CMHC Income Property is mortgage loan insurance for 2 – 4 unit rentals (non-owner occupied). It provides investors with more housing finance choice when purchasing a rental property.
Download our CMHC Income Property Fact Sheet (PDF).
Financing options for investors in all markets.
CMHC Income Property is mortgage loan insurance for 2 – 4 unit rentals (non-owner occupied). It provides investors with more housing finance choice when purchasing a rental property.
Download our CMHC Income Property Fact Sheet (PDF).
Up to 50% gross rental income or a net rental income approach may be used.
Gross rental income
Up to 50% of the gross rental income for the subject property may be included. Taxes and heat for the property can be excluded from the GDS and TDS ratios.
PITH* + Other Debt
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Borrower’s Gross Annual Income
*PITH means principal, interest, property taxes and heat costs.
Net rental income approach
Lenders may use their own internal guidelines for determining net rental income (gross rents less operating expenses) for the subject property and other residential investment properties. Any portion of heat payments that the tenant pays can be excluded.
Learn more about the different approaches to calculate rental income.
Individuals who are Canadian citizens, permanent residents of Canada, or non-permanent residents who are legally authorized to work in Canada.
For homeowner loans (owner-occupied properties), the loan-to-value ratio for 1 – 2 units is up to 95% LTV. For 3 – 4 units, the ratio is up to 90% LTV.
For small rental loans (non-owner occupied), the loan-to-value ratio for 2 – 4 units is up to 80% LTV.
For homeowner loans, the minimum equity requirement for 1 – 2 units is 5% of the first $500,000 of lending value and 10% of the remainder of the lending value. For 3 – 4 units, the minimum equity requirement is 10%.
For small rental loans, the minimum equity requirement is 20%.
For both homeowner and small rental loans, the maximum purchase price / lending value or as-improved property value must be below $1,000,000.
For homeowner loans, CMHC-insured financing is available for one property per borrower/co-borrower at any given time.
The maximum amortization period is 25 years.
The property must be located in Canada and must be suitable and available for full-time, year-round occupancy. The property must also have year-round access (via a vehicular bridge or ferry if it is on an island).
The down payment can come from sources such as savings, the sale of a property, or a non-repayable financial gift from a relative.
Whether the property is owner occupied or non-owner occupied, subject to an MLI application or not, we offer different approaches to rental income for qualification purposes.
Find out more about the approach(es) that can be used to calculate rental income and the inputs to consider when calculating the debt service ratios.
At least one borrower (or guarantor) must have a minimum credit score of 600. CMHC may consider alternative methods of establishing creditworthiness for borrowers without a credit history.
The maximum threshold is a gross debt service (GDS) ratio of 39% and a total debt service (TDS) ratio of 44%.
The GDS and TDS ratios must be calculated using an interest rate which is the greater of the contract interest rate plus 2 per cent, or 5.25 per cent.
Single advances include improvement costs less than or equal to 10% of the as-improved value.
Progress advances include new construction financing or improvement costs greater than 10% of the as-improved value. With Full Service, CMHC validates up to 4 consecutive advances at no cost. For Basic Service, the Lender validates advances without pre-approval from CMHC.
Non-permanent residents must be legally authorized to work in Canada (with a work permit). Mortgage loan insurance is only available for non-permanent residents for homeowner loans for 1-unit property, owner occupied, up to 90% LTV.
Non-permanent residents are not eligible for alternative methods of establishing creditworthiness. In cases where a credit report is not available, a letter of reference from the borrower’s financial institution in their country of origin may be considered.
Learn about mortgage insurance premium costs with our Premium Information for Homeowner and Small Rental Loans.
Contact your Regional Manager, Client Relations or call our Underwriting Centre team at 1-888 GO emili (1-888-463-6454).
This material is a quick reference tool for CMHC’s common Mortgage Loan Insurance. Additional conditions may apply.
This information is subject to change at any time. Please verify with CMHC that you have the most up to date information before the loan is processed.
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