Canada Mortgage and Housing Corporation (CMHC)
Definition and meaning of Canada Mortgage and Housing Corporation (CMHC) in real estate.
The Canada Mortgage and Housing Corporation is Canada's national housing agency, a Crown corporation that administers the National Housing Act and provides mortgage default insurance.
In more detail
Similar to the Federal Housing Administration in the United States, the corporation helps Canadians access affordable housing and mortgage financing. A primary function of the agency is providing mortgage insurance to lenders, which protects them in case a borrower defaults on a loan. In Canada, buyers with a down payment of less than twenty percent are typically required to purchase this mortgage insurance. The agency also conducts housing market research and supports affordable housing programs across the country.
Key facts
| Category | Mortgages & Financing |
|---|---|
| Also known as | CMHC |
| Applies to | Canadian housing market and mortgage financing |
| Required by | Canadian lenders for buyers with down payments under twenty percent |
A first-time buyer in Toronto with a ten percent down payment obtains a mortgage insured by the Canada Mortgage and Housing Corporation to secure a lower interest rate.
Frequently asked questions
What is the equivalent of the Canada Mortgage and Housing Corporation in the United States?
The Federal Housing Administration and private mortgage insurance companies perform similar roles in the United States.
Who pays the mortgage insurance fee to this corporation?
The borrower pays the premium, which is typically added to the total mortgage amount and paid monthly.