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Specific Documents for a Rental Loan

By building type: plex, 5+ units, commercial

Decision invest3 min readFebruary 11, 2026
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Obtaining a rental property mortgage in Canada requires significantly more documentation than an owner-occupied residential loan. Requirements vary considerably depending on property type: duplex or triplex (plex), buildings with 5 or more units, or commercial properties. For a 2-to-4-unit plex, conventional lenders and CMHC require current leases, an income and expense statement, and proof of the minimum 20% down payment. For buildings with 5 or more units, requirements intensify: audited financial statements, a Phase I environmental site assessment, a full commercial appraisal with cash flow analysis, and detailed operating history. The debt service coverage ratio (DSCR) becomes the central approval criterion. For commercial properties, lenders additionally require a business plan, financial projections, and often a personal guarantee from the borrower or borrowers. OSFI, through Guideline B-20, imposes strict qualification criteria for all mortgages, including rental properties. An AMF-certified mortgage broker can guide investors through preparing a complete file to accelerate the approval process and secure competitive financing terms.

Specific Documents for a Rental Property Mortgage in Canada

Rental property investment in Canada involves documentation requirements that are significantly more complex than a standard residential purchase. Lenders, whether federally regulated institutions governed by OSFI or alternative lenders, must evaluate not only the borrower's financial capacity but also the economic viability of the property itself. Understanding the documents required by property type allows investors to prepare a strong application and accelerate the approval process.

Duplex, Triplex and Fourplex (2 to 4 Units)

Properties with 2 to 4 units still qualify under residential financing programs, which relatively simplifies the requirements. However, the documentation is more detailed than for a single-family home. The lender must verify the property's ability to generate sufficient revenue to cover mortgage obligations.

  • Current leases signed by all tenants, including monthly rent amounts and lease duration in compliance with Quebec's Civil Code (CCQ, art. 1851 and following)
  • Income and expense statement for the property covering the last 12 to 24 months, provided by the seller or property manager
  • Appraisal approved by a member of the Ordre des évaluateurs agréés du Québec (OEAQ) or equivalent provincial body
  • Up-to-date municipal and school tax accounts
  • Survey certificate (certificat de localisation) less than 10 years old, conforming to the notary's requirements
  • Property insurance proof covering the rental building, including civil liability
  • Personal borrower documents: income proof (T4 slips, Notice of Assessment, pay stubs), bank statements showing down payment, and credit report

Buildings With 5 or More Units

Buildings with 5 or more units are classified as commercial properties by most lenders and CMHC. Documentation requirements increase significantly, as the analysis focuses primarily on the property's cash flow rather than the borrower's personal income. The debt service coverage ratio (DSCR) becomes the central approval criterion.

  1. Property Financial Statements: Provide audited or accountant-prepared financial statements for the last 2 to 3 years. These documents must include the balance sheet, income statement and cash flow statement.
  2. Phase I Environmental Site Assessment: Commission a Phase I environmental report from an accredited firm. This report evaluates soil and building contamination risks, in compliance with Quebec's Environment Quality Act.
  3. Full Commercial Appraisal: Obtain a commercial appraisal using all three approaches (comparison, income, cost) performed by an accredited appraiser. The income approach (capitalization) is the most important for this property type.
  4. Rent Roll and Vacancy History: Prepare a complete rent roll including vacancy history over 2 to 3 years, tenant turnover rates, and rent adjustments applied in accordance with Tribunal administratif du logement (TAL) guidelines.
  5. Building Inspection Report: Submit a detailed inspection report covering structure, roofing, plumbing, electrical, heating and the building envelope. Lenders may require specialized reports for specific elements.

Commercial and Mixed-Use Properties

Financing commercial or mixed-use (residential and commercial) properties in Canada requires even more thorough documentation. Lenders evaluate commercial risk by analyzing tenant quality, commercial lease duration and revenue diversification. A detailed business plan is often required, including financial projections for 3 to 5 years. Commercial leases, unlike residential leases governed by the CCQ in Quebec, are freely negotiated contracts between parties. Rent review clauses, renewal options and maintenance responsibilities (net, semi-net or gross leases) directly impact the lender's risk assessment. A personal guarantee from borrowers is almost always required by financial institutions for this type of financing.

Frequently Asked Questions

What documents are essential to finance a duplex or triplex in Canada?
For a 2-to-4-unit plex, lenders typically require current signed leases, an income and expense statement for the property, an approved appraisal, municipal and school tax accounts, an up-to-date survey certificate, proof of insurance, and the standard personal documents from the borrower(s) such as income verification, bank statements and identification.
How is the debt service coverage ratio (DSCR) calculated?
The DSCR is calculated by dividing the net operating income (gross revenue minus operating expenses, excluding debt service) by total annual mortgage payments (principal and interest). Most lenders require a minimum DSCR of 1.10 to 1.30 for rental buildings with 5 or more units.
Why is a Phase I environmental report required for a 5+ unit building?
A Phase I environmental site assessment evaluates contamination risk for the land and building. Lenders require it to protect against the risk that the property could lose value due to environmental issues. In Quebec, the Environment Quality Act imposes strict decontamination obligations on property owners.
What down payment is required for a rental property in Canada?
For a non-owner-occupied 2-to-4-unit plex, the minimum down payment is 20%. For a building with 5 or more units financed with CMHC insurance, the minimum is 15%. Without CMHC insurance, conventional lenders generally require 25% or more depending on the risk profile.
Can a foreign investor obtain a rental mortgage in Canada?
The Prohibition on the Purchase of Residential Property by Non-Canadians Act restricts residential property purchases by non-residents, though exemptions exist for certain categories. Commercial property restrictions differ. Lenders often require a higher down payment (35%+) and additional documentation from non-residents.

Educational information only. This does not constitute financial advice under the Act Respecting the Distribution of Financial Products and Services (LDPSF). Consult an AMF-certified mortgage broker before making any financial decision.

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