On December 10, 2020 the Consumer Financial Protection Bureau finalized changes to its Qualified Mortgage rule, moving away from a DTI and income verification standards and to a pricing construct to determine which loans are Qualified Mortgages. The new QM rule states that loans that are priced less than 150 basis over the average prime offered rate receive safe-harbor protection from ATR challenges, while loans prices between 151 and 225 basis points over APOR receive a rebuttable presumption of compliance with ATR. The new rule also allows for loans with certain product features and performance requirements (i.e., making payments for 36 months) to be deemed to be a Qualified Mortgage. The rule goes into effect 60 days after publication in the Federal Register, but compliance will not be mandatory until July 2021, giving lenders a period when they can utilize either the new QM rule or the previous GSE QM Patch, until the mandatory compliance date begins.

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