CMHC has advised us of key changes to the premium structure and premium insurance rates it applies to its standard rental and MLI Select multi-unit residential products. Helpfully, it has also updated its Rental Achievement Holdback policy requirement for its market products, providing greater certainty for LTC and LTV ratios.
These changes alter the rules of the game, making it essential that you speak to your First National advisor so that together we can evaluate your plans, and run updated numbers to assess the changing economics and dynamics of using different CMHC products or First National conventional loans.
In brief, the key changes fall into two significant categories:
New Insurance Premium Structure: Effective July 14, 2025, CMHC is updating both its premium structure and premium rates with implications across all of its multi-unit residential product sets. Of note, MLI Select loans will continue to provide lower relative insurance premiums compared to market loans through a new discount schedule. The amount of the premium discount may be as high as 30% depending on the level of social outcomes achieved across affordability, accessibility and energy efficiency categories. Other changes will reflect the level of downpayment used and the risk characteristics of the loan.
Rental Achievement: Effective immediately, MLI market rental construction loans can be advanced up to 85% loan-to-cost/loan-to-value (whichever is less) without the need for a rental achievement holdback. First National is encouraged by this change and over time has made our support for such an update known to CMHC. In particular, we believe this revision may reanimate projects in large Canadian cities where prior rental achievement holdbacks limiting leverage to 75% during construction challenged the economics for many clients.
Going forward consultations on MLI Select Rental Achievements
CMHC has also advised that it has prioritized a comprehensive policy review on the use of rental achievement holdbacks on MLI Select loans. We welcome this review and the consultations that the National Housing Agency will hold with Approved Lenders including First National in the weeks to come.
Better Lending means better choice
Over the past decade and across its various programs, CMHC has insured more than 1.5 million purpose-built rental units. As Canada’s largest and most dedicated multi-unit residential lender, many of these projects were funded with First National mortgages. After reviewing these changes in detail, we believe that CMHC’s programs will remain an important part of the financing landscape for the multi-unit property industry in Canada in the years ahead.
However, and as always, we also believe that you deserve to work with a lender that is willing and able to dispassionately assess the costs, benefits and advantages of using different financing options – insured and conventional – to deliver solutions that make the most sense for your project.
This is the basis of our Better Lending approach and in today’s challenging market environment, we think the choice First National offers – along with expert advice – adds tangible value for you.
To put Better Lending to work, please speak to me or your First National advisor today.