Residential Rehabilitation Assistance Program (RRAP) Frequently Asked Questions/ CMHC Contacts Program Terminology Rental / Rooming House / Conversion / Secondary / Garden Suites 668 0 /2 /10
Frequenly Asked Questions 1. Can the completed application be sent to CMHC by fax or email? CMHC requires the original signatures of all owners of the property on the application. As such we cannot accept faxed or e-mailed documents. All completed application packages must be submitted by mail. 2. Can a photocopied application be sent to CMHC? It is permitted to photocopy the application; however, CMHC still requires all original signatures of all the owners on the documents received. 3. Do all the Owners of the property need to sign the application? All persons registered as owners on title must sign all forms submitted. If the property is registered in the name of a numbered company, CMHC will require that Principals/Owners of the Company sign the forms submitted. 4. How does CMHC choose the successful applications? All application packages will be assessed against the checklist (p. 4 of Application form) to ensure that they are complete. Complete application packages will then be reviewed to ensure that all program criteria are met. Preference will be given to applications where the project contains a high ratio of units that are at or below the maximum rent limits (MMRs) established for the area and where the majority of tenant s incomes meet income limits (CNITs) established for the area. Projects must also be financially viable. Incomplete application packages will be returned to the applicant. Applicants have the option of providing the missing information/documentation and resubmitting their application. Applications will not be reviewed until they are complete. Applications that do not meet the minimum qualifying criteria will be returned to the applicant. Please submit the checklist together with the application package. 5. When should I submit my application for funding, and what are the chances of being selected? Budget funds are limited. Applications will be reviewed on a first-completed firstreviewed basis until budget dollars have been exhausted. You should submit your application when you have all of the required documentation and you have met all qualifying criteria outlined in the checklist (please see the application checklist for each program). Applications will be reviewed on an ongoing basis. Those projects that best meet the criteria for funding will be considered until all funding has been committed. For those complete applications that CMHC is unable to process due to lack of budget, the application will be held for a maximum period of six (6) months from the application receipt date. In the event additional budget funds become available you will be contacted 1
by CMHC. After the 6 month period, the application will be declared outdated and a new application package with updated information will need to be submitted for consideration. 6. What is an MMR or a CNIT? Median Market Rent (MMR) is the maximum rent, including utilities (e.g. heat, electricity, water but do not include other services, parking, cable, phone and internet) that can be charged by a landlord in order to qualify a unit under the program. It is based on the number of bedrooms in the unit. Core Need Income Threshold (CNIT) is the maximum household income limit established for the area, depending on the family composition of the tenants, to qualify for a unit under the program. Both the MMRs and CNITs are available from CMHC. CMHC s Market Analysis Centre is responsible for reviewing the Core Need Income Threshold (CNIT) and Median Market Rents (MMR) on an annual basis. 7. What is meant by inclusive or fully serviced rents? If the rents being charged include heat, electricity and water, this is considered inclusive or fully serviced rents. 8. What is meant by Less Vacancy Allowance on the Revenue & Expenses form? The vacancy allowance is normally expressed as a percentage of your annual rents or a dollar value. The amount will vary depending on the rental property and the number of vacancies the landlord experiences annually. 9. What is meant by Net Operating Income (NOI) or Principal & Interest (P & I) on the Revenue & Expenses form? NOI is the annual gross income less the annual total expenses. P & I includes yearly payments made on all encumbrances registered on property title. These could include mortgage/charge loans, lines of credit, etc. To determine cash flow, the P & I are deducted from NOI. 10. What is considered a qualifying repair? A qualifying repair is a mandatory repair required to correct a serious deficiency in one of the five categories (structural, electrical, plumbing, heating and fire safety). The cost of repair(s) would represent a substantial burden for the property owner and would require an increase in rent without assistance from RRAP. 2
