Product Specific Underwriting Guidelines

Homebuyer 95 Program

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

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 25 years

*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.

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:

LTV Ratio Total Loan Amount 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 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, non-repayable gift from immediate family member(s), 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.
  • Copies of leases are required
  • 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

Second Mortgage Program

This program provides borrowers with the additional flexibility of allowing a Second Mortgage to be registered against their property up to 95% combined LTV on a purchase.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

  • 95% Combined Loan-to-Value (CLTV) based on first and second mortgages
  • 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.

Special Conditions

The first mortgage must be Sagen insured under any of the following scenarios:

  • Purchase / Purchase Plus applications
  • Combined Loan to Value (CLTV) is > 90%
  • Business for Self (Alt. A) Program applications

Under all scenarios, the first mortgage must meet the following conditions:

  • Current at time of second mortgage application with stable repayment
  • Second mortgage agreement must contain cross-default clause (default on the first mortgage constitutes default on the second mortgage).
  • In the event of a re-advanceable first mortgage, no amount may be re-advanced until after the second mortgage is paid out.
  • If CLTV > 90%, the first mortgage must be held by the same Lender.

Eligible Properties

  • Maximum 4 units where at least 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

In addition, for 3 and 4 units, the property must meet the following criteria:

  • Municipal zoning
  • Fully self-contained units

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 %.

*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.

Amortization Options

  • Up to 25 years

Premium Rate

The premium payable will be the lesser of the premium of the combined first and second loan amounts, or the premium of the second mortgage amount only based on the rates below:

LTV Ratio Combined First and Second Loan Amounts Second Mortgage Amount
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%

For submissions of new insured concurrent first and second mortgages the premium payable on each mortgage will be based on the cumulative LTV of the combined first and second loan amounts. 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 and employment verification requirements

Credit

  • A minimum credit bureau score of 680 is recommended.

Down Payment

  • Qualified home buyers may use traditional down payment sources including personal savings, RRSP withdrawal, non-repayable gift from immediate family member(s), sweat equity, existing home equity, and proceeds from sale of property

Additional Criteria

  • The mortgage payment to be used on the first mortgage for qualification purposes will be the greater of the actual P+I payment or the calculated P+I payment based on the greater of the contract rate plus 2 per cent or 5.25 per cent.

GDS / TDS Guidelines

GDS TDS
39% 44%

Documentation / Information Requirements

  • Standard documentation requirements
  • 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

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

Assumptions / Assignments

  • Mortgage is assumable subject to meeting Lender guidelines.

Eligible Products*

  • Business for Self (Alt. A) Program
  • Homebuyer 95 Program
  • Purchase Plus Improvements Program
  • Vacation / Secondary Homes Program (Type A Properties)

*For specific underwriting guidelines related to the above eligible products, please refer to the applicable product overview.

Ineligible Products

  • Borrowed Down Payment Program
  • New to Canada Program
  • Progress Advance Program
  • Vacation / Secondary Homes Program (Type B Properties)
  • Investment Program
  • Family Plan Program

New to Canada Program

Qualified homebuyers who have immigrated or relocated to Canada within the last 5 years are eligible under Sagen’s New to Canada Program to purchase a property with as little as a 5% down payment.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

  • 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.

Loan Security

  • First mortgages

Eligible Properties

  • Maximum 2 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.

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 25 years

*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.

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:

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 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 and employment verification requirements apply.
  • 3 months minimum full-time employment in Canada (borrowers being transferred under a corporate relocation program are exempt).

Credit

  • 90.01-95%LTV
  • International credit report (Equifax or TransUnion) demonstrating a strong credit profile.

OR

  • Two (2) alternative sources of credit demonstrating timely payments (no arrears) for the past 12 months. The two alternative sources required are:
    • Rental payment
    • One other alternative source (hydro / utilities, telephone, cable, cell phone and auto insurance).
    • Up to 90% LTV
    • Letter of reference from a recognized financial institution OR six (6) months of bank statements from primary account.

Down Payment

  • Qualified home buyers may use traditional down payment sources including personal savings, non-repayable gift from immediate family member(s), proceeds from sale of property; subject to the loan to value outlined below:
    • 95% LTV, 5% of the down payment must be from own resources.
    • < 95% LTV, the remainder may be gifted from an immediate family member or from a corporate subsidy.

Additional Criteria

  • Must have immigrated or relocated to Canada within the last 60 months.
  • Must have a valid work permit or obtained permanent residency.
  • All debts held outside of the country must be included in the total debt servicing ratio (Rental income earned outside of Canada is to be excluded from the GDS / TDS calculation).
  • Guarantors are not permitted.
  • Foreign Diplomats or any other foreign politically appointed individuals who do not pay income tax in Canada are ineligible for this program.
  • Clergy assigned to specific church requires only a visitor record.
  • A down payment grant provided under a Sagen approved Affordable Housing Program may be used as down payment at 95% LTV (the borrower is not required to have 5% down payment from own resources).

GDS / TDS Guidelines

GDS TDS
39% 44%

Documentation Requirements: (to be kept on file by Lender)

LTV Documentation Requirements*
  All LTV’s
  • Valid work permit or verification of permanent residency
  • Income confirmation
  • Down payment confirmation
  • Purchase and Sale Agreement
  Up to 90%
  • Letter of reference from a recognized financial institution

OR

  •  Six (6) months bank statements from primary account
          90.01 – 95% International credit report demonstrating a strong credit profile OR Two (2) alternative sources of credit demonstrating timely payments (no arrears) for the past 12 months. The two alternative sources required are:

  • Rental payment history confirmed via letter from landlord and bank statements**
  • One other alternative source (hydro / utilities, telephone,
  • TV cable, cell phone and auto insurance) to be confirmed via letter from the service provider or 12 months billing statements.
  • Alternative sources of credit must be obtained from a Canadian source.

