| Documentation Requirements | • Most recent two years Notice of Assessments accompanied by T1 Generals (including Statement of Business or Professional Activities) for all BFS borrowers. Note: For Quebec residents, both Federal and Quebec NOA and either a Federal or Provincial T1 are required. • Where applicable, Schedules/Worksheets and/or Financial Statements. • Down payment confirmation. • If one of the applicants is salaried or if other sources of income are included, the income must be confirmed per standard income confirmation guidelines. • Closing cost confirmation of 1.5% of the purchase price is required for all insured deals and conventional deals with BFS income only. • Purchase and Sale agreement including all addendums, and MLS (if applicable). • Confirmation via one form of written third party documentation to confirm BFS status, evidencing at least two full years of self-employment OR confirmation of professional status as noted above (not applicable for Insured deals). Documentation to confirm BFS status may include: o Master Business License o Business Registration o Articles of Incorporation o GST Returns o Financial Statements prepared by a licensed accountant o Last two years income tax returns supported by two years Notice of Assessments o Active business account opened two years ago or more |
New to Canada – Insured
Overview
• This policy applies to customers who have immigrated to Canada within the last 60 months and are looking for an insured mortgage but do not have established Canadian credit bureau history.
• For customers who are new to Canada with three months’ minimum full time employment in Canada,
include details on the customer’s previous employment and/or details on how their income and down
payment has been generated including source of funds.
• Note: Indicating “New to Canada” in the customer’s employment/occupation details is not acceptable (refer to the Customer Occupation section).
• For customers who are working in Canada, have permanent residence, and already have an established Canadian credit history, our regular policy will apply.
• A full document package must be submitted to TD Mortgage Solutions (TDMS) upfront on all New to
Canada applications.
Guidelines:
| Eligible | Product: • Insured Mortgage • Fixed Rate • Closed VIRM | Purpose: • Purchase only • Refer to Purpose of a Credit Application | Property: • Maximum two units where one unit is the owner-occupied principal residence • New Construction • Resale |
| Ineligible | Product: • Insured Business for Self • Cottage • Second Homes • Rental Properties • TD Home Equity Flex Line | Property: • Non-owner-occupied properties |
| Borrower Qualifications | • Must have immigrated/relocated to Canada within the last 60 months. • Three months’ minimum full-time employment in Canada. • Borrowers transferred to Canada under relocation programs are considered on an exception basis. • Guarantor’s Income Confirmation required (if applicable). |
| Required Documentation | • Purchase and Sale Agreement including all addendums, and MLS listing (if applicable). • Standard income confirmation. • Confirmation of Landed Immigrant Status (Permanent Residency Card). • Preceding 12-month history of rent paid in Canada and 12-month history of two regular obligations (e.g. monthly). • Proof of Borrower Meeting Rental and Regular Obligations: o Rent – Supporting Bank Statements and letter signed by landlord indicating: – Date the tenant moved in – Monthly rent amount – Amenities included in the rent – Payment history o Regular Obligations: – Copy of bill payment confirmation from bank statement/paid invoices (e.g. Hydro/Utilities/Telephone/Cable) – Mandatory: Payments must be timely. No late payments. If unable to obtain the 12-month history of rent and the 12-month history of two regular periodic obligations, LTV is limited to 90%, and the following may be accepted: o Satisfactory Letter of Reference from a recognized Financial Institution outlining the history and past credit experience. Must be dated within 60 days of approval, or; o Six months of Bank Statements from a Primary Account (living expenses such as rent and food flowing through the account), with no evidence of financial difficulties (e.g. no NSF items). |
| Debt Servicing | • Maximum GDS Ratio o CMHC, Sagen, and Canada Guaranty: – 35% where beacon score is less than 680 (minimum beacon score is 650). – Up to 39% where beacon score is 680 or greater. • Maximum TDS Ratio o CMHC, Sagen, and Canada Guaranty: – 42% where beacon score is less than 680 (minimum beacon score is 650). – Up to 44% where beacon score is 680 or greater. • All debts outside country must be included in the TDS. • Rent earned outside of Canada is to be excluded from calculation. |
| Down Payment | • All Down payments must be verified • When LTV is 95%, down payment must come from borrower’s own resources • When LTV is less than 95%, Down payment can come from a Corporate Relocation Subsidy or be gifted by an immediate family member (parents, grandparents, mother, father, child, sibling, etc.). |
| Loan to Value (LTV) | • Maximum 95% • Maximum purchase price of $1,000,000 |
| Amortization | • Up to 25 years |
New to Canada and Returning to Canada – Conventional
Overview
• This policy applies to new Canada Permanent Residents or Canadians (citizens or permanent residents)
who returned from a foreign country to live in Canada on a permanent basis, and who cannot meet
standard income confirmation guidelines but whose income is reasonably expected to increase and/or have not had sufficient time to build credit history that would allow them to qualify under our traditional lending programs. To support an assessment of the sources of down payment accumulation, include details and documentation on the customer’s previous employment or asset sales that enabled their savings accumulation.
