Home Improvement / New Construction


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.



Transaction Types

  • Purchase transactions.
  • Portable eligible.
NOTE: Builder loans are not eligible.



  • 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.]
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 or the five-year benchmark rate.


Property Types

  • Maximum property value must be less than $1,000,000.
  • Maximum 2 units with 1 unit owner-occupied.
  • Single-family 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 an immediate 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%
NOTE: Mortgage Insurance premiums are non-refundable.


Last Updated: 03/17/2017

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