*Sagen may request that the Lender provide a copy of the documentation on a case-by-case basis. ** Letter from landlord must indicate the following: name of tenant, monthly rent, length of tenancy, payment history. Bank statements must support the amount of rent and timeliness of payments outlined in the letter.

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
  • Progress Advance Program
  • Purchase Plus Improvements 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
  • Family Plan Program
  • Vacation / Secondary Homes Program
  • Investment Property Program
  • Second Mortgage Program

Purchase Plus Improvements Program

Sagen can help qualified homebuyers make their new home just right for them, with tailored improvements, immediately after taking possession of the purchased property. All this can be done with one manageable mortgage and with only 5% down.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

  • 1 and 2 units: 95% LTV (includes both purchase and improvement amount)
  • 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 (includes both purchase and improvement amount).
  • Single or multiple advance options (excluding initial purchase advance) are permitted and may be managed by Lenders. Improvements must be greater than $40,000 or 20% of the purchase price to be eligible for draws managed by Sagen.
  • Lending value is based on the lesser of the improved property value or the sum of the purchase price plus direct costs of the improvements.

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

Maximum Property Value

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

Qualifying Terms and Interest Rates

  • Equity at sale closing includes the equity to close the sale plus additional equity for improvement portion.
  • 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 25 years

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:

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

*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.

Borrower Qualification

Income and Employment

  • Standard income and 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 score of 680.

Down Payment

  • Qualified home buyers may use traditional down payment sources including: personal savings, RRSP withdrawal, non-repayable gift from immediate family member(s), 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

  • For a list of eligible improvements please refer to the Sagen Renovation Worksheet found at sagen.ca – Lender – Products – Purchase Plus Improvements Program. Ineligible improvements would include, but are not limited to, any form of personal chattel such as furniture, appliances, electronics or other forms of moveable property.
  • If the proposed improvements exceed 20% of the initial purchase price or $40,000, a full appraisal will be required. Also, details of the proposed renovations including cost estimates and available contracts or a completed Sagen Renovation Worksheet must be faxed or emailed to Sagen.
  • 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.
  • The Lender is responsible for verifying the proposed improvements have been completed via documentation such as, but not limited to: a third-party report from a qualified professional, photos of the indicated improvements that support they have been completed (i.e., before and after photos), or paid invoices. The appropriate documentation should be commensurate with the amount and scope of improvements.

Additional Terms

Sagen will issue a conditional Commitment for Mortgage Insurance based on the LTV of the lending value of the improved property provided:

  • Coverage issued at the time of closing is for financing related to sale price only.
  • Mortgage insurance coverage will be effective for any Lender-managed advances provided proper confirmation of work completed is documented and on file.
  • For Sagen managed advances we will pay for up to 4 progress advance inspections. If more than 4 advances are required, the customer is responsible for the cost of the additional inspections required.

Eligible Products*

  • Business for Self (Alt. A) Program
  • Borrowed Down Payment Program
  • Family Plan Program
  • Homebuyer 95 Program
  • Investment Property Program
  • New to Canada Program
  • Second Mortgage Program
  • Vacation / Secondary Home Program

*For specific underwriting guidelines related to the above eligible products, please refer to the applicable product overview.

Ineligible Products

  • Progress Advance Program

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

  • 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.

Loan Security

  • First mortgages

Eligible Properties

  • Maximum 2 units where 1 unit must be occupied by an immediate family member.
  • 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.
  • Property must be in good condition with good marketability.

*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 25 years

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:

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 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

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.

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

 

Progress Advance Program

This program lets residential home builders and individual homebuyers to take advantage of insured progress advances while the property is being built. Mortgage insurance is based on the lesser of the market value of the work in place or the cost to complete.

Three Program Options

  • Residential Home Builder Program: For people who are buying a home through a residential home builder.
  • Contractor Program: For people who either own their own land or buy the land from a general contractor, and then build their home through that one general contractor (more than 50% of the cost to complete is done by one contractor).
  • Self-Built Program: For people who either own their own land or purchase the land, and act as their own general contractor and hire qualified, licensed trade persons to build their home.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

  • 95% with multiple advances during construction.
  • 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.

Loan Security

  • First mortgages

Eligible Properties

  • Maximum 2 units where 1 unit must be owner occupied.
  • Single -family detached and semi -detached homes.
  • Condominium properties are not eligible.
  • New construction must conform to the National Building Code and the latest edition of Residential Standards Canada or the applicable municipal and provincial building codes.
  • Pre -fabricated homes are eligible for full coverage. Sagen Approved pre-fabricated manufacturers are admissible for specific disbursement methods (as outlined in Appendix A), are eligible to receive a full advance with no holdbacks and may receive payment on delivery of the module(s).

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 25 years

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:

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 mortgage insurance premium is payable in full at the time of the first advance, in installments at the time of each advance, or at the end of construction.

Residential Home Builder Program and Contractor Program Qualification

  • Builders / contractors must meet general profitability and credit worthiness as per Lender’s guidelines.
  • Builders / contractors must be members of a Lender approved New Home Warranty Program (NHWP)*.
  • Incentive programs, if any, must meet Sagen guidelines.
  • Builders / contractors must be approved by Sagen to benefit from full coverage on all insured progress advances.

