The GSE QM (also called the 'GSE Patch') historically allowed loans to qualify as QMs even if they exceeded the 43% DTI threshold. This patch applied specifically to loans eligible for purchase by which entities?

Correct answer: Fannie Mae and Freddie Mac

The GSE Patch, formally known as the Temporary QM category, applied to loans that met the underwriting guidelines of Fannie Mae (FNMA) or Freddie Mac (FHLMC) — the government-sponsored enterprises (GSEs). Loans eligible for purchase by either GSE could qualify as QMs even if the borrower's DTI exceeded 43%, as long as other QM product feature requirements were met. This patch expired in 2021 when the General QM Final Rule took effect. "USDA Rural Development and Ginnie Mae" is incorrect — FHA and VA loans follow their own insuring agency guidelines, not the GSE Patch. "FHA and VA only" is incorrect — the patch was specific to GSE eligibility, not the lender's charter type. "Any federally insured depository institution" is incorrect — USDA and Ginnie Mae operate separate programs.