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National Housing Act (R.S.C., 1985, c. N-11)

Full Document:  

Act current to 2024-05-28 and last amended on 2020-03-25. Previous Versions

PART IHousing Loan Insurance, Guarantee and Protection (continued)

Marginal note:Objects

 The Corporation has the following objects in carrying on any activities under this Part or Part I.1:

  • (a) to promote the efficient functioning and competitiveness of the housing finance market;

  • (b) to promote and contribute to the stability of the financial system, including the housing market; and

  • (c) to have due regard to the Corporation’s exposure to loss.

  • 2012, c. 19, s. 351

Marginal note:Insurance of loans

  •  (1) The Corporation may provide insurance against risks relating to housing loans.

  • Marginal note:For whose benefit

    (2) For lenders, the purpose of insuring housing loans is to indemnify lenders in the event of default by borrowers. The obligations of borrowers or other persons are not released or discharged by that insurance or indemnification.

  • R.S., 1985, c. N-11, s. 8
  • R.S., 1985, c. 25 (4th Supp.), s. 4
  • 1999, c. 27, s. 3

Marginal note:Regulations — Minister of Finance

  •  (1) The Minister of Finance may, after consulting the Governor of the Bank of Canada and the Superintendent, make regulations respecting classes of housing loans and the criteria to be met by loans in each of those classes in order for the Corporation to be able to provide insurance against risks relating to those loans.

  • Marginal note:Criterion  — guarantee

    (1.1) Any criterion established by a regulation made under subsection (1) that relates to a guarantee of payment referred to in subsection 14(1) may apply to an existing insured loan.

  • Marginal note:Coming into force

    (2) A regulation made under this section comes into force on the day on which it is published in the Canada Gazette or on any later day that is specified in the regulation unless the regulation provides otherwise and it gives effect to a budgetary or other public announcement, in which case the regulation must not come into force before the day on which the announcement was made.

  • R.S., 1985, c. 25 (4th Supp.), s. 5
  • 1999, c. 27, s. 3
  • 2011, c. 15, s. 23
  • 2012, c. 19, s. 357
  • 2014, c. 20, s. 316

Marginal note:Fees for risk exposure

 The Minister of Finance may fix a fee to be paid by the Corporation to the Receiver General to compensate Her Majesty for Her exposure to the risks covered by Her agent the Corporation arising from the insurance relating to housing loans. That Minister shall notify the Corporation in writing of the fee.

  • 2011, c. 15, s. 23

Marginal note:Payments by Corporation for completion

 If the Corporation has insured a loan that has been provided to finance the completion of work relating to, or the supply of materials for, a housing project and the work has not been completed, the materials have not all been supplied or the work or materials have not been fully paid for, the Corporation may make loans or payments for the completion of the work or the supply of the materials or for the satisfaction of claims in respect of the project.

  • R.S., 1985, c. N-11, s. 9
  • R.S., 1985, c. 25 (4th Supp.), s. 6
  • 1999, c. 27, s. 3

Marginal note:Avoiding or curing defaults

  •  (1) The Corporation may make payments to approved lenders or to holders of insured loans, and may make loans or payments to borrowers or their assignees, for the purpose of avoiding or curing, in whole or in part, default under insured loans or facilitating variation of the terms of payment of insured loans, or for any other purposes that the Corporation considers appropriate to protect its interest as an insurer.

  • Marginal note:Subrogation

    (2) If the Corporation makes a payment to an approved lender or holder of an insured loan under subsection (1), the Corporation is subrogated, to the extent of the amount of the payment, to all the rights and interests of the lender or holder in respect of that amount, and may maintain an action in respect of those rights and interests in the name of the lender or holder or in the name of the Corporation. Any money recovered by the lender or holder must first be applied against money owing to the lender or holder on account of the insured loan.

  • Marginal note:Waiver

    (3) The Corporation may waive the right of subrogation referred to in subsection (2).

