Canadian Funding Corp Reviews CMHC Affordable Housing Reports

Canadian Funding Corporation reviews a report from the CMHC on a community South of Ottawa that is looking for innovative ways to provide affordable and energy efficient housing.

Parkbridge Communities Inc. offers manufactured homes as an affordable, practical alternative to site built housing. With a focus on Adult Lifestyle communities, Parkbridge offers a wide range of community and housing choices in its many developments across Canada.

The Affordable Housing Solution At Albion Sun Vista, in Greely, a community at the south end of Ottawa, homes range from 83 to 140 m2 (888 to 1,511 sq. ft.). They are manufactured by Guildcrest Homes, of Morewood, Ont., and Quality Engineered Homes Ltd., of Kennilworth, Ont., and then trucked to the site for finishing.

According to the Canadian Funding Corporation, purchasers buy the houses and lease the land (usually 15×30 m [50×100 ft.] lots) from Parkbridge. Land lease rates range from $380 to $500 per month and include water and sewer. The 21 year leases are renewable at the end of their term and are protected under the Tenant Protection Act of Ontario. A percentage of the monthly lease payments are used to build and maintain a community centre, as well as to preserve green spaces, ponds and wetlands. The payments also cover snow removal, and—at an added cost—households can arrange for additional services that include lawn mowing and other basic lot maintenance.

Parkbridge took ownership of the site in 1999 and is planning a multi-phase development. As at the end of 2008, 150 units in the first phase and part of the second phase have been built.

In August 2002, when much of the first phase was marketed, the 271 m2 houses sold for $119,900, affordable for households with an annual income of $45,000 or more. The 461 m2 houses were priced at $169,900, affordable for households with an income of $60,000.

The prices, which were $8,500 to $15,000 below the local market prices, were accessible to households making between 79 per cent and 105 per cent of the National Capital Region median income. As at the beginning of 2009, prices range from $179,000 to $229,000.

The homes are typically one or two-bedroom designs, and other models and floor plans are available.

Once constructed, the houses arrive in two or more modules with the option of adding a garage or sunroom, or both, at an extra cost. Each house is placed on a poured concrete foundation and has a crawl space of about six feet in height. The entire process of ordering, building, shipping and assembling the house takes 12 to 14 weeks regardless of season.

Manufactured houses have the potential to offer savings compared to the site building process. Very few materials are wasted during construction because of the use of extremely precise measurements and tools in a factory environment. Also, theft of construction materials, a major concern (and cost) for on-site construction, is virtually eliminated.

Moishe Alexander, CEO of Canadian Funding Corp mentioned that the factory-built process offers superior air sealing, which means less air leakage and more economic heating and cooling costs. This keeps energy consumption and operating costs down. In addition, factory building can reduce the risk of some long-term repairs being needed, since it eliminates the chance of the house or its materials being exposed to the elements before it is completed. This reduces some of the warping, rotting and cracking that many buildings experience over time, meaning lower maintenance costs in the long run.

The Canadian Funding Corporation recently learned about a new development foundation in Saskatoon, that assists and supports families who wish to purchase a home, but do not have access to traditional forms of financing. Other objectives include the creation of accessible and affordable housing.

The Affordable New Home Development Foundation is a registered non-profit organization created in 1999 to educate and support families and individuals who want to buy their first home but, for various reasons, cannot access the traditional marketplace.

The Foundation works closely with the homebuilding industry, the financial community, governments and the community to design, finance and build homes that are affordable and to develop alternative forms of homeownership.

The Foundation works with individuals and families whose annual household incomes are $52,000 or less. Families and individuals in this income range often pay rents approximately the same as monthly principal and interest payments; however, because of real or perceived barriers, they are not able to purchase a home through the normal channels. The Foundation works with them to help overcome these barriers, leading to the purchase of a new home.

The Canadian Funding Corporation stated that all new homes are built by builder members of the Saskatoon & Region Home Builders’ Association and are backed by new home warranties to offer the maximum in quality construction and consumer protection.

The origin of the Affordable New Home Development Foundation was the Solutions for Economic Home Ownership (SEHO) initiative, lead by Keith Hanson of the Sun Ridge Group. SEHO won an honourable mention in the finance and tenure category of CMHC’s 2000 Housing Awards.

