In Canada’s evolving real estate market, where housing demand continues to outpace supply, investing in new rental builds presents a lucrative opportunity for savvy investors. The Canada Mortgage and Housing Corporation (CMHC) New Build Rental Program, a component of the Multi-Unit Mortgage Loan Insurance (MLI) offering, is a game-changer for developers and investors looking to finance and build multi-unit rental properties. By leveraging this program, investors can enjoy favourable financing terms, enhanced cash flow, and access to new opportunities in the rental housing sector.
This comprehensive guide explores the details of CMHC’s New Build Rental Program, how it works, its benefits for real estate investors, and a case study showcasing its transformative potential.
What is the CMHC MLI Select New Build Rental Program?
The CMHC New Build Rental Program is designed to support the development of purpose-built rental properties across Canada. It provides mortgage loan insurance for new construction projects with five or more residential units. By insuring the mortgage, CMHC reduces the risk for lenders, enabling them to offer more favourable terms to borrowers.
This program directly aligns with CMHC’s broader mission of addressing housing affordability and increasing the supply of rental units. As housing shortages continue to strain the market, this program offers financial incentives to investors willing to contribute to Canada’s rental housing stock.
Eligible projects include:
- Purpose-Built Rental Apartments: Buildings designed specifically for long-term rental use.
- Mixed-Use Developments: Projects that combine residential units with commercial spaces.
- Affordable Housing Projects: New builds that meet CMHC’s affordability criteria.
- Sustainable Housing: Properties incorporating energy-efficient and environmentally friendly design.
How Buying a CMHC MLI Select New Build Rental Project Works
To qualify for these advantageous financing terms, projects must meet specific affordability, energy efficiency, or accessibility standards. Points are accumulated on a tiered system to access the best financing options.
The application and approval processes can be cumbersome and overwhelming, so we, along with our partners, handle all of this for our buyers.
Keep in mind that the MLI Select Program only offers the financing solution where as Meta Realty provides the purchaser with a truly turnkey investment package.
What We Handle for Our Buyers
Our team and partners consist of experienced professionals, including analysts, brokers, builders, and developers to ensure that everything is handled for our investors including:
- Land acquisition
- Entitlements
- Site plan & design
- CMHC application
- Construction management
- Lease up & stabilization
- Ongoing property management
These features translate into a high return on investment, guaranteed positive cash flow and significant appreciation potential.
Benefits of Investing in Real Estate with CMHC’s MLI Select New Build Rental Program
Reduced Upfront Costs
With up to 95% LTC financing, investors can allocate less equity upfront, freeing up capital for other opportunities. This high leverage is especially beneficial for large-scale projects that require significant funding.
Improved Guaranteed Cash Flow
CMHC conducts its own analysis of costs, rents etc., based on benchmarks in order to determine the project’s cash flow and only projects that have a projected net income of at least 110% of projected debt cost (minimum 1.1 debt coverage ratio) are eligible to qualify for the CMHC MLI Select Program.
Competitive Borrowing Terms
CMHC-backed loans often come with lower interest rates, which can significantly reduce the long-term cost of financing.
Support for Sustainability
Projects incorporating energy-efficient features or sustainable designs benefit from reduced premiums and additional support, aligning with investor goals of future-proofing their assets.
Access to Larger Projects
By reducing lender risk, CMHC enables investors to access funding for larger, more ambitious projects that might otherwise be unattainable.
Contribution to Housing Supply
Investing in purpose-built rental properties helps address Canada’s housing crisis, meeting a growing demand for rental units while positioning investors as leaders in the market.
Why the CMHC MLI Select New Build Rental Program is a Smart Choice for Investors
The CMHC New Build Rental Program is not just a financing tool; it’s a strategic enabler for investors looking to scale their portfolios while contributing to Canada’s housing goals. Whether you’re an experienced developer or entering the multi-unit rental market, the program provides the flexibility, affordability, and support needed to succeed.
Key Takeaways:
- Unlock Larger Projects: High leverage and reduced equity requirements open doors to ambitious developments.
- Optimize Returns: Lower interest rates and extended amortization improve financial outcomes.
- Drive Social Impact: Projects supporting affordability and sustainability align with broader market trends and policy goals.
CMHC MLI Select: A Path to Success in Rental Development
In today’s competitive real estate market, strategic investors need to leverage every available advantage. The CMHC New Build Rental Program offers a unique combination of financial benefits, risk mitigation, and long-term value creation. By aligning with Canada’s housing needs, investors can position themselves as market leaders while enjoying robust returns.
If you’re considering a new rental build, now is the time to explore how CMHC’s New Build Rental Program can help you turn your vision into reality. Let’s work together to assess your project’s potential and create a plan for success.
Current Projects Available Through TRB
Demand for these properties is very high, but new inventory is readily available. Qualified investors are encouraged to reach out through the form on this page, and we’d be happy to share the available and upcoming opportunities. Projects typically range in size from $1.5M to $120M+.
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