Canada Guaranty

Transaction Types

• Purchase transactions.
• Refinance transactions.
• Portable eligible.

Amortization

• 25 year standard.
• Eligible for up to 30 years amortization.
• 20 bps incremental premium surcharge for each additional 5 years beyond the standard 25 years.

Loan-to-Value Criteria

• Maximum 80% LTV for Purchase and Refinance: 1–4 units

Loan Criteria

• Fixed-rate, fixed-payment and positively amortizing adjustable and variable rate mortgages.

Property Types

• Maximum 4 units, non-owner-occupied.
• Resale or new construction (single advance).
• Restricted to residential units (no commercial properties).

Borrower Qualifications

• Down payment must be from borrower’s own resources.
• TDS 40%.
• Minimum personal net worth of $100,000.
• Personal guarantees are required when the borrower is a corporate entity.

Rental income must be confirmed with at least one of the follwing documents:

• T1 Generals
• Lease Agreements
• Fair Market Rents from an accredited appraiser approved by Canada Guaranty
• Bank Statements showing a 12-month history confirming rental income has been received

1. Validation of Rental Income with T1 Generals:

• Rental surplus can be added to the borrower’s gross annual income.
• Rental shortfall can be deducted from the borrower’s gross annual income.

2. Validation of Rental Income without T1 Generals:

• Full Principal, Interest and Taxes on the subject property plus full Principal and Interest on all other properties must be included.
• 50% of gross rental income may be added to the borrower’s gross annual income.

OR

• Net rental income can be calculated, as per the lender’s internal guidelines.
• Rental surplus may be added to the borrower’s gross annual income.
• Rental shortfall may be deducted from the borrower’s gross annual income.

3. 80% Rental Offset on Subject Properties of 80% LTV or Less

• Where the subject property (SP) has an LTV of 80% or less, an 80% rental offset may be applied.
  

Documentation Requirements

• Standard documentation.
• Agreement of Purchase and Sale.
• Equity and asset confirmation.
• Rental income documentation. (Please refer to Borrower Qualifications)
• Appraisal ordered by Canada Guaranty for each application.

Benefits of the Rental Advantage™ Product

• 80% rental offset may be used on the subject property.
• Net rental income can be calculated using the lender’s internal guidelines.
• Rental shortfall can be deducted from the borrowers’ gross annual income.
• Canada Guaranty-ordered appraisals automatically confirm Fair Market Rents.

Applicable Premiums