Insurable Housing Loan Regulations

Marginal note:Definitions

• 1 (1) The following definitions apply in these Regulations.

  Act

  Act means the National Housing Act. (Loi)

  credit score

  credit score means a score that is

  • (a) issued by a credit reporting agency that is incorporated by or under an Act of Parliament or of the legislature of a province; and

  • (b) based on a scale that is substantially equivalent to a scale used on June 26, 2011 by a credit reporting agency that was at that time incorporated by or under an Act of Parliament or of the legislature of a province. (pointage de crédit)

  eligible residential property

  eligible residential property means a property consisting of one to four family housing units, together with any associated property interests or real rights, structures and facilities. (immeuble résidentiel admissible)

  funded

  funded means, in respect of a housing loan, that money under the loan has been advanced to the borrower. (financé)

  gross debt service ratio

  gross debt service ratio means the percentage of a borrower’s gross annual income that is required to cover the annual payments associated with the eligible residential property against which a housing loan is secured. (coefficient d’amortissement brut de la dette)

  high ratio loan

  high ratio loan means a housing loan that is secured by an eligible residential property and whose principal amount, together with the outstanding balance of any loan having an equal or prior claim against the eligible residential property, is greater than 80% of the value of the eligible residential property at the time the loan is approved. (prêt à ratio élevé)

  low ratio loan

  low ratio loan means a housing loan that is secured by an eligible residential property and whose principal amount, together with the outstanding balance of any loan having an equal or prior claim against the eligible residential property, is less than or equal to 80% of the value of the eligible residential property at the time the loan is approved. (prêt à faible ratio)

  quarter

  quarter means any period of three consecutive months beginning on January 1, April 1, July 1 or October 1. (trimestre)

  total debt service ratio

  total debt service ratio means the percentage of a borrower’s gross annual income that is required to cover their annual payments associated with housing and all other debts. (coefficient d’amortissement total de la dette)

  value of the eligible residential property

  value of the eligible residential property means the value that is ascribed to an eligible residential property by a lender or the Corporation for the purpose of granting or insuring a housing loan and that is verified using a method that is generally accepted by prudent lenders, insurers or professional residential property appraisers. If the purpose of the loan includes the purchase of the property, the value must not exceed

  • (a) the purchase price of the property; or

  • (b) the purchase price of the property plus the estimated cost to the borrower of planned improvements to the property, if the purpose of the loan also includes those improvements. (valeur de l’immeuble résidentiel admissible)

• Marginal note:Verification of value

  (2) For the purposes of the definition value of the eligible residential property in subsection (1), generally accepted methods of verifying value include

  • (a) the use of a statistically reliable and up-to-date valuation model that assesses the value’s reasonableness;

  • (b) a fair-market-value appraisal by a professional residential property appraiser who is independent of the borrower;

  • (c) a drive-by appraisal; or

  • (d) a review of the value of comparable properties.

• Marginal note:Principal amount

  (3) For the purposes of these Regulations, the principal amount of a loan does not include any housing loan insurance premiums.