CMHC Eco Plus and Eco Improvement: How Homebuyers Could Get 25% of Their CMHC Insurance Premium Back

If you’re buying a home in Calgary, Airdrie, Cochrane, Red Deer, Rocky View County, Mountain View County, Carstairs or Olds, there is a CMHC program worth knowing about before you make your purchase. Some buyers with CMHC-insured mortgages may qualify to receive 25% of their CMHC mortgage insurance premium back through one of CMHC’s Eco programs.

Our mortgage team helps Alberta homebuyers understand how mortgage programs like these may fit into the bigger picture before they purchase.

For buyers already stretching their budget between the down payment, closing costs, moving expenses and improvements, getting several thousand dollars back can make a meaningful difference. We also know there are a lot of programs and rules to sort through when buying a home, so we’ll keep this one simple.

In this article:

• What the 25% CMHC premium refund actually means
• CMHC Eco Plus for newly built homes
• CMHC Eco Improvement for existing homes
• A real-world Alberta example
• Important application requirements
• Glossary and frequently asked questions

What is the CMHC 25% mortgage insurance premium refund?

First, there is an important distinction to make.

The refund is not 25% of the home’s purchase price.

It is not 25% of the amount you spend on renovations.

It is a 25% partial refund of the CMHC mortgage loan insurance premium you paid, provided you and the property meet CMHC’s eligibility requirements.

Here is a simple example.

Suppose your CMHC mortgage insurance premium is $20,000.

$20,000 × 25% = $5,000

If you meet the program requirements and CMHC approves your application, the refund would be $5,000.

That is why we think it is worth discussing these programs before buying an eligible home. A few questions before making an offer can help you understand what documentation you may need later.

There are two different CMHC Eco programs

The program that applies depends largely on what you are buying and what you plan to do with the property.

CMHC Eco Plus is designed for eligible newly built, energy-efficient homes.

CMHC Eco Improvement is designed for buyers who purchase an existing home and complete qualifying energy-efficiency improvements.

Let’s look at each one separately.

1. CMHC Eco Plus for newly built energy-efficient homes

CMHC Eco Plus may provide a 25% partial refund of the mortgage insurance premium when a borrower purchases or builds an eligible newly built, energy-efficient home using CMHC-insured financing.

For this program, newly built generally means the home has never previously been occupied.

This can be particularly relevant around Calgary and communities such as Airdrie, Cochrane, Carstairs and the surrounding counties, where buyers may be comparing resale properties with new construction.

Eligible property types can include:

• Newly built houses
• Eligible high-rise condominium units
• Prefabricated homes

The home must also meet CMHC’s energy-efficiency requirements.

One way to qualify is through an eligible energy-efficiency certification. Another is through energy-consumption performance that meets CMHC’s required threshold.

Under the energy-consumption option, the home must generally be rated at least 20% better than a typical new home under the applicable EnerGuide Rating System requirements.

This is an area where documentation matters. A home being advertised as “energy efficient” does not automatically mean it qualifies for the CMHC refund.

Before assuming a new build is eligible, we want to know what certification or energy documentation is available.

2. CMHC Eco Improvement for an existing home

The second program can be particularly interesting for buyers looking at an older home that needs work.

CMHC Eco Improvement may provide a 25% partial premium refund to an eligible borrower who purchases an existing property using CMHC-insured financing and then completes qualifying energy-efficient renovations.

The borrower must spend at least $20,000 on qualifying energy-efficiency improvements.

That $20,000 threshold is important.

It also does not mean CMHC refunds 25% of your renovation bill. The potential refund is still based on the CMHC mortgage insurance premium.

What renovations can qualify?

CMHC groups eligible improvements into several broad categories.

Examples include:

• Insulation
• Air sealing
• Energy-efficient windows and doors
• Roofing and attic upgrades
• Foundation improvements
• Heating systems
• Ventilation systems
• Air-conditioning systems
• Heat pumps
• Solar energy systems
• Wind energy systems
• Geothermal systems

This creates an interesting planning opportunity for some Alberta buyers.

Imagine you find an older home in Red Deer, Olds or Mountain View County that has the location and layout you want, but the windows, insulation and heating system are dated.

Rather than looking only at the purchase price, we can consider the bigger picture: the mortgage, the planned improvements, the available cash and whether those improvements could potentially meet CMHC Eco Improvement requirements.

Case Study: An Alberta buyer receiving $5,000 back

Let’s use a simplified example.

A buyer purchases an existing Alberta home using a CMHC-insured mortgage.

The CMHC mortgage insurance premium is $20,000.

After purchasing the home, the buyer completes more than $20,000 of qualifying energy-efficiency improvements and keeps the required invoices and supporting documents.

The potential refund calculation is:

CMHC insurance premium: $20,000

Eligible refund percentage: 25%

$20,000 × 0.25 = $5,000

Potential CMHC Eco Improvement refund: $5,000

Notice what we did not calculate.

