Homebuyer 95 Program
Enables qualified borrowers to become first-time homeowners with as little as a 5% down payment.
![Front door and porch of a home](https://www.sagen.ca/wp-content/uploads/2020/05/homeowner-95-540x475.jpg)
Buyers must owner occupy at least one unit of the property to qualify for this program.
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 and second 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 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:
Standard Premium Rate Chart
LTV Ratio | Premium Rate | Top-Up Premium |
---|---|---|
Up to 65% | 0.60% | 0.60% |
65.01% - 75% | 1.70% | 5.90% |
75.01% - 80% | 2.40% | 6.05% |
80.01% - 85% | 2.80% | 6.20% |
85.01% - 90% | 3.10% | 6.25% |
90.01% - 95% | 4.00% | 6.30% |
The above chart is for mortgages with an amortization that is 25 years or less. If a mortgage is eligible for an amortization greater than 25 years (up to 30 years) an additional premium of 0.20% will apply.
The mortgage insurance premium is non-refundable, paid at the time of closing and may be added onto the mortgage.
Borrower Qualification
Income and Employment
- Standard income / employment verification requirements apply.
Credit
- > 80% LTV: At least one applicant is required to have minimum credit bureau score of 600.
- ≤ 80% LTV: At least one applicant should have a minimum recommended credit bureau score of 680.
Down Payment
Qualified home buyers may use traditional down payment sources including personal savings, RRSP withdrawal, a non-repayable gift from an individual related to the borrower through a familial or legal relationship, sweat equity, existing home equity, proceeds from sale of property. Government grants may be considered if pre -approved by Sagen.
GDS / TDS Guidelines
GDS | TDS |
---|---|
39% | 44% |
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.
- For 3 and 4 unit properties Sagen requires that the Lender obtains a general assignment of rents and leases or include this requirement in the Standard Charge Terms.
Portability
- Mortgage insurance is portable, so homebuyers 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*
- Progress Advance Program (Maximum 2 units)
- Purchase Plus Improvements Program
- Family Plan Program
- New to Canada Program
- Vacation / Secondary Homes Program (Type A Properties)
- Second Mortgage Program
For specific underwriting guidelines related to the above eligible products, please refer to the applicable product overview.
Ineligible Products
- Business for Self (Alt. A) Program
- Borrowed Down Payment Program
- Secondary Homes Program (Type B Properties)
- Investment Property Program
Premium Calculator
The Premium Calculator helps you calculate the mortgage insurance premium on any Sagen™ products.
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