Operating expenses, vacancy, and reserves.
CMHC does not publish universal opex assumptions. Every expense line is built from three years of actual, detailed property statements (audited or reviewer-prepared where available). For new construction, market comparables and pro forma are used — stress-tested by CMHC against comparable stabilized buildings.
This page collects the benchmark ranges that tend to show up in CMHC-accepted submissions — alongside the vacancy logic pulled from the Rental Market Survey and the replacement-reserve conventions that apply across MLI Standard, MLI Select, and legacy affordable programs.
Typical ranges by line item.
These are industry-practice ranges that CMHC regularly accepts — not published assumptions. Actuals always govern.
| Line item | Typical range | Notes |
|---|---|---|
| Property management | 3–5% of EGI | Minimum 3% even if self-managed. Larger or full-service buildings 4–5%. |
| Property taxes | Actual (5–15% of EGI typical) | Based on current municipal assessment roll; adjusted for pending reassessment. |
| Insurance | Actual (1.5–3% of EGI typical) | Current broker quote or in-force policy premium. |
| Utilities (landlord-paid) | Actual (5–15% of EGI if included) | Heat, hot water, common-area electricity, water/sewer where landlord-paid. |
| Repairs and maintenance | Actual (5–10% of EGI typical) | 3-year trailing average with outliers investigated. |
| Replacement reserves | $250–500/unit/yr or 2–4% EGI | Discretionary under MLI Select; 2% EGI minimum under legacy AHF. |
| Total opex | 35–50% of EGI | Lower for newer all-inclusive-tenant-paid buildings; higher for older landlord-pays-utilities stock. |
A floor applies even at full occupancy.
CMHC underwrites vacancy from its own Rental Market Survey, by CMA. Even fully-occupied properties carry a floor (vacancy + bad-debt allowance). Actuals matter, but the RMS figure sets the minimum underwritten level.
| Market | Historical vacancy | Underwritten assumption | Notes |
|---|---|---|---|
| Tight market | <2% | 2–3% | Applied floor — CMHC will not underwrite below the floor even if property has zero vacancy. |
| Average / balanced | 2–4% | 3–5% | Matches or slightly conservative of Rental Market Survey figures. |
| Softer market | >4% | 5%+ | Aligned with Rental Market Survey; occasionally adjusted up for property-specific concerns. |
Underwritten vacancy pulls from CMHC's Rental Market Survey — see the data page for details on how the survey is conducted and accessed.
Capital replacement assumptions.
Replacement reserves are the annual allowance for capital items (roofs, windows, mechanical) that are neither routine repairs nor operating expenses. Treatment differs by program.
Not explicitly required under MLI Select but commonly included in NOI builds at industry-practice rates. CMHC underwriters will flag deals that omit reserves entirely.
Historic CMHC affordable-housing programs required a replacement reserve floor of 2% of EGI — carried forward informally into MLI Select underwriting for affordable-unit-heavy projects.
Typical range in accepted submissions. Newer buildings sit at the low end; older stock (30+ years, deferred maintenance) trends toward 4% EGI or more.
Self-managed still pays a management fee.
Many first-time multi-unit borrowers plan to self-manage and strip property management from their pro forma. CMHC will add it back. Even self-managed properties carry a minimum 3% EGI property management deduction — 4–5% on larger or more management-intensive buildings.
The logic: the loan needs to remain serviceable if the borrower ever contracts management out. NOI is computed assuming an arm's-length manager is paid.
- + Use 3% EGI minimum property management even if self-managed.
- + Include replacement reserves at $250–500/unit/year for newer buildings; more for older.
- + Vacancy at Rental Market Survey rate, never below it — even in tight markets.
- + Tenant-paid utilities excluded from opex; landlord-paid portion only.