Vol. 150, No. 3 — February 10, 2016
Registration
SOR/2016-10 February 3, 2016
NATIONAL HOUSING ACT
Regulations Amending the Insurable Housing Loan Regulations
The Minister of Finance, having consulted the Governor of the Bank of Canada and the Superintendent of Financial Institutions, pursuant to subsection 8.1(1) (see footnote a) of the National Housing Act (see footnote b), makes the annexed Regulations Amending the Insurable Housing Loan Regulations.
Ottawa, February 2, 2016
William Francis Morneau
Minister of Finance
Regulations Amending the Insurable Housing Loan Regulations
Amendments
1 Subsection 1(1) of the Insurable Housing Loan Regulations (see footnote 1) is amended by adding the following in alphabetical order:
Act means the National Housing Act. (Loi)
2 (1) Paragraph 5(1)(a) of the Regulations is replaced by the following:
- (a) at the time the loan is approved, its principal amount, together with the outstanding balance of any loan having an equal or prior claim against the eligible residential property against which the loan is secured, must be less than or equal to
- (i) 95% of the value of the eligible residential property, if its value is no more than $500,000, or
- (ii) $475,000 plus 90% of the value of the eligible residential property in excess of $500,000, if its value is greater than $500,000;
(2) Subsection 5(1) of the Regulations is amended by striking out “and” at the end of paragraph (i), by adding “and” at the end of paragraph (j) and by adding the following after paragraph (j):
- (k) if the loan is part of a pool of loans on the direct basis of which marketable securities are issued, any securities issued on the direct basis of the pool after July 1, 2016 must be guaranteed under subsection 14(1) of the Act.
3 Section 6 of the Regulations is amended by striking out “and” at the end of paragraph (a) and by adding the following after paragraph (b):
- (c) if the loan is part of a pool of loans on the direct basis of which marketable securities are issued, any securities issued on the direct basis of the pool after July 1, 2016 must be guaranteed under subsection 14(1) of the Act; and
- (d) if the loan is not part of a pool of loans on the direct basis of which marketable securities are issued,
- (i) the loan must be insured on an individual basis on either the day on which it is funded or the day on which additional money is advanced to the borrower as part of the loan’s refinancing,
- (ii) for any given day, for at least one day in the six-month period prior to that day, the loan must have been part of a pool of loans that meets the criterion set out in paragraph (c) or have not been insured,
- (iii) the loan must have been in arrears, have been insured when it fell into arrears and since remained insured, and, as a result, not be eligible to be part of a pool of loans, or
- (iv) the loan must belong for insurance purposes to a portfolio of loans with the Corporation and at least 95% of all portfolio insured loans of the lender with the Corporation must meet the criterion set out in paragraph (c) or subparagraph (ii) or (iii).
4 (1) The portion of subsection 7(1) of the Regulations before paragraph (a) is replaced by the following:
High ratio loans — before October 15, 2008
7 (1) The criteria set out in paragraphs 5(1)(a) to (j) do not apply to a high ratio loan that meets the requirements of a housing loan insurance product that was offered by the Corporation before October 15, 2008 if, before that date,
(2) Subsection 7(2) of the Regulations is replaced by the following:
High ratio loans — October 15, 2008 to April 18, 2010
(2) The criteria set out in paragraphs 5(1)(a), (b), (c), (d), (h) and (i) do not apply to a high ratio loan if
- (a) at the time the loan is approved, its principal amount, together with the outstanding balance of any loan having an equal or prior claim against the eligible residential property against which it is secured, is less than or equal to 95% of the value of the eligible residential property;
- (b) it is scheduled to amortize over a period that does not exceed 35 years; and
- (c) during the period beginning on October 15, 2008 and ending on April 18, 2010
- (i) the Corporation received a housing loan insurance application in respect of the loan,
- (ii) the lender made a legally binding commitment to make the loan to the borrower, or
- (iii) the borrower entered into a legally binding agreement of purchase and sale in respect of the eligible residential property against which the loan is secured.
