The Ultimate Guide to Multifamily Financing in Canada (2025 Edition)

Written By Renee Huse
The Ultimate Guide to Multifamily Financing in Canada (2025 Edition)

Updated for Alberta in 2025 – This comprehensive guide explores how real estate investors can finance apartment buildings and grow from single-family rentals to multifamily assets using programs like CMHC’s MLI Select. Learn the financing strategies, structuring options, and market opportunities tailored for Calgary, Edmonton, and beyond.

Table of Contents

What Counts as Multifamily Real Estate?

“Multifamily” typically refers to residential properties with five or more units under one roof or one title. In Canada, 1–4 unit properties are usually financed as personal residential real estate, but 5+ unit properties are considered commercial residential assets.

Here are common types of multifamily properties:

Apartment Buildings (5+ Units)

This category includes low-rise or high-rise buildings with multiple self-contained apartments. Value is primarily driven by rental income (Net Operating Income) rather than comparable sales, so these properties are appraised using the income capitalization (cap rate) approach rather than house price comparisons.

Investors love apartments for economies of scale – expenses per unit tend to be lower as unit count rises (e.g. one boiler can heat many units).

Row Housing and Townhouse Complexes

These are clusters of attached homes (townhouses or row houses) owned under one title and operated as a single rental business. For example, a 10-unit townhouse complex where an investor owns and rents out all units would be financed as a multifamily property. They offer the benefits of multi-unit income, often with more privacy and ground-level access for tenants (which can be attractive in suburban markets).

Mixed-Use Buildings

Mixed-use properties combine residential units with commercial space (such as ground-floor retail or offices). Financing is still possible under multifamily programs as long as the commercial component isn’t too large. CMHC’s criteria, for instance, limit the non-residential portion to 30% of the building’s gross floor area and lending value.

Mixed-use buildings can diversify your income (residential rents + commercial lease), but lenders will evaluate the commercial part separately (often capping its loan-to-value at 75% for that portion).

Other Specialty Multifamily

Some projects serve specific tenant needs – student residences, senior/retirement homes, or supportive housing – and can also qualify for certain financing programs (with specific criteria). For example, student housing might be eligible under MLI Select only for energy efficiency or accessibility points (not affordability).

These niche types may have slightly different risk profiles and requirements, but fundamentally they are still income-producing residential properties.

Key Financing Options for Multifamily Properties

Investors have several financing routes to consider when purchasing or refinancing a multifamily property. The best choice depends on the property’s characteristics and your investment strategy. Here are the key multifamily financing options in Canada and how they compare:

1. CMHC-Insured Mortgages (e.g. MLI Select)

Canada Mortgage and Housing Corporation (CMHC) multifamily mortgage insurance is a powerful tool for apartment investors. With CMHC insurance, lenders can offer higher leverage (loan-to-value) and longer amortizations because the loan is backed by the federal insurer. The flagship product in 2025 is CMHC’s MLI Select program – an insured financing option designed to encourage affordable, energy-efficient, and accessible rental housing.

How CMHC MLI Select Works

Borrowers commit to achieving outcomes in affordability, energy efficiency, and/or accessibility to earn points. At least 50 points are required to qualify for the program. The more points you score (out of 100+), the more flexible the financing terms. Key point categories:

  • Affordability: Earn points by offering rents below 30% of the median renter income in your market. Holding those rent levels for 10+ years is mandatory, and a 20-year commitment earns bonus points.
  • Energy Efficiency: Points are awarded for exceeding energy code standards on new builds or reducing energy use in retrofits (15–40% reductions).
  • Accessibility: Points are earned for building accessible or visitable units (e.g., 15%+ of units fully accessible or certified for universal design).

Financing Benefits with MLI Select

  • Loan-to-Value: Up to 95% for new builds and high-point retrofits; 85% LTV or more for existing buildings depending on point level.
  • Amortization: Up to 50 years amortization possible for high-scoring projects.
  • Debt Coverage: Debt coverage ratio (DCR) as low as 1.10, reducing the income needed to qualify.

