Short answer
A federal insured-refinancing framework may allow an eligible homeowner to finance construction of legal secondary suites, potentially up to 90% of the improved property value and up to a 30-year amortization.
The client problem behind this rule
The homeowner has equity on paper but not enough cash to build the suite. A normal refinance may be capped lower than the total project requires, while construction costs arrive before the completed value exists.
What the official source confirms
The federal parameters became available for mortgage-insurance applications submitted on or after January 15, 2025. They contemplate up to four total dwelling units, a maximum property value below $2 million and financing based partly on the as-improved value.
What this does not mean
This is not a general 90% cash-out refinance. The purpose, existing home, unit count, permits, zoning, appraised as-improved value, construction budget, lender and insurer approval all matter. The borrower must still qualify, and funds may be advanced in stages.
A practical Ontario example
Illustration only: A homeowner wants to convert a basement and detached garage into compliant rental units. The projected value may help support financing, but the file still needs plans, cost estimates, municipal feasibility, income review and a lender willing to administer the construction structure.
Practical mortgage routes to explore
Compare the insured program with a conventional refinance, secured line, renovation mortgage or staged alternative financing. Include contingency funds and confirm how rental income will be treated. The right structure should fund the work without leaving the client trapped after completion.
Questions to ask before relying on this rule
- Is this rule currently in force, future-dated, proposed or expired?
- Does it apply to an insured mortgage, an uninsured mortgage, a tax program or only a regulated institution?
- Which facts in my file have been verified, and which are still assumptions?
- What remains subject to the lender’s own income, credit, property and exception policy?
- If the preferred A-lender route does not work, what would an alternative/B, MIC or private option cost—and what is the exit plan?
Rajiv’s broker review
The official rule is the starting boundary, not the complete approval answer. I would verify the client’s timing, purpose, property, income, credit and available documents, compare the relevant lender policies, and then stress-test the practical options. A lower-rate route is not better if the client cannot complete the transaction or exit it safely.
Would a second opinion help? Ask Rajiv for a mortgage rule and strategy review. Bring the rule, deadline and concern so the conversation can focus on what is confirmed, what is missing and what may still be possible.