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The Canada Mortgage and Housing Corporation (CMHC) MLI Select program is a groundbreaking financing solution for real estate investors focused on multi-unit residential properties. It offers significant financial, tax, and cash flow benefits, making it an ideal option for those who want to contribute to affordable, sustainable housing while maximizing profitability. If you’re a real estate investor new to this program, here’s everything you need to know to make the most of the CMHC MLI Select program.
The CMHC MLI Select program encourages constructing and maintaining affordable, energy-efficient, and accessible multi-unit housing. Through a unique points-based system, CMHC offers developers and investors extended amortization and higher loan-to-cost financing options, prioritizing affordability, energy efficiency, and accessibility to their projects.
The MLI Select program offers investors financial flexibility and potential tax advantages, allowing them to reduce initial capital requirements and achieve long-term profitability with favourable financing terms.
A critical appeal of the CMHC MLI Select program is its high loan-to-cost (LTC) ratio—offering financing of up to 95% for new builds that meet the program’s criteria. With up to 50-year amortizations available, these terms can significantly reduce monthly debt service costs, enabling better cash flow for reinvestment and operational flexibility.
These features make the MLI Select program appealing to investors who want to minimize capital outlay while maximizing long-term investment returns.
For many investors, the tax deductibility of mortgage interest is one of the most attractive aspects of the CMHC MLI Select program. With the extended amortization periods, the interest on these long-term mortgages becomes a significant deduction over time, reducing taxable income and enhancing after-tax cash flow.
By pairing the high loan-to-cost ratio with tax-deductible interest, investors can increase their return on investment (ROI) through ongoing tax savings. This benefit is precious for larger-scale developments where the interest deductions provide considerable tax relief over the decades-long life of the mortgage.
The MLI Select program enhances a project’s cash flow potential by incentivizing energy-efficient upgrades and providing attractive financing terms. By integrating energy-saving systems into the initial construction phase, developers can achieve long-term operational savings, reduced utility costs, and a better return on investment.
The CMHC MLI Select program uses a points-based system to tailor financing benefits based on a project’s focus on affordability, energy efficiency, and accessibility. Investors can strategically choose a mix of these criteria to reach the desired points threshold, optimizing their financing terms and maximizing cash flow potential.
This flexibility allows investors to balance costs and benefits based on their unique project needs, making MLI Select a versatile financing tool for new builds and substantial renovations.
Contact Sunlite Mortgage today to learn how to leverage the CMHC MLI Select program for your next project. Our experienced team can guide you through each step, from eligibility assessment to application submission. We’re here to help you unlock the full potential of this program for both financial and social impact.