Borrower Qualification

Income and Employment

  • Standard income and employment verification requirements apply.

Credit

  • 80% LTV: At least one borrower 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 score of 680.

Down Payment

  • Qualified home buyers may use traditional down payment sources including personal savings, RRSP withdrawal, non-repayable gift from immediate family member(s), sweat equity, existing home equity, proceeds from sale of property.
  • Government grants may be considered if pre-approved by Sagen.

*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.

GDS / TDS Guidelines

GDS TDS
39% 44%

Documentation Requirements

Borrower documentation requirements to be retained in Lender’s file (both Full Service and Standard Service)

  • Residential Home Builder program: all schedules and plans.
  • Contractor program: all plans and specifications approved by the municipality and a copy of the contract with contractor(s).
  • Self -built program: all plans and specifications approved by the municipality, estimates and / or contracts for all aspects of the construction.

Borrower documentation requirements (Full Service only)

With loan submission:

  • A signed Offer to Purchase detailing land cost and construction costs
  • Self-Built Program: a completed Sagen Construction Worksheet located at www.sagen.ca – Lenders – Products – Progress Advance

During Construction:

  • Inspections are to be ordered using Sagen’s Inspection Request Worksheet located at sagen.ca – Lenders – Products – Progress Advance

Inspection Requirements

Standard Service (inspection and disbursement management under the Lender’s control): Standard Service (inspection and disbursement management under the Lender’s control):

  • Lender is fully authorized to make interim and final advances in accordance with their institution’s internal practices on progress draw Advances must not be made for land only.
  • Sagen authorization is not required for any advances or calculations
  • Lender is responsible for confirming the market value of the home

Full Service:

  • Sagen will pay for up to 4 progress advance inspections. If more than 4 advances are required, the customer is responsible for the cost of the additional inspections.
  • Lender must submit the Sagen Inspection Request Worksheet directly to the assigned Sagen appraiser or to the National Underwriting Centre.
  • The assigned appraiser will inspect the property, determine the percentage complete and inform Sagen.
  • Sagen will calculate the authorized amount and advise lender
  • Minimum amount for first draw is when the property is 15% complete (excavation, backfill, and foundation) and will include 100% of the land cost less the amount of the borrower down payment.
  • Advances must not be made for land only.

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*

  • Business for Self (Alt. A) Program
  • Borrowed Down Payment Program
  • Homebuyer 95 Program
  • New to Canada Program
  • Vacation / Secondary Homes Program (Type A Properties)

*For specific underwriting guidelines related to the above eligible products, please refer to the applicable product overview.

Ineligible Products

  • Family Plan Program
  • Investment Property Program
  • Purchase Plus Improvements Program
  • Second Mortgage Program
  • Vacation / Secondary Homes Program (Type B Properties)

Appendix A: Pre-fabricated Inspection Process:

First Advance: Land Preparation Second Advance: Module(s) Cost Final Advance: Finishing Cost
Evacuation, backfill Water supply (well and septic tank, where applicable) Concrete forms Concrete Crushed stone Foundation damp proofing 100% of the land cost (less the amount of the down payment) (First inspection required) Complete cost of the unit on delivery These disbursements require an inspection to determine the percentage complete. Sagen Full Service will cover up to four (4) inspections for each file. Additional inspections must be arranged at the Lender’ expense. (Second and third inspections required)

Self-Directed RRSP Program

Canadian tax regulations allow self -directed Registered Retirement SavingsPlans (“RRSP”) / Registered Retirement Income Funds (“RRIF”) funds to be used for a non -arm’s length mortgage investment, provided that the mortgage is insured.

Acceptable Loan Purpose and Applicable Loan -to-Value Limits

Purchase Transactions:

  • 95% LTV max 2 units
  • 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.
  • 90% LTV max 4 units

Loan Security

  • First and second mortgages

Eligible Properties

  • Maximum 4 units where 1 unit properties 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

Maximum Property Value

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

Qualifying Interest Rates and Terms

  • 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 %. In the event a self-directed mortgage goes to claim, the maximum interest rate paid on the balance owing will be the lesser of the contract rate plus 2 %t or 5.25 %.

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

  • Qualified home buyers may use traditional down payment sources including personal savings, RRSP withdrawal, non-repayable gift from immediate family member(s), sweat equity, existing home equity, and proceeds from sale of property.
  • Government grants may be considered if pre-approved by Sagen.

Additional Criteria

  • The holder of the RRSP and the borrower must be the same person (or be the spouse of the borrower).

GDS / TDS Guidelines:

GDS TDS
39% 44%

Documentation / Information 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

  • 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 *

  • Second Mortgage Program
  • Borrowed Down Payment Program
  • Business for Self (Alt. A) Program
  • Homebuyer 95 Program
  • Family Plan Program
  • Progress Advance Program
  • Purchase Plus Improvement Program
  • Vacation / Secondary Homes Program (Type A Properties)
  • Investment Property Program

*For specific underwriting guidelines related to the above eligible products, please refer to the applicable product overview.

