CMHC MLI Select: 95% Financing for Multifamily Canada

• Interest Rate
  • Property Management
  • Underwriting
  • Rental Income
  • Energy Efficiency
  • Recourse Loan
  • Non-Recourse Loan
  • Loan-to-Cost Ratio
  • Townhouse
  • Mixed-Use Property
  • Forced Appreciation
  • Heat Pump
  • Insulation semanticThemes:
  • high-leverage financing
  • government-backed multi-family programs
  • affordable housing incentives
  • cash flow optimization through extended amortization
  • qualifying for maximum financing benefits enrichedAt: ‘2026-02-07T21:38:11.111Z’

The CMHC MLI Select program represents one of the most powerful financing tools available for Canadian multi-family investors. This government-backed program offers extraordinary leverage—up to 95% loan-to-cost—with extended amortizations reaching 50 years. Understanding how MLI Select works helps investors access financing structures unavailable through conventional lending.

This guide is informed by an exclusive live presentation by top Canadian mortgage experts and developers Scott Dillingham, Christine Traynor, and Jennifer Champion, featuring real 2025–2026 deal examples that qualify for 95% financing with 50-year amortizations.

Book Your Strategy Call

Understanding MLI Select

What this program offers investors.

Program Purpose

Government-supported rental housing.

CMHC MLI Select incentivizes:

Affordable rental housing development, Energy-efficient construction, Accessible housing creation, Rental housing preservation, and Multi-family investment.

Government backing enables terms impossible in conventional markets.

Extraordinary Leverage

What 95% financing means.

MLI Select at maximum points provides:

Only 5% equity required for qualifying projects, 50-year amortization dramatically reducing payments, Limited recourse reducing personal risk, Premiums and fees included in financing, and Cash flow enhancement from longer amortization.

This leverage structure transforms multi-family investment economics. For context on how this compares to standard approaches, see our guide on financing multifamily properties in Canada. Some developers use private lending to bridge until CMHC takeout financing becomes available.

The Points System

How to qualify for maximum benefits.

Earning 100 Points

Three qualification categories.

MLI Select awards points for:

• Affordability: Units priced below CMHC thresholds
• Energy Efficiency: Better insulation, systems, and sustainability
• Accessibility: Features enabling disabled resident access

Maximum benefits require accumulating 100+ points across categories.

Affordability Points

Rent commitment requirements.

Affordability points come from:

Committing percentage of units to affordable rents, Rents at or below CMHC local thresholds, Duration commitments for affordability, and Documentation and monitoring compliance.

Affordability commitments reduce achievable rents but enable financing benefits.

Energy Efficiency Points

Environmental considerations.

Energy points earned through:

Higher insulation values, Energy-efficient windows, heat pump systems, Solar readiness or installation, and Overall building performance.

New construction easily achieves energy efficiency points through design.

Accessibility Points

Inclusive housing features.

Accessibility points from:

Wider doorways, zero-step entries, Grab bar installation, Accessible bathroom design, and Unit adaptability features.

Accessibility features expand tenant pool while earning points.

If you’re weighing whether the 100-point threshold is realistic for your project, book a free strategy call with LendCity and we’ll walk through the affordability, energy, and accessibility categories together.

MLI Select Points Breakdown: How the Scoring Actually Works

Understanding the mechanics of CMHC’s points system is critical because points directly determine your financing benefits. The system is purposefully designed to reward development choices that align with government housing policy objectives.

The Three Tiers

The points system operates on a tiered benefit structure:

50 Points provides basic MLI Select benefits—improved terms over standard CMHC but not maximum leverage.

70 Points delivers enhanced benefits including better amortization and recourse treatment.

100+ Points unlocks the maximum package: 95% loan-to-cost, 50-year amortization, limited recourse (meaning personal liability is capped), and premium discounts up to 25%. This is the sweet spot most developers target.

For example, a 20-unit project with 100+ points might finance $8.6 million at 95% LTC on a $9.1 million project cost. The same project at 70 points might only achieve 85% LTC, requiring $1.36 million in equity instead of $455,000—a $910,000 difference in required capital.

Affordability Scoring Details

Affordability points form the foundation of most MLI Select applications. CMHC establishes “Median Market Rent” (MMR) thresholds for every Canadian city—published annually and indexed to local rental markets.

How it works:

Units rented at or below 80% of the local MMR earn affordability points. The percentage of units committed to affordable rents, combined with the duration of the commitment (typically 10-year or 20-year periods), determines your total affordability score.

