You know you want to invest in real estate. You have done the research, run some numbers, and you are ready to move. But when you look at the financing options available, there are more programs than you expected, and picking the wrong one could cost you time, money, or the deal itself.
This guide cuts through the noise. We will match your investor profile to the right LendCity program so you can stop researching and start closing.
How to Use This Guide
Start with your investor profile below. Find the description that matches your situation, and we will point you to the right financing program with the details you need to move forward.
If you fit multiple profiles, that is normal. Many investors start in one category and grow into others. Read each relevant section and talk to a mortgage specialist about combining programs as your portfolio evolves.
Profile 1: First-Time Investor Buying 1-4 Units
You are: Someone buying your first or second investment property. You are looking at single-family homes, duplexes, triplexes, or fourplexes. You have a full-time job with verifiable income and you have saved a down payment.
Your program: Residential mortgage financing
This is the most straightforward path into real estate investing. Residential mortgages cover properties with one to four units and follow standard underwriting rules that most investors can meet.
What you need to know:
- Minimum 20% down payment for investment properties. No exceptions. CMHC insurance does not apply to non-owner-occupied purchases.
- You will be stress-tested at the higher of 5.25% or your contract rate plus 2%. Your gross debt service ratio must stay at or below 39%, and your total debt service ratio at or below 44%.
- Lenders will count a portion of the expected rental income to help you qualify, but not all of it. Most A-lenders use 50-80% of projected rents in their calculations.
- Terms range from one to five years with amortizations up to 25 years through A-lenders, or up to 30 years through some B-lenders.
Best for: Investors who want a conventional mortgage with the best available rates, have strong personal income and credit, and are buying standard residential rental properties.
Profile 2: Scaling Investor Buying 5+ Units
You are: An investor who has outgrown single-family rentals and is ready to move into apartment buildings. You are looking at five-plus unit properties and want to leverage the property’s income rather than relying solely on your personal financials.
Your program: Multi-family mortgage financing
Once you cross the five-unit threshold, you enter commercial lending territory. This is a different world from residential mortgages. The property’s income becomes the primary qualification driver, which is exactly what scaling investors need.
What you need to know:
- CMHC MLI Select and MLI Standard programs offer up to 95% loan-to-value on qualifying apartment buildings, giving you extraordinary leverage.
- Qualification is based primarily on the property’s net operating income and debt coverage ratio, not your personal income.
- Amortization periods of up to 40 or even 50 years are available through CMHC-insured programs, which significantly improves cash flow.
- You can use the CMHC MLI max loan calculator to estimate your borrowing power before making offers.
Best for: Investors who want to scale beyond four units, leverage the property’s income for qualification, and access the highest possible leverage through insured commercial financing.
Profile 3: House Flipper or BRRRR Investor
You are: An investor who buys distressed or undervalued properties, renovates them, and either sells for profit or refinances to pull out your capital and repeat. Speed and flexibility matter more to you than getting the absolute lowest rate.
Your program: Fix and flip mortgage financing
Flipping and BRRRR strategies require financing that works on a different timeline and with different criteria than traditional buy-and-hold mortgages. You need capital fast, you need it based on the property’s potential value, and you need to exit without massive penalties.
What you need to know:
- Bridge loans and private lending can close in as little as five to fourteen days, giving you the speed to compete on distressed deals.
- Lenders evaluate the after-repair value (ARV) of the property, not just the current purchase price, which means you can finance based on the property’s upside.
- Interest rates are higher than conventional mortgages, but the short hold period and forced appreciation typically more than offset the cost.
- For BRRRR investors, the exit strategy is critical. You refinance into a conventional mortgage once the renovation is complete and the property is tenanted. This is where residential mortgage financing comes back into play for the long-term hold.
Best for: Investors who want to force appreciation through renovation, recycle their capital across multiple deals, and build equity faster than traditional buy-and-hold allows.
Profile 4: Builder or Developer
You are: Someone building new construction, whether it is a single infill home, a small multi-unit development, or a larger project. You need financing that covers land acquisition, construction costs, and potentially the takeout mortgage once the project is complete.
Your program: Development mortgage financing
Development financing is structured completely differently from a standard mortgage. It is disbursed in draws as construction milestones are met, and the qualification process considers the project’s feasibility, your development experience, and the projected end value.
What you need to know:
- Construction loans are typically interest-only during the build phase, with the full mortgage converting to a standard amortization once the project is complete.
