When dealing with potential customers that have not previously had a CMHC insured mortgage on their apartment building, seniors home or health care facility, or perhaps have not had recent experience we often get the following questions:

Why should I finance with CMHC?

The primary reason that most apartment owners chose an insured loan is interest rate. Interest rates vary constantly with different rates between lenders, fluctuations in market activity, availability of funds and even different types of lenders; however one constant remains in all conditions and that is that CMHC insured loans provide the best rate.

There are however many other reasons why you should choose an insured option:

a) Ease of renewal: If you are holding your real estate for long term investment CMHC mortgages are the easiest to renew, the least costly to renew, and you maintain the rate advantage

b) Portability between lenders: as an investor you may want to get different rate quotes on renewal of your mortgage. Virtually all lenders will quote renewals of CMHC mortgages on the basis of a transfer of security, whereas a conventional loan would mean a whole new application and all the costs associated with it.

c) Ease of assumption: Should you ever decide to sell and the purchasers are assuming your debt CMHC has clearly defined guidelines in how to get the assumption approved. This process has made CMHC insured loans the easiest to assume and therefore will sometimes make your property easier to sell.

d) Geographic advantage: CMHC has a much wider geographic scope of insuring than most conventional lenders. This has a tendency to make insured financing an even better choice in some areas.

e) Investment size: there are some lenders that place minimum or maximum size limits on their conventional lending criteria. With CMHC you can insure from one unit* to however many you have.

· *with 1 -4 units CMHC has slightly different qualifying criteria.

How do I get hold of CMHC?

CMHC provides mortgage insurance to the Lender. That Federal Government mortgage insurance is what drives the lenders risk down and therefore create s the lowest rates in the market. You as the building owner deal with an approved lender such as Peoples Trust who looks after all dealings with CMHC. Peoples Trust specializes in CMHC lending and will answer all your questions or get answers for your very quickly.

How do I make an application?

Firstly you should contact a lender that deals with CMHC on a regular basis such as Peoples Trust to determine on a preliminary basis the best way to proceed. You can also contact us directly to receive by fax or e-mail a list of the information required by CMHC to process your loan.

CMHC has a very good web site and they have excellent information available on line. One link is which will take you direct to the section on Multi family lending.

How long does loan approval take?

The length of approval time does vary somewhat based on how busy the market in general is, but no matter what is happening there are several things you as the borrower can do to speed up your application.

1) Review the information requested with your lender. Peoples Trust will help you submit an application that has the information and documentation required.

2) Make sure the documentation provided is accurate and supports your application.

3) When dealing with third party professionals such as appraiser’s, engineers’ or consultants, have them confirm with your lender exactly what is required.
The time frame for mortgage insurance and loan approval is often related to the time frame and information quality of the application. It is important to work with a lender that deals with CMHC on a regular basis.

When can I fix my interest rate?

Most lenders will want CMHC approval before you can fix the rate. You should look for flexibility in timing so that you maintain some control over fixing the rate. Some lenders will want to automatically fix on the day of funding; some will fix on the day of commitment. Peoples Trust gives you the option of fixing anytime between mortgage commitment and the funding date. This flexibility can often save you on long term interest costs.