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CMHC Secondary Suite Loan: Who Qualifies?
The federal government's Canada Secondary Suite Loan Program — administered through CMHC — offers up to $40,000 at a 2% annual interest rate to help create or legalize a secondary suite on your property.
What Is the CMHC Secondary Suite Loan?
Launched under the National Housing Strategy, this program is designed to rapidly increase Canada's rental housing supply. The key terms:
| Feature | Detail |
|---|---|
| Maximum loan amount | $40,000 |
| Interest rate | 2% per annum |
| Repayment term | Up to 15 years |
| Eligible suite types | Basement suites, laneway homes, garden suites, secondary suites |
| Program focus | New suites or legalization of existing unpermitted suites |
Who Qualifies?
To be eligible, you must meet all of the following criteria:
1. Canadian Citizen or Permanent Resident
The applicant must be a Canadian citizen or permanent resident.
2. Owner-Occupant of the Primary Residence
You must live in the property as your primary residence. Investment properties where the owner does not reside do not qualify.
3. Household Income Under $209,000
Your total household income must be below $209,000 annually, assessed at time of application.
4. Property Type: 1–4 Unit Residential
The program applies to properties with 1 to 4 residential units.
5. The Suite Must Be a Rental Unit
The new or legalized suite must be rented to a tenant — not used as a short-term rental. Read our article on whether you can Airbnb a backyard suite in Ottawa for the full nuance.
6. Work Must Be Permitted & Code-Compliant
All work funded by the loan must be properly permitted and meet the Ontario Building Code. If you already have unpermitted work, the loan can fund the legalization process — but only if brought up to code.
What Does the Loan Cover?
- Architectural and design fees
- Building permit fees
- Construction and renovation labour
- Materials (framing, insulation, drywall, flooring, fixtures)
- Mechanical, electrical, and plumbing rough-ins and finishes
- Utility connection fees
It does not cover furniture, appliances (in most cases), or land acquisition.
How to Apply
- Getting a feasibility assessment and contractor quote
- Applying through your financial institution with income verification
- CMHC approval and fund disbursement tied to construction milestones
See our step-by-step article: how to apply for the Canada Secondary Suite Loan Program in Ottawa.
Can You Stack This With Other Programs?
- The Multigenerational Home Renovation Tax Credit (MGHRTC) — up to $7,500 in tax credits
- The Canada Greener Homes Grant for eligible energy-efficiency upgrades
- Home equity financing through your existing mortgage
Read our full article on home renovation financing options in Ottawa.
Building the Suite: Next Steps
Ottawa General Contractors specializes in secondary suite builds — including coach homes and garden suites under 600 sq ft, basement apartment conversions, and full ADU builds. Book a free consultation.
Related: Apply for CMHC Refinance to add a secondary suite | Basement apartment guide Ottawa | How long does it take to build a backyard suite in Ottawa?
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