Canada Secondary Suite Loan Program (SSLP)

Big news for homeowners:

New federal lending program for adding rental suites

The federal government has just unveiled a new mortgage refinancing program to help homeowners build additional living spaces, such as basement apartments or converted garages.

Starting in January 2025, this insured refinancing option will make it easier to create rental units and, in turn, help homeowners manage rising mortgage costs. A similar program was available until 2016 but was phased out to cool the housing market. Now, with housing in short supply, it’s back – giving homeowners a chance to add rental opportunities and even generate extra income.

As the government stated, "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 program details:

Eligibility: You must already own your home, live in one of the current units (or have a close relative living there), and plan to add new units.
Refinancing: You can access insured refinancing to fund the creation of additional units.
Unit requirements: The new units must be self-contained, like basement suites or laneway homes, and follow local zoning rules. Short-term rentals like Airbnb are not allowed.
Number of units: You can have up to four units on your property, including your existing home.
Property value: The "as improved" property value must be under $2 million.
Loan-to-value (LTV): You can refinance up to 90% of your property's value, including the new units.
Amortization: Up to 30 years.
Project costs: Financing must not exceed the total cost of the project.

This program could be a good option if you're considering adding a rental unit or creating more space for family.

However, it's important to understand the costs and how refinancing might impact your finances. If you'd like to see if this program makes sense for you, feel free to reach out. I can help you walk through the details and explore your options.

Exciting New Financing for Tiny Homes and Secondary Suites

Great news for homeowners across Canada! By early 2025, you’ll have the opportunity to access up to $40,000 in low-interest loans through the Canadian Mortgage and Housing Corporation (CMHC) to help build or purchase tiny homes as secondary units on your property. While details are forthcoming, now is the perfect time to start planning for this exciting program when it launches next year.

In the recent 2024 budget, the Canadian government introduced the Canada Secondary Suite Loan Program (SSLP), earmarking $409.6 million for CMHC over the next four years, starting in 2025-26. This initiative aims to empower homeowners by offering affordable loans to create secondary suites, making it easier than ever to enhance your property.

Time to Start Planning

“Many Canadians, from retirees to young families wanting to keep their parents nearby, are looking to add extra living space,” said Finance Minister Chrystia Freeland. “Through our Housing Accelerator Fund, we’ve already made zoning changes to facilitate this. We’re excited to announce that soon, homeowners will be able to access up to $40,000 in low-cost loans to help add secondary suites. We’re also reforming mortgage rules to support homeowners in increasing density in their communities.”

Versatile Uses for Secondary Suites

Adding a secondary suite can significantly benefit both homeowners and their communities. Here are some compelling use cases:

Rental Income: New rental suites can provide essential income for families, particularly seniors who wish to age in place. Whether you’re considering short-term, medium-term, or long-term rentals, these spaces can help bolster your financial situation.
Home-Based Businesses: For those running small businesses, converting a secondary suite into commercial space can be a game-changer. Professionals like hairdressers, masseuses, and artists often find renting offsite to be expensive. Building a dedicated workspace at home allows them to serve clients without the hefty rental costs.
Accessibility: New suites can be designed with accessibility in mind, catering to family members with physical impairments. Whether for aging parents or children with disabilities, these thoughtfully designed spaces can improve quality of life.
Guest Accommodations: Hosting family and friends? A secondary suite can offer your guests privacy and comfort, making every visit enjoyable for everyone involved.
Short-Term Rentals: With the rising popularity of platforms like Airbnb, your tiny home or bunkie can become a lucrative short-term rental, providing additional income while allowing you to share your space with travelers seeking unique experiences in Chatham and Chatham-Kent.

This program is poised to make a significant impact, and more information will be shared in the coming months.

Many homeowners have untapped spaces, such as basements or garages, just waiting to be transformed into rental suites. The SSLP is designed to simplify this process, making it more accessible and affordable. Previously, homeowners faced challenges due to high renovation costs and stringent municipal regulations. However, with the SSLP, you can confidently add rental suites to your property.

Recent municipal zoning reforms in major Canadian cities have opened doors for homeowners, supporting densification efforts through the Housing Accelerator Fund.