Liberals extend federal low-cost construction loan program to student residences

The federal government says its low-cost loans program for affordable housing construction is being expanded to include student residences.

Housing Minister Sean Fraser made the announcement Monday in Ottawa. He said broadening the Apartment Construction Loan Program to include student residences will help students find housing across the country.

«This is an important policy change,» Fraser said. «It's not just going to create more affordable places for students to live near where they're going to school. It's also going to relieve pressure on the housing market by freeing up housing supply that already exists in communities that are seeing students need to compete in the market more broadly.»

Fraser said colleges and universities can apply for the loan funding to build residences themselves, and non-profit builders and developers are also eligible to apply.

In last year's fall economic statement, the federal government announced that it was providing $15 billion in new low-cost loans starting in 2025-26 to encourage construction of new rental apartments across Canada.

Under the program, developers can get a loan for a ten-year term at a fixed interest rate, with an amortization period of up to 50 years.

According to the terms of the program, developers and builders only have to pay the interest on the loan during the construction period and only have to start paying both the principal and interest «after twelve months of stabilized effective gross income» on the rental unit.

At the end of the ten-year term, the builder or post-secondary institution must then move their loan to a Canada Mortgage and Housing Corporation-approved lender.

Housing experts say the massive recent spike in non-permanent residents has had a