The Missouri Credit Union Association (MCUA) supports some aspects of the U.S. Department of Housing and Urban Development’s (HUD) proposed Federal Housing Administration Safe Harbor QM Threshold definition, but also offered changes to clarify parts of the proposal, in a comment letter filed last week.
In the letter, MCUA said it generally supports HUD’s proposed QM definition. However, the definition does not clearly state how lenders would combine the annual mortgage insurance premium (MIP) with 1.15% to calculate the proposed FHA Safe Harbor QM threshold. MCUA suggested the agency adopt a simpler approach that uses a single percentage point amount, while still taking the MIP into consideration. This would be similar to the CFPB’s approach.
The letter also addressed streamlined refinancing and debt-to-income ratios, among other items.
HUD is required under the Dodd-Frank Act to issue its own QM rule, separate from the one issued earlier this year by the CFPB. Once finalized, HUD’s QM rule will replace the CFPB’s QM definition for FHA loans or certain other HUD insured loans. HUD expects to finalize and have its QM rule become effective on January 10 of next year, at the same time as the CFPB’s QM rule takes effect.