Feds to expand apartment loans to post-secondary institutions
The federal government is taking a new tack in its efforts to get more housing built.
Housing minister Sean Fraser recently announced the government would soon expand its Apartment Construction Loan Program to offer low-cost loans to colleges and universities build more student housing on- and off-campus.
"This is an important policy change," said Fraser. "It's not just going to create more affordable places for students to live near where they're going to school. It's also going to relieve pressure on the housing market by freeing up housing supply that already exists in communities that are seeing students need to compete in the market more broadly."
The over $40-billion Apartment Construction Loan Program, formerly known as the Rental Construction Financing Initiative, is providing low-cost financing to build more than 101,000 new rental homes across Canada by 2031–32.
The government intends to start accepting applications for these loans later in the year.
In the 2023 Fall Economic Statement, the federal government announced an additional $15 billion in low-cost loans for the Apartment Construction Loan Program and an additional $1 billion in new funding for the Affordable Housing Fund.
Under the terms of the program, developers will pay interest only on the loan during the construction period. Principal and interest are due after 12 months of income.
At the end of the loan period, the loan will have to be moved to a Canada Mortgage and Housing Corporation-approved lender.
The move is the latest in a series the government has taken to address housing affordability.
Immigration Minister Marc Miller recently announced a two-year cap on international student visas. The plan is to curb huge levels of growth in that sector and ease the pressure created by these students on the housing market.