Financing

The cost of a multifamily home or residential building built by Shelter must be paid on a monthly basis for work in progress. The work includes work on the site to be developed as well as work in the factory before the building modules are ready for delivery to the site.

These payments for work done can be made with a line of credit secured against other real estate assets, or, with a construction loan referred to as an "interim" loan, which is based on the appraised final completed value of the proposed improvements to the property being developed. The interim loan to pay these costs can then be repaid with a "term mortgage", often referred to as "take - out" financing registered on the developed property once the work has been completed.

There is a range of financing solutions that can be provided. Call us to discuss your situation at (604) 230-9392 so we can recommend the best way for you to proceed to obtain approval for financing with our mortgage broker at Mortgage Intelligence.

An interim loan refers to all funds used for the purpose of constructing the new duplex or multifamily residential building. It could be:

1. with no down payment because the land value can be used as security;
2. without mortgage insurance costs; and,
3. without construction loan management fees.

For example, let's assume a future multifamily homeowner ("FMFHO") decides to build on their land. The FMFHO would apply for a construction loan and a term mortgage, both based on the appraised value of a completed building on the property when the contract has been completed. The construction loan is used to make the monthly payments for work completed and the term loan, a long-term amortized mortgage, is used to pay out the construction loan when the building work has been completed.

During construction, the FMFHO is billed monthly for interest as it accrues on the amount borrowed to pay the Shelter contract, or, interest could accumulate and be added to the loan for repayment at the end of the construction process.