Real examples:

• Edmonton: MMR for a 1-bedroom is roughly $2,080/month. The 80% threshold is approximately $1,665/month. Many 1- and 2-bedroom units in purpose-built rental projects naturally rent near or below this level, making affordability commitments achievable without sacrificing cash flow.

• Calgary: MMR hovers around $1,950/month for 1-bedrooms, setting an 80% threshold near $1,560/month.

• Lower-rent markets (Windsor, Fort St. John): MMR thresholds can be dramatically lower—sometimes 50-60% of Edmonton’s rents—making affordability commitments economically challenging unless you’re building in a genuinely affordable market.

To maximize affordability points, developers commit a percentage of units (often 25-50%) to rents at or below the MMR threshold for a defined period. The commitment is binding—CMHC monitors compliance, and failure to maintain affordable rents triggers program penalties.

Energy Efficiency Scoring Details

Energy efficiency points reward construction choices that reduce long-term operating costs for tenants and owners. CMHC references the National Energy Code for Buildings (NECB) and requires documented improvements above this baseline.

Scoring mechanism:

Projects must achieve a percentage improvement over NECB performance—typically 10%, 15%, 20%, or higher, depending on building size and complexity. This improvement is verified through an EnerGuide rating issued by a certified energy auditor.

Common features earning maximum points:

• Heat pump systems (increasingly essential in new CMHC projects)
• Triple-pane or high-performance windows (U-value under 0.20)
• Insulation levels: R-30+ for walls, R-50+ for attic
• LED lighting throughout common areas
• High-efficiency HVAC and ventilation
• Solar-ready design or installed solar generation
• Smart thermostats and energy monitoring
• ERV/HRV (Energy Recovery Ventilators)

Cost reality:

Energy assessments cost $500–$2,000 depending on building size. These assessments must happen during design phase—retrofitting energy improvements after construction is exponentially more expensive. New construction easily achieves energy efficiency points because developers can integrate these features from the start.

A typical 20-unit new construction project might cost an additional $500,000–$1,000,000 to exceed NECB by 15-20%, but the resulting energy efficiency points often unlock 95% financing that more than offsets the incremental cost.

Accessibility Scoring Details

Accessibility points reward features that expand your tenant pool while serving a critical social objective—housing security for residents with disabilities.

What qualifies:

• Barrier-free units: Percentage of units meeting full accessibility standards (zero-step entries, wide doorways 36”+, accessible bathrooms, grab bars, roll-in showers)
• Universal design: Accessible kitchens, convenient outlet placement, open floor plans, accessible parking
• Adaptable units: Not fully accessible but designed to be retrofitted easily if needed (blocked plumbing, reinforced walls for grab bars)

Scoring structure:

Projects can earn points by committing specific percentages of units to full accessibility (often 5-10%) and a larger percentage to adaptable design (20-30%). Like affordability, these commitments are binding.

Economic impact:

Fully accessible units typically cost 3-8% more to construct but open access to tenant populations that are often underserved by rental markets. Adaptable units cost only 1-2% more and provide future flexibility.

A 20-unit project might commit 2 units (10%) to full accessibility and 6 units (30%) to adaptable design. This modest commitment—building perhaps $50,000–$100,000 in additional costs—can easily yield 20-30 accessibility points, contributing meaningfully to the 100+ point target.

New Construction Advantage

Why development projects dominate.

Design Integration

Building for points.

New construction advantages include:

Designing efficiency from start, Incorporating accessibility in plans, Achieving points more easily, Avoiding retrofit costs, and optimizing for program requirements.

Developers can design projects specifically for MLI Select qualification.

Existing Property Challenges

Retrofit difficulties.

Existing properties face challenges:

Costly retrofit requirements, Structural limitations, Lower achievable points, Economic feasibility questions, and More complex qualification.

New construction typically achieves better MLI Select outcomes.

Alberta Market Opportunity

Why this market combines well with MLI Select.

Provincial Growth

Economic expansion.

Alberta offers attractive fundamentals:

Strong population growth, Employment expansion, Relative affordability, Development-friendly environment, and Growing rental demand.

Economic growth supports multi-family investment.

Edmonton Focus

Capital city opportunity.

Edmonton specifically provides:

Growing population, Economic diversification, Strong rental fundamentals, Development activity, and MLI Select project viability.

Edmonton represents particularly attractive opportunity for MLI Select projects.

Project Examples

What deals look like.