The trade-off: Borrowers must prove rental affordability, meet energy and accessibility targets, and demonstrate solid management experience and net worth (typically 25% of the loan value).

Bottom line: CMHC’s MLI Select is ideal for maximizing leverage and cash flow if you’re willing to commit to long-term housing affordability and sustainability. Alberta investors, especially, can benefit by using this tool to refinance older buildings and pull out equity at ultra-low cost.

2. Conventional Commercial Mortgages

Conventional financing refers to standard loans from banks, credit unions, or other institutional lenders without CMHC insurance. These lenders will underwrite the multifamily property based on its income and the borrower’s financial strength. Since there’s no federal insurance, the terms are typically more conservative:

  • Loan-to-Value (LTV): Typically around 65%–75% for an apartment building purchase or refinance. That means you need a 25–35% down payment or equivalent equity. Truly prime assets might get up to 80% LTV, but that’s rare without CMHC backing.
  • Amortization: Usually 25 to 30 years max. While longer amortizations might be possible in special cases, shorter terms are the norm. This means higher monthly payments and a stronger required cash flow buffer.
  • Interest Rates: These can be fixed or variable. Many investors opt for 5- or 10-year fixed rates for predictability. Rates are generally a bit higher than CMHC-insured mortgages since lenders carry more risk. Banks may offer discounts for clients with strong relationships or assets under management.
  • Debt Service Requirements: Most conventional lenders require a Debt Service Coverage Ratio (DSCR) of 1.20–1.30. That means your building’s Net Operating Income (NOI) needs to exceed annual mortgage payments by 20%–30% to qualify. The focus is on the property’s income, not your personal earnings—though you still need to show liquidity and net worth as a sponsor.

Pros and Cons:

  • Pros: Faster approval process, less red tape, no CMHC premiums, and flexible structuring. These loans are often easier to negotiate if the property is clean and stabilized.
  • Cons: Lower leverage and higher down payments. You’ll likely need to put up more capital, and the shorter amortization results in higher monthly payments. For example, a $1M apartment building might qualify for a $750K loan (75% LTV) at a 1.25 DSCR—whereas CMHC financing could allow more leverage if the building qualifies.

Many Alberta investors compare conventional vs. CMHC-insured options on a deal-by-deal basis. Sometimes, taking a slightly smaller loan from a local lender is worth the simplicity—especially if the building doesn’t meet MLI Select's affordability or energy criteria.

3. Alt-A and Alternative Lenders

Between the strict standards of banks and the high costs of private lending, there’s a middle ground known as “Alt-A” or alternative lenders. These include mortgage finance companies, trust companies, MICs (Mortgage Investment Corporations), some credit unions, and private debt funds.

When does this make sense? Maybe your building’s finances aren’t quite stabilized yet. Maybe your credit or income doesn’t tick every box a bank requires. Or maybe you just need speed. Alt-A lenders step in when:

  • The property is partially vacant or under renovation
  • You need a quick close and can’t wait for CMHC approval
  • You want more leverage than a bank offers but don’t qualify for insured financing

Loan Terms: Expect higher rates than conventional loans—often a few points more. Terms are usually shorter (1–3 years) and may include interest-only payments to ease cash flow while you improve the property. Some lenders will offer up to 85% LTV, but that comes with steeper pricing and fees.

Pros:

  • More flexible borrower requirements (credit, income, experience)
  • Often underwrite based on future value or projected NOI
  • Quick to approve and fund—ideal for value-add or repositioning strategies

Cons:

  • Higher cost: rates can land in the mid-single digits to low teens
  • Lender and broker fees are common (1%–2% of the loan amount)
  • Usually short-term—designed as a stepping stone, not a long-term hold

Bottom line: Alt-A financing is a tool, not a destination. It helps you buy time and create value. Many Alberta investors use it to close fast, execute a reno plan, and then refinance into better long-term terms once the property stabilizes.

