Modifications to CMHC and Genworth’s treatment of rental income take effect September 28, 2015.
CMHC and Genworth will consider up to 100% of gross rental income from a two-unit owner-occupied property where:
-the credit score for all applicants is 680 or greater, and
-the rental income is sustained for at least two years, and
-the two-year average of the rental income can be confirmed
These changes will help sitting owners add a second unit to their homes or buy a duplex where they can live in one part and rent out the other. Why is that? Because previously, only 50% of rental income counted when calculating your GDS, gross debt service ratio. If it was too high (either because your other income is too low or your total debts too large), you could not qualify for a mortgage.
For 3–4 unit owner-occupied and 1–4 unit non-owner occupied properties, the net rental income (gross rents less operating expenses) can form part of the borrower’s gross annual income as per income tax returns schedule of rental activity.
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