What BC's new rules allow
BC's small-scale multi-unit housing rules require most municipalities to allow several homes on lots that used to allow one house. In practice that means a duplex with a suite in each half, a house with a garden suite behind it, or a duplex plus garden suites, on an ordinary residential lot.
How many units, how large, how much parking, and whether the lot is close enough to frequent transit for more, all depend on your municipality's bylaw and your lot's servicing. Check your municipality before you draw plans, and get the zoning confirmation in writing; the lender will ask for it.
Lendrite arranges the construction financing for these builds with lenders who have worked out how to treat them, which not every lender has yet. Book a 20-minute call →
Lenders that finance a duplex with suites
To a lender, the number of units decides which desk your application lands on. A duplex where you live in one side, with or without suites, usually stays with residential construction lenders, and most of them count the projected rent from the suites toward your approval. Add more units, or rent them all out, and some lenders move it to their small multi-family or commercial side, where the building is sized on its income and the fees and terms change. Four units and up is covered on multi-unit and fourplex.
The plan, the unit count and whether you will live there decide the lender before anything else. We match those three to the right desk before the application is written, not after a decline.
The usual residential documents still apply, with the construction items on top. See the document checklist.
Project management agreements and GST
Not every duplex build is a fixed-price contract. One way to structure it is a project management agreement: a licensed builder manages the build for a fee while you pay the trades and suppliers directly. Lenders can accept this when the agreement spells out the scope, the fee, who holds the building permit and who enrols the homes in warranty insurance. Expect more questions than on a fixed-price contract, and a budget backed by trade quotes rather than one contract price.
GST applies to new construction. The budget should show it as its own line, with the trades' quotes net of tax, so the lender can see the real cost and nothing is counted twice. Whether any of it can be recovered, through a rebate or through your company, depends on your situation and is a question for your accountant, not for this page.
A sample budget structure
The lines a lender expects on a duplex with two garden suites, without figures, because yours will differ.
| Line item | What it covers | Backed by |
|---|---|---|
| Land | The lot, or the existing house and lot if you are replacing it. | Title or purchase contract, appraisal |
| Soft costs | Design, engineering, survey, permits, the municipality's development cost charges, insurance, legal. | Invoices and fee schedules |
| Demolition and site | Taking down what is there, excavation, services to the lot line, driveway base. | Trade quotes |
| Foundation | Footings, walls, slab and drainage, for the duplex and for each suite. | Trade quotes |
| Framing to lock-up | Framing, roof, windows and doors, the exterior envelope. | Trade quotes |
| Mechanical and electrical | Plumbing, heating and electrical, with separate metering where the municipality requires it. | Trade quotes |
| Interior finishing | Drywall, flooring, kitchens, bathrooms and paint, for each unit. | Trade quotes and allowances |
| Garden suites | Each suite as its own line, so the lender can see the cost of the units that carry the rent. | Trade quotes |
| Exterior and landscaping | Fencing, paths, the landscaping the permit requires, final grading. | Trade quotes |
| Project management fee | The builder's fee under the agreement. | The agreement |
| Contingency | An allowance for what the quotes miss. | The lender's template |
| GST | On the construction, as its own line. | Your accountant |
| Interest reserve and fees | Interest during the build, plus lender, broker, appraisal, inspection and legal fees. | The lender's written commitment |
What to bring
The duplex items, on top of the usual income and down payment documents.
- Zoning confirmation from your municipality, in writing.
- The plans, showing every unit and suite, and where the building permit stands.
- The builder's contract or the project management agreement.
- The budget on the lender's template, with GST and each suite as their own lines.
- The builder's résumé: licence, warranty enrolment, recent completed homes.
- The current mortgage statement if the lot already has a house on it.
- Your income, ID and down payment documents, listed on the document checklist.
The ones we hear on duplex builds
Does the rent from the suites count toward my approval?
With most lenders, yes: projected rent from a market appraisal or a signed lease can be added to your income or set against the payment. How much counts, and which method, depends on the lender, and we choose the lender with that in mind.
Do I have to live in one of the units?
Not always, but it changes the lender. If you will live there, the application is a residential one. If every unit is rented, some lenders treat it as a small rental building and size the loan on the income.
Can I add a garden suite behind my existing house?
Often, if your municipality allows it on your lot. The financing is usually a refinance of the existing home or a smaller construction loan, rather than a full construction mortgage.
What does it cost?
Costs are gone through with you upfront, before you commit to anything, and there is no credit check at the enquiry stage. The process from there to funding is on how it works.