* CMHC Insured
* Non-CMHC Insured

People with healthy down payments frequently ask why they’d ever want to pay the CMHC premium if they can simply get a conventional mortgage.

Let’s take a $500,000 loan at 75% LTV, for example, on a 5-unit building. CMHC’s premium is 2.25% for a 25-year amortization. That’s $11,250—not exactly chicken feed.

But here’s the thing. Lenders consider multi-unit financing to be much safer when it’s insured. That means there’s less of a risk premium and borrowers get better rates on CMHC-backed deals. “There is a 200 basis point difference between that and a conventional loan,” First National’s, Jeremy Wedgebury, told BrokerNews.ca.

What many don’t realize is that this 2% rate differential translates into big dollars. On that same $500,000 mortgage, a 2% lower 5-year rate would save almost $34,000 after accounting for the $11,250 premium and CMHC’s $750 application fee. Moreover, the property cash flows better because the payment is 16% lower.

In sum, with multi-unit apartments, “pay to save” is often a good motto.

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2009/07/cmhc-insured-multi-residential-financing.html

reviewed by MOISHE ALEXANDER, CFC Canadian Funding Corp CEO

Canadian Funding Corporation – CFC – posts CMHC update. Mr. Greg Rickford, Member of Parliament for Kenora, joined with Naotkamegwanning First Nation and Chief Warren White to celebrate the grand opening of a new 10-unit seniors residence today, which was officially opened by Chief Warren White and will be home to more than 30 elders.

“The Government of Canada is committed to creating safe and affordable housing for Aboriginal people in Ontario and across the country.” said MP Rickford, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC). “This project provides area elders with access to safe, quality housing at an affordable cost.”

CMHC provided a housing loan of $1,064,000 to facilitate the construction of this seniors residence. CMHC will also provide housing subsidies for this project, which are estimated at $2.1 million over the term of the 25-year loan agreement.

“It’s been a long, prosperous journey and now we can express the wishes that our elders voiced years ago to develop a seniors residence in Naotkamegwanning First Nation,” said Chief White. “Through hard work, determination and negotiations with CMHC, it has become the greatest accomplishment for our community. We’re a community that believes dreams can become reality when we work very hard to achieve them.”

CMHC’s On-Reserve Non-Profit Housing Program assists First Nations in the purchase, construction, rehabilitation and administration of affordable on-reserve rental housing, and provides subsidies for First Nations people living on-reserve. The Government of Canada provides approximately $270 million in on-reserve funding each year to address housing need.

In April, the Government of Canada announced as part of Canada’s Economic Action Plan that it is providing $400 million in additional funding over the next two years to support on-reserve housing. These funds are dedicated to new social housing projects, the remediation of existing social housing and complementary housing activities through programming from CMHC and Indian and Northern Affairs Canada (INAC). This funding will also provide an economic stimulus for many First Nations and rural areas by creating jobs, developing skilled trades and supporting small businesses.

Canadian Funding Corp adds that the Buffalo project was officially opened today by Earl Dreeshen, Member of Parliament for Red Deer, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada, and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC); Mayor Morris Flewwelling, on behalf of the City of Red Deer; Stan Schalk on behalf of Potters Hands, and Patricia Turnbull on behalf of CMHA.

“The Government of Canada is committed to making affordable housing available in Alberta and across Canada for those who need it most,” said MP Dreeshen. “With the opening of this housing project, persons with special needs in Red Deer will access suitable, supportive housing that will help them start a new page in their lives.”

“I commend the staff and volunteers of the Buffalo Housing First Program for taking the initiative to provide housing and support services for some of our most vulnerable citizens in Red Deer,” said Cal Dallas, MLA for Red Deer-South. “The program aligns with Alberta’s “Housing First” approach and serves as a model for government, stakeholders and community organizations in ending homelessness in Alberta.”

The Buffalo is owned by Potters Hands Development Limited and operated by the Canadian Mental Health Association. Funding for the project’s renovation includes $960,000 from CMHC’s Residential Rehabilitation Assistance Program (RRAP), $75,000 through CMHC’s Proposal Development Funding Program, and $854,000 from the Government of Alberta.

The Buffalo uses a “Housing First” philosophy which moves people directly into permanent housing from living on the streets or in shelters.  Staff members assist tenants with day-to-day tasks such as laundry, cooking and housekeeping. Support staff may also help tenants find suitable activities, volunteer or employment opportunities or medical services.

“The Buffalo has truly made a difference in the Red Deer community,” said Patricia Turnbull, Executive Director of the Canadian Mental Health Association. “Many men and women who were sleeping on the streets now have a place to call home.”

CMHC’s RRAP programs provide funding for home modifications to help the elderly and disabled remain independent in their homes. The programs aim to preserve housing for people at risk of homelessness. RRAP and related programs help to improve living conditions for seniors, persons living with disabilities, victims of family violence and Aboriginal peoples.

HUA’s Outreach Support Services program will provide $32 million in 2009/10 to address the underlying causes of homelessness. The funding supports community-based initiatives that offer client-centered services which include a variety of programming such as addictions counselling and life skills coaching.

Last fall, the Government of Canada committed more than $1.9 billion over the next five years to improve and build new affordable housing and to help the homeless. Canada’s Economic Action Plan builds on this with an additional one-time investment of more than $2 billion over two years in new and existing social housing and lending of up to another $2 billion to municipalities for housing-related infrastructure.

