The 2019 Rural and Underserved Counties Lists are now available. Here’s a quick rundown of where these lists come into play.
- Balloon Payment QM’s
To be eligible to originate Balloon Payment QMs, you must be a small creditor. To be a small creditor you must meet an asset test, a loan volume test and a rural and underserved test. If you originate at least one closed-end, consumer-purpose, first-lien loan secured by a dwelling located in an area identified on one of these lists in 2019, it means you meet the rural and underserved test for 2020 and for applications received before April 1, 2021.
- HPML Escrows
Small creditors can also be exempt from the HPML escrow requirement, if they don’t maintain escrow accounts. If you originate at least one closed-end, consumer-purpose, first-lien loan secured by a dwelling located in an area identified on one of these lists in 2019, it means you meet the rural and underserved test for 2020 and for applications received before April 1, 2021.
- HPML Appraisals
If you originate HPML’s and find yourself subject to the additional appraisal requirement (due to the timing of when the seller became the owner and the purchase price), you don’t have to worry about the additional appraisal if the property is located in a rural county.
You can also use the CFPB’s Rural and Underserved Areas Tool to determine whether a specific address is located in a rural or underserved area.
If you would like to learn more about the requirements for Qualified Mortgage & Higher-Priced Mortgage Loans, be sure to join us on April 23, 2019, for our Ability to Repay, Qualified Mortgage, High Cost & Higher Priced Mortgage Loans webinar.
Published
2019/02/25
Amy Kudlacek
