The new First Time Home Buyer Incentive program from CMHC (Canadian Mortgage and Housing Corporation) was officially released on September 2. This program was met with mixed reactions across the mortgage industry, but we wanted to take a minute to give you the facts regarding the program. Below are the key points you need to know:.
What is it?
The new First-Time Home Buyer Incentive allows eligible first-time home buyers, who have the minimum down payment, to apply to finance a portion of their home purchase through a shared equity mortgage with the Government of Canada. The Incentive is not interest bearing and does not require ongoing repayments.
Through the First-Time Home Buyer Incentive, the Government of Canada will offer:
• 5% for a first-time buyer’s purchase of a re-sale home
• 5% or 10% for a first-time buyer’s purchase of a new construction home
As a shared equity mortgage, the government will then OWN 5-10% of the equity of your home (pending on how much was contributed to the down payment).
How do you know if you qualify?
First, you must be considered a “First Time Home Buyer” however this a has a few versions outside of the standard definition. A first-time buyer is stated as: