CMHC Rule changes - Advice 268

CMHC Announces Major Updates to Multi-Unit Mortgage Loan Insurance

Canada Mortgage and Housing Corporation (CMHC) has released new guidance for Approved Lenders, outlining several important changes to its Multi-Unit Mortgage Loan Insurance (MU MLI) programs. These updates impact documentation requirements, completion take-out financing, MLI Select energy efficiency criteria, and rental achievement holdbacks.

Here’s what you need to know:

🔹 Streamlined Documentation Requirements

CMHC has simplified and clarified the minimum documentation required at application submission. Updates include:

• A clearer definition of what qualifies as “documentation”

• Distinction between application-stage vs. advancing-stage requirements

• Removal of duplicative or outdated items

⏱️ Effective for all applications submitted on or after November 28, 2025.

🏗️ Changes to Completion Take-Out Financing

Completion take-out will now be more clearly defined to ensure consistency and risk mitigation. Eligible uses include:

• Paying out construction loans

• Reimbursing self-funded construction costs

• Purchasing newly constructed buildings

Advances must occur within 6 months of CMHC approval. Applies to applications submitted on or after November 28, 2025.

🌱 Updated MLI Select Energy Efficiency Criteria

CMHC is aligning its energy requirements with the newer 2020 National Building Code (NBC) and 2020 National Energy Code for Buildings (NECB) across the following tiers:(Example excerpt from page 3 table) Advice_Avis_268

Building Type	Level 1	Level 2	Level 3
New Construction – Part 3 (larger buildings)	25% better than NECB Tier 1 (20 pts)	50% better (35 pts)	60% better (50 pts)
New Construction – Part 9 (low-rise)	20% better than NBC Tier 1 (20 pts)	40% better (35 pts)	70% better (50 pts)

📌 Current criteria remain unchanged for existing properties.🕘 Transition period: prior energy rules allowed until September 30, 2026.

🏘️ Rental Achievement Holdback Policy Clarified

To manage lease-up risk in new builds, rental achievement holdbacks will now apply based on loan-to-value and debt coverage metrics. Example (page 4 table): Advice_Avis_268

Project Type	Trigger	Holdback Amount
Standard rental housing	LTV >95% & DCR <1.20	Difference between max loan and 85% LTC/LTV
Other shelter models	LTV >95% & DCR <1.30	Difference between max loan and 80% LTC/LTV

Applies to MLI Select applications submitted on or after November 28, 2025.

Why This Matters

These policy shifts signal CMHC’s continued push toward:

• Faster and clearer underwriting workflows

• Stronger control on construction and lease-up risk

• Greater push towards affordability

  
  

Developers, lenders, and investors leveraging CMHC insurance should start adjusting internal models and pre-construction pro formas now to meet the updated standards, particularly on energy performance to preserve qualification and maximize points.