Even though implementation of the Freddie Mac portion of the new 97 percent conventional loan program is still weeks away the program appears to be having an impact on credit availability.  The Mortgage Bankers Association (MBA) said today that its Mortgage Credit Availability Index (MCAI) ticked up in February and that the new loans may be partially responsible.

The MCAI increased by 0.7 percent to 118.6 in February.  Increases in the index, which was benchmarked to 100 in March 2012, indicate that lending standards are loosening.

"Credit availability improved marginally in February, led by further increases in jumbo loan programs, and additional take-up of Fannie Mae's 97 LTV program," said Mike Fratantoni, MBA's Chief Economist.  "More than half of investors are now offering a 97 LTV program, and Freddie Mac announced that their program will be available in mid-March.  In terms of conforming credit, this was offset by somewhat tighter constraints on cash-out loans and investors with multiple financed properties." 

There are four components to the MCAI, the Conventional Mortgage Credit Availability Index, the Government Mortgage Credit Availability Index, the Conforming Mortgage Credit Availability Index, and the Jumbo Mortgage Credit Availability Index, with historical data back to 2011.  The Jumbo component rose 1.4 percent in February while the Conventional and Government MCAIs each were up 0.6 percent.  These were offset slightly by the Conforming MCAI which declined from 113.6 to 113.4.

MBA constructs its credit accessibility indices from data gathered through its Weekly Mortgage Applications Survey and data from the AllRegs® Market Clarity® product. The Government MCAI examines FHA/VA/USDA loan programs, while the Conventional MCAI examines non-government loan programs. Similarly, the Jumbo MCAI examines everything flagged as "Jumbo" while the Conforming MCAI examines loan programs that fall under conforming loan limits.