First National Financial LP

First National reports record 2020 results, comments on four new industry developments that deserve a timely response

  • Jeremy Wedgbury, Senior Vice President, Commercial Mortgages

Earlier this week, we were very pleased to announce that First National surpassed $118.7 billion in mortgages under administration, of which a record $35.1 billion was invested in commercial properties across Canada.

Despite unusually challenging circumstances, we originated $9.1 billion of new commercial loans – 23% more than in 2019 – a milestone we are very proud to share with you. As a result of a sizeable increase in overall production – single family operations also set a record for annual originations at $19.2 billion in 2020 –  First National completed the year with record profitability, a strong balance sheet and a workforce now numbering over 1,200 across Canada, 18% larger than last year. A full copy of our earnings release is available here and it shows our pre-fair market value income was up 31% to $323.0 million on revenues of $1.38 billion.

However, since the pandemic continues to affect all parts of society, it is the future that is top of mind.

Four Key Developments To Watch

It is our contention that 2021 will be a positive year in many parts of Canada’s commercial property market, including multi-family where we believe current rent and vacancy headwinds will turn to tailwinds before long. We are prepared to stand behind our optimistic forecast with substantial liquidity, the launch of a new conventional product and an expert team ready to contribute to your success. However, it would be a mistake to believe that 2021 will be free of challenges. It is in this context that I’m writing today. We are keeping an eye on four developments.

Bond yields are rising. In the first two months of 2021, there has been a 70-basis point rise in 10-year Government of Canada bonds. Unless the economy reverses course, the cost of borrowing will increase as the year progresses and the recovery gains momentum. As a result of this development, we recommend using First National’s industry-leading Early Rate Lock Program to avoid the potential of paying more for a loan three or six months from now.

Due to demand, it is taking longer than normal to receive an insurance certificate. CMHC is working diligently to process applications, and while we have received approvals in 60 days, average turnaround times can be three months or more.  Rather than wait, First National’s short-term bridge loan program is the perfect alternative to a delayed closing and the resulting inflationary cost increases that may arise before an insurance certificate is issued. Our bridge programs can also be paired with Early Rate Lock for maximum benefit.

CMHC’s large borrower reviews are underway. These extensive reviews are designed to test the financial solidity of borrowers whose CMHC loan portfolios stand at $75 million and above. Rather than going it alone, we recommend working with First National to organize and present your case to CMHC in a format that will facilitate a successful outcome. 

Property insurance is becoming harder to find and more costly to buy. Many clients tell us they are experiencing challenges when renewing coverage on older properties and premium rate increases across the board. We can help. Please join us for our interactive Commercial Property Insurance Briefing on March 11, 2021 to learn more.

New Conventional Term Loans

With these developments in mind, our general advice is to speak to your First National advisor as soon as possible. But more specifically, depending on your plans, you may wish to consider the new FN Conventional Core term loan. It is competitively priced with the best that banks and lifecos can offer, available for all commercial property types and supported by First National’s value-added service and industry-leading execution. Your advisor can tell you more.

Our Commitment

First National will continue to lend no matter what happens in 2021, just as we did in 2020 and in every other recession over the past 30 years. This makes us different than some other commercial lenders but more important, means you can count on us for liquidity and a wide variety of financing options whenever you need them.

Economic signals point to a strong recovery in the second half of this year. We want you to be prepared for growth and for the opportunities and challenges that accompany it. The best way to do that is with the backing of a committed lender that has the means to move forward with you today: First National.

Please let us know how we can help.


Jeremy Wedgbury
Senior Vice President, Commercial Mortgages