MLI Select: What is it? How it Can Skyrocket Your Real Estate Portfolio

MLI Select lending is a specialized financing program in Canada offered by the Canada Mortgage and Housing Corporation (CMHC). It is specifically designed to provide flexible mortgage loan insurance options to support the construction, purchase, and refinancing of multi-unit residential properties. The primary objective of MLI Select is to encourage the development of affordable rental housing and improve the energy efficiency of existing rental properties.

Key Features of the MLI Select Program

Affordability Incentives:

MLI Select is tailored to promote affordability in the rental housing market. The program offers favorable loan terms for projects that include affordable housing units. Properties that set aside a portion of their units at below-market rents are eligible for more attractive financing conditions. This initiative helps to ensure that low and moderate-income households have access to quality rental housing.

Flexible Underwriting Criteria:

The MLI Select program provides flexibility in its underwriting criteria to accommodate a variety of project types and financial circumstances. This can include higher loan-to-value ratios, which allow borrowers to finance a larger portion of the property's value. Additionally, the program may offer longer amortization periods, making monthly mortgage payments more manageable. Reduced mortgage insurance premiums are also available for qualifying properties, lowering the overall cost of financing.

Energy Efficiency Incentives:

A significant component of MLI Select is its focus on energy efficiency. The program encourages the construction of new buildings and the retrofitting of existing properties to meet or exceed energy efficiency standards. Projects that incorporate energy-saving features, such as improved insulation, energy-efficient windows, and advanced HVAC systems, can benefit from reduced insurance premiums and other favorable loan terms. This not only helps reduce operating costs for property owners but also contributes to environmental sustainability.

Support for Social and Environmental Goals:

MLI Select aligns with broader social and environmental objectives by supporting projects that offer significant social benefits and reduce environmental impacts. For instance, properties that improve accessibility for people with disabilities or implement green building practices may receive additional incentives. The program's emphasis on social and environmental responsibility reflects CMHC's commitment to fostering inclusive and sustainable communities.

Benefits of MLI Select Lending

Stimulating Investment in Rental Housing:

By offering attractive financing options, MLI Select stimulates investment in the multi-family rental sector. This increased investment helps to address the growing demand for rental housing in many Canadian cities, contributing to more vibrant and diverse housing markets.

MLI Select lending is a pivotal program in Canada’s efforts to enhance the availability and quality of rental housing. Through its focus on affordability, flexibility, energy efficiency, and social and environmental responsibility, the program addresses key challenges in the housing market. By supporting the development and improvement of multi-unit residential properties, MLI Select plays a crucial role in building stronger, more sustainable, and inclusive communities across Canada. Allowing Canadians to diversify their real estate investment portfolios by using minimum down payment of 5%, amortizations of 50 years, etc. Where this would not be available on single family dwelling purchases.