The client
A household in Alma bought a $385,000 new-build home at 5% down, insured.
Purchase price
$385,000, Alma
5% down, insured
Warranty requirement
Mandatory new-home warranty enrollment
Quebec's own regime, not Ontario's Tarion
Combined income
$8,100/month
Other debt
$235/mo car loan
The problem
Quebec's Building Act regime requires most new residential construction to be covered by a mandatory new-home warranty plan, currently administered as GCR (Garantie de construction résidentielle) -- a genuinely Quebec-specific scheme, distinct in name, administrator, and rules from Ontario's Tarion.
What the lender needed confirmed before funding
- ▸Written confirmation the builder itself was actively enrolled in the mandatory plan, not merely licensed to build
- ▸A unit-specific warranty confirmation naming this exact property, not a general statement about the builder's standing
- ▸Neither document had been requested by the buyer's realtor or the builder proactively -- it surfaced only when the lender's own underwriting checklist flagged it
The home itself was built to code and ready to close. The file stalled on paperwork nobody had thought to ask for until the lender did.
The numbers
Once the warranty enrollment was confirmed, the insured purchase math was unremarkable.
| The insured takeout | Amount |
|---|---|
| Base mortgage (95% of purchase price) | $365,750 |
| CMHC premium (4.00% at 95% LTV) | +$14,630 |
| Total insured mortgage | $380,380 |
| Ratio check at the qualifying rate | Figure |
|---|---|
| Payment at the qualifying rate (6.95%), 25 years | $2,653/mo |
| GDS (payment + $290 tax + $115 heat) ÷ $8,100 income | 37.8% |
| TDS (GDS numerator + $235 car loan) ÷ $8,100 income | 40.7% |
37.8% and 40.7% sit comfortably inside CMHC's 39% GDS and 44% TDS maximums, consistent with the volume residential construction investment data shows moving through new-build purchases each year. The warranty confirmation, not the ratios, was the actual condition to clear.
The solution
A courtier hypothécaire licensed under Quebec's Act respecting the distribution of financial products and services treated the warranty condition as a documentation task with a clear source, not an open-ended delay.
First, contacted the warranty plan administrator directly rather than relying on the builder's own assurance that coverage existed, to obtain the builder's current enrollment status.
Second, requested the unit-specific warranty confirmation naming this property, since a general statement about the builder's standing with the plan was not what the lender's condition actually required.
Third, submitted both documents together to the lender's underwriter ahead of the funding deadline, closing the condition in one round rather than a back-and-forth.
The outcome
The takeout funded insured at 4.95% once the warranty enrollment was confirmed, with GDS at 37.8% and TDS at 40.7%. Quebec's welcome tax on the $385,000 purchase came to $3,886.
Both ratios sit comfortably inside CMHC's 39% GDS and 44% TDS maximums; the file was never close to either ceiling once the warranty documentation was in hand.
What to take from this file
- 01Quebec's mandatory new-home warranty regime is not Tarion. It has its own administrator, its own enrollment process, and its own documentation -- do not assume an Ontario-trained checklist covers it.
- 02Go to the warranty plan administrator directly for enrollment confirmation. A builder's own assurance is not the same as the plan's own written confirmation.
- 03Ask for a unit-specific confirmation, not a general one. A lender's condition naming this property is not satisfied by a statement about the builder's standing generally.
- 04Confirm a lender's new-build documentation checklist early in the file, not at the funding deadline -- warranty confirmation is exactly the kind of condition that surfaces late if nobody asks first.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸CMHC — Purchase (Mortgage Loan Insurance) — default-insurance premium schedule by LTV band (25-year amortization).
- ▸CMHC — CMHC Home Start — minimum down payment tiers (5%/10%) and the $1.5M insured price cap.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
- ▸Gouvernement du Québec — Droits sur les mutations immobilières — Quebec's transfer duties ('welcome tax') — 2026 indexed brackets.
Illustrative in this file — lender-specific, not rules:
- ▸4.95% contract rate — rates move daily; not a quote.
- ▸the lender's specific documentation requirement — each lender sets its own condition wording for confirming new-home warranty coverage before funding a takeout; this is not a universal rule.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.