4. Private Mortgages

Private mortgages sit at the far end of the spectrum—typically offered by individuals or private lending firms. They’re used for fast closings or special situations where no bank or Alt-A lender will go.

When do you use private financing?

  • You need to close in 1–2 weeks
  • The building is in serious disrepair or distress
  • Your financial situation doesn’t qualify anywhere else—but the deal is strong

Loan Terms: Private lenders rarely exceed 75% LTV, and more often cap at 65%–70%. Most loans are interest-only with terms of 6–24 months. There’s no amortization—you’re just paying interest monthly, which keeps payments lower but doesn’t reduce principal.

Cost:

  • Interest rates: 8%–14%+ depending on the deal risk
  • Lender fees: Typically 1%–2%, often deducted from the loan advance
  • You may also need to pay broker and legal fees out of pocket

Exit strategy is everything. These loans are bridges, not permanent solutions. You need a clear plan to refinance or sell—typically within 6–12 months. Many investors use private funds to:

  • Acquire an off-market deal at a discount
  • Finance major renovations to increase value
  • Buy time until CMHC or conventional financing becomes available

Example: Say you buy a 12-unit building in Calgary well below market value, but it needs $300K in upgrades. A private lender gives you the fast capital to purchase and renovate. Six months later, you refinance with an MLI Select loan, pay off the private lender, and now hold a cash-flowing, fully stabilized building under long-term financing.

Final word: Private mortgages are expensive—but sometimes, they’re the only way to take the shot. Just make sure the upside justifies the cost—and never enter a private loan without a solid Plan B.

Understanding Amortization, Interest Rates, and DSCR

When structuring a multifamily mortgage in Canada, it’s crucial to understand some fundamental loan terms and how lenders size up your deal. Let’s break down a few:

Amortization Periods

Amortization is the length of time over which your loan payments are calculated. A longer amortization means smaller monthly payments (since the debt is spread out more), while a shorter amortization means higher payments (you pay off the loan faster).

  • Standard vs. Extended Amortization: Conventional commercial mortgages often use a 25-year amortization. Some lenders may offer 30 years on strong multifamily properties, but going beyond 30 typically requires CMHC insurance. One big advantage of CMHC’s MLI Select is the ability to extend amortization up to 40, 45, even 50 years depending on your points score. A 50-year amortization dramatically lowers each payment compared to a 25-year schedule – this can make a marginal deal cash-flow positive. Do note that the amortization cannot exceed the remaining economic life of the building, so very old buildings might be limited by appraisal estimates.
  • Interest-Only Periods: Some loans (especially during construction or renovation phases, or short-term bridge loans) may be interest-only for a period. That means you’re not paying down principal, just interest. This keeps payments minimal while you execute your strategy. Just remember, interest-only is temporary – eventually the loan will either begin amortizing or need to be refinanced.
  • Impact on Strategy: Amortization length ties into your investment goals. If you want maximum cash flow, longer amortization or interest-only will help. If your goal is to pay down debt and build equity quickly, a shorter amortization accomplishes that (but you rely on strong income to cover the larger payments).

Interest Rate Structures (Fixed vs. Variable)

Interest rates on multifamily mortgages can be fixed or floating, and each has pros and cons:

  • Fixed-Rate Mortgages: You lock in a rate for a set term (often 5 or 10 years). This gives you predictable payments – crucial for budgeting in a multi-unit operation. Fixed rates shield you if interest rates rise, but if rates fall, you might end up paying more unless you refinance (which could incur prepayment penalties).
  • Variable (Floating) Rate Mortgages: These have interest rates that fluctuate with the market. Some loans come with a ceiling or cap rate to limit how high the rate can go, providing some protection. Variable rates can save you money if rates fall, but if rates rise, your costs rise too. These are less common for long-term multifamily loans, but may work for experienced investors who can manage the risk.
  • Current Environment (2025): In recent years, we saw interest rates climb rapidly, then potentially stabilize. By 2025, there’s anticipation of rate relief if inflation is under control. Still, economic uncertainty makes predicting direction tricky. If a deal works at today’s rates and you want certainty, a fixed rate can be the safer bet. If you believe rates will fall, a variable or shorter-term loan might be attractive. Always stress-test your deal for higher rates.

