Affordable Housing - Inner City Toronto

We recently had a Purchaser client that was income challenged to qualify for a mortgage; that was limited by the Ontario Disabilities Pension for their monthly income.

The building site that came to mind was the Option for Homes, where low income housing is mixed with open market purchases. This site is actually located at Keele and Dundas in the Junction, currently under construction with a proposed occupancy of 2011.

Options for Homes is a private, not for profit corporation dedicated to providing home ownership for low to middle - income households.

The not for profit model eliminates most developer costs including marketing. The Projects themselves are simple designs without pools or other frill improvements. Typically this means lower than market pricing per unit of about $ 30 to 40,000.

The Value Added Alternative Mortgage program allows Purchasers to pay 15% less than market value by providing an Options Alternative Second Mortgage without payment to the Borrower. This is registered on title and is not repayable until the unit is sold. The Options People then share in the appreciation of the property sale at 20% of the profit in addition to the repayment of the original amount. This provides the ongoing funding for additional projects.

This program of 5% down from the Purchaser and 15% as a Vendor Take Back program from Options permits the low income borrowers to save the CMHC 80 % advance and borrowing fees. Again the focus is on the Lowest payment possible.

With the market jitters that have recently occured Michel Labbe President for Option for Homes said "After seeing the impact of sliding property values in the U.S., Canadian families are getting nervous. The Options model has a built in cushion to protect home owners in the event of value decreases."

Mr. Labbe continued "The second mortgage on Options Units is repayable upon sale or rental of the unit. Should the resale value erode due to market pressures, the second mortgage will absorb up to a 13% drop in value. This feature protects low income families from getting in over their heads."

Pat Munroe, Director of Sales for Options advised me that a few penthouse and larger units still remain available for sale.

Will you be Buying one from Options and moving to the Junction? Tell me about it.