Mortgage credit availability increased slightly in January as new loan programs opened up more doors for would-be homebuyers.
The Mortgage Bankers Association (MBA) reported Thursday that its Mortgage Credit Availability Index (MCAI), which analyzes data from AllRegs' Market Clarity, increased 1.8 percent to 117.8 last month.
"Several new initiatives aimed at making mortgage credit more available and affordable to consumers were recently announced and resulted in a net loosening of credit over the month," said MBA Chief Economist Mike Fratantoni, pointing to the introduction of new low down payment programs by Fannie Mae and Freddie Mac and last month's cut in annual mortgage insurance premiums by the Federal Housing Administration (FHA).
Since the first announcement, roughly 40 percent of investors have begun to offer versions of Fannie Mae's high loan-to-value program, Fratantoni said. Freddie Mac's program will launch formally in March.
Since the FHA premium cuts impact mortgage affordability, Fratantoni added that he doesn't expect the change will have a major impact on the index.
All of the component indices measured by MBA increased month-over-month, with the gauge of conventional loan availability climbing 3 percent and the government index rising 0.9 percent.
MBA also introduced two new components this month: the conforming mortgage index, which rose 1.8 percent in January, and the jumbo index, which was up 1.9 percent.
"Growth in the jumbo loan market over the last few years has been a consistent and ongoing trend—with evidence of expansion on both the supply and demand sides of the market," Fratantoni said. "These new component indices allow us to more precisely measure how credit availability is changing with regards to jumbo loan programs and their conforming (non-jumbo) counterparts."