Federal mortgage-insurance rules expand options for small rental projects

The federal government has announced mortgage-insurance changes intended to expand financing options for “missing middle” and small rental housing projects.

For eligible five-to-50-unit properties, the framework allows insured financing for construction, purchase, refinancing and renewal. Maximum loan-to-value ratios are set at 90 per cent for new construction and 85 per cent for other transactions, with amortization limits of 50 years for new construction and 40 years for other eligible loans.

A separate product covers the construction or purchase of new three-to-four-unit properties, with a maximum 90 per cent loan-to-value ratio and 30-year amortization. The backgrounder sets borrower, credit and debt-service requirements and says owner occupancy is not required for either product.

The changes apply to applications submitted on or after February 1, 2027. They change insurance eligibility; they do not guarantee approval or financing for a particular project.

Source: Department of Finance Canada, backgrounder published November 5, 2026.

Featured image: illustrative apartment housing; photo by Isaac Quesada on Unsplash, under the Unsplash License. It does not depict a financed project. Cropped and resized.