Final QM Definition Released By HUD

12 Dec

The Department of Housing and Urban Development on Wednesday released its final rule defining a “qualified mortgage” that is guaranteed or administered by HUD, effective Jan. 10, 2014, applying to all mortgages with case number assignments on or after that date.

HUD proposed a QM definition aligned with the Ability-to-Repay criteria contained in the Truth-in-Lending Act as required by the Dodd-Frank Act and the agency’s mission to promote affordable mortgage financing options for underserved borrowers.

Under HUD’s QM definition, mortgage loans must require periodic payments without risky features; have terms that don’t exceed 30 years; be insured or guaranteed by FHA/HUD; and limit upfront points and fees to no more than 3% with adjustments to facilitate smaller loans, with certain exceptions.

HUD’s rule also adopts the CFPB’s list of transactions that are exempt from the ability-to-repay requirements, including reverse mortgages.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: