Canada Mortgage and Housing Corporation

The CMHC operates with a primary mandate of providing mortgage liquidity, assisting in establishing affordable housing development, and providing arms-length advice to the Government of Canada and the housing industry. The crown corporation acts as Canada's national housing agency. As such, it administers federal housing programs such as the first-time home buyer loan, acts as a mortgage insurer (primarily for high-leverage loans), and provides housing research. The agency's governance is led by an independent board of directors. However, the board is appointed by the Government of Canada and the agency is directly accountable to Parliament through the Minister of Housing, Infrastructure and Communities. CMHC is the largest crown corporation in terms of assets, with in assets as of the second quarter of 2021. ==History==

and the Aviation Parkway, Ottawa Wartime Housing Limited In 1941, the Government of Canada established the Wartime Housing Limited (WHL), a crown corporation that built and managed thousands of rental units for World War II workers and veterans. (Rural housing under the 1942 ''Veterans' Land Act'' remained with the Department of Veterans' Affairs.) During that time, an Advisory Committee on Reconstruction study (aka the Curtis Report) described a tremendous need for low and moderate income shelter throughout Canada, and recommended a national, comprehensive, and planned housing program emphasizing low-rental housing. In December 1945, the Central Mortgage and Housing Corporation was incorporated by act of the 19th Canadian Parliament, taking effect on 1 January 1946. In broad terms, its three primary functions were to administer the National Housing Act, 1944, "to provide facilities for the rediscounting of mortgages by the lending institutions," and to administer the Emergency Shelter Regulations (taking over this responsibility from the Wartime Prices and Trade Board). In 1947, the WHL became an arm of the CMHC, The government-owned plant employed workers from different parts of Canada, and the site—along with the residences and the facilities established for the munitions workers—evolved into a self-contained community constructed and operated by WHL. In 1948, the government mandated the CMHC to develop the site and its surrounding area into a modern industrial town. The CMHC manager of the area, George Finley, planned new housing subdivisions, commercial centres, and industrial areas. 1950s During the 1950s, housing quality concerns were added to the task of providing for sufficient quantity of housing. The banks thereafter began to issue mortgage loans with CMHC underwriting. If the individual receiving the loan went bankrupt then the bank who gave the loan would not lose money, but instead would be reimbursed by the government. As part of CMHC lending and insurance mechanisms, low-risk borrowers would have to pay insurance premiums if they wanted to borrow with small down payments. 1960s The 1960s marked CMHC's shift in focus towards municipal planning and development to help cities deal with rapid urban growth. 1970s In the 1970s, affordability became a major factor in the home buying process. To help make housing more affordable, lot sizes were reduced and the density of developments were increased. CMHC also introduced two on-reserve loan insurance products during the first half of the decade, enabling Band Councils or Aboriginal persons to access CMHC-insured financing for the construction, purchase or renovation of single-family homes or multiple residential properties, and an insurance pilot designed to increase market housing on-reserve. 2010s As part of the 2016 federal budget, the Government of Canada announced several initiatives that CMHC will be delivering: • Affordable Housing – A total of $1.4B over two years starting in 2016 broken down as follows: $504.4 million related to measures to support the construction of new affordable housing units, the renovation and repair of existing affordable housing, measures to support housing affordability such as rent supplements and measures to foster safe and independent living which are expected to benefit more than 100,000 Canadian households; • $200.7 million to support the construction, repair and adaption of affordable housing for seniors which is expected to improve housing conditions for more than 5,000 low-income households; • $89.9 million for the construction and renovation of over 3,000 shelter spaces for victims of family violence; • $573.9 million for retrofits and renovations to existing homes provided under our Social Housing Activity to address the increasing demand for repairs, as well as improve efficiency and reduce energy use, lowering utility costs and making housing more affordable; and • $30 million to help federally administered providers maintain rent-geared-to-income for low-income households living in social housing. • Up to $500 million per year for five years to provide low cost loans to municipalities and housing developers for the construction of new affordable housing projects. This initiative would encourage the construction of affordable rental housing by making low-cost capital available to developers during the earliest, most risky phases of development. • $208.3 million over five years to be invested in an Affordable Rental Housing Innovation Fund that would be used to test innovative business approaches – such as housing models with a mix of rental income and home ownership. • Northern & Inuit Housing – $177.7 million over two years starting in 2016 to address urgent housing needs in the North and Inuit communities. • On-Reserve – $137.7 million over two years starting in 2016 most of which would support the renovation and retrofit of existing housing and $10.4 million over three years starting in 2016 to support the renovation and construction of new shelters for victims of family violence in First Nations communities. • Up to $30 million over three years, starting in 2016–2017, to help homeowners dealing with costly structural problems in their homes as a result of the presence of the mineral pyrrhotite in their foundations. • $5 million for 2016–2017 to support internships for up to 625 Indigenous youth. The additional funding for CMHC's Housing Internship Initiative for First Nations and Inuit Youth (HIIFNIY) comes from the $165.4 million investment to expand opportunities for young Canadians under the Youth Employment Strategy announced in Budget 2016. In the 2019 federal budget, the Government announced the First-Time Homebuyers Incentive (FTHBI) program to help first-time homebuyers realize the goal of homeownership. The program functions as a shared equity scheme in which the CMHC provides eligible participants with up to 5% of the purchase price of a resale home, and up to 10% of the purchase price of a newly constructed home. The program was initially introduced over a limited four-year term and was allocated $1.25 billion. However, the governing Liberal party has committed to expanding the program further and removing certain pricing caps to make the potential pool of Canadians eligible for the program significantly larger. 2020s In 2020, CMHC announced it would be rebranding to better reflect its changing mandate. One name under consideration was "Housing Canada". At the beginning of the COVID-19 pandemic in 2020, then-CEO Evan Siddall warned home buyers that their support for homeownership "can't be unlimited." They followed one month later by tightening mortgage insurance qualifications. The minimum qualifying credit score was increased from 600 to 680, the gross debt service ratio was capped at 35% from 39%, and total debt service ratio was capped at 42% from the previous 44%. The CMHC only has the power to regulate its own borrowers, and not competing private mortgage insurers. The result of the increased qualifying criteria lead competition to acquire larger shares of the market. Sagen (formerly Genworth) subsequently replaced the CMHC as Canada's largest mortgage default insurer. In July 2021, the CMHC reversed the decision to tighten the lending criteria for mortgage insurance. The new CEO said it was a "mistake." == First-time home buyer incentive program ==

