CMHC rental construction funding provides low-cost financing to eligible borrowers during the riskiest phases of rental apartment product development (from construction to stabilizing operations). We offer flexible funding and funding opportunities, expertise and advice to help housing professionals promote and protect affordable housing in Canada. Our mortgage insurance and securitization products offer access to owned and rented homes, while supporting financial stability. PURPOSE OF THE LOAN Financing, purchasing or refinancing construction.
CMHC mortgage insurance provides access to preferential interest rates, reducing loan costs for building, purchasing, and refinancing multi-unit residential properties and facilitating renewals during the life of the mortgage. As a Canadian provider of mortgage loan insurance for multi-unit residential properties, CMHC ensures that the rental housing needs of Canadians are met and supports government efforts to expand and preserve the supply of rental units across Canada. This is where Ashdown can help: most CMHC-insured loans are offered through life insurance companies and monolineal mortgage lenders, and they have a unique set of requirements that conventional lenders don't always ask for. In addition to lower rates, CMHC mortgage insurance offers other incentives to encourage the construction, preservation and improvement of rental properties.
CMHC mortgage loan insurance from the start with the premium paid in full at no additional cost to the borrower. CMHC home loan insurance allows approved lenders to offer greater financing options to borrowers who offer standard rental accommodations in multi-unit residential buildings. We'll work closely with you to identify the right lender and the most appropriate CMHC program for your project. Ashdown Capital brokers are fully aware of the eligibility requirements for the various CMHC programs and have an established network of lenders they use in this area.
For example, a fully leased building can guarantee 5-year rates between 1% and 1.5% lower than conventional financing through the CMHC, and can also guarantee 10- to 15-year interest rates set at lower rates than conventional 5-year loan rates. When loan advances above the 75% level are required, the CMHC will authorize the advance once the approved lender has provided acceptable evidence to the CMHC that the property has achieved the projected rent level. Interest payments only during the construction and rental phase begin after 1 year of stable operating income. The Canadian Mortgage and Housing Corporation announced that it will provide funding for construction for rent, with the aim of improving supply in areas that require more rental housing.
The CMHC said the funding will not cover the construction of nursing homes, the occupancy of individual rooms or housing for students. To facilitate these efforts, the CMHC provides access to preferential rates that can substantially reduce loan costs for building, purchasing, and refinancing multi-unit residential properties, making it more attractive for builders and investors to build and maintain rental properties.