New to Canada Program - Sagen (2024)

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

• 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).

Loan Security

• First 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 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 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:

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

In the absence of a sufficient credit report from a Canadian credit reporting agency, Sagen will establish
creditworthiness in one of the following ways:

• International credit bureau
• Demonstrated payment consistency confirmed via 12 months bank statements from recognized financial institution or 12-month billing statements.
  • Examples of payments included but are not limited to rental payment, utilities, cable, phone, auto insurance, childcare, or documented regular savings.
• Letter of reference from a recognized financial institution endorsing borrower’s banking experience and relationship
• For 90% LTV or less, six (6) months of bank statements from primary account.

Down Payment

• Qualified home buyers may use traditional down payment sources including personal savings, RRSP withdrawal, 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, or a corporate subsidy.

Additional Criteria

• Borrowers must not be prohibited from purchasing a property under the “Prohibition on the Purchase of Residential Property by Non-Canadians Act”
• 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 and Non-Residing Co-borrowers 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.

GDS / TDS Guidelines

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

* Sagen may request that the Lender provide a copy of the documentation on a case-by-case basis.
** Examples of payments included but are not limited to rental payment, utilities, cable, phone, auto insurance, childcare, or documented regular savings

• 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*

• 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