Ontario’s New Secondary Suite Refinance Program is designed to expand the availability of affordable housing by offering financial aid to homeowners interested in adding secondary suites. These suites, commonly referred to as accessory dwelling units (ADUs), can be a great asset to your property, providing extra income while helping address the housing shortage.

Program Highlights

The Secondary Suite Refinance Program provides several important benefits to qualifying homeowners:

• Up to $40,000 in forgivable loans, covering 50% of the costs to build new secondary suites.
• Homeowners can now refinance up to 90% of their home’s value, including the potential value of the secondary suite they plan to build. This allows them to borrow a larger sum of money by tapping into the increased value of their property.
• The refinanced mortgage can be amortized over a period of up to 30 years, making monthly payments more manageable for homeowners. This longer amortization period spreads the loan out over a longer time, reducing financial strain.
• To ensure that homeowners across all regions can take advantage of the new regulations, the government has increased the mortgage insurance limit to $2 million. This applies to those who are refinancing specifically to build a secondary suite, providing flexibility for homeowners in higher-priced housing markets.
• Supports the creation of basement apartments, laneway houses, and garden suites.
• Encourages affordable rentals by requiring units to be rented below market rates.
• Promotes accessible housing by providing support for building suites that cater to seniors and people with disabilities.

Who Can Apply

To be eligible for the Secondary Suite Incentive Program, homeowners must meet the following conditions:

• Must be the registered owner and occupy the property as their main residence.
• Have a combined annual income of less than $209,420 for all property owners.
• The property’s assessed value must be below the homeowner grant threshold (set at $2.15 million in 2024).
• Acquire all necessary building permits from local authorities before starting construction.
• Rent out the unit at a rate below the market average for a minimum of five years to receive loan forgiveness.

How to Apply

Follow these steps to successfully apply for the Secondary Suite Incentive Program:

1. Assess Your Property: Evaluate the potential for adding a secondary suite and consult local zoning regulations to ensure compliance.
2. Secure Funding: Explore financing options to ensure you can cover your portion of the construction costs.
3. Obtain Permits: Submit the necessary permit applications to your local municipality, ensuring your plans meet all zoning and building code requirements.
4. Submit Your Application: Complete the program’s application form, providing all required documents, including income proof, property ownership details, and building permits.
5. Build the Suite: Once your application is approved, begin construction. Ensure all work is inspected and meets required standards.
6. Rent the Unit: Upon completion, rent the suite at the below-market rate for at least five years to qualify for loan forgiveness.

What is a secondary suite?

A secondary suite is a self-contained living space located within a single-family home or on the same property. It typically includes its own separate entrance, kitchen, bathroom, and living areas, making it independent from the main household. These suites are often referred to as basement apartments, in-law suites, or granny flats.

Secondary suites can be created by converting existing spaces, such as basements, garages, or attics, or by building a new structure like a coach house or laneway home on the property. They provide additional housing units within a residential area and can be rented out to generate extra income or used to accommodate family members, such as elderly parents or adult children.

In many cities, the construction of secondary suites is regulated by local bylaws, which specify requirements such as minimum size, zoning, and safety standards. These units are increasingly popular as a solution to housing shortages and as a way for homeowners to make more efficient use of their properties.

Primary unit and secondary unit examples.

Why Build a Secondary Suite?

There are several benefits to adding a secondary suite to your property:

• Extra Income: Generate rental income to help with your mortgage or other expenses.
• Boost Property Value: Increase your home’s value by adding a rentable unit.
• Contribute to Affordable Housing: Help provide affordable housing options within your community.
• Housing Flexibility: Use the unit to accommodate family members, like elderly parents or adult children, while maintaining privacy.

Questions to ask when Considering Building a Rental Suite?

Conclusion

The Secondary Suite Incentive Program in Ontario provides a valuable opportunity for homeowners to improve their financial situation while making a positive impact on the community. By understanding the program’s requirements and following the application steps, you can successfully develop a secondary suite that benefits both your family and the wider community.

Thinking of taking on a project like this?

Partnering with a knowledgeable mortgage broker like Mortgage With Mike will empower you to make informed decisions. Your mortgage is a fundamental aspect of your financial future, and it’s essential to ensure it’s built on solid ground.

Get in touch with us today to discover how we can assist you on your journey to homeownership.