Regulatory Alerts2016-03-24
Added · Updated
Interpretations of Exemptions from Concrete Construction Plans for Individuals' Land Loans
Individuals applying for land loans secured by land in urban planning residential or commercial districts are exempt from providing concrete construction plans if they are not involved in real estate investment or house construction, provide a statement that proceeds will be used for personal expenses or financial management, and agree to breach of contract terms for untruthful statements. The maximum loan amount is capped at 65 percent of the land's acquisition cost or appraised value, whichever is lower, with specific valuation rules for inherited or gifted land and existing loan extensions. Financial institutions must conduct enhanced pre-loan credit checks and post-loan management to verify the use of proceeds, and their internal audit units must include these cases in their focus areas. Existing land loans exceeding the 65 percent loan-to-value ratio are granted a one-year adjustment period to comply with the new limit.
More like this from CBC
We email you every new CBC publication the day it's published.