Mortgaging a Micro condo. Not everyone will mortgage these...
Those micro, small, studio and eco friendly condo's are popping up all over Vancouver. 300sqft to 500sqft or less! These shoe-box small condo or micro-apartments appeal to city lovers who love a prime downtown location over the lofty large places of the Fraser Valley.
The challenge lies in getting a mortgage. They can be difficult to finance if you don't know who to apply with. Not every lender will finance condo's less than 500-600 sqft. Lenders today are looking at these small units on approval on a case by case scenario.
If you're looking at financing these, you will definitely want to have a mortgage broker doing the leg work for you. We can take your application, your property documents and start asking all our internal sources for ideas, rates and such for your property.
The smaller the square footage, the fewer mortgage options you will have access to and you may not get one of those enticing “promo” rates because you’re limited to just a few lenders.
CMHC (if your going 5-20% down) doesn't have any restrictions on the condo size, so it's really up to the lender's policy, your income and the property location.
Here is what I know as of today (January 29/2015) for the Vancouver Area:
National Bank - 445sqft
Scotia - 300 sqft (on exception and have a separate bedroom and one parking spot to be considered under 550 Sq ft)
TD - 400sqft on exception
Coast Capital - 300sqft
RMG (500 sqft, with insurer approval)
MCAP - Condominiums must contain one bedroom and be 500 square feet or greater. Studio lofts will be considered, however they must be over 600 square feet and the underwriter must confirm CMHC/Genworth has approved the building for insurance purposes. This would only apply in major centres such as Toronto and Vancouver.
Radius - 300sqft
Canadiana - 484 sqft
North Shore Credit Union
Vancity - 450
These are just some of the recent lenders we have been using. Their guidelines changes often, so this list is no way exhaustive or limited.
Kiki Berg, The Mortgage Diva