Feds propose loan program for secondary suites  

Homeowners looking to add a secondary suite to their properties could soon access up to $40,000 in low-interest loans as part of a proposed federal program.

The loan program is part of a series of pre-budget housing measures the federal government announced last week, including a boosted withdrawal limit to the home buyers plan and a proposed 30-year mortgage amortization for first-time home buyers who purchase newly built homes.

Ottawa said the secondary suite loan program will help increase housing density to make the most of available space in communities across the country.

“Many Canadians, such as retirees who own their homes, or younger families who want their parents to move in to live close by, might want to add a unit to their home,” Finance Minister Chrystia Freeland said in a release Monday.

“Through our Housing Accelerator Fund, we’ve already reformed zoning to make this possible, and today, we’re announcing homeowners will soon be able to access up to $40,000 in low-cost loans to make it easier [to] add secondary suites.”

A similar program in British Columbia — set to launch this month — will provide approximately 3,000 homeowners in the province up to $40,000 in forgivable loans to create a new secondary suite or an accessory dwelling unit on their properties.

Secondary suites have increased in popularity in recent years, such as in Calgary, where 676 secondary suites were started and 842 were completed in 2023, according to figures from the Canada Mortgage and Housing Corporation (CMHC).  

This growth may be linked to Calgary’s secondary suites amnesty program, CMHC said in its spring 2024 housing supply report. The municipal program waives development permit and registration fees, allowing homeowners to build legal secondary suites at a reduced cost. 

The federal government is set to table its 2024 federal budget on Tuesday.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.