CMHC MLI SELECT program

Investing in Multi-Unit Rentals? Here’s How the CMHC MLI Select Program Can Help You Finance Multiplexes, 8-Plexes, and 16-Plexes

Image source: picture sourced from google images (https://globalnews.ca/news/7346802/coronavirus-cmhc-housing-strategy/) 

Investing in multi-unit rental properties is a powerful way to build long-term wealth, but securing the right financing can be challenging—especially for multiplexes like 8-plexes and 16-plexes. That’s where the CMHC MLI Select program comes in. Designed to reward affordable, energy-efficient, and accessible housing projects, this mortgage loan insurance program offers better terms that can lower your upfront costs and monthly payments.

Whether you’re a seasoned investor, developer, or just getting started with purpose-built rentals, understanding the ins and outs of MLI Select can help you unlock financing opportunities that traditional loans don’t offer. In this blog, we’ll break down what MLI Select is, how it differs from other CMHC programs, the key benefits, qualification requirements, common mistakes to avoid, and how you can take advantage of this program for your next multiplex investment.

---

What is CMHC MLI Select and Who Is It For?

CMHC MLI Select is a mortgage loan insurance program designed for multi-unit rental properties with five or more units. It offers improved financing terms for projects that include features such as affordability, energy efficiency, or accessibility.

This program is ideal for investors, builders, or developers focused on purpose-built rental apartments. It supports new construction, major renovations, or refinancing of existing rental properties, including multiplexes, 8-plexes, or 16-plexes. If your project aligns with CMHC’s social or environmental goals, MLI Select can provide better loan-to-value ratios and reduced premiums, helping you improve your bottom line.

---

How Does MLI Select Differ from Other CMHC Programs?

MLI Select stands out by offering more flexible and attractive terms for eligible projects, including:

• Loan-to-value (LTV) ratios up to 95%, compared to around 85% with standard CMHC loans

• Amortization periods up to 50 years, versus the typical 25 years

• Lower mortgage insurance premiums, starting around 2.8% depending on the project

• Interest rates often 3.5% to 4.5% lower than conventional or commercial loans

Unlike standard MLI programs, MLI Select uses a points-based system to reward projects that incorporate affordability, energy efficiency, and accessibility. This focus on social and environmental benefits makes MLI Select a strong choice for forward-thinking investors.

---

Minimum Down Payment Required

The minimum down payment can be as low as 5% of the property cost. However, lenders generally require additional liquidity—typically another 5% to 10%—to cover unexpected expenses and maintain financial stability. A net worth of approximately 25% of the total project cost is also often required to demonstrate the borrower’s capacity to manage a multi-unit rental project.

---

Key Benefits and Qualification Criteria

Key Benefits:

• Loan-to-value up to 95%, reducing upfront investment

• Amortization periods up to 50 years, lowering monthly payments

• Reduced mortgage insurance premiums and access to lower interest rates

• Flexibility to use for new construction, property purchase, or refinancing

Qualification Criteria:

• The project must include five or more rental units

• Applicants must earn at least 50 points based on features such as affordable rents below local market averages, energy efficiency improvements (e.g., solar panels, better insulation), and accessibility enhancements (e.g., ramps, barrier-free units)

• Required documentation includes appraisal reports, energy and accessibility assessments, and proof of net worth and liquidity

• Qualifying features typically must be maintained for at least 10 years

• Projects scoring 76 points or more unlock top-tier benefits, including full 50-year amortization and minimal premiums

---

Common Mistakes New Investors Make and How to Avoid Them

New investors often make mistakes such as:

• Applying too late in the development process

• Assuming any green or accessibility feature qualifies without proper certification

• Skipping rent benchmark analysis or miscalculating CMHC’s standards

• Trying to manage the application alone without expert guidance

• Underestimating liquidity needs, often requiring contingency funds around 10%

• Overlooking program updates and changes over time

• Confusing construction financing with term financing, which may require reapplication

To avoid these pitfalls:

• Work with mortgage brokers or consultants experienced in CMHC programs

• Develop your points strategy early in the planning phase

• Prepare all technical reports thoroughly and ahead of time

• Budget extra time and maintain cash reserves for contingencies

Following these best practices will increase your chances of securing financing through the CMHC MLI Select program.

---

Ready to Take the Next Step?

If you’re an investor or developer interested in financing multiplexes, 8-plexes, or 16-plexes, the CMHC MLI Select program offers a smart solution with lower premiums, higher loan-to-value, and flexible terms. To fully leverage these benefits and avoid common pitfalls, it’s important to understand the program’s details and qualification criteria.

Explore our in-depth resources on the CMHC MLI Select program to get started. For location-specific insights and opportunities, check out our dedicated pages for Calgary and Edmonton. Take the next step toward maximizing your investment potential by connecting with CMHC experts and knowledgeable mortgage professionals today.

Interested in CMHC product?
Contact CMHC specialist Afaq Khan today.

 

Advertisement Disclaimer:

This content is ad advertisement and should be used as  informational purposes only and does not constitute financial or legal advice. Homebaba is an independent technology and marketing platform and is not affiliated with or endorsed by CMHC. Afaq Khan is a licensed real estate agent based in Calgary, providing insights based on his experience. Individual circumstances may vary, and readers should consult with qualified professionals or Afaq Khan before making any financial or investment decisions.