Glossary of CMHC multifamily terms
Plain definitions of the terms in CMHC’s multi-unit insurance documents, in CMHC’s own words where it has them. CMHC publishes no current multi-unit glossary, so some wording comes from older CMHC guides still on its site; each chip names the document and its date.
- Amortization
CMHC defines it as “The period of time required to completely pay off a mortgage debt.” For multi-unit loans it “must not exceed the remaining economic life of the property, as determined by CMHC.” Under MLI Select the maximum is the tier’s number of years (40, 45 or 50) or the remaining economic life, whichever is less.
Source:CMHC newcomers’ guide glossary (2009)as of Oct 15, 2026(opens official source in a new tab)CMHC Standard Rental Housing fact sheetas of Oct 15, 2026(opens official source in a new tab)CMHC MLI Select fact sheetas of Oct 15, 2026(opens official source in a new tab)
- Approved Lender
CMHC’s definition: “A lending institution ... authorized by the Government of Canada to make loans under the terms of the National Housing Act.” The Approved Lender, not the borrower, applies to CMHC for the insurance.
Source:CMHC newcomers’ guide glossary (2009)as of Oct 15, 2026(opens official source in a new tab)CMHC Request – Certificate of Insuranceas of Oct 15, 2026(opens official source in a new tab)
- Canada Mortgage Bonds (CMB)
CMHC describes them as “CMHC guaranteed bonds used for investment opportunities into residential mortgages.”
Source:CMHC securitizationas of Oct 15, 2026(opens official source in a new tab)
- Certificate of Insurance (COI)
The document CMHC issues when it insures a multi-unit loan. It carries the “Special Conditions” and covenants the borrower must meet. CMHC’s application form is titled “Request – Certificate of Insurance”.
Source:CMHC fees and premiumsas of Oct 15, 2026(opens official source in a new tab)CMHC required documentation guideas of Oct 15, 2026(opens official source in a new tab)CMHC Request – Certificate of Insuranceas of Oct 15, 2026(opens official source in a new tab)CMHC multi-unit insurance servicingas of Oct 15, 2026(opens official source in a new tab)
- Commitment letter
The lender’s loan offer, not a CMHC document. CMHC’s own forms and guides refer to the Certificate of Insurance, and the lender’s loan documents include CMHC’s Certificate of Insurance requirements.
Source:CMHC required documentation guideas of Oct 15, 2026(opens official source in a new tab)CMHC Request – Certificate of Insuranceas of Oct 15, 2026(opens official source in a new tab)
- Construction financing and progress advancesalso “Draw”
CMHC’s 2008 guide: “short-term financing is used to pay for the work as it progresses ... provided in lump sums, known as advances”. CMHC’s current form uses “Construction financing” as a loan purpose and “Progress advances” as an advancing option. “Draw” is industry shorthand, not CMHC’s term.
Source:CMHC Equity, Funding and Financing (2008)as of Oct 15, 2026(opens official source in a new tab)CMHC Request – Certificate of Insuranceas of Oct 15, 2026(opens official source in a new tab)
- Debt coverage ratio (DCR)also “DSCR”
CMHC: “Calculate DCR by dividing the net operating income by the mortgage payment.” MLI Select requires a minimum DCR of 1.10 for standard rental housing, 1.20 for other shelter models and 1.40 for non-residential space. CMHC uses “DCR”; investors and lenders often say “DSCR”.
Source:CMHC Equity, Funding and Financing (2008)as of Oct 15, 2026(opens official source in a new tab)CMHC MLI Select pageas of Oct 15, 2026(opens official source in a new tab)
- Effective gross income (EGI)
CMHC gives no prose definition. Its worked layout deducts “Vacancy and bad debt” from rental income to reach “Effective Gross Income (EGI)”. If EGI is not met at the first advance on a non-construction loan, CMHC applies a 0.25% premium surcharge.
Source:CMHC Equity, Funding and Financing (2008)as of Oct 15, 2026(opens official source in a new tab)CMHC fees and premiumsas of Oct 15, 2026(opens official source in a new tab)
- Rental achievement holdback
Part of the loan that is not advanced until projected rents are achieved. CMHC’s MLI Select fact sheet says only: “For new construction, a rental achievement holdback may apply.” CMHC’s 2017 guide (superseded) described release “once the Approved Lender has provided evidence acceptable to CMHC, that the property has achieved the projected rent level”.
