Natalie Wellings, a mortgage broker with Mortgage Success, released an article that I thought would interest you.  You can view it on her website or read the article below:

Buying a “fixer-upper” but don’t have enough cash to do the fixing?

Have you searched high and low for the perfect home but can’t find one with all the upgrades you want? Maybe you’ve just saved enough for your down payment but don’t have the extra cash to change the furnace, replace the flooring, windows or whatever...let me help!

CMHC offers a Purchase-Plus Improvements mortgage that works wonderfully for individuals in this situation. The program allows you to purchase a home and add the cost of upgrades into the mortgage! This allows you to do the work now and improve the value of your home instead of adding the renovation costs to your credit card (with very high interest rates) or having to wait to save up the cash.
 

How does it work?
When you find a house that you want to buy, make a conditional offer (subject to financing). During your financing period, you’ll need to send me written quotes for the work to be completed. I’ll have them submitted to CMHC who will underwrite your file, and approve the quotes (OAC). Once you’ve taken possession you’ll have 12 months to complete the approved upgrades. Once you’ve finished them, just give me a call! I’ll let you know what documentation will be required as proof the upgrades have been completed. Once satisfied, your lawyer will be advised to cut you a cheque for the renovation totals. Easy as that!