Home Improvement / New Construction

Progress Draw Advantage™

The Progress Draw Advantage program is designed to assist borrowers who are constructing a new home or making major renovations to an existing property. Both contractor-built and self-built projects are eligible under the insured Progress Draw Advantage program.

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Transaction Types

Purchase transactions.
Portable eligible.

NOTE: Builder loans are not eligible.

Amortization

Maximum 25 years.

Credit Score Requirements

Strong credit profile required.

Loan-to-Value Criteria

Maximum 95% LTV for Purchase: 1-2 units
- Purchase Price ≤ $500,000: Minimum 5% down payment required.
- Purchase Price > $500,000 and < $1,000,000: Minimum 5% down payment required on the first $500,000 of the purchase price, plus an additional 10% down payment required on the portion of the purchase price above $500,000.]
Maximum 90% LTV for Purchase: 3-4 units

NOTE: Maximum LTV is subject to adjustments based on local housing market conditions.

Interest Rate Types

Fixed, standard variable, capped variable and adjustable rate mortgages permitted.
Borrower(s) must qualify at an interest rate that is the greater of the contract mortgage rate plus 2%, or 5.25%.

Property Types

Maximum property value must be less than $1,000,000.
Maximum 4 units with 1 unit owner-occupied.
Single-family detached and semi-detached homes.

Contractor-Built Criteria

Title to land must be in borrower’s name on or before closing.
Contractor and home are registered with an approved New Home Warranty program.

Self-Built Criteria

When the borrower acts as their own general contractor, individual contracts with sub-trades must each be less than 50% of total construction cost.

Borrower Qualifications

Down payment is from borrower’s own resources or gifted from a close family member.
No third-party or non-occupying guarantors.
Maximum debt service ratios: GDS 39% / TDS 44%

Basic Service (Lender Managed)

Lender orders appraisal from Canada Guaranty’s approved appraiser list.
Lender orders inspections and authorizes draws according to established lender policy.

Full Service (Insurer Managed)

Canada Guaranty orders appraisal from approved appraiser list.
Canada Guaranty orders all inspections and authorizes required draws.
Canada Guaranty will pay for up to 4 progress advance inspections.

Documentation Requirements

Title to land must be in borrower’s name on or before closing.
Lender obtains plans, cost estimates, building contracts, and permits.
Lender reviews construction cash flow requirements against draw schedule and addresses shortfalls.
Lender is responsible for managing holdbacks.

Applicable Premiums

Loan-to-Value Ratio	Single Premium	Top-Up Premium
≤ 65%	0.60%	0.60%
65.01%–75%	1.70%	5.90%
75.01%–80%	2.40%	6.05%
80.01%–85%	2.80%	6.20%
85.01%–90%	3.10%	6.25%
90.01%–95%	4.00%	6.30%

NOTE: Mortgage Insurance premiums are non-refundable.