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Mortgage Qualifying changes for July 1

Under Real Estate


Written by

Written on June 7th, 2020

COVD-19 has impacted people in so many ways and has brought uncertainty for our community, but amongst all of this, the housing market activity picks up in the Fraser Valley. In May Fraser Valley listings and property sales started to bounce back as Realtors helped their clients get adjusted to the new normal. The changes that were announced this past week will affect the market as 1st-time buyers or anyone putting less than 20% down will have a whole new set of rules.

We are here to support all of our clients as they navigate buying or selling a home – please contact us with any questions or concerns about the new CMHC policies.

Below is the CMHC announcement:

Effective July 1, the following changes will apply for new applications for homeowner transactional and portfolio mortgage insurance:

    • Limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to our standard requirements of 35/42;
    • Establish minimum credit score of 680 for at least one borrower; and
    • Non-traditional sources of down payment that increase indebtedness will no longer be treated as equity for insurance purposes.
    • To further manage the risk to our insurance business, and ultimately taxpayers, during this uncertain time, we have also suspended refinancing for multi-unit mortgage insurance except when the funds are used for repairs or reinvestment in housing. Consultations have begun on the repositioning of our multi-unit mortgage insurance products.

“COVID-19 has exposed long-standing vulnerabilities in our financial markets, and we must act now to protect the economic futures of Canadians,” said Evan Siddall, CMHC’s President and CEO. “These actions will protect home buyers, reduce government and taxpayer risk and support the stability of housing markets while curtailing excessive demand and unsustainable house price growth.”

These decisions are within CMHC’s authorities under the National Housing Act and are in anticipation of potential house price adjustment. We will continue to monitor market conditions and work with our federal colleagues on potential macro-prudential policy options.

CMHC supports the housing market and financial system stability by providing support for Canadians in housing need, and by offering housing research and advice to all levels of Canadian government, consumers and the housing industry.