CMHC eases mortgages for self-employed

August 6, 2018

Canada Mortgage and Housing Corporation (CMHC) wsill make it slightly easier for self-employed borrowers—which likely includes many residential contractors—to access mortgage financing starting October 1.
Under current rules, self-employed borrowers who operate their business or have been in the same line of work for fewer than two years can qualify for a mortgage provided they are considered a low risk.
These additions to the guidelines will reduce rigidity.
“Factors that could be used to support the lender’s decision will include acquiring an established business, having sufficient cash reserves, predictable earnings, previous training and education, and looking at borrowers’ demonstrated history of managing credit,” said Monica Guido, CMHC’s manager of client relations.
Newly self-employed borrowers are also getting a break. Documents showing previous employment are currently sufficient to support qualifying income, but, come October, previous documentation based on types of income will also be accepted, as will recent account statements, business documentation and signed contracts that are based on income types.
The following documentation will be added: A Statement of Business or Professional Activities report, and use of Notice of Assessments (NOA) to support income from the self-employed. This NOA should be accompanied by the T-1 General tax form.