Just want to make sure I am thinking this correctly.

We are a small creditor so the QM rules say over 3.5 of the APOR on either a first or second lien are HPMLs. If it is under 3.5 it could be a QM and not HPML. The appraisal rule does not appear to have this exemption for small creditors because it just says over 1.5 of APOR is HPML. But there is an exemption for QMs. So if we have a loan that is APOR+3, and it is a QM under the small creditor rules, can we still call it a QM under the appraisal exemptions for HPML and not require an appraisal?

I am thinking yes, but just want to make sure.

Thank you!

You have some apples and oranges in your post.

I think you are confusing a HPML and a higher-priced covered transaction. For a 1st lien HPML, the threshold is 1.5%, as there is not an additional small creditor threshold in the HPML rules.

However, if you are making a QM under 1026.43(e)(5), then it would be exempt from the appraisal requirements.

Thank you. I wasn't questioning about the HPML. It is a HPML under the appraisal rules. But just wanted to make sure that a QM under the small creditor rules was still a QM under the appraisal rule as well.