Secondary suites and ADUs are one of the fastest-growing real estate strategies in Canada — and CMHC has a program that lets you finance them with 90 percent leverage. In this episode, Scott Dillingham explains exactly how the program works, who qualifies, and how investors can use it to add rental income with minimal upfront capital.
Scott emphasizes practical steps for success, including building in cost cushions for overruns, sourcing competitive contractor quotes, and evaluating lot sizes for compliance. He highlights variations by region—such as Alberta's flexible multi-unit allowances—and cautions against overpaying for builds like tiny homes or modular units. With 30-year amortizations available and options for conventional financing at 80% LTV to skip premiums, this program opens doors for first-time investors. Even in slower markets, adding a self-contained unit can provide steady revenue streams, supporting long-term wealth building amid rising demand for secondary suites.
Tuning into this episode equips you with actionable insights on navigating bylaws, variances for multi-story additions, and faster permitting under new legislation. Scott encourages booking a no-obligation strategy call to explore personalized options, underscoring how ADU financing via CMHC can turn your home into a revenue-generating asset. Ideal for those searching "how to finance a garden suite" or "secondary suite rental income ideas," this discussion blends expert advice with real-world strategies to enhance property value and address Canada's housing affordability challenges.
Key Takeaways
- CMHC Refinance for ADUs: Access up to 90% of your home's completed value on primary residences to fund secondary suites, with a $2 million loan cap—funds strictly for unit additions like garden suites or basement apartments.
- Premiums and Costs: Expect CMHC top-up premiums on the increased loan amount (higher than new premiums but lower overall); opt for bank financing at 80% LTV to avoid fees, while securing a 30-year amortization for better cash flow.
- Regional Flexibility: Ontario supports up to three units without rezoning; areas like Alberta allow more based on lot size—always check local bylaws for "missing middle" housing to maximize rental income potential.
- Smart Building Tips: Get multiple contractor quotes to avoid overpaying; consider cost-effective options like foundation underpinning over backyard builds, and include buffers for material hikes or surprises during demo.
- Investor Mindset: Focus on self-contained units for compliant, rentable spaces; apply for variances if needed for height or layout, and leverage faster approvals under bills like Ontario's Bill 60 for quicker multifamily conversions.
- Next Steps for Success: Book a strategy call to review equity, options, and resources—pair with low-interest loans for comprehensive ADU financing to generate passive income amid housing shortages.
Links to Show References
- LendCity Mortgages (for Strategy Calls and Pre-Approvals): lendcity.ca
- CMHC Secondary Suite Resources: cmhc-schl.gc.ca
- (00:00) - - Introduction to CMHC ADU Refinance: Unlock 90% Financing for Secondary Suites
- (03:03) - - Key Rules: Loan Caps, Usage Restrictions, and Cost Cushions for Builds
- (05:25) - - Premiums Explained: Top-Up Fees vs. New Insurance and Amortization Benefits
- (07:52) - - Contractor Tips: Avoid Overpaying and Explore Underpinning Options
- (10:16) - - Conventional Financing for Rentals: Multi-Unit Strategies and Bylaw Navigation
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