How We Do Our Work

Two Agency co-workers in conversation

The Agency has a different way of administering co-operative housing programs. Our approach is risk-based, data-driven and client-focused.

Our risk-rating model

Co-operatives operating under federal housing programs have financed their properties through loans held or insured by Canada Mortgage and Housing Corporation (CMHC). The Agency manages the associated risks to CMHC by helping co-ops manage their business risks. Once a year, we assess each co‑operative through a unique risk-rating model, reporting back to it on its financial position and performance and how these might be improved. We regularly advise CMHC on the successes, problems and trends we see among the housing co-operatives we work with. Find out below how we go about this work.

Our information system

Our web-based custom information system collects client data, which it tests, analyses and combines in various ways. Every year, our clients receive back their results in plain-language reports that help them understand the many aspects of their operations and their financial success or difficulties. Our information system helps us manage our workflows and report to CMHC. It has become a rich source of knowledge about federal-program housing co-operatives.

Client-centred service

We hold ourselves accountable to our owner, the Co-operative Housing Federation of Canada, to Canada Mortgage and Housing Corporation, on whose behalf we administer the federal co-operative housing programs, and to our co-op clients. Client-centred service puts the needs and concerns of housing co-operatives at the core of all we do. It’s about helping co-ops stay strong financially or strengthen their operations, while meeting their obligations to CMHC. It’s also about being open, supportive and ready to go the extra mile for a client.

The Agency has published a set of standards that our staff have pledged to meet in delivering timely, knowledgeable and courteous client service. We report our success in achieving these service standards through our annual report card.

Quarterly interviews and short feedback surveys help us keep our service in sync with our clients’ needs. At intervals of several years, an independent organization surveys all of our clients to gather valuable ideas for improvement and to learn how satisfied they are with our service.

Assessing the risks of housing co-operatives

The Agency’s automated risk-rating model draws on

  • information gathered through periodic visual inspections of our clients’ properties
  • financial and other data received through an Annual Information Return (AIR) filed on line by each co-op’s auditor
  • other information in our database about our clients and the marketplace they operate in.

From the financial data, our system calculates a Liquidity Ratio and a Net-Income Ratio for each co-op. This is combined with the co-op’s physical-condition rating and other information in our system on the co-op’s circumstances to produce a preliminary risk rating. The co-op’s Agency relationship manager reviews the system-generated rating, taking into account their own knowledge of the co-op and further information on hand and accepts, raises or lowers the rating. Once the annual risk assessment is complete, the Agency sends the co-op a report comparing its performance with that of other co-ops and its own past results. With the help of Agency staff and the resources of the co-operative housing sector, the co-op works to correct whatever has placed it at risk. If the relationship manager learns about a new challenge arising or a problem solved between annual reviews, they will re-rate the co-operative. 

The four possible risk ratings are Low Risk, Moderate Risk, Above-Average Risk and High Risk. In addition, the co-op’s risk trend is assessed as Strengthening, Stable or Weakening.

Risk ratings defined

  • Low Risk: A strong, well-managed housing co-operative. The combination of its excellent physical condition, accumulated earnings and reserves, position in the marketplace and current capacity to contribute to its replacement reserve make it resilient in adverse market and economic conditions. Provided it continues to be well managed and has a capital replacement-reserve plan, the co-operative should be able to fund needed repairs and replacements and meet its debt obligations for the foreseeable future, without external support.
  • Moderate Risk: A sound, generally well-managed housing co-operative. It is in good or better physical condition, has access to adequate cash resources and is able to make a contribution from earnings to its capital replacement reserve, after covering its debt service and all normal operating expenses. No indicators of above-average or high risk are present. The co-operative should be able to remain in sound financial and physical condition, provided it continues to be well managed and economic or market conditions do not deteriorate significantly. It does not require external support or intervention.
  • Above-Average Risk: The co-operative shows signs of emerging or potential financial difficulties. One or more of the following conditions is present: the co-operative is in fair, but not poor, physical condition; its earnings are sufficient to cover current expenses, but do not allow for an adequate contribution to the replacement reserve; its combined accumulated earnings and replacement reserve are low and access to other cash resources, such as member shares or deposits, is limited; or vacancy losses or housing charge arrears are significantly above the median level for its peers. No indicators of high risk are present, but the co-operative may be challenged in funding needed capital repairs or meeting its obligations in the future, especially if the market is weak or weakens. It will require very effective management and some ongoing monitoring and support.
  • High Risk: The co-operative is in financial difficulty or is poorly managed. One or more of the following conditions is present: the co-operative’s earnings are insufficient to cover its debt service and current expenses, before a contribution to the replacement reserve; it has an accumulated operating deficit, a low or non-existent replacement reserve and limited access to other cash resources, such as member shares or deposits; vacancy losses or housing charge arrears are unusually high; the co-operative has urgent or major repair requirements that it is not able to fund; it is behind with its mortgage payment or property taxes; it has suffered a major loss of assets through fire or malfeasance against which it was not adequately insured; or it is suffering from a failure of governance. Without intervention and continuing support, and possibly a financial workout, the co-operative is at risk of failure.


  • Strengthening: A risk trend of Strengthening shows a co-operative that has worked hard to improve its operations. Even if the co-operative’s risk factors have not changed, there is evidence, such as fewer arrears and bad debts, that the co-operative’s situation is improving.
  • Stable: A risk trend of Stable indicates that there is little change in the co-operative’s situation. Depending on its risk rating, this can be good or bad. Where the risk rating is positive, so is a Stable trend, which shows that the co-operative is operating well. However, a Stable situation is not as good where a co-operative has a risk rating of Above Average or High. This rating could suggest that this co-op needs to do more to solve its problems or that it has kept its operation from worsening while it works on solutions.
  • Weakening: A risk trend of Weakening is a red flag for any co-operative with a positive risk rating, suggesting that it should look to the flaws in its management and governance before its problems grow. This trend is even more serious in a co-operative risk rated Above Average or High. It warns that the co-op’s management may not be effective enough for its challenging situation.

Tip of the Month

Infectious Arrears

In co-ops where board members are behind on their housing charges, the amount all members owe is almost four times higher than in co-ops where board members pay on time. This number speaks for itself.