Expanded insurance products aim to accelerate housing supply
Canada's federal housing agency has expanded its mortgage loan insurance offering to include prefabricated and modular homes, a move that signals a strategic pivot toward factory-built construction as a tool for addressing the country's protracted housing shortage.
The Canada Mortgage and Housing Corporation announced Wednesday the launch of CMHC Prefab Plus, a new product that allows homebuyers to purchase a factory-built home with a minimum down payment of five per cent and access insured financing.
CMHC Prefab Plus allows funds to be disbursed in up to four stages, known as draws, as construction milestones are reached.
The structure is designed to reflect how prefabricated homes are actually built and delivered, rather than fitting them into a financing model built for conventional on-site construction.
CMHC delivered a record-setting performance in 2025, expanding its reach across rental construction, homebuyer insurance and affordable housing programs even as trade tensions and macroeconomic volatility tested the country's financial foundations.https://t.co/rvdooyd9yn
— Canadian Mortgage Professional Magazine (@CMPmagazine) May 7, 2026
A new product for factory-built homebuyers
The staged draw structure addresses one of the practical hurdles in financing prefab construction.
A homebuyer can, for example, take an initial draw to acquire and prepare a site, and a subsequent draw once the home is delivered and ready for installation.
That flexibility mirrors the physical reality of prefab homebuilding, which unfolds differently from a conventional pour-and-frame project.
CMHC president and CEO Coleen Volk described the move as part of the corporation's broader mandate to expand access to homeownership.
"We continue to use every tool at our disposal to deliver commercial products and results for Canadians," Volk said.
The announcement comes as CMHC continues to warn that Canada must roughly double its annual housing starts over the next decade to restore affordability to pre-pandemic levels — a target requiring between 430,000 and 480,000 units per year against a current rate of approximately 259,000.
Read more: Build Canada Homes still shrouded in mystery as Carney government claims progress
Modular construction goes mainstream for multi-unit projects
On the multi-unit side, CMHC is expanding its existing insurance products to accommodate modular construction across all multi-unit offerings, including the MLI Select program.
Previously, modular multi-unit projects required access through a pilot initiative. That pilot, which facilitated insured financing for more than 800 new rental homes across five provinces, has now been used to justify a full expansion of eligibility.
The change matters to brokers who advise developer clients on financing structures for purpose-built rental projects.
Modular construction — in which units are built off-site and assembled on location — has attracted considerable attention from developers seeking to compress timelines and manage labour costs.
With CMHC insurance now available across all multi-unit products for modular builds, the financing calculus for these projects changes materially.
A Calgary project shows what's possible
The pilot's flagship example, 605 Studio West in Calgary, illustrates the timeline argument in concrete terms.
The 84-unit affordable housing complex, developed by Attainable Homes Calgary — a non-profit social enterprise owned by the City of Calgary — was built and occupied in under one year.
A comparable conventionally built project in the same community took close to two years to complete.
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