Government of Canada takes historic action to create new rental housing
By investing in the construction of more than 10,000 new rental housing units, the Government is taking action to improve the lives of hard working Canadians. It will allow more middle-class Canadians to spend more time with their children by living closer to public transit, schools and services.
The Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for the Canada Mortgage and Housing Corporation, was in Montreal today to announce the launch of the Rental Construction Financing initiative.
The Rental Construction Financing initiative will provide $2.5 billion in low-cost loans to support the construction of new rental housing, relieving pressure in rental markets that are experiencing low vacancy rates and high rents.
The initiative will complement commitments made in Budget 2017, which will invest more than $11.2 billion over 11 years for initiatives designed to build, renew and repair Canada’s stock of affordable housing. These significant investments are made as part of a new National Housing Strategy that will be launched later this year and help ensure that Canadians have housing that meets their needs.
“Canada’s middle class will benefit from the construction of new rental housing. Through these significant investments, our Government is taking action to increase the supply of new rental developments, providing housing options that are closer to public transit, schools and services for hard-working Canadian families.”
— Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for Canada Mortgage and Housing Corporation
- The rental market is an important housing option for approximately 30% of Canadians.
- The Rental Construction Financing initiative was announced as part of Budget 2016 and is expected to fund the construction of more than 10,000 new rental housing units in Canada.
- Starting in 2017, the initiative will provide up to $625 million in loans each year for four years to encourage the development of new rental housing by municipalities, non-profit organizations and housing developers.
- Combined with Budget 2017’s new direct lending initiative for the renewal of affordable housing, it is expected that the amount of capital available for lending at low cost will be more than $10 billion over 11 years.
- CMHC also announced new mortgage insurance measures to support affordable rental housing projects.
- CMHC has been helping Canadians meet their housing needs for more than 70 years. As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers unbiased housing research and advice to Canadian governments, consumers and the housing industry. Prudent risk management, strong corporate governance and transparency are cornerstones of CMHC’s operations. For more information, please call 1-800-668-2642 or follow us on Twitter, YouTube, LinkedIn and Facebook.
- For more information on the Rental Construction Financing initiative, please visit cmhc.ca/financinginitiative
The rental market is particularly important to many segments of the population including middle class families, young adults, seniors and new immigrants to Canada.
CMHC’s Seed Funding and Affordable Rental Innovation Fund are complementary initiatives that may be combined with the Rental Construction Financing initiative and with CMHC’s multi-unit mortgage loan insurance. These initiatives support the supply of affordable and innovative rental housing without reliance on ongoing operating subsidies.
Rental Construction Financing
To be eligible, borrowers must demonstrate that their projects are financially viable without ongoing operating subsidies. The financing initiative will prioritize projects that demonstrate greater social outcomes and may offer a loan for up to 100% of the cost of these projects. Borrowers must meet minimum requirements for affordability, energy efficiency and accessibility.
Applications will also be scored on additional social outcomes such as proximity to public transit and partnerships with other government organizations.
Lower-cost loans will be provided for terms of up to 10 years, providing cost predictability during the earliest and most challenging phases of development. Loans approved through the financing initiative will include CMHC mortgage loan insurance, providing access to preferred interest rates and simplifying loan renewal throughout the life of the mortgage.