After flatlining for much of the spring, credit availability last month fell to its lowest point since late 2025, as lenders pulled back on federal lending programs, according to the latest report from the Mortgage Bankers Association. 

The trade group's Mortgage Credit Availability Index dropped 2% to a reading of 105.8 in June, with lower scores indicative of tightening lending standards. In May, the MCAI finished at 108, having hovered near that mark since March. Compared to a year earlier, however, credit availability was up 2% from an index score of 103.7 in June 2025, when mortgage rates ran more than 20 basis points higher. 

"Mortgage credit availability decreased in June to its lowest level since December 2025," said Joel Kan, MBA's vice president and deputy chief economist, in a press release. 

"A contraction in government loan programs accounted for a significant share of the June decrease," he continued. Kan singled out, in particular, a reduction in certain Federal Housing Administration and Department of Veterans Affairs streamline refinance offerings that assisted borrowers with high loan-to-value ratios and low credit scores.   

The June decrease in FHA and VA programs helped pull the government MCAI lower by 4.6% month over month, after it came in flat in the prior reporting period. 

The government-backed market accounted for much of last month's overall credit retreat, with the conventional index edging downward by just 0.1% in comparison. In May, the conventional MCAI had inched upward by 0.2%.

In similar findings on government-backed lending this month, a report from Keefe, Bruyette & Woods noted a corresponding slowdown in FHA originations over the spring. Subdued activity in the segment coincided with rising stress that began emerging over the past several months in the performance of later FHA vintages, although KBW said it saw more recent stabilization in delinquency rates.  

Jumbo lending represents a bright spot

Of the two components within the Mortgage Bankers Association's conventional index, the MCAI tracking conforming products fell 2.2% following a flat reading the previous month. On the other hand, June's jumbo loan availability offset much of the conforming-market loss, climbing higher by 0.6% to maintain its rise after a 0.3% uptick in May.    

Upward movement in the jumbo MCAI aligns with shifts in market opportunity the lending community has noted throughout 2026, MBA's report showed.   

"The jumbo index increased slightly, supported by new non-QM programs, which is consistent with other market data showing a larger non-QM share of originations," Kan said.  

The MCAI was benchmarked to a score of 100 to represent lending standards in March 2012 following the Great Recession, with monthly readings determined through MBA's analysis of ICE Mortgage Technology data.