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Index-linked Mortgage (ILM) adjustment factors

The ILM adjustment factors

CHF Canada provides the ILM adjustment factors as a service to FCHP (ILM) co‑ops, their mortgage lenders, and to CMHC and provincial housing agencies and departments. The adjustment factors are updated monthly on our Web site.

Click here for the ILM adjustment factors. You will need Adobe Acrobat reader to open and print the document. To download Adobe Acrobat Reader click here.

Click here to learn about the ILM adjustment factors and how to use them.
Click here to find out about the Federal Co‑op Housing (ILM) Program

About the ILM adjustment factors ó Frequently Asked Questions

What does ILM mean?

ILM stands for Index-Linked Mortgage. Co‑ops that operate under the Federal Co‑operative Housing Program (FCHP) were funded with index-linked mortgage loans. These are long-term loans (30 to 35 years) in which the lender is guaranteed a real rate of interest after inflation and the borrower's payments are adjusted up or down each year in accordance with changes in the Consumer Price Index. (The rate of change in the national, all-item index, less two percentage points.) FCHP co‑ops are often called ILM co‑ops.

What are the ILM adjustment factors?

The ILM adjustment factors are formulas. They are used by FCHP co‑ops, their mortgage lenders, CMHC, and provinces that are administering FCHP co‑ops. The ILM adjustment factors are essential information for FCHP co‑op budgets.

What are the ILM adjustment factors used for?

The ILM adjustment factors are used to

  • calculate the change each year to the borrower's monthly payment
  • calculate the change each year to
    • the standard amount the co‑op must put into its replacement reserve
    • the amount an FCHP co‑op puts into its Security of Tenure Fund
    • the Federal Assistance paid to the co‑op

When do these changes happen?

All of these amounts change each year on the anniversary of the co‑op's original interest adjustment date (IAD), that is, the date on which the amortization period of the mortgage began. The IAD is usually, but not necessarily, the first day of the co‑op's fiscal year. CHF Canada updates the adjustment factors monthly and posts them on our Web site. The adjustment factors we post are for co‑ops with IADs three to nine months ahead of the posting date. For example, in January we post the factors for co‑ops with IAD anniversary dates falling between the following April and September.

How do the ILM adjustment factors work?

Click here to get the latest ILM adjustment factors.

Using the ILM adjustment factors is quite easy.† To calculate the new mortgage payment, simply multiply the current monthly payment by the adjustment factor shown for the co‑opís IAD.

Hereís an example:

line 1 ILM adjustment factor 1.004570
line 2 Current monthly ILM payment $10,000
line 3 New monthly ILM payment
= ILM adjustment factor
x current ILM payment
1.004570 x 10,000
= $10,045.70

Note that if the adjustment factor is less than 1 (one) the new ILM payment will be lower than the current one.

Use the same adjustment factor to calculate changes to the federal assistance and the amounts to put into the replacement reserve and the Security of Tenure Fund.

About the Federal Co‑operative Housing Program

The Federal Co‑operative Housing Program (FCHP) is often called the ILM program. It was the federal government's third co‑op housing program. Canada Mortgage and Housing Corporation delivered the program.

The FCHP began in 1986 and ran until its cancellation in early 1992. More than 460 co‑ops were developed under the FCHP, adding over 15,000 units to the supply of co‑op housing in Canada.

The program makes use of a different kind of mortgage, called the Index-linked Mortgage, or ILM, finance for development of the co‑ops. Unlike other mortgages used in Canada, ILM payments are linked to inflation. The monthly ILM payments are more affordable in the early years of a co‑op's operation. FCHP co‑op mortgages are insured by CMHC.

Click here to find out more about the ILM

FCHP co‑ops are mixed income communities. Between 50 per cent to 70% of households pay what are called regular occupancy charges, that is, a charge calculated to recover the co‑op's full cost of repaying its mortgage and operating the property. The remaining households have low incomes. Rent supplement programs allow them to pay a monthly housing charge geared to their income. Almost all FCHP co‑ops receive continuing federal assistance to help with their operating costs. This assistance enabled the co‑ops to reduce their initial regular occupancy charges to the level of rents for comparable housing in the surrounding market.

Starting in year 16 of their operation, FCHP co‑ops will have their federal assistance lowered if their regular occupancy charges are less than 85% of market rents for similar housing. FCHP co‑ops agreed to this rule in the operating agreements they signed with CMHC.

FCHP co‑ops that run into financial difficulty can ask for help from the Federal Co‑operative Housing Stabilization Fund. Each co‑op paid an enrollment fee to the fund equal to 3% of its capital costs. These fees, together with income earned from investing them, provide the fund with the means to lend money to FCHP co‑ops in difficulty. The fund can make loans to FCHP co‑ops to help them over temporary financial problems that could otherwise put them out of business. The Stabilization Fund is only for FCHP co‑ops.

If you would like to know more about the Federal Co‑operative Housing Program or the ILM mortgage, send us an e-mail at info@chfcanada.coop