All About The Canada Secondary Suite Loan Program
Everything You Need To Know About The Canada Secondary Suite Program
The Canada Secondary Suite Loan Program, introduced in the 2024 Fall Economic Statement (and updated in a recent news release on December 10th, 2024), provides homeowners with low-interest loans of up to $80,000 to create secondary suites such as legal basement apartments, laneway suites, and garden suites. The program aims to address Canada's housing supply challenges by enabling homeowners to add affordable rental spaces to their properties. Read on below to learn more about the program, and if you want to get your free project consultation started feel free to book below!
Key Features of the Canada Secondary Suite Loan Program
Eligibility for the canada secondary suite loan program
The program targets the creation of secondary suites for long-term rental purposes. It includes renovations for existing secondary suites and new construction of units like garden or laneway suites, as well as the conversion of garages into secondary suites. Learn more about how you can leverage BVM Contracting’s expertise in all three of these secondary suite projects.
How much can I borrow?
You will be able to borrow up to $80 000 from the government at a low interest rate (2 percent) and 15-year term, as per the recent news release on December 10th, 2024.
Purpose of the Canada Secondary Suite Loan Program
Focused on providing affordable housing options, especially in areas where rental units are in high demand like Toronto and larger cities.
Do New Garden Suites and Laneway Suites Qualify for this Program?
Along with secondary suites in the primary home and garage conversions, new construction garden suites and laneway suites qualify under this program. The initiative encourages the development of various forms of secondary housing, including newly constructed detached units like garden suites and laneway suites.
How BVM Contracting Can Help
For Toronto homeowners considering a legal basement apartment, secondary suite, garden suite, or laneway suite, this program provides an excellent opportunity to leverage low-cost loans to help increase the density of housing on your property. Coupled with the ability for lenders to be able to get you insured financing for secondary suite projects up to 90 percent Loan-to-Value (LTV), the prospect of getting additional income on your property (or a secondary suite for a family member) is now a lot easier to justify as an investment.
BVM Contracting specializes in the planning, design, and construction of secondary units, ensuring projects align with both municipal requirements, the funding program criteria, and your overall budget. Reach out today to schedule your free, no-obligation consultation to learn more about creating a secondary suite on your property!
Helpful resources and links to learn more
2024 Fall Economic Statement: Making it easier for homeowners to build secondary suites (December 10th News Release)
Deputy Prime Minister announces new actions to build secondary suites and unlock vacant lands to build more homes (October 8th News Release)
Government of Canada Federal Budget 2024: Chapter 1
Government of Canada Federal Budget 2024: Chapter 2
Frequently Asked Questions about the Canada Secondary Suite Loan Program
1. What is the Canada Secondary Suite Loan Program?
The Canada Secondary Suite Loan Program is a government-led program aiming to provide low-interest loans of up to $80,000 to homeowners who wish to create secondary suites, such as basement apartments, garden suites, or laneway suites, garage to accessory dwelling unit (ADU) conversions on their property. The program is designed to increase rental housing availability while helping homeowners offset construction costs by offering low-cost loans that are repayable over 15 years.
2. Who is eligible to apply for the Secondary Suite loan?
Homeowners across Canada can apply for the secondary suite loan, provided they intend to use the loan to create a long-term rental unit.
3. What types of projects qualify for the loan?
Qualifying projects include:
Renovating or upgrading existing secondary suites (e.g., basement apartments).
Building new units, such as garden suites or laneway suites, on the property.
These units must meet local zoning and building code requirements (which we can help you with!)
4. What is the interest rate for the loan?
The interest rate for the loan has been mentioned at 2 percent, but a more accurate rate will likely come out next year once the loan repayment terms are more accessible.
5. What are the conditions for the loan?
The secondary suite must be used for long-term rental purposes, not for short-term vacation rentals.
Homeowners must adhere to local zoning laws and meet all building code requirements.
The unit must contribute to affordable housing
6. Do new garden suites or laneway suites qualify?
New construction of garden suites and laneway suites are included in the program, as the program encourages a variety of secondary housing options to increase the rental supply.
7. How does this program differ from other housing initiatives?
Unlike tax credits or grants, this program offers direct, low-interest loans to cover construction costs, making it accessible and manageable for homeowners looking to create affordable rental spaces that can pay them back the monthly loan repayment amount (and probably more).
8. What would my monthly repayment be if I got the $80 000 loan?
Assuming that this product is going to be set-up as an installment loan and the interest rate is 2 percent, you will be paying $515 per month to repay the loan over the 15-year repayment period. This equates to about $12 700 in interest payments over and above the $80 000. This is cheap money!
9. How do I apply for the loan?
Details about the application process are expected to be available on the Government of Canada’s housing or finance department websites. You can monitor updates on the Government of Canada website or contact local housing authorities for guidance. We will also update this blog once more information surfaces so feel free to reach out to us to get put on our list!
10. How can I ensure my project qualifies for the loan?
Work with professionals like BVM Contracting to ensure your project meets local regulations, complies with building codes, and aligns with the program’s requirements. This will maximize your chances of loan approval and successful project completion.
11. Are there zoning restrictions for these secondary suites?
Yes, the project must comply with local zoning laws, including those that regulate accessory dwelling units (ADUs), such as garden suites and laneway suites. The process of obtaining a building permit will remain the same, so make sure you reach out to us to understand the permitting process before diving into your project!
12. Do I need to have a rental agreement in place to qualify?
While rental agreements aren't required upfront, the secondary suite must be designated for long-term residential use, aligning with program goals of increasing affordable rental housing.
About BVM COntracting
BVM Contracting is a full-service General Contractor or Home Builder located in Toronto. We provide home renovation and building services for major home renovations (kitchen renovations, bathroom renovations, basement renovations, full interior renovations, home additions, lot severances, and new home construction). Our goal is to help guide our clients through the process of renovating their home, from concept to completion.
Further than providing General Contracting and Project Management for major home renovations, we also offer value-added services such as renovation financing, renovation rebate consultations and services, building permit and design services, smart home installation services, and real estate investor services.
To learn more about our offering by visiting our services page.