Ineligible Products

  • New to Canada Program
  • Vacation / Secondary Homes Program (Type B Properties)

Portability Feature

Most Lenders have a portability feature, which allows the transfer of an original mortgage to a new property, preserving a low interest rate and saving the cost of setting up a new mortgage. If a homebuyer decided to port a mortgage to a new home and the mortgage is insured by Sagen, the mortgage insurance can also be ported. This reduces future mortgage insurance premiums. This product allows borrowers with a Sagen insured mortgage to save on the costs associated with a new mortgage by taking advantage of the L ender’s mortgage portability plan and “port” the mortgage insurance as well.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase transactions:

  • 95% LTV
  • Property value ≤ $500,000 – 5% down payment
  • 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.

Time Period

  • Mortgage insurance may be ported to a new property for up to a maximum of six (6) months after the closing date of the currently insured mortgaged property.

Amortization Options

  1. Straight port: amortization of the new loan cannot exceed that remaining on the original loan.
  2. Port / Top-Up with increased loan amount or increased LTV ratio:

Maximum amortization will be the greater of using the following

A. Blended Amortization: \frac{(Outstanding\,Balance\, x\, Remaining\,Amortization)\,+\,(New\,Funds\, x\, New\,Amortization)}{Outstanding\,Balance\, x\, New\,Funds} B. Lapsed Time Calculation: Amortization on new mortgage – Amortization elapsed on the original mortgage.

Premium Rate

  • Straight port: No new premium is payable.
  • The premium to be paid is the lesser of:
    • Full Premium Calculation: Full premium rate on total loan amount less applicable premium credit.
    • Top-up Premium Calculation: Top -up premium rate on new funds.

Standard Premium Rate

LTV Ratio Full Premium on Total Loan Amount Top-Up Premium on New Funds
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%

For specialty products, please refer to the applicable product overview for premium rates The mortgage insurance premium is non-refundable, paid at the time of closing and may be added onto the mortgage.

Premium Credit

  • Applicable for purchase applications where full premium was paid on the original mortgage
  • Premium credit will be applied to the full premium on the new mortgage as per the table below:
From Original Closing Date Of Original Premium Paid
Within 6 months 100%
Within 12 months 50%
Within 24 months 25%

*Sagen’s mortgage insurance continues to be portable beyond two (2)years; however, the premium credit will not apply.

Borrower Qualification

  • Original mortgage must have been insured by Sagen and be up to date.
  • Borrower reassessment is required. Existing requirements related to income, down payment and credit worthiness apply.
  • Where more than one borrower is involved, at least one of the borrowers must have been identified on the original application as a borrower and remain on title.
  • Complete borrower re -qualification is required when the borrower increases the loan amount or theLTV ratio.

Documentation requirements

  • Offer to Purchase
  • Port with increased loan amount and / or LTV ratio: standard documentation requirements

Business for Self (Alt.A) Program

This program is designed for self-employed borrowers who are unable to provide traditional income verification but have a proven 2 year history of managing their credit and finances responsibly. Eligible borrowers typically own a small size business for a minimum of two years, which can be confirmed via a third -party arm’s length document. In addition, the borrower is required to declare their annual income and annual business revenue, which should be reasonable based on the industry, length of operation and type of business.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

  • 90% LTV

Loan Security

  • First and second mortgages

Eligible Properties

  • Maximum 2 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.

Maximum Property Value

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

Maximum Loan Amounts

  • Metro Toronto, Metro Calgary and Metro Vancouver: $750,000
  • Rest of Canada: $600,000
  • Exceptions will be considered on a case-by-case basis.

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 25 years

*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.

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:

LTV Ratio Premium Rate Top-up Premium
Up to 65% 1.50% 3.00%
65.01% – 75% 2.60% 6.50%
75.01% – 80% 3.30% 7.00%
80.01% – 85% 3.75% 7.50%
85.01% – 90% 5.85% 9.00%

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

  • Minimum of two (2) years business-for-self tenure.
  • The self -employed borrowers stated income should be reasonable based on the length of operation, type and size of the business, and should be able to service the required mortgage as per the GDS / TDS guidelines.
  • Reasonableness of the stated income should also be reflective of the personal financial profile of the borrower.
  • Lender to provide the line 150 from the borrower(s) most recent years’ Notice of Assessment (NOA).

Credit

  • >80% LTV Minimum credit bureau score of 650 is recommended.
  • ≤ 80% LTV: At least one applicant should have a minimum recommended credit bureau score of 680.
  • Minimum 2 trade lines with at least two (2) years history.
  • No mortgage, instalment or revolving credit delinquencies appearing on the credit bureau in the past 12 months.
  • No reported defaults on residential mortgages for the past 7 years.
  • No previous bankruptcy.

Down Payment

  • ≤ 90% LTV Minimum 5% of the down payment from the borrower’s own savings. The remainder may be gifted from an immediate family member.
  • Qualified home buyers may use traditional down payment sources including personal savings, non-repayable gift from immediate family member(s), proceeds from sale of property.

Additional Criteria

  • Borrowers with commission income are ineligible.
  • Lender to ensure borrower(s) have no tax arrears.
  • All applicants used to qualify must occupy the property (If two unit property, one unit must be owner occupied).
  • Spousal guarantors acceptable.
  • Borrowers are permitted one (1) Sagen insured Business for Self (Alt. A) Program mortgage.

Business Information Requirements

Lender to provide the following information in the notepad to establish the type and size of the business, and help substantiate the reasonability of the borrowers stated income:

  • Industry type / profession of the borrower’s business.
  • Business type (sole proprietor, partnership or incorporated and percentage ownership).
  • Borrower(s) to provide stated annual business revenue.

