Credit Tightens as Lenders Cut Programs in High-Cost Markets: MBA

Mortgage credit availability tightened for the third consecutive month in May, according to the Mortgage Bankers Association.

The MBA's Mortgage Credit Availability Index decreased 0.8% to 121.4 in May, which indicates tighter lending standards, the group reported Wednesday. The index's benchmark of 100 was set in March 2012.

All four components of the overall index displayed tightening. The jumbo MCAI experienced the greatest tightening, dropping 1.3%. The government MCAI also dropped 1%.

The conventional MCAI slipped 0.8%, while the conforming MCAI only dipped 0.3%.

Greater availability of programs from Fannie Mae and Freddie Mac helped to offset the tight credit situation last month, according to Lynn Fisher, the MBA's vice president of research and economics.

"Gains in credit availability caused by the continued roll-out of Fannie Mae and Freddie Mac low down payment programs were offset by modest tightening among government loan programs that serve borrowers in high-cost areas," Fisher said in a news release.