An Adjustable Rate Mortgage (ARM) may be a Qualified Mortgage (QM) as long as it meets the federal requirements under the Consumer Financial Protection Bureau. See the following: https://www.consumerfinance.gov/ask-cfpb/what-is-a-qualified-mortgage-en-1789/. This means the ARM has no risky features such as interest-only periods, negative amortization (where the principal balance increases over time), terms exceeding 30 years, or balloon payments and the lender has thoroughly determined your ability to repay the loan per the QM rule. If an ARM includes a balloon payment or if the lender fails to properly verify your ability to repay, it would be classified as a Non-Qualified Mortgage.