If a lender wants to originate a QM loan with a DTI greater than 43%, which standard must it meet?

In the context of originating Qualified Mortgages (QM) with a debt-to-income (DTI) ratio greater than 43%, the Temporary QM standard is the correct choice. This option allows lenders to originate loans with DTIs above 43% under specific conditions that were set in response to economic factors, such as those that occurred during the COVID-19 pandemic.

The Temporary QM designation provides relief by allowing lenders more flexibility with income verification and underwriting requirements, thus facilitating access to credit for borrowers who might otherwise have difficulty qualifying under the stricter standards of other QM categories. This category is particularly relevant during periods of financial uncertainty, ensuring that more borrowers can secure financing.

In contrast, other QM categories have stricter compliance requirements that do not allow for a DTI above the conventional 43% threshold without meeting stringent additional criteria.