Ottawa, Ontario - Department of Finance Canada
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced that the annual limit for Canada Mortgage Bonds is being increased from $40 billion to up to $60 billion. This change is the next step in the government's plan to build more homes, faster, and will unlock low-cost financing for multi-unit rental construction. This new measure will help to build up to 30,000 more rental apartments per year.
The Canada Mortgage and Housing Corporation (CMHC) and the Canada Mortgage Bond program support the low-cost financing of new rental housing by providing mortgage loan insurance and securitization.
There is currently unmet demand from developers and builders to access low-cost financing, which is preventing them from building much-needed rental apartments. With the federal government removing the Goods and Services Tax on new rental housing, as proposed in the Affordable Housing and Groceries Act, the demand for financing is expected to further increase.
To ensure builders have the low-cost financing required to build more rental projects, the government is increasing the Canada Mortgage Bond issuance limit by $20 billion per year and designating the increased amount for funding mortgage loans on multi-unit rental projects insured by CMHC. Eligible rental projects must have at least five rental units and can include apartment buildings, student housing, and senior residences.
By signalling to builders that they can rely on this additional financing, more projects will be able to move forward and increase the supply of rental apartments for Canadians.
Housing financing is part of the government's comprehensive suite of broad-based solutions to build more homes, faster, in Canada. The government is also announcing that CMHC will launch consultations with the housing financing sector in order to inform potential additional solutions to increase Canada's rental housing supply.
