I’ve spent more than 20 years in mortgage lending, and one thing I’ve learned is that there are often more financing solutions available than people realize.
A “no” from one lender doesn’t necessarily mean there isn’t a path forward. Different lenders have different policies, risk appetites, areas of expertise and ways of assessing a transaction. That doesn’t mean every difficult deal can be financed, but involving the right financing expertise early can help your clients make better decisions and reduce the risk of unpleasant surprises later.
Here are five situations where having the financing conversation earlier can make a real difference.
1. Multiplexes: your client doesn’t need to be a professional developer.
BC’s small-scale multi-unit housing changes have created new opportunities for homeowners to add density to properties that historically accommodated a single home.
What’s particularly interesting is that many of these projects aren’t being undertaken by professional developers. Increasingly, homeowners are looking at ways to create additional housing for family members, generate rental income or unlock the development potential of a property they already own.
For agents, that means a property’s value may be influenced not only by the home sitting on it today, but also by what could potentially be built there tomorrow.
Financing has evolved alongside this trend. Vancity’s Multiplex Construction Mortgage is designed specifically to help homeowners finance duplex, triplex and fourplex projects, providing a path from an existing home through construction and into the completed units.
I also sit on the board of Small Housing BC, where we’re working to make the development process itself more accessible for homeowners who may have never considered themselves developers before.
Through education, research and practical guidance, Small Housing helps make multiplex development more feasible for communities, builders and industry across BC. They do this through policy guidance, industry training and homeowner-developer support – helping people understand what’s feasible, what’s involved and where the real decision points sit. If a client is weighing what their property could become, it's worth knowing that kind of support exists.
Agent takeaway: If a client owns a property with redevelopment potential, the financing conversation should happen before assumptions are made about what is or isn’t possible.
2. Buying or building together can be more flexible than people think.
High housing costs have encouraged more families and friends to explore co-ownership and multigenerational housing arrangements.
Parents may want to help children enter the housing market. Families may want to build a secondary home on an existing property. Friends may want to purchase together.
The challenge is that not everyone involved is on the same financial timeline.
Flexible ownership structures and financing solutions can help address that reality. With Vancity’s Mixer Mortgage, for example, co-owners can have separate mortgage portions with different terms, payment structures and amortizations while remaining collectively responsible for the overall mortgage.
For families pursuing multigenerational living or co-ownership, financing doesn’t always have to be one-size-fits-all.
Agent takeaway: Don’t assume co-owners need identical financing. Understanding their individual goals and timelines may open doors that weren’t initially obvious.
3. Some properties just need the right lender.
Certain properties fall outside the comfort zone of traditional lending. That doesn’t automatically make them unfinanceable, but they may require specialized knowledge and lending expertise.
Leaseholds are a great example. Government leaseholds, university leaseholds, First Nations leaseholds and private leaseholds can all be evaluated differently depending on the lender. Details such as the remaining lease term and lease structure can significantly affect financing options.
False Creek South provides a real-world example. Eligible owners have been offered the opportunity to purchase 20-year lease extensions from the City of Vancouver. We’ve completed transactions where buyers financed both the home and the lease extension as part of a single transaction.
Co-ops are another example. Although a co-op may look similar to a strata property, buyers are typically purchasing shares in a corporation rather than title to a specific unit. Because the lender’s security differs significantly, many lenders simply don’t finance co-ops.
I recently encountered a co-op purchase where a buyer had already secured an accepted offer before anyone assessed whether the particular co-op structure was financeable. An earlier review could have saved considerable time, frustration and uncertainty.
Property history matters too. Former grow-ops are a good example. Some lenders remain restrictive around properties with this history, but where appropriate remediation and/or re-occupancy can be demonstrated, we can generally finance these homes.
This is another situation where understanding the property and having the financing conversation early can make a real difference.
Agent takeaway: If the property isn’t typical, engage financing experts before an offer is written.
4. Renovations can create financing opportunities.
Many buyers assume they need to find a property that’s perfect on possession day.
Often, they don’t.
Purchase-plus-improvement financing can allow eligible buyers to roll renovation costs into their mortgage, helping fund improvements such as kitchens, bathrooms or other major upgrades.
In some cases, the opportunity goes beyond the renovation itself.
If the improvements include creating a secondary suite, future rental income may be considered as part of the qualification process. That can materially improve affordability and expand the range of properties a buyer can realistically consider.
Understanding what a client intends to do with a property can sometimes be just as important as understanding the property’s current condition.
Agent takeaway: A home that doesn’t work today may become the perfect fit once financing and renovation options are explored.
5. Income doesn’t always come neatly packaged on a T4.
The borrower can be just as complex as the property.
Self-employed individuals often assume financing will be challenging because their reported personal income doesn’t fully reflect their financial capacity. But lenders may have tools to analyze corporate income and business cash flow differently than a standard salaried applicant.
Retirees may have substantial assets despite relatively modest reported income. Contract workers, commission earners and gig-economy professionals may also fit outside traditional lending assumptions.
Rental income is another area where lender policies can create dramatically different outcomes.
Some lenders add a portion of rental income to the applicant’s earnings. Others offset rental income against expenses associated with the property.
At Vancity, we can apply a 90% rental offset on income-earning residences and an 85% offset on standalone rental properties. In markets where rental income plays an important role in affordability, those differences can have a significant impact on borrowing capacity.
The same borrower, property and rental income can produce very different results depending on the lender.
Agent takeaway: Don’t assume the income doesn’t work until someone with expertise in that income type has reviewed it.
Know when to ask the question.
Realtors don’t need to become mortgage experts. There is real value in recognizing when something about a property, ownership structure, income profile or future plan falls outside the ordinary.
That’s when experience in a particular type of financing can make a difference. The right lender may identify options or challenges that aren’t immediately obvious.
You don’t need to know the answer. You need to know when to ask the question.
