How to Evaluate a Mortgage Investment Corporation (MIC) in Canada: A Due Diligence Framework for High-Net-Worth Investors

Navigating the Private Lending Landscape in Canada

Most MIC evaluation mistakes begin before the offering memorandum is opened. Investors compare target distributions first, then reverse-engineer a rationale. A better sequence is the opposite: decide what job the capital must do, then ask whether any MIC can honestly do that job.

Write one short paragraph covering time horizon, income versus compounding preference, account location, maximum allocation you would even consider, and what would make you walk away immediately. If you cannot write that paragraph, you are not ready for product documents. For a broader map of where MICs sit beside other tools, read Compare the Alternatives.

This is education, not a guarantee that any checklist prevents loss. Exempt-market investments involve risk. Capital can be lost. Distributions, liquidity, and capital preservation are not guaranteed.

The Four Pillars of MIC Due Diligence

A Mortgage Investment Corporation pools investor capital to fund mortgages secured primarily by Canadian real estate. That sentence is necessary and insufficient. Two MICs can share the label and still behave like different businesses.

Ask what the MIC says it does in plain language: residential versus commercial mix, construction or land exposure, bridge lending, geographic focus, first versus subordinate mortgage targets, maximum loan-to-value policy, typical loan term, and what is explicitly out of mandate. Green flags look specific and repeatable. Red flags sound opportunistic about everything, or change with marketing seasons.

Then move to people and incentives. Who underwrites? How long has leadership operated through full cycles? Do principals have meaningful capital alongside investors? How are managers paid through management fees, origination fees, or other channels? What related entities sit near the loan book, such as brokerages, servicing shops, or development groups? Potential conflicts can occur in private lending. Clear disclosure and process help investors evaluate them calmly.

Strategic Asset Allocation with Diversifi Alternative Investments

Distribution continuity is useful information. It is incomplete information. Request and review, as available under disclosure rules, portfolio size, number of loans, average and maximum loan size, average and maximum LTV, lien priority mix, geographic and property-type concentration, top-loan concentration, cash drag, and any use of leverage or credit facilities.

Credit outcomes matter as much as income history. Ask about arrears over time, default definitions, realized losses and recoveries, enforcement timelines, and how non-performing loans are valued and reported. A portfolio can distribute while problems quietly accumulate. Professionals track both the income track and the credit track.

Our fuller process lives on the due diligence process page and in the curriculum-style checklist under Peter's Due Diligence Framework. Use those when you want a printable scorecard rather than a narrative overview.

Map liquidity before you discuss yield

Private MIC liquidity is usually policy-based: notice periods, redemption windows, caps, early redemption fees, and possible gates or suspensions. Ask what funds redemptions in practice, maturities, cash, new subscriptions, credit facilities, and what management does if redemption requests spike while loan demand is soft, or the reverse.

Investor mismatch is common: needing near-cash access while buying private-fund liquidity. If short-notice access is non-negotiable, a private MIC may simply be the wrong tool, regardless of how attractive a target distribution looks in a slide deck.

Common questions about evaluating a MIC