A Regina residential developer recently received the equivalent of $166,000 per suite in low-cost provincial government construction financing under what could be the most generous housing incentive in Canada. Almost $11.9 million in construction financing has been provided by the province through its HeadStart on a Home Program for the 72-unit Life Townhome project, being built by Oak Park Living.
Under HeadStart, builders and developers are eligible for construction loans of up to 90 per cent of the construction cost of the homes, including land, at an interest rate of 4 per cent.
"That is a tremendous deal," said commercial mortgage broker Michael Lee with Mortgage Alliance. Lee noted that a typical private-sector construction lender would cover just 70 per cent of a new condominium project, with interest rates at around 5 per cent.
As well, the City of Regina is offering incentives of up to $100,000, including up to $50,000 made available through Saskatchewan Housing Corp.'s Affordable Home Ownership Program, for new home projects.
So far, HeadStart has approved $155 million in construction financing for 955 homes, 250 of which are now occupied, according to Grant Kook, CEO of Wescap Mgt. Ltd., fund manager for the HeadStart program. Westcap is partnering with Saskatchewan credit unions to offer down-payment loans for purchasers.
The target sale price for homes constructed through HeadStart is at or below the MLS average sale price for a comparable home in each community.
from Western Investor October 2013
