The Canadian Mortgage and Housing Corporation is accepting applications to its Co-op Housing Development Program between July 15th and September 15th. We’ve put together this handy guide to summarize what you need to know!   

The Goal  

The Co-op Housing Development Program is allocating $1.5 billion to expand co-op rental housing, making it the most significant investment in co-op housing since the 1980s. The program aims to build thousands of new co-operatively owned homes over the next seven years. The funding will cover up to 100% of project costs through a combination of repayable and forgivable loans.   

Are you Eligible?   

There are many co-operative solutions to housing, but not every project will qualify. This program will fund projects that operate on a not-for-profit basis, including non-profit housing co-ops, community housing organizations, land trusts, and Indigenous housing co-operatives. Homeownership co-ops or investment co-op housing developments don’t qualify.   

To be eligible, projects must provide rental co-op housing. They can convert a non-residential building or construct a new space. If your project includes non-residential space (e.g., first-floor commercial space), you can still apply for up to 75% of eligible non-residential project costs.   

For this program, CMHC has set minimum project requirements. Projects in large urban areas with a population over 100,000 must build at least 75 units. In smaller urban areas with populations between 10,000-100,000, projects must include at least 30 units. Projects located in rural and remote areas can include fewer than 30 units and will be assessed on a case-by-case basis.   

To qualify for funding, projects must commit to keeping housing charges affordable for a minimum of 20 years. That means the co-op’s rent must be lower than the most recent CMHC Rental Market Survey for your area (find your area here). A project must also ensure at least 20% of units meet accessibility standards, and that common areas are barrier-free. And, projects must commit to achieving energy efficiency according to the National Energy Code of Canada for Buildings or the National Building Code of Canada 2020.   

If you’re not sure if you’re eligible or if the minimum requirements make sense for your community, give us a call. We can help you crunch the numbers.   

The Financials  

The program can cover up to 100% of the project costs through repayable and forgivable loans. This includes purchasing land, site assessments, closing costs, and construction. This doesn’t mean your team won’t face any costs, however. New co-ops will still need to raise funds to cover their incorporation, meeting expenses, and admin costs.   

One-third of project costs can be covered through forgivable loans. This portion of the loan is forgiven each year over a 20-year period if the co-op upholds its commitments to affordability, energy efficiency, and accessibility. The remaining two-thirds of the loan is repayable. The repayable portion can be amortized for up to 50 years with 10-year terms and below-market interest rates.  

Getting Started  

To access the Co-op Housing Development Program, you’ll need a co-op. That’s where we can help! Get in touch with our team of experts if you’re ready to incorporate a new housing co-operative. 

To create your co-op, you’ll need at least three individuals who are willing to be the founding members and board of directors. We can also help your team put some plans in place and crunch the numbers to ensure your project meets CMHC’s requirements. You can learn more about housing co-ops and get in touch with us here.   

To learn more about the Co-op Housing Development Program and to see if your project qualifies, check out the program website.