20 Jul CMHC introduces multi-unit loan insurance programs
CMHC introduces multi-unit loan insurance programs
The Canada Mortgage and Housing Corporation(CMHC) have allotted $3.75 billion to finance rental construction until 2021 in Canadian locales that demonstrate a dire need for housing. Known for insuring mortgages, the CMHC is offering several programs with steep incentives for developers.
The National Housing Strategy (NHS) unveiled by the federal government last year give the CMHC a central role in financing much needed rental units across the country.
Carla Staresina, VP of client relationship management at CMHC, says it’s quite a wide spectrum when they look at multi-unit loan insurance programs.
“Start at insurance for anyone wanting to build multi-unit from the far end of the spectrum and then we go to the multiunit flex insurance loan program, where we have increased the loan to value, possibly some decreases in premiums, longer amortization, and the mortgage loan insurance flex financing.
“Then it goes into what we call the Rental Construction Financing Initiative, which is a direct loan, and higher degrees of affordability are needed and higher degrees of accessibility is needed.”
Flex Financing, a program where loans up to 95% can be secured with lower interest rates & premiums with amortization stretched to 40 years is one option. Another is the Rental Construction Financing Initiative, a direct loan with higher degrees of affordability and accessibility needed.
“We’ve always been involved with multi-unit mortgage loan insurance, but we have more programs available now to the National Housing Strategy, and we’re most definitely trying to increase the supply of purpose-built rentals,” said Staresina.
“I want to make this clear, it’s not a shift from home ownership to rental: it’s just making sure both demands are being met and that we have the products to fill those demands, depending on where people live and the affordability needs they have.”