GDS / TDS Guidelines

GDS TDS
39% 44%

Documentation Requirements

Sole Proprietorship

  • A one-owner operation where the owner directs all the activities of the business, assumes all authorities and obligations, and is liable for its business debts. The sole proprietor income is reported to the Canada Revenue Agency (CRA) on the standard tax return (T1 General) together with the CRA’s required Statement of Business or Professional Activities form (T2125).
  • Documentation requirements – Any one of the following must confirm at least two (2) years business-for-self tenure:
    • Business License.
    • GST / HST Return Summary.
    • T1 Generals with Statement of Business Activities attached for a minimum 2 years prepared by an arm’s length third-party.
    • Audited Financial Statements for the last 2 years, prepared and signed by a Chartered Accountant (CA).
  • Plus, the most recent years’ Notice of Assessment from the borrower(s) to confirm the line 150 amount and no income tax arrears (In the province of Quebec, both federal and provincial NOA’s will be required).

Partnerships

  • Partnerships are businesses owned by two or more individuals who share the profits or losses of the business operation. The partnership income is reported to the CRA on the standard tax report (T1 General) together with the CRA’s required Statement of Business or Professional Activities (T2125), which reflects the percentage of the NET income or loss for each partner of the enterprise.
  • Documentation requirements – Any one of the following must confirm at least two (2) years business-for-self tenure:
  • Business License
  • GST / HST Return Summary
  • T1 Generals with Statement of Business Activities attached for a minimum 2 years prepared by an arm’s length third-party.
  • Audited Financial Statements for the last 2 years, prepared and signed by a CA
  • Plus, the most recent years’ Notice of Assessment from the borrower(s) to confirm the line 150 amount and no income tax arrears (In the province of Quebec, both federal and provincial NOA’s will be required)

Corporations

  • A limited company or corporation is a legal entity, separate from the persons (all shareholders) who own it. The business can own assets, enter into contracts and conduct business transactions in its own capacity. The company is called limited because the liability of the shareholders is limited to their investment. All provincial Corporations must obtain Articles of Incorporation from the province in which they are registered or may be federally incorporated. The applicant’s personal income will be reported by T4 from the corporation.
  • Documentation requirements – Any one of the following must confirm at least two (2) years business-for-self tenure:
    • Articles of Incorporation,
    • Audited Financial Statements for the last 2 years, prepared and signed by a CA
  • Plus, the most recent years’ Notice of Assessment from the borrower(s) to confirm the line 150 amount and no income tax arrears. (In the province of Quebec, both federal and provincial NOA’s will be required.

Portability

Mortgage insurance is portable under this program:

  1. When porting from a Business for Self (ALT. A) Program to another Business for Self (ALT. A) Program mortgage, the premium will be the lesser of:
    1. The increase in the loan amount multiplied by the top-up premium rates defined in the table above, OR
    2. The new loan amount multiplied by the full premium
  1. When porting from a Business for Self (ALT. A) Program loan to an existing standard Sagen insured loan, the premium will be the lesser of:
    1. The increase in the loan amount multiplied by the standard premium top-up rates as described in the Portability Feature product overview, or
    2. The new loan amount multiplied by the full standard premium
  1. When porting from an existing standard Sagen insured loan to a Business for Self (ALT. A) Program loan, the premium will be the lesser of:
    1. The outstanding mortgage balance multiplied by 2.30% + the top-up amount multiplied by the top-up premium rate, OR
    2. The new loan amount multiplied by the full premium

Example for Scenario #3:

  • Outstanding mortgage balance =  $100,000
  • Top-up mortgage amount = $80,000
  • New Loan Amount = $180,000 (90% LTV)

($100,000 x 2.30%) + ($80,000 x 9.0%)  = $9,500 ($180,000 x 5.85%)     = $10,530 Premium Payable is $9,500 When porting with a top-up mortgage amount, the blended amortization option is available.

Assumptions / Assignments

  • Mortgage is assumable subject to meeting Lender guidelines.

Eligible Products *:

  • Progress Advance Program
  • Purchase Plus Improvement Program
  • Second Mortgage Program

*For specific underwriting guidelines related to the above eligible products, please refer to the applicable product overview.

Ineligible Products

  • Borrowed Down Payment Program
  • Family Plan Program
  • New to Canada Program
  • Investment Property Program
  • Vacation / Secondary Homes Program

 

Borrowed Down Payment Program

Sagen’s Borrowed Down Payment Program helps make it possible for a borrower to start building equity in a home without having to save for years.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

  • 90.01% -95% LTV where any portion of the down payment is from borrowed resources.
  • 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.

Loan Security

  • First mortgages

Eligible Properties

  • Maximum 2 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.

Maximum Property Value

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

*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.

Qualifying Terms and Interest Rate

  • 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 25 years

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:

LTV Ratio Premium Rate Top-Up Premium Rate
90.01-95.00% 4.50% 6.60%

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 and employment verification requirements apply.

Credit

  • 90.01-95% LTV Minimum credit bureau score of 650 is recommended.

Down Payment

  • Qualified home buyers may use non-traditional sources of down payment including borrowed sources that are arm’s length to the purchase or sale transaction such as personal loans, lines of credit or credit cards, gifts from non-immediate family member(s) (an immediate family member is defined as a father, mother, child, brother, sister, grandparent, legal guardian, or legal dependent).
  • Repayment of borrowed funds must be included in the TDS calculation.

Additional Criteria

  • Non-residing co -borrowers are acceptable (must be an immediate family member and on title).
  • Non-residing guarantors are not permitted.
  • Lender to ensure that the borrower has the resources to accommodate all closing costs for the mortgage transaction. These funds may be borrowed provided any associated repayments are included in the TDS calculation based on a 12 -month repayment period.

