CMHC's guarantee of Canada Mortgage Bonds

Canada Mortgage Bonds issued by Canada Housing Trust^TM No. 1 (the “Issuer”) are fully guaranteed as to timely payment of principal and interest by Canada Mortgage and Housing Corporation (“CMHC” or the “Guarantor”) as agent of His Majesty in right of Canada (the “CMHC Guarantee”).

CMHC’s Guarantee of Canada Mortgage Bonds constitutes a direct unconditional obligation of CMHC, as agent of His Majesty in right of Canada, and as such carries the full faith and credit of Canada and constitutes a direct unconditional obligation of Canada. Amounts payable under the CMHC Guarantee of the principal of and interest on Canada Mortgage Bonds constitute a charge on and are payable out of the Consolidated Revenue Fund of Canada.

The following is the text of the CMHC Guarantee as set out on the Canada Mortgage Bonds and, if issued, on each bond in definitive form:

“Canada Mortgage and Housing Corporation as agent for His Majesty in right of Canada hereby guarantees the timely payment of the principal and interest set forth in this instrument in accordance with the terms and conditions of this instrument, pursuant to the powers given to it in Sections 4 and 14 of the National Housing Act, R.S.C. 1985, as amended, which expressly provide that ‘Every right or obligation acquired or incurred by the Corporation under this Act, whether in its name or in the name of His Majesty, is a right or obligation of His Majesty' (Section 4), and ‘The Corporation may guarantee payment of any or all principal or interest, or both, in respect of securities issued on the basis of housing loans’ (Section 14). It is certified that no provision of any law or contract adversely affects the rights of the holder to the benefit of this guarantee.”

The CMHC Guarantee ranks equally with all of the Guarantor’s other unsecured and unsubordinated indebtedness and obligations from time to time outstanding.