Q: How does a 2nd Mortgage work?

A: HOA provides down payment assistance in the form of 2nd mortgages. No scheduled payments of principal or interest are required until the home is resold or rented out, although homeowners may choose to pay them out at any time.


Q: When and why are 2nd Mortgages paid out?

A: When homeowners no longer need assistance (by sale or by voluntary payment) they pay out the mortgage plus a share of the increase in the value of the home.


Q: What is the average value of a 2nd Mortgage?

A: HOA 2nd mortgages are typically 10 to 15 per cent of the purchase price. The 2nd mortgage, which is equal to the difference between cost and market value of the housing, acts as an anti speculation tool as it is a disincentive to “flipping”.


Q: What happens to the funds that are repaid to HOA?

A: When HOA 2nd mortgages are paid back, HOA uses the proceeds to create more affordable homes for new purchasers.


Q: How do government partnerships help the HOA model?

A: Through partnerships with different governments, the HOA 2nd mortgage program for qualified low income, renter families has been expanded. For three developments in Pickering, Scarborough and Markham, HOA provided an average $60,000 2nd mortgage to allow specific households with annual incomes well below $45,000 a chance to own.