The Canada Mortgage and Housing Corporation (CMHC) offers the Rental Construction Financing initiative (Financing initiative) which provides lower-cost loans to encourage the construction of rental housing across Canada. It will provide up to $625 million in loans each year for 4 years starting in 2017.

The loans offer:

  • a 10-year term (fixed or hybrid) for certainty during the most risky periods of development

  • up to a 50-year amortization period for smaller monthly payments and long-term viability

  • CMHC mortgage loan insurance from the outset with the premium fully paid at no additional cost to the borrower

  • up to 100% loan to cost for residential space and up to 75% loan to cost for non-residential space

  • interest payments only during the construction and rent-up phase — principal payments begin after 1 year of stable operating income

Loans are available for:

  • municipalities

  • private sector developers and builders

  • non-profit housing providers

The initiative focuses on standard apartment projects in Canada. It does not support construction of niche housing types such as retirement homes, single room occupancy, student housing and equity co-ops.

For more information on this initiative, click here