CMHC’s financing programs continue to be an essential catalyst for rental development, but they come with strict appraisal standards.
As housing affordability continues to dominate headlines across Canada, the role of the Canada Mortgage and Housing Corporation (CMHC) in supporting rental development has become increasingly important. Through its multi-unit mortgage loan insurance programs, CMHC has helped improve access to capital for developers, incentivizing the construction of new rental housing across the country. However, as the demand for rental units continues to outpace supply, especially in urban centres like the Greater Toronto Area (GTA), the effectiveness of these initiatives and the importance of accurate property appraisals are more critical than ever.
The GTA Rental Market: Demand Still Surging
The rental market in the GTA has experienced unprecedented pressure in recent years. Despite new supply coming online, vacancy rates remain near historic lows. According to CMHC's Fall 2024 Rental Market Report, Toronto’s vacancy rate fell to just 1.2%, down from 1.6% in 2023. At the same time, average rents for purpose-built rental apartments in the region rose by 7.8%, driven by high immigration, limited housing completions, and a growing number of would-be homebuyers priced out of the ownership market.
Neighbouring cities such as Mississauga, Brampton, and Vaughan have mirrored these trends. In Mississauga, for example, the average rent for a one-bedroom apartment surpassed $2,200 in early 2025, while in Brampton, rent growth hit double digits over the past year. With provincial rent control measures exempting newer units, these market dynamics are particularly challenging for tenants and underscore the need for continued investment in rental housing supply.
CMHC Financing and Its Role in Rental Supply
The article “Building Solutions”by Altus Group, provides valuable insight into how CMHC's programs have supported a range of development initiatives. The Rental Construction Financing Initiative (RCFi) has been a cornerstone of this effort, offering low-cost loans to developers building purpose-built rental housing with affordability conditions. According to the article, this financing has enabled the creation of over 30,000 units nationally, with many more in the pipeline.
However, the report also highlights some of the program’s limitations. While CMHC financing helps reduce borrowing costs and increases developer certainty, regulatory delays, high construction costs, and restrictive zoning continue to limit the pace at which new rental housing can be delivered. In Ontario, where land prices and development charges are particularly high, even CMHC-backed projects can face significant barriers to completion. Still, the program remains a vital tool for encouraging construction, particularly in underserved segments of the rental market such as seniors housing and supportive housing.
Appraisal Requirements Tighten to Ensure Accountability
Recognizing the importance of accurate property valuations in a volatile market, CMHC has updated its appraisal requirements as of November 15, 2024. Under the new policy, all applications for mortgage loan insurance—regardless of property size—must be supported by a comprehensive appraisal report. These appraisals must incorporate the three key valuation approaches: direct comparison, income, and cost. Additionally, they must be completed within 12 months of the application date to ensure valuations reflect current market conditions.
For developers, lenders, and investors, these enhanced requirements mean that working with an experienced and trusted appraisal firm is no longer optional—it's essential. A well-prepared appraisal not only supports CMHC’s due diligence process but also contributes to better decision-making, more accurate financing structures, and greater confidence for all project stakeholders.
Ensuring Reliable and Accurate Appraisals
For developers and investors seeking CMHC financing, obtaining reliable, timely, and accurate appraisal reports is essential. These reports not only fulfill CMHC's stringent requirements but also provide a solid foundation for informed investment decisions.
At Bottero Appraisals, we understand the evolving landscape of rental housing and the critical role that timely, accurate, and defensible appraisals play in financing success. Whether you're developing a multi-unit residential project in Toronto, evaluating an income property in Hamilton, or preparing a refinancing application anywhere in Ontario, our team is here to help.
CMHC’s financing programs continue to be an essential catalyst for rental development, but they come with strict appraisal standards. If you're considering a CMHC-insured project, reach out to us today to discuss your needs or request a quotation. With our deep market knowledge and proven track record, we’ll ensure your valuation report meets all requirements—accurately, efficiently, and on time.