Why do some rental buildings secure a loan that covers nearly all of the construction cost while others need a much larger cheque from the owner? Part of the answer is a mortgage loan insurance program from the Canada Mortgage and Housing Corporation, known as CMHC, that rewards developers who commit to more affordable rents, more efficient buildings, and accessible design. The program is called MLI Select, where MLI stands for mortgage loan insurance, and it works like a scorecard in which more points earn better borrowing terms. This guide explains how the scoring works, what a project needs to qualify, and what to expect once construction begins.
How the Program Works
CMHC insures lenders against default on loans for multi-unit housing, which lowers the lender’s risk and lets it offer terms that an uninsured loan would not carry. Since March 2022, MLI Select has replaced the earlier MLI Flex product, and it applies to new construction and existing properties alike, including purpose-built rental buildings, supportive housing, and retirement homes. A borrower can focus on a single area, such as affordability, or combine commitments across three areas to reach a higher score.
How the Points System Works
Every project is scored on affordability, energy efficiency, and accessibility, and a total of at least 50 points is needed to receive any benefit. The better the score, the better the financing terms, which is the core idea behind MLI Select and the reason the scoring often shapes design decisions early in a project.
According to the CMHC tables, a new construction project with at least 50 points can borrow up to 95 percent of its construction cost, and amortization, which is the period over which the loan is repaid, runs up to 40 years at 50 points, 45 years at 70 points, and 50 years at 100 points. Existing buildings follow the same amortization steps but borrow up to 85 percent of the property’s value at 50 points and up to 95 percent at 70 points. At 100 points, the arrangement also becomes limited recourse, which restricts the lender’s claim against the borrower beyond the property itself, and the required debt service coverage ratio, which compares a building’s income to its loan payments, stays at a minimum of 1.10 for standard rental housing at every level. Premiums fall as the score rises as well.
MLI Select Affordability Commitments
Affordability carries the largest share of points, worth 50, 70, or 100 depending on how many units are rented at rents that equal no more than 30 percent of the median renter income in the local market. New construction needs 10, 15, or 25 percent of its units to meet that test for the three levels, while existing buildings need 40, 60, or 80 percent. The commitment runs for at least 10 years, and a commitment of 20 years or more earns an additional 30 points. Rent increases on those units are limited to what provincial rules allow or, where no rules apply, to a consumer price index percentage that CMHC publishes each year.
MLI Select Energy Efficiency Commitments
Energy efficiency is worth 20, 35, or 50 points. New buildings earn them by beating the 2020 National Energy Code for Buildings by at least 25, 50, or 60 percent, or by beating the 2020 National Building Code by at least 20, 40, or 70 percent, while existing buildings earn them by cutting energy use and greenhouse gas emissions by 15, 25, or 40 percent from current performance. A qualified professional such as an engineer, architect, or certified energy manager prepares the modelling, and solar panels can account for no more than 15 percent of the total reduction, so the building itself has to deliver most of the savings. The lender collects a signed statement within 60 days of the final advance confirming that the targets were met.
Accessibility Commitments
Accessibility is worth 20 or 30 points, and every project must first make all units fully visitable, meaning a visitor who uses a wheelchair can enter, move through the main level, and use a washroom, with barrier-free common areas under the Canadian Standards Association standard B651-2023. On top of that, the 20-point level requires at least 15 percent of units to be accessible or built to universal design, which means usable by people of all abilities without changes, or a Rick Hansen Foundation certification score of 60 to 79 percent. The 30-point level requires far higher shares, such as every unit built to universal design or a Rick Hansen Gold certification, and an architect or accessibility consultant signs a statement at application to support the commitment.
CMHC MLI Select Requirements
Eligibility comes before scoring under MLI Select, since a project that fails the basic tests earns no benefit regardless of its points. A project needs at least 5 units, or at least 50 units or beds for a retirement home, and non-residential space cannot exceed 30 percent of the gross floor area or 30 percent of the total lending value. Standard rental buildings, single room occupancies, supportive housing, and retirement homes can all qualify, while student housing can qualify only through its energy and accessibility commitments. The project also cannot be subject to the federal prohibition on the purchase of residential property by non-Canadians, and lenders and CMHC review the borrower and the project as well, so a strong application includes the financial, appraisal, and construction documents that any insured loan requires.
