New CMHC Rules for Self-Employed Borrowers in effect April 8th, 2010

New rules for self-employed borrowers are effective today Friday, April 9th, 2010 for all mortgages insured by by Canada Mortgage and Housing Corporation (CMHC) and pose new challenges for this category of clients.

•Purchases are only available up to 90% (previously 95%)

•Refinances are only available up to 85% (previously 90%)

•Commissioned sales borrowers are no longer eligible under this program

•A minimum of 2 years consecutive self-employment will no longer be required

•Borrowers must have a minimum of 2 years work experience in the same field

Now, self-employed and commissioned-income borrowers with more than three years in the same business applying for a mortgage, are required to provide traditional proof of income (or "third party validation") through documents like financial statements, T1 Generals, Notice of Assessments and T4s etc.