Courtesy of Canada Mortgage and Housing Corporation (CMHC)
Canada Mortgage and Housing Corporation (CMHC) announced today two additional changes as it has completed the review of its homeowner and multi-unit mortgage loan insurance business. These are:
- CMHC mortgage loan insurance for the financing of multi-unit condominium construction will be discontinued effective immediately. CMHC’s mortgage loan insurance for the homebuyers wishing to purchase a condominium is unaffected by this change; and
- CMHC will align its low-ratio transactional mortgage loan insurance product with its high-ratio product by establishing maximum house prices, amortization periods and debt servicing ratios effective July 31st.
“CMHC helps Canadians meet their housing needs and contributes to the stability of the housing market and finance system,” said Steven Mennill, Senior Vice-President, Insurance. “The changes announced as part of the review ensure that CMHC’s products and services are aligned with these objectives.”
The changes are a business decision designed to increase market discipline in residential lending while reducing taxpayers’ exposure to the housing sector through CMHC. They also support the government’s continued efforts to adjust the housing finance framework to restrain growth of taxpayer-backed mortgage insurance, as noted in Economic Action Plan 2014. They are not changes to the government’s mortgage loan insurance parameters and do not apply to private mortgage insurers’ products and services.
As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable housing solutions that will continue to create vibrant and healthy communities and cities across the country.