Planning a Multi-Unit Rental Project: CMHC Programs Explained (MLI Select basics)

If you are planning a purpose-built rental or other multi-unit residential project in the GTA, you have probably heard of CMHC programs such as MLI Select. Financing has a major influence on whether a rental project is viable, so it is worth understanding the basics before design decisions are locked in.

This article is general information, not financial, legal or lending advice. BRK Developments is not affiliated with CMHC, and program eligibility, terms and approvals are determined by CMHC and participating lenders. Program details change, so always confirm current requirements directly with CMHC, an approved lender or a qualified mortgage professional.

What is CMHC?

Canada Mortgage and Housing Corporation (CMHC) is a federal Crown corporation that supports housing in Canada. For multi-unit rental housing, it offers mortgage loan insurance and other programs intended to encourage the construction of rental homes, including affordable, energy-efficient and accessible housing.

MLI Select basics

MLI Select is a CMHC multi-unit mortgage loan insurance product for rental properties. It generally applies to projects with at least five residential units. It uses a points-based approach: projects earn points for commitments in three areas:

• Affordability – for example, keeping a share of units at rents below specified thresholds for a set period.
• Energy efficiency – exceeding applicable energy code or performance benchmarks.
• Accessibility – incorporating accessible units or universal design features.

Depending on the points achieved, CMHC describes potential benefits such as higher loan-to-value ratios, longer amortization periods and reduced insurance premiums. The specific thresholds, benefits and reporting obligations are set by CMHC and can change, so review CMHC’s current program information with your lender.

Commitments made to earn points – such as affordability terms – usually come with ongoing obligations. Understand them fully before you commit.

Other programs you may hear about

CMHC and other levels of government offer additional programs for rental and affordable housing from time to time, including construction financing for rental projects and funding for affordable housing. Names, terms and availability evolve, so ask your lender or advisor which programs may be relevant to your project at the time you apply.

How program goals affect design and construction

Financing decisions and building decisions are closely linked. If a project will pursue energy-efficiency or accessibility points, those targets need to be reflected early in the design, specifications and budget, for example:

• Energy modelling by a qualified energy consultant, and building envelope and mechanical choices that support the target.
• Accessible unit layouts, entrances and circulation planned from the first drawings.
• Construction quality and documentation that support any required testing or verification.
• A realistic budget that accounts for the cost of meeting these commitments.

Who is typically involved?

• Owner or developer – sets goals and makes financing decisions.
• Approved lender or mortgage professional – structures financing and applies to CMHC.
• Architect and engineers – design the building to meet zoning, code and program targets.
• Energy consultant – models performance and supports energy-efficiency commitments.
• Builder or construction manager – prices, plans and delivers the work.
• Legal and accounting advisors – review obligations, structure and tax implications.

Practical steps before you apply

1. Confirm what your site can support through a zoning and feasibility review.
2. Speak with an approved lender early about financing options and documentation.
3. Decide which program targets, if any, you intend to pursue.
4. Build those targets into the design brief, specifications and budget.
5. Prepare realistic construction budgets and schedules with contingency.

How BRK Developments can help

BRK Developments focuses on construction planning and coordination for multi-unit residential projects in the GTA. We can work alongside your architect, energy consultant and lender to align the construction scope with your project goals. We do not provide financing or financial advice, and we cannot guarantee CMHC approval, funding or program eligibility.

This article is general information only and is not legal, financial, tax or planning advice. Rules and programs change and vary by municipality — confirm current requirements with the City, CMHC, your lender or qualified advisers.