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.

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.
  • When porting from an existing standard Sagen insured loan to Borrowed Down Payment Program loan, the premium will be the lesser of:
    • The outstanding mortgage balance multiplied by 0.50% + the top-up amount multiplied by the top-up premium rate, or
    • The new loan amount multiplied by the full premium rate.

Assumptions / Assignments

  • Mortgage is assumable subject to meeting Lender guidelines.

Eligible Products*

  • Progress Advance Program
  • Purchase Plus Improvement Program
  • Vacation / Secondary Homes Program (Type A Properties)

*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
  • Family Plan Program
  • New to Canada Program
  • Vacation / Secondary Homes Program (Type B Properties)
  • Investment Property Program
  • Second Mortgage Program

Vacation/Secondary Homes Program

The Vacation / Secondary Home Program allows borrowers to purchase a second home with an affordable monthly payment with 5% down payment.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

Secondary Homes (Type A)

  • 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.

Vacation Homes (Type B)

  • 90% LTV

Loan Security

Secondary Homes (Type A)

  • First and Second Mortgages

Vacation Homes (Type B)

  • First Mortgages

Eligible Properties

Secondary Homes (Type A)

  • Maximum 1 unit
  • Property must be owner occupied or occupied by an immediate family member
  • 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

Vacation Homes (Type B)

  • Property characteristics same as Type A properties noted above except for the following:
  • Property need not be winterized
  • Seasonal access permitted (road not ploughed during winter)

Ineligible Properties (For both Type A and Type B homes)

  • Investment properties
  • Rental pool / Timeshare properties

*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

Maximum Loan Amounts

Secondary Homes (Type A)

  • Metro Toronto, Metro Calgary and Metro Vancouver: $750,000
  • Rest of Canada: $600,000

Vacation Homes (Type B)

  • $350,000 (exceptions will be considered on a case by case basis)

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 25 years

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. If porting the mortgage insurance premium from a Type A property to a Type B property, the difference in premium is 1.10%. This difference is charged on the mortgage balance being ported, in addition to the top-up premium on the additional loan amount.

Type A Properties Type B Properties
LTV Ratio Premium Rate Top-Up Rate Premium Rate Top-up Premium
Up to 65% 0.60% 0.60% 1.45% 2.90%
65.01% – 75% 1.70% 5.90% 2.55% 6.10%
75.01% – 80% 2.40% 6.05% 3.15% 6.40%
80.01% – 85% 2.80% 6.20% 3.50% 7.00%
85.01% – 90% 3.10% 6.25% 4.35% 7.60%
90.01% – 95% 4.00% 6.30% N/A N/A

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 and employment verification requirements apply.

Credit

  • No prior bankruptcy or judgments.
  • No R3’s in the last 24months.

Type A properties

  • >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.

Type B Properties

  • Minimum credit bureau score of 680 is required for all applicants.
  • Please note that on a case -by-case basis, Sagen will review instances where the primary applicant meets the minimum credit score but a second applicant has no credit at all.

Down Payment

Type A Properties

  • Qualified home buyers may use traditional down payment sources including personal savings, RRSP withdrawal, non-repayable gift from immediate family member(s), sweat equity, existing home equity, and proceeds from sale of property.

Type B Properties

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

Additional Criteria

  • Maximum of one Sagen insured vacation property per applicant.
  • No 3rd party guarantors for qualification purposes. Spousal guarantors are permitted
  • An immediate family member is defined as a father, mother, child, brother, sister, grandparent, legal guardian, or legal dependent.

GDS / TDS Guidelines

GDS TDS
39% 44%

Documentation / Information Requirements

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

Property Type Requirements

Secondary Home (Type A)

  • Foundation must be permanent and installed beyond the frost line. This includes concrete / concrete block or preserved wood foundations, or post / pier foundations on solid bedrock.
  • Must be zoned and used as residential, rural, or seasonal. Mixed uses or rental pooling is not accepted.
  • Freehold or condominium title. Co-ops or interest ownership is not accepted.
  • At minimum, property must have a kitchen, 3 piece bathroom, bedroom, and common area.
  • Remaining economic life must be 25 years.
  • Year-round road access on reasonable quality public roads, serviced by the local municipality.
  • Privately serviced roads are allowed, provided there is a maintenance contract in place.
  • Property must be winterized with a permanent heat source. For example, heating can be baseboard, forced air, water radiator, radiant, coal, propane, geothermal heat pumps, or heat pumps.
  • Good quality construction with no signs of deferred maintenance.
  • Water source: well, municipal serviced, and cistern. Water source must be drinkable. Lake or river water is acceptable, provided the property has its own filtration system. For example, a reverse osmosis system.
  • Property must have electrical power. Alternative energy sources may be considered on a case-by-case basis such as solar power, wind energy and generators.
  • There must be good market appeal in the area with no adverse influences / neighborhood nuisances.

Vacation Home (Type B)

All Type A property requirements apply to Type B, except for the following:

  • No permanent heat source is required. For example, a wood stove, fireplace, stove or heat blower is acceptable.
  • Foundation may be floating. For example, sitting on blocks.
  • Seasonal road use is acceptable. This means the road does not have to be ploughed during the winter.
  • Water source needn’t be drinkable. However, there must be running water in the home.
  • Property may be accessible only by boat.
  • Holding tanks may be considered provided it is common for the immediate area and meets all municipal/provincial requirements (e.g., CSA approved holding tank).

