Development Funds | Foundation Capital

Q: What are the Foundation Capital Development Funds?

Foundation Capital offers two development funds that let you invest like a developer and earn developer-level returns. Instead of buying a condo unit and hoping it appreciates, you invest in ground-up construction of brand new purpose-built rental apartment buildings across Southern Ontario. Development Fund 1 targets 24 to 27% annual returns building high-rise towers. Development Fund 2 targets 18 to 20% annual returns building mid-rise buildings at volume. Both funds use CMHC insured financing and federal, provincial, and municipal government incentives to build quality rental housing for Canada's core workforce while delivering outsized returns to investors.

The Opportunity

Canada's Core Workforce Has Nowhere to Live

Nurses, teachers, tradespeople, and first responders earning $50,000 to $75,000 a year are being priced out of the communities they serve. They earn too much for social housing and too little for today's market rents. Canada is not building nearly enough homes for these people. We are.

4.4M

Affordable homes Canada needs, including 1.4M for middle-income families

1.48M

Additional housing units needed in Ontario alone by 2035

$22.40/hr

The national "housing wage" needed to afford a 2 bedroom apartment

33%

Of Canadian renters spend over 30% of income on housing costs

The nurse who cares for your parents cannot afford to live near the hospital. We are building her a home.

Canada's core workforce makes between $25 and $36 an hour. That is $50,000 to $75,000 a year. At 30% of income, they can afford $1,250 to $1,875 a month in rent. But average 2 bedroom rents in Ontario now exceed $1,700, and turnover rents jump 23% or more above that.

The government knows this is a crisis. That is why CMHC is offering the most favorable construction financing in Canadian history to developers who build purpose-built rental housing for this exact market. Foundation Capital is building to meet that demand.

See the Funds

Purpose-built rental construction in progress

Our Strategy

Build. Finance. Fill. Repeat.

We build brand new, purpose-built rental apartment buildings designed for core workforce tenants, financed through CMHC programs that make the economics extraordinary for investors.

Design for the Workforce

Every building is purpose-built for the core workforce market: modern, efficient 1 and 2 bedroom apartments at rents that work for Canadians earning $50,000 to $75,000. Not luxury. Not subsidized. Just quality homes at honest prices for the people who keep our communities running.

CMHC Insured Construction

We access CMHC's MLI Select program for up to 95% loan-to-cost and reduced insurance premiums by committing 10% of units to affordable rents. Less equity per project means dramatically higher returns on invested capital. The government is paying developers to build this housing. We are taking them up on it.

Stabilize and Scale

Purpose-built rentals targeting the core workforce fill fast. Demand is massive and growing. Once a building is stabilized, we lock in long-term CMHC financing and repeat the process. Every completed project funds the next. Every building houses the workforce Canada cannot afford to lose.

The Funds

Two Funds. Two Return Profiles.

Both funds give you the opportunity to invest like a developer and earn developer-level returns. No buying a condo unit and hoping it appreciates. You are investing in the actual development, from ground-up construction to stabilized rental asset. The difference between the funds is scale and approach.

Development Fund 1

Foundation Capital Development Fund 1

24 to 27%

75% Allocated

Our highest growth vehicle. Fund 1 builds larger, higher-story towers (25+ stories) where the same land, permitting, and foundation costs are spread across far more units. More units per dollar of land means more rental income on the same footprint. Fewer projects, bigger scale, higher returns per building. Built for investors who want maximum capital growth from Canada's purpose-built rental boom.

Targeted Annual Return24% to 27%

StrategyHigh-Rise New Construction (25+ Stories)

FinancingCMHC Insured (MLI Select)

GeographySouthern Ontario

Target TenantCore Workforce ($50K to $75K income)

Return DriverCapital Appreciation + Scale Economics

Development Fund 2

Foundation Capital Development Fund 2

18 to 20%

Strong growth through volume. Fund 2 focuses on mid-rise buildings across multiple sites, spreading capital across more projects with faster construction timelines. More buildings, more locations, steady deployment. For investors who want development returns with diversification and faster execution.

Targeted Annual Return18% to 20%

StrategyMid-Rise New Construction (10 to 25 Stories)

FinancingCMHC Insured (MLI Select)

GeographySouthern Ontario

Target TenantCore Workforce ($50K to $75K income)

Return DriverCapital Appreciation + Volume

CMHC Leverage Advantage

With up to 95% loan-to-cost from CMHC, our funds require significantly less investor equity per project. That means your capital works harder. The same building, the same rental income, but dramatically higher returns on the equity you invest because the government is financing most of the project at below-market rates.

Proven Operator

Managed by the same CPA led team behind FCPRET: $60M+ in assets under management, 350+ units across 18 properties in Southern Ontario. We know these markets, we know the construction process, and we know how to deliver.

Aligned Interests

The principals invest alongside every investor. When you succeed, we succeed. That alignment drives discipline in underwriting, construction management, and capital allocation.

