Build Canada Homes’ New Investment Policy Framework Update

We have been closely monitoring updates related to the launch of Build Canada Homes (“BCH”), a new federal agency announced by Prime Minister Mark Carney to address Canada’s housing crisis through new financing and innovative, accelerated development. In a previous blog post, we covered BCH’s mandate, goals and structure. This post brings readers up to date on BCH’s new investment approach and policy framework (the “BCH Framework”), outlining how BCH selects, prioritizes and supports affordable housing projects.

Strategic Partnerships

BCH aims to attract investment partners by acting as a catalyst and intermediary between a wide range of organizations across the housing ecosystem:

• Non-Profit, Co-Operative and Non-Market Providers: BCH will partner with non-market housing providers committed to multi-year projects by providing equity and shovel-ready sites.
• Private Developers: BCH will continue working with private developers to establish affordable homes suitable for families, but urges them to also establish joint ventures with public, non-profit or co-operative housing organizations if their proposals include supportive or transitional housing.
• Factory-Built Housing Manufacturers: BCH is seeking organizations with the ability to scale production and manage financial risks, in support of its core pillar of innovative construction.
• Financial Institutions: While BCH itself maintains a large pool of money for funding, it will also partner with financial institutions to mitigate project and financing risks, as well as draw in private-sector capital.
• Indigenous Governments and Organizations: BCH will collaborate with First Nations, Inuit and Métis governments to ensure shared housing outcomes that deliver culturally appropriate housing models.
• Provinces, Territories and Municipalities: As a federal entity, BCH will rely on the provinces, territories and municipalities to help identify and advance priority projects through land contribution, expedited approvals and fee waivers.
• Affordable Housing and Philanthropic Funds: These organizations are described as ‘mission-driven’, and partnerships with BCH will aim to unlock innovative financing solutions for affordable housing.

Supported Investments

BCH will consider investment in projects or portfolios that deliver new housing units through:

1. new construction;
2. acquisition, conversion or re-purposing of non-residential buildings into residential housing;
3. conversions, rehabilitations, additions to existing buildings and in-fill opportunities; or
4. increasing or deepening affordability targets, in the case of ongoing projects.

BCH generally supports a broad range of housing forms, including mixed-income and mixed-use developments, student rental housing, supportive and transitional housing, co-operative housing solutions and mixed-income housing in rural, remote, northern and Indigenous communities. However, commercial-only properties and individual home ownership are notably ineligible.

In the short term, BCH is seeking shovel‑ready projects that are fully planned and ready to commence construction within 12 months. Over time, BCH intends to shift its focus to larger‑scale, portfolio‑based projects. To lay the groundwork for this transition, BCH currently allows one or more partners to submit multiple projects together.

The Funding Model

BCH funds may cover various costs, including construction costs, land acquisition, integration of modern construction technologies and certain forms of factory-built housing manufacturing capacity, provided those investments are directly tied to specific housing projects or portfolios. Funded projects are expected to blend market and non‑market units to avoid reliance on ongoing operating subsidies and to create financially resilient developments. Projects must therefore be deliverable within budget and supported by a credible financing strategy, with BCH retaining the ability to provide non‑repayable grants when necessary to achieve deeper levels of affordability.

BCH also adopts a place‑based, income‑tested definition of “affordability”, grounding rent levels in local median incomes rather than national benchmarks. This approach aims to ensure meaningful affordability for households with very low to moderate incomes, reflecting regional variations in rental markets across Canada. The BCH Framework provides illustrative rent maximums and emphasizes that final affordability requirements will be tailored to local data.

Proposal Assessment

In assessing proposals, BCH looks for projects that can materially increase the supply of affordable housing, demonstrate financial and construction readiness, incorporate modern methods of construction, improve environmental performance and strengthen local or national supply chains. BCH also places weight on partnerships that enhance sector capacity, particularly with Indigenous organizations and groups serving equity‑deserving populations.

A significant portion of the BCH Framework is also devoted to climate resilience, sustainability and supply‑chain strength. BCH will prioritize and favour projects which employ low‑carbon materials, energy‑efficient design and climate‑informed site planning. BCH also reinforces the “Buy Canadian” policy by prioritizing projects using domestically produced materials, with a particular preference for Canadian softwood lumber, aligning its housing strategy with broader economic and environmental goals. Although these factors guide BCH’s decision‑making, they are not rigid eligibility criteria.

Supportive and transitional housing receives special attention, with $1 billion allocated to projects that leverage factory‑built approaches, integrate wraparound services, align with local homelessness‑serving systems and demonstrate a clear need for BCH funding. Private-sector developers and for-profit organizations must have long‑term partnerships in place with non-profit or public proponents to access this funding.

Submitting a Proposal to BCH – Overview and Resources

After reviewing the BCH Framework, a proponent may submit a proposal through the Build Canada Homes Portal (the “Portal”). Accessing the Portal allows proponents to create, save, edit and submit proposals, as well as track their status.

A number of documents are also required at intake, including corporate documents, financial statements, confirmation of development and property management experience, property details and a project description. For a detailed list of the required documents, proponents should consult BCH’s Required Documentation checklist.

In addition to these documents, a valid proposal must include narrative responses to certain information-gathering questions:

• The Proponent: A detailed description of the organization, much of which will already have been gathered during account creation and through required documents.
• The Proposal: A broad overview of the project, including the number and type of units, project location, construction timelines and methods and land tenure.
• The Investments: A detailed description of the financial support requested, the total construction cost and any anticipated investments from other sources.

For greater detail on these steps or any other part of the BCH Framework, proponents may refer to BCH’s Proposal Step-By-Step Guide or contact one of the members of McCarthy Tétrault’s Real Property & Planning Group.