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.
  • When porting from an existing standard Sagen insured loan to a Vacation (Type B) loan, the premium will be the lesser of:
    • The outstanding mortgage balance multiplied 1.10% + the top-up amount multiplied by the top-up premium rate, or
    • The new loan amount multiplied by the full premium rate.

Assumptions / Assignments

  • Mortgage is assumable subject to meeting Lender guidelines.

Eligible Products *

Secondary Home (Type A) Vacation Home (Type B)
Borrowed Down Payment Program       Purchase Plus Improvements Program
Homebuyer 95 Program (Maximum 1 unit)
Progress Advance Program (Residential Home Builder, Contractor and Self-Build Programs)
Purchase Plus Improvements Program
Second Mortgage Program

*For specific underwriting guidelines related to these eligible products, please refer to the applicable product overview.

Ineligible Products

Secondary Home (Type A) Vacation Home (Type B)
Business for Self (Alt. A) Program Homebuyer 95 Program
Business for Self (Alt. A) Program
Family Plan Program Borrowed Down Payment Program
New to Canada Program Family Plan Program
Investment Property Program New to Canada Program
Progress Advance Program
Second Mortgage Program
Investment Property Program

Energy-Efficient Housing Program

Sagen wants to help protect the environment and support consumers as they make environmentally friendly choices. Through the Sagen Energy-Efficient Housing Program, homebuyers purchasing an energy-efficient home or making energy saving renovations are eligible for significant premium savings when Sagen mortgage insurance is obtained.

Consumer Benefits

  • A refund of up to 25 per cent of the Sagen mortgage insurance premium.
  • Available on all Sagen mortgage insurance products.

Mortgage Insurance Premium Refund Example :

$300,000 mortgage @ 95% LTV Premium Payable*
Standard Premium (95% LTV = 4.0%) $12,000
Energy-Efficient Premium Refund (15%) ($1,800)
Total Premium $10,200

*Mortgage insurance premium does not include any applicable provincial sales tax.

Loan Purpose

  • Purchase (New Construction or Existing Home)
  • Where improvements are being completed to make the home more energy -efficient, those improvements must be funded through a Sagen insured mortgage.

Eligibility Requirements

  • The energy-efficient home purchased, built or renovated to make energy-efficient improvements to the home must have used Sagen insured financing and meet all applicable Energy-Efficient Housing Program requirements noted below.
  • Sagen must receive all mortgage insurance premiums and fees prior to issuing the partial premium refund.
  • The percentage refund is based on the amount of premium paid on the Sagen insured loan at the time of funding. In the event a borrower is utilizing Sagen’s Portability Program to port an existing mortgage to a new energy efficient home the percentage premium refund would only be applicable to the increase in loan amount.
  • The date of the premium refund application cannot be greater than 24 months from the closing date of the mortgage.
  • All supporting energy-efficient documentation cannot be greater than 5 years old.

Purchasing a new or existing home

If the home is built under one of the qualifying energy efficient building programs listed below it is eligible for a partial premium refund:

      15% Premium Refund •  LEED® Canada for Homes (National)
•  Built Green CanadaTM (National)
•  Novoclimat 2.0 TM (Quebec)
•  EnergyStar® (National)
•  Greenhouse TM (Ontario)
•  Power Smart (Manitoba)
•  GreenHome (Yukon)
25% Premium Refund •  R-2000 (National)

OR If the home is not built under a qualifying energy -efficient building program, an NRCan qualified energy advisor must assess the home to confirm that it meets the EnerGuide ratings of one of the two scales listed below:

EnerGuide Rating 0-100 Scale •  Rating of 82-85 for a 15% refund

•  Rating of 86-100 for a 25% refund

 

EnerGuide Rating Gigajoules per year Scale

•  Rating of ≥ 15% lower than “A Typical New

House” for a 15% refund

•   Rating of ≥ 40% lower than “A Typical New

House” for a 25% refund

Purchasing a new or existing high-rise condominium unit, the building in which the unit is being purchased must be built to one of the energy efficient requirements listed below:

  • Built to LEED Canada New Construction Standard (Certified, Silver, Gold and Platinum) to qualify for a 15% premium

OR

  • If the condo building meets the requirements listed below you may also be eligible:
    • Built to be 20% more energy-efficient than compliance with the energy requirements of the applicable building code to qualify for a 15% refund.
    • Built to be 40% more energy efficient than compliance with the energy requirements of the applicable building code to qualify for a 25% refund.

Purchasing an existing home and completing renovations

  • Obtain a Sagen insured mortgage using the Purchase Plus Improvements Product to make energy- efficient improvements to the home.
    • Improvements made to individual condominium units that have shared heating / ventilation are not eligible for partial premium refunds.
  • An NRCan qualified energy advisor must perform a pre-improvement and the post-improvement energy efficiency evaluation. To contact an Energy Advisor, please visit nrcan.gc.ca – Energy –
  • Energy Efficient – Energy Efficiency for Homes – EnerGuide Energy Efficiency Home Evaluations.
  • Certify that the energy-efficient improvements that have been completed and meet one of the two EnerGuide rating scale requirements listed below:
EnerGuide Rating 0 – 100 Scale
  • With a pre-improvement rating <55 the post-improvement rating must increase by ≥ 10 points, achieving a rating of > 60 for a 15% refund or increase by ≥ 20 points, achieving a rating of > 60 for a 25% refund.
  • With a pre-improvement rating ≥ 55 the post-improvement rating must increase by ≥ 5 points for a 15% refund or increase by ≥ 10 points for a 25% refund.
EnerGuide Rating Gigajoules per year Scale (“GJ/yr”)
  • With a pre-improvement rating ≥ 200 GJ/yr. the post-improvement rating must decrease by ≥ 45 GJ/yr. achieving a rating of < 250 GJ/r for a 15% refund or decrease by ≥ 90 GJ/yr. achieving a rating <250 GJ/yr for a 25% refund.
  • With a pre-improvement rating <200 GJ/yr. the post-improvement rating must decrease by ≥ 20 GJ/yr. for a 15% refund or decrease by ≥ 45 GJ/yr. for a 25% refund.

