Financing Buildings, Not Just Homes.
Duplexes, triplexes and fourplexes look a lot like houses on paper — but a 5+ unit apartment building is a different animal. Paul Malandrino helps investors across Vaughan, York Region and the GTA understand where the line sits, how down payments and documents change, and how a lender sizes a loan against the building's own income.
How units change the rules
The unit count is the single biggest factor in how a building is financed.
Duplexes, triplexes and fourplexes are most often financed under residential rules. That generally means more familiar underwriting, and — where the borrower will live in one unit — sometimes lower down payments than a pure investment purchase. Terms still depend on the lender, product and the full application.
Once a building has five or more units, most lenders underwrite it as commercial or multi-residential real estate rather than as a home. The focus shifts from your personal income toward the building's ability to carry itself.
Crossing into commercial territory typically changes the required equity, the rate structure, the amortization options and the paperwork a lender expects. It is not simply "a bigger mortgage" — it is a different process.
How a property is zoned, whether any units are non-conforming, and any mixed residential/commercial use can move a deal from one lending category to another. It is worth confirming early.
What lenders assess
On larger multi-unit deals, the building is often the main story — not just the borrower.
The building's income
Lenders look at net operating income and debt-service coverage (DSCR) — essentially, does the rent, after expenses, comfortably cover the proposed mortgage payments with room to spare. Strong, well-documented cash flow is central to a commercial-style approval.
Property condition
Age, systems, deferred maintenance and overall condition all factor in. On larger buildings a lender may require an appraisal, environmental review or engineering report before committing.
Borrower & experience
Your credit, net worth, liquidity and track record with rental or commercial property give the lender confidence you can manage the asset and weather vacancies or repairs.
Location & market
Where the building sits — the neighbourhood, rental demand and marketability across Vaughan and the GTA — influences both the appraised value and the lender's appetite.
Down payment & insurance
Multi-unit and apartment buildings generally call for a larger down payment than a single-family home purchase. Exactly how much depends on the property, the product, the borrower and the lender — but investors should plan for meaningfully more equity than a typical owner-occupied purchase, and should expect the lender to size the loan against the building's income and value.
Where CMHC can come in
For qualifying multi-residential buildings, CMHC offers mortgage-loan-insurance programs (its multi-unit / MLI stream) that can support financing on insured terms. These programs have their own eligibility, application and premium rules, and can influence the equity required and the amortization available. This is a high-level, illustrative overview only.
Confirm current programs
Insurance programs, premiums and qualifying criteria change over time. Before you rely on any specific structure, we confirm what is actually available for your building today and model the numbers around it — rather than assuming yesterday's rules still apply. Nothing here is a commitment to lend or an approval; the underwriting on multi-unit and commercial deals is always case-by-case.
Documents you'll need
Having these ready up front speeds up a multi-unit review considerably.
A current rent roll listing each unit, its rent and lease status, plus copies of the actual leases so a lender can see the income is real and contracted.
Recent operating statements — rents collected against property taxes, insurance, utilities, maintenance and management — so net income and DSCR can be assessed.
Address and legal description, unit count and mix, age, recent capital improvements, tax bills, and any existing appraisal, survey or environmental reports.
Your credit profile, net-worth statement, notices of assessment or T1s, and proof of the equity and reserves behind the purchase or refinance.
Related pages
Mortgage Solutions
See how this fits with Paul's mortgage solutions.
Learning Centre
Plain-language guides on buying, costs, credit and more.
Commercial Mortgages
How commercial and multi-residential lending is underwritten.
Rental Property Mortgages
Financing single rentals and smaller income properties.
Cash Flow Analysis
Model the numbers on a building before you commit.
Looking at a multi-unit building?
Let's assess the building's numbers and the right lender fit.