- Lenders want to see a detailed project plan, cost breakdown, and realistic timeline before advancing funds.
- Your experience matters. First-time developers may face stricter terms or need a more experienced partner on the project.
- Draw schedules are tied to construction milestones inspected by the lender’s appraiser.
Best for: Investors who want to create value from the ground up, have construction or project management experience, and are comfortable with the complexity and timeline of development projects.
Profile 5: Canadian Buying in the USA
You are: A Canadian investor who wants to take advantage of US cash flow markets. You may be looking at single-family rentals in the Sunbelt states, small multifamily properties, or portfolio acquisitions. You do not have a US credit history or income.
Your program: US mortgage financing for Canadians
Canadians can absolutely finance investment properties in the United States, but you will not be using a standard US mortgage. DSCR loans are the primary vehicle, and they qualify you based on the property’s rental income rather than your personal financials.
What you need to know:
- DSCR loans require no US credit score, no US income verification, and no US tax returns. Qualification is based on the property’s debt service coverage ratio.
- Typical down payments range from 20% to 25% on investment properties.
- You will need to set up a US LLC to hold the property, which provides liability protection and simplifies tax filing.
- An ITIN (Individual Taxpayer Identification Number) is required for US tax purposes but is straightforward to obtain.
- Rates on DSCR loans are higher than conventional US mortgages, but the accessibility and simplicity make them the go-to for Canadian cross-border investors.
Best for: Canadian investors who want US cash flow, cannot qualify through traditional US lending channels, and prefer a streamlined qualification process based on property performance.
Profile 6: Canadian Buying in Mexico
You are: A Canadian who wants to purchase vacation rental property or a retirement home in Mexico. You are drawn to areas like Cancun, Playa del Carmen, Tulum, Puerto Vallarta, or Cabo.
Your program: Mexican property financing for Canadians
Financing property in Mexico as a Canadian is possible but works differently from both Canadian and US mortgages. Mexico has specific legal structures like the fideicomiso (bank trust) that allow foreigners to own property in restricted zones near the coast and borders.
What you need to know:
- Financing is available through cross-border lenders and some Mexican banks, though terms and rates differ from what you are used to in Canada.
- The fideicomiso structure is required for properties within 50 kilometers of the coast or 100 kilometers of international borders.
- Down payment requirements are generally higher than Canadian mortgages, often 30% or more.
- Currency risk is a factor. Your rental income may be in pesos or US dollars, while your mortgage obligations have their own currency dynamics.
Best for: Investors who want vacation rental income from Mexico’s tourism-heavy markets or are planning a retirement strategy that includes property ownership in Mexico.
Profile 7: Office or Retail Property Investor
You are: An investor looking at commercial properties like office buildings, retail plazas, strip malls, or mixed-use properties. You understand that commercial real estate operates on different fundamentals than residential.
Your programs: Office mortgage financing or Retail mortgage financing
Commercial property financing is underwritten based on the property’s income, tenant quality, lease terms, and location. Your personal financials still matter but take a back seat to the property’s performance.
What you need to know:
- Loan-to-value ratios on commercial properties typically cap at 65-75%, meaning you need a larger down payment or equity position.
- Lease structures matter enormously. Triple-net (NNN) leases with creditworthy tenants make financing significantly easier and cheaper.
- Environmental assessments are often required, which can add time and cost to the closing process.
- Commercial mortgages often have shorter terms (three to five years) with longer amortizations, so you need to plan for renewal risk.
Best for: Investors who understand commercial tenant dynamics, have higher capital reserves, and want the income stability that long-term commercial leases can provide.
Profile 8: Room Rental or Co-Living Investor
You are: An investor interested in maximizing rental income by renting individual rooms rather than entire units. You want to tap into the affordable housing demand and generate higher per-property cash flow.
Your program: PadSplit mortgage financing
PadSplit is a co-living platform that matches property owners with tenants seeking affordable, furnished rooms. Financing for PadSplit properties follows specific guidelines that account for the room-by-room rental model.
What you need to know:
- Room rental properties can generate significantly more gross income than traditional whole-unit rentals on the same property.
- Financing considers the room-by-room income model, which can improve your debt service coverage ratio.
- Property management is different from traditional rentals. You are managing individual tenants in shared spaces, which requires different systems and expectations.
- This model works best in markets with strong demand for affordable housing, typically urban areas with high conventional rent prices.
