A Purchase Plus Improvement Mortgage for New Construction

CMHC is offering mortgages up to 95% for new construction and purchase with improvements. This might be a good options for clients that are purchasing a new home that requires some renovations. Clients must obtain a list of improvements, along with contractor costs, estimates, invoices to support improvements prior to funding.  Although this option will not work for all our clients, we would be be happy to introduce you to a mortgage broker to discuss your financing needs.



A Purchase-Plus  Improvement
takes into account
the future value of a home with repairs or renovations as completed after the closing.



Example: Your realtor introduces you to a property that requires basement finishing or upgrading.

The estimated cost of the basement renovations is approx. $40,000. The current appraisal value and sale price of the home is $400,000. Instead of the standard 5% down on the $400,000 ($20,000), a Purchase-Plus Improvements Mortgage lets you place 5% down on the future value of the home ($440,000) which includes the cost of the basement renovations. The new mortgage amount would be $418,000.00 giving the client $38,000.00 for their renovations.          


Cost of Home:

$ 400,000

Standard Down Payment (5%)

$   20,000


Projected Cost of Renovations:

$   40,000

Approved Future Value:

$ 440,000


Total Down Payment (5%):

$   22,000





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