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Energy Efficient Homes Made More Affordable

OTTAWA, Ontario, July 27, 2005 — The Honourable Joe Fontana, Minister of Labour and Housing announced today several enhancements to mortgage loan insurance, that will promote energy efficiency and improve home affordability for many Canadians.

Canada Mortgage and Housing Corporation's Mortgage Loan Insurance Program for Energy Efficient Programs is based on Natural Resources Canada's EnerGuide for Houses rating system which rates the energy efficiency of houses. The minimum EnerGuide for New Houses rating requirement to qualify has now been reduced to 77 for a three-year pilot period.

This change in rating will make eligible existing energy-efficient building programs such as Built Green Society™ Alberta Gold, NovoclimatMC (Quebec), ENERGY STAR® (Ontario) and Power Smart™ (Manitoba).

"The Government of Canada is committed to offering affordable choices to ensure quality homes that are environmentally-friendly and energy-efficient are a real option for all Canadians," said Minister Fontana. "We are committed to housing strategies that support affordable housing and environmental sustainability."

In addition, CMHC is extending its energy-efficient flexibilities to all types of condominiums, allowing more Canadians to benefit from choosing to purchase an energy-efficient home. Effective July 27, 2005, CMHC has expanded its 10 per cent refund on its Mortgage Loan Insurance premiums for the purchase of Energy Efficient Homes to a broader scope of properties, including condominium units. The average premium saving would be about $350.

CMHC is also eliminating the premium surcharges associated with the longer amortization periods (25 to 35 years) offered under the Energy Efficient Homes policy effective August 12, 2005. These new changes will result in a one-time savings on CMHC's mortgage insurance premium of up to $500 on every $100,000 of the mortgage.

With these enhancements, about 14 per cent of new homes built in Canada could be eligible for the CMHC mortgage loan insurance premium refund.

Canada Mortgage and Housing Corporation (CMHC) is Canada's national housing agency. For over half a century, CMHC has been contributing to improving the living conditions and the well-being of Canadians through four areas of housing activities—housing finance, assisted housing, research and information transfer, and export promotion. CMHC is committed to helping Canadians access a wide choice of quality, affordable homes, and making vibrant and sustainable communities a reality across the country.

For further information, please contact:

Media Inquiries:
Christine Choury
Chief, Media and Associations Relations
(613) 742-5344

Public Inquiries:
1 800 668-2642


CMHC's Mortgage Loan Insurance Enhancements

Mortgage Loan Insurance:

Mortgage Loan Insurance (MLI) protects the lender against payment default by the homebuyer. Most financial institutions require it where the homebuyer has less than 25 per cent of the purchase price as a down payment. By providing MLI to lenders, CMHC enables home buyers to access mortgage financing with as little as five per cent down, at interest rates comparable to those financing the purchase of a home with a down payment of 25 per cent or more. The premium paid for MLI is based on the amount of the loan in relation to the value of the home. The cost of the premium is normally added to the mortgage balance.

CMHC mortgage insurance products have continued to meet the changing needs of Canadians. For example, some of the recent innovations announced by CMHC include:

The CMHC Mortgage Loan Insurance for Energy Efficient Homes is applicable to both owner-occupied and rental properties (apartment buildings, retirement and nursing homes) through participating financial institutions when a borrower obtains a new mortgage or refinances an existing one. CMHC's existing mortgage loan insurance products and policies are already contributing to promoting energy efficiency in homes.

The changes that are now introduced are built on a positive response from the housing industry since the program was first announced in November 2004. They encourage the development of more energy-efficient homes by making eligible a broader range of home building programs such as Built Green SocietyTMAlberta, NovoclimatMC, ENERGY STARR® and Power SmartTM.