First National Financial LP

A First National update on commercial lending during COVID-19

  • First National Financial LP

As we are now approaching the one-month mark since COVID-19 forced us to employ our business continuity program, it’s time to update you on commercial lending activities here at First National.  

My colleagues and I are now working entirely from our homes and we have made the adjustments necessary to maintain critical workflows across the country. By addressing extraordinarily high volumes over the past few weeks – in what I would call a practical stress test of our team and technology – we have increased confidence in our ability to operate on this new normal basis.

Product availability

As one of a few lenders with funds available, our volumes to date have grown quickly. We have also maintained transparency in our pricing process, which we think is appropriate at all times, not just at present.

You should also know that:

  • Insured mortgages on the shorter end of the curve continue to be available with terms ranging from 2 to 5 years.
  • Funding for construction projects also remains available on a conventional and insured basis. Given new government restrictions on construction activity in some provinces, it is important to speak to your First National advisor about the financial implications.
  • Bridge loans remain available for conventional financing as a short-term remedy to the frozen conventional term market.

As you know, interest rates remain near historically low levels. What you may not know is that our rate lock program continues, although with this volatile market we are restricting our hedging program to 30 days prior to funding.

We also continue to close our extensive pipeline of 10 year-term insured product.  We hope to be bidding for new 10-year business soon.

Government support

To date, the federal government has announced a number of market supports, including an expansion of the CMHC mortgage insurance program, a larger Canada Mortgage Bond program, the restart of the Insured Mortgage Purchase Program and the introduction of the Bank of Canada’s Standing Term Liquidity Facility. These initiatives should be helpful in improving market liquidity.

Mortgage relief

We understand the discomfort you may be feeling as a result of uncertainty with rental receipts. Early feedback from many of our clients is that they received 90% to almost 100% of April 1st rents.  This is very positive news, but we do recognize that this situation may deteriorate if the COVID-19 lockdown persists. 

To support property owners who are experiencing rental receipt delays, we have established a payments team comprised of experienced underwriters who are available to work with borrowers to determine the extent of their cash flow disruptions. The work of this team will allow us to take quick steps to help borrowers who need support the most.

Please reach out to our payments team if you would like to discuss your loan.

Overall, we are proud to work with clients who are able to offer support to their tenants in these difficult times.   

To learn more about First National’s response to COVID-19, please visit the special corner of our website.

Looking ahead

No one knows how long this crisis will last. But the one thing that will last is our commitment to doing everything possible to help you through this pandemic and beyond.

Please contact us if we can be of any assistance now or in the weeks ahead. In particular, I would highly recommend speaking to your originator to discuss the current state of the market as it is more volatile than ever.

I too would be pleased to speak with you directly to share my thoughts and consult on strategic issues.