In order to protect future home buyers and reduce risk, CMHC is changing its underwriting policies for insured mortgages.
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.
Under the changes effective July 1, CMHC will also no longer treat non-traditional sources of down payment funding, such as a personal unsecured line of credit, as equity for insurance purposes. Additionally, the CMHC will be suspending refinancing for multi-unit mortgage insurance except when the funds are used for repairs or reinvestment in housing.
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I think OREA and CREA need to object immediately to tightening anything for buyers at this point of our economy,
Hoping for buyers to have at least 680 credit score is going to create a very hard time for first timers that should be in our market place NOW,,,,,,
Also people who have been separated and have suffered credit issues due to their situation who may have kids at home and need to move forward and buy a home or buy down ,,,,,this is extremely unfair to them and they will not be able to get another home,,,,,,who came up with this nonsense,,,,,
I think everyone should write in and get immediate action to stop and negative impacts on our market like these,,,,,,
If these buyers cant buy then how are they expected to rent either since the landlords will need all the money they can get to pay for their properties and will not be interested in buying others to rent out,,,,,,
Also just because someones credit score is under 680 does not mean that they are not a good buyer and why should their dream of owning a home be crushed by our government,,,,,,
It will have a heavy impact on us selling first timer into condominiums and will slow our market down which is exactly what we need to move forward not backward,,,,
Lets all write in and OREA and CREA lets petition this,,,,,,
Thank you Elsie for your comment. This is something that the GR Committee will be working with CREA to advocate for.
Could not agree more!
Also….why are they pushing this change so FAST! Why not give a few months notice for significant changes like this ?!!
I agree. I am a single parent and this will make purchasing much harder And for single income house holds