Read before shovel ready
Why “Shovel Ready” Isn’t the Finish Line
Every developer I talk to has heard the phrase ‘shovel ready’ thrown around like it’s a finish line. It’s not. It’s a starting gun. And a lot of projects trip over their own feet in the sprint that follows — because the financing conversation happened too late.
Here’s what I mean. By the time a project is genuinely shovel ready — permits in hand, site prepped, engineering signed off — that window is already closing. Lenders want your capital stack, equity position, and program eligibility lined up well before that stage, not scrambled together once the excavators are booked.
So before you get anywhere near “shovel ready,” here’s what actually needs to happen first.
Know Your Financing Program Before You Know Your Site Plan
I see developers finalize unit mix, finishes, and building envelope decisions before they’ve had a real conversation about what financing programs their project could qualify for. That’s backwards. Some of the best terms available for multi-unit construction in Canada right now are tied to specific program criteria — and if you design around those criteria from day one, you save yourself a redesign (and a financing headache) later.
The single biggest opportunity most developers underuse: CMHC’s MLI Select program.
What MLI Select Actually Does
MLI Select is CMHC’s insured financing program built specifically for multi-unit residential construction, and it rewards projects that check one or more of three boxes:
- Affordability — a percentage of units held at below-market rental rates
- Energy Efficiency — building performance that beats national code by a meaningful margin
- Accessibility — units designed to barrier-free and universal design standards
The more of these your project hits, the better your financing terms get. This isn’t a minor incentive — it changes the entire math of a project.
Why It’s Worth Building Around
Higher loan-to-value ratios. Depending on how your project scores, you can access LTVs up to 95%. That’s a significant reduction in the upfront equity you need to bring to the table — capital you can redeploy into your next project instead of tying it up in this one.
Longer amortization. MLI Select allows amortization periods up to 50 years for projects that score well across all three categories. Stretch the amortization, lower the monthly debt service, and the project’s cash flow profile improves for the life of the loan.
Lower insurance premiums. Qualifying projects can see meaningfully reduced CMHC insurance premiums, sometimes with premium refunds available. That’s real money back into your project budget, not just a rate discussion.
Lower long-term operating costs. Energy-efficient buildings aren’t just a box to check for financing purposes — better insulation, high-performance windows, and efficient mechanical systems reduce your operating costs for as long as you own the asset. That’s a benefit that outlives the mortgage.
Market positioning. Tenants, investors, and municipalities increasingly favour buildings that check these boxes. A project built to MLI Select standards is more marketable on both the leasing side and, eventually, the exit side.
The Part Everyone Skips: Building Your Score Before You Build Your Plans
Developers qualify for MLI Select benefits on a scoring system — the more of the three categories your project satisfies, the stronger your terms. Here’s the problem: most developers only find this out after their architectural plans are locked in, at which point retrofitting for a better score is expensive or impossible.
The fix is simple but requires discipline: bring your broker into the conversation at the concept stage, not the permit stage. Before finishes are chosen, before unit counts are locked, before your engineer starts stamping drawings — that’s when a five-minute conversation about affordability set-asides, energy targets, or accessibility unit counts can meaningfully shift your final loan terms.
A Practical Pre-Shovel-Ready Checklist
Before you consider yourself close to shovel ready, make sure you can answer these:
- Have you had a financing conversation before finalizing your unit mix and building envelope?
- Do you know which MLI Select criteria your project can realistically hit, and has that shaped your design?
- Have you modelled your project’s cash flow under both a standard insured mortgage and an MLI Select-qualified structure, to see the real dollar difference?
- Is your equity position built around the LTV you actually qualify for, or an assumption?
- Have you accounted for how amortization length changes your debt service coverage ratio, and whether that opens up additional lending capacity?
If you’re answering “not yet” to more than one of these, you’re not as close to shovel ready as you think — and that’s a good thing to find out now rather than after the plans are stamped.
Before you start modelling any of this on your own, know your numbers first. I built a free Cap Rate & Deal Analyzer that runs cap rate and DSCR side by side, so you can see your borrowing power and your actual return in the same place — run your project through it before you lock in a single design decision.
Where This Fits Into the Bigger Picture
None of this happens in isolation from the rest of your capital stack. Whether you’re layering senior debt with mezzanine financing, bringing in equity partners, or coordinating a bank takeout down the line, the earlier your MLI Select strategy is set, the cleaner the rest of your financing structure falls into place around it. I’d rather have this conversation with you six months before your shovel goes in the ground than six weeks before.
If you’re planning a multi-unit residential development anywhere in Nova Scotia or Ontario, let’s talk about what your project could look like under MLI Select before your plans are finalized — not after.
Patrick Sawler | Principal Broker | Craigburn Capital | 902-465-5533 | craigburn.com
NS Brokerage 2025-3000179 | Broker 2025-3000180 | ON M23006699