How MICs underwrite: committee review, fund mechanics, and what actually changes.

Under section 130.1 of the Income Tax Act, a Mortgage Investment Corporation needs at least 20 shareholders, no single shareholder holding more than 25% of its capital, and at least half its assets in residential mortgages or cash held at a CDIC-member institution. In exchange for meeting those conditions, the MIC deducts the dividends it pays shareholders from its own taxable income, so the interest income effectively flows through and is taxed only once, at the shareholder level.

The practical effect is that a MIC has to keep its capital working — sitting on uninvested cash defeats the purpose of the structure — which pushes MICs toward faster, more flexible underwriting decisions than a bank, without necessarily lowering the bar on documentation.

The 25% single-shareholder cap matters for a different reason too: it forces a MIC to actually be a pooled vehicle rather than one or two investors calling every decision informally. In practice, that means a broker submitting to a well-run MIC is dealing with a real underwriting process, not a handshake between the borrower and a single private lender wearing a corporate name — the committee structure covered next exists partly because the tax rules require genuine diversification of ownership.

Knowing a MIC's meeting cadence ahead of time changes how a broker plans a closing date. A file submitted the day after a weekly committee meeting can lose most of a week waiting for the next one, while the same file submitted two days earlier might have cleared before the deadline it's now at risk of missing — a scheduling detail that has nothing to do with the deal's quality but everything to do with when the broker chose to submit it.

Loan-to-value and the property's marketability — how easily it could be sold if the loan ever needed to be recovered — typically carry more weight in a MIC's decision than a full GDS/TDS calculation does. Exit strategy matters too: a MIC wants a credible answer for how the borrower gets to a refinance, a sale, or a return to conventional financing before the term is up.

That said, “equity-based” doesn't mean income-blind. Ontario's regulator reviewed a sample of private mortgage transactions and found roughly two-thirds had missing, incomplete, or inconsistent documentation of the required suitability assessment — a finding that has pushed the sector toward tighter file documentation, not looser standards. A submission built the way the submission cover note template lays out works just as well for a MIC file as it does for an A-lender one.

Property marketability is a more subjective assessment than it sounds, and it's where a MIC's local knowledge often shows. A property in a thin, slow-moving rural market can carry a strong appraised value on paper and still be a hard sell in a hurry if the loan ever needed to be recovered, which is exactly the scenario a MIC's committee is trying to price for — a factor a straightforward LTV calculation alone doesn't fully capture.

How much capital a MIC has available to deploy at a given moment — shaped by its own redemption cycle and how recently it's raised new capital — can matter as much as the file's quality. A MIC that's fully deployed may take longer to fund a new file, or route part of a larger deal to a co-lending arrangement with another MIC, than one sitting on fresh capital.

That variability is one reason equity-based files often need more active tracking than a conventional A-lender deal. It connects directly to how equity lending programs work more broadly across private and alternative lenders. Brokers running these files through Treadstone's fulfillment associates get that tracking handled without it falling on the agent to chase.

Building a relationship with more than one MIC, rather than defaulting to a single go-to fund, gives a broker somewhere to route a deal when the first choice happens to be between capital cycles. It's a small piece of business development that pays off specifically on the files where speed matters most — the equity-based deals where a client is often working against a tighter timeline than a conventional purchase ever presents.