A critical component of the financial support model is that Home Ownership Alternatives also provides indemnities to home warranty programs and construction financing guarantees.
A construction loan guarantee represents the largest component of HOA’s financial support to affordable developments. Obtaining a commitment letter for construction financing is generally the final (and greatest) obstacle for a development to proceed.
In addition, HOA provides indemnities to the Tarion Warranty Corporation, the government-sponsored provider of deposit and new home warrany insurance. HOA has the resources to also provide letters of credit and other security for other parties involved in the development in exceptional cases.
HOA’s financial strength permits its development partners to proceed to construction once they have demonstrated a viable, cost-effective project through successful pre-sales, planning approvals and a fixed-price construction contract.
