Refi and jumbo loans help improve mortgage credit availability

Mortgage credit availability loosens as more loans are offered

Refi and jumbo loans help improve mortgage credit availability

Mortgage credit availability increased in August thanks to new refinance loan programs and a booming non-QM jumbo lending space, according to the Mortgage Bankers Association.

MBA reported a 3.9% increase in its Mortgage Credit Availability Index (MCAI), up to 123.7 in August. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.

“Credit availability increased in August, driven by significant activity across all indexes,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. “This expansion was heavily driven by the addition of refinance loan programs at a time when the 30-year fixed rate has been above 3% for the past month, and refinance activity has trended lower.”

Kan also noted the rapid growth of non-QM market share over the past couple of months. “Jumbo credit availability increased 9% to its highest level since March 2020, as more non-QM jumbo and agency-eligible high-balance loan programs were offered,” he said.

Read more: Blazing the trail for non-QM lending

The jumbo MCAI jumped 9.4% in August, along with the conforming index, which grew by 5.1% – both are indices of the Conventional MCAI, which increased 7.6%. Meanwhile, the government MCAI edged up by only 1.1% over the month.

“In the conforming space, more lenders offered GSE refinance programs catered to lower-income borrowers to help reduce their rates and payments,” Kan said. “There was also a slight expansion in government credit, as more investors offered streamlined refinance options for FHA and VA loans.”

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