Page 1


In praise of the Canada Mortgage and Housing Corp.

Follow us on Twitter @Robert_Fleet and on LinkedIn. Peter Cook and Robert Fleet are committed to helping borrowers strategize the best loan structure possible. They are available for oneon-one consultation for any CAM reader requiring multi-residential financing. As “Apartment Financing Specialists” with First National Financial LP they have originated over $4 billion of mortgages. Their combined 35 years experience in the financial industry has lead to frequent speaking engagements across the country. They freely share their knowledge and techniques with audiences, clients and prospective clients. If you have questions, Peter and Robert may be reached by phone or email. Peter Cook — (416) 593-2913 Robert Fleet — (905) 301-3449


There has been concern over the past few months by real estate investors relating to regulatory changes in the mortgage industry. Also, Canada Mortgage and Housing Corp. (CMHC) has been in the news recently over policy changes and concerns with the availability of insured funds as it approaches its lending limit of $600 billion. CMHC has insured $121 billion in mortgages since an increase in its ceiling limit of $450 billion in 2008. The federal government has no plans of increasing this limit at this time. Change can be good To curb the demand for consumer debt and CMHC insured funds the federal government has announced new policies and regulations for single-family residential mortgages. These changes include lower amortization periods, limiting CMHC insured mortgages for purchases less than $1 million, tighter debt service requirements and lower loan to value when refinancing. Changes in policy for residential mortgages allows CMHC to stay within its limit without having to alter its multi-family underwriting policies. This is good news for the apartment investor. The new regulations should result in positive lasting effects for the landlord. These tougher restrictions on qualifying for financing in the single-family market will create a barrier to home ownership and force the first time home buyer to stay in the rental market longer. The increased demand for apartment rentals will force vacancy rates even lower and should allow landlords to increase rents and in the process improve their bottom line. It is business as usual at CMHC Regardless of the news reported in the media it is business as usual at CMHC for multi-family investors. More than 80 per cent of the multi-unit mortgages we have financed this year are insured and we anticipate our new CMHC loan volume at First National in 2012 will exceed $1.5 billion. Whether you are the largest landlord in Canada or the owner of a 10-unit apartment building, CMHC in our opinion is still your best financing option.


CMHC Insured Mortgage Advantages • Lower rates – Between 1.0% and 2.5% lower. • Leverage up to 85% of value. • Limited personal guarantee: 0%-50% of loan amount. Depending on loan to value. • All CMHC insured mortgages are assumable provided that the purchaser meets qualification requirements. • No geographical restrictions. • Lender must offer renewal at term maturity. • Insurance premiums and application fees are tax deductible. • Debt Coverage Ratio (DCR) – (Net Operating Income/Annual Mortgage Payment): 5-year term minimum is 1.30% and 10-year term minimum is 1.20%. • Amortization periods up to 35 years. • Only environmental report required. Typically appraisal and structural reports not required. • Easy to transfer from one lender to another at term maturity providing borrowers stronger position to negotiate lower rates with other lenders. • CMHC 2nd mortgage program provides access to low interest rate funds up to 85% LTV. Can also be advanced behind an existing conventional mortgage. • CMHC offers an insurance premium rebate that provides incentive for borrowers to refinance or increase their mortgage within the first seven years. • Increase loan amount to 65% loan to value through CMHC’s Top up program and pay the insurance premium only on the new funds. • Insurance premium and CMHC application fee can be added to the mortgage-paid only once for the full amortization period. • Lender’s processing fees are typically 0.10% - 0.25% of loan amount.

Take Control of your Operating Costs! While all utility costs are skyrocketing, you as apartment owners can only increase your rent by 3.1% this year. We can help you! Tenants are Becoming More Conscientious! Potential tenants are looking for buildings with a reduced carbon footprint. The new trends are turning to apartments that are sustainable, have low energy consumption and offer affordable rates.

Times are changing! VIRTA can help you achieve this new balance and keep a strong bottom line.


Energy Studies Green Energy & Technology Energized Building Condition Assessments Project Management High Performance New Construction

12095_Virta_2012.indd 1

August 2012 9

12-08-20 2:44 PM

First National Timbercreek  
First National Timbercreek  

First National Timbercreek article