taken from gov Canada
Mortgage Insurance Rule Changes to Help Homeowners Add Secondary Suites
The Canadian government is introducing new mortgage insurance measures to help homeowners turn unused spaces, like basements or garages, into rental units. Effective January 15, 2025, these changes aim to increase housing supply and provide homeowners with new income opportunities, particularly seniors who wish to age at home.
The New Refinancing Program
Under the updated rules, homeowners can refinance their properties with insured mortgages to fund the construction of secondary suites. Borrowers can access up to 90% of their property’s value, including the value added by the new units, with a maximum amortization of 30 years. This makes it more affordable for homeowners to create fully self-contained units, such as basement apartments or laneway homes, provided they meet local zoning requirements.
Key Eligibility Requirements
The homeowner or a close relative must occupy one of the existing units.
The property’s total value, including improvements, must be under $2 million.
Additional financing must not exceed project costs.
The new units cannot be used as short-term rentals.
The property must have no more than four total units after improvements.
Broader Impact
These measures align with municipal zoning reforms supported by the Housing Accelerator Fund, which aim to increase density and address Canada’s housing affordability crisis. By streamlining processes and reducing financial barriers, the government hopes to unlock the potential of underutilized spaces while offering more affordable housing options for Canadians.
This program reflects the federal government’s commitment to using innovative solutions to address housing shortages. If you're a homeowner considering adding a rental suite, now might be the time to explore how these changes could benefit you. Stay tuned for more updates as this program rolls out in early 2025.
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