Source:CMHC MLI Select fact sheetas of Oct 15, 2026(opens official source in a new tab)CMHC Multi-unit Reference Guide (2017, superseded)as of Oct 15, 2026(opens official source in a new tab)
- Lending value
The value CMHC lends against, “as determined by CMHC”. CMHC’s 2008 guide describes it as costs, or “dividing the NOI by the market cap rate”.
Source:CMHC Standard Rental Housing fact sheetas of Oct 15, 2026(opens official source in a new tab)CMHC Equity, Funding and Financing (2008)as of Oct 15, 2026(opens official source in a new tab)
- Limited recourse
The lender’s recourse is “limited to the property and the other assets taken as security and not personally against the borrower”. Under MLI Select it is available at 100 points or more, among other cases. The borrower stays liable “for fraud and environmental liability in all cases”.
Source:CMHC MLI Select fact sheetas of Oct 15, 2026(opens official source in a new tab)
- Loan-to-cost (LTC)
CMHC’s 2008 guide: “the mortgage amount divided by the project costs”. MLI Select tiers cap new construction by loan-to-cost.
Source:CMHC Equity, Funding and Financing (2008)as of Oct 15, 2026(opens official source in a new tab)CMHC MLI Select fact sheetas of Oct 15, 2026(opens official source in a new tab)
- Loan-to-value (LTV)
CMHC’s 2008 guide: “a calculation of the mortgage amount divided by the value of a project”. MLI Select tiers cap existing properties by loan-to-value, and the base premium rises with LTV.
Source:CMHC Equity, Funding and Financing (2008)as of Oct 15, 2026(opens official source in a new tab)CMHC MLI Select fact sheetas of Oct 15, 2026(opens official source in a new tab)CMHC fees and premiumsas of Oct 15, 2026(opens official source in a new tab)
- Median renter income
The market-level income CMHC uses to set affordable rents: affordable units rent at a maximum of 30% of it. CMHC publishes it in a workbook linked from the MLI Select page.
Source:CMHC MLI Select pageas of Oct 15, 2026(opens official source in a new tab)CMHC median renter income workbookas of Oct 15, 2026(opens official source in a new tab)
- Mortgage loan insurance
CMHC’s definition: “Insurance that protects your lender against default.”
Source:CMHC newcomers’ guide glossary (2009)as of Oct 15, 2026(opens official source in a new tab)
- Net operating income (NOI)
CMHC’s 2008 guide: “The difference between gross operating income and operating costs is net operating income (NOI).”
Source:CMHC Equity, Funding and Financing (2008)as of Oct 15, 2026(opens official source in a new tab)
- Replacement reserve
A fund for future capital repairs. CMHC’s 2017 guide (superseded) described its purpose as “To mitigate the risk from cash flow fluctuations and to ensure adequate funds are available for future capital repairs”. Under MLI Select CMHC lists it as “discretionary”.
Source:CMHC Multi-unit Reference Guide (2017, superseded)as of Oct 15, 2026(opens official source in a new tab)CMHC MLI Select fact sheetas of Oct 15, 2026(opens official source in a new tab)
- Take-out financing and completion take-out
CMHC’s 2008 guide: “Mortgages or permanent financing, also known as ‘take out financing’ are used for long term financing.” “Completion take-out” is also a loan purpose on CMHC’s current application form.
Source:CMHC Equity, Funding and Financing (2008)as of Oct 15, 2026(opens official source in a new tab)CMHC Request – Certificate of Insuranceas of Oct 15, 2026(opens official source in a new tab)
- Visitable
A dwelling “that offers a basic level of access to accommodate visitors such as people who use a wheeled mobility aid”, in the Canadian Standards Association definition CMHC quotes. MLI Select requires all units to be 100% visitable under CSA B651:23.
Source:CMHC MLI Select pageas of Oct 15, 2026(opens official source in a new tab)
Not found: CMHC definitions of “holdback” as a general term, or of “DSCR”; CMHC uses “DCR”. More: borrower process, FAQ, step-by-step guide.