The CMHC Modifies its Rules to Help Self-Employed Workers Become Homeowners

From the CMHC Media Newsroom

On July 19, the CMHC announced that it was making changes to some of its guidelines in order to make it easier for self-employed borrowers to qualify for a mortgage. Because of the relative instability of their income, self-employed workers, who represent 15 per cent of Canada’s population, have more difficulty than salaried borrowers in fulfilling the conditions required to obtain a mortgage.
The CMHC will provide lenders with examples of factors that can be used to support their decision to grant mortgages to self-employed borrowers, such as: the acquisition of an established business, sufficient cash reserves, predictable earnings, as well as previous training and education. The CMHC will also be more flexible by accepting a broader range of documents for satisfying the eligibility requirements of self-employed workers.
•Providing examples of factors that can be used to support the lender’s decision to lend to self-employed borrowers who have been operating their business for less than 24 months, or in the same line of work for less than 24 months such as acquiring an established business, sufficient cash reserves, predictable earnings and previous training and education; and
•Providing a broader range of documentation options to increase flexibility for satisfying income and employment requirements when qualifying self-employed borrowers such as the Notice of Assessment (NOA) accompanied by the T1 General, the CRA Proof of Income Statement and the Statement of Business or Professional Activities (T2125) to support an “add back” approach for grossing up income for sole proprietorship and partnerships.
These changes, which come into effect on October 1, will make it easer for self-employed workers to access CMHC mortgage loan insurance and will enable them to benefit from competitive interest rates.
While this is wonderful news for thousands of potential home owners, it still leaves this same group of Borrowers out in the cold when it comes to purchasing investment properties, Multi-residential and commercial included, as well as those purchasing Industrial properties.
This is where a Mortgage Lender like TempBridge can help. They have provided funding to many that are self-employed or own their businesses and declare this type of income as their only source of income. They will lend up to 75% of your acquisition price, or the value of the property if you have owned it for many years. Proof of income via tax returns is usually sufficient.

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