With regard to qualified mortgages, the Veterans Administration has stated that VA-insured or -guaranteed loans are

• A. Non-qualified mortgages
• B. Non-conforming loans
• C. Not eligible for government backing
• D. Safe harbor qualified mortgages

Answer: (D)

When a loan is insured or guaranteed by a government program, it falls into the Safe Harbor category for Qualified Mortgages. VA loans, being VA-insured or guaranteed, meet the government-backed QM standard, which provides lenders with a safe harbor from certain ATR liability as long as the loan adheres to the applicable guidelines. This reflects that the underwriting guidelines and protections built into VA loans align with the ability-to-repay requirements.

VA loans are not non-qualified or non-conforming simply because they are government-backed, and the designation is not about being excluded from government backing. The safe harbor label specifically applies here, making the VA loan a Safe Harbor qualified mortgage.