We all do different things to go green in our day to day life: using reusable shopping bags, biking instead of driving, re-using water bottles… you name it. All of the various steps we take to minimize our environmental foot-print give us the satisfaction of knowing we are working towards a greener tomorrow-but how often do you get rewarded for going green? If your experience is anything like ours, not very often. But we have some exciting news right from CMHC-they want to reward YOU for going Green! Here’s how.
The CMHC Green Home Program is a relatively new program that allows lenders to offer borrowers more affordable financing choices when purchasing an energy efficient home or when purchasing an existing home and making energy-efficient improvements. This program gives you a refund of up to 25% of the CMHC Mortgage Loan Insurance Premium as long as the home is located in Canada. In addition, the process to apply is simple, all a borrower must do is fill out this application form and submit it to CMHC.
Sounds fairly straight forward doesn’t it? Let’s dig into a few more details though with a straightforward FAQ.
1. When Does the Program Apply?
The program is applicable when a new home is purchased (with a traditional or non-traditional source of down payment). The program also applies to new construction and to CMHC improvements related to energy efficiency.
2. What is the Loan-to-Value Ration?
The Loan to Value Ratio of this program will vary by CMHC product and the number of units. Contact CMHC or a Dominion Lending Centres mortgage specialist to find out more.
3. What are the Benefits of the Program?
The Program can offer a 15% or 25% refund of the total premium paid provided to borrowers. This is how you are “Paid to go Green”
4. What are the Energy Efficiency Requirements?
The requirements that must be met in order to qualify for a premium refund include:
Purchase of energy efficient homes or units located in low-rise residential building:
• Most new homes built under a CMHC eligible energy-efficient building standard automatically qualify for a premium refund.
• For all other homes, eligibility will be assessed using the NRCan EnerGuide Rating System (ERS) either the 0-100 scale or the gigajoule scale.
Purchase of condominium units located in high-rise residential buildings:
• For homes built under the LEED Canada New Construction Standard (certified, silver, gold and platinum)-Level 1 only.
• The building is designed to be either 20% or 40% more energy efficient than compliance with the applicable building cod.
Energy Efficient retrofit (renovations) of an existing home (purchase)
• To qualify the home must be assessed by a qualified energy advisor before and after the energy-efficient renovations.
• The refund is based on the improvement in the energy rating assessed using the NRCan EnerGuide Rating System (ERS) either the 0-100 scale or the gigajoule scale.
5. How does the Refund Application Process Work?
Borrowers should look at filling out the application located on the CMHC’s website. The application must be submitted within 2 years of the closing date of the mortgage and the energy efficiency documentation must be no more than 5 years old. Finally, the partial premium refund will be provided by CMHC directly to eligible borrowers that have incurred the costs of their lender’s CMHC mortgage loan insurance premium.
For those who qualify for this refund, it presents a unique opportunity to gain back some of their hard-earned money.
Courtesy of Geoff Lee, AMP – DLC GLM Mortgage Group
*Sources: CMHC Green Home Program https://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/hopr/upload/cmhc-green-home.pdf