Unit count is a useful starting point, but occupancy, legal use, property income and the lender’s program determine how a rental building is assessed. Organize the property facts before choosing a calculator.
Start with the property and program
CMHC’s homeowner purchase program includes eligible owner-occupied properties with one to four units. Its Standard Rental Housing program requires at least five rental units. These are program boundaries, not a guarantee that every lender will classify or approve a property identically. CMHC Purchase and CMHC Standard Rental Housing describe the respective routes.
A four-unit building with an owner living in one unit is a different file from a six-unit apartment investment. A mixed-use property needs another check: describe the residential and business space separately, rather than relying on the listing’s headline description.
Assemble the facts before testing the loan
Create a unit-by-unit rent roll showing occupied and vacant units, current rents, lease dates and who pays utilities. Keep current lease income separate from hoped-for rents after renovations. Record the source of each expense figure and flag estimates.
Alongside the income records, collect the tax bill, insurance information and a list of known repairs. Ask the lender what evidence it needs for legal units, permitted use, condition and valuation. Clarifying these items early makes the financial comparison more useful than assuming every space produces dependable rent.
An original six-unit illustration
Assume six apartments each rent for $1,500 a month, plus $2,400 of annual other income. For this example, allow vacancy equal to 5% of scheduled apartment rent and $42,000 of operating expenses:
| Annual item | Amount |
|---|---|
| Apartment rent | $108,000 |
| Other income | $2,400 |
| Vacancy allowance | −$5,400 |
| Operating expenses | −$42,000 |
| Net operating income | $63,000 |
With $50,000 of annual mortgage principal and interest, modelled debt coverage is $63,000 ÷ $50,000 = 1.26. The remaining $13,000 is before any costs outside this illustration. The vacancy allowance is an assumption, not a lender’s prescribed figure, and 1.26 is not an automatic approval.
More than one limit can control the loan
A proposed mortgage can fit the property value and still require too much annual debt service. Conversely, sufficient operating income does not remove a lender’s equity requirement. Ask for both the income-supported amount and the value-supported amount, with the assumptions behind each.
If the accepted expenses rise by $8,000 in our example, NOI falls to $55,000 and coverage becomes 1.10. That is a reason to verify the expense records, not simply change the ratio target until the deal appears to fit.
Use the right model and confirm the route
MLI Select offers an additional CMHC framework tied to affordability, energy efficiency and accessibility. It has eligibility and documentation requirements; do not import its potential flexibilities into an ordinary loan assumption without confirmation. Review CMHC MLI Select.
Use the commercial calculator to explore building income, coverage and value limits. For a suitable homeowner or small-property scenario, use the residential calculator and confirm how the lender treats rental income. Keep the two assessments distinct and avoid counting rent twice.
Put the figures into a scenario
Use the appropriate assumptions, compare the results and save a summary for your file.
Open the Commercial DSCR Calculator →Sources and review
References checked September 22, 2026. Examples are illustrative; confirm the lender, insurer and program requirements for your situation.