DSCR vs. GDS/TDS (How Lenders Measure Affordability)

When you got a mortgage on a single-family home or a 4-plex, your personal income was probably front-and-center in qualifying, measured by Gross Debt Service (GDS) and Total Debt Service (TDS) ratios. For multifamily (5+ units), lenders shift focus to the property’s income.

  • Debt Service Coverage Ratio (DSCR): This is the ratio of Net Operating Income (NOI) to annual mortgage payments. A DSCR of 1.25 means the NOI is 125% of the debt obligations, implying a 25% cushion. Most banks require 1.20–1.30 DSCR. For example, if a building’s NOI is $100,000, a 1.25 DSCR means annual mortgage payments can’t exceed ~$80,000.
  • CMHC Insured (MLI Select): One advantage of CMHC insurance is lower DSCR requirements – as low as 1.10. That means the property only needs a 10% income cushion over mortgage payments. The same $100,000 NOI could support ~$90,000 in debt service, allowing for a higher loan amount than conventional financing.
  • GDS/TDS (Personal Ratios): These are mostly irrelevant for commercial multifamily deals, but lenders still want to see a strong financial sponsor with liquidity and net worth. CMHC may require you to show net worth equal to at least 25% of the loan amount and relevant property management experience or a solid plan.

Bottom line: Small residential loans are about you. Multifamily loans are about the building. If the building cash flows and meets DSCR requirements, you may qualify – even if your personal income or TDS ratio wouldn’t fly on a regular house. This is one of the most powerful advantages of moving from single-family to multifamily real estate.

From Single-Family Investor to Multifamily Owner: A Case Study

To illustrate the concepts above, let’s walk through a hypothetical scenario that shows the “natural evolution” from a single-family investment to a multifamily property using MLI Select financing. This will highlight how the numbers and strategy can play out in Alberta’s market.

Meet Sarah: She’s an investor in Edmonton who owns a rental house that has appreciated in value. She purchased it years ago, fixed it up, and now has about $250,000 in equity sitting in that property. However, the single rental home is only producing a modest cash flow, and she’s itching to scale her portfolio.

With the 2025 market booming, she decides to sell the house and use the proceeds to jump into multifamily.

The Opportunity

Sarah finds a 12-unit apartment building in Edmonton listed for $5 million. It’s a mix of one and two-bedroom suites. The building is a bit older but in decent shape, and importantly, many of the long-term tenants are paying below-market rent.

That means there is upside (she can raise rents over time or renovate units to increase income). It also means the property might qualify as “affordable” under CMHC’s criteria. In fact, 8 of the 12 units (≈67%) have rents at or below the CMHC affordability threshold (30% of median income). Edmonton’s median renter income is around $66,600, so 30% of that is roughly $1,665/month. The current rents in those 8 units are at ~$1,500, which is within the affordable range.

Financing with MLI Select

Sarah approaches a mortgage broker who specializes in multifamily. They determine that with 67% of units affordable, her deal could score 70 points for affordability (since it exceeds the 60% of units at affordable rent needed for 70 points on an existing property).

If Sarah also plans some eco-friendly upgrades (like installing LED lighting and low-flow fixtures), she might get an extra 20 points in energy efficiency (for a 15% improvement over baseline in an existing building).

Accessibility is tougher to tackle in an existing three-story walk-up, but the property is small enough that the broker suggests it may not be worth chasing those points here. Still, with an estimated 90 points total, Sarah’s application would exceed the 70+ point tier.