Government Incentives

Three Levels of Government Paying Us to Build

Federal, provincial, and municipal governments are all offering unprecedented incentives to developers who build rental housing. From CMHC financing to municipal fee waivers, every level of government is reducing costs and increasing returns for our investors.

95%

Loan-to-Cost from CMHC (MLI Select). Only 5% investor equity needed per project.

10%

Affordable units commitment unlocks MLI Select's best terms. Points-based scoring rewards developers who build for the workforce.

~2%

Reduced insurance premiums through MLI Select's points system. 10% affordable units unlock the best financing terms.

100%

GST/HST rebate on new purpose-built rental construction. Zero tax on building costs.

Development charges in municipalities like London, ON. Cities are waiving fees and offering grants to attract rental construction.

25%

DC discount under Ontario Bill 17 for family-friendly rental units, plus interest-free deferrals on remaining charges.

How the Math Works for Investors

On a $10M construction project, conventional financing requires $2.5M to $3.5M in equity. CMHC financing at 95% loan-to-cost requires only $500K to $1M. Same building. Same rental income. But 3 to 6 times less capital deployed. That leverage, combined with reduced insurance premiums and zero HST on construction, is what drives 18 to 27% targeted returns for our investors.

CMHC MLI Select: Built for Builders

MLI Select uses a points-based scoring system. By committing 10% of our units to affordable rents, we earn enough points to unlock the most favorable terms available: up to 95% loan-to-cost and significantly reduced insurance premiums. These terms are only available to qualified developers building purpose-built rental housing.

Municipal Incentives That Stack

Cities across Southern Ontario are competing to attract rental developers. London, Ontario has waived development charges entirely for purpose-built rental, offers Community Improvement Plan grants, and provides tax increment financing. Other municipalities offer similar programs: fee waivers, expedited permitting, density bonuses, and direct grants. These municipal savings stack on top of federal and provincial incentives, reducing total project costs even further and driving higher returns to investors.

Think Bigger

Why Buy a Condo When You Can Invest Like the Developer?

Most Canadians think real estate investing means buying a condo and becoming a landlord. Here is what that actually looks like next to investing in the development itself.

	Pre-Construction Condo	Development Fund
Investment	$100,000 (deposit on $500K unit)	$100,000 (direct into development)
Monthly Cash Flow	Negative ($200 to $500/mo loss)	Returns paid on exit (no carrying costs)
Maintenance Fees	$400 to $700/mo (rising yearly)	$0 (you own the fund, not the unit)
Tenant Risk	100% (single unit, single tenant)	Diversified across 100s of units
Your Involvement	Landlord duties, repairs, LTB	Zero. Fully managed by our team.
Diversification	None (one unit, one building)	Multiple buildings, multiple sites
Exit Strategy	Sell on open market (timing risk)	Built-in (FCPRET acquires the asset)
Annual Return	3% to 7% (after all costs)	18% to 27% (targeted)

The condo investor buys one unit and becomes a landlord. The Development Fund investor profits from building the entire building, backed by CMHC financing, government incentives, and a professional team. Same $100K. Completely different outcome.

Why Us

Why Foundation Capital

Development returns require execution. Here is why investors trust us to deliver.

350+ Units Managed

We already own and operate 350+ apartment units across 18 properties in Southern Ontario. We know these markets, these tenants, and what it takes to build and manage rental housing.

CPA Led Underwriting

Every project is underwritten by a team of CPAs. Conservative assumptions. Detailed construction budgets. CMHC compliance built in from day one.

CMHC Qualified

Our team has the track record and financial standing to qualify for CMHC's most favorable programs. That access is what makes these returns possible.

Principal Co-Investment

We invest alongside you. Every dollar you put in sits right next to ours. That alignment drives accountability at every stage of construction and beyond.

Profit Like a Developer

You are not buying a condo unit and hoping it goes up. You are investing in the actual development, the same way real estate developers do, and earning returns from the full value creation chain: land, construction, lease-up, and stabilization.

Solve the Housing Crisis

Every building we construct houses dozens of working Canadian families who have nowhere to live. Your investment earns developer-level returns while directly addressing the workforce housing shortage that threatens our communities.

Built-In Exit Strategy

Most development funds need to find a buyer on the open market to cash out investors. We do not. FCPRET, our Private REIT, is a ready buyer for exactly the type of stabilized apartment buildings these funds construct. Once a building is complete and leased up, FCPRET acquires it, you get your return, and the building continues generating income for REIT investors. No market timing. No scrambling for a buyer. Your exit is already in place.