Best for: Investors who want maximum cash flow per property, are comfortable with a more management-intensive model, and want to serve the affordable housing market.
Quick Decision Matrix
Not sure which profile fits? Use this quick filter:
| Your Situation | Recommended Program |
|---|---|
| Buying a house, duplex, triplex, or fourplex in Canada | Residential mortgage financing |
| Buying an apartment building with 5+ units | Multi-family / CMHC MLI |
| Flipping houses or executing BRRRR | Fix and flip financing |
| Building or developing property | Development financing |
| Canadian buying rental property in the USA | Cross-border / DSCR loans |
| Canadian buying property in Mexico | Mexico financing |
| Buying office or retail commercial property | Office or retail financing |
| Renting rooms individually for maximum cash flow | PadSplit financing |
Combining Programs as You Scale
Most successful investors do not stay in one lane. You might start with residential mortgage financing for your first duplex, move to multi-family mortgage financing when you are ready for an apartment building, use fix and flip mortgage financing to force equity on a distressed property, and eventually diversify into Mortgage Financing for Canadians in the U.S.A. for cross-border cash flow.
The key is matching the right tool to the right deal. Every property and every strategy has a financing solution designed for it. You should not be forcing a square peg into a round hole.
Browse our investor education resources for guides on each strategy, or check out Investment Property Lending Locations to see if your target market is covered.
For Canadian-focused investors, start with our overview of Mortgage Financing for Canadians in Canada to understand how the lending landscape works before diving into specific programs.
What to Do Next
You have identified which program fits your situation. Here is how to move forward:
- Gather your documents. Every program requires financial documentation. Get your income verification, down payment confirmation, and property details organized before your first conversation.
- Get pre-approved. Pre-approval gives you a clear budget and shows sellers you are serious. The process differs by program, so start early.
- Talk to a specialist. Each financing program has nuances that a general mortgage discussion will not cover. Talk to someone who structures these deals daily and understands the specific program you need.
The worst thing you can do is guess. The right financing program saves you money, accelerates your timeline, and positions you for the next deal. The wrong one creates friction at every step.
Frequently Asked Questions
Can I use more than one LendCity financing program at the same time?
What if I do not fit neatly into one investor profile?
Do all programs require 20% down payment?
How quickly can I get approved?
What is a DSCR loan and how is it different from a regular mortgage?
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
February 15, 2026
Reading Time
10 min read
DSCR
Debt Service Coverage Ratio - a metric that compares a property's net operating income 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.
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.
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. Lower LTV generally means better rates and terms.
NOI
Net Operating Income - the total income a property generates minus all operating expenses, but before mortgage payments and income taxes. Calculated as gross rental income minus vacancies, property taxes, insurance, maintenance, and property management fees.
Amortization
The period over which a mortgage is scheduled to be fully paid off through regular payments of principal and interest. In Canada, common amortization periods are 25 or 30 years, though the mortgage term (when you renegotiate) is typically 1-5 years.
Pre-Approval
A conditional commitment from a lender stating your borrowing capacity, valid for 90-120 days. For investors, getting pre-approved helps you move quickly on deals and shows sellers you're a serious buyer with financing in place.
Down Payment
The upfront cash payment when purchasing a property. For 1-4 unit investment properties, minimum 20% down is required. 5+ unit multifamily can use CMHC MLI Select with lower down payments, and house hackers can put as little as 5% down on owner-occupied 2-4 plexes.
Coverage Ratio
A measure of a property's ability to cover its debt payments, typically referring to DSCR. Commercial lenders often require a minimum of 1.2, meaning the property's net operating income exceeds debt payments by at least 20%.
GDS
Gross Debt Service ratio - the percentage of gross income needed to cover housing costs (mortgage, taxes, heating). Maximum typically 39%. For investors, rental income from the property can offset these costs through rental offset calculations.
TDS
Total Debt Service ratio - the percentage of gross income needed to cover all debt payments. Maximum typically 44%. Investors can use rental income (50-80% offset) to help qualify, making it possible to scale a portfolio despite existing debts.
Conventional Mortgage
A mortgage with 20% or more down payment, not requiring default insurance. This is the standard financing type for investment properties in Canada, as high-ratio (insured) mortgages aren't available for pure rentals.
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.
Private Mortgage
A mortgage from a private lender rather than a traditional bank, typically with higher rates but more flexible qualification requirements.
