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CMHC Discontinues Second Home and Stated Income Programs - Options Still Available

On April 25, 2014 the Canadian Mortgage and Housing Corporation (CMHC) announced it is discontinuing two of its insurance programs.

Effective May 30, 2014, CMHC will no longer insure second homes or self-employed individuals who cannot prove income with traditional third party documentation.

The Crown Corporation said the changes are being made as part of its review of its mortgage loan business. “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, in a release. “As part of the review of its mortgage loan insurance business, CMHC is evaluating its products and services to ensure they are aligned with these objectives.

Combined, these two CMHC programs account for less than 3% of CMHC’s insured volume.

This number is not surprising, as CMHC made significant changes to its self employed program over three years ago, so most self-employed (stated income) mortgage applications have been approved through Canada’s other default-mortgage insurance companies, Genworth Canada and Canada Guaranty.

Genworth and Canada Guaranty will continue insuring self-employed borrowers, who are unable to provide traditional income verification, but have a proven 2-year history of managing their credit and finances responsibly. They will also continue offering financing for second homes with 5% downpayment.

To learn more about self-employed mortgages, please contact our office or Apply Now in 30 Seconds
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