Canada Mortgage and Housing Corporation (CMHC) continues to take an active role in helping Canadians through the COVID-19 pandemic while maintaining a strong financial position. Details are available in CMHC’s quarterly financial report released today.
In September 2020, the Government of Canada announced a $1 billion Rapid Housing Initiative (RHI) administered by CMHC to help address urgent housing needs of vulnerable Canadians. The RHI will create up to 3,000 new affordable housing units across Canada by funding the construction of modular housing, as well as the acquisition of land, and the conversion of existing buildings. The initiative is largely to help alleviate emerging pressures from the pandemic.
We have had an increase of $1,584 million (403%) in government funding for housing programs driven mainly by $1,549 million for the recently ended Canada Emergency Commercial Rent Assistance (CECRA) for small businesses initiative.
CMHC has also helped support the stability of the economy by guaranteeing $173 billion in new securities, up $49 billion (40%) from the same nine-month period last year. This is due to financial institutions accessing our programs, for additional sources of liquidity. The increased limit on Canada Mortgage Bond (CMB) issuances was a key factor in driving higher CMB volumes.
“CMHC plays a significant role in contributing to the stability of the Canadian economy,” said Lisa Williams, CMHC’s Chief Financial Officer. “We remain in a strong financial position as we continue our important work of finding housing solutions for people living in Canada.”
Additional quarterly report highlights for the three-month period ending September 30, 2020:
- Our estimated provision for claims has increased for the third quarter, due to the evolving impact of COVID-19 on economic variables such as average unemployment rate, house price index, and real gross domestic product.
- We experienced an increase of $42 million (28%) in other income mainly caused by a reduction in our expected credit loss (ECL) provisions -‒ the expected losses on loans, loan commitments, and investments -‒ by $22 million due to more optimistic financial market projections.
- Multi-unit residential volumes increased by 4,548 (12%) and 32,982 (36%) units from the same three and nine month periods last year, respectively, as many borrowers refinanced to benefit from lower interest rates.
- Transactional homeowner volumes decreased by 601 (2%) and 1,816 (2%) units from the same three and nine month periods last year, respectively, as a result of the changes to our underwriting criteria.
- Portfolio volumes increased by 19,804 (396%) and 65,181 (273%) units for the same three and nine month periods last year, respectively, as a result of the short-term expanded eligibility criteria for portfolio insurance implemented in March 2020 to help mortgage lenders access the Insured Mortgage Purchase Program (IMPP).
- The Government, through CMHC, worked with lenders to allow mortgage payment deferrals for up to six months as part of extraordinary measures to help homeowners and multi-unit borrowers facing financial difficulties during the pandemic, as well as to minimize the risks of further financial and market instabilities.
- As of September 30, 2020, CMHC’s entire insured book of business has 5% of loans with a payment deferral in place; a decline from approximately 8% in August. Access information on mortgage deferrals.
- We have temporarily suspended our dividend in order to conserve our capital to support further action by the Government, should the need arise.
- At September 30, 2020, our capital position remains strong and our excess capital of $5.3 billion will serve to buffer potential future impacts of the COVID-19 pandemic.
- Additional information regarding CMHC‘s role in supporting the Government response to COVID-19 is also online.
- We have also continued to work with the provinces and territories to co-develop the Canada Housing Benefit. Progress on the National Housing Strategy is reported quarterly, online.
- The full Quarterly Financial Report for Q3 is available online.
|Q3 Highlights||Three months ended September 30, 2020||YTD September 30, 2020|
|Net income ($M)||$336||$1,161|
|Government funding for housing programs ($M)||$1,977||$3,520|
|New securities guaranteed ($B)||$43||$173|
|Insured volumes (units): Transactional homeowner||28,876||72,881|
|Insured volumes (units): Portfolio||24,801*||89,089*|
|Insured volumes (units): Multi-unit residential||42,756||123,622|
* Portfolio substitutions were 8,291 and 27,270 units for the three and nine months ended 30 September 2020.
|Capital management||As at September 30, 2020|
|Total Mortgage Insurance capital ($B)||$13|
|Mortgage Insurance capital available to minimum capital required (%)||233%|
|Total Mortgage Funding capital available ($B)||$2.8|
|Mortgage Funding capital available to capital required (%)||233%|
CMHC supports the housing market and financial system stability by providing support for Canadians in housing need, and by offering housing research and advice to all levels of Canadian government, consumers and the housing industry. For more information, follow us on Twitter, YouTube, LinkedIn, Facebook and Instagram.
For information on this release:
Canada Mortgage and Housing Corporation