June 4, 2020 / 9:01 PM / 2 months ago

Canada Mortgage and Housing Corp tightens borrowing rules as it forecasts 9-18% home price drop

TORONTO, June 4 (Reuters) - The government-backed Canada Mortgage and Housing Corporation on Thursday said it would tighten borrowing requirements from July 1 for loans it insures as it forecast a 9% to 18% decline in home prices over the next 12 months.

CMHC is establishing a minimum credit score of 680 for borrowers of insured home loans, and will stop treating “non-traditional” sources of down payment as equity, the group, which insures residential mortgages with down payments of less than 20%, said in an e-mailed statement.

“COVID-19 has exposed long-standing vulnerabilities in our financial markets, and we must act now to protect the economic futures of Canadians,” said CMHC Chief Executive Evan Siddall. (Reporting By Nichola Saminather Editing by Chris Reese)

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