What CMHC’s MLI Select Means for Canadian Real Estate Investors

Precedent Developments
Aug 6, 2025
4 min read

MLI Select is CMHC’s incentive-based mortgage insurance for multi-unit rentals. Hit point thresholds across Affordability, Energy Efficiency, and Accessibility and you can access higher leverage (up to 95% LTC/LTV), longer amortizations (up to 50 years), and flexible DCR—powerful levers for cash flow, IRR, and downside protection. As of July 14, 2025, CMHC also updated multi-unit premium pricing; discounts are now tied more directly to the outcomes you commit to (affordability, accessibility, energy).

What is MLI Select—in investor terms?

MLI Select is CMHC insurance for new or existing rental assets (5+ units; retirement homes 50+). You earn points by committing to affordability, energy performance, and accessibility. Higher point tiers unlock more favourable loan terms—including up to 95% LTC on new construction, up to 95% LTV on existing, amortizations up to 50 years, and minimum DCRs starting at 1.10 for standard rentals.

Why investors care: lower annual debt service and higher proceeds can turn marginal pro formas into financeable deals—particularly for build-to-rent and acquire-rehab-hold plays.

How the points actually work

You need at least 50 points from any mix of these pillars:

Affordability: Commit a defined share of units with rents capped as a function of median renter income (Calgary, Toronto, etc.). A 10-year commitment is required, and a 20-year commitment earns +30 bonus points.
Energy Efficiency: For new builds, design above code (e.g., 20%, 25%, 40% better than NECB/NBC). For existing assets, reduce energy use versus current performance (e.g., 15%, 25%, 40%). A qualified professional and approved modelling software are required.
Accessibility: Meet CSA B651:23/universal design or RHFAC thresholds. All units must be 100% visitable and common areas barrier-free.

Investor takeaway: You can optimize for one pillar (e.g., affordability) or blend pillars to reach 70 or 100 points—the tiers that open 45- or 50-year amortizations and, at the top tier, potential limited-recourse treatment.

What changed in 2025 (and why it matters)

CMHC standardized multi-unit insurance premiums (including MLI Select) effective July 14, 2025, aligning price more closely with loan risk and introducing a clearer discount schedule for MLI Select commitments. Practically, that means your premium depends on factors like amortization length and your social-outcome points—but higher MLI Select tiers can offset base premiums via discounts. Underwriting is more transparent, and the incentive to reach higher tiers is clearer.

Use cases for Canadian investors

1) Build-to-Rent (BTR) with point-driven terms

Pair a modest affordability set-aside (e.g., 10–25% of units) with an envelope-first design (higher energy points). The result: longer amortization + higher proceeds without sacrificing your prime unit mix. Works well in growth corridors across Calgary, Edmonton, and secondary markets.

2) Acquire-Improve-Hold

Buy an under-managed property, execute energy retrofits (balancing, controls, windows where feasible), add accessibility upgrades, and commit to affordability on a portion of suites. Refinance under MLI Select to extend amortization, reduce annual debt service, and lock in durable cash yields.

3) Mission-aligned JV & Ground Lease structures

Faith groups, nonprofits, and municipalities contribute land; investors fund equity and improvements. The affordability pillar earns points while MLI Select financing optimizes the capital stack—balancing impact and return.

What you need to qualify (and not waste time)

Asset type: Standard rental, SRO, supportive housing, retirement homes (student housing qualifies via energy/accessibility only). Min 5 units (50+ for retirement). Non-residential area ≤30% of GFA and lending value.
Docs & attestations: Affordability methodology, energy model by a qualified professional, and accessibility attestation. CMHC’s Required Documentation Guide lists accepted certifications, software, and sign-off roles.

Pro-forma impacts (the levers that move IRR)

Amortization: Extending to 45–50 years materially lowers annual debt service—often the single largest boost to coverage ratios and cash flow in year one.
Leverage: Up to 95% LTC/LTV at higher tiers reduces equity required, improving equity multiples (mind your total premium and any surcharges).
DCR flexibility: Minimum DCR 1.10 (standard rentals) lets lenders size to cash flow more efficiently than conventional programs.
Premiums: Post-July 2025, pricing is standardized across multi-unit; MLI Select discounts are tied to your points—another reason to design for a higher tier.

How to design a points-efficient strategy

Model affordability early. Use CMHC’s median renter income dataset to set rent caps that still work in your submarket; consider a 20-year commitment to capture +30 points if the hold horizon supports it.
Go envelope-first for energy points. Continuous insulation, high-performance windows, airtightness, balanced ventilation/heat pumps—verified by a qualified energy model to hit your 20–40% thresholds.
Bake in accessibility. Plan clear routes, turning radii, and unit counts from concept; RHFAC or CSA B651:23 compliance is far cheaper designed-in than retrofitted.
Document like a lender. Follow CMHC’s Required Documentation Guide to avoid rework at final advance.

How MLI Select plays with other federal tools

For new construction, MLI Select can complement CMHC’s Apartment Construction Loan Program (ACLP)—a separate, direct-lending program that also rewards energy and accessibility. Investors/developers often compare or sequence these options depending on risk, timing, and capital stack preferences.

Risks & watch-outs (so you underwrite honestly)

Execution risk: Missed energy or accessibility outcomes can affect final advances—align design, trades, and documentation early.
Premium math: Longer amortizations can improve cash flow but may have premium implications; weigh NPV of cash savings vs. added premium under the 2025 pricing.
Affordability commitments: Rent caps are indexed and monitored; ensure operations can meet commitments for the full term.

Precedent Developments: Investor-ready delivery

We package opportunities with transparent pro-forma's, sensitivity cases, and documentation roadmaps aligned to your target tier. Our integrated team—land strategy, design, energy, accessibility, and construction management—helps you win points without breaking the budget, then executes to protect them through final advance.