An Update on CMHC Lending Program Changes

On June 4th CMHC announced financing changes from Advice 253 which applies to CMLS and other approved lenders.

Changes to energy efficiency scoring for the MLI Select Program

The continued development of affordable housing units is a key priority for CMHC.  To encourage this development, the maximum points achievable from energy efficiency for the MLI Select program scoring criteria is being reduced from 100 to 50 points.  Affordability and accessibility points remain unchanged. Achievement of sufficient points for MLI Select Level 3 will necessitate the inclusion of at least 10% affordable units.

Energy Efficiency and GHG Reductions
Level 1 reduced from 30 points to 20 points
Level 2 reduced from 50 points to 35 points
Level 3 reduced from 100 points to 50 points

Loans submitted prior to June 19th and not yet approved will follow the existing policy, while those submitted after will adhere to the new criteria.

Eliminating restrictions on the allowable use of proceeds for CMHC refinancing

CMHC is removing the criteria limiting the use of insured refinance proceeds.  This includes previously added measures such as non-approved lender debt, need to hold debt with a lender for minimum 24 months, exclusion of past renovations, etc.  In addition, identifying and tracking specified eligible use of proceeds will also not be required.  These changes are effective for any loan application submitted prior to June 4, 2024, that are not yet approved. Any existing COI is still subject to the use of funds restrictions and/commitments made during the application.

Increases to the maximum amortization for the MLI Market Program

CMHC is extending the maximum amortization period for MLI Market new construction projects from 40 years to 50 years.   This can assist in providing additional loan proceeds on some projects and/or improving project economics.  This change is effective June 19, 2024, and will not apply to applications submitted prior to that date.

Greater flexibility in the definition of new construction

CMHC is introducing greater flexibility in cases where a new construction project is built in the place of a previously existing demolished residential structure.  In addition, clarification has been included as to when existing projects are subject to the new construction energy efficiency qualifying criteria under MLI Select.  These changes are effective for any loan application submitted prior to June 4, 2024, that are not yet approved.

Only permitting applications from CMHC Approved Lenders

Only CMHC Approved Lenders will be permitted to apply to and correspond with CMHC.  Lender correspondents must work with an Approved Lender, who will submit and collaborate with CMHC for application processing. This change is effective September 3, 2024. Loans submitted before this date will be grandfathered.

For more information contact your CMLS Origination expert today.