How to Apply for the Secondary Suite Loan Program

A quick step-by-step guide to applying for the Secondary Suites Program using Simcoe County as an example. Information and links for other regions will be added to our blog, so sign up for updates by posting any comments on the article you are interested in.

Complete Information on the Secondary Suites Program in Simcoe County (Full Details)

1. Fact Sheet for the Secondary Suites Program

The Secondary Suites Program is supported by Simcoe County and federal/provincial governments. It provides financial assistance in the form of a forgivable loan for 15 years, up to $30,000, to create secondary or garden suites. Funding is limited and allocated on a first-come, first-served basis, with priority given to projects ready for construction.

Key Eligibility Criteria:

• Property Ownership: Applicants must own property in Simcoe County.
• Code Compliance: The creation of a secondary or garden suite must comply with all municipal and building codes.
• Tax and Mortgage Payments: Property taxes and mortgage payments must be up to date.
• Insurance: Insurance must cover the full replacement value of the property.
• Residency: Applicants must be Canadian citizens, permanent residents, or refugees.
• No Bankruptcy: Applicants must not be undergoing bankruptcy.
• Debt-to-Value Ratio: The total of all mortgages and liens on the property must not exceed its market value.

Eligible Projects:

• Secondary or garden suites: Housing must be available for affordable rental and comply with municipal and Ontario Building Code standards.
• Construction Deadlines: Construction must begin within 120 days of project approval.
• Rental Rates: Rental rates must remain affordable for 15 years.

Eligible Costs:

• Legal services up to $1,000.
• Labour and material costs.
• Accessibility modifications up to $5,000 (e.g., ramps, lifts, special signaling devices).

Ineligible Projects:

• Renovations started before approval.
• Cosmetic upgrades and landscaping.
• Solar panels and health-support equipment.

Funding Details:

• Maximum $30,000 per property.
• Accessibility modifications up to $5,000 provided as a grant.
• Loan forgiveness over 15 years if conditions are met.

Landlord Responsibilities:

• Rent must remain at the average market rate for 15 years.
• Annual rental reports are mandatory.
• Tenants must meet income eligibility requirements.

Violation Conditions: If conditions are violated (e.g., property sale or overcharging rent), the loan must be repaid.

2. Frequently Asked Questions (FAQ) for the Secondary Suites Program

Funding Amount: Maximum loan amount is $30,000. The amount depends on the cost of creating the unit and the available equity in the property.

Forgivable Loan: The loan amount reduces in equal parts annually over 15 years. If all conditions are met, no repayment or interest is required.

Security: The loan is secured by a mortgage on the property title. Costs for releasing the mortgage are paid by the owner.

Existing Mortgages: If there is an existing mortgage, the loan will be secured as secondary, provided the total encumbrance does not exceed the property’s market value.

Loan Disbursement Stages:

• Legal fees: $528.35
• Plumbing inspection: $7,367.92
• Framing and insulation inspection: $7,367.91
• Drywall and fireproofing inspection: $7,367.91
• Final inspection: $7,367.91

Additional Questions:

• Multiple Properties: Allowed but must be disclosed.
• Waiting for Funding: Work started before approval is not reimbursed.
• Renting to Relatives: Allowed if income eligibility is met.
• Rental Rates: Must not exceed CMHC market rates for the region and include utilities.

Legal Aspects: It is recommended to use Ontario’s standard lease agreement. A standard form is available on the provincial government’s website.

Loan Repayment Conditions: If the unit is not rented or the property is sold before the loan term ends, the remaining loan amount must be repaid.

3. Application Steps

1. Complete the application form with project details and attach the required documents.
   • Visit the Simcoe County website and select the “Housing Programs” section for basic information on housing programs.
   • Explore the “Affordable Housing Programs” section: Under “Housing,” choose “Affordable Housing Programs” to access information about the Secondary Suites Program, including available funding amounts and key eligibility conditions.
   • Download and review the following documents:
     • Fact Sheet — A summary of the program, eligibility conditions, eligible expenses, and landlord responsibilities.
     • FAQ — Frequently asked questions, payment information, and loan security conditions.
     • Application Package — The application form and a list of required documents.
     • Schedule A — Rental rate limits and tenant income requirements.
   • Complete the Application Package and attach all required documents, including proof of identity, ownership documents, proof of no outstanding property taxes, and insurance coverage.
2. Submit the application to:
   
   County of Simcoe
   Social Housing Department
   Attn: Secondary Suites Program
   1110 Highway 26, Midhurst, ON L9X 1N6
   Email: [email protected]

Next Steps: Once the application is approved, funding is provided based on the completion of inspections at each construction stage. To receive each disbursement, inspections must be passed, and reports submitted.