[jollyburger]

While lower-cost financing and insurance through the Canada Mortgage and Housing Corp. (CMHC)’s Apartment Construction Loan and MLI Select programs have driven construction, many in the industry anticipate changes as the federal government rejigs its housing strategy. This promises to bring changes to lending criteria as well as how CMHC supports builders.

“It’s an interesting time because CMHC has been responsible for about approximately 90 per cent of all multi-family new construction in the country,” said Nadeem Keshavjee, founder and president of GreenBirch Capital Inc., a lender based in Calgary that has financed about 300 MLI Select approvals over the past four years.

However, CMHC is pulling back and becoming more stringent with respect to deal assessment.

“I think in the new year we’re going to see more financing shift to the non-CMHC market,” he said. “That’s going to mean financing may be more expensive, the leverage may not be as high, and so that in turn will mean partnerships, joint ventures, creative solutions. Equity investments are going to be more important than ever in getting projects off the ground.”

Changes this past July introduced premium discounts for projects achieving affordability, accessibility and energy efficiency goals.

Premium schedules and rates were also updated to encourage specific types of construction, such as seniors housing.

“CMHC’s 2025 updates to multi-unit mortgage loan insurance – including the move to a standardized, risk-based premium approach and the new MLI Select premium discount schedule tied to affordability, accessibility and energy efficiency outcomes – are influencing how rental housing projects are being structured and financed,” a briefing note from Vancouver-based mortgage lender CMLS said.

https://www.westerninvestor.com/british-...ghter-times-amid-federal-shifts-11556433