GSEs Revise Guidance on New General QM and GSE Patch QM Purchases

On May 26, 2021, Fannie Mae and Freddie Mac issued additional guidance on their requirements for purchasing loans originated under the CFPB’s recent revisions to the general QM requirements (New General QM), as well as when they will cease purchasing so-called “GSE Patch” QM loans, and single-closing construction-to-permanent loans.

Under this new guidance, the GSEs reiterate that as a general matter in order for a GSE Patch QM that does not meet the New General QM requirements to be eligible for purchase or securitization, it must have an application date on or before June 30, 2021, and be purchased or securitized on or before August 31, 2021.

Importantly, however, the guidance also states that a single-closing construction-to-permanent loan that meets the criteria of a GSE Patch QM, but does not meet the criteria of a New General QM, can still be purchased or securitized on or before February 28, 2022, if its application date was on or before June 30, 2021.

The guidance also notes that loans subject to the Ability to Repay requirements with application dates prior to March 1, 2021, (the effective date of CFPB’s rule) may be purchased after August 31, 2021, provided the loans otherwise meet the New General QM requirements.