A financing tool for better rental housing.
MLI Select is a CMHC mortgage loan insurance program for eligible multi-unit rental housing. It can support new construction and existing properties. Financing comes through a lender; MLI Select is not a grant or a promise of funding.
Projects earn points by making commitments to affordability, energy efficiency, accessibility, or a combination of these outcomes. Qualifying projects may benefit from higher financing limits, longer repayment periods and reduced insurance premiums.
For landowners, the practical question is whether those commitments fit a viable building, budget and long-term operating plan.
These are program limits, not an approval or a financing quote. Other housing types and non-residential space have different requirements.
Three ways a project can qualify.
A project needs at least 50 points. The score can come from one category or a combination. Commitments need to be designed into the project and supported by the required documentation.
Affordability
A share of the homes must meet CMHC's rent threshold: 30% of median renter income for the market, converted to a monthly rent. This is not simply a discount from the rent you would otherwise charge.
For new construction, setting aside at least 10%, 15% or 25% of units at the required rent level earns 50, 70 or 100 points respectively.
The commitment generally lasts at least 10 years. A commitment of 20 years or more can add 30 points. Rent increases and ongoing compliance also need to be managed.
Energy efficiency
Better building performance can earn 20, 35 or 50 points, depending on the verified level achieved.
For a new building, performance is measured against CMHC's accepted reference standards. An existing building follows a different improvement framework.
This is a design and modelling exercise, not simply a list of efficient appliances. The project needs qualified technical input and supporting evidence.
Accessibility
Qualifying accessible or universal-design units, or recognized building certification, can earn 20 or 30 points.
Accessibility scoring also requires all units to be visitable and common areas to be barrier-free under the applicable CMHC criteria.
These requirements affect layouts and circulation. They are best considered early with the design team, rather than added after plans are complete.
The affordability percentages above apply to new construction. Existing buildings have different thresholds. The lender and relevant qualified professionals must confirm which criteria apply to your proposal.
More points can open different financing options.
For the residential component of qualifying new construction, the published tiers are:
| Minimum score | Maximum loan-to-cost | Maximum amortization |
|---|---|---|
| 50 points | Up to 95% | Up to 40 years |
| 70 points | Up to 95% | Up to 45 years |
| 100 points | Up to 95% | Up to 50 years |
Amortization cannot exceed the property's remaining economic life. The actual loan may be smaller because of debt-service capacity, underwriting, project costs, security requirements or other conditions. Existing-property financing uses loan-to-value: the 50-point tier is up to 85%, with up to 95% at 70 or more points.
“Up to 95%” is not the same as “only 5% cash required.”
The percentage applies to the eligible financing basis, not necessarily every dollar you will spend. Costs before advances, insurance premiums, lender conditions, contingencies, holdbacks and other funding needs can change the cash required. Your project budget must account for the timing as well as the amount of funding.
The building must support the debt.
CMHC lists a minimum debt coverage ratio of 1.10 for standard rental housing. In plain terms, the income available to service the loan must provide a buffer above debt payments. Meeting that minimum does not override the lender's assessment.
Longer repayment is a trade-off.
A longer amortization can reduce scheduled payments for the same loan amount and interest rate, but can increase total interest over time. It is not a fixed interest rate for 50 years. Rates, terms and renewal risk still matter.
A financeable project takes more than points.
- Site and planning: confirm what the site can accommodate and what approvals are needed. Loan insurance does not provide municipal development approval.
- Borrower strength: experience, management arrangements, financial capacity and guarantees are part of the assessment.
- Delivery evidence: plans, costs, market assumptions and professional attestations must support the application.
- Operating commitments: affordability obligations and reporting must be reflected in the ownership plan.
- Security and risk: limited recourse may be considered for eligible cases; it is not an automatic release from every guarantee or liability.
Connect the financing strategy to the building you want to deliver.
We approach the opportunity as a developer, builder and owner. Our role is to connect feasibility, budgeting, design, approvals and construction with the information a lender needs to assess the project.
Start with your property.
Share the address, your ownership objectives and any plans already underway. Site size, zoning and timing are useful if known.
Test the project fit.
We can help explore the development concept, preliminary economics and how program commitments could affect design and operations.
Coordinate the next steps.
Bring the appropriate consultants and lender into the discussion, refine the budget and identify the information needed to move forward.
The lender and CMHC make the financing and insurance decisions. Optima's involvement does not guarantee approval, a particular rate or a development outcome.
Discuss My SiteBefore you take the next step.
Does every unit need to have an affordable rent?
Not necessarily. Points can come from different combinations of commitments. If affordability points are used, the required share of units must meet the applicable rent threshold for the full commitment period.
Can I qualify without using affordability points?
Potentially. Energy efficiency and accessibility points can be combined to meet the minimum score. The achievable score and the cost of meeting those standards need to be assessed for the actual building.
Can a small Calgary infill project qualify?
Standard rental projects generally need at least five units. Unit count is only the starting point: the site, design, borrower, income and program commitments must also meet applicable requirements. Do not assume a four-unit project qualifies under this multi-unit program.
Will owning the land mean I do not need more cash?
Not necessarily. The treatment of land and equity depends on the lender's assessment and the transaction. A site-specific funding plan must account for project costs, advances, contingencies and other lender requirements.
Do I need a finished design before contacting Optima?
No. An early discussion can start with your property address and objectives. It can help identify what needs to be investigated before you commit to a full design or financing application.
Find out what is worth exploring.
Tell us about your property and what you hope to achieve. We can discuss the development opportunity and the questions that need answers.
Important information
This guide is general educational information prepared by Optima Developments. It is not personalized financial, mortgage, investment, legal or tax advice, a financing offer, or a commitment to provide services. Do not make a purchase, borrowing or development decision based solely on this page. Obtain advice from an appropriate lender and qualified independent advisers for your circumstances.
Eligibility, point calculations, financing amounts, premiums, amortization, guarantees and all other terms are subject to current CMHC requirements, lender underwriting and written approval. Program requirements can change, and additional conditions may apply. Current official requirements and your signed agreements take precedence over this summary. No approval, savings, profitability or other outcome is guaranteed.
Optima has taken reasonable care in preparing this overview but does not warrant that it is complete, current or suitable for a particular project. To the extent permitted by applicable law, Optima disclaims liability for loss arising from reliance on this general information. This notice does not exclude liability that cannot lawfully be excluded or override obligations in a signed agreement.
MLI Select is a program of Canada Mortgage and Housing Corporation (CMHC). This is Optima's independent explanation; it is not an official CMHC publication and has not been prepared or endorsed by CMHC.
Program references
Prepared in our own words using CMHC's MLI Select fact sheet and program guidance. Reviewed . References are provided for verification; you can contact Optima to discuss the development implications for your site.