Typical MLI Select projects in Alberta:

Purpose-built rental apartments, Mixed-use with residential, Mid-rise development, Affordable housing component, and Modern, efficient construction.

Understanding typical projects helps evaluate opportunities.

With 8-unit stacked townhome projects starting at $2.2M and requiring only $210K in liquidity, these deals are more accessible than most investors expect — book a free strategy call with us to see if you qualify.

Real 2025–2026 Deal Examples Using 95% CMHC MLI Select

1. The Kensington – 20-Unit Purpose-Built Rental (Completion Early 2026)

• Total project cost: ~$9.1 million
• Financing: 95% CMHC MLI Select (points from affordability + energy efficiency)
• Minimum investor net worth: ~$2.16 million
• Minimum liquidity: ~$865,000
• Ideal for passive capital partners or full ownership

2. 8-Unit Stacked Townhome Projects (Multiple Completing 2026)

• Purchase/construction cost: $2.2M – $2.5M each
• Typical layout: 4 upper 3-bed/2-bath + 4 lower 1- or 2-bed legal suites
• Net worth required: $500K–$600K
• Liquidity required: $210K–$240K
• Perfect entry point for newer investors or joint-venture groups

Both project types are being built from the ground up to hit maximum MLI Select points—meaning investors put in as little as 5% of total cost.

Step-by-Step: How to Apply for MLI Select

The MLI Select application process is rigorous but straightforward when you have the right team and preparation. Understanding the timeline and requirements upfront prevents costly delays or rejection surprises.

The 8-Step Process

Step 1: Assemble Your Team

Successful MLI Select projects require multiple specialists:

• Mortgage broker or lender experienced in CMHC MLI Select (not all brokers have this expertise)
• Architect and design team capable of designing for maximum points
• Structural and mechanical engineers for energy modeling and efficiency certification
• Energy consultant to run energy audits and EnerGuide ratings
• Project manager/developer with multi-family construction experience
• Accountant/lawyer for financial structuring and compliance documentation

Many inexperienced investors partner with experienced developers who already have these relationships. Developers often coordinate the entire process, dramatically improving approval odds.

Step 2: Design Your Project for Maximum Points

Before submitting any formal application:

• Work with architects and engineers to design affordability, energy, and accessibility features into the initial plans
• Run preliminary energy models to confirm NECB exceedance targets
• Determine what percentage of units will be committed to affordable rents
• Lock in accessibility commitments (barrier-free + adaptable unit counts)
• Prepare preliminary point calculations to estimate scoring

Design for points from day one. Retrofitting or redesigning mid-process kills timelines and budgets.

Step 3: Get Pre-Qualification from a CMHC-Approved Lender

Before formal submission:

• Approach a CMHC-approved lender with your project proposal
• Provide preliminary financial projections (development costs, rent roll, operating expense estimates)
• Confirm that your net worth and liquidity meet minimum thresholds
• Get a pre-qualification letter indicating CMHC will likely approve (not a guarantee, but a positive signal)

This step typically takes 2-4 weeks and confirms you’re not wasting time on a non-starter project.

Step 4: Submit Formal MLI Select Application

The formal application includes:

• Completed CMHC application forms
• Detailed project specifications (architectural drawings, engineering reports)
• Energy efficiency commitments and preliminary EnerGuide projections
• Affordability rent schedule and commitment term
• Accessibility feature documentation
• Formal points calculation summary
• Borrower financial statements and experience documentation
• Development timeline and cost breakdown

Your broker or developer typically manages this submission. Applications go to CMHC’s designated reviewer assigned to your lender relationship.

Step 5: CMHC Reviews and Issues Commitment Letter

This is the critical approval phase:

• CMHC reviews your application, energy models, financial projections, and team experience
• CMHC may request clarifications, additional documentation, or design modifications
• If approved, CMHC issues a Commitment Letter specifying:
  • Maximum loan amount (based on LTV/LTC and 100+ points approval)
  • Points confirmed (e.g., “applicant approved for 105 points”)
  • Term of commitment (typically 12-18 months)
  • Any conditions or monitoring requirements
  • Premium and insurance details

Timeline: Expect 6-12 weeks from application submission to commitment letter. This is where inexperienced projects often stall—incomplete documentation, unrealistic energy models, or weak borrower financials trigger endless back-and-forth.

