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The Purchase Plus Improvements Program

Posted by AJ Hazzi on Monday, November 18th, 2019 at 12:30pm.

The Purchase Plus Improvements Program could help you make improvements to your new home.

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Today I’m discussing a program that I love and one that many people don’t know much about. It’s called the Purchase Plus Improvements Program. It’s offered through CMHC, the government insurance company that insures high ratio mortgages. This is a tremendous product for people who have saved up for a down payment for a home, but if you’ve just drawn your down payment together, that doesn’t leave you with much room to improve the home once you own it. This program especially works for this particular type of buyer.

One thing we regularly find when working with buyers, especially those working with a smaller budget, is it’s difficult to find a home in the location you want, has the bones you want, and meets your tastes. Looking for a home like that tends to go on forever, and it’s hard to find. If you do find it, you certainly pay a premium for it. What I love about this program is that you can begin looking at these diamonds in the rough, ones that perhaps have some deferred maintenance or need cosmetic improvements, and you get the opportunity to make them your own and create some equity along the way. The best thing about it is that it’s not your money, it’s part of the loan that gets wrapped into the overall mortgage.

How they do it is pretty simple. They look at a home, let’s say, for example, one that is $500,000. They’ll get an appraisal that says, based on the renovation that you propose, what would be the after-renovation value? Hypothetically, let’s say the appraiser says it’s $600,000. In this program, you can have up to 10% of the after-renovation value. So now you would have a $60,000 loan from the bank that would be part of your original mortgage that would go toward these value-added renovations. The best part about it is, you picked up $40,000 in sweat equity using someone else’s money. That’s a pretty great deal. Not only did you get a house that you love but you also made some money, which is the purpose of real estate forced appreciation.

"I would advise you or anyone you know who is considering purchasing a home but is on a budget and maybe doesn’t have the cash to do a renovation to think about the Purchase Plus Improvements Program. "

Here at Vantage West, we love this program because we enjoy consulting on these kinds of things. In fact, we have our own construction company that can provide the quotes and help you through the process to figure out what you should do to the property to receive the most value and make it your own.

I would advise you or anyone you know who is considering purchasing a home but is on a budget and maybe doesn’t have the cash to do a renovation to think about the Purchase Plus Improvements Program.

I’m looking forward to working with you or anyone you know that wants to take advantage of this awesome program. If you have any further questions about the Purchase Plus Improvements Program or anything else concerning real estate, give me a call or send me an email. I would be glad to help you.

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