We did not take 25% of the purchase price.

We also did not take 25% of the renovation budget.

The calculation is based on the CMHC mortgage insurance premium.

The buyer still has to satisfy CMHC’s eligibility and documentation requirements, apply within the required timeframe and receive final approval from CMHC.

Important requirements buyers should know

There are several details we would want a buyer to understand from the beginning.

First, your mortgage must be insured by CMHC. Having an insured mortgage does not necessarily mean CMHC is the insurer, so this is something to confirm with your lender or mortgage professional.

Second, the application must be submitted within two years of the mortgage closing date.

Third, all borrowers on the mortgage must sign and date the application.

Depending on which Eco program you are applying for, supporting documentation can include:

• An eligible energy-efficiency certificate
• An energy-consumption or EnerGuide report
• Paid invoices for completed renovations
• A void cheque in the name of one of the borrowers

For Eco Improvement, keep your paid renovation invoices. CMHC requires documentation confirming the completed renovations and the amount spent.

Most importantly, final eligibility and approval come from CMHC.

We never recommend buying a property or committing to a renovation budget based solely on the assumption that a refund will be approved.

Why this matters before you buy

This is one of those mortgage details that is much more useful when you know about it early.

If you are considering a new construction home, ask the builder about its energy certification and documentation.

If you are considering an existing property that needs substantial upgrades, think about the renovations before closing rather than treating them as an afterthought.

For example, a buyer comparing two homes might be looking at:

Home A: newer and more energy efficient, but with a higher purchase price.

Home B: older and less expensive, but requiring new windows, insulation and a heating-system upgrade.

The mortgage decision should not be made based on a rebate alone. But understanding programs such as CMHC Eco Plus and Eco Improvement gives us another piece of information when we compare the true costs of the two options.

Glossary

CMHC: Canada Mortgage and Housing Corporation, a Crown corporation that provides mortgage loan insurance and other housing programs in Canada.

Mortgage loan insurance: Insurance that protects the mortgage lender against borrower default. It is commonly required when an eligible homebuyer purchases with less than a 20% down payment.

CMHC insurance premium: The amount charged for CMHC mortgage loan insurance. This is the amount used to calculate the 25% Eco refund.

CMHC Eco Plus: CMHC’s partial premium refund program for eligible newly built, energy-efficient homes purchased or built using CMHC-insured financing.

CMHC Eco Improvement: CMHC’s partial premium refund program for eligible borrowers who purchase an existing home and complete at least $20,000 in qualifying energy-efficient improvements.

EnerGuide Rating System: A Natural Resources Canada system used to evaluate and rate the energy performance of homes.

Building envelope: The parts of a home separating the inside from the outside, including walls, windows, doors, roofing, insulation and foundations.

Heat pump: A system that transfers heat to provide heating and, depending on the system, cooling while potentially reducing household energy consumption.

Frequently Asked Questions

[FAQ] Is the CMHC Eco refund 25% of my home purchase price?

No. The refund is 25% of the CMHC mortgage loan insurance premium paid, subject to CMHC eligibility and approval.

For example, if the eligible CMHC premium was $20,000, a 25% refund would equal $5,000.

[FAQ] Do I get 25% of my renovation costs back?

No. Under Eco Improvement, you must complete at least $20,000 in qualifying energy-efficient improvements, but the 25% refund is calculated on your CMHC mortgage insurance premium, not the renovation bill.

[FAQ] Can I qualify if I buy a new home in Calgary, Airdrie or Cochrane?

Potentially. If the property is newly built, meets CMHC’s energy-efficiency requirements and your financing is insured by CMHC, you may qualify for Eco Plus. The specific property and supporting energy documentation still need to meet CMHC requirements.

[FAQ] Can an older home qualify?

An existing home may qualify through CMHC Eco Improvement when it is purchased using CMHC-insured financing and the borrower completes at least $20,000 in qualifying energy-efficiency renovations.

[FAQ] How long do I have to apply?

CMHC requires the application to be submitted within two years of the mortgage closing date. Do not wait until the end of that period to start gathering your paperwork.

[FAQ] Is the refund guaranteed if I spend $20,000 on renovations?

No. Spending $20,000 does not by itself guarantee eligibility. The renovations must fall within CMHC’s qualifying categories, the mortgage must meet the program requirements, the required documentation must be submitted, and CMHC provides final approval.

Talk to us before you purchase

If you are considering a newly built energy-efficient home or an existing property that needs upgrades in Calgary, Airdrie, Cochrane, Red Deer, Rocky View County, Mountain View County, Carstairs or Olds, contact us before you purchase.

We can review the mortgage options with you, help you understand whether CMHC insurance may apply and identify the questions you should be asking about the property before you commit.

The final decision on Eco Plus or Eco Improvement eligibility and any premium refund rests with CMHC.