True or False: To be considered a QM, a first-lien loan's APR cannot exceed the APOR by a certain percentage determined by the loan size.

To be designated as a Qualified Mortgage (QM), a first-lien loan must indeed adhere to specific criteria regarding its Annual Percentage Rate (APR) in relation to the Average Prime Offer Rate (APOR). This connection is crucial because one of the key attributes of a QM is that it helps to ensure borrowers are provided with loans that are more sustainable and less likely to lead to default.

The regulation stipulates that for a loan to qualify as a QM, its APR must not exceed the APOR by a set percentage, which varies depending on the size of the loan. This means that as the loan amount increases, the allowable threshold for the APR above the APOR also adjusts. This measure is put in place to mitigate the risk of consumers taking on loans that they are not able to manage financially, thus promoting responsible lending practices.

Therefore, the assertion that for a first-lien loan to be considered a QM, its APR cannot exceed the APOR by a certain percentage based on loan size is true, validating the selection of that response.