Affordable Housing Fund: New Construction - Community Housing Sub-Stream

Low-interest loans and forgivable loans to build new affordable housing.

IMPORTANT

The Affordable Housing Fund has introduced 2 dedicated New Construction Sub-Streams:

The Community Housing Sub-Stream supports the construction of new affordable housing supply. Eligible projects include mixed-income and mixed-use developments that integrate supports and services.
The Rapid Housing Sub-Stream supports the construction of shelters, transitional and supportive housing for those in greatest need.

What is the New Construction: Community Housing Sub-Stream of the Affordable Housing Fund?

The Community Housing Sub-Stream supports the construction of new affordable housing supply. Eligible projects include mixed-income and mixed-use developments that integrate supports and services. CMHC requires projects to meet specific affordability, energy efficiency and accessibility outcomes.

The Affordable Housing Fund has options for new construction, the repair and/or renewal of existing buildings. Contact us to see which option is right for you.

Fund Details

The Community Housing Sub-Stream of the Affordable Housing Fund’s New Construction option offers low-interest repayable loans and forgivable loans. These loans help eligible applicants build new affordable housing.

Repayable loan: a form of loan that is to be repaid monthly within a specific time frame.

Forgivable loan: a form of loan that could be forgiven if you meet program criteria and targets.

You may be eligible for repayable loans combined with forgivable loans based on the needs of your project.

Low-interest repayable loans will be available for up to 20 years to fund projects demonstrating financial viability and long-term affordability.

Maximum Repayable Loan
Co-ops and non-profits, Indigenous governments and organizations	Up to 40% of costs
Provinces, territories and municipal governments	Up to 75% of costs
Private sector	Up to 75% of costs

Forgivable loans are offered to offset the additional costs of the higher performance and where project cash flow is insufficient.

Please complete the Project Assessment Workbook to assess potential forgivable loan incentive.

Maximum Forgivable Loans
Co-ops and non-profits, Indigenous governments and organizations	Up to 40% of costs
Provinces, territories and municipal governments	Up to 30% of costs
Private sector	Up to 15% of costs

Each repayable loan offers:

Either:

A 10-year term (closed to pre-payment) with a fixed interest rate locked in at first advance. The term will be renewable for another 10 years and the interest rate will reset when renewed.
A single 20-year term (closed to pre-payment) with a fixed interest rate locked in at first advance.

Up to a 50-year amortization for smaller monthly payments and long-term viability.
Up to 95% loan-to-cost for residential space for co-ops, non-profits and Indigenous governments.
Up to 75% loan to cost for residential space for municipalities, provinces, territories and private sector.
For all projects containing non-residential space, the maximum funding is up to 75% of eligible costs related to the non-residential component.
Interest-only payments until loan is fully advanced.
We consider repayable loans first. Forgivable loans may be available in addition to a repayable loan in the following circumstances:

Additional funding for higher performing projects to offset higher costs of meeting or exceeding minimum requirements.
Where cash flow is insufficient and a forgivable loan is needed to attain break-even cash flow.

PRO TIPS!

Use the Project Assessment Workbook (XLS) to determine the maximum low-interest repayable loan and/or forgivable loan amount.

Need help using the workbook? Access our interactive guide for more information. Coming soon! Meanwhile, a CMHC Specialist is ready to help you.

Find more details on Program Highlight Sheet (PDF).

Am I Eligible?

IMPORTANT

By the 2024, the Affordable Housing Fund will begin referencing the 2020 building model codes and the CSA B651:23 and B652:23.

Projects must have support from another level of government (such as municipalities, provinces and/or territories, Indigenous government) to ensure a coordination of investments. Support can be in the form of investment of resources but could also be in the form of a letter stating endorsement for the project.

Eligible applicants

community housing providers (i.e. public or private non-profit housing organizations or rental co-operatives)
municipalities
provinces and territories
Indigenous governments and organizations
private sector

Project requirements

We consider the following projects for funding:

community and affordable housing
urban Indigenous community housing
mixed use market / affordable rental
new construction and/or conversion from a non-residential use to affordable multi-residential
shelters
transitional and supportive housing

Support for Student Housing may be available under the Affordable Housing Fund through a future dedicated callout. We will provide updates when available.

Support for Long Term Care may be available under the Affordable Housing Fund (repayable loans only). Inquiries can be directed to CMHC.

