4 + 1 = 5. And 5 is the Magic Number

As anyone who has contemplated a renovation or construction project lately knows, making the numbers add up is no small thing. This is especially true for projects that aim to create some much needed new rental suites. The combination of recent increases in construction prices, interest rates, and the Residential Tenancies Act makes a solid pro-forma even more challenging of late.

This is what ‘gentle density’ can look like. This 6 unit multiplex blends seamlessly into it’s upper Beach neighbourhood. With the recent bylaw changes, additional housing could be built overtop of the existing 5 car garage at the rear. Note the solar PV array on the roof.

One of the challenges for this type of small scale commercial housing project is finding affordable financing. The CMHC offers a multi-unit form of mortgage loan insurance called MLI Select to encourage the preservation and creation of affordable, accessible and climate compatible housing. MLI Select mortgages might include higher loan-to-value ratios up to 95%, amortization periods up to 40 – 50 years, lower debt coverage ratios of 1.10, and reduced premiums.

“The more committed you are to social and environmental outcomes, the better the incentives”

5 is the Magic Number. The minimum number of dwelling units for a project to qualify for the MLI Select program is 5. However, this applies to the property as a whole, so a fourplex in front paired with a backyard house out back will meet the threshold to benefit from the MLI Select incentives.

The MLI Select program is points based (minimum 50 points required) so you can focus on the features that matter to you: Affordability, Energy Efficiency, or Accessibility. For example, making 1 of your 5 units accessible will score 20 points. Make them all accessible for 30 points. If you can offer below market rent on 1 of your 5 units at a maximum rent of 30% of the median renter income in your area (+/- $2,000/month) will get you 70 points right off the bat. Better yet, have us design your building to achieve an energy efficiency 40% better than the National Building Code minimums and score the full 100 points!

Whatever your personal preference may be, we can help you make the numbers add up so you can take advantage of this great finance opportunity!  Book a call with Daniel to see if this program makes sense for your project.