There was a time, pretty recently, when it seemed new home buyers got a home equity line of credit almost as soon as they moved into a new home.  Banks were eager to lend and, according to the

Equifax Personal Finance Blog, homebuyers were using home equity lines for non traditional purposes.

In her article, “

Credit Trends: Super-Prime Consumers Tap Home Equity Lines of Credit and Credit Cards Not Available To Most,” expert Janet Dedrick says that home equity lines were traditionally used for home remodeling or improvement projects – they were used to add value back to homes. But during the housing bubble, she says people used this form of credit to make big purchases or investments unrelated to their homes.

Now, when banks’ requirements are more stringent and homes have lost value, people have backed away from home equity lines of credit. Those who are still able to get credit are “super-prime” consumers who can meet the banks’ high standards.

In April 2006, YTD new home equity lines opened were valued at $115 billion. During the same time frame this year, only $22 billion in home equity credit had been extended.

The drastic reductions in accessing credit are seen in other sectors as well. New credit cards opened fell from $95 billion YTD in April 2006 to just $36 billion in the same period this year. Auto loans are back on the rise, but consumers are generally choosing less expensive cars and lenders are being more careful.

Dedrick says one sign the economy is improving will be when these lending requirements start to loosen. But for now, if you’re interested in using the equity in your (city) new home, you’ll probably want to have a long talk with the bank. You’ll likely need “super borrower” status and a good reason to take out the loan.

To read Dedrick’s complete analysis and make comments, check her out at the

Equifax Personal Finance Blog.