CMHC MLI Select Interest Rate
The lender sets the interest rate on an insured loan rather than CMHC, but the insurance lowers the lender’s risk, which usually shows up as pricing below what an uninsured loan would carry. One national lender, MCAP, described its pricing on these loans in January 2025 as the prime rate, the benchmark banks use, minus a spread, compared with prime plus a spread on conventional financing, and it noted a debt service coverage requirement of 1.1 times against the 1.25 times typical of conventional loans. CMHC charges its own premium on top of the rate, and that premium falls as the score rises, so the total cost of borrowing depends on the lender, the loan term, market conditions, and the points a project earns.
What Construction Looks Like Under the Program
For a developer using MLI Select on a new build, the construction process looks much like a conventional project, with extra documents to prove eligibility and the commitments. The same lender notes that CMHC requires bonding on major contracts, at 50 percent for labour and materials and 50 percent for performance, and that bonding waivers are no longer permitted, although a letter of credit or collateral security may be accepted in some cases. Bonding is a guarantee from a surety company that the contractor will finish the work and pay its subcontractors and suppliers. Funds are released through a drawdown schedule that typically allows one draw each month, with CMHC reviewing the first and last draws, and the lender reviews the credit of the general contractor or, where a project manager runs the build, the credit of the five major trades such as concrete, structural, and mechanical. The commitments continue after the building opens, since borrowers file an annual certificate of compliance for affordability and confirm that the energy and accessibility targets were achieved.
Final Words
The scoring system turns financing into a design and operating decision, because each commitment on rent, energy, or accessibility moves a project toward lower premiums, longer amortization, and in some cases higher loan limits. Those gains come with obligations that last for years, including rent limits on designated units for at least 10 years, higher construction spending to reach energy targets, and annual reporting once the building is open, so a sponsor should price the commitments against the savings before choosing which categories to pursue. Anyone weighing MLI Select should confirm current thresholds, premiums, and credit standards with CMHC and an approved lender, since program terms are updated from time to time. Black Creek Group looks at financing programs like this the same way it looks at any underwriting assumption, by testing it against the numbers before it becomes a commitment.
Frequently Asked Questions
How do you earn energy efficiency points under MLI Select?
Energy points come in three tiers worth 20, 35, and 50 points. New construction earns them by beating the 2020 National Energy Code for Buildings, or the 2020 National Building Code at different percentages, and existing buildings earn them by cutting energy use and greenhouse gas emissions by 15, 25, or 40 percent from current performance. A qualified professional prepares the modelling, and solar panels can count for at most 15 percent of the total reduction.
What are the requirements to qualify for CMHC MLI Select?
A project needs at least 5 units, or 50 units or beds for a retirement home, with non-residential space limited to 30 percent of the gross floor area or total lending value, and it must reach a minimum of 50 points. Standard rental buildings, single room occupancies, supportive housing, and retirement homes are eligible, while student housing can qualify only through energy and accessibility.
How does the MLI Select points system work?
Applicants earn points for commitments in affordability (50, 70, or 100), energy efficiency (20, 35, or 50), and accessibility (20 or 30), and at least 50 points are required in total. Higher totals bring lower premiums and longer amortization of up to 50 years, and a 20-year affordability commitment earns an additional 30 points.
What interest rate do you get with CMHC MLI Select?
The lender sets the interest rate, not CMHC. Insurance lowers the lender’s risk, so pricing is often below uninsured loans, and CMHC charges a separate premium that falls as points rise. Exact pricing depends on the lender, the term, and market conditions.
How do affordability commitments work under MLI Select?
Borrowers commit that a share of units will rent at levels that equal no more than 30 percent of the median renter income for the market, for at least 10 years. New construction needs 10, 15, or 25 percent of units for 50, 70, or 100 points, while existing buildings need 40, 60, or 80 percent, and rent increases on those units are limited to provincial rules or a CMHC published consumer price index percentage.
