Detached Additional Residential Unit (ARU) Forgivable Loan
No fixed amount
Loan
Description:
The Additional Residential Unit (ARU) Forgivable Loans offer financial assistance to property owners to help offset the costs of creating new detached additional residential units.
Comments on Funding:
Includes the following three streams for detached ARUs:
1. Detached ARU Forgivable Loan (no rent cap) – A $20,000 loan per unit at any rent with a lien on title for a period of 10 years to ensure the ARU is constructed and operational for this 10 year-period, at a minimum.
2. Affordable Detached ARU Forgivable Loan (100% Average Market Rent) – A $45,000 forgivable loan per unit with a minimum rental affordability period of 10 years capped at 100% CMHC Average Market Rent, secured through a lien on title.
3.Indigenous Detached ARU Forgivable Loan (no rent cap) – A $45,000 forgivable loan per unit to Indigenous-led housing providers or homeowners with a minimum rental period of 10-years, secured through a lien on title.
Continuous Intake
Eligibility:
Applicants must meet the following conditions:
1. The primary Dwelling Unit on the Property is owner-occupied, however, this is not required for the Indigenous-led detached ARU stream.
2. Only one ARU per Property is eligible for a loan.
3. The project must comply with all applicable laws, including all relevant regulations in the City of London Zoning By-law, as amended.
4. Multi-unit buildings that may be eligible under this program must have an existing Residential Rental Unit License (RRUL) where an associated Additional Residential Unit is proposed on the same property.
5. The ARU must receive and maintain a valid Residential Rental Unit License, which must be renewed with the City every year. The Property Owner shall use commercially reasonable efforts to ensure the ARU is rented or occupied.
6. Detached ARUs that use this incentive program are not permitted to be used as short-term accommodation as defined under the City of London’s Business Licensing bylaw.
7. The loan which is issued after the ARU is constructed and the RRUL is granted, is registered on title as a forgivable loan and is the lesser of the maximum applicable loan amount, or the cost of the project. The loan will accrue interest at a rate of 8% per annum, compounded and calculated every 30 days. Provided the Property Owner has complied with the terms and conditions of the Loan Agreement, the loan and accrued interest shall be forgiven at the end of the term.
8. In the case of default, the loan and accrued interest shall become payable to the City of London on demand. The City may add the loan and accrued interest to the tax roll.
Application Steps:
Applicants must contact City Staff at 519-930-3500 or email CIPincentives@london.ca.
Documentation Needed:
No specific documentation has been identified
Other Things to Note:
About the author
Maurice
