{"id":9420,"date":"2025-02-02T10:09:51","date_gmt":"2025-02-02T10:09:51","guid":{"rendered":"https:\/\/finderica.com\/?p=9420"},"modified":"2025-02-02T10:09:51","modified_gmt":"2025-02-02T10:09:51","slug":"questions-linger-over-the-governments-new-secondary-suite-refinancing-program","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=9420","title":{"rendered":"Questions linger over the government’s new secondary suite refinancing program"},"content":{"rendered":"
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The program, first unveiled in October, allows homeowners to refinance up to 90% of their property\u2019s value (capped at $2 million) to build secondary suites intended for long-term rental use, specifically excluding short-term rentals like Airbnb.<\/p>\n

In a previous post, Canadian Mortgage Trends<\/em> examined the pros and cons of the program, concluding that it appears to offer significant benefits for homeowners looking to boost their investments or ease financial pressures by adding a tenant. The initiative also holds potential to create jobs and contribute to the broader housing supply.<\/p>\n

However, the program\u2019s details remain unclear, creating uncertainty that has made some brokers hesitant to fully support homeowners seeking to refinance.<\/p>\n

\u201cIt\u2019s very bare bones,\u201d says Connor Green, a mortgage agent with Concierge Mortgage Group, referring to the limited information and criteria available for the program so far. \u201cTypically with a product of this nature you\u2019d see something much more fleshed out.\u201d<\/p>\n

There has also been limited information available to homeowners eager to take advantage of the program, particularly regarding the application process. <\/p>\n

The Canada Mortgage and Housing Corporation (CMHC), which is overseeing the program, told Canadian Mortgage Trends<\/em>, \u201cInterested homeowners should reach out to their lender or mortgage provider.\u201d<\/p>\n

Overall details of who will qualify remain vague<\/h2>\n

Since the program\u2019s January 15 launch, key details remain unclear, including financing logistics, timelines, permit and zoning requirements, and inspection criteria, critics say. <\/p>\n

\u201cI think there needs to be more direction on how the funds are going to be managed,\u201d notes Tracy Valko, Principal Mortgage Broker and Founder of Valko Financial. \u201cThey\u2019re saying it\u2019s a refinance, but typically with a refinance you give funds on closing \u2026 we know that won\u2019t be the case with this but then there needs to be some rollout about what that expectation is.\u201d<\/p>\n

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\"Secondary<\/figure>\n<\/div>\n

Even the program\u2019s very definition of a \u201cdistinct secondary suite\u201d remains unclear. <\/p>\n

With the core incentive open to interpretation, homeowners face uncertainty when deciding on specific development options, such as a basement suite, laneway house, garden suite, or a simple partition within the home. Each option carries the risk of not aligning with potential future clarifications provided by the government, critics say.<\/p>\n

\u201c\u2018Distinct secondary suite\u2019 is very vague,\u201d notes Green. \u201cIs that an addition? A detached unit? A basement apartment? Is it splitting a basement apartment into two units, three units? \u2026 It\u2019s all vague in that sense where I\u2019m not exactly sure what they are looking to finance under this program.\u201d<\/p>\n

Opportunity for multi-generational home owners unclear<\/h2>\n

One demographic that appears to have been overlooked in the initial planning and follow-up information for the program is homeowners seeking to refinance for the creation of multi-generational homes\u2014households that accommodate at least three generations of the same family.<\/p>\n

A 2021 Statistics Canada report<\/a> revealed a sharp rise in multi-generational homes over the past two decades, with their numbers increasing by 50% between 2001 and 2021.<\/p>\n

Such homes would also benefit from support to expand but are more likely to focus on projects that accommodate additional family members rather than tenants, such as creating in-law suites or undertaking \u201cnon-distinct\u201d expansions.<\/p>\n

However, since the federal government\u2019s new Secondary Suites Refinancing Program is specifically geared towards the creation of rental units, it seems, at least for now, to overlook the opportunity to offer refinancing options for this rapidly growing demographic of homeowners.<\/p>\n

Looming tariffs add to the uncertainty<\/h2>\n

Another source of uncertainty is the looming U.S. tariffs, which could drive up the cost of labour and materials needed for renovations under the program. <\/p>\n

Shortly after being sworn in on January 20, U.S. President Donald Trump announced plans to impose a 25% tariff on goods imported from Canada, set to begin February 1. While the tariffs might not directly impact renovation projects in Canada, the potential for retaliatory measures and an escalating trade war could disrupt supply chains and increase costs.<\/p>\n

\u201cMaterials are expensive, labour is expensive in Canada now,\u201d says Valko. \u201cAnd there\u2019s also the timeline\u2014you don\u2019t want to have a unit half completed and not be able to finish it by the end of the year \u2026 I think that\u2019s why lenders are reluctant.\u201d<\/p>\n

Visited 3,074 times, 1 visit(s) today<\/p>\n

CMHC Connor Green Editor’s pick Secondary Suite Refinance Program secondary suites tracy valko<\/p>\n

Last modified: January 25, 2025<\/p>\n<\/p><\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The program, first unveiled in October, allows homeowners to refinance up to 90% of their property\u2019s value (capped at $2 million) to build secondary suites intended for long-term rental use, specifically excluding short-term rentals like Airbnb. In a previous post, Canadian Mortgage Trends examined the pros and cons of the program, concluding that it appears<\/p>\n","protected":false},"author":1,"featured_media":9421,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[216],"tags":[3616,3615,413,542,3619,3617,3618],"class_list":{"0":"post-9420","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mortgage","8":"tag-governments","9":"tag-linger","10":"tag-program","11":"tag-questions","12":"tag-refinancing","13":"tag-secondary","14":"tag-suite"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/9420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9420"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/9420\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/9421"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}