A Purchase Plus Improvements (PPI) mortgage lets an Edmonton fixer-upper buyer fold renovation costs into the purchase mortgage — but the improvement money is not handed over at possession. The lender approves the total (price plus quoted improvements), funds the purchase portion first, and holds the improvement funds back until the work is complete and verified by an inspection or appraiser visit; then the funds release, usually to pay the contractor. Buyers who plan their cash around that sequence renovate smoothly. Buyers who expect the money up front stall mid-project.
What qualifies as an improvement
Structural and value-adding work: kitchens, bathrooms, flooring, windows, roofing, furnaces, electrical and plumbing updates, and finishing a basement. Cosmetic luxuries and movable items — furniture, hot tubs, landscaping flourishes — generally do not qualify, and the improvements must be reflected in the property’s value on the final appraisal. Quotes must be in writing from the contractors who will do the work, obtained before your financing condition is waived, because the lender approves the improvement amount from those quotes. The full mechanics, including draw options on larger projects, are in my main guide to Purchase Plus Improvements mortgages in Canada.
The cash-flow reality nobody advertises
Between possession and the release inspection, someone fronts the money: you, your contractor’s payment terms, or a short-term credit line you arranged in advance. Contractors on PPI jobs know the rhythm and usually structure deposits and progress payments around the holdback — get that schedule in writing before work starts. Keep every invoice and receipt: the release is a reimbursement against documented, completed work, and the final appraiser must see the quoted improvements actually done. Scope changes mid-project need lender approval before, not forgiveness after.
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Which Edmonton homes suit PPI best
Sound-structure homes with dated finishes in established neighbourhoods — the pattern in my guide to the repair side of older homes — where the renovation visibly lifts value. Homes with uninsurable systems are a different conversation: a PPI approval still needs insurance bound for funding, so a knob-and-tube or 60-amp panel problem must be solved inside the plan, which is why those files start with the insurance questions in my old electrical panels guide. Bring the quotes and the plan together through the Pre-Approval & Refinance Check before the offer, and the financing condition becomes a formality instead of a gamble.
Frequently asked questions
How much can I add to my mortgage with Purchase Plus Improvements?
Insured PPI programs commonly allow improvements up to a set percentage of the purchase price or a dollar cap that varies by insurer and lender. Your broker confirms the current limit for your file when the quotes are submitted — do not plan a renovation budget above the program ceiling.
Do I get the renovation money at possession?
No. The purchase portion funds at possession; improvement funds are held by the lender or solicitor and released after the work is complete and verified, against invoices. Arrange how the contractor is paid in the interim before work begins.
Can I do the renovation work myself under PPI?
Lenders generally want licensed contractor quotes and completed-work verification; sweat-equity arrangements are restricted and must be approved in advance. Assume contractor-completed work unless your lender confirms otherwise in writing.
Found an Edmonton fixer-upper and want the renovation financed into the deal properly? Call (780) 720-8240 — I will try to call you this week, or reply with a good time and we will set a phone appointment to structure the quotes, the holdback and your cash bridge.
By Travis Bannert, Realtor and Mortgage Broker
Travis Bannert, Mortgage Broker | Next Door Mortgages, BFL Dominion Lending Centres | (780) 720-8240 | nextdoormortgages.com