Rick Palacios Jr Rick Palacios Jr.

There is a new risk on the horizon for homebuilders. The qualified mortgage patch, which currently exempts Fannie and Freddie from Dodd-Frank's 43% debt-to-income ratio cap, will expire. According to John Burns Real Estate Consulting, the change could impact as much as 14% of the mortgage market and could remove some would-be homebuyers from the market altogether. It could also put homebuilders at risk.

"The main risk is that a portion of home buyers that could qualify for a mortgage under the qualified mortgage patch may not be able to after January 2021 given the changes in underwriting requirements, namely Fannie Mae and Freddie Mac no longer allowing 43%-plus debt-to-income ratios," Rick Palacios Jr., principal and director of research at John Burns Real Estate Consulting, tells GlobeSt.com.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.