What does this get her? Potentially CMHC insurance with 95% loan-to-value on an existing property purchase.

In numbers: For a $5,000,000 purchase, 95% LTV means $4.75 million loan, and only $250k down payment. That $250k is exactly the equity she freed up from selling her house – she is now buying a 12-unit apartment with no additional cash out-of-pocket beyond what she already had.

Compare this with a conventional loan scenario: at 75% LTV, she would have needed to put $1.25 million down (which she didn’t have). Clearly, MLI Select is a game-changer for her ability to acquire this asset.

Loan Details

The $4.75M CMHC-insured mortgage comes with a 50-year amortization (since she crossed 70 points, CMHC allows 45 years, and some lenders might stretch to 50 given her near 90 points). The interest rate is fixed for 10 years at, say, 4.5% (just a hypothetical current insured rate). With a 50-year amortization, the monthly payment on $4.75M at 4.5% is about $17,500.

How does that stack up to the building’s income? Before purchase, the building’s gross rent was around $200,000/year (with those low rents). After accounting for vacancies and expenses, the NOI is about $100,000/year. That’s not enough to cover $210k/year in debt service (which is what $17.5k/month comes to) – at first glance, it looks short.

However, Sarah isn’t buying this property to leave things as-is. She plans to gradually raise rents on turnover and renovate units to increase NOI. In the first year, she also gets a break: because she maintained those affordable units, CMHC allows a lower DSCR (1.10).

On a $210k annual debt service, 1.10 DSCR would mean they expected at least $231k NOI. The building isn’t there yet, so how did she get approved? Likely through pro forma underwriting: CMHC and the lender see that current rents are under-market and that even with modest increases, the NOI will reach the required level. They may hold back part of the loan until she achieves certain rental income. Sarah also has additional income from her job and some savings, which can support the property in the early months if needed – plus the lender knows she’s putting in capital to renovate.

Outcome

Sarah closes the deal, becoming a multifamily owner with just 5% down. Over the next 24 months, she renovates 4 of the units as tenants move out, which allows her to raise those units to market rent.

Even the long-term tenants see two moderate rent increases. Alberta has no rent control limiting the amount, aside from only one increase per year, so she brings those $1,500 units closer to say $1,650 over time. After two years, the property’s NOI jumps to $150,000.

Now the debt coverage is comfortably above 1.1 and even approaching 1.3, which is very healthy. The property’s value also increases – higher NOI divided by market cap rate (~5.5%) means significant appreciation. She forced the value up by improving net income.

This scenario shows how an investor used MLI Select to leverage existing equity from a house into a much larger asset. The key takeaways: high leverage and long amortization made the deal possible and relatively cash-flow manageable, even though initial DSCR was thin.

Such a move essentially accelerated what would otherwise have taken many years of saving for down payments. Of course, it comes with responsibilities – she must maintain affordability on those units for 10+ years and manage a more complex property. But Sarah has now entered the realm of multifamily, gaining the benefits of scale, and she’s positioned for greater wealth building as the apartment grows in value over time.

Important: This example is simplified for illustration. In reality, a lender might not allow quite 95% LTV unless the deal was very strong, and they could require additional guarantees or an interest reserve. But CMHC’s program does allow as low as 5% effective equity in exceptional cases, which is why it’s attracting so much attention. The scenario underscores how multifamily financing opens doors that traditional single-family investment cannot – no bank would lend you 19x your down payment on a personal mortgage, but with the right multifamily deal, it’s feasible.