Step 6: Begin Construction with Progress Monitoring

Once your commitment letter is issued:

• Begin construction according to approved timelines and specifications
• CMHC may require quarterly progress reports, photo documentation, or site inspections
• Maintain compliance with affordability and accessibility commitments made in the application
• Any material design changes require CMHC approval (avoid change orders that alter your points structure)

CMHC reserves the right to revoke commitment if the project deviates significantly from approved plans.

Step 7: Achieve Rental Achievement (Lease-Up to Stabilization)

As construction nears completion:

• Begin marketing and leasing units (typically 6-12 months before completion)
• Achieve occupancy and rental rate targets confirmed in your application
• For affordable units, ensure rents comply with committed thresholds
• Document lease achievements and rental income to CMHC

CMHC monitors whether your project achieves projected rents. Significant shortfalls can affect the takeout financing.

Step 8: Convert to Permanent Financing

At project completion and lease-up:

• Submit final documentation to your lender
• CMHC issues the permanent mortgage commitment
• Close permanent financing and pay off any interim construction financing
• Project transitions to stabilized operations

Total Timeline Reality

From initial concept to funded permanent mortgage, expect 18-36 months for new construction:

• 3-6 months: Design and pre-qualification
• 6-12 weeks: CMHC formal review and commitment
• 12-24 months: Construction and lease-up
• 2-4 weeks: Final financing and close

This timeline assumes smooth approvals and no major construction delays. Complications extend timelines significantly.

MLI Select vs MLI Standard: Which Program Is Right for You?

Both MLI Select and MLI Standard are CMHC programs, but they serve different project types and investor profiles. Understanding the differences helps you choose the right program for your deal.

When MLI Standard Makes Sense

MLI Standard is ideal if:

• You’re purchasing an existing, stabilized rental property (not new construction)
• The project doesn’t easily accumulate 100 points (retrofit energy costs are prohibitive)
• You want faster approval (no energy modeling or design validation required)
• You have sufficient equity and don’t need 95% financing
• You’re an individual or partnership with limited development experience

Example: Buying a 12-year-old 8-unit apartment building for $2.4M. You have $500K in equity and need $1.9M in financing. MLI Standard at 80% LTV gets you financed in 6 weeks with minimal documentation burden.

When MLI Select Makes Sense

MLI Select is ideal if:

• You’re building new multi-family housing (development projects)
• You’re adding value through energy retrofits or accessibility upgrades (value-add)
• You need maximum leverage (95% LTC with 5% equity down)
• You have the development expertise, team, and timeline flexibility
• Affordability, energy efficiency, and accessibility align with your project vision

Example: Developing a 20-unit new construction project for $9.1M in Edmonton. You design for 105 points, access 95% financing, and only need $455K equity. The 50-year amortization dramatically improves cash flow on a high-leverage project.

The hybrid approach: Many developers use MLI Select during development (construction and lease-up) then refinance to MLI Standard permanent financing once the project is stable and cash-flowing. This locks in 95% construction financing while the project is riskier, then moves to conventional terms once risk is lower.

Common Mistakes That Kill MLI Select Applications

Understanding what kills applications helps you avoid costly delays or rejections.

1. Not Designing for Points from the Start

The mistake: Submitting designs without integrated affordability, energy, or accessibility features, then trying to bolt them on mid-process.

Why it fails: CMHC reviews the design package to validate that points are achievable. Half-baked designs trigger rejections or lengthy revision cycles. Energy models must run during schematic design, not during construction drawings.

Fix: Before engaging with a broker or lender, work with your design team to lock in points-generating features. This adds months to your timeline if you skip it.

2. Underestimating the Timeline (3-6 Months Minimum for Approval)

The mistake: Assuming you can submit an application and close within 60-90 days.

Reality: Formal CMHC review takes 6-12 weeks alone. Pre-qualification, document assembly, revisions, and energy modeling take another 6-10 weeks. Total: 4-6 months minimum, often longer.

Fix: Plan 6-month runway from project conception to CMHC commitment letter. If you’re under timeline pressure, consider MLI Standard instead.

3. Insufficient Net Worth or Liquidity Documentation

The mistake: Providing incomplete balance sheets, outdated tax returns, or opaque asset valuations that leave CMHC uncertain about your actual financial capacity.

Why it fails: CMHC underwrites borrower strength aggressively. Vague financial documentation triggers requests for clarification—a sign of higher risk.

Fix: Prepare complete personal and corporate financial statements, audited if possible. Verify that documented assets match program requirements before application.

