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Writer's pictureLisa Belanger

New Opportunities for Homeowners: Navigating the Changes in Secondary Suites Financing

The recent press release from the government regarding new rules around secondary suites is a game changer, especially for those of you with extra space that could be converted into rental units.


The New Landscape

The recent municipal zoning reforms, supported by the Housing Accelerator Fund, are designed to simplify the process of adding secondary suites, such as converting basements or garages into rental units. This is particularly relevant in our major cities, where housing demand continues to rise. The government’s initiative aims to not only create more rental opportunities but also to empower homeowners, particularly seniors looking to age in place while generating additional income.


Mortgage Insurance Changes

Effective January 15, 2025, new mortgage insurance rules will come into play, making it easier for homeowners to finance the creation of additional rental units. Here’s what you need to know if you’re considering tapping into your property’s potential:

  1. Eligibility Requirements:

    • You must already own the property.

    • Either you or a close relative should occupy one of the existing units.

    • The intention is to construct fully self-contained units that comply with local zoning laws.

    • Importantly, these units cannot be used as short-term rentals.

  2. Financing Options:

    • The government will allow insured refinancing specifically for the purpose of building these additional units.

    • You can access up to 90% of the property value (including the added value from the new suites), provided the total does not exceed the project costs.

    • The maximum property value for eligibility is set at $2 million.

  3. Amortization and Loan Limits:

    • The amortization period can extend up to 30 years, providing more manageable monthly payments.

    • You can add a maximum of four dwelling units, including the existing unit, further increasing your property’s potential.


Why This Matters

For homeowners, this change means not only the opportunity to generate rental income but also the chance to enhance your property's value significantly. Whether you have an unfinished basement, a garage, or a spacious backyard, these new rules can provide a pathway to transform that space into a sustainable income source.


A Word of Caution

While this initiative opens up exciting possibilities, it’s essential to approach any renovation project with careful planning. Ensure you have a clear understanding of your financial situation, the costs involved, and local regulations. Consulting with professionals—including a mortgage broker, contractor, and real estate advisor—can help you navigate this process smoothly.


Conclusion

The government’s new measures regarding secondary suites represent a pivotal moment for Canadian homeowners. As a mortgage broker, I’m here to guide you through these changes and help you explore the best financing options tailored to your needs. If you're considering adding a rental suite to your home, let’s connect to discuss how you can take advantage of these upcoming opportunities. Together, we can unlock the potential of your property and contribute to addressing Canada’s housing challenges.

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