Alternative Funds
DAMI Mortgage Income Fund
FundServ Code Series A – DUR201, and Series B – DUR202
Fund Overview
The DAMI Mortgage Income Fund Corp. (the “Fund”) is a Canadian mortgage investment corporation that provides investors with access to an actively managed portfolio of mortgage loans secured by Canadian real property. The Fund is designed to generate regular income while emphasizing capital preservation through disciplined underwriting and portfolio construction.
The Fund lends primarily against residential real estate located in Ontario, with a focus on short‑term mortgages that are under‑served by traditional financial institutions. The Fund is managed by Durham Asset Management Inc., an Ontario‑registered Portfolio Manager, Investment Fund Manager, and Exempt Market
Investment Objective
The Fund’s investment objective is to generate income for shareholders while preserving capital for reinvestment or distribution, by investing primarily in mortgage loans secured by real property.
Investment Strategy
The Fund conducts direct mortgage lending rather than acquiring mortgages in the secondary market. It focuses on borrowers and situations that may not meet the underwriting criteria of conventional lenders but where the underlying collateral and borrower profile are considered appropriate on a risk‑adjusted basis.
Key elements of the strategy include:
- Direct lending secured by Canadian real property
- Emphasis on first and second mortgages, with second mortgages historically representing the majority of the portfolio
- Short‑term loan durations, typically twelve months or less
- Interest rates determined based on loan‑to‑value, borrower credit profile, property characteristics, and repayment capacity
- Use of conservative underwriting standards, including independent property appraisals
The Fund primarily lends on properties located in Ontario and may consider opportunities in other provinces, subject to applicable regulatory approvals.
Portfolio Construction & Risk Management
Risk management is integrated throughout the Fund’s investment process and includes both structural restrictions and underwriting practices.
Portfolio construction emphasizes:
- Diversification by borrower, property type, and geographic location
- Loan‑to‑value thresholds generally not exceeding 80% of appraised property value
- Predominantly interest‑only loan structures
- Canadian‑dollar denominated loans secured by Canadian real estate
The Fund is subject to defined operating restrictions, including:
- No use of derivatives
- No real estate development or property management activity
- Independent appraisals obtained prior to funding
- Limits on commercial and construction mortgage exposure
These restrictions are designed to support the Fund’s income objectives while managing downside risk across market conditions.
Mortgage Types
The Fund may invest in:
- Residential mortgages
- Commercial and mixed‑use mortgages (subject to limits)
- First and second mortgages
- Limited participation in syndicated or co‑lending arrangements where appropriate
Construction loans are not a primary focus, and exposure to such loans is expected to be minimal.
Distribution Policy
The Fund intends to distribute substantially all of its net income and net realized capital gains to shareholders. Distributions are declared monthly at the discretion of the Board of Directors and are paid from income generated by the mortgage portfolio, not from capital or offering proceeds.
Distribution amounts may vary from month to month and are not guaranteed
Redemptions & Liquidity
The Fund offers limited liquidity through redemption features subject to:
- Mandatory minimum holding periods
- Advance written notice requirements
- Early redemption fees during specified hold periods
- Potential limits on aggregate redemption amounts in any period
Redemptions are not guaranteed, may be suspended under certain market or operational conditions, and should be considered illiquid. The Fund is therefore not suitable for investors requiring short‑term liquidity.
Fund Structure
| Attribute | Description |
|---|---|
| Legal Structure | Mortgage Investment Corporation |
| Jurisdiction | Ontario, Canada |
| Manager | Durham Asset Management Inc. |
| Offering Type | Private placement (Offering Memorandum) |
| Securities | Class A Preferred Shares (multiple series) |
| Minimum Subscription | $5,000 |
| Valuation | Monthly, with additional calculations for redemptions |
| Auditor | Available on request |
Tax Considerations
The Fund qualifies as a Mortgage Investment Corporation under the Income Tax Act (Canada). As such:
- Distributions are taxable to investors as interest income
- Shares are eligible for RRSPs, RRIFs, TFSAs, and certain other registered plans, subject to ongoing MIC qualification
Investors should consult their own tax advisors regarding the tax treatment of an investment in the Fund.
Risk Factors
An investment in the Fund involves material risks, including but not limited to:
- Illiquidity and redemption restrictions
- Mortgage borrower default risk
- Real estate market risk
- Interest rate risk
- Reliance on the Manager and key personnel
- No assurance of distributions or targeted yields
Prospective investors should carefully review the Offering Memorandum, including Item 9 – Risk Factors, before making an investment decision.
Fund Documents
- Offering Memorandum – September 2025 (available on request)
- Audited Financial Statements (available on request)