How to Buy Multi-Million Dollar Properties with 5% Down: The CMHC MLI Select Program (2025 Guide)

Investing in multi-million dollar properties with just 5% down is no longer a pipe dream—thanks to Canada's CMHC MLI Select Program. Designed for investors eyeing large multi-unit residential buildings, this government-backed initiative unlocks high-value real estate opportunities with minimal upfront costs. Here's your 2025 guide to leveraging this program.

For a step-by-step walkthrough of the MLI Select application process, check out our detailed guide: Navigating the CMHC MLI Select Program: A Step-by-Step Guide for Investors

For a detailed guide on understanding different terms associated with mortgages 
https://redleafhomes.ca/blog/understanding-cmhc-mli-select-terms-dscr-ltv-noi-cap-rate

Complete a buyer intake form today: CMHC MLI Select Buyer Intake Form

What is the CMHC MLI Select Program?

The MLI Select Program is a specialized mortgage loan insurance product for investors targeting properties with 5+ residential units. Unlike traditional CMHC insurance (limited to 1-4 units), this program offers:

Sources: CMHC MLI Select Guidelines, MLI Select Program Guidelines

Who Qualifies?

To secure MLI Select approval, you must meet:

• Property Requirements:
  • Minimum 5 residential units (or 50+ units offering meals and services for retirement homes).
  • Max 30% non-residential space (e.g., retail in mixed-use buildings).
• Financial Requirements:
  • Credit Score: Minimum 600.
  • Net Worth: At least 25% of the property's value.
  • Debt Coverage Ratio (DCR): Minimum 1.1 (rental income must exceed mortgage principal, interest, taxes, heat, and 50% of condo fees by 10%).

Source: CMHC MLI Select DCR Calculation

Boost Your Approval Odds: The Points System

The program rewards projects that align with national priorities. Maximize your score across three categories:

1. Affordability (50 pts):
   • Offer 10%+ below-market rent for 10+ years (+15 pts).
   • Include min. 10% rent-geared-to-income units (+10 pts).
2. Climate Compatibility (35 pts):
   • Achieve energy-efficient certifications like LEED (+15 pts).
3. Accessibility (15 pts):
   • Install universal design features (e.g., wheelchair ramps).

Score 100 points for the best terms (50-year amortization, lower premiums). Source: CMHC MLI Select Scoring Grid

Where to Invest? Alberta's Hot Markets (2025)

Alberta's booming population and infrastructure projects make it a prime target:

Calgary Highlights

• Average Home Price: $605,074 (+12% YoY).
• March 2025 Sales: Record high, up 35% YoY (Source)
• Top Neighborhoods:
  • Beltline District: Avg condo price $332,000, 1.8% vacancy.
  • Inglewood/Ramsay: 8.5% annual growth, Green Line LRT expansion.
• Key Projects:
  • $5.5B Green Line LRT (2025 completion).
  • $1.2B Event Centre District.
  • $2.5B Calgary Cancer Centre, attracting healthcare jobs (Source)

Edmonton Highlights

• Average Home Price: $552,684 (+11.9% YoY).
• Rental Vacancy Rate: 3.2%, avg 2-bed rent $1,427 (Source)
• Sales-to-Listings Ratio: 91% (seller's market).

Sources: CREB Market Reports, CMHC Research

Application Process: 4 Steps to Approval

1. Pre-Application (1-2 weeks): Gather documents (credit report, net worth statement).
2. Documentation (2-3 weeks): Submit property appraisal, rent rolls, and environmental reports.
3. CMHC Review (3-4 weeks): Await points verification and underwriting.
4. Closing (1-2 weeks): Sign documents and secure funding.

Key Docs Checklist:

• Property appraisal, Phase 1 environmental report.
• 2 years of tax returns, 90 days of bank statements.

Sample Financial Breakdown

For a $2.5M property with 5% down:

• Gross Rental Income: $14,200/month ($170,400/year).
• Net Operating Income (NOI): $8,474/month after expenses.
• Mortgage Payment: $7,200/month (95% LTV, 50-year amortization).
• Debt Coverage Ratio: 1.18 (exceeds 1.1 minimum).

Tax Tips for MLI Select Investors

• Claim Capital Cost Allowance (depreciation) on rental property to offset income (Source)
• Expense interest on loans used to purchase rental properties (Source)

2025 Mortgage Stress Test Update

As of April 1, 2025, the minimum qualifying rate for the mortgage stress test has been updated:

• The higher of:
  1. The contract rate plus 2%, or
  2. 5.25% (reduced from 5.95% in 2024)
• Applies to both insured and uninsured mortgages

This change may impact borrowing power for some MLI Select investors. (Source)

CMHC Green Home Program Incentives

MLI Select properties with energy-efficient features may qualify for additional benefits:

• Partial CMHC premium refund of up to 25%
• Must be ENERGY STAR® certified or achieve 15% energy savings over building code
• Rebates also available for LEED, Passive House, or Zero Carbon building standards

These incentives provide further reason to prioritize sustainability in your MLI Select project. (Source)

Alberta's Evolving Building Code (2026)

Investors planning new MLI Select projects in Alberta should be aware of upcoming changes:

• All new homes and buildings must be "net-zero energy ready" by 2026
• Includes requirements for enhanced insulation, air-tightness, triple-pane windows, heat recovery ventilation, and solar panel-ready roofs
• Factor these into your construction plans and budgets

Building to these standards from the start can help you access the MLI Select program's sustainability incentives. (Source)

Immigration Driving Rental Demand

Canada's ambitious immigration targets are set to fuel demand for purpose-built rental:

• 500,000 new permanent residents planned for 2025
• Alberta expected to welcome 12% of newcomers, many of whom will rent initially
• Calgary and Edmonton are top settlement destinations

MLI Select investors can capitalize on this trend by developing multi-unit rental properties in these high-growth markets. (Source)

Avoid These Pitfalls

• ❌ Incomplete paperwork: Missing appraisals or tax returns delay approvals.
• ❌ Unrealistic rent projections: Overestimating income risks DCR failures.
• ❌ Ignoring sustainability: Missing green certifications = lost points.

FAQs

Q: Can non-residents apply?
A: Yes, with a Canadian partner or corporation.

Q: Is new construction eligible?
A: Yes, but builders must pass CMHC reviews.

Q: How long does approval take?
A: 4-8 weeks on average.

Final Tips

• Partner with a CMHC-approved lender.
• Use the MLI Select Scoring Guide to pre-calculate points.
• Consult a real estate attorney for compliance.

The CMHC MLI Select Program is your ticket to scalable real estate investing—with minimal upfront capital. Ready to dive into multi-million dollar deals? Start preparing your application today. 🏢🔑

(Disclaimers: Program terms subject to change. Consult a financial advisor for personalized advice.)

Complete a buyer intake form today: CMHC MLI Select Buyer Intake Form