	FCPRET	Development Fund	Affordable Housing Fund
Targeted Annual Return	15%	18% to 27%	6%
Return Structure	7% Cash + 8% Appreciation	Capital Appreciation on Exit	Accrues, Realized on Redemption
Strategy	Value-Add (Buy, Renovate, Grow NOI)	New Construction (CMHC Insured)	New Construction and Affordable Rental Preservation
Asset Class	Existing Multi-Family	New Purpose-Built Rental	Affordable Multi-Family
Distributions	Monthly	On Exit	On Redemption (5-Year Term)
Minimum Investment	$10,000	$100,000	$50,000
Registered Accounts	RRSP, TFSA, RESP, LIRA	RRSP, TFSA, RESP, LIRA	Contact Us
Geography	Southern Ontario	Southern Ontario	Southwestern Ontario
Structure	Private Trust	Limited Partnership	Limited Partnership
Management Team	Same Proven FC Team

FAQ

Frequently Asked Questions

What are the Foundation Capital Development Funds?

Foundation Capital offers two development funds that build brand new purpose-built rental apartment buildings across Southern Ontario. Development Fund 1 targets 24 to 27% annual returns. Development Fund 2 targets 18 to 20% annual returns. Both funds use CMHC insured financing and government incentives to build high quality rental housing for Canada's core workforce, people earning between $50,000 and $75,000 per year who need quality homes at attainable rents.

What is the difference between Development Fund 1 and Development Fund 2?

Development Fund 1 targets 24 to 27% annual returns by building larger, higher-story towers (25+ stories) with maximum CMHC leverage. Fewer projects, bigger scale, higher returns per building. Development Fund 2 targets 18 to 20% annual returns by building mid-rise buildings (10 to 25 stories) across multiple sites with faster construction timelines. More projects, more locations, greater diversification. Both funds give you the opportunity to profit like a developer, not a condo end-user, by investing in ground-up construction across the same Southern Ontario markets using the same CMHC programs and managed by the same team.

How does CMHC financing make these returns possible?

CMHC's MLI Select program offers up to 95% loan-to-cost and reduced insurance premiums for qualified purpose-built rental projects that commit a portion of units to affordable rents. This means Foundation Capital needs significantly less investor equity per project. Less equity in the deal with the same rental income means dramatically higher returns on invested capital. Combined with the 100% GST/HST rebate on new rental construction and development charge deferrals, the government effectively subsidizes the cost of building rental housing, and those savings flow to investors.

Who is the target tenant for these buildings?

Our buildings are designed for Canada's core workforce: nurses, teachers, tradespeople, first responders, and young professionals earning between $50,000 and $75,000 per year. These are the people who keep our communities running but are increasingly priced out of market-rate housing. They earn too much for social housing but not enough for today's rents. Our buildings are purpose-built to serve this market at rents that work for working Canadians.

How do the Development Funds differ from FCPRET?

FCPRET acquires existing multi-family apartment buildings, renovates units on turnover, improves net operating income, and generates returns through a value-add strategy. It targets 15% annual returns with 7% monthly cash distributions. The Development Funds build brand new purpose-built rental buildings from the ground up using CMHC construction financing. Returns are higher (18 to 27%) because of the leverage advantage from CMHC programs, but the strategy involves construction timelines rather than immediate cash flow. All three funds are managed by the same experienced team.

What government programs support this strategy?

Three levels of government support purpose-built rental construction. Federal: CMHC MLI Select provides up to 95% loan-to-cost and reduced insurance premiums for developers who commit a portion of units to affordable rents. A 100% GST rebate applies to all new rental construction. Provincial: Ontario provides a 100% HST rebate on the provincial portion. Ontario Bill 17 allows development charge deferrals with no interest and up to 25% DC discounts for family-friendly rental units. Municipal: Cities like London, Ontario have waived development charges entirely for purpose-built rental and offer Community Improvement Plan grants, tax increment financing, and expedited permitting. Other Southern Ontario municipalities offer similar incentive packages. These incentives stack across all three levels, dramatically reducing total project costs and driving higher returns to investors.

What is the risk profile of the Development Funds?

New construction carries risks including permitting delays, construction cost overruns, interest rate changes, and lease-up timelines. Foundation Capital mitigates these risks through conservative underwriting, experienced project management, CMHC insured financing which locks in rates for 10 years, phased construction approaches, and deep local market knowledge across Southern Ontario. The CMHC insurance also provides a layer of risk mitigation not available to conventional developers. Targeted returns are not guaranteed and all investments carry risk, including the risk of loss of principal.

What is the exit strategy?

Unlike most development funds that need to find a buyer on the open market, Foundation Capital has a built-in exit. Once a building is completed and stabilized, FCPRET (Foundation Capital Private Real Estate Trust), our existing Private REIT, is positioned to acquire the finished asset. FCPRET already owns and manages 350+ apartment units across Southern Ontario, and these newly built, fully leased buildings are exactly the type of asset it acquires. That means your capital is returned without relying on market timing or third-party buyers. Your exit is in place before the first shovel hits the ground.

How do I invest in a Development Fund?

Start by booking a call with our team. We will walk you through both funds, the CMHC financing structure, target projects, and projected returns. We will discuss which fund aligns with your investment goals and risk tolerance. If there is a fit, we guide you through the offering documents and onboarding process.

Building New Homes for Canada's Core Workforce