What is the Canada Rental Protection Fund and how does it work?

The Canada Rental Protection Fund (CRPF) is a $1.5-billion federal fund created by Build Canada Homes to protect existing affordable rental housing across Canada.

The Canadian Housing Acquisition Fund (CHAF) uses CRPF funding to help eligible community housing providers purchase existing rental properties and move them into long-term community ownership. The Fund has the potential to protect 7,000 homes over its first five years, aligned with market conditions and available acquisition opportunities, with the potential to protect more homes as capital is repaid and reinvested.

Why is the CRPF focused on acquisitions of existing rental housing?

Canada needs to build more affordable housing, but construction alone cannot solve the housing challenge if existing affordable homes are being lost at the same time.

Many existing rental buildings provide homes at rents below what tenants would pay for comparable housing in the local market. When these properties are sold, that affordability can be lost through rising rents, redevelopment or conversion.

Acquisition funding helps community housing providers purchase these properties when they come up for sale, protecting existing tenants and keeping the homes affordable over the long term.

These acquisitions ensure housing is secure, affordable, and owned and operated by community housing providers in less time than it takes to deliver new homes and at a fraction of the cost.

What is CHAF’s role with the CRPF?

CHAF is an independent non-profit organization responsible for making investment decisions using funding available through the CRPF.

CHAF brings community housing expertise directly into investment decisions and works with financing partners to evaluate, structure and approve eligible acquisitions.

Final decisions on the deployment of CRPF capital are made by CHAF’s independent Investment Committee.

Eligibility

What types of organizations can apply for CRPF funding?

Organizations will complete a pre-qualification process to be eligible to submit an acquisition proposal. Organizations must also fall within at least one of the following categories:

• Community housing providers, including societies, non-profit housing co-operatives and other organizations that are wholly non-profit in structure, operation and purpose;
• Government housing organizations, including housing entities established by provincial, territorial or local governments, but excluding governments themselves;
• Indigenous housing organizations, including entities established to develop, own or operate housing for Indigenous peoples; or
• First Nations, Inuit or Métis governments or governing bodies.

Organizations must currently own or operate an existing portfolio of affordable housing and must have at least three years of housing operating experience.

What types of properties are eligible for acquisition?

CRPF funding can support the acquisition of existing, occupied multi-unit rental and co-operative housing in Canada.

Properties must:

• Have at least five self-contained residential units;‍
• Be primarily residential;
• Be privately owned before the acquisition; and
• Be able to operate sustainably without ongoing operating funding agreements.

The acquisition must include the whole property and its underlying freehold interest. New developments, buildings that have never been occupied, fully vacant buildings, non-self-contained units like SROs and rooming houses, individual condominium or strata units, partial interests and leasehold properties are not eligible.

A property must also be a good fit forthe organization acquiring it, including its location, size and the organization’s ability to operate and steward it over the long term.

How does CHAF determine whether a property is affordable enough to qualify?

Affordability looks different acrossCanada, CHAF considers both what tenants are paying today and whether thoserents are affordable to local renter households based on their incomes.

As a general benchmark, CHAF looks forproperties where at least 40% of homes are affordable at 30% of local medianrenter household income, consistent with Build Canada Homes affordability parameters and reflects local market conditions. The goal is to preserve affordability, where existing rents are already below-market, recognizing that rental buildings may include a mix of rent levels at acquisition. Meeting this benchmark alone is not enough; the rents across the property as a whole must also represent meaningful affordability compared with local market rents.

CHAF also considers local incomes andhousing needs, the types of homes being protected, and how long existingtenants have lived there.

The goal is to identify properties wherecommunity ownership can protect meaningful affordability for existing andfuture tenants.

How will affordability be protected after a property is acquired?

Properties acquired with CRPF funding must remain affordable for at least 20 years.

Where enforceable in the applicable jurisdiction, this commitment will be legally secured on the property so that the affordability requirements continue even if ownership changes in the future.

Community ownership provides an additional layer of long-term stewardship. Organizations receiving CRPF funding are also required to report regularly to CHAF on affordability, financial performance, property stewardship and other investment commitments.

Existing tenants cannot be displaced as a direct result of the acquisition, including where subsequent capital work is required, unless suitable relocation is provided.

Funding

What types of funding are available through the CRPF?

CRPF funding can include a combination of repayable and forgivable loans on a 10-year term.

Repayable funding is expected to be repaid, including through future refinancing, allowing CHAF to reinvest that capital in future acquisitions.

Forgivable funding may be forgiven provided the housing provider meets the affordability and other commitments associated with the investment.

CRPF funding will generally form one part of the overall financing for an acquisition and will typically be combined with a commercial mortgage on a 10-year term and, where available, other sources offunding or investment.

Can CRPF funding support building repairs and capital renewal as part of an acquisition?

Yes. CRPF funding can support eligible capital renewal required to help ensure an acquired property remains safe, sustainable and financially viable over the long term.

CHAF will consider the condition of the property, the timing and scale of required repairs, and whether the proposed capital plan, informed by a Building Condition Assessment, represents aresponsible and efficient use of CRPF funding.

Capital renewal funding is intended tosupport the long-term viability of existing housing acquired through the CRPF and is not a standalone funding program for properties already owned by a community housing provider.

Can other governments, funders or investors co-invest alongside the CRPF?

Yes. CHAF is building partnerships with governments and public, private, impact and philanthropic partners to expand the amount of capital available to protect affordable rental housing.

Co-investment may support a specific acquisition or housing provider, or provide capital that can be deployed more broadly alongside CRPF funding.

Bringing together multiple sources of funding can help extend the reach of the CRPF and protect more affordable homes.

Application Process

How does my organization apply for CRPF funding?

Organizations begin by applying to pre-qualify with CHAF. Pre-qualification confirms that an organization meets the basic eligibility requirements and has the governance, financial position and organizational capacity required to participate in the program.

Once pre-qualified, an organization canbring forward a specific property for consideration through CHAF’s regular property intake cycles.

Properties that advance through the initial evaluation will then complete detailed due diligence and underwriting before being considered for a final investment decision.

How does CHAF evaluate potential acquisitions and make investment decisions?

Meeting the basic eligibilityrequirements does not automatically mean an acquisition will receive CRPFfunding.

CHAF considers the overall strength andimpact of each proposed acquisition, including:

• Affordability and impact on tenants;
• The housing provider’s capacity and experience;
• Financial viability;
• Property condition and long-term sustainability;
• Acquisition price and value;
• Efficient use of CRPF capital;
• Ability to attractother financing;
• Geographic outcomes;
• Indigenous leadership, partnerships and housing outcomes; and
• Broader strategic housing value.

Shortlisted acquisitions undergo detailed financial and property due diligence and underwriting. Final investment decisions are made by CHAF’s independent Investment Committee.