CMHC Enhances its Mortgage Insurance Policy

The Canadian Mortgage and Housing Corporation has enhanced its mortgage policy. (CMHC insures mortgage with a loan to value ratio of less then 20% of the purchase value.)

The following was released from CMHC:

April 17, 2008 CMHC has successfully provided a homeowner mortgage loan insurance product up to 100% loan to value since November 2006. I am pleased to inform you that based on this experience, CMHC is now able to introduce enhancements at the 95.01% to 97% range. These enhancements are effective April 18, 2008.

Premium Reduction and Borrower Eligibility Criteria
Where the borrower is contributing a traditional source of down payment of at least 3%, the premium has been reduced from 3.10% to 2.90%. CMHCâ€^TMs Beacon score guideline or equivalent for these applications is 650.

Where the borrower is contributing a non-traditional source of down payment of at least 3%, the premium has been reduced from 3.10% to 3.00%. CMHC's current minimum Beacon score guideline of 680 or equivalent will continue to apply to these applications. When submitting an application with a LTV between 95.01% and 97% and the borrowerâ€^TMs down payment is from a non-traditional source, the emili "Flexible Downpayment" indicator must be selected.

TDS ratios up to 42% will be available for applications with LTVs from 95.01% to 97% as part of the standard offering. TDS ratios > 42% and up to 44% can also be considered for applications where all borrowers have a minimum Beacon score of 680 or equivalent. Note: These changes do not apply to 1-4 Rental applications or owner occupied applications with LTVs from 97.01% to 100%.

CMHC continues to consider applications with total debt service ratios beyond 44% where considered warranted by an Approved Lender.

Pierre Serré Vice-President, Insurance Product and Business Development