Why do some lenders hesitate to finance a buyer purchasing a power of sale property in Ontario?

Lenders financing your purchase of a power of sale property face some of the same uncertainty you do as the buyer. Without vendor representations about condition, without a guarantee of vacant possession, and sometimes with limited information about the property's recent history, an underwriter has less of the usual reassurance it relies on when assessing risk. Appraisers may also flag uncertainty where access or information is limited, which can complicate the lender's own valuation of the property.

Timelines add another layer of difficulty - power of sale transactions can move on a different schedule than an ordinary resale, and a lender unfamiliar with these deals may not be able to turn around an approval quickly enough to match it. This does not mean financing is unavailable; many buyers successfully finance power of sale purchases every year, but it often takes more groundwork, more documentation, and sometimes a lender who specifically has experience with these transactions.

Start the financing conversation early, be transparent with your lender about the nature of the purchase, and ask specifically whether they have experience with power of sale transactions before you are far into the deal.