Affordable Housing Grants in Edmonton
Through the Cornerstones program, people in Edmonton are able to receive grants in an effort to increase the number of affordable housing options in the area. At Sterling, we’ve seen that many of our customers are taking advantage of this grant program to include an income suite in their new home build.
Is this grant program a good fit for you? Once you learn more, we think you’ll see that it presents a great opportunity.
Grants to Help You Build Your Home
Grant money from Cornerstones is intended to go toward building a secondary suite in a person’s home. Many people use the money to build a suite onto their current residence, but it’s also possible to use the money toward building a brand-new home. However, it’s important to note that the grant funds are not available for direct use toward your single-family home. They must be applied toward a suite.
Sterling Homes can include secondary suites in the design of a new home. The suite could be in the basement of the home with a separate entrance, or it could be above the garage. Our experience means that the process is streamlined, and you can simply put the grant money toward your mortgage.
The grant program is designed to help low- or moderate-income families who would otherwise struggle with the cost of building a suite. As such, your family’s income cannot exceed the maximum income limits. These limits are on a sliding scale based on the number of people in your family. Check out the City of Edmonton website for the latest information on limits.
In addition to the maximum income limits required for receiving the grant, your grant application much show that you have bank approval for financing. This means that you’ll also need the income necessary to get approval for your mortgage. Remember that you’ll be able to include 100 per cent of the rental income to qualify for the mortgage, so you may qualify for more money than you think.
Working with a builder-approved lender in a case like this is helpful because borrowing for a brand-new home and including an income suite in that home add complexities to the mortgage process.
Remember the goal of the grant program is to help increase the availability of affordable rental units in Edmonton. This means you must follow the program’s limits on how much rent you can charge for your income suite. Rates can change, but they’re calculated at 85 per cent of the average market rate for the type of home you’re renting. For instance, if you have a one-bedroom suite, you might be able to charge $850 per month for rent.
Note that those who add an income suite without receiving grant money are not bound to these limits.
How Much Can You Get?
Grant money is available on a first come, first served basis. You can receive up to $20,000 in grant money or 50 per cent of the cost of the build, whichever is less. In the case of a new home build, the grant funds are calculated based solely on the cost of the income suite portion of the home.
The Five-Year Agreement
When you receive grant money for your income suite, you’re making a commitment. You cannot sell the home within five years, and you must make the unit available for rent during those five years. If you don’t follow through on this commitment, you have to repay the grant money in full. This can be very troublesome if you have to move for work or want to move to a bigger home to accommodate your growing family. At the same time, having an approved income suite should increase the value of your home if you’re ready to sell after those first five years.
Whether you put the rental income toward your monthly mortgage payment or use it to pay more toward the principal balance, it’s nice to have the extra money coming in. Choosing to build the income suite as part of your brand-new home is the best way to reduce the costs associated with the build. The grant money makes an income suite even easier to afford.
Photo credit: dollar house, piggy pank
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