Refinancing vs. Buying vs. Building: When to Use Each Strategy

Real estate investors constantly face the question of how best to grow or optimize their portfolio. Is it better to refinance an existing property to pull out cash, to buy another property, or even to build a new development? The answer depends on market conditions and your personal situation. Here’s a breakdown of when to consider each route:

Refinancing an Existing Property

Refinancing means replacing an old mortgage with a new one – typically to unlock equity or get better terms. In the context of multifamily, refinancing can be a powerful tool:

  • When to Refinance: If your property’s value has increased significantly, a refinance can allow you to pull out that equity as cash. Multifamily values often rise after you’ve increased NOI (through rent increases, renovations, improved management). For example, after executing a value-add plan on a Calgary apartment building, you might refinance at the new higher appraisal and use the cash to fund the down payment on your next acquisition.
  • CMHC Refinance: If you originally used conventional financing, moving to a CMHC-insured loan on refinance can increase your loan amount and extend amortization. Even if you already had CMHC, programs like MLI Select may let you refinance to tap into more value if you make the property greener or more affordable.
  • Caution: Refinancing resets your loan term and may incur penalties if done before your current loan matures. Also, pulling out too much equity can reduce your cash flow. The ideal scenario is refinancing after you’ve increased income and when interest rates are favourable—so your monthly payment might stay similar while you pocket funds.

Buying an Existing Multifamily Property

Acquiring another property is the most straightforward way to grow. When should you focus on buying?

  • When Opportunities Arise: Keep an eye on the market for a good deal – perhaps a mismanaged building, a motivated seller, or an emerging neighborhood. In Alberta’s market, you might find older walk-up apartments in Edmonton with higher cap rates than in markets like Toronto or Vancouver.
  • Portfolio Diversification: Adding another building can reduce location or size risk. For example, after success in Calgary, you might expand into Edmonton or diversify by building size.
  • Leverage and Market Conditions: Alberta’s 2025 economy is benefiting from interprovincial migration and a strong job market—leading to high rental demand. Acquiring now could lock in a property before values climb further. Just be sure to run numbers based on current financing conditions.
  • Process Tip: Buying multifamily is more complex than a house. It involves reviewing rent rolls, lease terms, building condition, and financing. Work with a knowledgeable commercial broker and mortgage expert to navigate due diligence and close successfully.

Building a New Multifamily Development

Building (developing) a multifamily property from scratch is a more advanced strategy, but it can yield great rewards and add much-needed housing supply to the market:

  • When to Build: Build when existing inventory doesn’t meet your goals. You might want a new, energy-efficient building to command top rents or control all systems from day one. The federal government has eliminated GST on purpose-built rentals, and CMHC’s ACLP program offers favorable financing options.
  • Financing for Construction: Construction loans typically come from banks or CMHC. These loans fund in stages and are usually replaced with a long-term CMHC take-out mortgage once construction is complete and the building is leased.
  • Risks and Rewards: Building comes with risk—cost overruns, delays, and lease-up uncertainty. But the payoff is a custom, brand-new asset with no inherited problems and potential equity gains if market values exceed your construction cost.
  • Alberta Angle: Alberta cities like Calgary and Edmonton are development-friendly, offering incentives, lower land costs, and no rent control. With the right team and timeline, building can turn $1 of investment into $1.50 or more in value.

In Summary

Think of Refinance, Buy, Build as tools in a toolbox. Often, successful investors do all three over time:

  • Refinancing to recycle capital.
  • Buying to expand strategically.
  • Building when the market and your capacity align.

Your strategy in 2025 should consider interest rates, inventory levels, and your own time and capital. Align your moves with your long-term plan and make sure you’re working with professionals who understand multifamily from the ground up.

Ownership Structure: HoldCo vs. OpCo and Tax Considerations

How you structure the ownership of your multifamily properties can have significant implications for liability, taxation, and long-term flexibility. Two common concepts to understand are the separation of holding and operating companies, and the difference between taxable and tax-advantaged structures.

HoldCo vs. OpCo Structure

In a HoldCo/OpCo setup, you create one company to own the real estate (the holding company, or HoldCo) and another company to operate/manage the property (the operating company, or OpCo). Why do this?

