REAL VALUE » CHMC

Opening New Doors to Homeownership On-Reserve

cmhcauthor — Fri, 15 Jul 2011 12:23:32 +0000

CMHC Loan Insurance Helps First Nations Access Housing Financing Options

Having a safe, affordable place to call home is about more than four walls and a roof. A home is an important source of

To help create easier access to housing and better housing conditions on-reserve, Canada Mortgage and Housing Corporation (CMHC) offers three innovative loan insurance options that can enable First Nations to borrow the funds to buy, build or renovate a home of their own.

pride and is essential to the health and well-being of families and communities across the country.

Loan Insurance with a Ministerial Loan Guarantee. This loan insurance option may assist First Nation members living on reserve in accessing financing for the construction, purchase and/or renovation, of housing. First Nation members must be able to obtain a Ministerial Loan Guarantee (MLG) from the Minister of Aboriginal Affairs and Northern Development.
Leasehold Market Housing On-Reserve. This loan insurance option may assist First Nation members in accessing financing for the construction, purchase and/or renovation, of leasehold market housing on- reserve (e.g. designated lands). First Nation members must be able to obtain a Ministerial Loan Guarantee (MLG) from the Minister of Aboriginal Affairs and Northern Development. An MLG is not required in cases where First Nation members are able to provide a minimum 10 percent down payment from one of the following sources: cash savings, withdrawal from the borrowers Registered Retirement Savings Plan (RRSP), proceeds from the sale of another property.
CMHC Insurance for Loans Facilitated Through the First Nations Market Housing Fund (FNMHF). Eligible First Nation members who wish to buy, build or renovate a home on-reserve may obtain a CMHC-insured housing loan from an Approved Lender designated as an eligible lender by the FNMHF. The First Nation must also be qualified by the FNMHF and agree to provide a guarantee for the members’ housing loans. For more information about the FNMHF visit www.fnmhf.ca.

Eligibility for CMHC’s On-Reserve Loan Insurance options may require prior participation from the First Nation. As well, First Nation borrowers must also be able to satisfy the Approved Lender financing requirements including, for example, minimum down payment requirements and be able to support repayment of the loan.

For more information on CMHC’s On-Reserve Loan Insurance options, or for information on any other aspect of owning, maintaining or buying a home, visit our web site at www.cmhc.caor call CMHC at 1-800-668-2642. For more than 65 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency and a source of objective, reliable housing expertise.

Breaking New Ground in “Green” Housing

cmhcauthor — Sat, 19 Mar 2011 01:56:04 +0000

CMHC’s newest EQuilibrium™ Housing demonstration home opens its doors in Winnipeg

EQuilibrium™ Housing is a national initiative led by Canada Mortgage and Housing Corporation (CMHC) that brings the private and public sectors together to develop homes that are energy- and resource-efficient, environmentally friendly, and healthy to live in.

To help Canadians learn first-hand about sustainable housing, CMHC has been working with teams of designers, architects, builders and developers to design, construct and demonstrate EQuilibrium™ Sustainable Housing Demonstration homes across the country. The latest of these projects to open its doors to the public is Winnipeg’s Urban Ecology — a two-storey duplex located on an infill site in the heart of the city’s downtown core.

Designed by Winnipeg Housing Rehabilitation Corporation (WHRC), Urban Ecology includes energy-efficient and resource-conscious features and on-site integrated renewable energy systems. The result is an attractive and highly advanced “green” home that significantly reduces its energy consumption and minimizes its environmental footprint.

Among its other innovations, the Urban Ecology home features:

An accessible, adaptable and attractive open-concept design;
Locally-produced and environmentally-appropriate building materials, to reduce pollution and enhance indoor air quality;
Energy-efficient lighting and appliances designed to reduce energy consumption to as little as 17 percent of the energy used in a typical Canadian home;
Passive solar heating and a four-panel flat plate solar collector system to help heat the home and provide hot water;
A drain water heat recovery system that is predicted to decrease the home’s hot water heating requirements by close to 20 percent;
A photovoltaic (PV) energy system which will be connected to the local power grid, allowing the occupants to “sell” excess energy back to Manitoba Hydro;
Advanced water-conserving features and fixtures, including rain gardens and the ability to harvest rainwater runoff from the roof for landscaping during dry spells;
An air-tight high-performance building envelope to provide a comfortable living environment.

