More (and not so nice) CMHC Policy Changes

After decades of stagnant rental supply, in 2018, CMHC announced construction financing programs that brought life to the rental market. Not only did CMHC provide the light, they also provided the gasoline to go with it.

The ACLP and MLI Select programs were a huge success and have delivered hundreds of thousands of new rental homes across the country. So much supply, that today, we can actually see some softening of rents and an increase to vacancy rates. Two things the housing industry was working hard for, for a long time.

Over the past two years, CMHC has announced change after change that continues to push new challenges on rental developers. Implementing immediate and sometimes costly changes to the previously robust construction programs that developers rely upon to deliver new rental housing.

July 3^rd, 2025 was no different. CMHC announced two changes. One of which, makes the MLI Market construction program a bit more enticing (if less leverage is an option) while the other change will add further costs to projects that rely on MLI Select for viable financing.  

The changes to the MLI Select program will not affect leverage, but it will add to the costs.

Citifund, on behalf of its clients, has successfully navigated each and every CMHC policy change by analyzing and maximizing the available options. These new changes are no different.

Citifund is here to help. Do not hesitate to call. 

Advice 263 - Rental Achievement Holdbacks for MLI Market Loans

Effective immediately, MLI Market multi-unit loan applications will no longer require Rental Achievement Holdbacks. This allows loans to be advanced up to 85% LTC or LTV (whichever is less) without any holdbacks. This applies to all loan purposes under the market rental product but does NOT apply to MLI Select applications.

Advice 264 - CMHC Premium Changes for Construction Loans

Applications submitted on or after July 14^th, 2025, will see a new Mortgage Insurance Premium schedule. MLI Market and MLI Select applications will have two categories, “Construction Financing” and “All Other Loan Purposes,” each with their own schedule.

All Other Loan Purposes will include construction take-out, purchases and existing properties.

MLI Select Insurance Premiums used to be based on point scoring where now, Premiums are based on the LTV.

In addition to the increase in premiums for construction applications, CMHC is now adding surcharges. These surcharges are applicable to all loan types.

MLI Select Construction applications do have one benefit. Where borrowers commit to energy efficiency, accessibility and/or affordability, a discount can be applied to the base premium and any applicable surcharges depending on the MLI Select points awarded.

For contrast, a 95% LTC MLI Select construction loan on a purpose built rental project that achieved 100 points would have seen a 2.80% CMHC. With this new premium schedule, this same project, with the same leverage would see a premium of 5.775%. An increase of 206%.