Mortgage Loan Originator (MLO) Licensing Practice Test

The statement that limiting to only fixed-rate mortgages is not a requirement for a safe harbor Qualified Mortgage (QM) according to VA standards is accurate. In the context of VA lending, safe harbor QMs can include various types of mortgage products, including adjustable-rate mortgages (ARMs) as long as they comply with all necessary borrower protections and underwriting standards.

This flexibility allows lenders to offer a wider array of mortgage options, accommodating different borrower needs and financial situations. Instead, the other requirements, such as being creditworthy according to Ability to Repay (ATR) standards, compliance with VA regulations, and the absence of subprime characteristics, are fundamental to defining a safe harbor QM. These criteria are designed to ensure that borrowers are protected from predatory lending practices and that loans are adequately underwritten, supporting responsible lending practices within the VA loan program.