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Home Renovation Programs to help with Home Renovation Financing

16 January 2013

We’ve talked before about the Ontario Healthy Homes Renovation Tax Credit, a government return on certain renovations made to make your home healthier, mostly for senior citizens. But what about if you need home renovation financing before you actually start making repairs? What if you need renovations done to your home, but just can’t afford to pay for them? Luckily, there are programs available to help you absorb some of the cost. Here are the three most common in Canada.

Homeowner Residential Rehabilitation Assistance Program (RRAP)

Many people think that if their home needs repairs but they can’t afford to make them, they’re out of luck. However through the Canada Mortgage and Housing Corporation, the federal government has made sure that’s not the case. The RRAP program is available to low-income homeowners that need to make repairs to their home that are absolutely necessary. These repairs include things such as electrical work, structural work, heating repairs, plumbing issues, or work needed to take care of fire safety issues.

The way the program works is that a forgivable loan is issued to the homeowner to make the repairs. So long as the homeowner continues to live in and own the property during that period, the loan never needs to be repaid. CMHC does have very strict income guidelines to go along with this program, and homeowners must meet them in order to be eligible to receive the RRAP loan.

Residential Rehabilitation Assistance Program for Persons with Disabilities

This is another form of the RRAP, with the exception that these repairs are focused specifically on making the home safer, or more accessible, for individuals with disabilities. These could include things such as removing barriers, installing safety bars or ramps, or any other improvements or repairs to make the home friendlier to those with disabilities.

This type of RRAP is open to both landlords and homeowners, as long as the property is owned or will be occupied by an individual with a disability. Other very strict lending criteria is in place for these loans, including that owned homes must be valued below CMHC’s set limit, rental homes must have rental fees below a specific amount set out by CMHC, and homes cannot have any major structural or systematic problems.

Just like the original RRAP loan, the RRAP – Disabilities loan is forgivable and never needs to be repaid. Homeowners must agree to live in and own the home until the loan is fully paid out; while rental homes will have rent and occupancy restrictions placed on them during the life of the loan, and its forgiveness period.

Home Adaptations for Seniors’ Independence (HASI)

This program is similar to RRAP – Disabilities, except that it’s specifically for repairs made to better accommodate senior citizens. These renovations are also meant to be smaller improvements, such as installing chair lifts, or converting a space on the main floor into a bedroom. While minor however, the changes must be made to permanently remain on the property. This program is also open to both homeowners and landlords, so long as a senior will continue to reside in the home; and landlords agree not to raise rent during the forgiveness period.

Like both other programs, the HASI loan never needs to be repaid, as long as the conditions are met. These loans are also smaller, with a maximum of $3,500 available.

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