For more information about this project, the CMHC EQuilibrium™ Sustainable Housing Demonstration Initiative or to schedule a tour of a demonstration home near you, visit our website at www.cmhc.ca/equilibriumhousing or call CMHC at 1-800-668-2642. For more than 60 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency and a source of objective, reliable housing information.

New Mortgage Rules are New Monetary Policy Tool

Marcus Assalone — Tue, 18 Jan 2011 03:50:13 +0000

Today Canada’s Federal Finance Minister Jim Flaherty introduced new restrictions to be placed on mortgages insured by the CMHC. (Those are mortgages where the homeowner contributes less than 20% of the purchase price as a down payment.) These new rules will take effect on March 19, 2011.

· Maximum Mortgage Amortization periods will be reduced from 35 years to 30 years.
· On refinancing, you can only borrow against 85% of the value of your home. (Down from 90%)
· Home equity lines of credit will no longer be covered.

The Finance Minister said the reason these changes were necessary was to reduce rising levels of consumer debt. The Governor of the Bank of Canada, Mark Carney has raised similar concerns in his regular statements.

So What’s Going On?

Economic troubles in the United States have forced the U.S. government to print dollars in order to meet financial commitments and to free up money to boost their economy. The side effect of this is that when you put more U.S. dollars in circulation, it weakens the value of the U.S. dollar. This reduction in value has had serious repercussions around the world. In Canada, one of the effects is that the Canadian dollar has strengthened in value against the U.S. Dollar making our exports less attractive to them. Since they are the biggest consumer of our products, this impairs our economy. U.S. products look more attractive to us because of their relative lower price. For example, right now the Canadian dollar is actually worth more than the U.S. dollar it is trading at $1 CAD = $1.01 USD and many Canadians tell me they are interested in investing in U.S. real estate rather than Canadian properties.

It is with this climate in mind, that the Bank of Canada and others in our government are examining Canadian debt, the dollar, international trade, unemployment, inflation and other important components to balance all these factors to make sure our economy remains stable.

Look at the low interest rates we have in Canada, but contrast that with our equally low economic growth. This highlights that low interest rates are not enticing Canadian business to invest. This is a problem.

Canadian consumers are buying with cheap money, choosing to pay later, driving up debt loads. Every dollar that a Canadian receives as disposable income (that is money not allocated to necessities of life like shelter, clothing and food) they owe $1.48 ! This situation is unsustainable, and means in the future we will see increased defaults on debt. This second problem is caused by low interest rates. However, the Bank of Canada cannot raise interest rates to combat this problem.

I was one of those people who believed that once interest rates rose significantly, people would realize they paid too much for their homes and a correction in home prices would begin. It will not happen this way because the Bank of Canada cannot raise interest rates dramatically.

Lets consider the downward pressure the U.S. & Canadian Dollar exchange rate is having on Canadian exporters to the U.S. If the Bank of Canada raised interest rates dramatically, international investors would start putting their money in Canadian banks. This would further increase the value of the Canadian Dollar and put even more pressure on those same exporters damaging our economy.

So What To Do?

The government can’t raise interest rates and they can’t lower them. So they are using these new rules, specific and targeted against a problem in our economy. Some have criticized that the rules are limited in scope and don’t really have much effect in the market place. This is for a reason. They are using these rule changes, like they used to use changes to the interest rate. They will make slow, gradual, incremental changes to bring increased stability to the economy. Slowly, they will make consumers less able to take advantage of low interest rates.

For those of you who still believe the goal of financial regulators is to create economic growth, please think again. If that were true, they have failed miserably. They are not aiming for growth; they are aiming only for stability. So far they have succeeded. Hopefully, these new rules will bring them one step closer to resolving the growing debt we are carrying.