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Rental Construction Financing

If you’re planning to build new rental units, CMHC’s Rental Construction Financing program offers low-cost, insured loans to support the construction phase. This program helps developers access long-term financing at competitive interest rates and supports the creation of affordable rental housing.

CMHC offers several benefits for developers and investors looking to build rental housing projects. Some of the key advantages include:

  • High Loan-to-Value (LTV) Ratio:

    CMHC Rental Construction Financing allows for a high loan-to-value (LTV) ratio, often up to 95% of the eligible costs. This means developers can secure a significant portion of the project's funding, reducing the amount of equity they need to contribute.

  • Longer Amortization Periods:

    CMHC provides longer amortization periods compared to conventional financing options. The extended repayment terms can lead to lower monthly payments, making it easier for developers to manage cash flow during the construction phase and stabilize the property after completion.

  • Attractive Interest Rates:

    CMHC Rental Construction Financing offers competitive interest rates, which can be lower than what is typically available through traditional commercial loans. This reduced cost of borrowing helps to improve the project's overall profitability and cash flow.

  • Non-Recourse Financing:

    CMHC's rental construction loans are typically non-recourse, meaning that the borrower's personal assets are not at risk in the event of a loan default. This provides added financial protection and peace of mind to the borrower.

  • Favorable Loan Terms:

    CMHC's loan terms are tailored to the specific needs of rental construction projects, making it more manageable for developers to handle initial costs.