There was less credit available for the first time in four months in December, when lenders offered fewer conventional and government products, particularly Veterans Affairs-guaranteed loans, the Mortgage Bankers Association said.

The Mortgage Credit Availability Index fell by 3.5% to 182.2 in December, compared with 188.9 in November. But this was well above the 175.0 in December 2018; the number of products dropped from the market a year ago was influenced by the end of the Home Affordable Refinance Program.

"Perhaps most noteworthy was a 6% drop in government credit supply because of changes to the VA loan program, which eliminated loan limits for certain borrowers as of Jan. 1, 2020," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "This likely prompted many investors to remove VA programs in high-cost counties from their offerings. There was also a reduction in streamline refinance programs, as slightly higher rates slowed the refinance market at the end of 2019."

He was referring to the VA's Interest Rate Reduction Refinancing Loan program, which in fiscal year 2019 (ended Sept. 30) had a 75% increase over the prior year's volume.

Government mortgage credit availability has been trending downward since it peaked in April 2017 and is now at its lowest level since the spring of 2015.

On the other hand, conventional product offerings, primarily driven by an increase in jumbo credit availability, spent 2019 on the upswing, until December.

December was only the second month where conventional product availability decreased from the previous month. The conventional MCAI was down by 1.4%, with its conforming loan portion 1.6% lower. The jumbo component fell by 1.3% from November.

Mortgage credit availability ended the year at its lowest level since August. The MCAI is calculated by the MBA using loan program data from Ellie Mae's AllRegs Market Clarity database. It was benchmarked to a value of 100 based on conditions in March 2012.