housing Administration (FHA), US Department of Veterans Affairs (VA), and US Department of Agriculture (USDA) loan programs, was unchanged for the third consecutive month.
Non-agency programs provide a partial buffer
Even as conventional access tightens, the non-agency market is absorbing some of the pressure. Kan's comments point to continued growth in non-agency loan programs as a partial counterweight.
Mortgage brokers working with self-employed borrowers, real estate investors, or clients with non-standard income documentation should note that non-agency channels may remain open even where conventional options are narrowing.
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