VersaBank today announced the launch of an enhanced Canadian Mortgage and Housing Corporation (CMHC) insured lending program that will generate a minimum of $2 million in incremental revenue during fiscal 2026. The new program focuses on CMHC‑insured multi‑unit residential (MUR) term mortgages originated by established partners and will be funded through the bank’s Canadian Mortgage Bond (CMB) program capacity.
The enhanced CMHC program will invest in MUR term mortgages that are insured by CMHC, allowing VersaBank to earn fee income while maintaining a low risk profile. Leveraging the CMB program means the bank can issue new bonds to fund the program with minimal additional operating costs and only de‑minimis regulatory capital requirements, keeping the cost of capital low and the margin profile strong.
The launch comes on the back of the 2025 Federal Budget, which increased the CMB annual issuance limit from $60 billion to $80 billion starting in 2026. VersaBank’s existing CMHC lending program had already reached $1 billion in insured loan commitments by the end of fiscal 2025, positioning the bank to scale the new program quickly and capture a larger share of the growing MUR mortgage market.
VersaBank’s strategy is to combine proprietary technology, low‑cost deposit funding, and a focus on underserved segments to drive sustainable growth. The new CMHC program complements the bank’s Receivable Purchase Program (RPP) in the United States and the steady growth of its Canadian mortgage portfolio, reinforcing the bank’s low‑cost funding base and margin profile.
Founder and President David Taylor said the program “leverages our proprietary banking technology and specific expertise to capitalize on unique opportunities in the banking industry, using operating leverage to drive earnings growth and value for shareholders while further mitigating risk.” He added that the federal government’s expansion of CMHC‑insured funding for multi‑unit housing is a “significant and much‑needed initiative” that VersaBank is proud to support.
In Q3 2025, VersaBank reported revenue of $22.98 million and earnings per share of $0.22, beating consensus estimates. The incremental $2 million in fee income from the new program will help offset the revenue miss and strengthen the bank’s margin profile, as the program’s operating costs are minimal and regulatory capital requirements are low.
The enhanced CMHC program positions VersaBank to capture a larger share of the multi‑unit residential mortgage market, strengthen its low‑cost funding base, and improve its margin profile. The program’s alignment with government policy and the bank’s existing technology platform provides a clear path to sustainable growth in a low‑risk, high‑return initiative.
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