Rental Construction Financing

The Rental Construction Financing initiative provides low-cost loans to encourage the construction of rental housing across Canada. It supports sustainable apartment projects in areas where there is a need for additional rental supply. The initiative has a total of $2.5 billion in available loans, and is open from 2017 to 2021.


Loans are available for:

  • municipalities
  • private sector developers and builders
  • non-profit housing providers

Eligible housing types

The initiative focuses on standard apartment projects in Canada with general occupants. It does not support construction of niche housing types such as retirement homes, single room occupancy, student housing and equity co-ops, nor construction of supportive housing or housing with tenancy restrictions.

First Nations eligibility

Projects situated on a reserve may be eligible for financing if the borrower can demonstrate that enforceable security over the lands can be granted to CMHC.

Loan characteristics

Each loan offers:

  • a 10-year term (closed to pre-payment) and a fixed interest rate locked in at first advance for certainty during the most risky periods of development. The applicant is responsible to arrange take-out financing with a CMHC Approved Lender at the end of the term.
  • up to a 50-year amortization period for smaller monthly payments and long-term viability.
  • CMHC mortgage loan insurance is effective from first draw and for the duration of the amortization period to simplify loan renewal. The borrower does not pay the premium, only the PST (if applicable).
  • up to 100% loan to cost for residential space and up to 75% loan to cost for non-residential space (depending on the strength of the application).
  • Interest only payments financed by the loan during construction through to occupancy permit.
  • Interest only payments paid by the borrower from occupancy permit until 12 consecutive months of stabilized effective gross income.

Download the product highlight sheet for complete loan characteristics.

Minimum criteria

All projects must:

  • have at least 5 rental units
  • have a loan size of at least $1 million
  • respond to a need for rental supply
  • have zoning in place, site plan in process with municipality, building permit available and first construction draw must be within 6 months of date of the executed letter of intent
  • meet minimum financial viability and social outcome requirements described below

Financial viability requirements

You must have the financial and operational ability to carry the project without ongoing operating subsidies. This includes the capacity to deal with development risks such as cost overruns, delays in construction and lease-up.

Projects must meet the minimum debt coverage ratio (DCR) requirements using an interest rate stress test of 100 bps over the indicative rate provided by your regional CMHC representative.

Social outcome requirements

At a minimum, your project must meet the following social outcomes.


To meet the affordability requirements, you must meet one of the following criteria:

Criteria A:

  • have the total residential rental income at least 10% below its gross achievable residential rental income, as supported by an independent appraisal report
  • rent at least 20% of units at or below 30% of the median income for the area
  • maintain unit affordability for at least 10 years after the date of first occupancy

Criteria B:

  • The affordability requirement may be met if the proposal has been approved under other housing programs/initiatives (federal, provincial, territorial, or municipal) that provide support for development of affordable rental housing such as capital grants, municipal concessions or expedited planning processing.
  • maintain unit affordability for at least 10 years after the date of first occupancy

Energy efficiency

Projects must decrease energy use and greenhouse gas (GHG) emissions to at least 15% below the 2015 National Energy Code for Buildings or the 2015 National Building Code.

If we advance your application to the underwriting stage, we will require a confirmation of the energy efficiency and GHG emissions reduction by a qualified energy professional. See Appendix B of the Required Documentation fact sheet.


At least 10% of the project’s units must meet or exceed accessibility standards as regulated by local codes. In addition, access to the project and all common areas must be barrier-free as regulated by the local codes or the 2015 National Building Code. See Appendix A of the Required Documentation fact sheet.

Approval process

We accept applications on a continuous basis. Once we review your application, we will notify you of the end-date of the current 60-day prioritization window. We will inform you within 5 business days of the end of this window whether your application was selected for underwriting, retained for the next prioritization window or declined.

Selected applications are subject to approval based on an underwriting assessment of the borrower, the property and the market. CMLS Financial has been contracted to complete the underwriting assessment on CMHC’s behalf.

Prioritization of applications

Factors used to prioritize and select applications for underwriting include social outcomes, readiness for construction, local need for rental supply, financial viability and CMHC’s borrower exposure. Your project’s assessment from the social outcome grid will also assist in determining your projects’ loan to cost.

Documentation requirements

The Required Documentation provides the minimum information and documentation required when an application is selected for underwriting and before final credit approval.

Application fees

If your application is selected for an underwriting assessment, the following fees will be required for your application to proceed to underwriting:

Residential portion:

  • $200/unit for the first 100 units
  • $100/unit for subsequent units
  • Up to maximum of $55,000 for the residential portion of the application fees

Non-residential portion:

  • 0.30% of the non-residential loan amount if it exceeds $100,000

If your application is approved and funded, the application fees will be credited back to you through a reduction in the loan’s interest rate.

