Apartment Building Mortgage Canada — CMHC MLI Select & Conventional Financing
Purpose-built rental apartments are Canada's most financeable commercial asset class. CMHC MLI Select offers up to 95% LTV and 50-year amortization — the best financing terms available anywhere in Canadian commercial real estate.
Get Apartment Financing Quotes
Free consultation from CMHC MLI Select specialists.
Financing Options for Canadian Apartment Buildings
CMHC MLI Select
- • Up to 95% LTV
- • Up to 50-year amortization
- • Below-market fixed rates
- • Purpose-built rentals only
- • Minimum 5 residential units
- • Scoring criteria required
Bank / Life Company / Credit Union
- • 65–75% LTV typical
- • 20–25 year amortization
- • Prime + spread pricing
- • Faster approval than CMHC
- • All property types
- • More flexible underwriting
Bridge & Short-Term
- • 12–24 month terms
- • Used during construction or repositioning
- • Higher rates (Prime + 2–5%)
- • Converts to permanent financing
- • Interest only payments
- • Flexible draw structure
CMHC MLI Select — The Complete Guide
MLI Select (Multi-Unit Mortgage Loan Insurance Select) is CMHC's flagship program for purpose-built rental apartments. Launched in 2022, it replaced older CMHC programs and offers the most competitive financing terms available anywhere in Canadian commercial real estate.
MLI Select Scoring Components
Affordability
Percentage of units rented below median market rent in the area
Accessibility
Percentage of units meeting barrier-free accessibility standards
Climate Compatibility
Energy efficiency rating of the building (targeting net-zero or near net-zero)
Minimum 50 points required to qualify. Higher score = better LTV and amortization terms.
Score Bands vs Loan Terms
| Score | Max LTV | Max Amortization |
|---|---|---|
| 50–69 | 85% | 40 years |
| 70–84 | 90% | 45 years |
| 85–100 | 95% | 50 years |
Target 85–100 points to access the maximum 95% LTV and 50-year amortization.
MLI Select Application Process
- 1Work with a CMHC-approved lender (most major banks, credit unions, and mortgage investment corporations)
- 2Property assessment and MLI Select scoring — determine affordability, accessibility, and climate compatibility points
- 3CMHC underwriting — adds 60–90 days beyond conventional approval timeline
- 4CMHC approval and insurance commitment issued
- 5Funding and registration
Working with a commercial mortgage broker experienced in CMHC MLI Select submissions is strongly recommended — the approval process is complex and timeline-sensitive.
Conventional Apartment Building Financing
When MLI Select isn't applicable — for stabilized assets, quick closings, or properties that don't meet CMHC criteria — conventional financing offers more flexibility.
65–75%
Typical LTV
20–25 years
Amortization
1.20x
Min DSCR
2–4 weeks
Approval Timeline
Conventional lenders for apartment buildings include Schedule A and B banks, credit unions, life insurance companies (often the most competitive for larger loans), and mortgage investment corporations (MICs). A commercial mortgage broker provides access to all these channels simultaneously.
Apartment Building Cap Rates by City (2026)
Cap rates (NOI ÷ property value) determine how properties are priced in each market. Lower cap rates mean higher valuations — investors accept lower yields in markets with strong growth expectations.
| City | Typical Cap Rate Range | Market Trend |
|---|---|---|
| Toronto | 3.5–4.5% | Compressing |
| Vancouver | 3.0–4.0% | Compressing |
| Calgary | 4.5–5.5% | Stable |
| Edmonton | 5.0–6.5% | Stable |
| Ottawa | 4.0–5.0% | Stable |
| Winnipeg | 5.5–7.0% | Stable |
| Halifax | 4.5–5.5% | Compressing |
| Montreal | 4.0–5.0% | Stable |
Cap rates are indicative ranges based on market transactions. Actual cap rates vary by property age, condition, location, and tenant quality. Consult with a commercial broker for current market intelligence.
How to Qualify for an Apartment Building Mortgage
NOI Calculation
Lenders calculate NOI as gross scheduled rent minus vacancy allowance (typically 5%) and operating expenses (property management, insurance, utilities, maintenance, taxes). Personal expenses are excluded.
DSCR Requirements
Most conventional lenders require 1.20x–1.25x DSCR minimum. CMHC programs have their own DSCR requirements. A broker can stress-test your NOI against multiple lenders' requirements before you apply.
Property Inspection & Appraisal
All lenders require a professional appraisal by an approved appraiser. Physical condition inspection is standard. Lenders discount NOI for properties requiring significant capital expenditure.
Environmental Assessment
A Phase 1 Environmental Site Assessment (ESA) is required for most commercial mortgages. Phase 2 may be required if Phase 1 identifies concerns. Factor 2–4 weeks and $2,000–$5,000 into your timeline and budget.
Apartment Building Mortgage FAQ
Common questions from apartment building investors and developers.
Finance Your Apartment Building
Get matched with a licensed commercial mortgage broker who specialises in apartment building financing and CMHC MLI Select. Free consultation, no obligation.