HOA helps start a 643-home development in Toronto
HOA used its financial and management strengths to help Options for Homes, a non-profit developer, embark on its largest project ever, the 643-home Kintyre development
HOA’s contacts and local knowledge were useful in the negotiation process for the land acquisition. HOA provided $50,000 towards the refundable deposit to secure the site. While this figure may seem modest, few non-profit organizations have such amounts available to initiate a land acquisition. Later, HOA and the builder Deltera provided a 22% cash down payment, and HOA guaranteed the vendor take back mortgage and a 3rd party land mortgage. Without this financial support, the non-profit developer could not have acquired the land.
HOA provided a full guarantee for the construction financing. Even in normal times, the construction loan guarantee is significant. During the 2008-9 financial panic, it was crucial. In addition to providing $103 million of guarantees, HOA put up $10 million in cash - $7 million of its own cash and $3 million that HOA borrowed from the City of Toronto for pay for the development charges.
In late 2008 banks, and even the government Canada Mortgage and Housing Corporation, had effectively stopped lending. Credit unions were still willing to lend, but were focused on serving their existing members. HOA’s strong relationships with the credit unions, and the experience and credibility of our management team, were critical to the financing. A former Board member of HOA provided the introduction that eventually led to a successful credit union syndicate financing for the Kintyre Co-op in late 2008 when world credit markets were frozen tight.
