We specialize in providing financing to well-established real estate developers and condominium corporations in selective niche markets throughout Canada.
Our success in establishing ourselves as a long-standing and credible lender is due to our understanding of the marketplace, our strong appreciation of the development industry and our ability to offer cost-effective financing solutions in a timely manner.
Our real estate account managers have decades of successful lending experience, making our in-house real estate lending expertise second to none in the markets we serve.
We specialize in many areas of real estate lending for residential and commercial developments throughout Canada. Our substantial experience and successful track record, along with our access to ample resources, flexible terms and fast turnaround are among the many reasons our clients choose to work with us.
Our lending products include loans and mortgages to assist with development and to provide long-term financing for a variety of projects, including multi-family residential, retail centres, office buildings, medical buildings, industrial projects, public storage projects, seniors housing projects, land acquisition and servicing.
We are ready to put our experience and expertise to work for you and your development.
For more information on our Real Estate Financing, please email us at: [email protected] .
Condominium Corporation Financing / Strata Plan Financing
Condominium boards are entrusted with the critical duty of ensuring financial resources are available to provide for the repair, ongoing maintenance and eventual replacement of their condominium’s common elements. This becomes an especially difficult task when large, unexpected expenses, such as a roof replacement or building envelope repair, arise. Often, adequate reserve funds are not available to cover these unplanned costs and the board must determine how the corporation will pay for the work.
Our condominium corporation financing solutions allow condominium corporations to complete these repairs, without requiring owners to come up with large lump-sum special assessment payments or arrange their own financing.
Our experienced lending team is committed to working with property managers and condominium boards to ensure that the financing provided is optimal for our clients’ specific needs, manageable for the individual condominium owners and approved without unnecessary delays.
What We Offer
Renovation and Repairs
We provide short-term construction financing while repairs are underway, and long-term financing options that allow the costs of improvements to be paid over an extended period of time.
Short-Term Construction Financing
- Provides affordable monthly payments tailored to suit each condominium corporation’s specific needs
- Reduces interest costs by only drawing on the funds as they are required
- Allows for immediate funding of critical repairs
- Provides long amortization periods of up to 20 years, resulting in affordable payments for condominium owners
- Ensures competitive fixed interest rates
Loan Refinance and Lease Buy Out
Refinancing an existing loan can help your corporation save on interest costs. Here are examples of loans that your organization may want to consider refinancing:
- Mortgages on guest units or superintendent suites
- Equipment leases
- Developer loans
- Loans from other financial institutions
What are some of the advantages to borrowing funds rather than taking on the costs of special assessment or delayed repairs?
- Supports affordability –Many condominium unit owners find smaller monthly loan payments easier to manage than large special assessments.
- Protects unit values – Our financing provides the necessary funds to complete critical repairs in a timely manner and to efficiently maintain common elements.
- Minimizes project costs – Timely completion of work helps to avoid increasing the scope of work and overall project costs.
- Helps to keep the “Reserve Funding Plan” on track – Loans help to avoid depleting the reserve fund when unexpected costs arise.
- Distributes the cost of the work – Since loans are repaid over an extended period of time, financing helps to distribute the cost of repairs among those who benefit from them, both current and future owners.
- Provides streamlined loan approval– Loan approval is NOT based on the finances of individual unit owners.Individual credit checks are not required, and we do not ask for proof of income from individual unit owners.
FAQs – Condominium Corporation Financing – Strata Plan Financing
How does repair financing work?
Often we will provide the condominium corporation with two loans:
- The FIRST loan is a construction loan. Typically, the money from the loan is drawn on only as needed. This saves the corporation money in interest charges since the money is not borrowed until it is required.
- The SECOND loan is a term loan. This is a long-term loan used to pay off the construction loan once the repairs are complete. At the end of the term, the loan will come up for renewal and, subject to formal approvals,the interest rate will be reset.
Please note that only ONE loan will be advanced at any given time. The term loan replaces the construction loan.
Do all unit owners need to provide their personal financial information?
Loans to condominium corporations are made to the corporation as a whole rather than to individual unit owners. On behalf of all unit owners, the condominium board takes the corporation through the application process directly with our lending experts. We do not require individual credit checks on unit owners or their personal financial information.
How are the payments made?
The condominium corporation will submit ONE monthly payment to the bank. The corporation collects these funds from each owner, similar to how they collect monthly condo fees.
What happens if individual unit owners do not make their monthly payments?
If an individual unit owner does not pay for their share of the loan payment, the corporation will take the standard action to recover any arrears in payments owing to them. The monthly payments collected by the bank from the corporation will remain unchanged, regardless of any arrears from individual owners.
Why are your interest rates higher than the ones offered at my personal bank?
Within the condominium financing industry, rates are typically higher than personal lending rates. Our interest rates are competitive within our industry.
How will this affect my mortgage?
In condominium corporation financing the corporation is the borrower, not the individual owners. Consequently, a separate mortgage charge is not placed on each individual unit in the complex. This means that loans do not impact the current financial arrangements such as mortgages that individual unit owners may have in place. Instead, the loan balance owing, based on each unit’s pro rata share, is reflected in the status certificate of each unit.
Can I change the terms for my share of the loan – for example, increase or decrease mypayment amount or only partially finance my unit’s share of the repairs?
No. While each unit owner is responsible for their pro rata share of our loan, condominium corporation financing is provided to the corporation rather than directly to individual unit owners. This means that although we can tailor the loan terms to suit the corporation’s needs as a whole, we are unable to administer separate loan terms for each unit owner.
What if I sell my unit before the loan is paid off?
This will be negotiated between you and the buyer. The buyer may be willing to take up the payments, but if they are not, you may have to use some of the equity from the sale to pay off your share. This agreement with the potential buyers will be negotiated by you and your real estate agent. Penalty charges will apply to any loan prepayment amounts.
**Please note: This information has been developed for general discussion purposes only. Each loan has unique circumstances that may affect the accuracy of the information provided. VersaBank provides loans to condominium corporations and strata plans; we do not assess each owner’s individual financial situation. When considering the impact of our financing on your personal finances, please direct your questions to your personal banker or financial advisor.**
Phone or email us to learn more about our tailored condominium corporation financing solutions.
Toll Free: 1-866-979-1919
Email: [email protected]