  • Liability Separation: Real estate inherently carries liability (what if someone slips and falls, or a tenant lawsuit occurs?). By having an OpCo that manages day-to-day tasks—signs leases, collects rent, handles maintenance—you can isolate liability in that entity. The HoldCo just owns the building and usually leases it to the OpCo or has a contract with it. If the OpCo is sued, the HoldCo is a layer removed, potentially protecting the asset.
  • Active Business vs. Passive Income: Rental income is generally considered passive (and taxed higher) in a corporation. But if a corporation has more than 5 full-time employees, it might qualify as an active business and pay a much lower small-business tax rate. An OpCo that manages multiple properties might qualify for this, while the HoldCo would still receive passive income. Paying a management fee from HoldCo to OpCo helps shift income into the active bucket.
  • Joint Ventures and Partnerships: This structure also works well for joint ventures. For example, you and a partner could co-own the HoldCo that owns the property, while you solely own the OpCo that operates it. You could also hire a third-party OpCo. Think of HoldCo as the owner and OpCo as the property manager—even if they’re both you.

Taxable vs. “Exempt” Structures

Let’s clarify: truly tax-exempt ownership (like a charity) is rare. But there are several tax-advantaged structures to consider:

  • Personal Ownership: Simple and common. Rental income is taxed at your personal marginal rate. You do get capital gains treatment when you sell, but no principal residence exemption. Great for simplicity, but not always ideal for high earners.
  • Corporate (Taxable) Ownership: Rental income earned in a Canadian corporation is usually taxed at around 50% (because it’s passive). However, through the Refundable Dividend Tax on Hand (RDTOH), some of that tax is refunded when you pay yourself dividends. If you don’t need the cash, you can leave profits in the corporation to reinvest. If you qualify for active business income (e.g. via an OpCo with 5+ employees), that portion is taxed much lower—~11–12% on the first $500k in Alberta.
  • Trusts and REITs: Larger investors may use trust structures (like REITs) to flow income through to beneficiaries and avoid double taxation. On a smaller scale, Bare Trusts or personal trusts can help with estate planning or avoid land transfer tax in certain provinces (note: Alberta doesn’t have this tax). These setups require professional guidance.
  • Tax-Exempt Entities: Non-profits or charities may be tax-exempt, but as a private investor you typically wouldn’t own through them unless it’s part of a social housing partnership. Some investors partner with non-profits to access grants, but this is a complex structure.

In Summary

Most private investors will choose between holding property in their personal name or through a corporation. The HoldCo/OpCo model is a smart way to structure ownership for long-term scalability:

  • HoldCo owns the property assets (some investors use a separate numbered company per property).
  • OpCo manages operations and potentially qualifies for active income tax treatment.

Alberta Advantage: Alberta has no provincial sales tax and lower corporate taxes than many provinces. This makes it attractive for incorporating your real estate business. Just note: transferring a property into a corporation later may trigger taxes and fees—better to plan the structure before you buy.

Key takeaway: Structure your ownership with your future goals in mind. If you want to build a portfolio, raise capital, or sell down the road, the right structure can save tens of thousands in taxes and protect your assets. The wrong structure—or doing it DIY without expert advice—can cost you. Consult a real estate accountant and lawyer to get it right from day one.

Alberta Market Insights (2025): Why Alberta for Multifamily?

Finally, let’s talk about the local context. While most of the financing principles above apply Canada-wide, the Alberta market has some unique features that savvy investors can leverage:

Strong Rental Demand: Alberta is experiencing a surge in population growth, partly due to interprovincial migration. People from across Canada are moving to Alberta for its job opportunities and affordable living. In 2023 and into 2024, Calgary and Edmonton saw record in-migration. This influx, combined with international immigration, is fueling high demand for rental units. Many newcomers choose to rent before buying, and some may rent long-term. The result? Vacancy rates in Calgary and Edmonton have tightened significantly, and rents have been climbing. For investors, this means multifamily properties in Alberta are benefiting from full buildings and the ability to increase rents as leases turn over.

