Do you qualify for BC Housing's $40,000 Forgivable Loan?

A $40,000 forgivable loan sounds great! But what's the catch?

The Secondary Suite Incentive Program is one of BC Housing's answers to help create affordable housing. The aim of this program is to help homeowners convert part of their property into a new secondary suite. Applications open on April 17, 2024, and at least 3,000 eligible homeowners over three years will be able to access this rebate/forgivable loan.

There are definitely some caveats to this incentive, which may be a deal breaker for some. However, it could be very beneficial for those who qualify! We're going to breakdown everything we know about this, so read on to find out more...

The most important thing to know is that homeowners who qualify would receive a forgivable loan of up to 50% of the cost of renovations, up to $40,000. So homeowners still need to pay for at least half of the renovations out of pocket. The homeowner(s), property and secondary suite all need to meet the following criteria below to qualify.

For the loan to be forgiven, the homeowner must:

• be the registered owner(s) of the property
• be Canadian citizens or permanent residents
• continue to live in the property as their primary home
• have a combined gross annual income of all homeowners on title of less than $209,420 in the previous tax year, and
• rent the suite out below market rates for at least 5 years (find the rates HERE, or see the table below) ‍

Kamloops' below market rent amounts are $1105 for a bachelor or 1 bedroom suite, $1350 for a 2 bedroom suite, and $1883 for a 3+ bedroom suite. Homeowners will have to do the math to see if it's worthwhile, and also determine if they will continue to live in the home for AT LEAST 5 years with the suite being rented out at these rates.

For the property itself to be eligible, it must:

• be located within the approved list of municipalities (found HERE), and
• have a BC Assessment value below BC's homeowner grant threshold of $2,150,000 in 2024

The secondary suite itself:

• must be a new legal self-contained unit with a kitchen and full bathroom (improvements to existing rental units are not eligible)
• must have received municipal building permits on or after April 1, 2023, and
• can be a laneway home/garden suite

This info from BC Housing's Secondary Suite Factsheet (found on their website) show what costs would be eligible for this program.

We had also found this example from BC Housing on what the loan forgiveness timeline could like, it gives a good idea of what amount you would have owing if you decided not to follow through on the eligibility criteria after receiving the loan.

Lastly, if it seems like this program will work for you, BC Housing has laid out a step-by-step (and steps within steps 😅) guideline:

If you've read this far - congratulations! It's a lot of information to digest.

As always, if there's anything you'd like to discuss in regards to this blog post, or anything else real estate, please reach out!