Apartment Construction Loan Program: Student Housing

Access low-cost financing to build or convert non-residential buildings into student housing.

How does the Apartment Construction Loan Program Support Student Housing?

The Apartment Construction Loan Program provides low-cost financing to support the construction of student housing. It also supports the conversion of non-residential to student housing.

The Apartment Construction Loan Program has options to build or convert non-residential buildings into sustainable rental housing. Contact us to see which option is right for you.

Fund Details

Am I eligible?

Eligible borrowers include post-secondary educational institutions, for-profit developers, non-profit developers and other levels of government.

All projects must:

have at least 5 rental units
have a loan size of at least $1 million
respond to a need for student housing
primary purpose of the project must be considered residential with the non-residential component not to exceed 30% of total gross floor space nor 30% of total cost
must be permanent in nature (long-term stay)
meet the minimum documentation requirements

Financial viability

You must have the financial and operational ability to carry the project without ongoing subsidies and the ability to meet debt coverage ratio requirements.

Affordability

You must meet and maintain one of the following affordability requirements for at least 10 years:

Option 1: 

At loan initiation, rents for all units or beds must be comparable to existing on-campus student housing in the local market, considering project details.
If existing on-campus student housing projects aren’t suitable comparables, the required appraisal or market study (pdf) must show how the project and rents meet student needs and ensure project viability and marketability.
As a general guideline, proposed base rents should not exceed the lower end of the local rental market for comparable projects.
CMHC will assess the reasonability and acceptability of the proposed base rents as part of application and underwriting process.
Any comparables used must reflect unfurnished units or bedrooms or show recommended adjustments.

Option 2:

Alternatively, the requirement may be met if rents are established pursuant to an affordable housing program or other initiative (federal, provincial, territorial or municipal) that approves the proposal and provides support for the development of the student housing project.

Rent increases

Rent increases must be capped for a minimum of 10 years from authorized first occupancy (referred to as the affordability period).

Refer to the Program Highlight Sheet (PDF) for more information.

Location

On-campus:

self-contained and non-self-contained units are eligible
no maximum number of bedrooms for self-contained units

Off-campus:

only self-contained units are eligible
maximum of 4 bedrooms per unit
must be conveniently serviced by public transportation or within walking distance to campus

Note: For off-campus projects, a post-secondary educational institution must be involved. This may include:

developing or managing the project
providing capital or operating funding
leasing units
offering student tenant selection services

Application Steps

Application Steps

APPLICATION

You will need to provide all documents outlined in the Required Documentation Checklist (PDF) in the application stage.

Additionally, complete these forms before signing in or creating an account in the CMHC portal:

• Project Assessment Workbook – Student Housing (Excel)
• Integrity Declaration (PDF)

After receiving confirmation from your CMHC specialist that your draft application is complete, you can submit your application to the portal and upload all required documents.

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PRIORITIZATION

Once received, your application will be reviewed for readiness, eligibility and completeness.

We will only review complete applications. In some cases, we may determine that a different program better meets your project’s needs. If so, a CMHC specialist may encourage you to apply for a different initiative/program.

The Apartment Construction Loan Program aims to prioritize only the strongest projects that:

• Meet or exceed the mandatory minimum requirements
• Demonstrate greater social outcomes that contribute to vibrant, socially inclusive neighborhoods
• Address a need for supply in the market

Selected applications will receive a conditional approval within 30 days of complete submission.

The conditional approval will outline the terms, conditions and additional required documents that must be submitted for underwriting.

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UNDERWRITING BY CMLS

After receiving conditional approval of your application from CMHC, it will be sent to CMLS (our external service provider) for underwriting.

You will then be required to pay the application fees according to the details provided in the Program Highlight Sheet (PDF).

Once you have received conditional approval, you’ll have up to 90 days to submit the necessary documents for underwriting. If you don’t submit the documents within this timeframe, your application will be withdrawn.

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

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TERM SHEET

Successful applicants will receive a term sheet from CMHC. This document outlines the key terms and conditions of the financing.

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LOAN AGREEMENT

We will issue a loan agreement within 40 days of receiving the signed term sheet. You have 30 days to accept and return the signed loan agreement to CMHC.

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FIRST ADVANCE AND SERVICING

The funding process with monthly construction draws will begin once the loan agreement has been fully executed.

CMLS will administer the loan on behalf of CMHC. At the end of the term, borrowers must transfer the CMHC-insured mortgage to a CMHC approved lender.

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