30 years ago a 1000 square foot condo might have been considered modest. These days, in major centres like Toronto and Vancouver, 1000 square feet is pretty big.
With condo sizes shrinking, financing is not always straightforward. As best we know, the default insurers (CMHC, Genworth, and AIG) have no published minimum condo size limitations. Nonetheless, anything under 500-600 square feet may get scrutinized. Size is a factor and lenders and insurers need to know a unit can resell quickly in the event of default.
There are a few lenders that seem quite open to small condos, even as low as 300 square feet. Abode is one. FirstLine will sometimes look at them too.
If you know of another good lender for small condos we welcome you to leave a note in the comments section.
Last modified: April 25, 2014
That layout looks more like a hotel room than a condo!
How much would something like that cost in downtown Vancouver?
What a timely post for my scenario. I’m working with a client right now on a 570sf rental in Cloverdale. To complicate things further, it’s a studio unit so there is no actual bedroom. Firstline will only do the deal if it’s insured (even though LTV is 80% and the clients are willing to go to 75%). Good news: Vancity will provide financing and they don’t care about the size or the bedroom (albeit not at a fully discounted rate).
Can you please clarify..Re Vancity…I thought this was a Credit Union…and members have to reside in BC..so how can they offer Mortgages in Ontario?
Cloverdale is in BC. My mistake. I didn’t realize the focus was on Ontario.
Hi Joe,
Thanks so much for the post. We’ll add Vancity to our small condo “cheat sheet.”
By the way, the focus of Canadian Mortgage Trends is nationwide, not just Ontario. We welcome brokers comments from Vancouver to Toronto to Halifax to Nunavut (if there are any brokers up there!).
Cheers,
Rob
Hi MDJ,
I didn’t have a lot of time to research this but found a few old stats form last summer.
This story says $577 per square foot in Vancouver…
http://calsun.canoe.ca/News/Alberta/2007/04/12/3993246.html
This says story $800 per square foot (retail) in Vancouver…
http://www.theglobeandmail.com/servlet/story/RTGAM.20070629.revan-boddy0629/EmailBNStory/RealEstate/
Let suppose ($600 per square foot) for this unit assuming it has a decent location and amenities. So maybe $202,000 for this 338 sq. ft. unit?
I could be way off though. Maybe some of our Vancouver readers have a better idea…
My condo is just under 600 sq ft and I’ve been worried about being able to sell it especially if the buyer can’t get a mortgage. Should I be worried at all?
I would say No don’t be worried, check out Tv show: Tiny House Nation, on channel 248 (FYI). I’m actually looking into it & came across your question. You’ll see just how many people are interested in this type of home. Dan
WCO,
Generally speaking, a 600 square foot condo should qualify for mortgage default insurance, so you should be OK.
Rob
why build crappy 300 sf condos
its not good to live in cramped spaces
minimum should be 600 sf
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