Canada Mortgage and Housing Corporation (CMHC): Meaning, History

What Is the Canada Mortgage and Housing Corporation (CMHC)?

The term Canada Mortgage and Housing Corporation (CMHC) refers to a Canadian Crown Corporation that serves as the national housing agency of Canada. The goal of the agency is to make mortgage loans affordable for all Canadians through a housing development strategy and mortgage insurance, among other initiatives. Established in 1946, the CMHC is headed by a board that reports to the federal housing minister.

Understanding the Canada Mortgage and Housing Corporation (CMHC)

The Canada Mortgage and Housing Corporation is the national housing agency of Canada. CMHC is a Crown corporation that provides a range of services for home buyers, the government, and the housing industry.

CMHC’s stated mission is to “promote housing affordability and choice; to facilitate access to, and competition and efficiency in the provision of, housing finance; to protect the availability of adequate funding for housing, and generally to contribute to the well-being of the housing sector.”

A primary focus of CMHC is to provide federal funding for Canadian housing programs, particularly to buyers with demonstrated needs. Headquartered in Ottawa, it provides additional services to renters and home buyers, including mortgage insurance and financial assistance programs. The CMHC acts as an information hub for consumers, providing information on renting, financial planning, home buying, and mortgage management.

CMHC also provides mortgage loan insurance for public and private housing organizations and facilitates affordable, accessible, and adaptable housing in Canada. It also provides financial assistance and housing programs to First Nations and Indigenous communities in Canada.

Special Considerations

CMHC provides services to both professionals and consumers. The agency's goal is to collaborate with different professional groups to provide affordable housing. Services include:

• Project funding and mortgage financing
• Providing information to understand Canada's housing market
• Innovation and leadership networks to access funding and talent to spur housing innovation and increase supply
• Providing speakers and hosting events for the industry

For consumers, CMHC seeks to provide the tools individuals need to either buy or rent a home, as well as a variety of information and assistance for current homeowners, such as managing a mortgage, services for older individuals to age in place, and financial hardship assistance.

The CMHC provides financial and hardship tools like payment deferrals, repayment period extensions, adding missed payments to the mortgage balance, moving from variable-rate to fixed-rate mortgage loans, and special payment arrangements.

History of the Canada Mortgage and Housing Corporation (CMHC)

The CMHC was established in 1946 as the Central Mortgage and Housing Corporation by Canada's federal government. Its primary mission was to administer the National Housing Act and the Home Improvement Loans Guarantee Act while facilitating discounts to mortgage companies.

The corporation initially provided housing to returning Canadian war veterans. It shifted its focus toward the end of the 1940s to include the administration of housing programs across Canada, including the opening of Regent Park, a subsidized housing project and Toronto’s first redevelopment initiative in 1948, and the introduction of housing cooperatives and multi-unit apartment buildings throughout Canada by the 1960s.

Canada Mortgage and Housing Corporation (CMHC) and the National Housing Strategy

In November 2017, the Canadian government announced the National Housing Strategy. Rooted in the idea that housing is a human right, this 10-year project worth more than $82 billion is largely expected to be administered by CMHC, although some services and deliverables will be provided by third-party contractors and other Canadian federal agencies.

Strategic initiatives of the National Housing Strategy include:

• Building new affordable housing and renewing existing affordable housing stock
• Providing technical assistance, tools, and resources to build capacity in the community housing sector and funds to support local organizations
• Supporting research, capacity-building, excellence, and innovation in housing research

Criticism of the Canada Mortgage and Housing Corporation (CMHC)

The CMHC has come under scrutiny for some of its policies and practices, including its role in certain projects.

For instance, several moves, including the development of an overpass, in Hogan's Alley in Vancouver led to the displacement of Black Canadian residents by 1970 after the area was razed. The neighborhood was the city's only Black neighborhood. The highway was never built after protests from neighboring communities, although the community was destroyed. The corporation admitted to playing a role, funding as much as 75% of what it called a "community urban renewal."

CMHC was also criticized after providing a multi-million dollar low-cost loan in June 2021 to a company to build housing units in Halifax, Nova Scotia. The CBC reported that rents for the units would range between $1.455 and $1,844 each. Activists and groups called out the organization for helping price certain individuals out of the "unaffordable" units.