There are a number of multi-family projects in Alberta that have stalled, primarily due to a lack of funding caused by cost overruns, lenders backing out and other causes related to a struggling economy. Such incomplete MF projects can be saved if the Developer is prepared to convert the use of their stalled out project to Affordable Housing status.
The CMHC Insurance Certificate is double-pronged, in that it works both for the construction financing and for the take-out mortgage at completion. You can get the rate locks on both mortgages, even as far as to funding the take-out mortgage into escrow, all this at the currently vary low rates – I am seeing numbers in the range of 2.2% for 10-year terms.
The Balance Sheet lenders are now advantaged big-time over the Monoline and other mortgage lenders.
The rent is 10% below market, increasing by CPI annually, and is tied to the address no matter who the tenant may be – for 10 years. The Affordable Housing requirements remain in place for 10 years, so this is not a short term scenario to solve a financing problem, but for the right projects and the right Developers it can save a project.