If your application is declined or withdrawn, we will retain a portion of the fees (minimum 10%) for the underwriting work rendered. Once CMHC has issued a commitment Letter of Intent, we will not refund any portion of the fees, even if the loan is not advanced.


Rental Construction Financing Social Outcome Grid

This tool will help you look at various scenarios by providing some information regarding the proposed project such as costs, financing and sources of equity. The tool will also help you determine if your project meets the mandatory minimum requirements for financial viability, affordability, energy efficiency, and accessibility. In addition to these mandatory requirements, applications will be scored on additional criteria linked to social outcomes. Although a more detailed underwriting will be required when an application is formally submitted, this will give you sufficient information to explore different options.
Download and complete your Rental Construction Financing Social Outcome Grid (.XLSM)

Energy efficiency

You must demonstrate how your project will achieve a minimum 15% decrease in energy intensity and Greenhouse Gas (GHG) emissions relative to similar projects constructed to the 2015 National Energy Code for Buildings or the 2015 National Building Code.
Resource-efficient homes


At least 10% of units within the project must meet or exceed the local accessibility standards of the municipality, Province or Territory, and the accessibility requirements of the 2015 National Building Code.
Accessible and adaptable housing


What does the financing initiative provide housing developers?

It will provide lower-cost construction loans that will be approved for 10 year terms providing cost predictability during the earliest stage of rental development. In addition, loans through the financing initiative include CMHC mortgage loan insurance. This will simplify the loan renewal throughout the life of the mortgage.

What is the maximum loan amount that an applicant can request?

The financing initiative will prioritize projects that demonstrate greater social outcomes and will potentially offer a loan for up to 100% of the cost of these projects.

Why does the Rental Construction Financing initiative have social outcome eligibility criteria?

The eligibility criteria of project viability, affordability, accessibility, and energy efficiency are to ensure that the subject residential rental property is self-sustaining without government subsidy and that it positively contributes to a vibrant, socially inclusive, neighborhood.

Is there a fee for applying to the Rental Construction Financing initiative?

Yes. Once we have reviewed the initial application, the following fees will be required for the Rental Construction Financing application to proceed to the underwriting assessment:

For the first 100 units $200 per unit
Subsequent units $100 per unit up to a maximum of $55,000
Additional Fees for non-residential components (where the loan amount relating to the non-residential components exceeds $100,000) 0.30% of the non-residential loan amount*

* In addition to the $55,000 maximum per loan.

If the Rental Construction Financing loan is approved and funded, the application fee is credited back to the borrower through a reduction in the loan interest rate.

What happens to the application fee if my application is declined or withdrawn?

If your application is declined by CMHC or is withdrawn (after the underwriting assessment has begun) CMHC will retain a portion of the application fee for work rendered thus far. A minimum of 10 percent of the application fee will be retained. Once a commitment letter is issued, the fee is deemed to have been fully earned by CMHC and will not be refunded even if the loan is not advanced.

Could a project receive additional funding assistance?

Proponents may apply for other CMHC products, programs or services and if approved this additional assistance can form part of the loan application to the Rental Construction Financing. Projects can also leverage other government housing programs or initiatives to improve project feasibility and affordability however it is a requirement that the project must be financially viable without ongoing operating subsidies to the borrower.

Are provinces and territories eligible for financing?

The financing initiative was not specifically designed to target provinces and territories as borrowers or delivery partners for new construction as these entities benefit directly from the Federal Government’s Investment in Affordable Housing (IAH) funding.

Are on-reserve groups eligible for financing?

Projects situated on a reserve could be eligible for financing provided that the borrower is able to demonstrate that enforceable security over the lands can be granted to CMHC. New rental housing projects off-reserve would be eligible.


For more information or help with your application, contact your regional CMHC representative or email the Rental Construction Financing team.

Phone: 1-800-668-2642 (8 a.m. to 7 p.m. ET)

Mailing address:

Canada Mortgage and Housing Corporation
Attention: Rental Construction Financing
700 Montreal Road
Ottawa, Ontario
K1A 0P7

CMHC representatives by region

Paula Gasparro

Paula Gasparro


Region: Ontario

Krissy Fry

Krissy Fry


Region: Atlantic

Michael Sagert

Michael Sagert


Region: Prairies

Robyn Adamache

Robyn Adamache


Region: B.C.

