Policy 13 - Second Mortgage for the Purchase of a House

Approved Executive Committee of the Board of Governors 70.149



1. This policy is to assist regular, non-unionized staff members, who otherwise satisfy the terms and conditions set out below, in purchasing a home in the Ottawa-Hull area by providing guaranteed second mortgage financing.


2. In accordance with the above-mentioned principle the University has established the following objectives:

  • a) to attract, retain and motivate competent staff;
  • b) to familiarize staff members with the nature of the program and the conditions for admissibility;
  • c) to familiarize University managers with the second mortgage loan policy.


3. Subject to the terms and conditions herein, the program provides for the guarantee of second mortgage loans as follows:

  • a) Amount: Up to the lesser of 30% of the purchase price of the property or $30,000;
  • b) Term:*

Amount Term

$20,500 or less 10 years
$20,501 to $22,500 11 years
$22,501 to $24,500 12 years
$24,501 to $26,500 13 years
$26,501 to $28,500 14 years
$28,501 to $30,000 15 years

*NOTE: The term of the loan shall in any event not exceed the number of years remaining before the normal retirement age of the member.

  • c) Rate: Interest charged shall be at the preferential rate prevailing from time to time at the Canadian Imperial Bank of Commerce plus one half (1/2) of one per cent. It is understood that the interest charged is subject to any agreement the University may enter with the Canadian Imperial Bank of Commerce or any other financial institution.
  • d) Repayment:
    • i) Interest payable, as it accrues, on a monthly basis;
    • ii) Principal payable monthly in equal instalments during the term of the loan;
    • iii) Prepayment of principal may be made at any time without notice or bonus if the member satisfies any and all bank requirements.


4. In order to qualify for this program the member must satisfy the University of the following:

  • a) That he holds a regular full-time position in the support staff category, in the non-unionized academic staff category or geographical full-time requiring 50% or more of a normal workload and is appointed pursuant to a renewable one year contract.
  • b) That the property being purchased does not contain more than three dwellings.
  • c) That the property will be occupied by the member and that it shall at no time be leased except during a study or sabbatical leave, or a leave for refresher studies. When on such leave, if the member is obliged to leave the Ottawa-Hull area, the property may be leased for a period not to exceed fourteen months.
  • d) That the member is making a cash payment equivalent to 10% of the purchase price and that the first mortgage financing together with the cash payment constitute at least 70% of the total purchase price.
  • e) That the total capital and interest payments on the first and second mortgages, together with municipal and school taxes do not exceed 30% of the member's regular gross monthly salary. It is understood that any regular earnings of the member including a percentage of the spouse's salary or the rents to be collected may be taken into consideration in determining the member's eligibility under this section.
  • f) That the member, to the satisfaction of the University, has a sound financial position. The member shall allow the University to perform a regular credit inquiry.
  • g) The member shall agree to execute and instruct his solicitor to register at his expense a good and valid second mortgage (or charge) against the property in question in an amount equal to the amount guaranteed by the University.

In addition the member must provide the following:

  • i)  An assignment of interest of the University group life insurance policy in favour of the University duly executed by the member and spouse.
  • ii)  A certified copy of an insurance policy covering fire and other casualties in an amount equal to the total of the first and second mortgages and naming the University as second mortgagee.
  • iii)  An undertaking to execute any further documents required by the University in furtherance of the agreement with the University.


5. The Director of Personnel Services or his nominee will provide on request any information or forms relating to this program.

6. Approval of applications is not automatic and the member is cautioned to consult with Legal Counsel before signing any agreement which may involve the necessity of receiving approval under this program. A duly executed contract in writing between the member and the University is required to make the approval official and binding on the University.

7. The staff member shall assume all legal and other costs related to the preparation, execution and registration of the necessary documentation.

8. The guarantee shall be withdrawn and repayment in full shall be demanded forthwith by the University on the occurence of any of the following:

  • a) Termination of employment.
  • b) Sale, transfer or other disposition of the subject property.
  • c) The member ceases to reside in the subject property.


9. The loan application forms shall be completed by the staff member, countersigned by the dean of the faculty or by the director of the service and forwarded to Personnel Services three weeks in advance of the closing date for the contracts.

10. The Director of Personnel Services, or in his absence his nominee, shall be responsible for reviewing the file in relation to the provisions of this policy in order to determine whether the staff member qualifies for a guaranteed loan and to set the specific terms. The Director shall then forward his final recommendation to the staff member and to the Legal Counsel.

11. Upon receipt of the recommendation from the Director of Personnel Services, the Legal Counsel shall do whatever is necessary to complete the transaction.


12. The University reserves the right to make an exception to this policy by approving a second mortgage guaranteed by the University in respect of a staff member submitting a favourable file but not complying with all the technical requirements of this policy. The University also reserves the right to refuse a second mortgage to a staff member whose file does not correspond with the spirit or letter of this policy or does not provide the appropriate financial securities in the opinion of the Director of Personnel Services or Director of Financial Services, without the case being referred to an Arbitration Board in the event of litigation.


13. The Director of Personnel Services is responsible for the interpretation of this policy. The application of the policy is the joint responsibility of the faculty and service administrators and the Director of Personnel Services.


14. The present policy applies to employees and/or situations not covered by provisions of a collective agreement.


15. No exception may be made to this policy without the written consent of the Administrative Committee.

Revised February 4, 1985

(Human Resources)

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