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Home Purchase + Renovation Mortgage Program
This program allows you to add renovation costs to your mortgage at the time of purchase.
How It Works:
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You must provide completed estimates before submitting your mortgage application.
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These estimates are added to the agreed purchase price, creating what’s known as the “as-improved value” (home cost + renovation costs).
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Borrowers can put down as little as 5% of the as-improved value.
Important: Be sure to extend the financing condition date to allow enough time for obtaining estimates.
Lender & Insurer Guidelines for Renovation Financing
While lender guidelines may vary slightly, the two primary insurer programs allow for:
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Up to 10% of the “as-improved” value; or
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Up to 20% of the “as-improved” value, capped at $40,000.
Important: The as-improved value must still be supported by an appraisal and approved by the insurer.
Renovation Financing Process & Payment Terms
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Upfront Payment Required – Lenders only reimburse for completed work, meaning you must cover the renovation costs upfront. Funds are released only after receipts are provided and an inspection is completed.
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Mortgage Payments Begin on Possession Date – You start paying for the full mortgage amount as of your possession date.
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Improvement Funds Held in Trust – The renovation funds are sent to your lawyer, who holds them in trust until the work is verified as complete.
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Appraisal Costs – You may need to pay for an initial appraisal and a final inspection to confirm completed work. Estimated cost: $350 if both are required (unless the insurer approves the value as-is).