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For housing co-operatives, land trusts and non-profits, specialized financing is the missing piece to scale affordable housing

Unaffordable purchase prices, rapidly increasing rents, and rising interest rates are just a few of the many obstacles Canadians currently face when trying to secure a place to call home.

For housing to become more affordable and accessible, systemic changes must take place. But the government and the market on their own can’t solve the complex housing problems we face.

Many land trusts and non-profit organizations are making a difference by preserving or creating new affordable homes. But before they do that, they’re often stuck with the same old problem: accessing financing fast enough to be able to quickly react to a competitive housing market.

Other entities, like housing co-operatives, face their own financing hurdles. Housing co-operatives are not a new concept by any means, they have existed in Canada for decades offering a middle ground between owning and renting – housing tenure that doesn’t require a down payment.

Since they operate on a break-even basis, housing co-ops are often much more affordable than market rentals. But because most co-ops were built in the ’70s and ’80s, the cost of needed repairs can be prohibitive and challenge a co-op’s existing level of affordability.

“When searching for financing, housing co-operatives tend to go to CHF Canada, which provides valuable advice and resources for co-ops. After consultation CHF Canada usually refers them to impact lenders like VCIB for financing,” says Eric Visser, Director of Commercial Real Estate at Vancity Community Investment Bank (VCIB).

“Since co-ops are often searching for smaller and more flexible loans, they struggle to get support from big banks as it can be a lot of work for a lender. But VCIB doesn’t shy away from putting that extra effort.”

A values-aligned financing partner

Born from Vancity Credit Union’s co-operative roots and values, VCIB offers financing tailored for impact-driven organizations to preserve and scale Canada’s affordable housing stock.

“We’re the only bank in Canada that has a 100% impact mandate, which means we only provide financing to organizations and projects driving positive change,” says Eric.

Two years ago, VCIB and Canada Mortgage and Housing Corporation (CMHC) announced a first-of-its-kind agreement to accelerate the delivery of affordable housing across Canada, providing financing for more than 1,100 units of affordable homes in 2021.

VCIB’s long-standing relationship with CMHC enables them to work together to provide housing co-operatives and affordable housing developers with uniquely structured loans that meet their specific financing needs. One example is VCIB’s financing for Innisfree Housing Co-op.

Innisfree Housing Co-op needed financing to make urgent repairs on the property. Unlike many competitors, VCIB allowed the team at Innisfree to allocate their funds where they deemed them to be most important.

“We wouldn’t have been able to offer our decent home standard, if we had restrictions on how we used the loan. I can’t emphasize enough how important that is,” said Don Jones, Innisfree’s onsite property manager.

More recently, VCIB supported Union Co-operative’s purchase of two apartment buildings to preserve the affordability of the buildings’ 58 units in perpetuity.

“The financing Union Co-op required was very unique and required a tailored solution. We dove into the details and really helped structure the loan in a way that was flexible for the borrower,” said Chloe Wong, Commercial Account Manager at VCIB.

Learn more about VCIB’s social purpose real estate financing in our website. If interested in chatting with VCIB about your financing needs, get in touch.

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Vancity Community Investment Bank is a member of CDIC and is a Certified B CorpTM