Rental Construction Financing

The loan offers:

Favorable Terms

• 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
• up to a 50-year amortization period
• 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)

Low costs

• interest only payments financed by the loan during construction through to occupancy permit
• principal and interest payments are due after 12 months of stabilized effective gross income

Access to CMHC Mortgage Loan Insurance

• CMHC mortgage loan insurance that 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

Download Product Highlight Sheet (PDF)

Eligible borrowers include for-profit developers, non-profit developers and municipalities.

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, a site plan in process with municipality and a building permit available. The first construction draw must be within 6 months of date of the executed loan agreement
• meet minimum financial viability and social outcome requirements described below
• Meet minimum requirements (Key highlights) :
• Financial Viability: You must have the financial and operational ability to carry the project without ongoing subsidies and ability to meet debt coverage ratio requirements.
• Affordability: You must meet one of the following affordability requirements and it should be maintained for at least 10 years.
• A: At least 20% of units must have rents below 30% of the median total income of all families for the area, and the total residential rental income must be at least 10% below its gross achievable residential income.
• B: The proposal has been approved under another affordable housing program or initiative from any government level, such as capital grants, municipal concessions or expedited planning processing.
• Energy efficiency: Projects must decrease energy use and GHG emissions. Both must be 15% below the 2015 National Energy Code for Buildings or the 2015 Code at minimum.
• Accessibility requirements: At least 10% of the project’s units must meet or exceed accessibility standards as regulated by local codes.

Download Eligibility and Requirements Details (PDF)

We accept applications on a continuous basis. We will notify you of the end-date of the current 30-day prioritization window after we review your application. 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.

RCFi Application Process

Prioritization of applications

The RCFi looks to prioritize projects that:

• Meet or exceed the mandatory minimum requirements for financial viability, affordability, energy efficiency and accessibility
• Demonstrate greater social outcomes that contribute to vibrant, socially inclusive neighborhoods and
• Address a need for supply in the market

Your project’s assessment from the Social Outcome Grid will also assist in determining your projects’ loan-to-cost ratio.

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

Once your application has been selected for an underwriting assessment, the following fees will be required:

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 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, no refund will be available, even if the loan is not advanced.

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