An Alberta buyer is purchasing an acreage property with a private water well and septic system. How do these features affect the buyer's ability to obtain CMHC-insured financing?
Correct Answer
C) CMHC may insure it, subject to satisfactory water potability tests, a septic inspection and minimum property standards
CMHC can insure properties with private wells and septic systems, but requires that these systems meet acceptable standards. The lender will typically require a water potability test, well flow test, and septic inspection. If the well or septic fails to meet standards, CMHC may decline the insurance, requiring the buyer to make a 20% down payment for conventional financing.
Why This Is the Correct Answer
Option C correctly states that CMHC may insure properties with wells and septic systems provided they pass required tests—water potability testing, well flow assessment, and septic system inspection. The property must meet CMHC's minimum standards for these systems. Failure means the buyer needs conventional financing with a minimum 20% down payment.
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An Alberta buyer is purchasing a rural acreage property. What additional lending challenge might they face compared to an urban purchase?
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An Alberta first-time buyer makes their first Home Buyers' Plan (HBP) withdrawal from their RRSP in 2026. What is the maximum withdrawal, and when must repayment begin?