• For customers who can debt service, traditional financing should apply.
• A full document package must be submitted to TD Mortgage Solutions (TDMS) up front on all New to
Canada applications.
Guidelines:
| Eligible | Product: Conventional Mortgage • Fixed Rate • Closed VIRM • TD Home Equity Flex Line | Purpose: • Purchase • Refinance • Single Advance • Refer to Purpose of a Credit Application | Property: • Owner-occupied • New Construction • Resale • Cottage • Non owner-occupied properties |
| Ineligible | Product: • All product types not listed under Eligible. | Purpose: • Non-Residents • Temporary Residents |
| Maximum Number of Properties | • Maximum two properties in Canada per household including the subject property. One owned property (owner-occupied, second home or recreational/cottage) in addition to the subject property. Property can be free and clear or financed with TD or another financial institution. |
| GDS/TDS | • TDS >44% to ≤ 80% • TDS > 80% may be considered on exception for strong applications with a minimum $500M in non-gifted liquid assets in Canada for a minimum 90 days over and above the down payment. Refer to the Down Payment and Closing Costs section for a list of Eligible/Ineligible Sources of Liquid Assets. • All foreign debts must be included in the TDS. • Where TDS is < 44%, standard lending policy should be used. |
| Credit Worthiness | • Canadian or US applications – credit bureau with no negative trades for any of the borrowers. • For foreign applications – copy of foreign credit report or evidence of established credit history via six months of credit cards or bank statements from the country of origin that demonstrates evidence of credit repayment history. |
| Maximum LTV | • Lesser of 65% or Sliding Scale, no exceptions |
| Amortization | • Maximum 25 years • No exceptions permitted |
| Appraisal | • Full appraisal is required |
| Income | • Customer must be employed full-time in Canada for a minimum of three months. • Income must be confirmed as outlined in the Income Confirmation section. Evidence must be obtained to prove the minimum three months employment. Note: for fluctuating income and where annual income documents for the last two years are not available, only base income will be used and a letter of employment and one of pay stub or direct deposit is required. • For Business for Self applicants, refer to the Business for Self policy for income documentation requirements • Income Growth Requirements: The applicant profile must support a reasonable expectation of income growth to support a TDS of no more than 44% within 24 months based on current confirmed Canadian employment and income, prior experience, education, training and other factors. |
| Down Payment | • Standard Down Payment and Closing Cost Guidelines apply. • Submission commentary for both the sales and underwriting must always support the reasonability of the customers accumulation of down payment and 12 months of principal, interest and tax payments (PIT) with supporting documentation on prior income sources and asset sales that enabled the savings. • This requirement is above the current 90-day history in the Down Payment Guidelines. • In addition to the 35% down payment requirement, applicant(s) must provide evidence of the equivalent of 12 months of principal, interest and tax payments (PIT) in liquid savings in Canada. • Gifted down payment and/or 12 months PIT is only available for owner-occupied properties with current TDS < 80% and is limited to immediate family (parents, grandparents, mother, father, child, sibling etc.). • For Non-Owner Occupied Rental Properties: o Minimum $500,000 in non-gifted liquid assets in Canada is required for a minimum of 90 days prior to application; assets do not have to be with TD. o Down payment requirements or the additional $500,000 in liquid assets cannot come from gifted sources. o Refer table below for eligible sources of liquid assets. Net worth requirement is in addition to funds for down payment but may include 12 months PIT. Eligible sources of liquid assets Eligible: • Liquid assets are defined as cash, near cash, stocks and bonds which are easily liquidated into cash. • Liquid Assets in RRSP/RRIF margined at 30%. • Liquid Assets in a TFSA that are not margined. • Liquid Assets held in a personal holding company. • Assets must be in Canada a minimum of 90 days at the time of application, but do not need to be held at TD. Ineligible: • Gifted Assets. • Margin Investment Accounts. • RESP Holdings. • Restrained savings/investments. • Liquid Assets in an Operating Company. • Insurance. • Real Estate Equity. • Assets jointly owned/shared with a person not on the application |
