Financing a multi-unit building with MLI Select on the South Shore

Every time an investor talks to me about buying an income property on the South Shore, the real question shows up fast: how do we finance it. For a few years now, a CMHC program has changed the math for buildings of five units and more. It is called MLI Select, and it moved again this fall. Here is how it works, and who it is for.

What just changed on September 30

Let me start with the news, because that is what makes this timely. MLI Select runs on a points system: the more boxes a project ticks for affordability, energy efficiency and accessibility, the more the loan terms loosen. The energy side was just tightened. Since September 30, 2026, new buildings are scored against the 2020 codes, the National Building Code and the National Energy Code for Buildings, rather than the older 2015 and 2017 versions. CMHC announced the change on November 28, 2025.

In plain terms, the bar went up. A building designed to hit a certain number of energy points last year earns fewer today, because it is now measured against a stricter code. A project that was grazing 100 points can land lower. For an investor, that means one simple thing: aim for energy efficiency early in the project, not as something you bolt on at the end.

How the program works

MLI Select is CMHC mortgage loan insurance for multi-unit housing. First filter to know: the building must have five units or more. A duplex, a triplex, even a fourplex do not qualify. On the South Shore, where a lot of investors own two- to four-door plexes, that is the first thing to check before dreaming about the terms.

Then come the points. You need at least 50 to get into the program, and three tiers open progressively better terms:

• 50 points: amortization up to 40 years, a loan up to 85% of value, a minimum debt coverage ratio of 1.10.
• 70 points: amortization up to 45 years, a loan up to 95% of value.
• 100 points: amortization up to 50 years, a loan up to 95% of value.

That is where the real lever sits. A 50-year amortization spreads the principal over twice the time of a conventional 25-year loan. The monthly payment drops, and the building's cash flow gets room to breathe. A loan at 95% of value means a far thinner down payment than the 25% often required in classic commercial lending. For an investor, those two numbers are often the difference between a project that works and one that does not.

None of it is free, though. Since a July 2025 update, CMHC adds a premium surcharge of 0.25% for every five-year increment of amortization beyond 25 years. Pushing out to 50 years therefore raises the premium you pay up front. The math still tends to come out ahead thanks to the lower payment, but you have to run it, numbers in hand, project by project.

The rate at 2.50% and today's math

The backdrop changed on October 28. The Bank of Canada raised its policy rate to 2.50%, its first increase since July 2023. Prime followed to 4.70%. I went through what the hike changes for everyone in my piece on the October 28 decision.

For an income property, the value of the CMHC guarantee shows up precisely in the price of money. An insured loan is cheaper to finance than an uninsured one, because the lender carries less risk. To give a sense of scale on the residential side, nesto showed a best three-year fixed insured rate of 4.54% on November 3, against 5.10% on the uninsured side. The same principle plays out on multi-unit: going through an insured program like MLI Select generally costs less than conventional commercial financing. With a policy rate that is no longer falling, that gap matters even more.

What this means for you

• You own a building of five units and more: your building is eligible to a pool of buyers who can finance it with MLI Select, so with a lower down payment and stretched payments. That widens demand for your asset. Before selling, it is worth knowing its true value and what a well-financed buyer can get out of it.
• You invest or are looking to buy: the program is a real tool, but it asks for work up front, especially since the September 30 energy tightening. Target buildings where affordability and energy efficiency are reachable, build the points file early, and weigh the premium surcharge against the cash-flow gain. On the South Shore, Longueuil is still the deepest market for this kind of building.
• You own a two- to four-door plex: MLI Select is not for you, or not for that building anyway. There are other insured financing routes for small plexes, and the real question often becomes whether grouping up or scaling up gets you to the five-unit threshold.

I work both residential and commercial, and multi-unit sits right where the two meet. If you are thinking of selling, buying or putting together an income-property project, let's talk before you pick the financing, not after. Request a free evaluation of your building or write to me directly. I answer personally. And for the context on returns, I also wrote about cap rates on the South Shore.