Giovanni De Benedictis


Region: Quebec

Submit your loan application

Reminder: Please have your completed Social Outcome Grid (.XLSM) ready to submit with your application.

Tell us about yourself

Phone number

Tell us about your project

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Zoning compliant?
Site plan approval completed?
Property title
Project permit in process with the city?
Current as-built appraisal completed?
Current market feasibility completed?
Cost consultant review of budget?
Environmental report completed?
Terms and conditions

By submitting an application for a loan under ‘Rental Construction Financing, the Applicant hereby acknowledges and agrees to the following terms and conditions.

  1. Additional information regarding the project will be required, and the Applicant agrees to provide such information on or before the date(s) specified in writing by or on behalf of CMHC. There is no obligation to provide the requested information, but failure to do so may prevent CMHC from considering the application.
  2. If the Applicant is selected by CMHC to receive a loan, agreements that set out the terms and conditions of the loan must be entered into with CMHC. The agreements will specify, among other things, the amount to be advanced to the Applicant. The granting of a loan or any part thereof or approval for insurance by CMHC is not to be construed or relied on by the Applicant or any other party as representing a confirmation of the value or condition of the underlying property, whether or not appraisals or inspections are carried out by or for CMHC; nor is it to be construed or relied on by the applicant or any other party as representing a confirmation of the borrower(s) and any guarantor(s) ability to pay the loan.
  3. All applications shall become the property of CMHC upon submission, and CMHC shall have intellectual property rights in the application and other submitted materials. The application and any other submitted materials will not be returned to the Applicant. The Applicant is not entitled to any compensation for any work related to, or materials supplied in connection with, the application. The Applicant represents and warrants to CMHC that all rights necessary to satisfy this requirement have been obtained and that it has waived, or has obtained a waiver in favour of CMHC, all moral rights in the application and related materials, and hereby assigns all rights in the application and materials as provided for in the law of copyright. If requested by CMHC, the Applicant will execute documentation to further acknowledge CMHC’s ownership of the material and the waiver of moral rights.

    All information regarding the terms and conditions and financial and/or technical aspects of the Applicant’s proposal that are proprietary or confidential in nature have been and will be marked “PROPRIETARY” or “CONFIDENTIAL” when submitted to CMHC. Proprietary and confidential markings shall be included beside each item or at the top of each page containing information that the Applicant wishes to protect from disclosure. CMHC will make all reasonable efforts to protect this information. Notwithstanding the foregoing, CMHC shall have no liability of any kind to the Applicant, or any other party, based on inadvertent or unintentional disclosure of proprietary information. The Applicant has been advised that as a Crown Corporation, CMHC is subject to federal legislation including the Access to Information Act and the Privacy Act. In certain specific circumstances, information submitted to CMHC by the Applicant may be required to be disclosed pursuant to federal legislation. In such cases, to the extent reasonably possible, CMHC will make efforts to advise the Applicant of the required disclosure prior to releasing the information.
  4. The Applicant agrees that the information submitted to or obtained by CMHC in connection with an application or a loan may be used and exchanged for the following purposes: (i) to consider its eligibility for the loan requested; (ii) for any purpose related to the provision of mortgage insurance generally; (iii) for evaluation of the Rental Construction Financing initiative; (iv) for use by CMHC and the Government of Canada for any purpose related to the National Housing Act (Canada); and (v) to protect CMHC from errors and fraud. CMHC and others engaged by CMHC to administer the Rental Construction Financing initiative are authorized to process and store such information and make it available to CMHC employees (and others engaged by CMHC) for the purposes of assessing the Applicant’s eligibility for the loan requested, the administration of the Rental Construction Financing initiative and the collection of analytics. If any of the information changes or becomes inaccurate, the Applicant must promptly notify CMHC of the change.
  5. If the Applicant is selected by CMHC to receive a loan, CMHC shall have the right to publicize details of the housing project, the funding assistance and the name of the successful Applicant, in accordance with CMHC's obligations as a Canadian Crown Corporation. By submitting this application, the Applicant confirms its consent to the disclosure of this information. The Applicant is not permitted to make any announcement regarding the Rental Construction Financing initiative, including (without limitation) any funding without the express written consent of CMHC.
  6. CMHC and any other person engaged by CMHC are each authorized to (i) contact any person listed in this application to consider the Applicant’s eligibility for the loan requested or in connection with the administration of the Rental Construction Financing initiative and may send you information by email; and (ii) make any inquiries required, including obtaining corporate and business information, to assess this application for a loan.

If you have any questions or concerns, please email the Rental Construction Financing team.



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