The Mortgage Bankers Association said its Mortgage Credit Availability Index (MCAI) moved lower in August due to a decline in its jumbo loan component index.  The composite MCAI decreased 0.3 percent to 183.5.  A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.

"Overall credit availability saw a slight decrease in August, for the first time in four months, as the jumbo index retreated from its record high in July. Strong month-over-month increases in the jumbo index reversed because of a reduction in the number of jumbo programs. The decline in jumbo credit availability was offset partially by an increase in the conforming index, which increased over the month due to the addition of low down payment programs," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting.

The Conventional MCAI decreased (down 0.9 percent) and the Government MCAI increased slightly (up 0.1 percent). Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 2.1 percent while the Conforming MCAI increased by 0.8 percent.

The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via the AllRegs® Market Clarity® product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time.  The index was benchmarked to 100 in March 2012.  The Conforming and Jumbo indices have the same "base levels" as the Total MCAI (March 2012=100), while the Conventional and Government indices have adjusted "base levels" in March 2012. MBA calibrated the Conventional and Government indices to better represent where each index might fall in March 2012 (the "base period") relative to the Total=100 benchmark.