Multi-Family and Apartment Building Mortgages in Ottawa
Ottawa has a large rental market, and multi-unit buildings from duplexes to large apartment blocks are popular with investors. Which financing applies depends mainly on the number of units and whether you will live in one.
Financing by number of units
| Property | How it is usually financed |
|---|---|
| 1 to 2 units, owner-occupied | Residential mortgage. Your income and credit lead, and rental income may help you qualify. |
| 3 to 4 units, owner-occupied | Residential mortgage with different down payment and qualification rules. |
| 1 to 4 units, not owner-occupied | Residential investment mortgage, generally with a larger down payment. See investment property mortgages. |
| 5 or more units | Commercial or multi-unit lending, based mainly on the building’s income. |
How lenders size a multi-family loan
- Net operating income: Rents minus vacancy allowance and operating expenses, such as taxes, insurance, utilities, maintenance, management and reserves.
- Debt service coverage: The loan payment must be covered by NOI with a cushion. Use the DSCR calculator to test it.
- Loan-to-value: Conventional loans are typically lower than insured ones.
- Condition and rent roll: Lenders review leases, arrears, capital needs and market rents.
CMHC multi-unit insurance
CMHC offers mortgage loan insurance for qualifying rental buildings, including programs such as MLI Select that reward affordability, energy efficiency or accessibility features. Insured financing can allow higher loan-to-value ratios and longer amortizations than conventional lending, which can improve cash flow. Program criteria, points systems and limits change, so check CMHC and ask a lender or broker who works with these programs.
Ontario considerations for landlords
- Rent control and tenant rules under the Residential Tenancies Act affect how much rent can be increased and how income is projected.
- Older buildings may need capital repairs, so lenders may ask for a building condition report.
- Environmental and title checks are typical on larger buildings.
Checklist before you approach a lender
- Current rent roll and copies of leases
- Two to three years of operating statements
- Property tax, insurance and utility costs
- Your net worth statement and real estate schedule
- A summary of planned renovations and how they change income
Frequently asked questions
What is the minimum down payment for an apartment building in Ottawa?
It depends on the lender and program. Conventional commercial loans often need 25% or more, while insured multi-unit programs can allow a smaller down payment for qualifying buildings.
Can I buy a fourplex with a regular mortgage?
Yes, a property with up to four units can generally be financed with a residential mortgage, with different rules depending on whether you live in one of the units.
Does rental income count toward qualifying?
Yes, lenders usually count a portion of rental income, and for larger buildings they underwrite the property’s net operating income.
How long does a multi-family mortgage take to close?
Often several weeks or longer, because of appraisal, environmental review and legal work. Insured programs can take longer.
Talk to a licensed professional about financing a multi-unit property
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