Client Objective: exit early from Section 95 agreement to build
An affordable housing provider with three years left on its Section 95 agreement wanted to exit early to pursue a building opportunity. With an early exit, the client could refinance its existing property and access the equity required to build approximately 100 new units, creating another vital revenue stream.
The First National Solution: secured $3.5 million in financing
The client’s financing goals were twofold. First, secure ample funds to pay out CMHC for the early Section 95* exit. And second, access enough equity to cover early development costs. The First National team recommended a conventional solution and ultimately secured $3.5 million in financing for the client’s two key requirements.
The First National Approach: affordable housing and construction financing expertise
The First National team played a consultative role, providing a combination of affordable housing and construction financing expertise. For the early exit from the Section 95 agreement, the First National team provided needed advice and guidance. For the development project, the team was able to delve deep into the client’s construction strategy, acting as a key business partner in the client’s ongoing viability.
*During the 1970’s and 1980’s, the Federal Government established these Section 95 agreements with property owners to create a steady stream of affordable housing in some of Canada’s largest cities. The agreements were put in place to help these owners offer affordable housing while accelerating their ability to pay down their mortgages.
Based on the obligations and restrictions of these agreements, many owners were able to operate their properties, but could not upgrade them. Owners now find themselves wanting to continue to provide affordable housing, but their properties require significant capital improvements, and they lack sufficient funds to execute on them
Transaction managed by Team Cook.