Prefab Plus: CMHC Finally Has a Product Built for Factory-Made Homes

In short — Since May 7, 2026, CMHC offers Prefab Plus, its first mortgage loan insurance product designed expressly for buying a prefabricated, modular or factory-built home: down payment from 5%, and above all up to four staged advances matched to the real milestones of a factory project. The same announcement opens every multi-unit insurance product — including MLI Select — to modular construction. Here is what actually changes, and what doesn't.

The choke point of prefab has never been quality — it is the payment schedule. A factory wants to be paid at order and at delivery; a bank wants to advance funds at the pace of a job site it can inspect. Caught between the two, the factory-home buyer used to negotiate case by case, as we explained in our guide to financing a modular home. That is exactly the gap CMHC just closed.

What Prefab Plus changes for the buyer

The program insures the loan of a new prefab home buyer with the same broad parameters as a conventional property: minimum down payment of 5% on the first $500,000 (10% on the remainder), maximum property value of $1,500,000, 25-year amortization, standard debt ratios. Nothing exotic — and that is precisely the point: the factory-built home stops being a special case.

The real novelty is elsewhere: up to four staged advances aligned with the actual sequence of a prefab project.

1. Land and site preparation — excavation, foundation, well or septic where needed.
2. Unit delivery — the big payment, the moment the home arrives from the factory.
3. Post-installation — connections and the work that follows placement.
4. Finishing — what remains before move-in.

It is construction-draw mechanics, but drawn for the factory rather than the traditional job site. The large payment due at delivery — the moment that made buyers and lenders sweat — becomes a planned step of the product instead of an anomaly to justify.

Two details worth knowing: an energy-efficient home earns a 25% partial premium refund through CMHC's Eco products, and it is your lender who submits the application — you never deal with CMHC directly. The property must be suitable for year-round living with year-round road access.

What doesn't change

Prefab Plus is loan insurance, not a grant: the premium (0.60% to 4.50% depending on the down payment) is added to the loan, as with any insured property. The land, foundation and connections remain your project and your budget — the total cost adds up the same way as before. And the fundamental distinction stands: a home permanently affixed to a foundation is financed with a standard insured mortgage, while a movable home that is not affixed falls under chattel financing, on less favourable terms — our article on the mortgage for a modular home maps that boundary. Quebec's mandatory new-home warranty still runs through GCR, and property taxes and home insurance follow the same rules as any residence — see taxes, insurance and assessment for a modular home.

The part nobody notices: multi-unit

The same May 7 announcement opens all of CMHC's multi-unit insurance products — including MLI Select, the favourite tool of affordable-rental developers — to modular construction. The pilot that preceded the decision insured financing for more than 800 rental homes across five provinces; CMHC points to 605 Studio West in Calgary, an 84-unit affordable modular complex delivered in under a year, where a comparable conventional project took nearly two.

For a Quebec developer or nonprofit, the consequence is direct: insured — meaning cheaper — financing no longer forces a choice between going modular and using CMHC's best products. It is one more piece of the ecosystem making prefab apartment projects financeable, alongside the fundamentals in our complete modular home guide.

Shopping for a factory-built home and want the full project priced — land, foundation and transport included? We can prepare a quote request with you.