Kelowna attracts people from outside Canada for the same reasons it attracts people from inside it. Newcomers arriving here with savings and an income are often surprised to find that buying a home is possible sooner than they expected, and equally surprised by which parts of the process are complicated.
Two separate questions decide a newcomer file. The first is whether you are permitted to buy at all, which is a matter of federal law. The second is whether a lender will finance the purchase, which is a matter of underwriting. They have different answers and they need to be worked through in that order.
First Question: Are You Permitted to Buy
The Prohibition on the Purchase of Residential Property by Non-Canadians Act restricts purchases of residential property by people who are neither Canadian citizens nor permanent residents. It came into force on 1 January 2023 and has been extended to 1 January 2027.
Two points determine whether it applies to you.
The prohibition covers residential property inside a Census Metropolitan Area or a Census Agglomeration. Kelowna is a Census Metropolitan Area, so the prohibition applies here. Property outside those areas is not covered, which is why the answer can differ between a home in Kelowna and a property further out.
Permanent residents and Canadian citizens are not affected by any of this. If you hold permanent residence, the prohibition does not apply to you.
The Exceptions for Temporary Residents
The regulations exempt two groups, each with conditions that have to be met in full.
Work permit holders. You are exempt if you hold a valid work permit or authorization to work in Canada, have 183 days or more of validity remaining on it at the time of purchase, and have not already purchased residential property during the prohibition.
International students. The conditions here are considerably tighter. You must be enrolled in a program of authorized study at a designated learning institution, have filed income tax returns for each of the five taxation years preceding the purchase, have been physically present in Canada for at least 244 days in each of the five calendar years preceding the purchase, not have purchased residential property during the prohibition, and the purchase price must not exceed $500,000.
The exemption is per person and it is not something to assume. Where any part of it is uncertain, confirm it with a lawyer before an offer is written rather than after.
Second Question: Will a Lender Finance It
Assuming you are permitted to buy, financing is a separate assessment, and CMHC has a product built for this situation.
If you are a permanent resident, CMHC Newcomers gives you access to all of CMHC’s homeowner mortgage loan insurance products, with no minimum period of residency required. In practice you are treated as any other insured borrower from the day you arrive.
If you are a non-permanent resident, you need legal authorization to work in Canada, such as a work permit. Financing is available on properties of one to four units, at least one of which must be owner-occupied, and the purchase has to comply with the prohibition Act described above.
The published loan-to-value limits are:
- One to two units: up to 95 percent, so a minimum down payment of 5 percent
- Three to four units: up to 90 percent, so a minimum down payment of 10 percent
- Small rental of two to four units, not owner-occupied: up to 80 percent, so 20 percent down
The maximum lending value is $1,500,000 on homeowner loans and $1,000,000 on rental loans, with a maximum amortization of 25 years.
One restriction applies specifically to non-permanent residents: the non-traditional down payment option, which allows borrowed funds as a down payment for certain highly qualified borrowers, is not available to them. The down payment has to come from savings, the sale of a property or a non-repayable gift.
Credit History When You Have None in Canada
This is the part that worries newcomers most and it is more manageable than it appears.
At least one borrower or guarantor needs a minimum credit score of 600. Where a borrower has no Canadian credit history at all, CMHC will consider alternative evidence of creditworthiness, including an international credit report and a letter of reference from the borrower’s financial institution in their country of origin.
Lenders vary widely in how they treat that evidence and how much of it they want. It is one of the clearest cases where the choice of lender decides the outcome, because two lenders can look at the same international credit report and reach different conclusions.
Build Canadian credit alongside the application regardless. A secured credit card used lightly and paid in full each month establishes a domestic history within months, and it will matter at renewal even if it is not needed for the purchase.
Documents to Gather Early
- Passport, and your work permit, study permit or permanent resident card
- Confirmation of Permanent Residence, where applicable
- A letter of employment stating position, salary and start date, plus recent pay stubs
- Any Canadian tax filings you have made, and foreign tax documents where a Canadian record does not yet exist
- An international credit report, or a reference letter from your bank in your country of origin
- Ninety days of statements on the account holding your down payment, showing where the funds came from
- Where the down payment is transferring from abroad, documentation of the source and the transfer
Funds arriving from outside Canada attract more scrutiny than domestic savings, and this is the single most common cause of delay on a newcomer file. Start the paper trail before you move the money, not after.
Where a Broker Helps Most on These Files
Newcomer files are where lender choice matters more than on almost any other kind of application, because the differences between lenders are largest precisely where the file is unusual.
Michelle submits one application and places it with the lender whose guidelines fit the circumstances, whether that is a bank lending through broker channels, a credit union or a monoline lender. Credit unions in particular sometimes take a more flexible view of foreign credit and non-permanent residency than a branch’s national policy allows.
Newcomer Mortgage FAQs
How long do I have to live in Canada before I can buy?
If you are a permanent resident, there is no minimum residency period for CMHC Newcomers. If you are a temporary resident, the constraint is not time in Canada but whether you meet one of the exemptions under the prohibition Act.
Can I buy in Kelowna on a work permit?
Yes, provided you have 183 days or more of validity remaining on the permit at the time of purchase and have not already bought residential property during the prohibition. Financing is a separate question, and CMHC Newcomers covers non-permanent residents with authorization to work.
Does my spouse need to be a permanent resident too?
Not necessarily, but the structure of the purchase matters and so does whose name goes on title. Work it out before an offer rather than at the lawyer’s office, because it affects both the prohibition analysis and the mortgage application.
Will a foreign income be accepted?
Lenders generally want Canadian employment income for a Canadian mortgage. Foreign income is sometimes considered, particularly where an employer has transferred you, and the treatment varies substantially between lenders.
What happens if my permit expires during the mortgage term?
The mortgage does not end when the permit does. The prohibition and the CMHC eligibility rules are tested at the point of purchase. Renewal at the end of the term is a separate assessment, and planning for it early avoids a scramble.
To find out what you can buy in Kelowna and which lender fits your status, contact Michelle Scheibel at My Kelowna Mortgage. She is licensed by the BC Financial Services Authority and places newcomer files with banks, credit unions and monoline lenders through one application.