How MLI Select Benefits Real Estate Developers and Investors
The Canada Mortgage and Housing Corporation’s (CMHC) MLI Select program is reshaping real estate financing for developers and investors. With a focus on affordability, accessibility, and energy efficiency, MLI Select empowers developers to sell units faster while offering buyers financing options that boost cash flow and enable portfolio growth. Sunlite Mortgage partners with developers who build rental properties, sell to real estate investors and assist investors in purchasing multi-unit rental properties.
What is MLI Select?
CMHC’s MLI Select program is a mortgage loan insurance solution tailored for multi-unit properties with five or more units. Developers and investors can unlock significant advantages by aligning projects with three key social outcomes:
- Higher Loan-to-Value Ratios (LTV): Up to 95% financing.
- Extended Amortization Periods: Up to 50 years, reducing monthly payments.
- Lower Down Payments: Investors can secure properties with as little as 5%.
- Reduced Insurance Premiums: Favorable rates for qualifying projects.
- Flexible Qualification: Income from property revenues and assets is factored in, streamlining approvals.
To qualify, projects must achieve minimum scores in affordability, energy efficiency, and accessibility through a points-based system. Higher scores unlock better financing terms, creating a win-win for developers and buyers.
New Construction – Point Distribution for Social Outcomes
For new construction projects, points are earned based on specific criteria in affordability, energy efficiency, and accessibility. Below is the detailed point distribution real estate investors can get through the MLI Select program:
| Category | 50 Points | 70 Points | 100 Points |
|---|---|---|---|
| Affordability | 10% of units at 30% of median renter income | 15% of units at 30% of median renter income | 25% of units at 30% of median renter income |
| Energy Efficiency | 20% above code | 25% above code | 40% above code |
| Accessibility | – 100% visitable units (CSA B651:23) – Min. 15% accessible or universal design or Rick Hansen Certification (60%-79%) | – Min. 15% accessible & 85% universal design – 100% universal or accessible units – Rick Hansen Gold Certification (80%+) | It is the same as 70 points, with complete certification standards met. |
Key Benefits of Higher Points:
- 50 Points: 40-year amortization and competitive LTV ratios.
- 70 Points: 45-year amortization and increased financing flexibility.
- 100 Points: 50-year amortization, highest LTV ratios, and reduced premiums.
How MLI Select Improves Investor Cash Flow
By reducing financing costs and offering extended amortization periods, MLI Select significantly enhances cash flow for investors.
Investor Success Story:
- Property Value: $2.5M multi-unit building
- Down Payment: $125,000 (5%)
- Monthly Rent Income: $13,800
- Net Cash Flow: $5,000/month after expenses
Within a year, the property appreciated by 10%, increasing its value to $2.75M and adding $250,000 in equity. By refinancing through MLI Select, the investor accessed that equity to acquire another property, accelerating portfolio growth.
Buying One Unit
If an investor purchases a $550,000 property with traditional financing, they would need a 20% down payment ($110,000). With MLI Select, only 5% is required, freeing up capital for other investments and improving cash flow.
How MLI Select Helps Developers Sell Units Faster
Developers integrating MLI Select financing into their projects attract a broader range of buyers, accelerate unit sales, and increase profitability.
Example:
A real estate developer in Ontario partnered with Sunlite Mortgage to offer MLI Select. One buyer initially qualified for two units under traditional financing. With MLI Select’s 95% LTV option, the buyer purchased five units instead. This helps the developer sell faster, reducing carrying and interest costs and thus maximizing returns.
Key Benefits for Developers:
- Expanded Buyer Pool: Lower down payments make units accessible to more buyers.
- Faster Sales: Affordable financing accelerates sales cycles, reducing unsold inventory.
- Scalable Purchases: Buyers can qualify more easily for multiple units, increasing total sales volume.
Why Partner with Sunlite Mortgage?
Sunlite Mortgage specializes in helping developers leverage the CMHC MLI Select program to sell more units and satisfy buyers.
Our Expertise Includes:
- Tailored Solutions: Aligning your project with MLI Select’s affordability, energy efficiency, and accessibility goals.
- Buyer Support: Simplifying the qualification process, even for buyers purchasing multiple units.
- Maximized Sales: Attracting socially conscious investors and creating win-win outcomes for all stakeholders.
Take the Next Step with MLI Select
CMHC’s MLI Select program isn’t just a financing tool—it’s a pathway to sustainable, affordable, and profitable housing solutions. Let Sunlite Mortgage guide your project toward success with enhanced buyer financing and expert developer support.
Ready to sell faster and attract more buyers? Contact Sunlite Mortgage today to learn how MLI Select can transform your development strategy.
