Ontario Multifamily
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Start with gross rental income vs. the asking price (gross rent multiplier). A rough rule: in Ontario secondary markets, a GRM of 10–14× is reasonable. Next, estimate the net operating income — gross rent minus vacancy allowance (typically 5–10%), property taxes, insurance, and maintenance. Divide NOI by purchase price to get cap rate. In Hamilton, anything 5%+ is strong. Then determine whether the financing works at current rates using the debt service coverage ratio.

Properties with 2–4 units are underwritten as residential — income qualifies the borrower, but lender rules are based on the borrower's personal financial picture (TDS/GDS ratios). Properties with 5+ units are underwritten commercially — the property's income (NOI and DSCR) becomes the primary qualifier. Access to CMHC's insured MLI Select product opens at 5+ units and can significantly improve loan terms and amortization.

Yes — for 2–4 unit properties, lenders will apply a rental offset (typically 50–80% of gross rental income from non-owner-occupied units) to reduce your qualified debt load. Some lenders use rental income more aggressively than others. For 5+ unit properties, the rental income is the primary underwriting basis, which often makes it easier to qualify even if your personal income appears modest relative to the property value.

CMHC's MLI Select is an insured financing program for rental properties with 5+ units. Properties that score high on affordability, accessibility, and energy efficiency criteria qualify for lower insurance premiums, down payments as low as 5%, and amortization periods up to 50 years — dramatically improving cash flow compared to conventional 25-year financing. It is one of the most powerful tools available for Ontario apartment investors and something we actively incorporate into strategy sessions.