As of Canada Day, the Canada Mortgage and Housing Corporation has made changes to its lending standards.

CHMC will no longer treat non-traditional sources of down payment as equity. That would include things like borrowing from a line of credit. And would-be home buyers’ qualifying credit scores must also now be at least 680, up from the previous 600.

Speaking on the Jeff Andreas Show, Kamloops Mortgage Broker with Invis Brenda Colman says it will have an impact on first time home buyers. “I think more so because of the down payment. Plus they’re going to qualify for a little bit less. The calculation they figure is about 12 per cent less of what they’re going to be able to qualify for. So that will impact things especially if housing prices are going up.”

Colman says the changes mean that people may want to start thinking about saving up for that down payment a little bit sooner. “With that being said it is important that people start saving for the down payment because they’re going to have to have the five per cent down.”

COVID-19 is driving the changes and the pandemic is creating belief that there will be some significant declines in housing prices. CMHC is forecasting a nine to 18 per cent decrease in home prices over the next 12 months due to higher mortgage debt and increased unemployment.

But, Colman says, we’re not seeing those decreases in Kamloops. “We don’t see a ton of investors coming in looking for rental properties. Typically in a blue collar town like Kamloops the end users are the owner occupied places. So there’s still a drive for that housing, market so we’re not seeing the prices come down to the same effect.”