In the 2019 federal budget, the Canadian government introduced the First-Time Home Buyer Incentive program (FTHBI). The program was initially introduced over a limited four-year term and was allocated $1.25 billion. However, the governing Liberal party has committed to expanding the program further and removing certain pricing caps to make the potential pool of Canadians eligible for the program significantly larger. These, along with various other restrictions, limit the effective maximum price of an FTHBI-eligible property to $565,000. This is far below the median property prices in population centers such as Toronto and Vancouver, leading to concerns regarding the efficacy of the program in these areas. During their 2019 federal election campaign, the Liberal Party of Canada promised to expand this program to better help buyers in Toronto and Vancouver. The program is unaffiliated with the Home Buyer Plan, which allows buyers withdraw from their RRSP to increase their down payment. == Securitization ==

The CMHC engages in securitization of residential mortgages, under the provisions of the National Housing Act. This assists registered banks to be more liberal with lending policies, making it easier for residential buyers to obtain mortgages. There are nearly $500 billion worth of CMHC mortgage securities in force. CMHC also administers the legal framework for Canadian covered bonds on behalf of the Government of Canada. Introduced in 2012, the framework supports financial stability by helping lenders to further diversify their sources of funding and by attracting more international investors, thus making the market for covered bonds more robust. While many experts champion this government monopoly in Canadian mortgage securitization, citing the high prudential regulation and stringent public oversight, this model nevertheless means that the majority of securitized mortgage debt is registered on the federal government's balance sheet. In a May 2019 speech to the Canadian Credit Union Association in Winnipeg, Manitoba, Bank of Canada Governor Stephen Poloz revealed his support for the development of a private mortgage securities market in Canada that would compete with the public securitization programs of the CMHC. == Other programs and initiatives ==

Policy and research CMHC facilitates the development and implementation of federal housing policy in Canada. This includes the examination of housing finance trends and policy options for regulations, incentives, and securitization tools in the primary and secondary markets; the analysis of distinct housing needs of specific populations such as Aboriginal people, seniors, persons with disabilities, and low-income households, and how these needs can be addressed; and the identification of practical approaches to advancing sustainable technologies and practices in the housing sector. CMHC provides regular housing market analyses and forecasts at the local, provincial, and national levels. The CMHC is also the host of the Housing Finance Symposium, an academic event to discuss global housing finance issues. Mortgage loan insurance Mortgage loan insurance is mandatory for federally regulated lenders in Canada when the buyer of a home has less than a 20% down payment. This insurance protects the mortgage lender against loss if a borrower defaults, and allows qualified borrowers to access homeownership at interest rates comparable to those offered to buyers with larger down payments. As a public mortgage insurer, CMHC has a mandate to provide service in all parts of the country and for a range of housing forms. Also as part of the $2 billion annual investment, CMHC provides funding to provinces and territories under the "Investment in Affordable Housing" (IAH). First Nations housing Through CMHC, the Government of Canada provides funding each year to address housing needs in First Nations communities. CMHC's funding supports the construction of new rental housing, the renovation of existing homes, ongoing subsidies for existing rental social housing and an investment in capacity building for First Nations people living on-reserve. CMHC's On-Reserve Non-Profit Housing Program assists First Nations in the construction, purchase and rehabilitation, and administration of suitable, adequate and affordable rental housing in First Nations communities. CMHC provides a subsidy to the project to assist with its financing and operation. ==See also==