Modifications to CMHC Multi-Unit Condominium Construction and Low Ratio Mortgage Loan Insurance

CMHC helps Canadians meet their housing needs and contributes to the stability of the housing market and finance system. CMHC has completed the review of its homeowner and multi-unit mortgage loan insurance products and services to ensure they are aligned with these objectives. This is the last set of changes as a result of the review.

Multi-Unit Condominium Construction

Effective immediately, CMHC is discontinuing its mortgage loan insurance for financing of multi-unit condominium construction. Despite the availability of this product, demand has been low. CMHC has not provided any insurance for multi-unit condominium construction since 2011. Financing needs for condominium construction are well served by the marketplace.

CMHC’s insurance for mortgage loans to home buyers wishing to purchase a condominium is unaffected by this change, and will continue to be available throughout Canada. 

Low Ratio Mortgage Loan Insurance

Effective July 31, 2014, CMHC will better align its low ratio insurance with its high ratio product by establishing maximum house prices, amortization periods and debt servicing ratios. These changes for loans with a loan-to-value ratio of 80% or less include:

  • Limit the maximum purchase price/lending value to less than $1 million;
  • Limit the maximum amortization period to 25 years;
  • Limit the Gross Debt Service (GDS) ratio to 39% and Total Debt Service (TDS) ratio to 44%.

The changes to CMHC’s low ratio insurance align this product with our objectives to help Canadians meet their housing needs as well as government parameters for high ratio mortgage loan insurance.

The changes are a business decision designed to reduce taxpayers’ exposure to the housing sector through CMHC. They are not changes to the government’s mortgage loan insurance parameters and do not apply to private mortgage insurers’ products and services.  

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