Start With The Zone Code
Your Schedule A zoning code determines whether a detached ARU is even worth exploring. Some zones and property types may be off-limits.
London, Ontario backyard ARU screen
Check If Your London Backyard Qualifies For The $45,000 ARU Forgivable Loan
Before you spend money on drawings, builder deposits, or site visits, run a quick address-based screen for zoning, setbacks, lot coverage, servicing risk, owner-occupancy, and CMHC rent caps.
Homeowners often call it the London ARU grant. Officially, the City offers ARU loans and detached ARU forgivable loans, with approval required before work begins.
Up to $45,000 Detached ARU forgivable loan
$1,371/mo Current 1-bed CMHC rent cap
$1,645/mo Current 2-bed CMHC rent cap
Pre-build screen Before drawings or deposits
Next step
Your Preliminary ARU Screen
We’ll use your answers to sort the property into the most likely route: ready for deeper review, needs zoning checks, servicing risk, rent-cap review, or not a fit yet.
Your route is based on the address screen, not a floor plan guess.
85%
Route fit - Residential zone
- Main home check passed
- Space use looks manageable
- A local review may still be needed
Plain-English check
The 4 Checks That Can Make Or Break A London ARU Project
Check The Existing Footprint
The house, garage, additions, and proposed ARU all count toward lot coverage limits. A large-looking backyard can still fail the math.
Measure Before You Design
A side yard that looks workable can become a problem if windows face the shared lot line or if the rear yard clearance is too tight.
Confirm The Program Rules Early
The forgivable loan is tied to owner-occupancy, affordability, rent caps, licensing, and approval before work begins.
CMHC plan guide
CMHC Plans Can Save Time — But They Still Need A London Review
The CMHC Housing Design Catalogue can be a helpful starting point for backyard ARU planning. But “near permit-ready” does not mean approved for your lot.
Before choosing a design, you still need to confirm your London zoning code, lot coverage, rear and side yard setbacks, servicing route, bedroom limits, grading, drainage, Ontario Building Code requirements, and whether the plan fits the City’s ARU rules.
Compare CMHC ARU PlansNext checks
More London ARU checks
01 London ARU Zoning Rules Check zoning, setbacks, lot coverage, and detached ARU placement rules. 02 CMHC Rent Cap Calculator Model the 1-bedroom and 2-bedroom rent caps before relying on the loan. 03 Cost To Build A Detached ARU Review construction, servicing, permit, insurance, tax, and development charge risks. 04 CMHC ARU Plan Guide Compare catalogue plans before choosing a design direction. 05 London ARU Grant Guide Review the forgivable-loan screens before you spend on drawings.
Hidden costs
The $45,000 Loan Helps — But Hidden Costs Can Decide The Project
The biggest surprises are usually not the walls, windows, or finishes. They are the site-specific items: trenching, servicing, access, permits, rental licensing, insurance, development charge review, and property tax reassessment.
Utility hookups
Water, sanitary, hydro, gas, internet, trenching, capacity checks, and final connection work.
Site access
Tree removal, narrow access, crane delivery, grading, slope, driveway damage, and yard restoration.
Soft costs
Survey, drawings, engineering, permits, rental licence fees, insurance, development charge review, and future tax reassessment.
Rent check
Sanity-Check The Rent Cap Before You Build
The affordable detached ARU stream caps rent at 100% of CMHC Average Market Rent. That means the loan can help with upfront cost, but your long-term pro forma still needs to work at the capped rent.
$
Capped monthly rent $1,371
Annual gross rent $16,452
After financing $471/mo
Important: These rent caps create a ceiling, not a guarantee. Vacancy, maintenance, financing cost, insurance, and taxes still need to be included in your decision.
Frequently Asked Questions
Frequently Asked Questions About London ARU Grants, Loans & Backyard Suites
What is the $45,000 London ARU grant, and how do I get it?
Homeowners often search for the ‘London ARU grant,’ but the official program is structured as an ARU loan or detached ARU forgivable loan. The affordable detached ARU stream can forgive up to $45,000 if the project meets City requirements, including affordability rules, rent caps, owner-occupancy, rental licensing, and approval before work begins.
Should I apply before or after I start construction?
Before. The City incentive must be applied for and approved before work begins. If you start construction, order work, or commit to the project too early, you may put funding eligibility at risk.
Can I charge market rent for the unit?
Not if you are using the affordable detached ARU forgivable loan stream. Rent must be capped at 100% of CMHC Average Market Rent for the required affordability period, so the rent calculator matters before you build.
Is a detached ARU the same as a tiny home?
Not exactly. A tiny home used as a dwelling still needs to comply with zoning, permits, servicing, building code, rental licensing, and ARU rules. The label matters less than whether the unit is legal, safe, and approved for your property.
Do I need to live on the property to qualify for the loan?
Yes, in most cases you need to live in the main house. There are a few special exceptions, including some Indigenous-led projects.
Does my backyard automatically qualify for a detached ARU?
No. The lot still has to pass a few basic checks, like the right zone, enough space, and room for utilities and access.
Do I have to pay Development Charges (DCs) for my ARU?
Sometimes yes, sometimes no. Some ARU setups can avoid these charges, but the rules depend on how the unit is built, so the City confirms it during permit review.
Can I use my ARU for Airbnb or short-term rentals?
No. If you use the City’s incentive programs, the unit is for regular tenants, not short-term rentals.
Do I need a licence to rent out my ARU?
Yes. You need a rental licence, and it has to stay current each year if you want to keep the loan in good standing.
Can I just build a pre-approved design from the CMHC catalogue?
You can start with a catalogue plan, but it still has to be adjusted for your own lot before the City will approve it.
How many bedrooms can my ARU have?
The current limit is two bedrooms per unit. If you build more than one unit on the property, there is also an overall bedroom limit.
What hidden costs should I be aware of before I build?
The surprise costs usually come from utility hookups, access, permits, plans, the rental licence, insurance, development charge review, and possible property tax reassessment.
Your report
Get Your London ARU Route Pack
Based on your audit result, we’ll send the next-step checklist for your property route: zoning review, site-visit prep, builder-readiness, rent-cap math, or a self-serve research pack.
Your route pack may include:
- zoning and lot coverage checks
- documents to gather before a designer quote
- hidden-cost worksheet
- CMHC rent cap math
- City loan checklist
- questions to ask before paying a builder deposit