CMHC MLI Select
The CMHC MLI Select Program offers a strategic pathway for investors seeking to capitalize on unique government-backed financing for new build multi-residential properties. By leveraging this program, investors significantly reduce both upfront costs and long-term expenses, making multiplex ownership more accessible and sustainable.
What is the CMHC MLI Select Program?
The MLI Select Program by CMHC is a federal initiative that supports housing development by offering mortgage insurance for multi-unit properties (5+ units), making it easier to access favorable financing in order to encourage apartment construction.
What is Our Background with CMHC MLI Select?
Meta Realty is the premier expert in providing turnkey multi-residential investment solutions, backed by CMHC through the MLI Select Program. To date, Meta Realty has effectively leveraged its expertise and network to successfully sell over $200 million in MLI Select inventory; this equates to over 450 housing units being built in order to aid in Canada’s housing shortage. Additionally, Meta Realty has secured over $2 million in cash flow for its investors to date.
Are There CMHC MLI Projects Available Today?
Demand for these properties is very high, but new inventory is readily available. Qualified investors are encouraged to reach out, and we’d be happy to share the available and upcoming opportunities. Projects typically range in size from $1.5M to $120M+.
What’s the Qualifying Criteria for CMHC MLI Select Investors?
To qualify as a buyer under the CMHC MLI Select Program, individuals need to demonstrate financial stability. Investors must meet certain net worth and liquidity requirements that includes:
5-10%
5-10% of project cost as deposit needs to be readily available
10%
An additional 10% of project cost in liquid assets as a contingency
25%
Personal net worth totaling at least 25% of the project cost
What Exactly is Handled for the Purchaser?
Our team of experienced professionals, includes analysts, brokers, builders, and developers to ensure that everything is handled for the investor including:
01
Land
acquisition
02
Entitlements
03
Site plan
and design
04
CMHC
application
05
Construction
management
06
Lease up and
stabilization
07
Ongoing property
management
BUT DON’T WORRY ABOUT CUMBERSOME APPLICATION & APPROVAL PROCESSES WE HANDLE ALL OF THAT FOR THE BUYER!
Keep in mind that the MLI Select Program only offers the financing solution where as Meta Realty provides the purchaser with a truly turnkey investment package.
How is Positive Cash Flow Guaranteed?
CMHC conducts its own analysis of costs, rents etc., based on benchmarks in order to determine the project’s cash flow and only projects that have a projected net income of at least 110% of projected debt cost (minimum 1.1 debt coverage ratio) are eligible to qualify for the CMHC MLI Select Program.
How Does a Property Qualify for the CMHC MLI Select Program?
To qualify for these advantageous financing terms, projects must meet specific affordability, energy efficiency, or accessibility standards. Points are accumulated on a tiered system to access the best financing options.
Borrow Up to 95%! Is CMHC’s MLI Select Mortgage Good For Your Toronto Real Estate Investment?
What Is The CMHC MLI Select Mortgage?
Let me start by explaining what the CMHC MLI Select mortgage. It’s an insured mortgage for multiplexes with five or more units. They look at your affordability, energy efficiency, and accessibility.
Let me start by explaining what the CMHC MLI Select mortgage. It’s an insured mortgage for multiplexes with five or more units. They look at your affordability, energy efficiency, and accessibility.
You can get up to a 95% loan-to-value, up to 50 years to pay it off, and limited recourse with a commercial mortgage. You can earn points for each category and depending on how many points you get, that determines what type of mortgage you’d qualify for. Here are more details on the CMHC MLI Select Program.
But, and there’s always a but, let me give you the lowdown on how the MLI Select has actually been working.
Access to money has been tougher with higher interest rates, and so when this happens, Toronto real estate investors are getting more create with financing options.
One option that’s getting more talk lately is the CMHC MLI Select mortgage, which sounds pretty attractive for Toronto real estate investors that don’t have that much investment capital.
The MLI Select says that you can borrow as much at 95% of the value of the home if you invest in a multiplex with 5 or more units.
They also have lower interest rates and a longer payback period, and with new rules in Toronto where every house can be converted into a fourplex plus a backyard house, this is definitely catching the attention of many Toronto real estate investors.
The CMHC MLI Select could be a good mortgage option for some Toronto real estate investors, but is it the best fit for you? Let’s dive in!
MLI Select Approvals Take A While
Getting approvals for the MLI Select takes around 6 months, plus another 2 months for design/drawings. If you’re super efficient, you might be able to get the design and drawings done during the closing period but that still means you haven’t applied for MLI yet.
So as you can see, you’ll still have to get a regular residential mortgage, come up with the 20% standard downpayment that goes with the residential mortgage, and then start paying for the renovations while you’re applying for the MLI Select.
It also looks like CMHC might be tightening their rules on refinancing, and you might have to wait 24 months before you are allowed to do the refinance, which leads to the next point.
You Need A Huge Upfront Investment
It’s a huge upfront capital investment with the MLI Select, which is the opposite of what most people think. The cheapest route is to improve an existing house – not build one.
But if you’re going for a 4-unit conversion, build a backyard house, and pay for the 20% downpayment and closing costs, you’ll need close to $900,000 or more upfront in cash.
Plus, it’s not a walk in the park – it takes time and experience to get it right.