If you’re one of those who invest in real estate, you’re well aware that it’s becoming increasingly difficult to obtain the financing required for the construction and even renovation of rental buildings. Fortunately, the Canada Mortgage and Housing Corporation (CMHC) has created the MLI Select program, which offers a number of highly attractive incentives. But how does it work? Is it worth the effort? Read our article as we break down CMHC’s MLI Select program for you.

What is MLI? First of all, the acronym MLI stands for Mortgage Loan Insurance. CMHC’s MLI Select program was launched in March 2022 as a new government mortgage insurance program designed to promote three social causes among real estate investors:

1. Housing affordability
2. Housing accessibility for people with reduced mobility
3. Building energy efficiency

A lower debt coverage ratio, an extension of your amortization period by up to 50 years, a lower CMHC premium cost, an increase in your loan-to-value ratio by up to 95%, a reduction in your security deposit: these are just a few of the many benefits APH Select offers you.

To qualify for these incentives, you need to score points in one or more of the three categories mentioned above. In all, you can accumulate up to 100 points and enjoy the maximum benefits APH has to offer. While the criteria vary for new and existing construction, let’s take a look at the objectives of each category.

With regard to housing affordability, CMHC considers a unit to be affordable if the rent is below 30% of the median income in the sector where the building is located. Media income by sector is available on the CMHC website. To obtain 100 points in this category, 80% of the units must be affordable in the case of an existing building, and 25% in the case of new construction. In both cases, the commitment is for a minimum period of 10 years.

In the case of accessibility, 30 points can be obtained if various targets are met in terms of unit design, compliance with CSA standard B651-18, or if the building achieves Gold certification from the Rick Hansen Foundation. We invite you to visit the CMHC page (click here) to learn more about these targets.

Now let’s talk about energy efficiency. To obtain the 100 points available in this category for an existing building, the building’s energy performance must be improved by around 40% compared with its pre-renovation performance. For new construction, you need to plan to achieve energy efficiency targets 40% higher than those required by the 2015 National Building Code. This is where our specialists can really help! In fact, we’ve produced a case study available online (click here) in which we outline the advantages of opting for this category, so that you can benefit from all the advantages MLI has to offer.

So, if you’re considering the construction, purchase or refinancing of a residential building of five units or more, remember these three little letters: MLI.