Nobody wants to be left behind.
Over the past 30 years, the cost of home ownership has increased dramatically in the Toronto region. First, it was low-income earners who struggled to own. Now, it’s moderate-income earners including young working professionals who find themselves priced out of a real estate market that, just a few years ago, was within reach.
Options for Homes, an affordable housing developer and mission-driven social enterprise, has been working to reverse this trend for 25 years. To do so, Options develops high-quality condos and offers buyers up to 15% in down payment assistance, helping to make home ownership possible for individuals and families making as little as $40,000 per year.
Since 1994, Options has created housing for more than 3,000 people, supporting wealth building and financial security for low and moderate-income people. Their latest Toronto-based project, The Humber, continues this legacy.
The Humber: Building Community in Weston Village
The new project is located on a quiet street in the Weston Village neighborhood, steps from the tree-lined Humber River Valley. The condo is on the site of a formerly abandoned automotive shop and is helping to drive new activity in the up-and-coming neighborhood.
Once construction is complete, the project will provide housing for 232 families.
“We’re trying to help a group of people who have the capacity to own,” explains Heather Tremain, CEO of Options for Homes. “They have good stable incomes, but they don’t have enough for a down payment.”
Early purchasers include new Canadians, young families and working professionals who are finally realizing their dream of owning a home.
To be eligible for down payment assistance, a purchaser must have saved enough to cover 5% of the purchase price—about $25,000 for a two-bedroom unit in The Humber—and intend to live in their home. Options actively deters investors as a way to ensure housing affordability goes to those who need it and to foster a sense of community pride that comes through ownership.
“When you talk about the housing crisis, it’s a crisis across a whole system.” Tremain explains. “There’s a homelessness crisis, there’s a crisis in the rental sector, and there’s a crisis of affordable home ownership.”
“In order to solve the housing crisis, we’re going to need a multitude of solutions. And Options is part of that,” she said.
The Options Model: How Does it Work?
Options for Homes developments are built by Deltera, a part of the Tridel Group of Companies. Deltera builds well-constructed and beautifully appointed buildings that balance quality, affordability and style.
Like any developer, Options then sells the units to interested buyers. In doing so, it offers down payment assistance that boosts the buyer’s 5% down payment by 10%-15% of the price of the unit.
As Tremain explains, “by accessing an Options down payment loan, buyers are now in a position to have a conventional mortgage, rather than a high-ratio mortgage. This also helps them to save on mortgage insurance.”
Additionally, the Options down payment loan is payment-free for as long as the unit is occupied by the owner, reducing the monthly carrying costs of their housing.
When the buyer eventually sells, they repay the down payment loan as well as a 10%-15% share in the unit’s appreciation (depending on the down payment support received). Options then puts that money into a “pay-it-forward fund” and the cycle repeats for future developments and future buyers.
Partnering with VCIB to Drive Impact
In financing The Humber, Options for Homes turned to Vancity Community Investment Bank (VCIB).
“We’ve had a long-standing relationship with VCIB,” Tremain explained. “They’ve been very supportive of our projects in the past and have been an important partner in supporting us to achieve our mission. Given that history, when we started to look for financing for this project, we looked to VCIB.”
To support Options, VCIB extended a syndicated construction loan of more than $80,000,000 for the Humber, providing construction financing for the project.
“The VCIB staff just really get what we’re trying to do. They understand social impact, and they understand the financing of these projects, and it makes them a great partner for our team,” Tremain explained.
For Caroline Rauhala, VCIB’s Director of Impact Lending, the value of the Options model—and what has inspired the bank to support four Options developments and counting—is its ability to build community capital. “Not only are 232 families and individuals about to become homeowners, they’re going to build equity, and later, they’re going to pay it forward to help more families do the same,” said Rauhala.
“So much more than just a house”
Although the project only broke ground recently, the condos are nearly sold out—and local businesses are thrilled.
“This is one of the first developments in this neighborhood since the ’90s,” Tremain explained. “The local Business Improvement Association is very supportive of this development, because they know that helping to bring more people into the neighborhood is going to be positive for local businesses.”
For the families and individuals involved, the development will make a world of difference.
“We help people, who couldn’t otherwise, to purchase homes. This takes pressure off the rental market; and it also has positive benefits for so many aspects of people’s lives,” Tremain said.
“Home ownership affects the rate of a buyer’s children accessing higher education. It also affects health outcomes. Home ownership touches so many areas of individuals’ lives.”
“It’s so much more than just a house.”
The information provided herein is intended for informational purposes only and is not intended to constitute investment, financial, legal, accounting, tax or other advice and should not be relied upon for such purpose. Always consult a professional regarding your specific needs and circumstances. The customer endorsements that appear on this page were solicited by VCIB.
