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    CHF Canadas Refinancing ProgramCHF Canadas Refinancing ProgramCHF Canadas Refinancing ProgramCHF Canadas Refinancing ProgramPresenters: Janet Shim, Program Manager, Refinancing

    Randy Harris, Financial Consultant

    Housing Services Corporation Regeneration Forum

    May 9, 2016 Toronto, ON

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    IntroductionIntroductionIntroductionIntroduction

  • 2

    Introduction Introduction Introduction Introduction

  • 3

    Why Refinancing for Why Refinancing for Why Refinancing for Why Refinancing for Housing Housing Housing Housing CCCCoooo----opsopsopsops????

    Section 95 refinancing pilot project

    Mondragon Co-op, 78 units in Brampton, Ontario

    Alterna Savings Credit Union

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    Advantages of Refinancing?Advantages of Refinancing?Advantages of Refinancing?Advantages of Refinancing?

    Existing reserves and future reserve contributions not

    enough for cost of repairs

    Reduced future maintenance costs because of new repairs

    and renovations

    Economics of scale on renovations

    Repairs completed immediately

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    Advantages of RefinancingAdvantages of RefinancingAdvantages of RefinancingAdvantages of Refinancing? ? ? ? ContdContdContdContd

    Less disruption and lower maintenance costs compared to

    waiting for repairs/waiting for first mortgage to end before

    new borrowing

    Could be small or no impact on existing mortgage payment,

    we will work with your co-op here

    Avoids large housing charge increases to pay for needed

    repairs

    Dealing with a lender that you own (Credit Unions are

    financial co-operatives)

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    Refinancing Refinancing Refinancing Refinancing How it works in simple languageHow it works in simple languageHow it works in simple languageHow it works in simple language

    It means taking out a new mortgage, for an amount that

    pays out the existing mortgage, plus an amount for the

    needed repairs, and extending it for a longer period of

    time.

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    Refinancing Refinancing Refinancing Refinancing How it works in simple How it works in simple How it works in simple How it works in simple language language language language contdcontdcontdcontd

    EXAMPLE:

    $28,000/month existing mortgage payment

    Existing CMHC mortgage of $1.8 million

    At 4.5% interest rate, a co-op could borrow $4.5 million

    Pays out CMHC mortgage of $1.8 million

    Leaves $2.7 million for repairs (covers 10 years of BCA-

    identified repairs)

    Amortized over 25 years

    New mortgage payment of $27,192/ month

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    Basic Lender Requirements

    Repayment financial ability to service a larger mortgage

    Maintenance of the Property adequate Reserves to finance

    BCA scheduled repairs

    Security Value new mortgage cannot exceed 75% of the

    appraised value

    Governance and Management - annual reporting for the

    entire new mortgage amortization period

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    CHF Canadas RoleCHF Canadas RoleCHF Canadas RoleCHF Canadas Role

    Financial expertise and analysis

    Attend board/member meetings

    Mortgage Support Agreement

    Post- refinancing services (BCA, AMP, project management

    services etc.)

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    Lenders ComfortLenders ComfortLenders ComfortLenders Comfort

    Step by step refinancing process

    Obtaining a BCA report / update

    Credit union process

    Government process

    Mortgage Support Agreement

    Ongoing support to the co-op

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    Lessons LearnedLessons LearnedLessons LearnedLessons Learned

    Creative Lending Solutions

    Size does not matter

    Does not necessarily increase your mortgage payments

    Complex financial arrangements

    Credit Union experience and understanding

  • 12

    Our Credit Union PartnersOur Credit Union PartnersOur Credit Union PartnersOur Credit Union Partners

    Supporting the co-operative movement

    Alterna Savings

    Collaboration- Key to the success of the program

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    To assess preliminary eligibilityTo assess preliminary eligibilityTo assess preliminary eligibilityTo assess preliminary eligibility

    Call or email Janet Shim at

    CHF Canadas Office

    1-800-268-2537 / 416-366-1711 ext 239

    jshim@chfcanada.coop

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    Any questions?Any questions?Any questions?Any questions?