Relief for co-op housing

OTTAWA — Co-operative housing providers are being given a multi-million-dollar financial boost by the federal government to help thousands of low-income tenants stay in their homes.

The minister in charge of the federal housing file said co-ops will be able to pay off the federally backed, high-interest mortgages they signed decades ago with no penalty.

Social Development Minister Jean-Yves Duclos said the government will provide $150 million over four years to federally funded co-ops and non-profit housing providers to help them pay off their federal loans, allowing them a chance to test the private market for mortgages at vastly reduced rates.

For a place like Winnipeg’s Village Canadien, the move will save the co-op about $50,000 a month in interest payments.

The previous Conservatives government promised the money in the 2015 budget, but deferred the spending until this year.

Duclos, in a speech Saturday to co-op housing providers in Hamilton, Ont. said the funding should reduce their expenses, let them use private capital to finance repairs and become selfsustaining and not reliant on federal funding to keep operations afloat.

The 40- and 50-year mortgage agreements captured in the announcement were signed between housing providers and the Canada Mortgage and Housing Corp., in the 1970s and 1980s and came with interest rates of up to 13 per cent.

Some providers have found the prepayment penalties are more than the cost of their interest payments.

The government plans to use $30 million from the affordable housing money set aside in its first budget to renew funding agreements that have expired since April 1 and those that are set to expire before the end of March 2018.