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Unlocking Investment Potential with MLI Select: How Lawtiq Can Guide Your Journey

Writer's picture: Lawtiq TeamLawtiq Team


The MLI Select (Multi-Unit Lending Innovation) program by Canada Mortgage and Housing Corporation (CMHC) is a transformative initiative aimed at addressing Canada’s housing crisis. It provides incentivized financing for multi-unit residential rental properties, with a specific focus on affordability, energy efficiency, and accessibility. For investors and developers, MLI Select is a golden opportunity to align with national housing priorities while securing long-term financial benefits. This article delves into the features of MLI Select, its benefits, eligibility criteria, and how Lawtiq can streamline your investment journey.


What is MLI Select?


Launched in 2023, MLI Select is a CMHC-backed financing program designed for new construction, refinancing, and the purchase of multi-unit residential properties. It offers reduced interest rates, extended amortization periods of up to 50 years, and loan-to-value (LTV) ratios as high as 95%, depending on the level of affordability, energy efficiency, or accessibility a project achieves.

The program uses a point-based scoring system, rewarding developers who:

  1. Allocate a significant percentage of units as affordable housing (based on local median income).

  2. Incorporate energy-efficient designs that exceed minimum code requirements.

  3. Ensure accessibility features that improve the quality of life for people with disabilities.


Key Benefits of MLI Select


  1. Increased Loan Amounts:

    • Borrowers can access up to 95% of the loan-to-value (LTV) ratio for projects that meet high affordability, accessibility, and energy efficiency standards.

  2. Extended Amortization:

    • Amortization periods of up to 50 years reduce monthly debt obligations, improving cash flow.

  3. Lower Interest Rates:

    • Preferential rates are offered to projects that meet or exceed thresholds in affordability, energy efficiency, and accessibility.

  4. Reduced Risks:

    • As an insured product, MLI Select reduces risks for lenders, making it easier for developers and investors to access capital.

  5. Alignment with ESG Goals:

    • Developers and investors can align their projects with environmental, social, and governance (ESG) objectives, improving market appeal and long-term sustainability.


Eligibility Criteria


To qualify for MLI Select, a project must meet specific criteria:

  • Property Type: Multi-unit residential properties with a minimum of five units.

  • Project Focus: New construction, refinancing, or acquisition.

  • Affordability: At least 10% of units must meet CMHC’s affordability definition.

  • Energy Efficiency: A minimum of 15% improvement over the energy code baseline.

  • Accessibility: Incorporation of universal design features.

MLI Select in Numbers

  • Affordability Threshold: Units priced at 30% of local median household income.

  • Energy Efficiency Goal: At least 15% energy savings for moderate incentives, and up to 40% for maximum benefits.

  • Accessibility Incentive: Projects scoring high on CMHC’s accessibility criteria can unlock an additional 15-20 points in the program’s scoring system.


Why MLI Select is a Game-Changer for Investors


  1. Addressing Demand: With Canada’s population projected to grow by over 1.2 million by 2025 (Statistics Canada, 2023), the demand for rental housing is unprecedented. MLI Select provides the financial tools to meet this demand profitably.

  2. Government Incentives: The federal government has committed over $82 billion to the National Housing Strategy (NHS) by 2027-28, further enhancing the investment ecosystem for programs like MLI Select.

  3. ESG Alignment: Investors increasingly prioritize ESG metrics. MLI Select’s focus on affordability and sustainability aligns with these values, making projects more attractive to socially conscious investors.


How Lawtiq Can Help You Succeed


Navigating the complexities of programs like MLI Select requires expertise in regulatory frameworks, financial modeling, and project execution. This is where Lawtiq’s comprehensive services come into play.

  1. Project Feasibility Analysis:

    • Lawtiq helps evaluate your project’s potential to meet MLI Select’s criteria, ensuring optimal point scores.

  2. Financial Structuring:

    • Our experts assist in structuring your financing to maximize loan amounts and minimize costs, leveraging MLI Select’s benefits.

  3. Regulatory Guidance:

    • We navigate federal, provincial, and municipal regulations to ensure compliance, reducing approval delays.

  4. Application Support:

    • From document preparation to submission, Lawtiq streamlines the MLI Select application process, ensuring accuracy and efficiency.

  5. Risk Management:

    • We provide risk assessment and mitigation strategies tailored to your project’s unique challenges.

  6. Post-Financing Support:

    • Lawtiq offers ongoing support, from managing compliance requirements to securing additional funding for future phases.


Case Study: Lawtiq’s Success with MLI Select


One of our clients, a mid-sized developer, approached Lawtiq to finance a 50-unit affordable housing project in Calgary. By leveraging MLI Select, Lawtiq secured:

  • 95% LTV financing

  • A 50-year amortization period

  • $1.2 million in annual savings through reduced energy costs



Conclusion


MLI Select is a revolutionary program for real estate investors and developers, offering unparalleled opportunities to contribute to Canada’s housing solution while reaping financial rewards. However, the program’s intricacies require expert navigation to unlock its full potential. Lawtiq’s tailored services ensure you not only meet but exceed MLI Select’s requirements, setting you up for long-term success.

Ready to transform your investment vision into reality? Contact Lawtiq today for a consultation and let us guide you every step of the way.


References


  • Canada Mortgage and Housing Corporation (2023). MLI Select Program Guide.

  • Statistics Canada (2023). "Projected Population Growth by Province."

  • National Housing Strategy (2023). "Investments in Affordable Housing."

  • CMHC’s Affordability Definitions and Guidelines (2023).

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1 Comment


f98982103
Jan 30

Hey

I'm interested details me please

I live in Pakistan

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