By Alisa Aragon-Lloyd, as seen in "New Home + Condo Guide" magazine, December 2, 2024
The federal government has introduced another initiative to help address the country’s housing shortage and affordability issues. This new program is designed to support homeowners build a secondary suite, while also helping them to navigate the financial challenges of rising mortgage costs.
With more than 70 percent of mortgages set to renew between 2024 and 2026, many homeowners are facing the reality of higher interest rates compared to what they are currently paying. This program offers a practical solution to allow them to offset these increased costs while contributing to the need for additional housing supply.
THE FOLLOWING ARE KEY PARAMETERS OF THIS PROGRAM:
• Maximum loan-to-value (LTV): Homeowners can borrow up to 90 percent of the value of their property, including the added value of a secondary suite(s). This total includes any other outstanding loans secured by the property.
• Property value cap: The “as improved” value of the property must be less than $2 million to qualify.
• Extended amortization period: The program allows a maximum amortization of 30 years for refinancing, spreading payments over a longer term to make them more manageable.
• Number of units: Homeowners can add up to four units on their property, including the existing one.
• Self-contained suites: Each secondary suite must be fully self-contained with a private entrance, kitchen, and bathroom such as with basement suites, and/ or laneway homes. This ensures compliance with municipal zoning requirements.
• No short-term rentals: To prioritize long-term housing needs, the additional units cannot be used for short-term rentals, such as Airbnb.
• Cost control: Financing must not exceed the actual project costs.
If you are a homeowner, this is an important program to help you evaluate your options. Whether you are planning to build a basement suite, convert unused space, or explore the potential of a laneway home, this program can be a game-changer.
Connect with a trusted mortgage expert who can explain the details of this program, provide personalized options, and help you determine how it can align with your financial goals.
Comments