CMHC’s Rental Program A Hit

Rental-Property-Mortgage A few weeks ago CMHC launched a new mortgage insurance program for rental properties.  It’s designed for investors and applies to properties with up to 4 units.  The program has generated a lot of interest in a short amount of time.

The benefits:

  • Up to 100% financing is available (for 1-2 units only)
  • Approval decisions are fast
  • 40-year amortization or interest-only terms are available to improve cash flow
  • Title can be in the name of a business

A 650 credit score (680 for 100% financing) and verifiable income are required.

There are two downsides however.  First, almost no lenders are participating in CMHC’s $0-down rental program.  Second, CMHC’s default insurance premium (assuming you put nothing down) is 7.25%.  Fortunately, these premiums can be tax deductible on income properties, which reduces the impact (consult your accountant).

Call us or your favorite mortgage planner for more details.

  1. Hi Melanie
    I am interested in the offer/program, do you mind elaborating more or email me the details?
    Thank you.
    How is this different than getting the mortgage ourselves (as landlord)?

  2. Here’s a link to the official CMHC Rental Program with more info.
    Jerry, this program helps investors purchase rental properties. It is, in fact, intended for landlords.
    Rita, call CMHC’s broker line at 1-888-463-6454 and they can give you more details and lender references.
    Hope this helps…
    Melanie

  3. MyNext Mortgage is one of the few (if only) lenders that I know are offering 100% financing on rentals under this program. I’m on the lookout for more. MyNext only deals with Mortgage Architects planners so if you need these terms, we can help. – Melanie

  4. non related co applicants buying a house together 90LTV. The main applicant who is occupying the property as a principle residence is a first time buyer with strong credit and enough income to service at 90LTV. the co applicant is providing the 10% downpayment from own resources and they’ve agreed to split the ownership 50/50. The co applicant has a home of their own but their income is enough to debt service their own debts. Think the banks and insurance will accept this?
    i think the biggest issue is that the applicants and not related to each other and one applicant is not occupying the property.

  5. In your first post, it indicates a credit score of 650 is required, however this credit requirement only applies if the Small Rentals loan is in conjunction with another product which has a minimum recommended credit score, like a Refi over 90%, Flex Down, Flex 100, LOC or TDS over 42%) Otherwise, the Small Rentals does not have a minimum Beacon.

  6. Hi Jeremie,
    Thanks for the post. Technically you are right. The 650 Beacon is only a minimum “guideline.” Yet, I find CMHC is sticking pretty close to it because of the risk of this product.
    In addition, the main reason people are interested in CMHC’s small rental program is its minimal down payment requirements, for which the 650 guideline applies. If a client doesn’t need the other products that require this credit score (for example, if they’re putting down 10% or more) they might not need CMHC’s rental program to begin with. You could go to Geneworth or AIG instead.
    In any case, I definitely understand your point and appreciate the feedback.
    Have a great night,
    Melanie

  7. Hi Melanie, I would like to find out more about the My Next Mortgage program or any other program you may have for rental properties investor. Thanks.

  8. Hi Jessie,
    Thanks for the note. There’s now a half dozen lender options for rental properties. MyNext is great when:
    * You need to purchase in the name of a business;
    * You just meet CMHC’s guidelines (MyNext underwriters follow CMHC’s guidelines exactly without adding extra requirements like some lenders)
    * Want a competitive interest rates.
    * Need fast turnaround (MyNext is very fast–akin to FirstLine)
    As one more point of note, MyNext is available only through Mortgage Architects planners.
    If you need further info feel free give me a call sometime.
    Have a wonderful day,
    Melanie

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