Our Business

New Haven Mortgage Income Fund (1) Inc.’s (NHMIF (1) Inc.) business objective is to maintain a stream of income by optimizing its investment portfolio within the mortgage investment corporation (MIC criteria mandated by The Tax Act). Among other things, these criteria affirm that primary investments made by a MIC are mortgage loans that focus on residential real estate.

The MIC’s primary focus is earning income through investing in residential and to a limited extent smaller commercial mortgages. There is an established need for real estate mortgage financing that is not readily provided by Banks, Trust Companies, Credit Unions and other traditional lenders. This market is collectively referred to as the “alternative mortgage market”. Short-term mortgage financing is a continuing need of people with bruised credit, landed immigrants with no lengthy credit history, and self-employed people with fluctuating income, individuals and builders. Because of their need for flexibility and a quick response, they often require the services of private lenders and organizations such as NHMIF (1) Inc. The MIC’s primary revenue source will be interest payments received on its mortgage investments. The mortgage portfolio may also generate additional remuneration for the MIC, by way of interest bonuses for early prepayment by the borrower or late payoff bonuses after maturity of the mortgage.

Factors such as the standardization of institutional mortgage underwriting, liquidity complications in the commercial paper securitization market, and stringent income and credit regulations imposed on major Financial Institutions in Canada reduce the availability of funds for many individuals and Corporations. The mortgage manager concentrates its resources on this under-serviced niche in the mortgage market. It has specialized in this market for many years.

The main criteria for qualification in this niche mortgage market focuses principally on the value and quality of the real estate being effected as security (the loan-to-value ratio), but also takes into consideration a reasonable exit strategy.

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