Liberals extend federal low-cost construction loan program to student residences

The federal government saysits low-cost loans program for affordable housing construction is being expanded to include student residences.

Housing Minister Sean Fraser made the announcement Monday in Ottawa. He saidbroadening the Apartment Construction Loan Program to include student residences will help students find housing across the country.

"This is an important policy change," Fraser said. "It's not just going to create more affordable places for students to live near where they're going to school. It's also going to relieve pressure on the housing market by freeing up housing supply that already exists in communities that are seeing students need to compete in the market more broadly."

Fraser said colleges and universities can apply for the loan funding to build residences themselves, and non-profit builders and developers are also eligible to apply.

In last year's fall economic statement, the federal government announced that it was providing$15 billion in new low-cost loans starting in 2025-26 to encourage construction of new rental apartments acrossCanada.

Under the program, developers can get a loan for a ten-year term at a fixed interest rate, with an amortization period of up to 50 years.

According to the terms of the program, developers and builders only have to pay the interest on the loan during the construction period and only have to start paying both the principal and interest "after twelve months of stabilized effective gross income" on the rental unit.

At the end of the ten-year term, the builder or post-secondary institution must then move their loan to a CanadaMortgage and Housing Corporation-approved lender.

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Ottawa to offer low-interest loans for student housing

7 months ago

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Housing Minister Sean Fraser says the government is expanding its Apartment Construction Loan Program to include student housing. The low-cost loans will be made available within 'months, not years,' he said.

Housing experts say the massive recent spike in non-permanent residents has had a substantial impact on the price of rental housingbecause temporary residents overwhelmingly live in rented accommodation.

Fraser admitted as much earlier this month in Halifax when he told reporters "the temporary foreign workers program, and in particular the international student program," were making the housing crisis worse.

Statistics Canada said that by the end of 2023, there were 2,511,437 non-permanent residents in the country a class that includes international students and temporary foreign workers compared to 1,305,206 in the fall of 2021.

In 2011, the number of international students in the country was just shy of 240,000. Late last year, Immigration Minister Marc Miller said Canada was on track to host as many as 900,000 international students in 2023.

To address the problem, Miller announced last week that the federal government is capping the number of student permits over the next two years.

Ottawa said it will approve approximately 360,000 undergraduate study permits for 2024 a 35 per cent reduction from 2023.

Under the plan, each province and territory will be allotted a portion of the total, which will be distributed according to population.