Lending Like it's 2003 to 'Qualified' Homebuyers

Despite "horror stories" about the difficulties of getting a mortgage, banks are willing to lend to qualified homebuyers, Barry Habib, chief market strategist at Residential Finance, told CNBC on Monday. But he stressed that the definition of "qualified" has reverted back to the standards of "10-15 years ago."

"It was too far to the extreme ... 580 credit scores getting loans, which is really not appropriate," Habib said in a "Squawk Box" interview, adding that the minimum credit score for a mortgage now is around 640. "[But] you need your down payment. You do need to have a job."

Habib said that the Federal Reserve's near zero percent interest rate policy and its monthly bond-buying program are, to a large extent, driving the current housing recovery.

(Read More: Housing Recovery 'Fundamentally Strong': Lennar CEO)

But he observed that the Fed's also having an indirect, psychological effect to the upside. "Interestingly enough," he said, "you feel better when your equities perform better. And you think about buying homes."

Many stock market watchers have told "Squawk Box" in recent weeks that the rise of the Dow Jones Industrial Average to all-time highs is being aided by the central bank's easy money policies.

Meanwhile, the latest existing home sales report showed robust activity last month, despite tight inventory levels, which did ease a bit but remained below the six-month supply that's viewed as a healthy balance between available homes and demand for them.

(Read More: Finally: Supply of Homes for Sale Begins to Rise)

"Three or four years from now, you're going to have more inventory come on the market, because housing is going to do better," Habib predicted. "A lot of folks are trapped in their homes [now]. They can't sell. When their homes get to have a higher value, they'll be able to sell."

By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC