New rules designed to make it more difficult to get a mortgage loan in Canada were rolled out by Finance Minister Jim Flaherty yesterday. They are scheduled to take effect April 19.

“There’s no clear evidence of a housing bubble, but we’re taking proactive, prudent and cautious steps today to help prevent one,” Flaherty told reporters. “Our government is acting to help prevent Canadian households from getting overextended.”

Three changes were announced:

1. To obtain a mortgage loan, you must qualify for a five-year fixed-rate mortgage. That standard will apply, even if you choose a variable mortgage.
2. If you choose to refinance your mortgage, the maximum withdrawal will drop from 95% to 90% of the value of your home.
3. Real estate investors (those who purchase properties that aren’t their primary residence) will have to make at least a 20% down payment to qualify for Canada Mortgage and Housing Corporate (CMHC) insurance.

To the surprise of many, Flaherty did not boost the minimum down payment required to buy a house. The current rule, which demands that at least 5% of the value of the home be put down, remains unchanged. (The maximum number of years Canadians can take to pay off a mortgage was also untouched, at 35 years.)

You probably know that down payments ranging between 5% and 20% of the value of the home require CMHC insurance. That’s a legal requirement of federally regulated lenders. The agency backstops mortgage loans to protect financial institutions in the event that a homeowner defaults on his or her mortgage. This means more Canadians get a loan.

There’s more to CMHC’s role though. Here are five things you probably didn’t know about CMHC:

• The agency was created in 1946 to address a housing shortage in Canada after the Second World War. At that time, it oversaw the National Housing Act and the Home Improvement Loans Guarantee Act, and it helped Canadians gain access to mortgage loans. CMHC was funded with $25 million in capital and a $5 million reserve fund. Today, according to CMHC’s website, the agency has about $480 billion worth of mortgages currently insured.
• Mortgage Loan Insurance was introduced as part of a series of amendments to the National Housing Act in 1954. CMHC was made responsible for reviewing loan applications at that time.
• CMHC’s mandate has broadened in the 60-plus years since. It now publishes forecasts and analyses of housing market trends and provides information on home buying, renovations and more. The Canadian Housing Information Centre is CMHC’s library.
• The Fraser Institute published a report last week recommending that mortgage insurance be privatized in Canada. “Government intervention in the mortgage insurance market is exposing Canadian taxpayers to enormous potential liabilities if Canada were to be hit with a mortgage default crisis similar to what occurred in the United States,” reads a Feb. 8 press release.
• CMHC programs include the Homeowner Residential Rehabilitation Assistance Program, which provides “financial assistance to low-income homeowners for mandatory home repairs that will preserve the quality of affordable housing.” The Emergency Repair Program offers “assistance to help low-income households in rural areas, for emergency repairs required for the continued safe occupancy of their home.” Information on other programs is available on the CMHC website.