NEW First-Time Home Buyer Incentive
Earlier this year, the Government of Canada announced their plans for a new first-time home buyer incentive that will help new homeowners in Canada enter the Real Estate Market. The details are now available, and the program will be launched shortly.
The Government’s objective of this program is to help qualified first-time homebuyers reduce their monthly mortgage carrying costs without adding to their financial burden. The program will be ready to receive applications on September 2, 2019, with the first closings under the program taking effect on November 1, 2019.
If you meet the Government’s criteria of what a first-time home buyer is in Canada, you can then apply for a 5% or 10% shared equity mortgage. With this shared equity second mortgage, the government will have a proportionate share in both the upside and downside of the property’s future value.
The Government is offering a 5% shared equity incentive for re-sale homes, and either a 5% or 10% shared equity incentive in new construction homes.
You may repay the incentive at any time without a prepayment penalty. However, it is required that the incentive is repaid upon selling the property, or in 25 years (whichever comes first). The repayment amount is equal to the proportionate share (i.e., 5% or 10%) of the sale price of the home, or the fair market value of the property at the end of 25 years.
The total amount of funding that the Government is budgeted to provide is $1.3 billion over the next three years.
For full program details and examples of how this program works, CLICK HERE.