To apply for the Energy-Efficient Rebate please select one of the following options below:

  • Complete the application found at sagen.ca – Lenders – Products – Energy-Efficient Housing Program and upload the required documentation electronically.

OR

  • Download and complete the PDF version found at: sagen.ca – Lenders – Products – Energy- Efficient Housing Program and submit by mailing or faxing your completed application, along with the required documentation (see below) to:

Sagen

2060 Winston Park Drive

Suite 300

Oakville, ON L6H 5R7

Fax: 1 (877) 246 5509

Attention: Finance Department – Energy Efficient Group

Documentation requirements to accompany application form

Purchasing a new or existing home

  • Documentation certifying your home was built under a Sagen qualifying energy efficient building program.

OR

  • Provide a copy of the first page of your EnerGuide performance evaluation report confirming the Energuide rating of the home is greater than or equal to the minimum program

Purchasing a new or existing high-rise condominium unit

  • Copy of the building’s LEED

OR

  • Documentation signed by NRCan, the project engineer or builder to confirm that the entire condo building is greater than or equal to the minimum program requirements.

Purchasing an existing home and completing renovations

  • Provide a copy of the first page of the pre -improvement and first page of the post -improvement EnerGuide performance evaluation report prepared by an NRCan qualified energy advisor confirming that the Energuide rating of the home is greater than or equal t o the minimum program requirements.

Sagen will recognize either of the Natural Resources Canada (NRCan) EnerGuide rating systems, the 0-100 Scale or Gigajoules per year scale based on the jurisdiction the home is located in. For detailed information regarding the applicable scale refer to NRcan. Refunds are processed and mailed within 30 business days of receipt of application.

Investment Property Program

Sagen’s Investment Property Program provides qualified borrowers an opportunity to purchase an investment property with as little as 20% down payment.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

  • 80% LTV

Loan Security

  • First mortgages

Eligible Properties

  • 2-4 units
  • 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, the property must meet the following criteria:
    • Municipal zoning
    • Fully self -contained units

Ineligible Property Types

  • 1-unit dwellings
  • Time -share Interests
  • Vacation Homes
  • Commercial zoning
  • Rooming Houses
  • Quarter Share / Shared Ownership
  • Rental Pools

Maximum Property Value

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

Maximum Loan Amounts

  • Metro Toronto, Metro Calgary and Metro Vancouver: $750,000
  • Rest of Canada: $600,000

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 %

*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.

Amortization Options

  • Up to 25 years

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:

LTV Ratio Premium Rate Top-Up Rate
Up to 65% 1.45% 3.15%
65.01% – 75% 2.00% 3.45%
75.01% – 80% 2.90% 4.30%

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 and employment verification requirements apply.

Credit

  • Borrowers should have a strong history of managing their credit
  • Minimum credit bureau score of 680 is recommended.
  • Two (2) trade lines with at least two (2) years history
  • No prior bankruptcy
  • Sagen will consider applications with lower scores based on the overall merit of the application and where other risk mitigating factors exist.

Down Payment

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

Rental Income

  • Sagen will accept 100% of the rental income subject to:
    • Each applicant having a minimum credit score of 680
    • Income can be validated using a two year average based on lease agreements or
    • Where rental income cannot be validated with lease agreements for a two year period, income for new or existing units is to be confirmed via fair market rent from an appraisal. Lenders should apply a market vacancy rate in accordance with their internal policy.
  • If the above credit and income requirements cannot be met, 50% of rental income is to be used for qualification.
  • Taxes and heat are to remain excluded from the debt service ratio calculation.
  • Total Debt Service Ratio (TDSR) Calculation:

\frac{Principal\, + \,Interest\, + \,50\%\,Condo\,Fees\,(if\,applicable)\,+\,Other\,Debts}{Gross\,Annual\,Income\,+\,\%\,of\,Gross\,Rents}

Additional Criteria

  • Personal guarantees are required when the borrower is not an individual (e.g.,corporate entity).
  • The personal guarantee cannot be released without prior consent from 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.
  • Sagen requires that the Lender obtains a General Assignment of Rents and Leases or include this requirement in the Standard Charge Terms.

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.
  • When porting from an existing standard Sagen insured loan to an Investment Property loan, the premium will be the lesser of:
    • The outstanding mortgage balance multiplied by 0.50% + the top-up amount multiplied by the top-up premium rate, or
    • The new loan amount multiplied by the full premium rate.

Assumptions / Assignments

  • Mortgage is assumable subject to meeting Lender guidelines.

Eligible Products*

  • Purchase Plus Improvement 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
  • Family Plan Program
  • Homebuyer 95 Program
  • New to Canada Program
  • Progress Advance Program
  • Vacation / Secondary Homes Program
  • Second Mortgage Program