CMHC MLI SELECT - Property Scoring
How does the MLI Select property scoring work?
There are two main considerations for qualifying for the MLI Select Program. The first, is whether or not you qualify, and the second is whether or not your property qualifies. On this page, we are going to dive into the criteria for the property. Based on how the property scores, you will get different levels of advantages from the MLI Select Program which will be covered below. If you have any questions, please reach out to someone on our team at the link below and we will be happy to properly assist.
What is MLI Select?
MLI Select is an innovative multi-unit mortgage loan insurance product offered by the Canada Mortgage and Housing Corporation (CMHC). It’s designed to incentivize developers and property owners to create more affordable, accessible, and energy-efficient housing
Benefits from the MLI Select Program
- An increase in the loan-to-value ratio;
- An extension of your amortization period (up to 50 years);
- A decrease in your down payment;
- A decrease in minimum debt coverage ratios;
- And a reduction in your insurance premiums.
How Does the Scoring System Work?
MLI Select uses a point-based system to evaluate properties, with a maximum score of 100 points. The more points your project earns, the better the mortgage terms you can access
Three Categories for MLI Select Scoring
Effective June 19, 2024 the number of points that can be obtained through this social outcome will be reduced as shown on the right.
This will mean that obtaining maximum benefits in the MLI Select program with 100 points will be reserved exclusively for projects that provide some level of affordability. This appears to be the social outcome that CMHC is aiming to encourage more of.
Affordability
- 50 points: Minimum 10% of units at 30% of median renter income
- 70 points: Minimum 15% of units at 30% of median renter income
- 100 points: Minimum 25% of units at 30% of median renter income
Affordability commitments must be maintained for at least 10 years. An additional 30 points are awarded for 20+ year commitments
Energy Efficiency
For new construction:
- 20 points: 20% better than NECB/NBC
- 35 points: 25% better than NECB/NBC
- 50 points: 40% better than NECB/NBC
For existing properties:
- 20 points: 15% decrease over current baseline
- 35 points: 25% decrease over current baseline
- 50 points: 40% decrease over current baseline
Accessibility
Points are awarded based on the level of accessibility and adaptable building design
Benefits of Scoring Higher
The MLI Select program offers significant advantages for developers and property owners who achieve higher scores. By committing to greater affordability, energy efficiency, and accessibility, projects can unlock more favorable mortgage terms and financial incentives.
Scoring higher in the MLI Select system can lead to substantial benefits for your project as outlined below:
Score
Loan-to-Value Ratio
Amortization
Recourse
50+ points
Up to 85%
Up to 40 years
Recourse
70+ points
Up to 95%
Up to 45 years
Recourse
100+ points
Up to 95%
Up to 50 years
Limited Recourse
50+ Points
Loan-to-value ratio: Up to 85%
Amortization: Up to 40 years
Recourse
70+ Points
Loan-to-value ratio: Up to 95%
Amortization: Up to 45 years
Recourse
100+ Points
Loan-to-value ratio: Up to 95%
Amortization: Up to 50 years
Limited Recourse
Understanding Recourse
Recourse refers to the lender’s ability to recover the outstanding balance from the borrower in case of default. In a recourse loan, if the sale of the collateral (e.g., the property) doesn’t cover the full amount owed, the lender can pursue the borrower’s other assets to recover the difference
Full Recourse vs. Limited Recourse
- Full Recourse: The lender can pursue all of the borrower’s assets to recover the debt.
- Limited Recourse: The lender’s ability to pursue the borrower’s assets is restricted, potentially reducing the borrower’s personal risk.
For MLI Select, achieving 100 points unlocks limited-recourse terms, which means there are no personal guarantees on the project, substantially reducing the risk for the builder/owner
Questions About The MLI Select Program?
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