CMHC vs. Conventional Commercial Financing: Which Is Right for Your Deal?
For multi-unit residential in Nova Scotia, you usually have two roads to financing: CMHC-insured or conventional. They lead to very different terms, and the right one depends entirely on your deal and your plans. Here's how to choose.
General information from the Indi Mortgage Commercial Division team — not financial advice.
In short: CMHC-insured financing (e.g., MLI Select) offers higher leverage, longer amortization, and lower rates in exchange for program commitments and more paperwork; conventional financing is faster and simpler but lower-leverage and higher-rate. For 5+ unit rental you're usually choosing between the two.
The quick comparison
| CMHC-insured (e.g., MLI Select) | Conventional | |
|---|---|---|
| Leverage | Higher (less down) | Lower (more down) |
| Amortization | Longer (up to 50 yrs at top MLI Select tiers) | Shorter |
| Rate | Typically lower (insured) | Typically higher |
| Up-front cost | CMHC premium + application fee | No insurance premium |
| Speed / paperwork | Slower, more documentation | Faster, simpler |
| Strings attached | Affordability / energy / accessibility commitments | Fewer restrictions |
| Best for | 5+ unit residential, buy-and-hold, developers | Speed, flexibility, non-qualifying assets |
When CMHC wins
If you're buying or building 5+ unit residential and plan to hold the asset, CMHC financing is often the stronger structure — the higher leverage, longer amortization, and lower rate usually more than offset the premium. In a high-cost market like Halifax, it's frequently what makes a multifamily deal work at all. → CMHC MLI Select explained
When conventional wins
Conventional financing shines when you need speed or flexibility, when the property isn't multi-unit residential (retail, office, industrial), or when you don't want the multi-year affordability/energy/accessibility commitments that come with an insured loan. It's also common for shorter hold periods where the CMHC premium wouldn't pay off.
It's not always either/or
Many developers use both over a project's life: conventional or construction financing to build, then a CMHC-insured takeout once the building is complete and leased. → What is a takeout mortgage?
How to actually decide
The choice comes down to your hold period, the property type, and the numbers — the premium and commitments on the CMHC side versus the higher rate and down payment on the conventional side. The best way to decide is to model both and compare the all-in cost over your expected hold.
- Compare both on your deal: feasibility calculator (runs CMHC and conventional scenarios)
- Get a recommendation for your situation: (902) 298-0218
- Related: The complete guide to commercial mortgages in Nova Scotia
Sources
- CMHC — Multi-unit mortgage loan insurance (incl. MLI Select) — insured program tiers and terms
Indi Mortgage Commercial Division — CMHC and conventional commercial financing across Halifax and Nova Scotia. General information only; program terms are set by CMHC and lenders and change over time. Not financial advice.