Definition
Buildings of 5 units or more are treated as commercial properties by lenders. Qualification criteria change radically:
**Income-based valuation**: - Building value is calculated using the capitalization method (NOI ÷ Cap rate) - Maximum financing is a percentage of this value (70-85% depending on lender)
**Debt coverage ratio (DCR)**: - DCR = NOI ÷ Annual debt service - Lenders generally require DCR ≥ 1.2 to 1.3
**CMHC APH Select Program**: - For residential 5+ unit buildings - Minimum 5-10% down payment with CMHC insurance - Amortization up to 40 years - Additional benefits for affordable or energy-efficient buildings
**Specialized lenders**: - CMLS, First National, Equitable Bank, Laurentian Bank for commercial multiplexes - Multiplex financing is specialized — a commercial mortgage broker is recommended