GUELPH, March 4, 2009 — Canada Mortgage and Housing Corporation (CMHC) honoured Terra View Homes today under the CMHC Healthy Housing™ Recognition Program for its efforts in building healthier homes.

“CMHC recognizes Terra View Homes for its dedication to building healthy, energy efficient homes that also incorporate design principles for seniors who plan to remain in their home for as long as possible,” said Peter Friedmann, Ontario General Manager, CMHC.

Terra View Homes integrate on-site renewable energy, rainwater harvesting and grey water recycling systems in their Guelph Rotary Green Dream Home, which is currently under construction. The home’s features include recycled building materials, locally-produced stone and brick, and improved indoor air quality through the use of zero emission products and superior ventilation. The barrier-free design can be adapted to meet changing occupant needs and reduces future renovation costs.

“The entire staff at Terra View Homes feel that this is the perfect opportunity to showcase a way of building a healthier, more energy efficient home, which will have positive health benefits while reducing the impact of construction on the environment,” said David Brix, Vice President, Terra View Homes.

Terra View Homes is based in Guelph, Ontario and builds award-winning homes in the Guelph, Waterloo, Kitchener and Cambridge areas. The company has completed more than 3,000 homes in the past 18 years. The company was recognized by CMHC on February 7 at the Guelph and District Home Builders’ Association Annual President’s Ball.

CMHC Healthy Housing™ Recognition Program honours builders and others in Ontario who put their knowledge of CMHC’s five Healthy Housing™ principles into practice. These five principles include: occupant health, energy efficiency, resource efficiency, environmental responsibility, and affordability. The program recognizes housing industry professionals who demonstrate their knowledge by building, renovating or designing a home that meets criteria under the principles.

According to the Canadian Funding Corp, the Canada Mortgage and Housing Corporation (CMHC) draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities and cities across the country.

Many types of building materials are needed to construct a house.

Occasionally, one material can have a detrimental effect on an adjacent material resulting in premature material degradation.

Builders, renovators and building designers need to be aware of this incompatibility issue and better understand how to determine if materials are compatible. Because there is no central registry for recording and sharing incompatibility problems, Canada Mortgage and Housing Corporation and the Canadian Home Builders’ Association initiated this research project to help practitioners in the home construction industry to become and remain aware of material incompatibility situations.

The purpose of this research project is to document building material incompatibilities so that lessons learned in the field can be shared. Increased awareness of building material incompatibilities will reduce construction defects to the benefit of builders, designers and homeowners.

An Advisory Committee comprised of industry practitioners, and building science and material experts was formed to define the project scope and direction, identify sources of information, and to provide assistance for getting the report information to building professionals and practitioners.

Reports of building material incompatibilities were sought by researching building and material sources of information. The search included the Internet, builder periodicals, and scientific library databases. The literature research generated 10 cases of the 35 incompatibility cases that were incorporated into the final report.

A survey form was sent to architects, builders, renovators, building officials, industry associations, and selected individuals to obtain reports of building material incompatibility. Respondents were asked to describe the problem and, where possible, a solution to the problem. The survey generated 25 of the 35 cases that were incorporated into the final report. (Many other responses were not included in the report because they were either duplicates or did not meet the project criteria for incompatibility.)

The literature search cases and the survey responses were screened for suitability. The results of the screening were submitted to the Advisory Committee for approval. Prior to inclusion in the final report, cases were confirmed by a) published information or b) by one or more technical experts including manufacturers’ representatives.

The Commentary section of the report explains the type of problem, the timeframe it takes for the problem to become apparent, and as much as possible, an explanation of why the materials are not compatible, the reporting source and the solution. The report uses the Masterformat numbering system. In some cases, a General Information section was included when it was deemed beneficial to explain general principles or properties. For example, dissimilar metals are known to be problematic, especially when moisture is present.

Because there are perhaps 20 to 30 metals that can find their way into residential construction, the General Information explains the combination of metals can be satisfactory or unsatisfactory depending on how far apart they are on the Noble table.

A technology transfer plan was developed to provide the report to individuals and organizations that assisted with survey responses or technical review. In the longer term, the report might be available on the Internet and provide a mechanism for adding additional examples of material incompatibility as they arise.

A review of the report shows that sealants and metals are two groups of materials that had several incompatibility reports. In the case of metals, the science of dissimilar metals is very advanced but builders may not be aware of this body of information. In the case of sealants, there is an overwhelming number of products to suit a wide range of applications, and there is no simple and universal product labelling system to help avoid improper selections. In both cases, the General Information sections in the reports should improve the level of understanding of properties, applications and limitations for these materials.

Other cases result from jobsite-imposed conditions or deadlines.

For example, the rush to apply paint in unheated conditions as winter approaches often ignores the temperature application ranges recommended on a product. While ignoring the product limits may get the project completed in time, it also brings a fairly high likelihood of recalls at a later date, often at higher cost than doing the work according to instructions in the first place.

Conclusions

According to the Canadian Funding Corporation, The Incompatible Building Materials report is a first attempt at identifying and recording cases of incompatibility. The report contains 35 examples of incompatibility cases that building professionals and construction industry practitioners should be aware of, in addition to the myriad of building performance issues that result from climatic and building environment factors.