The Urban Institute’s (UI’s) Housing
Finance Policy Center has updated its credit availability index (HCAI) to
reflect data for the second quarter of 2020. The Index shows a slight dip from
an adjusted 5.3 percent in the first quarter to 5.2 percent in the second
quarter. Tightening in the GSE and government channels has driven a retraction
of credit availability through the first half of 2020, as the risk in the
portfolio and private-label securitization market remains a shadow of what it
once was. 
The HCAI measures the percentage of
owner-occupied home purchase loans that are likely to default-that is, go
unpaid for more than 90 days past their due date. When the HCAI declines it
indicates the lenders have a greater unwillingness to tolerate defaults and they
are imposing tighter lending standards, making it harder to get a loan. A
higher HCAI indicates a higher tolerance for defaults and that lenders are
taking more risks, making it easier to get a loan.


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