Secondary Suite Loan Program
The Canada Secondary Suite Loan Program is a federal initiative designed to assist homeowners in creating self-contained secondary units within their primary residences. These units, often referred to as basement apartments, laneway homes, or in-law suites, provide separate living spaces complete with their own entrances, kitchens, bathrooms, and sleeping areas.
Program Overview
Launched as part of the 2024 federal budget, the program initially offered low-interest loans of up to $40,000 to eligible homeowners. Recognizing the need for more substantial support, the government announced in December 2024 an increase in the loan limit to $80,000, with a fixed interest rate of 2% over a 15-year term. This enhancement is set to take effect in early 2025.
Key Features
-
Loan Amount: Up to $80,000.
-
Interest Rate: 2% fixed over the loan term.
-
Repayment Period: Up to 15 years, with no prepayment penalties.
Eligibility Criteria
To qualify for the Canada Secondary Suite Loan Program, homeowners must:
-
Property Ownership: Own a residential property in Canada.
-
Purpose of Funds: Use the loan specifically for constructing or renovating a secondary suite.
-
Regulatory Compliance: Ensure the new suite adheres to local building codes and zoning regulations.
-
Financial Assessment: Demonstrate the ability to repay the loan, which may include providing proof of stable income or projected rental earnings.
Application Process
The application involves several steps:
-
Initial Assessment: Submit a detailed proposal outlining the scope of work and estimated costs.
-
Approval: Upon review, eligible applicants will receive loan approval.
-
Construction Phase: Proceed with the construction or renovation of the secondary suite.
-
Final Inspection: Ensure the completed unit meets all regulatory standards and obtain necessary certifications.
Benefits
-
Affordable Housing: Increases the availability of rental units, addressing housing shortages.
-
Supplemental Income: Provides homeowners with an additional revenue stream through rental income.
-
Multigenerational Living: Offers a viable solution for families wishing to accommodate aging parents or adult children, promoting close-knit family support.
-
Accessibility: Allows for the creation of barrier-free units tailored to individuals with disabilities
By facilitating the development of secondary suites, the Canada Secondary Suite Loan Program aims to enhance affordable housing options and support homeowners in maximizing their property's potential.