Canada Mortgage Housing Corporation (CMHC)

CMHC-insured mortgage loans

Canada Mortgage and Housing Corporation (CMHC) insured mortgage loans are available to cover the purchase price of a home as well as an amount to pay for immediate major renovations or other improvements that the purchaser may wish to make to the property. This option eliminates the need to obtain secondary financing after the purchase to pay for improvements. The homebuyer obtains a single first mortgage, makes a single mortgage payment, and benefits from first mortgage interest rates.

Details

The insured loan will be based on the lower of:

• The purchase price plus the actual cost of improvements, or,
  

• The "as improved" market value. Prior to approval, CMHC will determine the market value of the property after renovations/ improvements. The lending value will not exceed the market value of the property after renovations/ improvements.

• Applicants must have the following:

  • A minimum of 5% down payment of total cost (purchase price plus renovations/ improvements).

  • Cost estimates for renovations/improvements.

  • Qualifications to obtain a CMHCinsured loan through an approved lender.

• For more information call CMHC at (416) 221-2642 or www.cmhc.ca.

  EXAMPLE:
  Purchase Price	$100,000
  Renovations/improvements costs	$25,000
  Total cost	$125,000
  Lending Value	$125,000
  Maximum Mortgage (95%)	$118,750
  Mimimum 5% down payment	$6,250

CMHC's Homebuying Step by Step CMHC Interactive Version (links to website)

CMHC's Homebuying Step by Step guide is here to make things easier for you by providing the information you need to make a wise homebuying decision. This section provides examples and worksheets that will guide you through the entire homebuying process, from the moment you make the decision to buy your own home to the moment the movers carry the first box through the front door. It couldn't be easier!

In this Section:

• Step 1 — Is Homeownership Right for You?
  Buying a home is one of the biggest financial and lifestyle decisions you will make, so it pays to make an informed decision by first looking at the main advantages and disadvantages of homeownership.

• Step 2 — Are You Financially Ready?
  In this Step you will find a number of simple calculations that will help you evaluate your current financial situation and determine how much house you can afford and the maximum price that you should be considering.

• Step 3 — How Much Will It Really Cost?
  After you have calculated the maximum home price you can afford, you will need to calculate the up-front costs and expenses associated with buying a home to make sure you are financially prepared.

• Step 4 — What Should You Buy?
  Before you start searching for a home you need to think about your current and future housing needs and what characteristics are important to you in a home.

• Step 5 — What Professionals Should You Call On?
  This Step describes the roles played by the professionals you will call on in the homebuying process: real estate REALTOR®, mortgage broker, lawyer/notary, inspector, insurance broker. This guide for newcomers tothe Canadian housing market, written in clear English, has everything needed tounderstand how to rent or buy a home.

• Step 6 — How Can You Find the Right Home?
  If you have decided that you are ready to start your search, this Step offers information on ways to find the home that is right for you, useful tips for your search and Home Hunting worksheets.

• Step 7 — Ready to Buy?
  Once you find the home you would like to buy, you will need to present the vendor with an Offer to Purchase or Agreement of Purchase and Sale. This Step describes the Offer to Purchase process.

• Step 8 — The Final Steps
  Describes the final steps in the homebuying process: things you will need to do on closing day, and how to hire and work with a moving company.

• Step 9 — Is There More to Homebuying?
  The real financial responsibilities of homeownership begin when you take possession of your new home; you will need to budget for mortgage payments, ongoing operating costs and an emergency fund.

• Step 10 — Tips on Home Repair and Maintenance
  This section offers useful tips for new homeowners on home repair, maintenance and renovations, and discusses the importance of security and fire safety. Also includes a practical Maintenance Calendar.

• Worksheets