Federal gov't promises support for the Canadian mortgage industry

Funding will help CMHC insure and buy previously uninsured loans

Federal gov't promises support for the Canadian mortgage industry

Canada’s mortgage lenders are slated to receive a $50-billion federal boost so that they can remain operational amid the ongoing COVID-19 pandemic.

The tranche is among the adjustments made late last week to a $565-billion-plus stimulus package intended to ensure “credit and liquidity support,” in the hopes of reinvigorating an economy ravaged by the outbreak. This came in the wake of Prime Minister Justin Trudeau’s pledge to inject $82-billion into the financial system.

The $50-billion war chest will “help provide stable funding and liquidity to financial institutions and mortgage lenders and support continued lending to Canadian businesses and consumers,” the government stated.

Said funding will also give the Canada Mortgage and Housing Corporation (CMHC) the means to insure and purchase previously uninsured loans, the Financial Post reported.

“The government will do whatever it takes to support Canadians and we are prepared to take further action as necessary to meet the challenges ahead,” Finance Minister Bill Morneau assured.

Housing has been one of the sectors hardest hit by the coronavirus, with the desire for buying homes in Canada significantly dwindling over the last few weeks, Point2 Homes reported.

“The outbreak has shattered seasonality, transforming the spring months, which was normally the time when the housing market was starting to pick up speed, into a period of anxious down time,” Point2 Homes noted.

“Much of the activity associated with homebuying and home selling is simply on hold, as people and institutions alike are trying to see where the pandemic is headed.”