- September 2, 2025
- Posted by: Stephen Thomas
- Category: Mortgage Advisory
CMHC Financing 101 for Apartment Investors and Developers
Compare Standard Rental, MLI Select, & ACLP to Maximize Capital
Commercial real estate financing can be complex—especially when navigating Canada Mortgage and Housing Corporation (CMHC) programs. For apartment investors, developers, and property owners across Canada, CMHC offers three powerful insured mortgage pathways: the Standard Rental Housing Program, MLI Select, and the Apartment Construction Loan Program (ACLP). Each addresses different project types—from traditional rental units to sustainable, inclusive development construction projects—with unique benefits and eligibility criteria. Selecting the right CMHC stream can unlock longer amortizations, reduced equity needs, improved cash flow, and leverage that conventional lenders won’t match. In this comprehensive guide, we break down the features, construction financing options, Debt Service Coverage (DCR) requirements, and best use cases for each program—plus practical tips on strategy, eligibility, and working with advisors.
1. What Is CMHC Insured Apartment Financing?
CMHC mortgage loan insurance encourages lenders to provide more favourable terms on multi-unit residential projects. By mitigating risk, CMHC allows lenders to offer higher loan-to-value (LTV), extended amortization, and competitive interest rates. Under CMHC-backed terms, eligible projects receive financing that aligns with Canada’s strategic housing objectives. Whether you’re refinancing, acquiring, or building rental housing, CMHC insurance can dramatically improve debt service terms and reduce equity requirements.
CMHC’s three core financing streams are:
- Standard Rental Housing Program – supports traditional stabilized rentals without performance requirements
- MLI Select – rewards projects that meet affordability, energy-efficiency, or accessibility criteria
- Apartment Construction Loan Program (ACLP) – streamlines construction-to-rental financing for new builds and conversions
Learn more about each program’s current terms, eligibility, and mechanics on CMHC’s official site:
2. Standard Rental Housing Program
Best For: stabilized or near-stabilized rental properties with standard market rents.
Program Highlights:
- Up to 85% LTV – provides significant leverage compared to conventional financing.
- Amortization: up to 40 years, extending cash flow and reducing monthly debt servicing pressure.
- Debt Service Coverage Ratio (DCR):
- 5–6 units: 1.10 (purchase) / 1.20 (refinance)
- 7+ units: 1.20 (term ≥10 years) / 1.30 (term <10 years)
- Non-residential components: 1.40 (term ≥10 years) / 1.50 (term <10 years)
- Construction financing available—advances up to 85% of eligible costs during build phase.
Advantages:
- No affordability, energy, or accessibility requirements.
- Straightforward underwriting for existing rental buildings.
- Lower perceived risk accelerates lender approvals.
Limitations:
- Less leverage and lower amortizations than MLI Select or ACLP.
- Requires stronger DCRs and higher equity.
Use Case Example:
A small landlord with a 6-unit apartment building at market rent wants to refinance and reduce their monthly debt burden. The Standard Rental program offers 85% LTV and 40-year amortization—balancing manageable coverage ratios with affordable financing.
3. MLI Select: Affordable, Energy-efficient & Accessible Housing
Best For: developers and property owners committed to social or environmental outcomes—including affordable rents, energy upgrades, or accessibility features.
Program Highlights:
- Up to 95% LTC for new construction; 95% LTV for acquisition/refi.
- Amortization: up to 50 years, enabling very low debt service payments.
- DCR: as low as 1.10 (residential); 1.40 (non-residential).
- Reduced insurance premiums based on project scoring.
Eligibility is Points-Based: (Minimum 50 points across three categories)
- Affordability:
- New builds: ≥10% of units ≤ 30% median renter income for 10+ years.
- Existing buildings: ≥40% of units have the same requirement.
- Energy Efficiency: building must exceed baseline energy code by 15%–40%+.
- Accessibility: at least 15% of units must meet CSA B651:23 standards.
Construction Financing:
- Advances up to 95% of eligible costs, depending on scoring.
Why It Works:
- Encourages developers toward social + green outcomes.
- Maximizes leverage (95%+), reduces equity needs dramatically.