  • R.S., 1985, c. N-11, s. 10
  • R.S., 1985, c. 20 (2nd Supp.), s. 8, c. 25 (4th Supp.), s. 7
  • 1999, c. 27, s. 3

Marginal note:Maximum total

 Notwithstanding anything in this Act, the total of the outstanding insured amounts of all insured loans may not exceed the sum of

  • (a) three hundred billion dollars, and

  • (b) any additional amounts authorized by Parliament under an appropriation Act or other Act of Parliament on or after April 1, 1997.

Marginal note:Maximum total as of day section comes into force

 For greater certainty, the amount that the total of the outstanding insured amounts of all insured loans may not exceed is, as of the day on which this section comes into force, seven hundred and fifty billion dollars.

 [Repealed, 1999, c. 27, s. 3]

Marginal note:Administration of housing loans

 The Corporation may administer a housing loan by agreement with the holder of the loan.

  • R.S., 1985, c. N-11, s. 12
  • R.S., 1985, c. 25 (4th Supp.), s. 9
  • 1992, c. 32, s. 11
  • 1999, c. 27, s. 3

Marginal note:Corporation may lend

 The Corporation may make a housing loan in any of the following circumstances:

  • (a) where the loan would otherwise not be available to the borrower;

  • (b) where the Corporation intends to

    • (i) make a contribution to the borrower,

    • (ii) make another loan, or advances on another loan, to the borrower, or

    • (iii) forgive any indebtedness of the borrower to the Corporation; or

  • (c) where the Corporation is a party to an agreement respecting the operation of the housing project to which the loan relates.

  • R.S., 1985, c. N-11, s. 13
  • R.S., 1985, c. 25 (4th Supp.), s. 9
  • 1992, c. 32, s. 12
  • 1999, c. 27, s. 3

Marginal note:Guarantee

  •  (1) The Corporation may — with the Minister of Finance’s approval and on any terms or conditions that are specified by him or her — guarantee payment of any or all of the principal or interest, or both, in respect of securities issued on the basis of housing loans. The terms and conditions may, among others, relate to the amount and price of the guarantee, the characteristics of the securities to be guaranteed and the manner in which the securities are to be issued.

  • Marginal note:Regulations — Governor in Council

    (2) The Governor in Council may, on the Minister of Finance’s recommendation, make regulations respecting the characteristics of those who may issue or sell the securities.

  • Marginal note:Regulations — Minister of Finance

    (3) The Minister of Finance may make regulations respecting the characteristics of the housing loans.

  • Marginal note:Compensation

    (4) The Minister of Finance may fix a fee to be paid by the Corporation to the Receiver General to compensate Her Majesty for Her exposure to the risks arising from a guarantee referred to in subsection (1). That Minister shall notify the Corporation in writing of the fee.

  • R.S., 1985, c. N-11, s. 14
  • R.S., 1985, c. 25 (4th Supp.), s. 9
  • 1992, c. 32, s. 13
  • 1999, c. 27, s. 3
  • 2012, c. 19, s. 352

Marginal note:Prohibition

 It is prohibited for the Corporation to guarantee payment of any or all of the principal or interest, or both, in respect of a covered bond as defined in section 21.5.

  • R.S., 1985, c. 25 (4th Supp.), s. 9
  • 1999, c. 27, s. 3
  • 2012, c. 19, s. 353

 [Repealed, 1999, c. 27, s. 3]

Marginal note:Maximum total

  •  (1) Despite anything in this Act other than subsection (2), the total of the outstanding guaranteed amounts of principal for all issues of securities in respect of which guarantees that have been given under section 14 are in force may not exceed the total amount provided for in section 11.

  • Marginal note:Maximum total — other Acts

    (2) The total of the outstanding guaranteed amounts of principal may not exceed the amount authorized by Parliament under an appropriation Act or other Act of Parliament.

  • R.S., 1985, c. N-11, s. 15
  • 1999, c. 27, s. 3
  • 2012, c. 19, s. 354

 [Repealed, 1999, c. 27, s. 3]

Marginal note:Interest rate protection

 The Corporation may provide protection against the effects of changes in interest rates for housing loans.

