CMHC MLI SELECT PROGRAM

  The CMHC MLI (Multi-Unit Mortgage Loan Insurance) Select Program is a flexible mortgage insurance product designed to support the development, refinancing, and acquisition of multi-unit residential properties. The program offers favorable loan terms and insurance benefits for properties that contribute to affordable housing, energy efficiency, and accessibility.

Eligibility is open to Canadian borrowers, including developers, real estate investors, and property managers looking to finance multi-unit residential properties with five or more units. Applicants must meet specific criteria related to affordability, energy efficiency, and accessibility.

Some of the main benefits include: 

• Higher Loan-to-Value (LTV) Ratios: Up to 95% LTV for affordable housing properties. 
• Reduced Premiums: Insurance premium discounts based on meeting affordability, energy efficiency, or accessibility standards. 
• Extended Amortization: Up to 50-year amortizations are available, offering more favourable repayment terms. 
• Streamlined Approval Process: Faster processing times for eligible projects. 

CMHC conducts its own analysis of costs, rents etc., based on benchmarks in order to determine the project’s cash flow and only projects that have a projected net income of at least 110% of projected debt cost (minimum 1.1 debt coverage ratio) are eligible to qualify for the CMHC MLI Select Program. 

To qualify for these advantageous financing terms, projects must meet specific affordability, energy efficiency, or accessibility standards. Points are accumulated on a tiered system to access the best financing options. But don’t worry about the cumbersome application and approval process – we help the investor with all of that. 

Our team of experienced professionals, includes analysts, brokers, builders, and developers to ensure that everything is handled for the investor including: 

• Land acquisition 
• Entitlements 
• Site plan & design 
• CMHC application 
• Construction management 
• Lease up & stabilization 
• Ongoing property management 

To qualify as a buyer under the CMHC MLI Select Program, individuals need to demonstrate financial stability. Investors must meet certain net worth and liquidity requirements that includes: 

• 5-10% of project cost as deposit needs to be readily available 
• 10% of project cost in liquid assets as a contingency 
• Personal net worth totaling at least 25% of the project cost 

Demand for these properties is very high, but new inventory is readily available. Qualified investors are encouraged to reach out, and we’d be happy to share the available and upcoming opportunities. Projects typically range in size from $1.5M to $120M+. 

All associated costs are built into the purchase price; but there may be costs involved, such as appraisal fees, legal fees, and insurance premiums. However, the CMHC MLI Select program offers premium discounts for projects that meet the program’s goals related to affordability, energy efficiency, and accessibility, which can lower the overall cost of financing.

Limited recourse financing means that, unlike traditional mortgages where the borrower is personally liable for the entire loan, the lender cannot pursue the borrower for more than a limited portion of the loan in the event of default. This feature of CMHC MLI Select provides a layer of protection for investors, reducing their personal risk when taking on large, multi-unit real estate projects.

One of the most powerful benefits of CMHC MLI Select is the option for extended amortization periods of up to 50 years. By spreading out mortgage payments over a longer time frame, monthly debt service payments are significantly reduced, allowing many projects to achieve positive cash flow even from day one. This, combined with high loan-to- cost ratios, maximizes profitability.

No, not all units in a project need to be affordable to qualify for CMHC MLI Select benefits. Depending on the region and project, as little as 10% of the units may need to meet the area’s benchmark affordable rent. This flexibility allows developers to incorporate affordability while maintaining profitability across the rest of the units.

CMHC conducts its own thorough analysis, including a Debt Service Coverage Ratio (DSCR) requirement of 110%. This means the rental income must cover at least 110% of the building's costs, ensuring a sound financial foundation before any loan is granted.

Yes, CMHC focuses on the strength of the building's financials rather than personal income or credit. As long as you can provide the required 5% deposit and have a net worth of 25% of the project value, you can qualify for financing, regardless of personal income or credit score.

After the project is done & stabilized your mortgage payments begin.

We use the local market data combined with CMHC benchmark rents for the area.