- Lower DCR lets projects with lower initial NOI qualify.
Trade-offs:
- More documentation needed (energy modeling, affordability agreements, certificates).
- Performance obligations (rent restrictions, access standards) must be maintained long-term.
Use Case Example:
A developer has renovated an existing building—added energy-efficient windows, solar panels, and converted some units to barrier-free layouts. Now owning 50 units, 15 of which are stabilized affordable housing. They apply under MLI Select, qualifying for 95% LTV and a 50-year amortization, enabling lower monthly payments and faster ROI.
Explore details: MLI Select Program
4. Apartment Construction Loan Program (ACLP)
Best For: new construction or conversions (e.g., office → residential), particularly when affordability or energy goals are integral.
Key Features:
- Up to 100% LTC, depending on affordability and climate commitment.
- Interest-only payments during construction and lease-up.
- No rental achievement holdbacks—so cash flow starts immediately after occupancy.
- Amortization: up to 50 years—extends the cost of financing over decades.
- DCR: 1.10 (residential), 1.40 (non-residential).
Affordability Commitment:
- Units must remain affordable (≤ 30% median renter income) for 10–20+ years, or be part of recognized housing programs.
Energy Performance:
- Measured against NECB/NBC tiers—higher tiers get preferential financing terms.
Why It’s Powerful:
- Maximizes leverage—most of your capital can remain invested in operations, acquisitions, or reinvestment.
- Removes rent-up risk by allowing interest-only service.
- Supports sustainable development through energy/inclusion incentives.
Considerations:
- Requires robust pre-construction planning, documentation, and tight capital stack modelling.
- Typically needs detailed proforma, architectural plans, and environmental modelling.
Use Case Example:
A developer is converting a vacant office building into 80 apartments in a dense urban area. By securing ACLP financing, they get 100% LTC, interest only during lease-up, and a 50-year amortization— allowing them to debut a high-equity, affordable project with strong long-term cash flow.
5. Deep Dive Comparison Table
Here’s a quick reference to compare CMHC’s insured loan streams:
| Feature | Standard Rental | MLI Select | ACLP |
|---|---|---|---|
| Max LTV/LTC | 85% | 95% | 100% |
| Amortization | 40 years | 50 years | 50 years |
| Min DCR (res.) | 1.10–1.30 | Down to 1.10 | 1.10 |
| Affordability | None | Yes (10–40%) | Yes (10–20+ yrs) |
| Construction LTC | Up to 85% | Up to 95% | Up to 100% |
How to Decide:
- Lower-risk, established rentals: Standard Rental.
- Affordable/green/accessible projects: MLI Select (points-based).
- New construction or conversions with affordability goals: ACLP.
6. Working with a CMHC Financing Advisor
Navigating CMHC’s programs is not just complex—it’s constantly evolving. From underwriting criteria and scoring rubrics to risk-based insurance premiums and environmental benchmarks, each CMHC stream has its nuances.
Why use a commercial financing intermediary like HALO Mortgage Advisory?
- Program matchmaking: We assess your project and align it with the optimal CMHC stream and lender appetite.
- Strategic packaging: We optimize Debt Coverage Ratio (DCR), Loan-to-Cost (LTC), and amortization to maximize leverage and cash flow.
- Bank and CMHC-savvy: We speak lender and CMHC language—ensuring early alignment and avoiding common approval pitfalls.
- Speed and negotiation: We facilitate multiple offers, competitive terms, and quicker closing timelines.
- Long-term compliance: We help structure affordability or energy obligations to meet CMHC requirements over years, not just at closing.
Many CMHC-insured transactions are structured and closed faster with broker involvement than through direct bank negotiation.
7. Conclusion & Call to Action
Understanding CMHC’s three apartment financing streams—Standard Rental, MLI Select, and ACLP—is essential to unlocking optimal terms for your real estate project. From maximizing leverage to aligning with affordability and sustainability goals, CMHC serves as a powerful partner in funding Canadian rental housing.
Ready to explore which financing path fits your development?
Want help structuring your next CMHC-insured deal?
Schedule a free 20-minute consultation with our CMHC financing experts today. Your next apartment project deserves tailored capital solutions.
