CMHC rental construction financing provides low cost funding to eligible borrowers during the most risky phases of product development of rental apartments (construction through to stabilized operations). The minimum loan is $1,000,000, and a maximum of up to 100% of Loan to Cost (for residential loan component).
The initiative focuses on standard rental apartment projects in Canada with general occupants where there is a need for additional rental housing supply.
Note: It does not support construction of niche housing types such as retirement homes, single room occupancy and student housing. To learn about funding for niche housing types, please visit MLI for Affordable & Market Rental Housing.
Before starting your application, please take a moment to download, save, and review our portal guide. The guide includes information required to create your profile and start the application process successfully.
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)
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
Please note: at the end of the term, the applicant is responsible to arrange take-out financing with a CMHC Approved Lender.
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 be a minimum of 15% more efficient in energy consumption and GHG emissions than the applicable reference model building code:
Low-rise multi-unit buildings under Part 9 of the National Building code must demonstrate a minimum 15% improvement over the 2015 NBC.
All buildings under Part 3 on the National Building code must demonstrate a minimum 15% improvement over the 2017 NECB.
Accessibility requirements: At least 10% of the project’s units must meet or exceed accessibility standards as regulated by local codes.
Considerations for Indigenous and Northern Housing Solutions Clients
In addition to a Ministerial Loan Guarantee (MLG), Canada Mortgage and Housing Corporation (CMHC) is now accepting four additional alternative types of security for projects on First Nation lands.
After receiving confirmation from your CMHC specialist, you can
submit your application on the application portal along with the
necessary documentation for the prioritization.
PRE-SCREENING AND PRIORITIZATION
CMHC completes a prescreening (review for eligibility and
completion) and prioritization of the strongest applications. Each
application is either selected for underwriting, rejected, or kept
on hold. It may be determined that a different program would be a
better fit for your application and a CMHC specialist may encourage
you to apply for a different initiative.
The RCFi looks to only prioritize the strongest 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
You will be notified in a timely manner of the prioritization
decision. It can take up to 60 days following your
submission to receive a conditional commitment letter if your
application is selected for underwriting.
UNDERWRITING BY CMLS
Once selected, your application will be sent to CMLS (our external
service provider) for underwriting and you will then be required to
pay the application fees. Please consult the
RCFI Product Highlight Sheet
for Application Fee details.
Applications are subject to approval based on multiple factors that
include but not limited to the underwriting assessment of the
borrower, the property and the market.
Once all the required documentation has been provided to CMLS, it
can take up to 265 days to complete the
underwriting and for the applicant to receive a Letter of Intent.
LETTER OF INTENT
CMHC Credit committee will perform a final review and decision of
the application once the underwriting is completed by CMLS.
Successful applicants will be issued a Letter of Intent.
LOAN AGREEMENT AND FUNDING
Once the signed Letter of Intent is returned, CMHC will issue a Loan
agreement to be executed by the borrower. This loan agreement will
be typically issued within 40 days of the signing
of the Letter of Intent.
Execution of the Loan agreement will subsequently initiate the
funding process with monthly construction draws.
CMLS will be administrating the loan on behalf of CMHC and at the
end of the closed 10-year term, borrowers will be required to have
the CMHC insured mortgage assumed by a National Housing Act Approved