Affordable Housing Loan Program

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The Affordable Housing Loan Program provides a flexible financing alternative for residential property developers that will provide incentives for the inclusion of affordable rental units in new multi-unit residential housing developments, or in existing properties being renovated.

Do I qualify?

Eligible applicants include, but are not limited to:

  • Community Housing sector (e.g. non-profit housing organizations and rental co-operatives);
  • Private entrepreneur/builder/developer

Property Management Experience: applicants will be required to exhibit satisfactory experience in operating a housing property of similar type and size (in lieu, a formal property management contract with a professional third party firm).

Credit and Repayment History: at least break even cash flow over past five years with excellent credit and repayment history.

Construction Management Experience: must have successfully completed a similar project on time and within budget. Alternatively, proponents must enter into a fixed price contract with a general contractor who has experience building projects of similar size, cost, building form and construction type in the same market area. Proponents must have a demonstrated ability to withstand unexpected increases in construction cost.

For newly formed groups, alternate covenants, collateral and mitigation may be considered.

Financial Viability: Borrowers must demonstrate:

  • Their financial and operational ability to carry the project without ongoing operating subsidies that would be required to maintain viability; and,
  • The financial viability of the proposed project itself, as well as capacity to deal with development risks such as cost over-runs and delays in construction or repairs/renewal.

Does my proposed project qualify?

Eligible property types and sizes will include:

  • Construction of new rental affordable housing or housing being repaired/renewed.
  • Rental Properties with a minimum of five units and a maximum of fifteen.
  • Fully self-contained units only.
  • Primary use is Residential.
    • If there is a Non-Residential component, it may not exceed 30% of total gross floor space, or 30% of total cost.
  • Permanent housing (long term stay).
  • Standard apartments. Excludes Retirement, Long-term care, Student housing Single Room Occupancy facilities and supportive housing.


  • Rents for at least 30% of the units must be less than 80% of the Median Market Rent as published annually by Canada Mortgage and Housing Corporation.


  • Projects will be expected to meet the requirement that 10% of units within the project meet or exceed the local accessibility standards as prescribed by the Municipality, or in the absence of the aforementioned, the accessibility requirements of the 2015 National Building Code.

What is the Financing Criteria?

Maximum Loan to Cost/Value:

  • For new construction, up to 90% loan to cost on the residential component, and up to 75% on non-residential component.
  • For repair / renewal, up to 80% of loan to value (improved value) on the residential component, and up to 65% loan to value (improved value) on non-residential component.

Interest Rate on Loans:

  • Fixed interest rate for up to a 10 year term, based on prevailing rates, beginning at first loan advance. The interest rate will reset at end of initial term and fixed for up to another 10-year term. Interest rate will be based on prevailing rates.
  • Loan may be prepaid at any time, without penalty.
  • Subject to verification that affordability requirements have been fulfilled, and the loan being in good standing, on an annual basis the Lender will rebate to the Borrower an amount equal to 1.5% of the interest rate charged during the previous 12 month period of the loan.
    • Where the loan to cost ratio is greater than 75%, the rebate will be applied as permanent reduction in the Borrower’s loan, otherwise the rebate will be rebated directly to the Borrower.

Loan Repayment:

  • New Construction:
    • Repayment amortization period of up to 25 years;
    • Interest only payments financed by the loan during construction through to occupancy permit;
    • Interest only financed by the borrower from occupancy to 12 months of stabilization; and,
    • Principal and interest from 12-month stabilization for the remainder of the terms.
  • Repair / Renewal:
    • Repayment amortization period of up to 20 years;
    • Interest only payments to completion of repairs; and,
    • Principal and interest from 12-month stabilization for the remainder of the terms.

Minimum Debt Coverage Ratio Requirements:

  • 1.10 for residential loan component
  • 1.40 for non-residential loan component


  • The loan may be fully advanced during the construction and/or repair/renewal period.

Security Type

  • First, second and pari passu mortgages are permitted.

Reserve Requirements

  • None required.

Covenant/ Guarantee Requirements

  • The borrower and guarantor must provide their covenant/guarantee for 100% of the loan for deficiency after enforcement of security.

How do I apply?

As an eligible applicant, you must complete and submit the Financing Application Form and relevant business plan and projections to an account manager with Finance PEI. The account manager will conduct an interview with you to discuss the business proposal and the next steps to determine eligibility.

Where can I find more information?

If you have any further questions, please contact

Bruce Johnston, Senior Financial Analyst
Finance PEI
94 Euston Street, 2nd Floor
PO Box 1176
Charlottetown, PE
Phone: (902) 894-0379
Fax: (902) 368-6255


Date de publication : 
le 10 Septembre 2019
Finances Î.‑P.‑É.

Renseignements généraux

Development Lending and Strategic Initiatives and Properties Division
2nd Floor, 94 Euston Street
Charlottetown, PE   C1A 7M8
Phone: 902-368-6300
Fax: 902-368-6255