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New Rental Assistance Program Set to Launch on September 1, 2020
September 1, 2020 marks an important date for co-ops that began under federal funding programs. CMHC’s new Rental Assistance Program (RAP, also known as FCHI-2, or the Federal Community Housing Initiative – Phase 2) is about to launch. The co-op housing sector lobbied hard for the Federal government to respond to the challenge of expiring operating agreements and RAP is the successful result of those efforts.
RAP focuses on low-income households and does not offer support for general co-op operations. More specifically:
- Section 95 co-ops that have already seen their original operating agreement expire (after March 31, 2016) and which have been benefiting from an FCHI-Phase 1 extension agreement will be the first to transition to the new program and will already have made arrangements through The Agency for Co-operative Housing and CMHC.
- Section 95 co-ops that have an operating agreement set to expire after September 1, 2020 will be contacted by CMHC near the end of their original agreement to offer them the option of enrolling in RAP.
- CMHC has not yet formally agreed to extend RAP to Section 95 co-ops with operating agreements that expired before April 2016. CHF BC, CHF Canada, and the BC government are working hard to persuade CMHC to do the right thing and include these co-ops in the program.
- Co-ops with expired ILM agreements who paid off their mortgages and were included in the FCHI-1 program should already have been invited to enroll in RAP. Federal assistance payments will end, and any assistance available through RAP will be limited to low-income households not covered by existing Rent Supplement Agreements with BC Housing.
- Co-ops with ILM agreements who will be paying off their original mortgages after September 1, and whose ILM agreements end with those mortgages, will be contacted by their Agency Relationship Manager near the end of their original agreement to offer them the option of enrolling in RAP. Federal assistance payments will end but there may be some opportunity for additional targeted supports for low-income households.
- Former Section 61 co-ops may have been invited to participate in RAP, but they will likely not see any immediate confirmation of acceptance until CMHC has a chance to review overall program uptake and budget.
The Rental Assistance Program is both time limited and voluntary – its supports will end March 31, 2028 for co-ops that decide to opt in. Until that time, it will provide participating co-ops with support for low-income households and the time to make plans for operations after 2028. In exchange, co-ops will continue reporting some data to CMHC (through the Agency), and there will be a new obligation to prepare an action plan — stay tuned for more details on this in the coming weeks).
The new program offers some advantages over the earlier programs: in particular, the amount of support can vary according to the needs of the low-income households. Under the new program, co-ops should not face situations in which a limited subsidy pool forces co-ops to charge members more than 30% of their income (but it does set a cap on the number of households to be included). The Rental Assistance Program is also quite flexible: within limits, some co-ops may be able to stabilize the maximum percent of income on housing to between 25% and 30%.
CHF BC encourages co-ops to learn more about the program and also to consider what their communities will need when it ends in 2028.
Here are a couple of links for more information:
Note: Any moneys flowing from Phase 1 of FCHI will end August 31, 2020. Participating co-ops will be required to provide a reconciliation up to that date.