4. Choosing a Mortgage Broker Without MLI Select Experience

The mistake: Using your regular residential mortgage broker because they “know CMHC” for insured mortgages. Commercial multi-family lending is a different animal.

Why it fails: MLI Select requires specialized knowledge of points calculation, energy modeling, development timelines, and CMHC multi-family underwriting. Inexperienced brokers submit incomplete applications or miss opportunities to optimize points.

Fix: Ask your broker: “Have you successfully closed MLI Select applications in the past 12 months? Can you provide three references?” If the answer is no, find someone who specializes in this program.

5. Not Getting Energy Assessments Early Enough

The mistake: Commissioning energy modeling during construction documents phase, then discovering your design doesn’t hit your NECB exceedance target.

Why it fails: Energy models validate building performance. If your preliminary design only achieves 8% above NECB but you promised 15%, you must redesign—killing your timeline.

Fix: Run energy modeling during schematic design. Hire your energy consultant before your architect finalizes plans.

6. Skipping the Pre-Qualification Step

The mistake: Submitting a formal CMHC application without first confirming a lender thinks your project is fundable.

Why it fails: Formal application rejection is a red flag that damages your credibility with CMHC. Pre-qualification confirms your lender believes in your project before you submit formally.

Fix: Always get a pre-qualification letter from your CMHC-approved lender before formal application.

7. Assuming Existing Buildings Easily Qualify (Retrofits Are Expensive)

The mistake: Buying an older apartment building and expecting to qualify for MLI Select by upgrading mechanical systems and windows.

Why it fails: Retrofit energy improvements cost $1,500–$2,500 per unit just for HVAC and insulation. Adding accessibility retrofits (barrier-free upgrades, grab bars, accessible bathrooms) cost another $5,000–$15,000 per unit. On an 8-unit building, this is $56,000–$200,000+ in incremental costs for possibly 40-50 points. That’s expensive leverage.

Why it fails for existing buildings specifically: The building shell (envelope) is fixed. You can’t add insulation efficiently after the fact. Energy upgrades on older buildings achieve lower point multipliers than new construction.

Fix: For existing buildings, use MLI Standard unless your retrofit costs are justified by the value you’re adding anyway (e.g., you’re doing a full repositioning).

Borrower Requirements

What investors need to qualify.

Qualification Criteria

Who can access MLI Select.

Borrower requirements include:

Multi-family project (5+ units minimum), Demonstrated experience or partnerships, Adequate equity contribution, Financial capacity verification, and Commitment to program requirements.

Specific thresholds to be aware of:

• Net worth: Greater of 25% of loan amount or $100,000
• Liquidity: Roughly 10% of project cost in cash, investments, or unused lines of credit
• Relevant real estate experience

These hurdles are exactly why most successful projects are done through partnerships or joint ventures—experienced operators bring the track record while capital partners bring equity and liquidity.

Experience Considerations

Track record requirements.

CMHC evaluates:

Development experience, Property management capability, Financial capacity, Team qualifications, and Partnership arrangements.

Inexperienced investors often partner with experienced developers.

Financial Requirements

What CMHC needs to see.

Financial verification includes:

Net worth documentation, Liquidity verification, Income and cash flow analysis, Debt capacity assessment, and Project feasibility analysis.

Thorough financial analysis required for approval.

Working with MLI Select

How to access the program.

Mortgage Professionals

Expert guidance essential.

Work with professionals who:

Understand CMHC programs, Have MLI Select experience, Can structure qualifying deals, Navigate application processes, and Maintain CMHC relationships.

Specialized expertise significantly improves outcomes. For a comprehensive multi-family financing guide covering MLI Select and all other Canadian programs, working with an experienced broker can help you evaluate whether the 100-point threshold is realistic for your specific project.

Application Process

How deals progress.

MLI Select applications involve:

Project proposal submission, Points calculation and commitment, CMHC review and feedback, Commitment letter issuance, Construction monitoring, and Final funding.

Process requires specialized knowledge and patience.

Development Partners

Building the right team.

Successful MLI Select projects require:

Experienced developers, Qualified architects, Specialized contractors, Property management capability, and Financial structuring expertise.

Team quality determines project success.

Investment Considerations

Evaluating MLI Select opportunities.

Return Analysis

Understanding project economics.

Evaluate projects based on:

Total project cost, Expected rental income, Operating expense projections, Financing terms achieved, Cash-on-cash returns, and Long-term appreciation potential.

Use our MLI Select Calculator to estimate your maximum loan amount and monthly payments under different CMHC scenarios.

