The down payment is the small part: net worth and liquidity

The headline on MLI Select is up to 95% financing. Investors read that as a 5% down payment and start looking at buildings.

The down payment is real, and it is genuinely small. It is also almost never what stops a file. What stops files is the position behind the down payment, and it is measured differently than most people expect.

What the borrower test measures

Lenders working with CMHC on multi-unit look for two things from a borrower.

Net worth of at least 25% of the loan amount, commonly subject to a floor around $100,000.

Liquid capital of roughly 10% of the loan amount, verified through statements.

Three things about that are worth stating precisely, because they are routinely got wrong.

First, this is underwriting practice, not a published CMHC threshold. You will not find it in the program documentation the way you will find the point tiers. It is how lenders assess borrowers, the exact requirement is set by CMHC and the participating lender, and it varies by file.

Second, it is measured against the loan amount, not the purchase price. On a 95% loan-to-cost deal those are close but not identical, and quoting it against price overstates what you need.

Third, these are concurrent requirements, not alternatives. Meeting the net worth test with an illiquid balance sheet does not satisfy the liquidity test. That is the whole point of having two.

Why liquid is the one that fails

Net worth is usually the easier test for an established investor, because it counts everything: property equity, business value, registered accounts, the lot.

Liquidity does not count most of that.

Equity in another property is not liquid. It becomes liquid when it is refinanced or sold, and both of those are transactions with timelines, costs, and their own approvals. An investor with substantial net worth and nothing readily available fails the second test while comfortably passing the first, and this is the single most common way a file that looked strong turns out not to be ready.

The practical consequence is a sequencing one. Arranging genuinely available capital takes longer than most investors plan for, and it usually has to start before you are looking at buildings rather than after you have found one. A file assembled in the order most people attempt it, find the building then arrange the position, tends to run out of time.

What the 5% is actually for

None of the above makes the low down payment unimportant. It changes what the same capital can do.

At conventional multi-unit leverage, a given amount of equity supports one building. At up to 95% loan-to-cost on a qualifying MLI Select file, the same equity is spread thinner per project. That is the mechanism behind the program's appeal, and it is also its risk: higher leverage is higher leverage regardless of who insures it, and a building financed at 95% has less margin against vacancy, rate movement at renewal, and cost overrun during construction.

CMHC's own illustration of the July 2025 premium change describes a borrower on a $15.6M new construction loan across 48 units seeing roughly 12% savings on monthly payment against a conventional loan, and approximately $3M less required as down payment. Both halves of that matter. The payment saving is what makes coverage work. The down payment saving is what makes the second building conceivable.

Reserves are not the same as the down payment

One more distinction that causes confusion.

The liquidity the lender wants to see is not the down payment sitting in an account waiting to be spent. It is capital available in addition to what closes the transaction. Its purpose is to demonstrate that you can carry the building through a period where it does not carry itself.

An investor who arrives with exactly the down payment and nothing behind it has not met the test, no matter how correct the down payment is.

What to have ready

Before a review call is useful, you want to be able to answer two questions without estimating:

• What is your net worth, and how much of it is in a form a lender will treat as liquid?
• If the building were empty for a quarter, what carries it?

You will notice this platform never asks either of those in a form. Suitability is inferred from your target range and your current holdings, and the actual figures are discussed privately, once, with a person. That is a deliberate design decision and not an oversight.

What this does not tell you

These are the guidelines lenders commonly apply, described as practice rather than as rules. They are not a commitment that any particular file will be approved on those terms. The requirement is set by CMHC and the participating lender, and it varies by borrower and by project.

Specific projects are presented by licensed representatives, not by this platform.