CMHC (Canadian Mortgage & Housing Corporation) just announced that they are now funding modular home construction.
In an effort to boost housing starts (with a hope to double them), and make housing more affordable, CMHC is providing mortgage insurance in a program called “Prefab Plus”which allows buyers to get up to 4 draws – similar to building a conventional home.
‘‘By offering mortgage loan insurance for the financing of prefabricated homes and multi-unit modular construction, CMHC is committed to expanding access to homeownership and supporting the development of rental supply. We continue to use every tool at our disposal to deliver commercial products and results for Canadians.’’
— Coleen Volk, President and CEO of CMHC
The full press release with all the details is here: https://rem.ax/4uBOi0i
The graph below shows the ‘affordability index for homes in Canada. With an increase in supply, the goal is to get housing costs down to 30% of household income. It is currently in the 53 – 54% range.
This does address the cost to build new homes but the land costs have not changed and when I ran some numbers, in our area you will be into a modular on it’s own land for $650,000 or more. With a minimum down payment (5%), the monthly mortgage payment will be right around $3,025/month.
It will be interesting to see if this makes any real change to housing affordability.
