20 Billion in New Financing For Rental Units
From the Government of Canada’s Department of Finance, The Government of Canada unlocking $20 billion in new financing to build 30,000 more apartments per year.
The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced that the annual limit for Canada Mortgage Bonds is being increased from $40 billion to up to $60 billion. This change is the next step in the government’s plan to build more homes, faster, and will unlock low-cost financing for multi-unit rental construction.
The Canada Mortgage and Housing Corporation (CMHC) and the Canada Mortgage Bond program support the low-cost financing of new rental housing by providing mortgage loan insurance and securitization.
There is currently unmet demand from developers and builders to access low-cost financing, which is preventing them from building much-needed rental apartments. With the federal government removing the Goods and Services Tax on new rental housing recently.
This increase from $40 billion to $60 billion annually, will provide low-cost, repayable construction financing for new multi-family, secured purpose-built rental housing. The 30,000 a year projected builds are specifically aimed at apartment buildings, student housing and senior residences.
CMHC has also estimated we need to build an additional 3.5 million homes, on top of the current pace of building, by 2030 to restore affordability.
With the boomer generation aging and a massive student population it makes complete sense to target these types of builds specifically.
Most of these builds we be using the MLI select program from CMHC, which is a gamified point system that allows for some pretty great terms, such as 95% loan to value and loan to cost, as well as 30-40 amortizations.
The points are gained by hitting targets for Affordability, Accessibility & Energy Efficiency.
Check out the whole cut sheet here, MLI Cut Sheet