The client
A family building a modular home near Miramichi, New Brunswick, on land they already owned. $365,000 total project cost, combined income $8,000/month, financed on a standard progress-draw construction mortgage.
Borrowers
Combined income $8,000/month
Both salaried
Project
$365,000 total cost
Site prep, foundation, modular home, finishing
Other debt
$270/mo
Other monthly debt payment
Manufacturer terms
30% deposit before shipping
A factory-floor milestone, not an on-site stage
The mismatch
No inspectable on-site progress yet
The lender's own draw schedule had nothing to advance against
The problem
A construction (draw) mortgage releases funds against physical stages a lender can inspect on the building site — foundation, framing, lock-up, completion. A modular home's manufacturer works to a different calendar entirely: production starts, and a large deposit is due, before the module ever leaves the factory floor.
What the mismatch actually meant
- ▸Manufacturer's deposit requirement: $109,500 (30% of the $365,000 project), due before production began
- ▸The lender's site-inspection draw schedule had no stage to advance funds against — a factory production run isn't something an on-site appraiser or inspector can confirm
- ▸Without the deposit paid on the manufacturer's timeline, the family risked losing their spot in the production queue entirely
Neither party was being unreasonable. The manufacturer needs to be paid to start building; the lender's draw schedule is built around inspecting a physical structure on a physical lot. The two calendars simply don't line up on their own — a friction point that shows up more often as a growing share of Canada's new housing supply is factory-built rather than framed on site.
The numbers
The bridge only needed to cover the gap between the factory deposit and the first genuine on-site draw — not the whole project.
| The bridge, and the completed take-out | Amount |
|---|---|
| Factory deposit (30% of $365,000 project) | $109,500 |
| Bridge rate, illustrative | 8.75% |
| Bridge interest, 3 months | $2,394 |
| Minimum qualifying rate on the take-out (greater of contract + 2% or 5.25%) | 7.25% |
| Qualifying payment, 25 years | $2,613/mo |
The bridge covered only the deposit itself, for the roughly three months between the deposit being paid and the module's delivery and set on the foundation — the point at which the first genuine, inspectable on-site draw could reimburse it.
Ratios on the completed take-out
| Ratio | At completion |
|---|---|
| GDS (payment + $250 tax + $115 heat) ÷ $8,000 income | 37.2% |
| TDS (GDS numerator + $270 other debt) ÷ income | 40.6% |
The solution
A New Brunswick mortgage associate structured a short-term bridge specifically for the factory-deposit gap, rather than treating it as a construction-mortgage problem.
First, confirmed the manufacturer's deposit terms and production timeline in writing — exactly when the $109,500 was due, and when the module would actually ship and arrive on site.
Second, arranged a three-month bridge sized to the deposit alone, not the whole project, keeping the cost of the mismatch to $2,394 in interest rather than asking the family to fund the full deposit from savings.
Third, earmarked the first on-site draw — foundation and set — to retire the bridge immediately once the module arrived and the site-inspection schedule had something real to advance against.
The outcome
The module delivered on schedule, the bridge was repaid in full from the first on-site draw, and the build proceeded on the lender's normal inspection schedule from that point forward. The take-out funded at $365,000, qualifying payment $2,613/mo, GDS 37.2%, TDS 40.6%.
Total cost of solving the mismatch: $2,394 in bridge interest — a fraction of what losing the production slot, or draining savings to cover the deposit outright, would have cost.
What to take from this file
- 01A modular manufacturer's payment schedule and a lender's draw schedule run on different calendars. A factory-floor deposit isn't something a site-inspection draw can fund.
- 02Size the bridge to the specific gap, not the whole project. A short-term bridge covering only the deposit keeps the cost of the mismatch small and defined.
- 03Confirm the manufacturer's exact timeline before pricing the bridge. The number of months the bridge has to cover drives the cost directly.
- 04Earmark the first real draw to retire the bridge immediately. Once the module is on site and inspectable, the normal draw schedule takes over.
- 05This is a scheduling problem, not a credit problem. The file itself qualified cleanly — the only issue was two different industries' payment timelines not lining up.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸30% factory deposit / 8.75% bridge rate — manufacturer deposit terms and bridge pricing are set by the individual manufacturer and lender, not by a published schedule.
- ▸5.25% contract rate — rates move daily; not a quote.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.