Reply To: ATR/QM


1. If it is a loan covered by section 1026.43 then you must make a reasonable and good faith determination at or before consummation that the consumer has the ability to repay the loan according to its terms. You may choose to comply with the general ATR requirement or, in order to gain the safe harbor/rebuttable presumption of compliance, one of the QM requirements. Either way you will need to comply with this section if you have a covered loan.
2. No, there is no exemption for more than 25+ acres that I am aware of, but there is an exemption for vacant land. See a coverage summary from the CFPB’s Small Entity Compliance Guide below:
The Bureau’s ATR/QM rule applies to almost all closed-end consumer credit transactions secured by a dwelling including any real property attached to the dwelling. This means loans made to consumers and secured by residential structures that contain one to four units, including condominiums and co-ops. Unlike some other mortgage rules, the ATR/QM rule is not limited to first liens or to loans on primary residences. However, some specific categories of loans are excluded from the rule. Specifically, the rule does not apply to:
•Open-end credit plans (home equity lines of credit, or HELOCs)
•Time-share plans
•Reverse mortgages
•Temporary or bridge loans with terms of 12 months or less (with possible renewal)
•A construction phase of 12 months or less (with possible renewal) of a construction-to-permanent loan
•Consumer credit transactions secured by vacant land

3. Originated loans would not include denied applications.