Apartment Construction Loan Program: Standard Rental Housing

• The borrower must be a for-profit developer, a non-profit developer, or a government entity (other levels of government).
• The project must create or convert to standard rental housing with at least 5 rental units and be permanent in nature (long-term stay).
• The project’s primary purpose must be residential, with any non-residential component limited to a maximum of 30% of total gross floor space and 30% of total cost.
• The applicant must demonstrate sufficient financial and operational capacity to carry the project without ongoing subsidies and meet required debt coverage ratios.
• The project must address a need for rental supply and meet one of the defined affordability conditions for at least 10 years.

Who is eligible?

• For-profit real estate developers
• Non-profit housing developers
• Other levels of government (e.g., municipal, provincial, territorial)

Eligible geographic areas

• Businesses located anywhere in Canada, as this program is administered by the Canada Mortgage and Housing Corporation (CMHC), a federal Crown corporation.

• Applications are prioritized when projects meet or exceed the mandatory minimum requirements of the program.
• Projects that demonstrate stronger social outcomes and contribute to vibrant, socially inclusive neighbourhoods are favoured.
• Projects that clearly address a need for additional rental housing supply in their market are prioritized.

• CMHC mortgage loan insurance is automatically integrated into the loan; the borrower is only responsible for paying provincial sales tax (PST) on the premium, where applicable.
• Interest-only payments are financed by the loan during construction and then paid by the borrower from the issuance of the occupancy permit until 12 consecutive months of stabilized effective gross income.
• After stabilization is reached, the borrower is responsible for principal and interest payments from stabilization until the end of the loan term.
• At the end of the term, borrowers must transfer the CMHC-insured mortgage to a CMHC-approved lender (take-out financing).