CMHC MLI Select Program: What You Need to Know in 2024

The CMHC MLI Select Program is designed to incentivize the development and renovation of multifamily properties in Canada by offering favorable mortgage terms. This program uses a points-based system that focuses on affordability, energy efficiency, and accessibility to provide developers and investors with lower borrowing costs and extended amortization periods—up to 50 years for qualifying projects as of June 2024.

Key Features of MLI Select:
– Loan-to-Value (LTV) Ratios: LTV can go as high as 95%, requiring only 5% equity, which is attractive for developers looking to finance multifamily projects.
– Longer Amortizations: The maximum amortization has been extended up to 50 years under specific circumstances, making it an excellent option for long-term real estate investments.
– Energy Efficiency Criteria: As of June 2024, changes have been made to focus more on affordability rather than solely on energy efficiency, requiring affordable units to qualify for maximum program benefits.

Calgary’s Market and the MLI Select Program:
Calgary, with its high average household income and abundant multifamily opportunities, is a prime location for investors using the MLI Select Program. Investors can take advantage of older buildings that need redevelopment to improve energy efficiency and designate a portion of units as affordable, making it easier to qualify for the program. The city’s housing market, with its growing demand for affordable rental units, aligns well with the goals of MLI Select, making it a win-win for both developers and tenants.

Recent Updates (June 2024):
– Amortization Extension: The maximum amortization period has increased, offering more flexibility for long-term investments.
– Refinancing Opportunities: The CMHC has relaxed some of its restrictions, allowing for more refinancing options for developers looking to renovate older buildings or start new projects.
– Focus Shift to Affordability: New requirements emphasize the inclusion of affordable units to maximize the benefits of the program. This change reflects the growing need for affordable housing in major Canadian cities like Calgary.

In Calgary, neighborhoods like Mission and Mount Royal are hot spots for multifamily redevelopment. Investors are purchasing older buildings, improving their energy efficiency, and increasing rental yields while still meeting the affordability criteria set by CMHC. This strategy not only revitalizes properties but also meets the growing demand for affordable housing in the city.