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Apartment Construction Financing

Finance ground-up multi-family development and major renovations with CMHC's Apartment Construction Lending Program (ACLP) and specialized construction-to-permanent financing. Access 90% loan-to-cost on apartment projects, with flexible draw schedules and seamless conversion to long-term mortgage insurance upon completion.

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1

Project Approval

Present your development plan, architectural drawings, and budget to our construction lending specialists for initial approval.

2

Construction Draws

Access funds on a progress-draw schedule tied to construction milestones, typically monthly as work completes.

3

Permanent Conversion

Upon substantial completion, convert to long-term CMHC mortgage insurance with fixed rates and extended amortization.

Construction

90% LTC Apartment Development Financing

Construction financing is critical for apartment development. Our CMHC ACLP programs and construction-to-permanent structures reduce your upfront equity requirement and manage cash flow through the development phase, with seamless transition to long-term financing upon project completion.

90%
Maximum Loan-to-Cost
$2M+
Typical Project Size
24-36mo
Construction Period
50yr
Takeout Amortization

High Leverage Construction

Achieve 90% loan-to-cost on apartment construction, minimizing your upfront equity and preserving capital for other projects.

Progress Draw Schedules

Access funds tied to construction milestones—typically monthly as work completes, improving your cash management and budget control.

Seamless Conversion

Convert from construction financing to permanent CMHC mortgage insurance without refinancing, with rates locked during the construction phase.

Fixed-Rate Construction

Lock in rates during construction rather than facing floating-rate uncertainty. Your permanent rate is typically set at or near the construction loan rate.

Builder & Developer Friendly

Structure designed to accommodate developer cash management, inspector holdbacks, and contingency reserves typical in multi-family projects.

CMHC Takeout Certainty

Permanent financing is pre-approved through CMHC ACLP, reducing risk of financing gaps and enabling reliable project budgeting.

Ready to finance your apartment development?

Let's discuss your project scope, timeline, and construction-to-permanent strategy.

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Services

Construction Financing Options

Specialized construction programs for ground-up development and major renovations.

Ground-Up Development

Finance new apartment construction from the ground up with CMHC ACLP, covering 90% of construction costs with progress draws through completion.

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What's Included

  • 90% loan-to-cost available
  • Monthly progress draws
  • Fixed-rate construction loans

Conversion & Major Renovation

Finance major renovations, building conversions to rental, or significant upgrades with construction-to-permanent CMHC financing.

Discuss this financing option

What's Included

  • Construction draws based on milestones
  • Conversion to permanent CMHC insurance
  • Extended amortization on completion

CMHC ACLP Program

CMHC's dedicated program for multi-family construction, offering the highest leverage available in Canada with streamlined underwriting for qualified projects.

Discuss this financing option

What's Included

  • 90% loan-to-cost financing
  • Dedicated CMHC underwriting
  • Pre-approved permanent takeout
Eligibility

Apartment Construction Financing Requirements

Construction financing requires detailed project documentation, experienced builders, and clear development plans. CMHC ACLP has specific requirements to ensure project success.

Requirements

  • Detailed architectural drawings, engineering reports, and construction budget.
  • Experienced contractor/builder with multi-family development track record.
  • Developer or sponsor equity injection (minimum 10% of construction costs).
  • Detailed pro forma financial projections for permanent take-out phase.
  • Site control or ownership and zoning/municipal approvals.
  • Professional project manager and construction loan inspector assignment.

How We Help

  • Expert project underwriting and construction-to-permanent structuring.
  • Access to CMHC ACLP and specialized construction lenders across Canada.
  • Rate lock during construction with permanent CMHC financing upon completion.
  • Construction cash flow management strategies and draw timing optimization.
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FAQ

Questions About Construction Financing Options

Everything you need to know about construction financing options.

Construction Financing Basics

ACLP (Apartment Construction Lending Program) is CMHC's dedicated program for financing new apartment construction and major renovations. It offers up to 90% loan-to-cost with pre-approved permanent financing upon project completion.
Construction financing covers costs during building (typically 24-36 months) with progress draws. Takeout financing is the permanent mortgage that replaces construction financing once the building is complete and stabilized.
As your project completes construction milestones (typically monthly), you submit requests with contractor invoices and inspector certifications. The lender funds the draw, usually holding back 10-15% until final completion.
Yes. Most construction-to-permanent programs allow you to lock in your takeout rate during or near the end of construction, protecting you from rising interest rates.

Project Requirements & Planning

Minimum projects are typically $2M+ in construction costs. Smaller projects may be possible but often require alternative lenders at higher cost of capital.
Typical equity requirement is 10-15% of total construction costs. This ensures developer commitment to the project and helps secure the 90% LTC financing available through CMHC ACLP.
Construction loans can include contingency reserves (typically 5-10% of budget). If contingency is exhausted, you'll need additional capital, a budget revision, or approval from your lender for increased drawdowns.
Detailed architectural drawings, engineering reports, construction budget, contractor qualifications, site plans, zoning approvals, project pro forma, and detailed permanent financing assumptions.

Financing & Rates

Multi-family construction typically takes 24-36 months depending on project size, complexity, and construction schedule. Lender commitment usually covers construction period plus 6-month buffer.
Construction rates are typically 0.50-1.00% above prime, but the rate is often fixed. Your takeout (permanent) rate is usually set at or near your construction rate, providing rate certainty.
Upon substantial completion and occupancy, the construction loan converts to permanent CMHC mortgage insurance. The property stabilizes over 6-12 months, then you have a long-term fixed mortgage at your pre-locked rate.
Yes. Once the building achieves stabilized occupancy (typically 90%+), you can refinance the permanent mortgage to potentially access better rates or different terms with standard CMHC MLI Standard or MLI Select programs.

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