Can You Own an Investment Property If You are new in Canada

This policy applies to customers who have immigrated to Canada within the last 60 months, and are looking for an insured mortgage but do not have established Canadian Credit Bureau history.

For customers who have worked or studied in Canada, have applied for permanent residence, and already have a Canadian credit history, our regular policy will apply.

Properties allowed:

1. Purchase only • Maximum 2 units where one unit is owner occupied principal residence
2. New Construction
3. Resale

Properties not allowed:

1. Insured Business for Self
2. Cottage
3. Second Homes
4. Rental Properties
5. Non-owner occupied properties

Borrower Qualifications

1. Must have immigrated/relocated to Canada within last 60 months.
2. 3 months minimum full time employment in Canada.
3. Borrowers transferred to Canada under relocation programs are considered on an exception basis.
4. Guarantor’s Income Confirmation required (if applicable).
5. Required Documentation
6. Purchase and Sale Agreement including all addendums, and MLS listing (if applicable).
7. Standard income confirmation.
8. Confirmation of Landed Immigrant Status (Permanent Residency Card).
9. Preceding 12 month history of rent paid in Canada and 12 month history of 2 regular obligations (e.g. monthly).
10. Proof of Borrower Meeting Rental and Regular Obligations:

• Rent – Supporting Bank Statements and letter signed by landlord indicating:

Date the tenant moved in,Monthly rent amount, Amenities included in the rent, Payment history

• Regular Obligations:

Copy of bill payment confirmation from bank statement/paid invoices

     Mandatory: Payments must be timely. No late payments.

1.     obligations, LTV is limited to 90% and the following may be accepted:

• Satisfactory Letter of Reference from a recognized Financial Institution outlining history and past credit experience. Must be dated within 60 days of approval, or;
• 6 months of Bank Statements from a Primary Account (living expenses such as rent and food flowing through the account), with no evidence of financial difficulties (ie. no NSF items).

 Total Debt Service (TDS)

• 42% with Credit Score < 680
• 44% with Credit Score >/= 680
• All debts outside country must be included in the TDS
• Rent earned outside of Canada is to be excluded from calculation

Gross Debt Service (GDS)

• 35% with Credit Score< 680
• 39% with Credit Score >/= 680

Down Payment

• All Down payments must be verified
• When LTV is 95%, down payment must come from borrower’s own resources
• When LTV is less than 95%, Down payment can come from a Corporate Relocation Subsidy or be gifted by an immediate family member.
• Maximum purchase price of $1,000,000

Amortization

• Up to 25 years

New to Canada – Conventional

This policy applies to customers who have immigrated to Canada within the last 60 months, and who cannot provide confirmation of income meeting TD conventional income confirmation guidelines but otherwise demonstrate a strong profile.

Note: For customers who have worked or studied in Canada, have applied for permanent residence, and already have a Canadian credit history, our regular policy should apply.

 

Product Purpose Property

Eligible

• Conventional Mortgage
• Fixed Rate
• Closed VIRM
• Cashback mortgages permitted
• Purchase
• Refinance
• Single Advance
• Owner occupied (or occupied by an immediate family member) up to 4 Units
• New Construction
• Resale

Ineligible

• Non Residents
• Temporary Residents
• Cottage
• Non-owner occupied properties
• Maximum Aggregate Mortgage Amount (Total of all Mortgages)

Properties in ONT:

• $1,000,000
• Up to 2 properties

 GDS/TDS:

• No GDS or TDS test is required for conventional financing.
• Note: Income not required and instead applicant must provide evidence of the equivalent of 12 months of mortgage principal, interest and tax payments in liquid savings in Canada (this is in addition to the applicants 35% down payment).
• Maximum LTV –Lesser of 65% or Sliding Scale, no exceptions.
• Amortization – Maximum 25 years.
• Appraisal – Full appraisal is required.
• Down Payment – Minimum down payment $40,000, from own resources, cannot be borrowed or gifted.
• Closing costs must be confirmed.
• Confirmation funds are in Canada before funding application.
• No exceptions permitted.

