The agency expands its mortgage-buying program from the initial $50bn
Canada Mortgage and Housing Corporation (CMHC) revealed plans to expand its revised Insured Mortgage Purchase Program (IMPP) in a bid to boost the financial system amid the economic disruptions brought about by the COVID-19 pandemic.
In a statement, CMHC announced that it is ready to purchase an additional $100bn of insured mortgage pools on top of the $50bn the agency committed last March 16.
"This action will expand the stable funding available to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses," CMHC said.
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CMHC added that the insured mortgage pools already carry government backing, so there is no additional risk to taxpayers.
Details for the purchase operations can be viewed via the agency’s website.
Ottawa employed a similar program to buy insured mortgages during the 2008-09 financial crisis. At that time, the CMHC ended up taking over about $69bn worth of mortgages, about half the amount they were willing to take on.
CMHC said that plans to expand the issuance of Canada Mortgage Bonds to $60bn are also in place but will be dependent on market conditions and investor demand.
"These supports to the financial sector build on previous measures announced by the government of Canada to provide significant and effective action to support Canadian individuals and businesses facing financial hardship as a result of the economic impacts of the global COVID-19 outbreak," CMHC said.
