Canada Mortgage Professionals Practice Exam

The Canadian federal government stimulated the housing market post-World War II primarily by creating mortgage-backed securities. This initiative was aimed at increasing the availability of mortgage credit, which was pivotal during a time when housing demand surged due to returning soldiers and a growing population. Mortgage-backed securities enabled financial institutions to offer more loans by pooling various mortgages and selling them to investors, allowing them to access capital more efficiently.

By doing this, the government encouraged banks to issue more loans, making home financing more accessible to a broader segment of the population. This facilitated higher homeownership rates and contributed significantly to housing market stability and growth in the post-war era, a critical factor in the economic recovery and expansion during that time period.

Other options like reducing interest rates or eliminating property taxes did not have the same focused impact on increasing the availability of mortgage financing directly. Similarly, mandating minimum down payment requirements would typically have the opposite effect, as it could restrict access to mortgages for many potential buyers due to the upfront capital required.