Canada Mortgage and Housing Corporation (CMHC) released its Q1 2018 financial report in late May, recapping its contributions to the Canadian housing markets and support to Canadians in housing need.
CMHC also published supplemental data on its Assisted Housing, Securitization and Covered Bonds activities, along with an expanded Mortgage Loan Insurance business supplement.
According to the Q1 2018 financial report, CMHC:
• provided mortgage loan insurance for more than 43,000 new units across the country, including over 24,700 rental units;
• maintained the quality of its portfolio with an overall arrears rate of 0.29 per cent. The typical CMHC-insured borrower had, on average:
o Credit score – 752
o Purchase price – $ 281,123
o Equity – 7.8%
• and, provided guarantees for $36.7 billion in securities to support residential mortgage financing. This includes $27.2 billion for National Housing Act Mortgage-Backed Securities and $9.5 billion for Canada Mortgage Bonds.
CMHC helped Canadians gain access to suitable, affordable housing by investing $1 billion through its Assisted Housing activities to create housing for low- and middle-income families.
The Rental Construction Financing Initiative
Budget 2018 proposed to increase the amount of low-cost loans provided by the Rental Construction Financing Initiative by $1.25 billion over the next three years, bringing the total to $3.75 billion in available loans for this initiative, which is open until December 31, 2020.
Delivering results for Canadians
CMHC’s mortgage loan insurance and securitization guarantee programs operate on a commercial basis. As a result of these activities in the first quarter, CMHC generated net income of $293 million.
As a responsible risk manager, CMHC holds capital for its commercial activities in line with its risk profile and with regulatory capital requirements. Its overall insurance-in-force as at March 31, 2018, was $472 billion and for this it had $14.3 billion in capital available, representing 177% of the minimum regulatory capital target.
“We continue to navigate a changing regulatory environment that has impacted our mortgage loan insurance volumes,” said Lisa Williams, Chief Financial Officer. “Nonetheless, we generated a net income of $293 million from our commercial activities, including securitization. This quarter, we also invested $1 billion to create much-needed housing units for low- and middle-income Canadians across the country.”
