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Low Doc Advantage™

Further to OSFI’s Guideline B-21, new requirements for information used to verify the reasonability of income for self-employed borrowers became effective as of August 1, 2015. To ensure you are prepared for these changes, please take a moment to review the following important guidelines, which outline critical information to include with your client’s next application.

UPDATED GUIDELINES | Effective August 1, 2015

The Low Doc Advantage continues to be a program designed for borrowers with an established history of self-employment and a strong credit profile. In addition to satisfying existing Low Doc requirements and ensuring the borrower’s income is reasonable for the nature and tenure of the business:

  • Lenders are required to obtain the Notice of Assessment (NOA) from the most recent tax year, at the time of application, to confirm the income from line 150 and that there are no income tax arrears.
  • The following information must be included in the submission notes of the application, for each self-employed borrower:
  1. Income amount confirmed by line 150 on the most recent NOA.
  2. Gross revenue of the borrower’s business.
  3. Type of business being owned and operated (e.g. landscaping, bookkeeping, etc.).
  4. Ownership structure (e.g. sole proprietor) and the percentage of ownership.

To review all requirements and qualifying guidelines, please visit the Canada Guaranty website to download the Low Doc Advantage product sheet. Should you have any questions or wish to discuss your client’s unique circumstances, please do not hesitate to contact your dedicated Account Executive or speak directly with a member of our National Underwriting Team at 1.877.244.8422.

NOTE: The Lender’s internal guidelines always take precedence and must be adhered to prior to review by Canada Guaranty.

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