Mortgage Insurance for Flood-Impacted Homebuyers

CMHC (Canada Mortgage and Housing Corporation) continues to provide mortgage insurance to Albertans, but what’s changed if you live and/or lived in a flood-affected area? CMHC has released a statement that clears up some of these questions, but here’s the basics you need to know:

• Applications for properties affected by floods will be considered, provided information is disclosed about any damages, and the lender confirms that remedial action has been taken to address flood-related issues.
• No new policies have been introduced by CMHC for underwriting mortgage applications for flood areas.

Now let’s get the next part right from their own words so you know exactly how this is working:

CMHC policy requires lenders to ensure that adequate property insurance is in place to protect against loss or damage by fire and other insurable perils. Mortgage loan insurance is to indemnify lenders against losses due to borrower default and is not insurance to cover property damage. CMHC recognizes that homeowners impacted by the flooding may experience some financial hardship as they rebuild or repair their homes. CMHC encourages homeowners with CMHC insured mortgages to contact their financial institution at the first signs of financial difficulty to discuss their specific situation. CMHC provides lenders with a series of default management tools which can be used to assist borrowers experiencing difficulty meeting mortgage obligations. – CMHC

These situations are going to be dealt with on a case-by-case basis, so if you were/are living in a flood-affected area, it’s best to address any questions you might have directly with myself. Feel free to contact me anytime.

Tags : calgary homebuying, calgary mortgage, calgary mortgage broker, calgary real estate, CMHC, mortgage alberta