11. What is the difference between a bed-unit and a self-contained unit? A bed-unit means a bed within a rooming house rented to an occupant unrelated to the owner and located in an area which meets the minimum space standards for bed-units as outlined in the CMHC RRAP standards. Kitchen and bathroom facilities may be shared. A self-contained unit means a unit providing therein living, sleeping, eating, food preparation and sanitary facilities for a household. 12. Are applicants required to submit estimates from contractors along with the initial application? It is not mandatory that actual contractor s estimates for work are submitted with the initial application; however, an estimate of potential cost of the work being requested by the Owner is required with the submission of the application to determine eligibility. 13. What if a tenant refuses to provide details of their total household income? Unfortunately, if the tenant does not want to provide the income information, then the costs associated with repairs to that unit and the pro-rated costs of common areas will be the responsibility of the landlord. Note: If an application meets the criteria and moves forward to formal commitment, the landlord will be required to submit Tenant Declarations, signed by their tenants that will confirm income/rent. 14. The tenants in my building pay their own electricity. How do I determine if the rents being charged are below the MMR for the area? In order to determine if a unit is eligible, the rent being charged + monthly costs of services paid by Tenants is compared to CMHC s MMR. 15. Is the maximum loan amount per unit or per building? The maximum loan amount relates to the number of eligible units or bed-units within a building. The maximum loan available is also based on the geographic zone where the property is located. 16. How do I determine which zone my property is located in? In Ontario, there are a maximum of two zones. Zone 1 is for the southern part of the Province and Zone 2 starts north of Cochrane in Northern Ontario. If you are unsure, contact a CMHC Representative for clarification. 17. Does a building require a maximum number of eligible units to qualify? There is no maximum number of units required to qualify for assistance. If all tenants incomes are below the CNIT for the area and the rents paid are below the MMR for the area then all units would be eligible for the program. 3
18. What does a forgivable loan mean? A forgivable loan does not have to be repaid provided the landlord abides by the terms and conditions of the RRAP loan approval and the RRAP Operating Agreement. If the landlord does not adhere to these conditions for the loan term, then balance of unearned forgiveness will have to be repaid to CMHC with interest. 19. What does forgiveness earned mean and how long does it take for me to earn my full forgiveness? The earning period for the forgivable loan and duration of the Operating Agreement is based on the level of forgiveness provided per unit or per bed-unit. Where 100% of the maximum forgivable assistance is provided, the term of the loan and Agreement is 15 years. As the amount of the forgivable loan decreases, the term of the agreement decreases to a minimum of 8 years. Landlords may further reduce the loan term to a minimum of 4 years by contributing additional funds to reduce the forgivable loan. 20. When a tenant moves out of an apartment after the work is completed, what do I do? If a unit becomes vacant during the earning period, you are required to rent the unit to other eligible low-income tenants at the same rent that was charged the previous tenants. You will be responsible to ensure that all Tenant Declarations are completed, signed and retained on your file in the event that CMHC monitors your property at a future date. 21. Does CMHC find the tenants for the landlord? No, CMHC does not provide tenant lists for landlords. You may want to contact your local Municipal Office, ODSP or Social Services Departments for a list of low-income individuals seeking rental accommodation. 22. What happens if I decide to sell the property before the forgiveness is earned? If you decide to sell your property before the forgiveness is fully earned, the unearned portion of the forgivable loan may become due and payable at the time of the sale. 23. Can I re-apply for the program after I have already received assistance once before? Owners of properties which have previously received RRAP may reapply for a second loan, 15 years after the date the original RRAP loan was approved, provided that the outstanding balance of any previous repayable loan has been repaid and the forgivable loan has been earned in full. The amount of the previous RRAP assistance is not deducted from the maximum Rental RRAP loan currently available. Owners of properties which have received RRAP loans less than 15 years ago may be eligible for reduced assistance. The combined total forgivable loan amount of both the original and the second loan cannot exceed the maximum in effect at the time for the second loan application. 4
Current eligibility criteria must be met, e.g. rents at or below MMR, property requires major repair, etc. A second loan will not be considered until any arrears or losses on the first RRAP loan are paid in full. 24. Will CMHC require a lien or a mortgage on the property? If the RRAP loan exceeds $25,000, a mortgage will be registered against the property. Otherwise, if the loan is less than $25,000, CMHC will only require a Promissory Note as loan security. 25. Does the property need to comply with the Municipal Zoning requirements? It is the property owner s responsibility to ensure that all local requirements are met. 26. Who is responsible for the permits? Again, the property owner will be responsible to ensure that the appropriate permits are obtained, from the Authority having jurisdiction, before any work gets underway. 27. What does Other Encumbrances mean? Other encumbrances may include other mortgages, loans, collateral mortgages, lines of credit, promissory notes and/or any other claim registered against the property title. 