Commercial Lending
Financing for commercial real estate or business purposes, typically qualified based on property income (NOI) rather than personal income. Includes mortgages for multifamily buildings (5+ units), retail, office, and industrial properties.
BRRRR
Buy, Rehab, Rent, Refinance, Repeat - a real estate investment strategy where you purchase a property below market value, renovate it to increase value, rent it out, refinance to pull out your initial investment, and repeat the process with the recovered capital.
Cash Flow
The money left over after collecting rent and paying all expenses including mortgage, taxes, insurance, maintenance, and property management.
Appreciation
The increase in a property's value over time, which builds equity and wealth for the owner through market growth or forced improvements.
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, and property improvements.
Leverage
Using borrowed money (mortgage) to control a larger asset, amplifying both potential returns and risks on your investment.
Multifamily
Properties with multiple dwelling units, from duplexes to large apartment buildings. Often offer better cash flow and economies of scale.
Single Family
A detached home designed for one household, the most common property type for beginner real estate investors.
Refinance
Replacing an existing mortgage with a new one, typically to access equity, get a better rate, or change terms. Investors commonly refinance to pull out capital for purchasing additional properties (cash-out refinance) while retaining ownership of the original property.
DSCR Loan
A loan qualified based on the property's Debt Service Coverage Ratio rather than the borrower's personal income, popular for US investment properties.
ITIN
Individual Taxpayer Identification Number - a US tax ID for foreign nationals, required for Canadians to invest in US real estate and file US taxes.
LLC
Limited Liability Company - a US business structure commonly used to hold investment properties, providing liability protection and tax flexibility.
Credit Score
A numerical rating (300-900 in Canada) that represents your creditworthiness, affecting mortgage rates and approval. 680+ is typically needed for best rates.
Interest Rate
The cost of borrowing money, expressed as a percentage. It determines how much you pay on top of the principal borrowed.
Property Management
The operation, control, and oversight of real estate by a third party. Property managers handle tenant screening, rent collection, maintenance, and day-to-day operations.
Fixer-Upper
A property that needs repairs or renovations, typically priced below market value. Often targeted by investors using BRRRR or fix-and-flip strategies.
Underwriting
The process lenders use to evaluate the risk of a mortgage application, including reviewing credit, income, assets, and property value to determine loan approval.
Rental Income
Revenue generated from tenants paying rent on an investment property. Gross rental income is the total collected before expenses, while net rental income subtracts operating costs to show actual profitability.
Duplex
A residential property containing two separate dwelling units, either side-by-side or stacked. Duplexes are popular among beginner investors because they can house-hack by living in one unit while renting the other to offset mortgage costs.
Triplex
A residential property containing three separate dwelling units. Triplexes offer higher rental income potential than duplexes while still qualifying for residential mortgage financing in most cases, making them attractive to growing investors.
Fourplex
A residential property containing four separate dwelling units. Fourplexes represent the largest property type that typically qualifies for residential mortgage financing, offering strong cash flow potential while avoiding commercial lending requirements.
After Repair Value
The estimated market value of a property after all planned renovations and improvements are completed. ARV is a critical calculation for BRRRR investors and house flippers to determine maximum purchase price and projected profit margins.
Debt Service Ratio
A broad term for ratios measuring a borrower's ability to service debt. In Canadian residential lending, the key ratios are GDS and TDS. In commercial lending, the DSCR serves a similar function but focuses on property income rather than personal income.
Room Rental
A strategy where individual rooms within a property are leased separately to different tenants rather than renting the entire unit. Room rentals generate higher per-property revenue but require more management and may have specific zoning and financing considerations.
Mixed-Use Property
A building that combines residential and commercial uses, such as retail on the ground floor with apartments above. Mixed-use properties can diversify income streams and may qualify for commercial financing terms.
Fideicomiso
A Mexican bank trust allowing foreigners to own property in Mexico's restricted zone within 50 km of coast or 100 km of borders. A Mexican bank holds legal title while the foreign buyer retains full beneficial ownership rights.
Currency Risk
The potential for financial loss from fluctuations in foreign exchange rates. Canadian investors holding US or Mexican properties face currency risk because values and rental income in foreign currencies change in Canadian dollar terms.
Forced Appreciation
An increase in property value driven by the owner's actions rather than general market conditions. Strategies include renovations, increasing rents, reducing vacancies, or cutting operating expenses. In commercial real estate, raising NOI directly increases the property's income-based appraised value.
Hover over terms to see definitions, or visit our glossary for the full list.