CMHC for Housing Industry Professionals and Community Groups	November 2007

CMHC Seed Funding Program Details

The successful development of housing requires appropriate skills, expertise and commitment. Proponents need to be organized, and must know how to evaluate housing need and demand in their community, and how to obtain the money and other resources to make their proposed housing project a reality. CMHC Seed Funding provides proponents with financial assistance to carry out these initial activities.

What is Seed Funding?

Seed Funding offers financial assistance to housing proponents who are in the early stages of developing an affordable housing project.

What types of housing projects are eligible?

The proposal must be for a housing project that will be affordable.

The housing project must be located in Canada.

There are no restrictions on:

Building form
Tenure type
Future residents of the housing
The type of housing proponent organization

To be eligible for Seed Funding, your proposed housing project must be affordable

You intend to produce a rental housing project in which most of the units will have rents within CMHC’s Affordability Criteria. (CMHC can provide you with the Affordability Criteria in the community where you intend to produce housing that meet this guideline.)

You intend to produce a homeowner project in which the units will be modest and the purchase prices will be below the market for units of a similar type, size and number of bedrooms in the subject housing market.

Who is eligible?

Seed Funding may be made available to any proponent of a housing project that will be affordable. For example, the proponent may be:

A not-for-profit organization
A housing cooperative
A First Nation
A private entrepreneur
A group of individuals who may or may not intend to become incorporated

What activities are eligible?

Seed Funding may be used to pay for a variety of activities in the early stages of developing a housing project proposal. These activities must be directly related to the development of the housing project proposal. Eligible items include:

Housing market studies to evaluate need and demand for the proposed project
Development of a business plan
Exploration of funding sources or options
Evaluation of procurement options
Preliminary financial viability analysis
Environmental site assessment
Preliminary design of the housing project (new construction, renovation or conversion)
Incorporation of a not-for-profit organization

What expenses are not eligible?

Expenses not related to the development of the housing project proposal
Expenses for housing project development activities carried out prior to CMHC's written approval of Seed Funding
Expenses related to “hard” project development activities, such as site preparation, lot servicing, construction, renovation, and so on
Ongoing operating expenses of the organization, for example, staff salaries and benefits, travel expenses, rental of office space, premiums for liability insurance or other insurance coverage, office supplies or equipment, or other similar expenses
Retainer fees paid to consultants or any other professionals for work to be completed in the future

What is the maximum funding amount?

The maximum amount of Seed Funding is $20,000 per housing project proposal to carry out eligible activities.

Up to $10,000 for a given housing project proposal is in the form of a grant, with no repayment required.
An additional amount — up to $10,000 — may be made available in the form of an interest-free loan, which is repayable if the housing project proceeds.
If the proposal does not result in the production of housing, the repayable portion of the Seed Funding may be forgiven by CMHC.

How will the actual funding amount be determined?

For successful applications, CMHC will determine the amount of Seed Funding to be provided to a proponent for a specific housing project proposal by taking into consideration the nature of the proposal and the amount and cost of work that is required to carry out the eligible activities.

What are the conditions of funding?

Housing proponents who are selected by CMHC to receive Seed Funding must enter into a Contribution Agreement with CMHC which will set out the terms and conditions of funding, including the activities for which funding is provided and the specified time period within which the activities must be carried out.
CMHC will advance funds only for eligible expenses that can be confirmed with invoices or receipts.
Need and demand studies must be confirmed to CMHC’s satisfaction for the proposed housing project, and an acceptable business plan must be received by CMHC before further funds will be advanced for additional approved activities.
All funded housing project development activities will normally be expected to be completed within 12 months of the date of the Contribution Agreement. A longer period of the time may be negotiated where appropriate.

Will recipients of Seed Funding be eligible for other CMHC tools?

Affordable housing proponents who are selected to receive Seed Funding may also apply for other CMHC initiatives.

An approval by CMHC of Seed Funding is not a guarantee that the housing project proposal will be approved for other forms of CMHC assistance.

Some of CMHC's other tools, including interest-free proposal development funding loans and mortgage loan insurance flexibilities, are available only for housing projects with a minimum of five units. The project must also meet CMHC's definition of “affordable”.

What is the application process?

Applications are accepted on an on-going basis; there is no deadline to apply. Applications should be sent to the appropriate CMHC office. A list of offices can be found in the application form. The number of applications that can be approved by CMHC in a given budget year will be limited by budget availability.

Section B – What CMHC is looking for in your Seed Funding Application

CMHC is looking for housing project proposals whose characteristics are consistent with factors that are critical to successful production of affordable housing..

Compatibility with Seed Funding Criteria

It must be clear from the information in the application that:

Your ultimate goal is to produce housing, that is, you are not seeking Seed Funding solely for the purpose of exploring a concept or conducting research.
The proposed housing project will be affordable (see definition in Section C).
The funding is requested for housing project development activities that are eligible for Seed Funding.

Applicant capability

The key people involved in your proposal and those hired to complete the required development activities must have the skills and knowledge that will enable them to carry out the proposed Seed Funding activities within the time frame for the project.