CMHC announced on April 25, 2014 that they are discontinuing both the Second Home and Self-Employed mortgage insurance products effective May 30, 2014. These two programs have been available to Canadians for approximately 7 years but account for less than 3% of CMHC’s insured business. Given the limited use of these products, the cancellation of these programs is not expected to have a significant impact on the housing market.
The self-employed program allowed business owners to qualify for a mortgage without proving their income. An applicant with great credit could qualify for a mortgage before being able to prove their income by traditional sources. Self-employed Canadians can still qualify for CMHC insured financing with a validation of their income using traditional methods.
The second home program allowed applicants to have two insured mortgages through CMHC, one for a principle residence and one for a second home or vacation home type property. Applicants will no need a minimum 20% down payment for a second home or apply for an insured mortgage through Genworth Canada and Canada Guaranty.