CMHC Programs for Secondary Suites: What's Actually Available Now

“CMHC-backed” and “cheaper” tend to go together, because a program carrying federal mortgage insurance or federal loan capital behind it can offer terms a conventional lender simply cannot match on its own book. That is still true for secondary suite financing, but the specific programs on offer changed in the 2025 federal budget, and a lot of homeowners and even some lenders are still working off outdated information. This piece sets the record straight on what happened to the CMHC Secondary Suite Loan Program, and then goes deep on the CMHC Refinance Program, which is the federally backed option actually available today. For the full picture including HELOCs, standard refinancing, and construction draw facilities, the complete ADU financing guide covers the broader landscape this article sits inside.

The CMHC Secondary Suite Loan Program was cancelled in the 2025 federal budget

The Secondary Suite Loan Program was announced in the 2024 federal budget and offered financing of up to $80,000 to help homeowners add a self-contained secondary suite to their existing home, at an illustrative rate of 2% over a 15-year amortization, with no prepayment penalties. It carried an income eligibility cap of $209,420 for most of Ontario. It was cancelled in the 2025 federal budget because it overlapped with the CMHC Refinance Program, the 90% loan-to-value insured refinance introduced in January 2025 covered in depth below. The two programs were solving the same problem, and the government consolidated into the one that reaches more homeowners and larger builds. The practical result: the $80,000-at-2% loan is not currently available. If you have heard of this program, whether from a contractor, a forum post, or an older article, it is no longer something you can apply for, and any financing plan built around it needs to be re-run against what is actually on offer now.

The CMHC Refinance Program, in depth

The CMHC Refinance Program, introduced in January 2025, is now the primary federally backed financing path for a homeowner adding a secondary suite. Under standard refinancing rules, the loan-to-value ceiling on a refinance is 80% of the property's current appraised value. This program raises that ceiling to 90% LTV, and it changes what that 90% is calculated against: the as-complete appraised value of the property once the secondary suite is finished, not the value today. Maximum loan amounts under the program go up to $2 million.

That distinction is the entire point of the program. A property appraised today at $700,000 with a $400,000 existing mortgage gives access to roughly $160,000 through a standard 80% LTV refinance. If adding the secondary suite brings the as-complete value to $900,000, the 90% ceiling is applied against $900,000, not $700,000: a maximum loan of $810,000, and available proceeds of $410,000 against the same $400,000 existing mortgage, more than double what the identical property would generate under conventional refinancing. For a build costing $180,000 to $220,000, the realistic range for a larger secondary suite or a garden suite in most Ontario markets, this is frequently the only single-transaction structure that covers the full cost, and at up to $2 million in maximum loan size it also reaches well beyond what the cancelled $80,000 loan ever could.

The property must end up with one to four units once construction is complete, and the borrower has to occupy one of those units. This is an owner-occupied program, not a vehicle for financing a pure rental conversion. Because the increased LTV is achieved through mortgage insurance, CMHC's insurance premium applies on the insured portion of the loan. The exact premium varies by LTV tier and is set by CMHC's published premium schedule, so it should be confirmed for the specific LTV a given file lands at rather than assumed. It is a real carrying cost, and it needs to be built into the return calculation on the project, but it is the toll for accessing loan proceeds against a future value that no other insured product will lend against on a primary residence.

Because the qualifying value depends on an as-complete appraisal, the appraiser's opinion of what the property will be worth once the suite exists becomes the single most consequential number in the file. A conservative as-complete estimate shrinks the available proceeds meaningfully, which is why realistic comparables and a clear scope of work in front of the appraiser before that valuation happens are worth the extra coordination.

Who the CMHC Refinance Program actually fits

With the Secondary Suite Loan gone, the CMHC Refinance Program now sits alongside HELOCs, standard cash-out refinancing, and construction draw facilities as the options on the table, rather than alongside a second CMHC program. It tends to fit best when existing equity is not enough to fund the build on its own: a homeowner with a modest amount of equity and a build in the $150,000-and-up range is the typical case where the 90% LTV-against-as-complete-value structure closes the gap that a standard 80% refinance or a HELOC cannot. A homeowner with substantial existing equity and a smaller build may find a standard refinance or a HELOC gets the project done without the insurance premium at all, and that comparison is worth running before defaulting to the insured program. If the suite's rent needs to help the file qualify, the treatment of that projected income varies by lender and by whether the property is owner-occupied or a standalone rental. The rental income qualification guide covers that piece in full.

Why CMHC restructured its secondary suite financing

The underlying policy goal has not changed: a deliberate federal and provincial push toward making secondary suites and additional dwelling units easier to finance and build. Ontario's Bill 23, the More Homes Built Faster Act, made secondary suites and garden suites as-of-right in most municipalities starting in 2023, removing the rezoning barrier that used to stop these projects before they started. The Secondary Suite Loan was the first financing response to that policy shift, and the Refinance Program was introduced months later to reach larger builds and homeowners without enough equity to bridge a construction period on their own. Once both existed, the overlap between them was the rationale the 2025 budget gave for folding the smaller program into the larger one rather than running two federal products aimed at the same outcome.

The program rewards homeowners who plan the financing before the first shovel goes in the ground, not partway through the build when the equity and cash-flow questions become urgent. The right structure still depends on the build cost, the existing equity position, and household qualifying income. Run your own numbers through the ADU Financing Calculator to see how the CMHC Refinance Program compares to a standard refinance or HELOC for the project you are actually planning.