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Exciting Update for Homeowners
Homeowners, get ready for some exciting news! The federal government has launched a new mortgage refinancing program aimed at helping you create additional living spaces, such as basement apartments or converted garages.
Beginning January 2025, this insured refinancing option will simplify the process of establishing rental units, which can also aid homeowners in managing increasing mortgage expenses. A similar initiative existed until 2016 but was discontinued to cool the housing market. With housing availability becoming increasingly limited, the program is making a comeback, offering homeowners the chance to generate rental income.
As the government highlighted, “New rental suites would provide more homes for Canadians and could provide an important source of income for seniors continuing to age at home.”
Key Features of the Program:
Eligibility: Homeowners must reside in one of the current units (or have a close relative living there) and intend to add new units.
Refinancing: The program allows access to insured refinancing to support the creation of additional units.
Unit Specifications: New units must be self-contained, such as basement suites or laneway homes, and must comply with local zoning regulations. Short-term rentals, like those listed on Airbnb, are not permitted.
Number of Units: You can have up to four units on your property, including your existing home.
Property Value: The “as improved” value of the property must be under $2 million.
Loan-to-Value (LTV): Homeowners can refinance up to 90% of their property’s value, which includes the new units.
Amortization: Terms can extend up to 30 years.
Project Costs: Financing cannot exceed the total cost of the project.
This program could be a fantastic option if you’re thinking about adding a rental unit or expanding your living space for family.
However, it’s crucial to understand the associated costs and how refinancing might affect your financial situation. If you’re interested in exploring whether this program is right for you, feel free to get in touch. I can guide you through the details and help you assess your options!