28. Why is it necessary to forward balance of all encumbrances and assessment notice or recent appraisal? We require evidence that the total encumbrances (mortgage and/or loan) registered on title and CMHC RRAP forgivable loan will not exceed the current market value/property assessment of the project. 29. Can legal fees and permits be included in the loan? Legal fees and permits may be included with the RRAP loan. 30. Will an Environmental Site Assessment be required at the time of loan application? If you are applying for the RRAP Conversion program and the proposed new project will contain more than 6 units, CMHC will require the favourable results of a Phase I Environmental Site Assessment (ESA) duly completed by a qualified environmental consultant in accordance with the Canadian Standards Association. 31. If I am applying for the Secondary/Garden Suite Program, can I do any type of suite? The creation of a secondary suite or a garden suite must be modest in size and cost. 32. If I am applying for the Secondary/Garden Suite Program, can the occupants of the newly created suite be a relative? Yes, unlike the Rental Guidelines, where secondary or garden suites are being created, 5
the new unit can be rented to eligible family members provided they meet the income requirements. If the Senior or disabled tenant moves out, upon turnover any subsequent tenant can rent the Secondary/Garden suite unit as long as the tenant meets CMHC s income requirements. 33. Can the owner of the property do the work themselves? The work can be completed by the Owner/Landlord provided that the Owner/Landlord is a contractor/renovator normally employed in the building or renovation industry and the contract price submitted is reasonable, i.e. competitive, and the work will be satisfactorily completed and meets local requirements. If the owner/landlord is not employed in the building or renovation industry, CMHC will only pay for the cost of the materials. 34. How long does it take to find out if I will receive funding? Once CMHC receives your application, every effort will be made to complete the review in a timely manner. The length of time it takes will depend on the number of applications received and the budget available. 35. Will I be notified if my property is not selected for funding? Receipt of all applications will be acknowledged. If an application package is not complete, the package will be returned to you to be completed. Applications that do not meet the minimum qualifying criteria will be returned to the applicant. In the event the budget is fully committed, your complete application will be kept on file for a period of 6 months. Should budget become available within that 6 month period you will be contacted by CMHC. After the 6 month period, the application will be declared outdated and a new application package with updated information will need to be submitted for consideration. 36. Who will review my application? CMHC s will be reviewing all applications received within their office to determine completeness and eligibility of the applicant s request. 37. What is the minimum property age to be eligible for Rental/Rooming House and Conversion program? The property must be a minimum of five years old to be eligible for CMHC funding. 38. Can I apply if I reside in one unit and rent the other unit (s)? You can apply providing the rental unit is self-contained and meets CMHC s qualifying criteria for the program. The property must also comply with Municipal by-law and zoning requirements. 6
39. Where do I send my completed application? Depending on the location of the project, the complete application for assistance should be sent to the CMHC representative indicated on the following list: CMHC Contacts (Name/Address) Telephone Area of Delivery Mail applications to: CMHC, Special Initiatives, Ontario Community Development, 2037 Long Lake Road, Unit A15, Sudbury, Ontario P3E 6J9 Lise Riopel 705-523-2938 Districts of Parry Sound, Nipissing, Muskoka, Haliburton, Simcoe, Sudbury, Timiskaming, Manitoulin (including Region of Sudbury), Algoma & Cochrane; Districts of Thunder Bay, Rainy River, Kenora (including the City of Thunder Bay) Mail applications to: CMHC, Special Initiatives, Ontario Community Development, 25 Main St West, Suite 1000, Hamilton, Ontario L8P 1H1 Christina Walton 905-570-7374 Vania Farina 905-570-7373 Counties of Brant, Hamilton-Wentworth, Haldimand- Norfolk and Niagara (including the Cities of Hamilton, Brantford, Niagara Falls and Welland) County of Wellington (including City of Guelph), County of Dufferin & Grey Counties of Huron, Perth, Middlesex (including City of London), Counties of Essex, Lambton, Elgin, Kent & Oxford (including the Cities of Windsor and Sarnia) Counties of Bruce and Waterloo (including the Cities of Kitchener and Cambridge) Mail applications to: CMHC, Special Initiatives, Ontario Community Development, 100 Sheppard Ave E, Suite 500, Toronto, Ontario M2N 6Z1 Sandra Arsenault Lindsay MacNeil (and) Ishita Panchal 416-250-3270 Counties of Peterborough, Northumberland, Victoria & Durham, City of Oshawa, York Region, Counties of Halton & Peel (excluding the City of Mississauga) 416-250-3287 416-218-3316 Cities of Toronto and Mississauga Dorothy Robinson (and) Sadna Luchman 416-250-2749 416-250-3275 City of Ottawa, Counties of Renfrew, Lennox & Addington, Frontenac, Prince Edward, Hastings, Lanark, Leeds, Grenville, Prescott & Russell, Glengarry, Stormont and Dundas, City of Kingston 7