All projects must

have a minimum of 5 units/beds
have residential as its primary use
meet minimum requirements for partnerships, financial viability (XLS), energy efficiency (PDF) and accessibility (PDF)

Prioritization of applications

We prioritize applications based on:

affordability
energy efficiency (shifting to 2020 model codes – projects must achieve Tier 2 of the 2020 National Energy Code of Canada for Buildings or Tier 3 of the 2020 National Building Code)
accessibility (shifting to CSA B651:23 and B652:23)
shovel readiness
proximity to transit, childcare centres and community centres
collaboration and financial partnerships
social inclusion and community oriented
supporting National Housing Strategy priority groups and vulnerable populations

We give higher scores to applications that exceed minimum requirements.

The Affordable Housing Fund prioritizes affordable housing projects that are rural, Northern and Indigenous-led.

Considerations for Indigenous and Northern Housing Solutions clients

In addition to a Ministerial Loan Guarantee (MLG), CMHC is now accepting 4 additional alternative types of security for projects on First Nation lands.

Considerations for municipalities

In instances where municipalities are unable to provide the required forms of mortgage security, debentures may be considered as an alternative, on a case-by-case basis.

Application Steps

Timelines are approximations and will depend on the complexity and completeness of the application.

Application Steps:

APPLICATION

Application preparation and submission takes time and depends on the readiness of your project. You will need to complete the Required Documentation Checklist (PDF), which outlines the minimum documentation required at each stage of the process in order to move forward.

PRO TIP! Use the Applicant Guide (Coming soon!) to understand the application process.

Additionally, complete these forms before signing in or creating an account in the CMHC portal:
• Project Assessment Workbook (XLS)
Please note: Our interactive guide is currently being updated.
• Integrity Declaration (PDF)
• Energy Efficiency Attestation (PDF)
• Accessibility Attestation (PDF)

1
PRIORITIZATION

Once received, your application will be reviewed for readiness, eligibility, and completeness. Processing your application is contingent on receiving all required documentation upon submission of your application.

We will contact you if additional documentation or clarifications are required. Once your application is confirmed as complete, we will conduct an initial assessment and prioritize applications based on project readiness, achievement of social outcomes and budget availability.

Complete applications will receive a decision (decline or conditional approval) within 30 days. A conditional approval will outline the conditionally approved funding amount and any required documents that must be submitted prior to underwriting.

You need to submit documents required for underwriting within 90 days or the application will be withdrawn from consideration.

2
UNDERWRITING

After receiving conditional approval of your application, it will be assessed based on:
• financial viability
• minimum requirements
• shovel readiness
• socio-economic outcomes to be achieved
• local community need
• available funding

We will contact you if additional documentation or clarification are required as we process your application.

After receipt of all necessary documentation, it can take up to 60 days to complete the underwriting process.

3
LOAN AGREEMENT

Once your application is approved, we will prepare your package of loan documents, typically within 40 days. Timing is dependent on the complexity of your application.

The loan agreement will detail items such as:
• funding amounts
• conditions to funding
• details of the socio-economic outcomes in your project
• general representations and warranties
• events of default
• interest rate
• the advancing mechanics
• security for the loans
• reporting requirements
• standard terms and conditions, among other terms, including those specific to your project
• a list of security required by CMHC to secure the loan obligations

Security documents may include but are not limited to:
• mortgage security
• assignments of rents and leases
• material contracts and insurance
• where applicable, guarantees and/or inter-creditor agreements

You have 30 days to accept and return the signed loan documents to CMHC.

4
FIRST ADVANCE

The fully executed loan agreement between CMHC and the successful applicant will contain a drawdown schedule. The drawdown schedule itemizes when and in what amount funds are expected to be advanced against CMHC forgivable or repayable loans.

The first advance typically includes:
• initial repayable loan advance of $50,000 to set interest rate
• advancing of full forgivable loan

Please note, you must satisfy all conditions required prior to initial funding, which includes submitting a draw request to CMHC, along with:
• Borrower Certificate
• the project status certificate
• the project consultant’s certificate
• any other documentation that CMHC may deem necessary

Conditions for subsequent advances are specified in the loan agreement.

Required documentation must be provided 10 days before each draw down date.

5

This process takes time. To speed up your application, be prepared to submit specific documents throughout the process. Inability to provide the outlined documents at each stage of the process will inhibit progression of the file and may result in withdrawal of the submission.

Refer to the Required Documentation Checklist (PDF)

Application resources

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Date Published: November 12, 2024

Affordable Housing Fund: New Construction - Community Housing Sub-Stream