 Borrower Qualifications

• Must be resident of Canada with Landed Immigrant / Permanent Resident Status or confirm application for Permanent Resident Status has been received by Immigration Canada.
• Must be Landed Immigrant/ Permanent Resident no more than 5 years.
• Applicant(s) must provide evidence of 12 months mortgage principal, interest and tax payments (PIT) in liquid savings in Canada.
• A minimum 30 days savings history of the 12 months PIT is required.
• Confirmation of Landed Immigrant Status (Permanent Residency Card).
• If customer files taxes in Canada, copy of most recent Notice of Assessment to confirm no outstanding taxes owing.
• Note: The New to Canada policy is to assist applicants that have not been able to establish a Canadian credit history. If an individual is deemed new to Canada however in that time has shown a poor credit repayment track record in Canada, they should not be considered under this program.

Temporary Residents

Applicants under these guidelines will typically be employed by established, well respected companies who are being relocated to Canada for a specific period of time for work purposes.

Product Purpose Property

Eligible

• Conventional Mortgage
• Fixed Rate
• Closed VIRM
• Purchase • Owner occupied –
• maximum one unit
• New Construction
• Resale

Ineligible

• Refinance
• Equity Take Out
• Purchase with Improvement
• Refinance with Improvement
• Rental
• Multi-unit

 LTV

• Maximum 80% for Conventional Mortgage Financing subject to Sliding Scale.
• Maximum 90% for Insured Financing. Down Payment Minimum of 10% from borrower’s own resources.

Amortization –

Maximum of 25 years where the LTV is greater than 80%.

Debt Servicing

Maximum GDS Ratio

• 35% where beacon score is less than 680.
• Up to 39% where beacon score is 680 or greater.

Maximum TDS Ratio

• 42% where beacon score is less than 680.
• Up to 44% where beacon score is 680 or greater.

Credit Bureau

• For CMHC insured deals, CMHC will obtain copies of the international credit bureau.
• For Conventional and Genworth insured deals, the Underwriter will review foreign credit bureau reports, as provided by the Broker.
• The Underwriter will forward the credit bureau to Genworth for insured mortgages.
• There may be cases where they are cost-prohibitive or take too long; in such cases, a letter of reference from the financial institution where the customer currently has borrowings will be required. – The Supplier will review and verify the validity of all reference letters for Conventional requests and forward the letters of reference to the insurers for review for all insured requests.

Borrower Eligibility

• Standard borrower eligibility criteria apply.
• Customer must have relocated to Canada within the last 24 months, must be eligible to work in Canada and must be employed in Canada for a minimum of 3 months. Confirmation of valid Canadian Employment Authorization Form  (Work Permit form 1442).
• Program not available to diplomats or foreign political parties that do not pay income tax in Canada (in the event of a foreclosure TD is unable to enforce against a diplomat).
• Must confirm sale of principal residence in their home country, or be able to carry both properties.
• Income Confirmation
• Confirm income as declared on the application, by letter of employment indicating length of contract in Canada and no probationary period.

Non-Residents

Applicants under these guidelines do not reside in Canada.

Maximum exposure of 3 properties per non-resident investor.

Product Purpose Property

Eligible

• Conventional Mortgage
• Fixed Rate
• Closed VIRM
• Purchase
• Refinance
• Transfer In
• Rental Properties up to 4 units,
• Recreational properties meeting conventional standards.

 Ineligible

• Cashback mortgages not permitted
• Purchase with Improvements
• Refinance with Improvements

LTV

• Maximum 65% LTV subject to Sliding Scale
• No exceptions to LTV are permitted

Appraisal Requirements

• Full Appraisal Required

Amortization

• 25 years

Debt Servicing

• All debts including housing costs from principal residence are included in the debt servicing calculations
• Standard debt servicing calculations applies.

Maximum GDS Ratio:

• 35% where beacon score is less than 680
• Up to 39% where beacon score is 680 or greater

Maximum TDS Ratio:

• 42% where beacon score is less than 680
• Up to 44% where beacon score is 680 or greater
• Credit Bureau

Satisfactory international credit bureau OR satisfactory Letter of Reference from Bank in country of origin where customers currently have borrowings.

Income Confirmation – Standard income confirmation is required.