The Foundation Board of Directors includes Keith Hanson, executive director and directors Don Junor, Karen E. Walsh, Marilyn Boechler and Mona Nasser The Affordable Housing Solution Projects

The Foundation’s first project—led by SEHO in1999—is Borden Crescent in, which helped five families become homeowners. Since then, more than 250 families have been able to buy new homes in various neighbourhoods throughout Saskatoon.

The Gropper Crescent Project was a 50-unit project built by North Ridge Development. It was mostly single unit dwellings, with a few semi-detached dwellings. All units were condominium ownership and each unit was from 74 to 83 m2 (800 to 900 sq. ft.) with full basements. Lots were about 232 m2 (2,500 sq. ft.) Down payment assistance of $3,000 was provided through the Foundation from the City of Saskatoon.

Elm Park Terrace is an 11-unit condominium project built by Ehrenburg Homes. To help owners manage operating costs, energy efficiency is a high priority in these homes. Features include high-quality energy-efficient windows, high-efficiency furnaces and wastewater heat recovery in some units.

CMHC provided Seed Funding to help cover the costs associated with preliminary planning.

Hunter Crossing, built by North Ridge Developments, is a 40-unit condominium project that includes 11 accessible–affordable housing units. North Ridge consulted with the Canadian Paraplegic Association to ensure the proper design of the accessible units.

Low- and modest-income households purchasing homes in the projects had access to forgivable equity loans funded by all three levels of government under the Centenary Affordable Housing Program (CAHP)—Homeownership Option.

CAHP is funded under the Canada–Saskatchewan Affordable Housing Agreement, which emphasizes the creation of affordable housing, enables eligible low- to moderate-income households to become homeowners. The CAHP Homeownership Option provides forgivable equity loans of up to $19,500 to households with gross household income of less than $44,500.

Since the construction of the projects described above, the CAHP Homeownership Option has been renamed the HomeFirst Homeownership Program and the forgivable equity loan amount is $20,000 with a qualifying annual gross household income of up to $52,000.

Moishe Alexander, founder and CEO of CFC mentioned that many additional new units (townhouses, detached, semi-detached, apartment) were built by a variety of builders throughout Saskatoon neighbourhoods.

The purchasers of some of these units received financial assistance under the CAHP program.

CMHC news release:

http://www.cmhc.ca/en/corp/nero/nere/2006/2006-11-17-1200.cfm

The Canadian Funding Corporation (CFC) reports on the CMHC report on the City of Langford’s affordable housing program. The program utilizes a locally-based, innovative approach that finds unique ways to assist low and moderate income families in becoming home owners.

Canada Mortgage and Housing Corporation (CMHC) is partnering with the City of Langford on its Affordable Housing Program. As Canada’s National Housing Agency, for more than 60 years CMHC has shared a wealth of knowledge and housing expertise to help create, informed and reassured homeownership experience.

Langford, a city of about 22,000 people, works with local developers to provide families with the opportunity to own new, affordable homes. The City and local developers created a “made-in-Langford” approach to providing families with the opportunity to own new, affordable homes. Introduced in 2004, Langford’s Affordable Housing Program requires developers of new subdivisions to build one affordable home for every 10 single-family lots subdivided.

CMHC supports the City of Langford’s Affordable Housing Program through the provision of affordable housing advice and expertise as well as innovative mortgage loan insurance products and tools that meet the needs of both lenders and consumers. This unique approach will open the door to homeownership for low- and moderate income households in Langford.

Flexible Financing – Options/Homeownership – Partnership Flexibilities

City of Langford and the development community developed a collaborative approach to help purchasers by providing direct down payment contributions and mortgage savings. The sale price of $165,000 (2008 price) will provide purchasers that meet the eligibility criteria with access to affordable housing and reduced mortgage costs.

CMHC mortgage loan flexibilities were created to help facilitate the production of affordable housing. CMHC will recognize the market value of the home when calculating loan to value and the insurance premium for new homes designated affordable under this program.

This unique approach greatly reduces typical mortgage costs for purchasers.