Housing Loan (Insurance, Guarantee and Protection) Regulations (SOR/2012-232)

Interpretation

Marginal note:Definitions

1 The following definitions apply in these Regulations.

Act

Act means the National Housing Act. (Loi)

housing loan

housing loan has the same meaning as in section 7 of the Act. (prêt à l’habitation)

Designation of Approved Lenders

Marginal note:Designation

2 To be designated as an approved lender for the purposes of Part I of the Act, a person must meet the criteria set out in paragraph 3(1)(a) or (b) and, as applicable, subsections 3(2) and (3).

Marginal note:General criteria

• 3 (1) The person must be

  • (a) a corporation whose articles do not restrict its powers to lend in the jurisdictions in which it operates and

    • (i) a financially sound institution with at least $3,000,000 of unencumbered paid-up capital that is incorporated by or under an Act of Parliament or of the legislature of a province,

    • (ii) a federal financial institution or an authorized foreign bank within the meaning of section 2 of the Bank Act,

    • (iii) a trust, loan or insurance corporation that is incorporated and regulated by or under an Act of the legislature of a province,

    • (iv) a cooperative credit society that is incorporated and regulated by or under an Act of the legislature of a province,

    • (v) a federal or provincial department, agency or Crown corporation, or

    • (vi) any other entity as long as the housing loans that it insures with the Corporation are guaranteed by Her Majesty in right of Canada or a province; or

  • (b) a federally or provincially regulated pension fund, or its subsidiary, that was designated, before the coming into force of these Regulations, as an approved lender under section 5 of the Act.

• Marginal note:Criteria for underwriting

  (2) To underwrite housing loans, the person must, in addition to meeting the criteria set out in paragraph (1)(a) or (b),

  • (a) have at least three years’ experience underwriting residential mortgage or hypothecary loans in Canada and the capability and resources to underwrite housing loans and make loan commitments;

  • (b) be a subsidiary of a parent corporation that is an approved lender for the purposes of Part I of the Act and that meets the criteria set out in paragraph (a), if the parent corporation undertakes to fulfil the task of underwriting housing loans in Canada for the subsidiary and to be accountable to the Corporation for the subsidiary’s performance in relation to those loans; or

  • (c) have paid-up capital of at least $5,000,000 or be an entity referred to in subparagraph (1)(a)(v) or (vi) and, in either case, employ at least two mortgage officers who each have a minimum of ten years’ residential mortgage or hypothecary underwriting experience and who are responsible for underwriting the person’s housing loans in Canada.

• Marginal note:Criteria for administering

  (3) To administer housing loans, the person must, in addition to meeting the criteria set out in paragraph (1)(a) or (b),

  • (a) have at least three years’ experience administering residential mortgage or hypothecary loans in Canada and the capability and resources to administer housing loans and meet all insurance conditions;

  • (b) be a subsidiary of a parent corporation that is an approved lender for the purposes of Part I of the Act and that meets the criteria set out in paragraph (a), if the parent corporation undertakes to fulfil the task of administering housing loans in Canada for the subsidiary and to be accountable to the Corporation for the subsidiary’s performance in relation to those loans; or

  • (c) have paid-up capital of at least $5,000,000 or be an entity referred to in subparagraph (1)(a)(v) or (vi) and, in either case, employ at least two mortgage officers who each have a minimum of ten years’ residential mortgage or hypothecary administration experience and who are responsible for administering the person’s housing loans in Canada.

• Marginal note:Exception — designated cooperative credit societies

  (4) A cooperative credit society referred to in subparagraph (1)(a)(iv) need not meet the criteria set out in subsection (2) to underwrite housing loans or in subsection (3) to administer them if, before the coming into force of these Regulations, it was designated as an approved lender under section 5 of the Act.

Conditions on the Corporation

Marginal note:Restriction — substitution

• 3.1 (1) The Corporation must not replace an insured loan with another housing loan under the same insurance coverage unless

  • (a) both loans are made to the same borrower and the purpose of the new loan is to discharge the outstanding balance of the loan being replaced; or

  • (b) the new loan is made in relation to a loan workout whose purpose is to reduce or avoid losses on a real or potential housing loan insurance claim in respect of the outstanding loan being replaced.

• Marginal note:Restriction — portfolio insurance

  (2) If the Corporation makes a commitment to insure a portfolio of housing loans up to a specified total value, it must not insure a housing loan in accordance with that commitment later than one year after the day on which the commitment is made.

Transitional Provision

Marginal note:Reduced capital requirement

4 For a period of one year beginning on the day on which these Regulations come into force, the amount of unencumbered paid-up capital required under subparagraph 3(1)(a)(i) is at least $1,000,000.

Marginal note:Existing portfolio commitment

• 4.1 (1) Subsection 3.1(1) does not apply in respect of insurance coverage resulting from a commitment to insure a portfolio of housing loans up to a specified total value that is made before that subsection comes into force.

• Marginal note:Existing portfolio commitment

  (2) Subsection 3.1(2) does not apply in respect of a commitment that is made before that subsection comes into force.

Coming into Force

Marginal note:S.C. 2011, c. 15

Footnote ^*5 These Regulations come into force on the day on which section 20 of the Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act comes into force, but if they are registered after that day, they come into force on the day on which they are registered.

• Return to footnote ^*[Note: Regulations in force January 1, 2013, see SI/2012-87.]