MLI Select: 24-Unit Edmonton Apartment Building at 95% LTV

Marcus had built a solid Ontario rental portfolio over twelve years. His properties were performing well, but he'd hit a familiar ceiling: to scale to his next target—a 24-unit building in Edmonton—he'd need to deploy significant capital as a down payment. That meant either slowing his growth or finding creative financing.

The challenge wasn't credit or qualification. It was capital efficiency. He wanted to acquire the Edmonton building while preserving dry powder for future opportunities. A conventional 20% down payment would tie up $640,000. He needed a better option.

The Edmonton market itself was attractive: strong rents, steady occupancy, and undervalued multifamily assets compared to BC and Ontario. But the entry cost had to work within his capital strategy.

Marcus and his lender designed the deal around CMHC's MLI Select product. Rather than pursuing standard MLI, they built a loan structure that maximized affordability points—specifically, by ensuring all 24 units rented at or below 75% of the Edmonton area median market rent.

The 24-unit building had been set up with rents well below market—a result of the previous owner's conservative pricing. This turned out to be a significant advantage. By keeping rents at that level (committing to the affordability requirement), Marcus qualified for 50 affordability points. Combined with his strong borrower profile and clean payment history, this pushed his LTV to 95%—meaning just 5% down.

On a $3.2 million purchase price, 95% LTV meant a down payment of just $160,000. The mortgage was insured through CMHC's MLI Select program, and because of the affordability commitment, insurance premiums were reduced compared to a standard loan. He also qualified for a 40-year amortization, maximizing monthly cash flow.

The mortgage rate locked at 3.95%—attractive for the Edmonton market. With an annual NOI of $240,000, his DSCR came in at 1.35x, well above the lender's 1.25x minimum.

CMHC's MLI Select program was designed to support affordable rental housing. Borrowers earn points across three categories—affordability, accessibility, and energy efficiency. Accumulating 40+ points unlocks higher LTV and reduced insurance premiums.

Marcus's strategy was straightforward: maintain affordability. All 24 units had to stay at or below 75% of the Edmonton area median market rent. In exchange, he received the full 50-point affordability bonus, which combined with his borrower strength to push his LTV to 95%.

The affordability commitment is binding for the first 5 years of the mortgage. After that, the restriction lifts, but by then the property should have appreciated and the loan will be seasoned, reducing risk for future refinancing or sales.

The Edmonton property closed without drama. Marcus deployed just $160,000 to acquire a $3.2 million income-producing asset. Immediately, the property generated $20,000 per month in gross rent and approximately $6,200 in monthly net cash flow after debt service.

In year one, the property paid down approximately $37,000 in principal, creating an additional $37,000 in equity. Combined with the built-in equity from the purchase, Marcus had created over $197,000 in total equity ($160,000 principal paydown + $37,000 from year-one paydown) on a $160,000 investment—a 123% return on invested capital in year one alone.

Even accounting for maintenance reserves and property management, the property delivers a 46.5% cash-on-cash return annually ($6,200 × 12 = $74,400 annual cash flow on $160,000 invested). Most importantly, the Edmonton acquisition didn't force Marcus to liquidate or heavily leverage his Ontario portfolio. He had preserved $150,000+ in dry powder for a second Alberta expansion property he's already eyeing.