| Borrower Qualifications | • New Immigrants: o Must be resident of Canada with Landed Immigrant Status confirmed via Permanent Residency Card (PRC). Do not keep copy of PRC in file. Instead, document: Name, Number and Issue Date of PRC in submission comments as evidence that a review of Landed Immigrant / Permanent Residency Status has taken place. o Must be Landed Immigrant/ Permanent Resident no more than five years. • Canadians Returning to Canada: o Applicants must be residents of Canada with Landed Immigrant Status confirmed via a Permanent Resident Status Card (PRC) or Canadian citizenship confirmed from one of the following: Canadian Passport, Canadian Citizenship or Naturalization Card/Certificate, Certificate of Indian Status (Canadian) or Secure Certificate of Indian Status (Canadian). o Do not keep copy of the PRC or other document supporting Canadian citizenship on the file. Instead, provide document: Name, Number and Issue Date of PRC or other document supporting Canadian citizenship in submission comments as evidence that a review of the documents has taken place. o Applicants must have returned to Canada for no more than 60 months. o Documentation provided with the application including income confirmation, accumulation of down payment and 12 months principal, interest and taxes evidence must support the customer declared return to Canada date. o Where there is evidence that the applicant(s) have returned to Canada greater than five years prior or where the documentation already provided does not support the declared return to Canada date, additional documentation may be required. o If customer has filed taxes in Canada, copy of most recent Notice of Assessment or T1 General to confirm no outstanding taxes owing greater than $2,001. |
Temporary Residents
Overview
• Applicants under these guidelines are not permanent residents (foreign resident) and will typically be
employed by established, well respected companies who are being relocated to Canada for a specific
period of time for work purposes.
• Maximum exposure one (1) property in Canada.
Guidelines:
| Eligible | Product: • Conventional Mortgage • Fixed Rate • Closed VIRM • TD Home Equity Flex Line | Purpose: • Purchase • Refer to Purpose of a Credit Application | Property: • Owner-occupied – maximum one unit • New Construction • Resale |
| Ineligible | Product: • All product types not listed under Eligible. | Purpose: • Refinance • Equity Take Out • Purchase with Improvement • Refinance with Improvement | Property: • Rental • Multi-unit • Recreational |
| LTV | • Maximum 80% for conventional financing subject to Sliding Scale. • Maximum 90% for insured financing. |
| Amortization | • Maximum of 25 years. |
| Debt Servicing | • Maximum GDS Ratio* o 35% where beacon score is less than 680 (minimum beacon score is 650) o Up to 39% where beacon score is 680 or greater • Maximum TDS Ratio* o 42% where beacon score is less than 680 (minimum beacon score is 650) or no credit score o Up to 44% where beacon score is 680 or greater *TD Mortgages requiring default insurance are restricted to a maximum of TDS based on credit score, exceptions will not be considered above these thresholds. |
| Credit Bureau | • For CMHC insured deals: o CMHC will obtain copies of the international credit bureau if the country of origin is the United States. o For all other countries, if an international credit bureau cannot be obtained, the Broker should confirm creditworthiness by obtaining a letter of reference from the home bank in the customer’s country of origin. • For Conventional deals: o For customers with a US address and social security number, the customer can provide a copy of the Equifax US credit bureau. o For non-US international applicants, customers are required to provide a copy of their international credit bureau report. However, if a copy of the customer’s international credit bureau is not available, they may provide one of the following showing evidence of credit history to the Broker who will forward it to the Underwriter for review: – Six months of credit card statements from the country of origin demonstrating satisfactory repayment OR – Six months of bank statements from the country of origin |