How to Finance Multifamily Properties in Canada

Buying a multifamily property? The way you finance it can make or break your deal. Most investors head straight to their bank, but that’s often a mistake. Let me show you why.

What Counts as Multifamily?

First, let’s get clear on what we’re talking about. Multifamily means five units or more. These properties fall under commercial financing rules, which work differently than your typical rental property loan.

Here’s the problem: many investors and even some realtors don’t know how to run the numbers properly on these deals. That leads to missed opportunities and smaller loan amounts than you could actually get.

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The Bank Route: Why It Falls Short

Going to your bank for a multifamily loan seems like the obvious choice. But here’s what you’re stuck with:

25-year Amortization (maybe 30 years if you’re lucky)
75% loan to value (sometimes 80% as an exception)
Higher interest rates

Banks lend based on the property’s cash flow. When they squeeze that analysis into a 25-year payback period, your loan amount shrinks. It’s math that doesn’t work in your favor.

The Better Option: CMHC Insured Programs

Here’s where things get interesting. CMHC offers two programs for multifamily properties that blow bank financing out of the water: MLI Standard and MLI Select.

Think of it like this: just as first-time homebuyers use CMHC insurance to buy with less money down, multifamily investors can tap into similar programs. CMHC reviews your property, analyzes the Cash Flow, and backs the loan.

MLI Standard Program

This program offers:

Up to 85% loan to value
Up to 40-year amortization
lower interest rates (low to mid threes)

Compare that to the bank’s 75% LTV and 25-year amortization. The difference is huge.

MLI Select Program

This one goes even further, but it takes more work to qualify. MLI Select uses a points system based on three things:

Affordability: How reasonable are your rents?
Energy efficiency: How green is the building?
Accessibility: How accessible is it for people with disabilities?

The more points you rack up, the better your terms get. Hit 100 points and you unlock the best deal available:

95% financing of the purchase price
50-year amortization

That’s double what banks offer. Not a small difference—a massive one.

Best Fit for MLI Select

MLI Select works best for new properties that are still vacant. You can set up the rents and features from scratch to hit those point targets. Existing buildings with tenants already in place are harder to qualify.

What About the Fees?

Nothing’s free. CMHC charges an insurance fee for these programs, just like they do for regular home purchases. The fee gets added to your loan, so you pay it over time rather than upfront.

But here’s the thing: even with the fee, you come out ahead. The lower interest rates, longer amortization, and higher loan amounts more than make up for it.

Why the Numbers Matter So Much

Let’s break this down simply. Commercial lenders look at whether the property’s rental income can cover the mortgage payments. They call this the debt service coverage ratio.

When you stretch payments over 40 or 50 years instead of 25, each monthly payment is smaller. That means the same rental income can support a bigger loan. You qualify for more money with the same property.

For investors, this is everything. It’s the difference between getting the deal done and walking away.

Why Most Investors Miss This

Most banks don’t offer these insured programs. They only have conventional options. So if you walk into your local branch asking about multifamily financing, you’ll only hear about the 25-year, 75% LTV option.

You won’t know what you’re missing unless someone tells you. Now you know.

The Bottom Line

If you’re buying a property with five or more units, don’t default to bank financing. Explore CMHC’s MLI Standard and MLI Select programs first. You’ll likely qualify for a bigger loan, get a lower rate, and enjoy payments spread over a much longer period.

The difference isn’t small. It’s the kind of gap that separates investors who build serious portfolios from those who get stuck after one or two properties.

Talk to a mortgage broker who knows these programs inside and out. The right financing strategy can change everything about what’s possible for you.

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Frequently Asked Questions

What qualifies as a multifamily property for commercial financing?

A multifamily property is any residential building with five or more units. Once you hit that threshold, the property falls under commercial financing rules rather than residential mortgage guidelines.

What is the CMHC MLI Standard program?

MLI Standard is a CMHC-insured financing program for multifamily properties. It offers up to 85% loan to value and amortization periods up to 40 years, which is significantly better than conventional bank financing.

How is MLI Select different from MLI Standard?

MLI Select uses a points system based on affordability, energy efficiency, and accessibility. If you score 100 points or more, you can access up to 95% financing with a 50-year amortization period.

Why are CMHC programs better than bank financing for multifamily?

CMHC programs offer higher loan-to-value ratios (up to 95%), longer amortization periods (up to 50 years), and lower interest rates. Banks typically max out at 75-80% LTV with 25-30 year amortizations.

Are there fees for CMHC multifamily programs?

Yes, CMHC charges an insurance premium that gets added to your loan amount. However, the lower interest rates and better terms usually more than offset this cost.

What interest rates can I expect with CMHC multifamily financing?

Rates are typically in the low to mid three percent range, which is often better than what you'd get on a primary residence mortgage.

Which properties work best for MLI Select?

New, vacant properties are ideal for MLI Select because you can set rents and features to maximize points. Existing buildings with tenants are harder to qualify.

Why don't banks offer these better multifamily programs?

Most banks only provide conventional commercial loans. They don't participate in CMHC's insured multifamily programs, so they can't offer the same favorable terms that come with government-backed insurance.

Disclaimer: LendCity Mortgages is a licensed mortgage brokerage, and our team includes experienced real estate investors. While we are qualified to provide mortgage-related guidance, the broader financial, tax, and legal information in this article is provided for educational purposes only and does not constitute financial planning, tax, or legal advice. For matters outside mortgage financing, we recommend consulting a Chartered Professional Accountant (CPA), licensed financial planner, or qualified legal advisor.

Written by

LendCity

Published

January 12, 2026