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.
Independent London, Ontario ARU screen
Find The London ARU Grant Or Loan Path That Fits Your Project
Compare the current $20,000 and $45,000 grants, the separate repayable loan, zoning and site risk, CMHC rent math, and the permit window before you spend on plans.
This site is independent from the City of London. Results are preliminary and every funding path must be confirmed with City staff before work begins.
$20K or $45K Current construction-grant paths
$1,371/mo Current 1-bed CMHC rent cap
$1,651/mo Current 2-bed CMHC rent cap
September 7 Permit-fee window to verify
Current funding paths
Compare London’s ARU grants and separate loan
Verified July 20, 2026. This independent summary is not an approval or City application.
| Path | Maximum | Rent rule | Commitment / repayment |
|---|---|---|---|
| ARU Construction Grant | $20,000 | No rent cap stated; rental commitment applies | 10-year rental commitment. Registered as a forgivable loan; forgiven after the compliant 10-year term. |
| Affordable ARU Construction Grant | $45,000 | Rent at or below 100% of applicable CMHC Average Market Rent | 10-year rental and affordability commitment. Registered as a forgivable loan; forgiven after the compliant 10-year term. |
| Indigenous ARU Construction Grant | $45,000 | No rent cap stated; rental commitment applies | 10-year rental commitment. Registered as a forgivable loan; forgiven after the compliant 10-year term. |
| New-home ARU Construction Grant | $20,000 | Confirm the current agreement terms with City staff | Permit, construction and occupancy milestones apply. Grant conditions and lien discharge depend on compliant completion. |
| Additional Residential Unit Loan | $45,000 | No affordability rent cap stated | 108 monthly payments begin one year after the advance. Repayable loan. |
Eligible permit-fee support currently targets permits issued by September 7, 2026, subject to funding, location and City confirmation.
Interactive funding screen
Find the ARU funding path to ask the City about
Get a useful preliminary route before sharing contact information.
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
Each grant or loan has its own ownership, rent, commitment, repayment and approval rules. Match the agreement 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 Funding Path Finder Compare the current $20,000 and $45,000 grants and separate loan. 02 Application Checklist Build a saved, printable City application file. 03 Project Budget Calculator Model all-in cost, funding timing and rent assumptions. 04 Quote Comparison Tool Normalize two ARU contractor quotes and flag missing scope. 05 Basement Vs Garden Suite Compare cost, disruption, property constraints and privacy.
Hidden costs
Funding 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 $45,000 Affordable ARU Construction Grant uses 100% of the applicable CMHC Average Market Rent. 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 ARU grants and loans are available in London, Ontario?
The City's current incentive page describes a $20,000 ARU Construction Grant, a $45,000 Affordable ARU Construction Grant, a $45,000 Indigenous ARU Construction Grant, a $20,000 new-home ARU grant, and a separate repayable ARU Loan of up to $45,000. The correct path depends on the property, unit, applicant, rent plan and agreement terms.
Should I apply before or after I start construction?
Contact City CIP staff before starting work or signing commitments that depend on funding. The repayable ARU Loan must be approved before work begins. The time-limited grants have permit, construction, legal-agreement and payment milestones that should be confirmed for the selected stream.
Can I charge market rent for the unit?
The affordable $45,000 construction-grant stream uses 100% of the applicable CMHC Average Market Rent. Other paths have different rent and repayment rules, so verify the agreement before choosing the pro forma.
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?
Owner occupancy is a major screen for homeowner paths, while the Indigenous and new-home streams have different audiences. Confirm the current agreement with City staff.
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?
The current homeowner funding programs require a valid Residential Rental Unit Licence that is maintained and renewed annually. Confirm licensing for the specific ARU and agreement before occupancy.
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?
Bedroom limits and total-unit rules are affected by current zoning and interim controls. Confirm the cap that applies to the property and ARU configuration before choosing a plan or underwriting rent.
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