In an effort to support the financial system amid the coronavirus outbreak, the government of Canada has unveiled the revised Insured Mortgage Purchase Program (IMPP), according to the Canada Mortgage and Housing Corporation (CMHC).
Under the program, the government purchase up to $50bn of insured mortgage pools through CMHC. This will provide stable funding to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses.
Furthermore, the eligibility rules for portfolio insurance have been relaxed temporarily to assist mortgage lenders access to the IMPP. According to CMHC, low loan-to-value loans with amortization up to 30 years and refinancing loans will be eligible for the insurance.
In addition, CMHC said it will be expanding the issuance of Canada Mortgage Bonds, which is part of its standard mortgage-funding suite of products. This, however, will depend on market conditions and demand from potential investors.
"These supports to the financial sector build on previous measures announced by the Government of Canada to provide significant and effective action to support Canadian individuals and businesses facing financial hardship as a result of the economic impacts of the global COVID-19 outbreak," CMHC said in a statement.