Vacation Home

With lifestyle demands, a second home in the  city to reduce that weekly commute, or a cottage at the lake for weekend  getaways can be very appealing. In 2003, CMHC and Genworth introduced a  product to make this process more feasible - with as little as 5% down!

Acceptable Loan Purpose

• Secondary homes (Type A) available for purchase and refinance
• Vacation homes (Type B) available for purchase only 
• 25/30 - year amortizations available on Secondary (Type A)

*The program does not provide for the purchase of investment, rental  pool or timeshare properties; therefore, incidental rental income will  not be used for qualification purposes.

Eligible Properties (Refer to the Property Type Schedule)

Secondary Homes (Type A Properties):

• Maximum loan amount: - Metro Toronto, Metro Vancouver and Metro Calgary - $700,000; rest of Canada - $600,000
• Available for purchase and refinance

Vacations Homes (Type B Properties):

• Property characteristics same as Type A properties except for the following;
• Property need not be winterized
• May have seasonal access (road not ploughed during winter)
• Maximum loan amount:  $350,000 (exceptions will be considered on a case by case basis)
• Available for purchase only

Loan-to-Value Ratio Limits

'Loan-to-value' (LTV) is the relationship between the principal  balance of a mortgage and the property value. For example, if you have a  house valued at $100,000 with a $90,000 loan, you have a 90% LTV  ($90,000 divided by $100,000 = 90%).

• For A properties, the maximum LTV is 95%
• For B properties, the maximum LTV is 90%

Borrower Qualifications

• Maximum TDS: 42%
• Lenders require a minimum credit bureau score of 680 on all applicants.
• No prior bankruptcy or judgements
• No late payments in the last 24 months
• Maximum of one insured vacation property per applicant
• No 3rd party guarantors for qualification purposes. Lenders do accept spousal guarantors
• Lenders do not allow gifted down payments under this program

Document Requirements

• Offer to purchase
• Employment/income verification
• Verification of down payment

Appraisal Requirements

Turnaround times in this program are outside the standard purchase business levels. Property specifications
 

Type A Property:

• Foundation must be permanent and installed beyond the frost line.  This includes concrete/concrete block or preserved wood foundations  certified by a professional engineer or post/pier foundations on solid  bedrock
• Must be zoned and used as residential, rural or seasonal. Lenders do not accept mixed uses or rental pooling
• Freehold or condominium title. Lenders do not accept co-ops or ? interest ownership
• At minimum, property must have a kitchen, 3-piece bathroom, bedroom, and common area
• Must have a remaining economic life of at least 5 years more than the mortgage amortization period
• Year-round road access on reasonable quality public roads, serviced  by the local municipality. Lenders also allow privately serviced roads,  provided there is a maintenance contract in place
• Property must be winterized with a permanent heat source. For  example, heating can be baseboard, forced air, water radiator, radiant,  coal, propane, geothermal heat pumps, or heat pumps
• Good quality construction with no signs of deferred maintenance
• Water source: well, municipal serviced, and cistern. Water source  must be drinkable. Lenders accept lake or river water, provided the  property has its own filtration system. For example, a reverse osmosis  system
• There must be good market appeal in the area with no adverse influences/neighbourhood nuisances

Type B Property:

All Type A property requirements apply to Type B, except for the following:

• No permanent heat source is required. For example, a wood stove, fireplace, stove or heat blower is acceptable
• Foundation may be floating. For example, sitting on blocks
• Seasonal road use is acceptable. This means the road does not have to be plowed during the winter
• Water source needn't be drinkable. However, there must be running water in the home
• Property may be accessible only by boat

FOR PROPERTIES OUTSIDE THE PROVINCE AND INTERNATIONAL PURCHASES, PLEASE CONTACT ME DIRECTLY TO DISCUSS YOUR OPTIONS.