(3) The portion of subsection 7(3) of the Regulations before paragraph (b) is replaced by the following:
High ratio loans — April 19, 2010 to March 17, 2011
(3) The criteria set out in paragraphs 5(1)(a), (b), (c), (d) and (h) do not apply to a high ratio loan if
- (a) at the time the loan is approved, its principal amount, together with the outstanding balance of any loan having an equal or prior claim against the eligible residential property against which it is secured, is less than or equal to
- (i) 95% of the value of the eligible residential property, if the purpose of the loan includes the purchase of that property, and
- (ii) 90% of the value of the eligible residential property, if the purpose of the loan does not include the purchase of that property;
(4) The portion of subsection 7(4) of the Regulations before paragraph (b) is replaced by the following:
High ratio loans — March 18, 2011 to June 21, 2012
(4) The criteria set out in paragraphs 5(1)(a), (b), (c), (d) and (h) do not apply to a high ratio loan if
- (a) at the time the loan is approved, its principal amount, together with the outstanding balance of any loan having an equal or prior claim against the eligible residential property against which it is secured, is less than or equal to
- (i) 95% of the value of the eligible residential property, if the purpose of the loan includes the purchase of that property, and
- (ii) 85% of the value of the eligible residential property, if the purpose of the loan does not include the purchase of that property;
(5) Subsection 7(5) of the Regulations is replaced by the following:
High ratio loans — June 22, 2012 to July 8, 2012
(5) The criteria set out in paragraphs 5(1)(a), (b), (c), (d) and (h) do not apply to a high ratio loan if
- (a) the loan meets the criteria set out in paragraphs (4)(a) to (c); and
- (b) during the period beginning on June 22, 2012 and ending on July 8, 2012, the Corporation received a housing loan application in respect of the loan and the loan is funded not later than
- (i) December 31, 2012, or
- (ii) June 30, 2013, if it is documented as being scheduled to be funded no later than December 31, 2012 but is delayed due to unforeseen circumstances beyond the borrower’s control.
High ratio loans — June 22, 2012 to February 14, 2016
(6) The criterion set out in paragraph 5(1)(a) does not apply to a high ratio loan if, at the time the loan is approved, its principal amount, together with the outstanding balance of any loan having an equal or prior claim against the eligible residential property against which it is secured, is less than or equal to 95% of the value of the eligible residential property and
- (a) during the period beginning on June 22, 2012 and ending on July 8, 2012, the Corporation received a housing loan insurance application in respect of the loan and the loan was not funded in accordance with paragraph (5)(b);
- (b) during the period beginning on July 9, 2012 and ending on December 10, 2015
- (i) the Corporation received a housing loan insurance application in respect of the loan,
- (ii) the lender made a legally binding commitment to make the loan to the borrower, or
- (iii) the borrower entered into a legally binding agreement of purchase and sale in respect of the eligible residential property against which the loan is secured; or
- (c) during the period beginning on December 11, 2015 and ending on February 14, 2016, the Corporation received a housing loan insurance application in respect of the loan and the loan is funded not later than
- (i) July 1, 2016, or
- (ii) December 31, 2016, if it is documented as being scheduled to be funded not later than July 1, 2016 but is delayed due to unforeseen circumstances beyond the borrower’s control.
5 (1) Subsection 8(1) of the Regulations is replaced by the following:
Low ratio loans — before October 15, 2008
8 (1) The criteria set out in paragraphs 6(a) and (b) do not apply to a low ratio loan in respect of which the Corporation received a housing loan insurance application before October 15, 2008 if it meets the requirements of a housing loan insurance product that was offered by the Corporation before that date.
(2) Section 8 of the Regulations is amended by adding the following after subsection (2):
Low ratio loans — before July 1, 2016
(3) The criterion set out in paragraph 6(d) does not apply to a low ratio loan if the Corporation received a housing loan insurance application in respect of the loan — or in respect of the portfolio of loans to which the loan will belong for insurance purposes — before July 1, 2016, unless the application has been denied or the loan has ceased to be insured under insurance resulting from the application.
Transitional Provision
6 The criteria set out in paragraphs 5(1)(k) and 6(c) do not apply to a loan that is part of a pool of loans on the direct basis of which marketable securities were issued before July 1, 2016 during the period beginning on that day and ending on December 31, 2021.
Coming into Force
7 (1) These Regulations, except subsection 2(1) and section 4, come into force on the later of July 1, 2016 and the day on which they are published in the Canada Gazette, Part II.
(2) Subsection 2(1) and section 4 are deemed to have come into force on December 11, 2015.
N.B. The Regulatory Impact Analysis Statement for these Regulations appears following SOR/2016-9, Regulations Amending the Eligible Mortgage Loan Regulations.
- Footnote a
S.C. 2012, c. 19, s. 357 - Footnote b
R.S., c. N-11 - Footnote 1
SOR/2012-282