CMHC Improvement | CMHC

Eligible borrowers

Individuals who are Canadian citizens or permanent residents of Canada.

Loan-to-value (LTV) ratios

For homeowner loans (owner-occupied properties), the
loan-to-value ratio for 1 – 2 units is up to
95% LTV. For 3 – 4 units, the ratio is up to 90% LTV.

For small rental loans (non-owner occupied),
the loan-to-value ratio for 2 – 4 units is
up to 80% LTV.

Minimum equity requirements

For homeowner loans, the
minimum equity requirement for 1 – 2 units is
5% of the first $500,000 of lending value and 10% of the remainder of the
lending value. For 3 – 4 units, the minimum equity requirement
is 10%.

For small rental loans, the minimum equity requirement is
20%.

Purchase price / lending value, amortization and location

For both homeowner and small rental loans, the maximum
purchase price / lending value or as-improved property value
must be below $1,000,000.

For homeowner loans, CMHC-insured financing is available for
one property per borrower/co-borrower at any given time.

The maximum amortization period is 25 years.

The property must be located in Canada and must be suitable
and available for full-time, year-round occupancy. The property must also have
year-round access (via a vehicular bridge or ferry if it is on an island).

Down payments

The down payment can come from sources such as savings, the sale of a
property, or a non-repayable financial gift from a relative.

Rental income

Whether the property is owner occupied or non-owner occupied, subject to an
MLI application or not, we offer different approaches to
rental income for qualification purposes.

Find out more
about the approach(es) that can be used to calculate rental income and the
inputs to consider when calculating the debt service ratios.

Creditworthiness

At least one borrower (or guarantor) must have a minimum credit score of
600. CMHC may consider alternative methods of establishing creditworthiness
for borrowers without a credit history. 

Debt service

The maximum threshold is a gross debt service (GDS) ratio of
39% and a total debt service (TDS) ratio of 44%.

Interest rates

The GDS and TDS ratios must be calculated using an interest rate which is the
greater of the contract interest rate plus 2 per cent, or 5.25 per cent.

Advancing options

Single advances include improvement costs less than or equal
to 10% of the as-improved value.

Progress advances include new construction financing or
improvement costs greater than 10% of the as-improved value. With Full
Service, CMHC validates up to 4 consecutive advances at no cost. For
Basic Service, the Lender validates advances without pre-approval from CMHC.

Non-permanent residents (homeowner loans only)

Non-permanent residents must be legally authorized to work in
Canada (with a work permit).
Mortgage loan insurance is only available for non-permanent residents for
homeowner loans for 1-unit property, owner occupied, up to 90% LTV.

Non-permanent residents are not eligible for alternative
methods of establishing creditworthiness. In cases where a credit report is
not available, a letter of reference from the borrower’s financial institution
in their country of origin may be considered.