An identity of interest transaction is a sale between parties with family or business relationships.
The maximum loan to value (LTV) ratio for identity of interest transactions on principal residences is capped at 85% (compared to the normal 96.5%)
Financing above the 85% maximum for identity of interest transactions is permitted under certain circumstances, as described in the table below:
Exception |
Description |
Family Member Purchase | A family member purchases another family member’s home as a principal residence. If the property is sold from one family member to another and is the seller’s investment property, the maximum mortgage is the lesser of
Note: The 85% limit may be waived if the family member has been a tenant in the property for at least six months immediately predating the sales contract. A lease or other written evidence must be submitted to verify occupancy |
Builder’s Employee Purchase | An employee of a builder purchases one of the builder’s new homes or models as a principal residence. |
Tenant Purchase | A current tenant, including a family member tenant, purchases the property where he/she has rented for at least six months immediately predating the sales contract.
Note: A lease or other written evidence to verify occupancy is required.
The maximum mortgage calculation is not affected by a sales transaction between a tenant and a landlord with no identity of interest relationship. |
Corporate Transfer | A corporation
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