Canada Mortgage and Housing Corporation (CMHC) today released its second quarter financial report demonstrating its contributions to the stability of housing markets and the financial system while also providing support for Canadians in housing need.
CMHC also published reports on its Assisted Housing, Mortgage Insurance, Securitization and Covered Bonds activities, providing additional insights into each of these activities.
Contributing to the stability of the financial system and facilitating access to housing
Through the first half of 2018 we provided mortgage insurance for nearly 107,000 homes across the country, split between homebuyers (57,781) and rental units 48,885). The quality of CMHC’s mortgage loan insurance portfolio continues to be strong with the overall arrears rate decreasing from 0.29% to 0.27%
During the first six months of the year, the average CMHC-insured homebuyer purchased their home for nearly $271,000. Nearly all of these homebuyers chose a 25 year amortization with 80% choosing a fixed-rate mortgage over a variable rate alternative. The average homebuyer insured by CMHC had a down payment of 7.6% and a credit score of 754.
Our securitization guarantee programs benefit homebuyers and the entire Canadian housing industry by providing lenders with an affordable and reliable source of mortgage financing. Through the first half of 2018, we provided nearly $75 billion in guarantees through our securitization programs.
Helping Canadians in housing need gain access to suitable housing they can afford
Through the first half of 2018, our Assisted Housing business delivered nearly $1.5 billion to create and support much-needed housing units for low- and middle-income Canadians. We also continued the implementation of National Housing Strategy (NHS) initiatives.
As part of the NHS, we launched Phase I of the Federal Community Housing Initiative, the National Housing Co-Investment Fund, Demonstrations initiative, Solutions Labs initiative, NHS Research and Planning Fund, the CMHC Housing Research Scholarship and Awards programs and initiated NHS-related data and research. As of June 30, the first wave of applications under the National Co-Investment Fund have been received for new construction projects as well as repairs and renewals.
We also concluded multilateral discussion, and continued bilateral negotiation with provinces and territories that will be effective April 2019.
Delivering results for Canadians
Our business activities generated revenues of $2.7 billion and a net income of $681 million through the first half of 2018.
As a responsible risk manager, we hold capital for our commercial activities in line with our risk profile and with regulatory capital requirements. New capital guidelines for mortgage insurers were recently released by the Office of the Superintendent of Financial Institutions (OSFI) with an effective date of January 1, 2019. We expect our capital required to decrease on transition and to increase over the planning horizon as new business is written.
As at June 30, 2018, our overall insurance-in-force was $463 billion and for this we had $13.5 billion in capital available, representing 177% of the minimum regulatory capital required.
As at June 30, 2018 our total guarantees-in-force were $479 billion and for this we held $2.5 billion in capital, representing 143% of the minimum required.