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CMCC is a "CMHC Approved Lender" which
is a very unusual feature for a mortgage
brokerage company and reflects our
large volume of mortgage business and our
underwriting expertise in structuring loan
proposals. As a "CMHC Approved Lender" we
work directly with CMHC to structure the loan proposal in a way that maximizes the benefit to our client.
CMHC will issue a Certificate of Insurance
in our name, which we can then market to
lenders without having to rely upon another
financial institution to negotiate important
terms and conditions with CMHC (i.e. loan
amount, amortization period, term etc…).
CMHC is active in insuring construction
financing on large multi-residential
developments. The advantage to a borrower is
a significantly reduced cost of borrowing.
CMHC will insure the following types of
construction loans: |
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High-rise & mid-rise condominiums |
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Freehold properties (single family home developments, townhouses etc.)
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Apartments/condominiums to be built for rental purposes
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Retirement & Nursing home developments
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Mixed use property development, where the residential component represents at least 80% of the overall project.
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Student housing developments. |
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In aggregate, we have structured almost
$1 billion and some of the largest CMHC-insured construction loans. The senior partners at CMCC have extensive construction lending experience, both in structuring loans with traditional lenders (on a conventional basis) and with CMHC (on an insured basis).
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Financing Terms Available:
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Interest Rate & Fees
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the interest rate, which can be obtained from a lender on a CMHC-insured deal, will be well below
conventional rates.
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Loan Amount
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the loan amount is limited to (i)
75% of the total sales value of the units being sold, (ii)
a percentage of the value of the development at full lease-up (if a rental project),
or (iii) a maximum of 85% of total costs |
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Presales Level for Condominiums
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the presales threshold for a condominium project is generally 50%-75% of total sales,
depending on the quality of the
project. |
Underwriting
on New Rental Construction Loans
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CMHC is the 'lender' of choice on new rental construction loans and retirement and nursing home developments. Traditional lenders have difficulty underwriting the high rental rates associated with new rental developments.
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CMHC'S Fee Structure:
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The fees are outlined below:
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CMHC Application Fees - upfront fee of $200 per unit for the first 100 units and a fee of $150/unit for any additional amount.
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CMHC Mortgage Insurance Premium (MIP) - a mortgage insurance premium, which is only paid on the amount of each draw. Please note that the 'loan to value' is calculated for residential condominiums based on the aggregate proceeds from sale to individual purchasers (and is not based on the project cost).
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High-rise & mid-rise Condominiums
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Max. Loan to Value - Up to 75.0% of Loan to Value.
Mortgage Insurance Costs - 1.20%
to 1.50% on the amount drawn. |
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New Rental Apartments*
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Max. Loan to Value - Up to 85% of Loan to Value
Mortgage Insurance Costs - 2.25% to 5.0% (increases as the loan to value escalates
to 85%).
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New Rental Retirement Nursing Homes*
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Max. Loan to Value - Up to 85% of Loan to Value
Mortgage Insurance Costs - 3.25% to 6.0% (increases as the loan to value escalates
to 85%).
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* Please note that for 'new rental' loans, the CMHC insurance policy is valid for both the construction period and for 25-40 years after completion.
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