Quick Answer
Ontario modular homes are financed through standard mortgages (once on foundation), construction mortgages (during the build), or CMHC-insured mortgages (minimum 5% down). All Big 6 banks lend on CSA A277 modular. Construction draws are released in stages tied to build milestones.
Two Main Financing Scenarios
If You Already Own the Land
Construction Mortgage (recommended): Covers the build period with staged draws released at milestones — foundation complete, modules delivered, enclosed, occupancy permit. Converts to a standard mortgage at occupancy. All major banks offer these in Ontario.
Standard Mortgage (post-placement): Finance the home after it is placed on the foundation. Requires bridge funding during the construction period.
Buying Land + Home Together
Purchase and Construction Mortgage: One mortgage covering lot purchase and home construction. Lender requires an as-built appraisal. Typically 20% minimum down payment.
Turnkey Package: Some dealers bundle land, foundation, and home into one purchase price — simplest financing, treated as a standard home purchase.
Land-Lease Community (55+ Modular)
You are financing only the home ($180K–$310K typically). Many buyers in this price range purchase with cash, RRSP proceeds, or downsizing equity. CMHC insured financing is available on homes with permanent foundations within communities.
CMHC Programs
CMHC Mortgage Loan Insurance: Available with 5%–19.99% down. Premium: 2.8%–4.0% added to mortgage. Home must be CSA A277 on permanent foundation.
CMHC MLI Select: For developers building affordable or seniors housing. Significant premium discounts for projects meeting affordability and accessibility criteria — highly relevant for Fountainhead Villages-type community developers.
Current Rates (March 2026)
| Product | Typical Rate |
|---|---|
| 5-year fixed mortgage | 4.2%–4.8% |
| Construction mortgage | Prime + 0.5%–1.5% |
| CMHC-insured (5% down) | 4.2%–4.6% |
Frequently Asked Questions
Can I use my RRSP Home Buyers Plan for a modular home?
Yes — if you qualify as a first-time home buyer under CRA definition, you can withdraw up to $35,000 from your RRSP tax-free for a modular home purchase on owned land.
What is a construction draw schedule for a modular home?
A typical schedule releases funds at: lot purchase, foundation complete, modules delivered and set, home enclosed, mechanical rough-in complete, and occupancy permit issued. Each draw requires an inspection.
Can a non-resident of Canada finance a modular home in Ontario?
Non-residents face additional restrictions. CMHC insurance is not available to non-residents. Conventional financing at higher down payments (35%+) may be available through some lenders.