Are you dreaming of owning a second home? Perhaps you’re imagining a serene lakeside cottage for summer holidays or considering a conveniently located city property to reduce those draining weekday commutes. Maybe you’re preparing for your child’s upcoming college life. Whichever scenario you’re facing, purchasing a “second home” is an attainable goal, thanks to programs from Genworth, Canada Guaranty, and CMHC. These entities provide Canadians the opportunity to secure these properties with as little as a 5% down payment. Let’s break down the details.

Understanding Your Options: Genworth’s “Secondary Homes (Type A)” and “Vacation Homes (Type B)” Programs

Genworth offers two prominent programs for secondary or vacation homes. The fundamental requirements for both types revolve around the property itself and the occupants.

The properties in question must be single-family units, occupied by either the borrowers or their family members. In the case of Secondary Homes or the Canada Guaranty’s LifeStyle Advantage Property, they must have permanent property amenities like a full foundation, a persistent heat source, and a potable water source. However, Vacation Homes are not bound by the same requirements; they do not need to be winterized or have a potable water source. Moreover, they can be located in areas without year-round road access.

Borrower Prerequisites and Mortgage Specifications

For all programs, borrowers typically require an Equifax Beacon credit score of at least 650. Moreover, the operating costs of the property must be fully covered by the borrowers’ income. Rental income or contributory income from the property cannot be utilized to qualify for the mortgage.

When it comes to the down payment, Vacation Homes require it to come from the borrowers’ resources. However, the down payment for a Secondary Home can also be gifted by a family member. As for the LifeStyle Advantage program, the down payment can be borrowed or gifted from any arm’s length source.

Additionally, Purchase Plus mortgage products are available for all programs, but cash back mortgage products are only accessible for the Secondary Home program.

Seek Guidance for Your Specific Situation

The journey to owning a second home is thrilling, yet it can be complex. If you’re unsure whether your situation qualifies for a “Second Home” program, don’t hesitate to reach out. As an experienced mortgage broker, I’m here to help you review and navigate your mortgage needs.