, For Home Renos
Renovating a home to make it more energy efficient can be expensive, but the Canada Mortgage and Housing Corp. (CMHC) offers a program that could reduce the sticker shock.
CMHC Green Home offers a refund "equivalent to" 10 per cent of CHMC mortgage loan premiums for those who use CMHC-insured financing to pay for a renovation that increases the energy-efficiency of a home.
Legalese aside, the program, which dates back to 2004, offers an incentive for homeowners looking to either renovate their home to be more energy-efficient, buy a home undergoing improvements, or build or buy a new green home, says CMHC business development representative Nicole Lilge.
"Our Green Home product is great for people looking for high-ratio financing and have plans for (an energy-efficient) home renovation or new home," she says. "And you can go online and fill out the form."
There are several steps to take in applying for the CMHC Green Home program.
First, and before any renovation work begins, says Lilge, you need to have your home inspected by an energy adviser qualified by the Office of Energy Efficiency (part of National Resources Canada) to determine the home’s EnerGuide (energy efficiency) rating at the outset. According to the CMHC, after taking this baseline reading of the home, the adviser will then provide suggestions for improving that rating as part of your upcoming renovation work.
For the second step, "the main thing is to talk to your lender or your broker to say we’re purchasing a home that we know is green, or we will be renovating a home," says Lilge. At that point, the homeowner can find out what CMHC insurance-related refinancing options might be available.
After that, the saws and hammers come out and work begins on your renovation, addition, teardown and rebuild, or whatever vision you have for your home.
Once the dust settles, and within 24 months of completion, a second inspection by an energy adviser must be conducted to determine whether efficiency has actually been improved.
CMHC’s website says the threshold of improvement for a home reno has to be at least five points and a minimum overall EnerGuide rating of 40. For new homes, the EnerGuide rating minimum ranges from 77 and 82 – the number varies depending on the purchase-closing date and was recently increased to 82 for purchases closing on Jan. 1, 2013, or later. Hit the magic number, and you may be eligible for the premium refund. You can apply via an online form or download the application and mail it in.
Although the program has been in place for nine years, homeowners are often not aware that it’s available as a potential option when they finance a major renovation, says Ryan Scott, president of Avalon Master Builder.
"Quite a few of our customers have taken advantage of it — but almost none of them were aware of it prior to purchasing a home from us," he says. "It is a perk of buying from a green builder.
"The biggest challenge is awareness of the program, and what it means to (customers) and how much money it can save them. The paperwork is pretty simple."
Scott says, whether building new or renovating, clients often misunderstand some of the terminology used in building. "A lot of people think ‘building to code’ builds you an (energy-efficient) house," he says. "It builds you a house that is safe — ‘code’ is all about safety, it’s not about energy-efficiency. Building a house ‘to code’ isn’t good enough."
Although an exact breakdown of how many home renovations have taken advantage of CMHC Green Home isn’t available, Lilge says, "since 2004, Green Home has provided more than $6 million in premium refunds."
Green Home is one of a number of CMHC resources, including information resources, available to homeowners and renovators, says Lilge. There are brochures available on a variety of topics via links on the CMHC Green Home website
"(Homeowners) can also take advantage of our Purchase Plus Improvements Program, where you would include the cost of your renovation in your mortgage at the outset," says Lilge.
The program allows those buying homes that need to undergo major renovations to roll the cost of that work into a single monthly mortgage payment rather than having to create separate financing, if the cost of the renovation work is known.
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