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MLI Select Program – What You Need to Know!

Feb 17, 2025

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Back in 2022, Canada Mortgage and Housing Corporation (CMHC) rolled out the MLI Select program to helps finance multi-unit rental housing. It gives better loan terms—like higher loan amounts, longer repayment periods, and lower premiums— which was based on a points system that rewards affordable, energy-efficient, and accessible projects. Since then it has undergone some changes to the program, however it is a go to for any investor looking to gain some doors at an affordable upfront cost.

Previous Key Features:

The MLI Select program is designed to encourage the development and preservation of affordable, accessible, and energy-efficient rental housing based on the key features below:

Incentive-Based System
- Borrowers earn points based on affordability, energy efficiency, and accessibility.
- Higher points = better financing terms (higher loan-to-value, longer amortization, lower insurance premiums).
Eligible Properties
- New construction, acquisitions, and refinancing of rental properties.
- Must have five or more residential units.
Financing Benefits
- Up to 95% Loan-to-Value (LTV) for eligible projects.
- Up to 50-year amortization for high-scoring properties.
- Reduced premiums or premium refunds based on affordability and sustainability criteria.
Affordability Component
- Points awarded for maintaining rents at below-market levels for at least 10 years.
Energy Efficiency
- Incentives for projects that reduce greenhouse gas emissions or meet high-efficiency building standards.
Accessibility
- Additional points for buildings that meet or exceed universal design and accessibility standards.

Based off these key features, the MLI Select program was able to provide better financing for higher scores making rental projects easier to fund, manage, and cash flow. Over time, the program has evolved with updates that enhance financing flexibility, sustainability, and due diligence in multi-unit housing development.

Key Updates:

Over the last year, the program has undergone several key features:

Refinancing Flexibility: CMHC removed restrictions on how refinance proceeds can be used.
Energy Efficiency Scoring Adjustment: Lowered maximum points for energy efficiency to prioritize affordability.
Extended Amortization: New construction projects can now qualify for up to 50-year amortization under MLI Standard.
Submission Protocol Change: Only CMHC Approved Lenders can submit multi-unit applications.
Mandatory Appraisals: All applications now require appraisals to ensure accurate property valuation.
Rental Achievement Holdbacks: Higher loan requests require proof of rental income performance.
Updated Accessibility Criteria: Standards now align with CSA B651:23 and Rick Hansen Foundation Certification 4.0.

The 2024 updates to the MLI Select program are all about making things easier and more flexible for investors. They’re focused on tackling housing challenges by boosting affordability, energy efficiency, and accessibility, while also improving due diligence. With changes like mandatory appraisals and updated accessibility standards, the goal is to promote sustainability and market stability. The updates also make the application process smoother, helping investors feel more confident about long-term rental property investments.

Before the 2024 changes, investors and developers had to meet a minimum net worth to show they could handle the risks of multi-unit rental projects. But with the new updates, there’s no longer a strict net worth requirement. Now, the focus is more on financial stability, cash flow, and the investor’s ability to meet debt service ratios. It’s all about making sure the project is financially sound and sustainable, rather than just checking off a net worth box.

Benefits of Getting into an MLI Select:

The MLI Select program offers some solid perks for investors. You can get up to 95% loan-to-value, meaning you need less cash upfront, plus longer amortization (up to 50 years) for lower monthly payments. CMHC also cuts your insurance premiums, saving you even more. With these benefits, it’s easier to keep your cash flow positive, and since the program is government-backed, it helps ensure your properties stay profitable. The lower payments and longer terms make it easier to manage long-term, pay off loans, reinvest, and keep things running smoothly.

The program also promotes sustainable development by rewarding energy-efficient and accessible housing, which benefits both the environment and local communities. It helps tackle housing shortages by offering financial incentives to build rental properties, especially in areas where demand is high. Investors get better financing with lower premiums, longer terms, and higher loan-to-value ratios, making it easier and cheaper to develop or maintain properties. This boosts cash flow, ensures long-term profitability, and brings both public support and private investment into the mix.

Conclusion:

In short, MLI Select makes financing easier, cheaper, and more sustainable, helping you grow and maintain successful rental properties. As for when the program ends, it’s ongoing for now, with no set end date. It’s a long-term initiative for promoting sustainable rental housing development, but changes could come depending on government priorities or policy updates. So, it’s a good idea to get in while the program’s still available!

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