CMHC changes take effect June 1, 2014

Who needs to know:
  1. If you are looking to buy a second home OR are self-employed AND
  2. You have less than a 20% down payment
Why this buyer segment?
  • In Canada, home buyers with less than 20% down payment are required to buy mortgage insurance.
What is CMHC?
  • Canada Mortgage and Housing Corporation (CMHC), the largest provider of mortgage insurance in Canada.
Details - Second home buyers:
  • Currently, CMHC offered mortgage loan insurance to second home buyers with less than a 20% down payment. 
  • This program is discontinued after Friday, May 30, 2014. 
Details - Self-emplyed buyers:
  • Currently, self-employed buyers were allowed to prove their income without traditional third-party validation.
  • Starting June 1, 2014, the new program will require self-employed buyers to prove their income with copies of their Canada Revenue Agency Notice of Assessment, audited financial statements, or unaudited financial statements prepared by an independent third party, for the previous two year period.
But I'm applying with CMHC this week for my closing at the end of June!
  • You're in luck. Regardless of the closing date of the home purchase, both programs are available for new mortage loan applications received by CMHC on or before Friday, May 30, 2014.
Why is CMHC doing this?
  • As an insurance provider, they continually review their business and believe these changes are a positive step to reduce taxpayers' exposure to risk.
Do you have any alternatives?
  • Yes, private insurers such as Genworth will still offer mortage insurance to buyers of second homes and to self-employed borrowers unable to provide traditional sources of income validation.
For any mortage related questions, I advise that you also speak with a mortgage professional. If you would like a professional referral, please contact me - Erik Carlson, 604.719.1501 or

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