program definitions Commitment means a written undertaking to advance funds for an identified unit or project and to incur budgetary or non-budgetary expenditures related thereto. Core Housing Need means those households in need, who cannot afford or cannot obtain adequate and suitable accommodation, and cannot afford to solve the problem themselves. Eligible Repair means those repairs required to correct deficiencies in the structure or systems (plumbing, heating, electrical, fire safety). Garden Suites are small houses (usually prefabricated) that are placed on the same lot of an existing single family residential dwelling. Household means a person or a group of persons who occupy on a regular basis or who have need of a unit. Income See Total Household Income. Income Threshold means the financial test utilized for the purpose of determining targeted households. In Ontario the income thresholds are referenced as Core Need Income Threshold (CNIT). Market Area means all off-reserve municipalities, townships, districts, counties and parishes with populations of 2,500 or more, i.e., all urban areas of the country, are market areas. Median Market Rent means the maximum rent, including utilities (e.g. heat, electricity, water but do not include other services, parking, cable, phone and internet) that can be charged by a landlord in order to qualify a unit under the program. It is based on the number of bedrooms in the unit. National Occupancy Standard means the prescription used for calculating the Core Need Income Threshold, i.e. the appropriate unit size, in terms of bedroom count, for a household of a given size and composition as follows: no more than 2 nor fewer than 1 person per bedroom; parents do not share a bedroom with their children; permanent household members aged 18 or more (except couples) do not share a bedroom. dependents aged 5 years or older of the opposite sex do not share a bedroom. Non-Market Areas means areas that are rural in nature and lack a rental market within the rural area itself or in proximate area. Non-Residential Property means building or part of a building that is not intended or zoned for human habitation or residential use. Owner means owner(s) of a property including the person(s) to whom one or more of the following conditions apply: the freehold owner(s) with clear title to a housing unit containing at least one or more units; the executor(s) or other legal representative(s) of the estate of such person(s); the mortgagor(s) who has/have an equity of redemption in a housing unit containing at least one or more rental units under a mortgage, trust agreement or contract; purchaser(s) of property under a signed agreement for sale; 8
lessee(s) of property under a lease expiring not less than three years after the maturity of any loan made to the lessee(s) of land under the Act; lessee(s) of land under a lease from the Crown or from any municipality when the lessee(s) own(s) a home located thereon; and veteran(s) with whom the Director, Veterans Land Act, has a subsisting contract for the sale of land made pursuant to Part I of the Veteran s Land Act. Post-RRAP Rents means those maximum monthly rents that can be charged immediately following the completion of the repairs/conversion. Remote means areas or communities (both on and off-reserve) in RRAP Zones 2 and 3 with populations equal to or less than 2,500, that do not have year-round road, rail or ferry access. Residential Care Facility means a residence where on-site medical care is provided for persons who are referred by an agency or association working in conjunction with a provincial agency. Care/accommodation payments may be paid directly by the provincial agency or by the person receiving care. The property may or may not be licensed as a residential care facility, depending on the province. On site medical care does not include temporary care such as nursing or home care, where the professionals are working on the site for brief periods during the day. Rural means off-reserve rural areas or communities having a population of 2,500 or less or rural municipal jurisdictions having a population of greater than 2,500 but where the population is dispersed (i.e. the population core is less than 2,500). Secondary Suites are self contained apartments in single, semi-detached and row houses. They are also called accessory apartments and in-law suites. Self-contained Units means a unit providing therein living, sleeping, eating, food preparation and sanitary facilities for a household. Special Purpose Housing means hostel or self-contained housing, used as a principal residence which includes on-site care services and facilities, excluding food, related to residents common physical, social and emotional condition or disability. Sweat Equity means the value of labour that clients contribute without charge to repair or improve the housing unit. Total Household Income means the total income (before tax) from all sources for all persons in the household 16 years of age and over, as defined by Statistics Canada. The gross income of households with disabled members is to be reduced by the federal disability tax credit of the previous year. Also, households with disabled members will exclude the income of non-family, live-in caregivers. Transitional Home means an extended-term, interim housing project for those leaving emergency shelters, providing accommodation generally for a period not to exceed one year. Urban means communities having a population of more than 2,500 based on the most recent census, except rural municipal jurisdictions having a population greater than 2,500 but where the population is dispersed. Note: The definitions contained in the National Housing Act and the National Housing Loan Regulations shall also apply. 9