Family Plan Program

This program enables people to help buy a home for immediate family members who have good credit but lack the income to meet standard GDSR / TDSR requirements.

Suggested Applications of the Program Include

• A parent who wishes to help an adult entrepreneurial child buy a home.
• A parent helping to buy a home for an adult child at a post -secondary educational facility.
• An adult helping to buy a home for elderly parents who are on a fixed income.
• This program does not include the purchase of non-owner-occupied investment properties nor purchases for family members with poor credit.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

• 1 and 2 units: 95% LTV
• Property value ≤ $500,000 – 5% down payment required
• Property value > $500,000 and < $1,000,000 – 5% down payment required up to $500,000, with an additional 10% down payment on the portion of the home value above $500,000
• 3 and 4 units: 90% LTV

Loan Security

• First mortgages

Eligible Properties

• Maximum 4 units where 1 unit must be owner occupied
• New construction covered by a Lender approved New Home Warranty Program*
• Existing resale properties
• Readily marketable residential dwellings, located in markets with demonstrated ongoing re-sale demand
• Estimated remaining economic life of the property should be a minimum of 25 years
• In addition, for 3 and 4 units, the property must meet the following criteria:
  • Municipal zoning
  • Fully self-contained units

_{*For new construction properties in the territories (Yukon, Northwest and Nunavut Territories) where New Home Warranty is not an option, Lenders must obtain either the occupancy permit or a third-party report from a qualified professional such as: an inspector, architect or engineer. The qualified professional must carry the appropriate liability insurance and confirm construction is completed in compliance with applicable bylaws and regulations.}

Maximum Property Value

• Property value must be less than $1,000,000.

Qualifying Terms and Interest Rates

• Fixed, standard variable, capped variable and adjustable rate mortgages are permitted.
• Maximum interest rate term of 25 years.
• The qualifying interest rate is the greater of the contract rate plus 2 % or 5.25 %

Amortization Options

• Up to 30-year amortization
• For greater than 25-year amortization, refer to 30-year amortization eligibility criteria.

Premium Rate

The premium payable will be the lesser of the premium as a % of the total new loan amount or the premium as a % of the top-up portion on the additional loan amount (if existing insured) based on the rates below:

The mortgage insurance premium is non-refundable, paid at the time of closing and maybe added onto the mortgage.

Borrower Qualification

Income and Employment

• Standard income and employment verification requirements apply.

Credit

• >80% LTV: At least one applicant is required to have a minimum credit bureau score of 600.
• ≤ 80% LTV: At least one applicant should have a minimum recommended credit bureau score of 680.

Down Payment

• Must be from own resources and may include personal savings, RRSP withdrawal, existing home equity, proceeds from sale of property.

Additional Criteria

• Applicant(s) buying the home for a family member must have clean credit, stable employment and income, positive net worth.
• An immediate family member is defined as a father, mother, child, brother, sister, grandparent, legal guardian, or legal dependent.
• All qualifying applicants, including the resident family member, must be on the title.
• The income and debts, including shelter costs, of all persons on the application will be used along with those of the occupying borrower to calculate the TDSR.

GDS / TDS Guidelines

Documentation Requirements

• Standard documentation requirements apply.
• Sagen may request that the Lender provide a copy of the required documentation on a case-by-case basis.

Portability

• Sagen mortgage insurance is portable, so home buyers can take advantage of a Lender’s portability plan. For further details, refer to the Portability Feature product overview.

Assumptions / Assignments

• Mortgage is assumable subject to meeting Lender guidelines.

Eligible Products*

• Homebuyer 95 Program
• Purchase Plus Improvements Program

Ineligible Products

• Business for Self (Alt. A) Program
• Borrowed Down Payment Program
• New to Canada Program
• Progress Advance Program
• Vacation / Secondary Homes Program
• Investment Property Program
• Second Mortgage Program