Revisions to Homeowner Affordable Housing Flexibilities l CMHC

Rental

Victoria legalizes suites

Revisions to CMHC Homeowner Affordable Housing Flexibilities

CMHC enables lenders to offer flexibilities to home buyers and proponents of affordable housing projects beyond those available for the financing of market housing. Proponents can be government agencies, private proponents, sponsors and/or other profit or non-profit groups.

Effective September 28, 2015, revisions to homeowner policies in the areas of down payment assistance, market value requirements, share of equity appreciation and monthly subsidy assistance will be made to align CMHC’s policies with the evolving financing needs of the affordable housing marketplace.

The policy modifications will apply to all proposals for Homeowner Affordable Housing Flexibilities submitted to CMHC, by a proponent, on or after September 28, 2015. The updated “Flexibilities for Affordable Housing — Homeowner Mortgage Loan Insurance” publication will be available on CMHC’s website on the effective date.

Treatment of Rental Income for Borrower Qualification Purposes — Homeowner (1 – 4 Units)

Secondary rental suites are recognized as a source of affordable housing offered at a cost that is often lower than those for apartments in purpose built rental buildings.

Effective September 28, 2015:

  • CMHC will consider up to 100% of gross rental income from a 2-unit owner-occupied property that is the subject of a loan application submitted for insurance. The annual principal and interest for the property including the secondary suite must be used when calculating the debt service ratios.
  • For 3 – 4 unit owner-occupied and 1 – 4 unit non-owner occupied properties the net rental income (gross rents less operating expenses) can form part of the borrowers’ gross annual income.

Additional conditions when 100% of gross rental income is used include:

  • The income must have been sustained over at least two years.
  • The income amount must not exceed the average of the past two years, to address income fluctuations, smooth out cyclical trends and unexpected events such as vacancies.
  • Up to 100 percent of gross rental income may be used only where prospective borrowers can demonstrate a strong history of managing credit generally considered to be a minimum credit score of 680.

CMHC is working closely with lenders to ensure a smooth transition.

What are the Requirements for a Secondary Suite to be considered Legal?

In order for a Secondary Suite to be legal, all of the requirements outlined below must be met.

  • The property must be located within the defined area known as Secondary Suite Permit Area (see map below).
  • The property must be zoned for single family use (RS Zones only).
  • Conditions of the relevant zone must be met (ex. maximum floor area/floor space ratio).
  • The secondary suite must be wholly contained within the single family dwelling. Secondary Suites may not be connected to the house by a breezeway or enclosed hallway, they must be an integral part of the single family house.
  • No more than one (1) secondary suite is permitted per lot or per single family dwelling.
  • The registered owner of the property must occupy either the single family dwelling or the secondary suite as their principal residence ( a signed affidavit is required).
  • An Occupancy Permit must be issued for the Secondary Suite from the Saanich Building Inspections Division, based on the relevant section(s) of the BC Building Code related to Secondary Suites.
  • One (1) additional onsite-parking space for the occupant of the secondary suite must be provided. Tandem parking on the driveway is permitted.
  • No more than two (2) kitchens are permitted per lot or per single family dwelling;
  • Boarding is not permitted within the secondary suite.
  • “Accommodation for a Family Member” OR a Secondary Suite is allowed, not both.

What is the Process to make a Secondary Suite Legal?

A.  Existing Single Family Dwelling (Owner Occupied)

Building Inspection staff will review the submitted material, do the necessary inspections, and assuming all requirements can be met by the property owner, an Occupancy Permit will be issued for the Secondary Suite. If you sell the property in the future, the new owner would need to complete and sign a new affidavit confirming that they will occupy either the single family dwelling or the secondary suite as their principal residence.

B.  New Single Family Dwelling (Owner Occupied)

Same as above, except you would need to complete and submit a Building Permit Application for a new Single Family Dwelling, including all the required attachments, the signed owner affidavit, and permit fee.

C.  New Single Family Dwelling (Occupancy Unknown / Spec. House)

Same as above, except you would need to complete and submit a Building Permit Application for a new Single Family Dwelling, including all the required attachments and fee. The Secondary Suite would not be legal until such time that the owner submitted a signed owner affidavit confirming that they will occupy either the single family dwelling or the secondary suite as their principal residence.

Fees are provided for convenience only and are subject to change without notice.

Secondary Suites are Allowed

Secondary Suites are Allowed

Have Further Questions?

Premium Urban Design, Building l Design Build

250-383-9990 or [email protected]

Building Inspections
250-475-5457

Planning
250-475-5471 or [email protected]

 



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