More flexible financing and openness to innovation are on the Canadian government’s housing agenda for the coming months. The newly released 2026 spring economic update announces plans to amend mortgage insurance rules for low-rise, multi-unit developments, and allocates funds to “reduce regulatory friction” related to factory-built housing and prefabricated construction products.

A pending 30-day public consultation will seek input on the government’s proposal to allow private lenders to:

• offer multi-unit mortgage loan insurance on properties with five to eight residential units; and
• offer products for borrowers building triplexes and fourplexes.

The envisioned new rules are presented as a way to promote competition and choice among lenders and unlock more financing for the low- to mid-rise housing format commonly referred to as the  missing middle. Although a growing number of Canadian municipalities are loosening their zoning bylaws to allow for denser infill development in existing residential neighbourhoods, financing costs still make the business case challenging for builders.

“Building more row homes, stacked townhouses, or smaller low-rise apartments makes better use of serviced land and existing infrastructure while creating attainable housing options in established neighbourhoods,” the economic update states. “Further, the government intends to consult on possible additional financing measures to support the continued supply of more owner-occupied homes in advance of Budget 2026.”

Meanwhile, for large scale multifamily developments, the economic update states that the government proposes to “accelerate over $7 billion in low-cost loans under the Apartment Construction Loan Program to speed up the construction of up to 16,500 new rental homes” but there are no other details in the document.

On the innovation front, nearly $42 million over five years is earmarked for updates to the model national codes, other regulatory streamlining and research. The National Research Council, the Standards Council of Canada, and Innovation, Science and Economic Development Canada will be tasked with:

• forging a more proficient and consistently interpreted approval pathway for modular and panelized building systems;
• accelerating review and approval processes for innovative building products;
• accurately assessing how proposed changes to codes and standards flow through to costs and housing affordability; and
• modernizing the collection, tracking, monitoring and sharing of housing data.

The spring economic update also confirms that an extended grace period will remain in place for new participants in the Home Buyers’ Plan. Borrowers who withdraw from their registered retirement savings plans (RRSPs) to finance a home purchase between Jan. 1, 2026 and Dec. 31, 2028 will have five years before repayment must begin. That’s the same deadline that borrowers who withdrew RRSP funds between Jan. 1, 2022 and Dec. 31, 2025 enjoy, while homebuyers who withdrew RRSP funds at an earlier date had just two years before repayment requirements kicked in.