What is the typical back-end debt-to-income (DTI) limit used to define a General QM?

• A. 40%
• B. 50%
• C. 60%
• D. 43%

Answer: (D)

Back-end debt-to-income measures how much of a borrower’s gross monthly income goes toward all monthly debt payments. For a loan to be a General QM, the back-end DTI must be at or below 43%. This threshold provides a safe harbor for lenders under the ATR rules, signaling that the borrower’s total debt obligations are manageable given their income. The back-end DTI includes all monthly debts—credit cards, student loans, auto loans, alimony or child support, and the housing payment itself—divided by gross monthly income. If the DTI exceeds 43%, the loan would not be considered a General QM and would fall outside that safe harbor, requiring different underwriting considerations. The other percentages are not the standard General QM threshold.