Modular construction is growing across Canada for the development of multi-unit rental housing. CMHC mortgage loan insurance offers financing options for developers building new rental properties using modular construction methods.
Modular construction projects must meet the following requirements:
Modular manufacturers and their manufacturing facilities must be in Canada.
All project modules are CSA certified.
The manufacturer is an established organization with the skills and experience to deliver building projects of a similar size and nature.
Eligibility
Modular construction can be used for any of CMHC’s mortgage loan insurance products. Learn more about CMHC’s multi-unit products.
To be eligible, your project must:
have at least 5 rental units, or 50 beds in the case of retirement homes
be at least 70% residential in terms of both floor area and the total lending value
have a maximum loan-to-value ratio of 85%; a loan-to- cost ratio of 95% may be available with MLI Select
In addition, the borrower must have:
proven experience managing a property of a similar size and type
a minimum of 5 years' experience in multi-unit property management (or a property manager with this record)
a net worth of at least 25% of the loan amount
the ability to guarantee 100% of the loan until the project has 12 consecutive months of stable rents
Bonding
For modular construction projects, CMHC requires appropriate bonding to be in place before authorizing advances during construction.
ADDITIONAL RESOURCES
Additional information about CMHC multi-unit mortgage loan insurance, including:
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