Two aspects of the QM rule, though, may make this market slow to develop for borrowers with lower credit scores.
First, the QM requirement that borrower payments on all debts and some recurring obligations must be 43 percent or less of borrower income may disproportionately affect less-advantaged borrowers.17 Board staff tabulations based on the Survey of Consumer Finances indicate that such households tend to have lower incomes, fewer financial assets, and higher mortgage loan-to-value ratios than households with lower payment ratios (figure 14).18 Second, the QM definition affects lenders’ ability to charge for the risks of originating loans to borrowers who are more likely to default.