Today, the Provincial Government announced it is seeking expressions of interest from property developers that are undertaking new purpose-built residential rental development projects in Newfoundland and Labrador. The program is part of the Provincial Government’s five-point plan designed to help increase the availability of housing that is affordable.

The Government of Newfoundland and Labrador’s Rental Housing Development Loan Program will offer low-interest loan financing to qualified property developers to encourage the construction of new rental housing. The aim of the program is to help increase the availability of housing as quickly as possible by incentivizing the construction of new units.

The Government of Newfoundland and Labrador will commit up to $50 million for the program in eligible loans. The Rental Housing Development Loan Program will be delivered by the Innovation and Business Investment Corporation and administered by the Department of Industry, Energy and Technology with funds awarded through a multi-phased solicited proposal process consisting of the following:

• Phase I: Call for Expressions of Interest.
• Phase II: A Request for Proposal invitation to successful Phase I applicants to provide an application with detailed proposal.
• Phase III: Award and signing of funding agreements with successful applicants.

Expressions of Interest (Phase I) are now being accepted until Wednesday, February 21, 2024. Program details, eligibility requirements and information on the application process are available in the backgrounder below and on the department’s website.

Quotes
“Helping create access to housing is a priority for our government. We look forward to working with property developers through this program to ensure we can give residents of Newfoundland and Labrador a place to call home.”
Honourable Andrew Parsons, KC
Minister of Industry, Energy and Technology

“The Rental Housing Development Loan Program will help ensure developers have access to low-interest funds and encourage the construction of new residential rental development projects. This is one of the many ways our government is working with industry to increase the availability of housing in Newfoundland and Labrador.”
Honourable Siobhan Coady
Minister of Finance

“We recognize the importance of safe and affordable housing for the well-being of individuals and families. Today’s announcement is another measure of a series of meaningful actions under our government’s five-point plan to encourage partnerships with the private and community sectors to get more homes built faster.”
Honourable Paul Pike
Minister Responsible for Newfoundland and Labrador Housing Corporation, and Minister of Children, Seniors and Social Development

“The development of this loan program is a positive step towards the creation of new affordable housing for our province. The Canadian Home Builders’ Association of Newfoundland and Labrador is optimistic that builders and developers will avail of the program and add to the affordable housing stock in our province.”
Alexis Foster
Executive Officer of the Canadian Home Builders’ Association Newfoundland and Labrador

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Rental Housing Development Loan Program

Provincial Government Launches Five-Point Plan to Improve Availability of Housing That is Affordable

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BACKGROUNDER

Rental Housing Development Loan Program

Eligible Projects

Qualifying projects under the program must meet the following criteria:

• Projects must have at least four units.
• Projects must pertain to purpose-built rental housing units (including modular homes) or the conversion of non-residential buildings into rental housing units.
• Project costs must pertain to the construction, engineering and architecture of the housing property.
• Prospective tenants must be unrelated and unaffiliated to the property developer.

Eligible Applicants

Eligible applicants must meet the following criteria:

• Have previous experience as a residential project developer or contractor (at least five years).
• Be incorporated or a registered entity in the Province of Newfoundland and Labrador.
• Be in good standing with the Province of Newfoundland and Labrador.
• Pledge security as collateral for a loan up to the amount requested by means including, but not necessarily limited to:

• • First collateral mortgages
  • Promissory note
  • Personal guarantees of the business owners
  • Cross-corporate guarantees

Eligible applicants who have applied for and received, or who have an application actively under consideration, for financial assistance from the Government of Newfoundland and Labrador or its entities (e.g., Newfoundland and Labrador Housing Corporation) for the same proposed project, will not be eligible for this program.

Available Financing

• Rental Housing Development Loan Program loan financing may not exceed 90 per cent of the eligible project costs of each development, to a maximum loan amount of $10 million for a single development project.
• Interest rates will be applied as follows:

• • Government of Newfoundland and Labrador borrowing rate at the date of loan acceptance (4.7 per cent as of January 30, 2024) for the first $6 million requested in program financing.
  • Bank prime rate at the date of loan acceptance (currently this rate is 7.2 per cent), for any amount of requested financing that exceeds $6 million, up to the maximum loan amount of $10 million.

• Loans will bear interest at the qualifying fixed rate for a term of 10 years with a loan amortization period of 25 years.
• Loans will have an interest-only payment period until the completion of construction.
• An advance payment of 20 per cent of eligible project costs will be provided upon the signing of a financing agreement for use for pre-construction project costs. Three subsequent tranches of funding will be provided in accordance with the start and progress of construction, for a total of four payments of approved financing.

Submitting the Expression of Interest

There is no application fee to apply for Rental Housing Development Loan Program funding. Proponents may submit multiple projects for consideration, up to a maximum of three, but each project must be submitted as an individual expression of interest. Completed expressions of interest should be forwarded by close of business (4:30 p.m. NST) February 21, 2024, via email in PDF format to RHDLP@gov.nl.ca.

Any questions related to this call for Expressions of Interest should be submitted in writing to RHDLP@gov.nl.ca on or before February 15, 2024.