If you have renovations in mind, you may want to consider going a step further to create a self-contained rental unit within your home—largely at the government's expense.

The resulting rental income may allow you to undertake further property improvements in the future or offset increases in property taxes, energy costs and other escalating expenses.

Forgivable financial assistance is available from the federal housing agency, Canada Mortgage and Housing Corporation (CMHC) through initiatives which include the Residential Rehabilitation Assistance Program (RRAP). Funding may also be provided at the provincial/territorial level.

An estimated 1.5 million households in 10 major Canadian centres spent more than C$12,800 on upgrades and other improvements to their homes in 2007. Among this group, there may have been some who would have added value to their homes and increased available rental housing for low-income tenants, aged 65 or older, or for individuals with disabilities, if the homeowners had known about RRAP. The same may be said for homeowners who have not renovated yet or who live in rural and remote areas.

Since a significant proportion of those who renovated last year indicated they would spend C$1000 or more in 2008, according to The Renovation and Home Purchase Survey released by CMHC, it may not be too late for them, or other property owners, to consider expanding their renovation plans.

CMHC's Secondary/Garden Suite Residential Rehabilitation Assistance Program (S/GS RRAP) "assists in the creation of affordable housing for low-income seniors and adults with a disability by providing financial assistance to convert or redevelop existing residential properties."

Secondary suites are self-contained units built within an existing home. Garden suites are separate small self-contained homes, usually manufactured housing, which share the residential lot with the main dwelling.

An eligible residential property must meet local building and zoning bylaw requirements, so that the accessory unit created is a legal self-contained rental accommodation. Eligible property owners, referred to by CMHC as clients, may be homeowners, private entrepreneurs or First Nations.

Selected clients must enter into an Operating Agreement, which establishes the rent that may be charged during the term of the Agreement. The income of eligible tenants must be below the ceiling placed on rent for the unit.

Clients who meet the conditions of the program receive a fully-forgivable loan, which may be used to cover costs related to creating the suite, provided the work was undertaken after loan approval. A 25% supplement is available in remote areas. The maximum loan available varies with the geographic zone: Zone 1: Southern areas of Canada ... C$24,000/unit Zone 2: Northern areas of Canada ... C$28,000/unit Zone 3: Far northern areas ... C$36,000/unit

Accessibility modifications for low-income tenants with disabilities may be covered under the RRAP for .

Additional assistance from the contact local municipal departments and provincial/territorial CMHC offices.

Source: CMHC www.cmhc.ca

Published: June 17, 2008

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