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Posted by on Oct 2017 in All Stories, Features | 0 comments

New CMHC lending rules worth a closer look

Close up of female accountant or banker making calculations. For ONPHA members seeking cost-effective capital for expansions or renovations, recent changes made by Canada Mortgage and Housing Corporation are worth a close look, according to Daniel Bragagnolo, Director, Commercial Financing at First National, Canada’s largest CMHC multi-residential lender.

Bragagnolo, whose team specializes in CMHC lending to affordable housing providers across Canada, described four enhancements that taken together, significantly improve borrowing flexibility.

The first change permits the use of bulk leases. [A bulk lease allows borrowing against the future cash flow of a funded lease portfolio.] As a result, properties subject to a bulk lease for a portion of their residential units will now be eligible for mortgage insurance, provided the loan supports housing in the North, affordable housing, housing for students or for vulnerable groups.

The second is a 5-percentage point increase in CMHC’s loan to value or “LTV” ratio for non-recourse loans. The third simplifies affordability criteria for new CMHC construction loans. The fourth allows refinancing of affordable housing units up to 85% LTV under certain circumstances.

“As Section 95 agreements expire, ONPHA members would be well-advised to assess the implications of these enhancements,” says Bragagnolo. “In our view, they could make a material difference to the viability and financing costs of affordable housing developments and that’s great news given the urgent need for more and better units.”

With a $100 billion mortgage portfolio, First National provides capital to our sector as well as a deep understanding of CMHC’s broad product assortment.

“CMHC programs are there for the asking, but navigating the options and creating qualifying structures and strategies is not easy,” says Bragagnolo. “That’s why our affordable housing team exists. We’re here to help providers capture every possible financial advantage as they transition to self-sustaining business models.”

To learn more, contact Daniel at 416-597-5460 or



This story was sponsored by First National.

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