Higher leverage improves returns when projects succeed. Understanding how to force appreciation in multifamily properties further enhances outcomes.

Risk Considerations

What can go wrong.

Consider risks including:

Construction cost overruns, Rent achievement uncertainty, Operating expense variations, Interest rate changes, Market condition shifts, and Program compliance requirements.

Leverage magnifies both returns and risks.

Book Your Strategy Call

Frequently Asked Questions

Conclusion

CMHC MLI Select provides extraordinary financing terms for qualifying multi-family projects—up to 95% leverage with 50-year amortization and limited recourse. The points-based system rewards affordable, efficient, and accessible housing development.

New construction projects in growing markets like Alberta can optimize for MLI Select qualification, accessing financing terms that transform project economics. However, program complexity and experience requirements typically require professional partnerships.

For investors seeking high-leverage multi-family exposure, understanding MLI Select opens access to financing structures unavailable through conventional lending channels.

Written by

LendCity

Published

January 30, 2026

· Updated February 26, 2026

Reading time

23 min read

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Cmhc Mli Select Multifamily Canadian Mortgage High Leverage Financing

Key Terms

CMHC Insurance

CMHC Insurance

Mortgage default insurance from Canada Mortgage and Housing Corporation. For 1-4 unit investment properties, investors must put 20%+ down (no insurance available). However, CMHC offers MLI Select for 5+ unit multifamily properties, and house hackers can access insured mortgages with 5-10% down.

CMHC MLI Select

CMHC MLI Select

A CMHC program offering reduced mortgage insurance premiums and extended amortization (up to 50 years) for multifamily properties with 5+ units that meet energy efficiency or accessibility standards. Popular among investors scaling into larger apartment buildings.

LTV

LTV

Loan-to-Value ratio - the mortgage amount expressed as a percentage of the property's appraised value or purchase price (whichever is lower). An 80% LTV means you're borrowing 80% and putting 20% [down](/glossary/down-payment). Lower LTV generally means better [interest rates](/glossary/interest-rate) and terms. See also [Equity](/glossary/equity) and [Leverage](/glossary/leverage).

Amortization

Amortization

The period over which a mortgage is scheduled to be fully paid off through regular payments of principal and [interest](/glossary/interest-rate). In Canada, common amortization periods are 25 or 30 years, though the mortgage term (when you renegotiate) is typically 1-5 years. A longer amortization lowers monthly payments, improving [cash flow](/glossary/cash-flow) but increasing total interest paid.

DSCR

DSCR

Debt Service Coverage Ratio - a metric that compares a property's [net operating income](/glossary/noi) to its mortgage payments. A DSCR of 1.25 means the property generates 25% more income than needed to cover the debt. Lenders typically require a minimum DSCR of 1.0 to 1.25 for investment property loans. See also [Cap Rate](/glossary/cap-rate) and [Cash Flow](/glossary/cash-flow).

Commercial Mortgage

Commercial Mortgage

Financing for commercial properties like retail, office, or multifamily buildings with 5+ units, with different qualification criteria than residential mortgages.

Cash Flow

Cash Flow

The money left over after collecting rent and paying all expenses including mortgage, taxes, insurance, maintenance, and property management. Positive cash flow is the primary goal of buy-and-hold investors. See also [NOI](/glossary/noi), [Cash-on-Cash Return](/glossary/cash-on-cash-return), and [Vacancy Rate](/glossary/vacancy-rate).

Appreciation

Appreciation

The increase in a property's value over time, which builds [equity](/glossary/equity) and wealth for the owner through market growth or [forced improvements](/glossary/forced-appreciation).

Equity

Equity

The difference between a property's current market value and the remaining mortgage balance. If your home is worth $500,000 and you owe $300,000, you have $200,000 in equity. Equity builds through mortgage payments, [appreciation](/glossary/appreciation), and [forced appreciation](/glossary/forced-appreciation). See also [LTV](/glossary/ltv) and [Refinancing](/glossary/refinancing).

Leverage

Leverage

Using borrowed money (mortgage) to control a larger asset, amplifying both potential returns and risks on your investment. A higher [LTV](/glossary/ltv) means more leverage. See also [Down Payment](/glossary/down-payment) and [Equity](/glossary/equity).

Multifamily

Multifamily

Properties with multiple dwelling units, from duplexes to large apartment buildings. Often offer better cash flow and economies of scale.

Hover over terms to see definitions. View the full glossary for all terms.