LENDING

Mortgage investment corporations explained

A MIC is a tax structure before it is a lender. The conditions that define one also shape what it can and cannot do with your deal.

A mortgage investment corporation is a Canadian company that pools investor capital and lends it out on mortgages. What makes it a MIC is not its business model but its tax status: it qualifies under section 130.1 of the Income Tax Act, and that qualification comes with structural conditions.

For a broker, those conditions are not trivia. They explain why a MIC will take some deals and refuse others that look similar.

The conditions a MIC has to satisfy

  • It is a Canadian corporation whose only undertaking is investing funds, and it does not manage or develop property
  • At least 20 shareholders, with no shareholder and related persons holding more than 25% of any class
  • Residential mortgages plus eligible deposits make up at least half the cost amount of its property
  • Real property acquired other than through foreclosure stays under a quarter of its property
  • Leverage is capped, with the limit depending on the mix of qualifying assets
  • No foreign real property and no debts owing by non-residents unless secured on Canadian property

Why the residential threshold matters to you

A MIC has to keep residential mortgages and eligible deposits above half its book. That is a portfolio-level constraint, which is why a MIC that has been taking commercial or land deals may decline yours for reasons that have nothing to do with the file.

How the money flows

MICs distribute their income to shareholders as dividends, and the structure is designed to be flow-through for tax purposes rather than taxed at the corporate level. Investors receive the return; the corporation is not intended to accumulate it. Confirm the specific tax treatment with an accountant before repeating it to a client — it is the part most often summarised inaccurately.

The line brokers need to watch

Arranging a mortgage is mortgage brokering. Raising money from investors to fund a MIC is securities activity, governed by provincial securities regulators and their prospectus and registration requirements. Those are separate regimes with separate licences. A broker who drifts from placing deals into introducing investors has crossed into different territory, and mortgage licensing does not cover it.

Common questions

What is a mortgage investment corporation?
A Canadian company that pools investor capital and lends it on mortgages. What makes it a MIC is its tax status under section 130.1 of the Income Tax Act, which carries structural conditions.
How many shareholders must a MIC have?
At least 20, with no shareholder and related persons holding more than 25% of any class of shares.
Is raising money for a MIC the same as mortgage brokering?
No. Arranging a mortgage is mortgage brokering. Raising money from investors is securities activity governed by provincial securities regulators, and a mortgage licence does not cover it.

Where to verify this

Section 130.1 of the Income Tax Act sets out the conditions in full and is available at laws-lois.justice.gc.ca. Current as of 1 September 2026.

Private and alternative lender access

A.I.M.I. Collective runs matchmaking forums that put brokers in front of private lenders directly.