You Can Now Put 5% Down on a Factory-Built Home: How the New Financing Works

One of the most common worries we hear from Sunshine Coast buyers is not about the home itself – it is about the mortgage. “Can I even finance a house that is built in a factory and delivered to my lot?” For a long time the answer was complicated. That is changing.

What actually changed

This year CMHC, the federal housing agency, expanded its mortgage insurance to fit prefabricated and modular homes through a new option called Prefab Plus. In plain terms, an eligible buyer can now purchase a factory-built home with as little as 5% down and CMHC-insured financing – the same starting point as a conventional home.

Why staged draws matter for modular

The part that matters most for modular is how the money is released. Instead of one lump sum, Prefab Plus can advance the mortgage in stages, or “draws,” as construction milestones are met. A buyer might take one draw to acquire and prepare the property, then another once the home is delivered and ready to be set on its foundation. That sequencing lines up almost exactly with how a factory-built home comes together, which removes a real source of friction between buyers, builders and lenders.

It is a meaningful shift, and it is part of a bigger picture. Governments at every level are making it easier to build homes off-site, faster and with more cost certainty – a welcome direction for a region where a small trades pool and a ferry-dependent supply line make traditional building slow. The Province has also rolled out a digital tool to speed up prefab housing approvals, another sign of the same direction.

A couple of honest notes

Program terms and eligibility can change, so confirm the current details with your lender and CMHC before you plan around them. And financing is only half the picture. What you can actually place on your specific lot still comes down to zoning, servicing and setbacks. Rate stability helps too: the Bank of Canada has held its policy rate steady, which keeps buyer budgets more predictable while you plan.

Where to start

If you are wondering what is possible on your property, our free Zoning Lookup is a good first step. Tell us the address and we will help you understand what the rules allow – then you can talk to your lender about financing with confidence.