Commercial Construction Financing Ottawa
From purpose-built rental buildings to mixed-use developments and commercial build-to-suit projects. Commercial construction financing requires specialized knowledge of draw structures, cost certification, and lender underwriting. Jessy Gill brings that expertise to every Ottawa development file.
Key Differences
Commercial vs Residential Construction Financing
Commercial construction operates on a different scale, and with different rules. Understanding these differences is critical before approaching lenders.
| Feature | Residential Construction | Commercial Construction |
|---|---|---|
| Typical loan size | $300K – $1.5M | $1M – $50M+ |
| Down payment | 20% of total project cost | 25–35% of total project cost |
| Approval process | 4–6 weeks | 8–16 weeks (more diligence) |
| Lender type | Bank, credit union, monoline | Bank, life co, CMHC, MIC |
| Draw monitoring | Progress inspections | Cost certifications + quantity surveyor |
| Builder requirements | Licensed Ontario builder | GC + project team review required |
Project Types
What We Finance
Purpose-Built Rental
CMHC EligibleNew apartment buildings with 5+ units intended for long-term rental. Eligible for CMHC MLI Select financing with the lowest rates in the market and up to 95% LTV.
Mixed-Use Development
Complex StructureGround-floor commercial with residential units above, increasingly common in Ottawa's growth corridors. Financing structure depends on the residential vs commercial ratio.
Commercial Build-to-Suit
Tenant-DrivenBuilding for a specific commercial tenant or owner-operator. Often requires a signed anchor lease or pre-commitment from a creditworthy tenant to secure financing.
Condo Development
Pre-Sales RequiredMulti-unit strata construction requiring pre-sales thresholds (typically 65–80% sold) before most lenders will advance construction funds. Timing and presale strategy are critical.
CMHC MLI Select
The Best Rate in the Market for Multi-Res Construction
For eligible purpose-built rental projects (5+ units), CMHC's MLI Select program offers the lowest construction financing rates available, often 150–200 bps below conventional. Projects earn points for affordability, sustainability, and accessibility commitments.
FAQ
Commercial Construction FAQs
- What is a cost certification and why is it required?
- A cost certification is a report prepared by a quantity surveyor (QS) that verifies the actual construction costs incurred to date against the project budget. Commercial lenders require cost certifications at each draw stage to ensure the project is on track, both physically and financially. The QS acts as an independent third party protecting the lender's interest. Residential construction mortgages use simpler progress inspections; commercial requires the more rigorous QS process.
- Can I use CMHC financing for a commercial construction project?
- CMHC's MLI Select program is available for eligible multi-residential construction (5+ units) and offers the lowest available financing rates, often 100–200 basis points below conventional commercial construction rates. The program rewards projects that meet sustainability, accessibility, and affordability criteria. Not all commercial construction qualifies; CMHC financing applies specifically to purpose-built rental housing projects. Jessy can assess your project's eligibility.
- What happens if construction costs overrun the approved budget?
- Commercial lenders will not advance funds beyond the original approved loan amount regardless of cost overruns. Developers must either fund overruns from reserves, arrange supplemental financing (which is difficult mid-project), or reduce scope. For this reason, commercial construction budgets must include a meaningful contingency (typically 10–15%) and lenders scrutinize project budgets carefully at underwriting. Jessy works with developers to structure budgets that will satisfy lender due diligence.
Financing Your Ottawa Development Project
Commercial construction deals are complex, and lender selection matters enormously. Book a call with Jessy to review your project specs, budget, and financing timeline.
CMHC, conventional, and bridge construction financing available across the Ottawa region.