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Cmhc Mortgage Insurance

CMHC Mortgage Insurance

If you’ve ever watched or read a news report on the Canadian housing and mortgage industry, you’ve probably heard the CMHC mentioned. You may have even dealt with them personally to insure your own mortgage.

The CMHC play a very important role in the Canadian lending landscape with good reason: they help people meet their housing needs.

What is the CMHC?

The letters are an acronym for Canada Mortgage and Housing Corporation. They act as Canada’s authority on all matters of housing and help contribute to the strength of the market by helping lenders and borrowers alike.

Where is the CMHC located?

The head office of the Canada Mortgage and Housing Corporation is in our nation’s capital. The Ottawa office is where the majority of dealings occur; however, they do have regional locations across Canada.

What does the CMHC do?

As the leading power for housing in Canada, the CMHC wears many hats. They provide:

  • Mortgage loan insurance – to protect lenders against borrower default
  • Affordable housing – helping to regulate housing conditions to ensure all Canadians have access to quality and reasonably-priced dwellings
  • First Nation housing – working with Aboriginal Affairs and Northern Development Canada to improve living conditions for First Nations people
  • Policy and research – delivering market analysis, research and information about the housing industry to help Canadians stay informed and make educated decisions
  • Securitization – ensuring that financial institutions such as banks and other lenders have access to funds to provide mortgages to borrowers

Why was the CMHC created?

Nowadays, the CMHC’s main function is to provide mortgage insurance to borrowers and help regulate the housing industry. When they were first created on January 1st, 1946, they had an entirely different role.

The National Housing Act, passed by the Parliament of Canada in 1938, was intended to promote the construction of new dwellings, repair and modernize existing homes and improve living conditions for all Canadians. Once the act was in place, the government needed a body to help enforce it. Thus, the CMHC was born.

In the period following the Second World War soldiers were returning to Canada in dire need of affordable housing for their families. The CMHC, then known as the Central Mortgage and Housing Corporation was shaped to house returning soldiers and give them quality homes at an affordable price. The CMHC further expanded to offer aid to loan and mortgage companies, and with the government, deliver a social housing program to assist low-income families.

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Your home is your most valuable asset. It is probably the single largest investment you will make in your lifetime. Your home is more than a place to rest your head and raise a family. Your home contains equity. It is a treasured resource and in some cases, can even be used as an ATM (aka cash back mortgages and HELOCs – don’t worry we’ll get there).

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