No Rent Control: Unlike British Columbia or Ontario, Alberta does not have rent control limiting annual rent increases (the only rule is you cannot raise rent more than once per year for the same tenant, but there’s no cap on the percentage increase as long as it’s reasonable/market-driven). This is a huge advantage for investors. Alberta’s median renter incomes are the highest in Canada, meaning tenants can absorb increases more readily. That flexibility translates into strong NOI growth opportunities.

The Alberta Economy: Known for its oil & gas sector, Alberta’s economy has historically been cyclical. But 2025 Alberta is more diversified than a decade ago. Tech, finance, logistics, and public sector employment are expanding, supporting long-term rental demand. If interest rates stay high, more people will rent longer – a trend that supports multifamily demand, even in slower economic periods.

Affordability and Cash Flow: Alberta’s multifamily market offers significantly better cap rates than other major Canadian cities. You might find 5-6% caps in Alberta vs. 3-4% in Toronto. This means better cash flow, more financing leverage, and less need for out-of-pocket capital to make a property work. Your dollar simply goes further in Alberta.

Landlord-Friendly Environment: Alberta’s landlord-tenant laws are viewed as more balanced. Faster eviction processes, no land transfer tax, and lower regulatory barriers all make Alberta attractive for investors. You save time, money, and headaches compared to markets like Ontario or BC.

Current Market Conditions: As of early 2025, high interest rates are pressuring property values, opening up opportunities to negotiate better deals. Meanwhile, Alberta rents remain strong and vacancies low, helping offset financing costs. Calgary’s rents have spiked, and Edmonton offers slightly higher cap rates for investors looking for yield.

Takeaway: Alberta’s fundamentals are solid – strong demand, higher yields, and fewer regulatory roadblocks. While market risks always exist, Alberta remains one of Canada’s best markets for building a multifamily portfolio.

Conclusion: Positioning Yourself for Multifamily Success

Multifamily real estate investing – whether in Alberta or elsewhere in Canada – is a powerful avenue for building wealth and generating income. By understanding the financing landscape in 2025, you can make informed moves that accelerate your progress:

  • Leverage CMHC’s MLI Select to reduce capital outlay and boost cash flow – if your project meets their social and environmental criteria.
  • Explore a full range of financing options: CMHC-insured, conventional, alternative, and private. Match the lender to your strategy.
  • Master amortization strategies, DSCR metrics, and rate structures so you can confidently underwrite and negotiate deals.
  • Use refinancing and acquisition timing to grow sustainably. Yes, it’s possible to leap from one home to a 12-unit using smart financing.
  • Lean into the Alberta Advantage: better cap rates, no rent control, and a business-friendly environment for landlords.

As a commercial mortgage strategist based in Alberta, I’ve seen first-hand how informed investors can thrive in the multifamily sector. By applying the knowledge from this guide, you’ll be well on your way to analyzing deals like a pro and positioning yourself as a thought leader among your peers. Remember, multifamily investing is a journey – surround yourself with a great team (mortgage brokers, realtors, lawyers, accountants), keep learning, and stay adaptable with the market. Here’s to your success in 2025 and beyond, as you build your portfolio and make a positive impact through providing much-needed housing!

About the Author: This guide was written by Renee Huse, Commercial Mortgage Strategist and Founder of Spire Mortgage. With deep roots in Alberta’s real estate market and hands-on experience helping investors scale their portfolios, Renee specializes in strategic multifamily financing—especially CMHC-insured, MLI Select, and custom lending solutions. If you’re planning your next investment move or need help navigating complex financing options, reach out directly—Renee can be reached at 403.804.5465 or by email at renee@spiremortgage.ca. Let’s build something great, together.

Renee Huse
Previous

MLI Select 101: How to Qualify for CMHC’s Most Powerful Apartment Building Program
Next

What Is a Mortgage? Mortgage Basics for First-Time Buyers in Alberta