CFPB Delays Mandatory Compliance Date for General QM Rule

Housing Finance
Published

The Consumer Financial Protection Bureau (CFPB)  has formally delayed the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021, to Oct. 1, 2022.

The agency said in a press release that it is taking this action “to help ensure access to responsible, affordable mortgage credit, and preserve flexibility for consumers affected by the COVID-19 pandemic and its economic effects.”

The General QM final rule would replace the current requirement for General QM loans that the consumer’s debt-to-income ratio (DTI) not exceed 43%, with a limit based on the loan’s pricing.

In adopting a price-based approach to replace the specific DTI limit for General QM loans, the CFPB determined that a loan’s price is a strong indicator of a consumer’s ability to repay and is a more holistic and flexible measure of a consumer’s ability to repay than DTI alone. A loan meets the general QM definition if its annual percentage rate exceeds the average prime offer rate (APOR) for a comparable transaction by less than 2.25 percentage points.

In addition, the General QM final rule:

  • Provides higher pricing thresholds for loans with smaller loan amounts, for certain manufactured housing loans, and for subordinate-lien transactions.
  • Retains the General QM loan definition’s existing product-feature and underwriting requirements and limits on points and fees.
  • Requires lenders to consider a consumer’s DTI ratio or residual income, income or assets other than the value of the dwelling, and debts, and removes appendix Q and provides more flexible options for creditors to verify the consumer’s income or assets other than the value of the dwelling and the consumer’s debts for QM loans.

QM loans are presumed to be made based on the lender’s reasonable determination of the home owner’s ability to repay the loan.

Read the final rule.

Read an executive summary of the final rule.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Environmental Issues

May 30, 2025

NAHB Members Provide Final Recommendations for New WOTUS Rule

NAHB members concluded their participation in multiple “waters of the United States” (WOTUS) listening sessions with strong showings in Washington, D.C., and Salt Lake City. In total, 12 NAHB members and four staff members from NAHB and state home builder associations (HBAs), representing 11 states, provided oral statements at listening sessions.

Workforce Development

May 30, 2025

Statement from NAHB Chairman Buddy Hughes on DOL Decision to Pause Job Corps Center Operations

NAHB Chairman Buddy Hughes issued the following statement after the Department of Labor announced it was pausing Job Corps center operations nationwide.

View all

Latest Economic News

Economics

May 30, 2025

Multifamily Absorption Moves Lower for New Apartments

The percentage of new apartment units that were absorbed within three months after completion continued to trend lower, according to the Census Bureau’s latest release of the Survey of Market Absorption of New Multifamily Units (SOMA).

Economics

May 29, 2025

Treasury Yield Increase Drives Mortgage Rates Higher in May

Mortgage rates continued their upward trend in May due to market volatility triggered by fiscal concerns and weaker U.S. Treasury demand. According to Freddie Mac, the average 30-year fixed-rate mortgage rose to 6.82% — a 9-basis-point (bps) increase from April. The 15-year fixed-rate mortgage increased by 5 bps to 5.95%.

Economics

May 28, 2025

Aging-in-Place Remodeling Work Fell While Familiarity and Receptiveness Remain High

Only 56% of professional remodelers undertake projects designed to allow homeowners to Age-in-Place (AIP), according to results from NAHB’s Q1 2025 Remodeling Market Index (RMI) survey.