  • R.S., 1985, c. N-11, s. 16
  • R.S., 1985, c. 25 (4th Supp.), s. 11
  • 1992, c. 32, s. 19
  • 1999, c. 27, s. 3

Marginal note:Dealing in obligations by Corporation

 The Corporation may

  • (a) acquire housing loans or interests in housing loans;

  • (b) make loans to the holders of housing loans;

  • (c) sell any obligation held by the Corporation and may, under an agreement made with the purchaser, continue to administer the obligation; and

  • (d) issue securities based on housing loans.

  • R.S., 1985, c. N-11, s. 17
  • R.S., 1985, c. 25 (4th Supp.), s. 12
  • 1992, c. 32, s. 20
  • 1999, c. 27, s. 3

Marginal note:Mortgage insurance

 The Corporation may provide the liquidator of a company, society or foreign company within the meaning of subsection 2(1) of the Insurance Companies Act with services in relation to the company’s, society’s or foreign company’s mortgage insurance business, and it may acquire some or all of the company’s, society’s or foreign company’s mortgage insurance policies or reinsure some or all of its mortgage insurance policies.

  • 2007, c. 6, s. 440

Marginal note:Reinsurance

  •  (1) The Corporation may obtain reinsurance with respect to the risk covered by the Corporation in respect of any insurance, guarantee or other protection provided by the Corporation under this Part.

  • Marginal note:Payment to Receiver General

    (2) The Corporation may pay to the Receiver General amounts determined in accordance with the Corporation’s corporate plan approved under section 122 of the Financial Administration Act to compensate Her Majesty for Her exposure to the risks covered under this Part by Her agent the Corporation. Those amounts are, for the Corporation, expenses of carrying on business under this Part.

  • R.S., 1985, c. N-11, s. 18
  • R.S., 1985, c. 25 (4th Supp.), s. 12
  • 1992, c. 32, s. 21
  • 1999, c. 27, s. 3.

Marginal note:Terms and conditions

 Subject to any regulations made under this Part, the Corporation may

  • (a) set the terms and conditions on which it exercises any powers or functions under this Part, including terms and conditions relating to the payment of claims in respect of any insurance, guarantee or other protection provided by the Corporation under this Part; and

  • (b) establish schedules of premiums, fees and charges for anything done in the exercise of any powers or functions of the Corporation under this Part.

  • R.S., 1985, c. N-11, s. 19
  • R.S., 1985, c. 25 (4th Supp.), s. 13
  • 1992, c. 32, s. 22
  • 1999, c. 27, s. 3
  • 2012, c. 19, s. 355

Marginal note:Agents

 The Corporation may authorize an approved lender to act as agent for the Corporation in the exercise of any of its powers or functions under this Part, including in a situation involving a loan made or administered by the lender.

  • R.S., 1985, c. N-11, s. 20
  • R.S., 1985, c. 25 (4th Supp.), s. 14
  • 1999, c. 27, s. 3

 [Repealed, 1999, c. 27, s. 3]

Marginal note:Establishment of funds

  •  (1) The Corporation must establish and maintain funds to provide for claims, losses, expenditures and costs relating to the conduct of its business under this Part.

  • Marginal note:Corporate plan

    (2) The Corporation’s corporate plan required under section 122 of the Financial Administration Act must contain a proposal that the Corporation’s profits from the conduct of its business under this Part that are not credited to a fund established under subsection (1) be used for one or more of the following purposes:

    • (a) the capitalization of the Corporation’s business under this Part;

    • (b) the payment of a dividend to the Consolidated Revenue Fund;

    • (c) the purposes of this Act or the Canada Mortgage and Housing Corporation Act or any other purpose authorized by Parliament relating to housing; and

    • (d) retention.

  • Marginal note:Implementation of proposal

    (3) The Corporation is authorized to implement a proposal referred to in subsection (2) after the proposal is approved under section 122 of the Financial Administration Act as part of the Corporation’s corporate plan.

  • Marginal note:Non-application

    (4) Section 29 of the Canada Mortgage and Housing Corporation Act does not apply to profits from the conduct of the Corporation’s business under this Part.

  • R.S., 1985, c. N-11, s. 21
  • R.S., 1985, c. 25 (4th Supp.), s. 16
  • 1992, c. 32, s. 25
  • 1995, c. 47, s. 1
  • 1999, c. 27, s. 3
 

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