Financial Services

Financial Services

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Guaranteed Housing Loans for Staff

A full-time member of staff who has a continuing appointment or is on a term appointment of two years or more, whose salary is paid from regular University operating funds, may qualify for loan assistance under the following conditions. The University's guarantee, which is secured by a second mortgage, enables the staff member to borrow at a rate of interest equal to the bank's prime rate for the purchase of a principal residence.

The loan must be for the financing of a principal residence in the Kingston area intended for the applicant's own occupancy.

The applicant must have equity of not less than 10% in the property, and the total of the first mortgage and the staff member's equity should not be less than 70% of the purchase price.

The maximum second mortgage loan shall be the lesser of: (a) the applicant's current annual University salary (rounded to the nearest $1,000 to a maximum of $40,000 or (b) 30% of the purchase price of the property.

In cases where more than one member of the family is a member of staff of the University and qualifies for loan assistance, the guarantee provided on the property will be subject to a maximum of $40,000.

The carrying charges related to the property purchases (taxes, amortization of the first mortgage and the guaranteed housing loan) normally should not exceed 30% of the staff member's income. If an applicant's spouse is working on a continuing basis, 50% of the spouse's income may be considered as part of the income for purposes of this calculation. If an applicant's spouse is on a full-time continuing appointment with Queen's, 100% of the spouse's income may be considered as part of the income.

Repayment must be completed within the lesser of ten (10) years or the number of years to normal retirement date. If the loan is for five (5) years or less, the applicant must make an irrevocable decision as to whether to accept a fixed or a floating rate equal to the prime bank borrowing rate. If the loan is for more than five (5) years, then only the floating rate equal to the prime rate is available. Payments may be accelerated by the borrower at any time without penalty.

The loan will be provided by the University's bankers. Applicants will be asked to authorize the University's bankers to debit their own bank or trust company account with the monthly payment required to amortize the loan.

As security, applicants are required, at their own expense, to take out a mortgage in favour of Queen's University. The mortgage will not bear interest unless the University is required to make payment under the terms of its guarantee. The second mortgage will become payable if (a) the home is sold or rented for more than twenty-four (24) months; (b) the home ceases to be a principal residence; or (c) the applicant is no longer on the University staff.

The University requires that the second mortgage be processed through its legal counsel at the applicant's expense. Applicants may use a solicitor of their own choice to look after their interests in the completion of the purchase.

The University normally does not require an appraisal but reserves the right to request that one be provided at the expense of the applicant if a question arises about the adequacy of the University's security in the property.

If there are questions of interpretation of the guidelines, or if the applicant does not appear to qualify under the above guidelines and the guaranteed housing loan is refused, the applicant may request that the case be reviewed by the designated Vice-Principal. Each request will be considered on its own merits and will not create a precedent for subsequent cases.

Information and applications are available from the Financial Services Main Office. In establishing a closing date for a purchase, it should be kept in mind that applications for second mortgage assistance should be made 3-4 weeks before the legal closing date as this period is required for the completion of the documentation associated with the guaranteed housing loan.