Asbestos is not the Bestos

As most people know, if you are purchasing a home with less than a 20% down payment you are required to have your mortgage insured by CMHC or Genworth.  These insurers have their own set of conditions that your home must pass in order for them to allow your mortgage to be funded.  

Did you know that if the insurer discovers that there is Vermiculite insulation in the attic of your potential new home, they will not fund the mortgage?  I recently came across this problem and we were sent scrambling to figure out a solution.  Because the product usually contains harmful asbestos fibers, it cannot be removed by just anyone with a vacuum truck.  It has to be professionally removed by a certified asbestos removal crew at the staggering cost of around $10,000!!  I think it goes without saying that the Seller was not willing to remove the vermiculite before possession date (which was the requirement from the lender).  So what we came up with is that the Buyers would have formal quotes from the contractors to remove the insulation, we were able to build the shared cost of the removal into the mortgage (Seller paid half) and the work will commence upon possession date.

This doesn't mean that you can't buy a home with vermiculite or if you currently have a home with vermiculite that you won't be able to sell it.  Many lenders don't ask for a Disclosure Statement or results of a home inspection so they usually aren't aware of which homes have vermiculite and which ones don't.  It's just another one of those things to be aware of!

Do you have questions about vermiculite?  Comment below and I'll answer them!


  1. Kyle 02/24/2015 at 7:50 AM Hello Ryan,

    Have you noticed any changes in the insurers since this post? I am in the process of securing a mortage (less than 20% down) and the house has vermiculite insulation in attic, was tested and containis asbestos. A condition of the sale is to remove insulation by a professional as per federal regulation and replace with R50 blown cellulose. Already 0 for 1 on mortage default insuarance companies, hoping 1 of the remaining 2 will be ok with this. Any comments or have you been in the same boat with your clients?

  2. Ryan Souster 02/24/2015 at 2:16 PM Hello Kyle,

    I have not come across a situation where the mortgage insurance companies would not approve a property where proper remediation has taken place. I am very surprised that you are having issues. If the remediation has taken place, with certification, then the issue is no longer present. Does the mortgage insurer have the documentation stating that the work will be completed prior to possession?

Thank you! Your comment has been submitted and is awaiting approval.

Ryan Souster

Ryan Souster

CENTURY 21 Fusion
Contact Me