First-Time Home Buyer Incentive
20 Aug 2019 by Sloan Van Mierlo

The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage carrying costs without adding to their financial burdens.

The First-Time Home Buyer Incentive launches September 2, 2019*.

* The program will be ready to receive Incentive applications on September 2, 2019 (barring any unforeseen circumstances). The first closing will take effect on November 1, 2019.

How it all works…

1

Learn About the Program

2

Determine Your Eligibility

  • Contact a lender/mortgage professional
  • Review program requirements and ensure that this is for you.
  • Try the self-assessment tool.
3

Choose Your Incentive and Apply

  • Review the details and select the incentive that is right for you.
  • Read, print and sign the application documents (coming soon) and take them to your lender.
  • Application submissions will be completed by your lender.
  • Notify your solicitor.
  • Call the 1-800 number to activate (see “How do I apply?”).
4

Repayment

  • Early payout options in full are available at any point in the duration of the 25 years.
  • Learn more about fair market value and how this will help you calculate repayment.
  • Calculate the fair market value of your home and multiply it by the percentage of the Incentive you received.

There are a few qualifiers to apply for this incentive:

  • you need to have the minimum down payment to be eligible
  • your maximum qualifying income is no more than $120,000
  • your total borrowing is limited to 4 times the qualifying income

If you meet these criteria, you can then apply for a 5% or 10% shared equity mortgage with the Government of Canada. A shared equity mortgage is where the government shares in the upside and downside of the property value.

How does it work?

The Incentive enables first-time homebuyers to reduce their monthly mortgage payment without increasing their down payment. 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

How do I know how much I have to pay back?

You can repay the Incentive at any time in full without a pre-payment penalty. You have to repay the Incentive after 25 years or if the property is sold, whichever happens first. The repayment of the Incentive is based on the property’s fair market value.

  • You receive a 5% incentive of the home’s purchase price of $200,000, or $10,000.
    If your home value increases to $300,000 your payback would be 5% of the current value or $15,000.
  • You receive a 10% incentive of the home’s purchase price of $200,000, or $20,000 and your home value decreases to $150,000, your repayment value will be 10% of the current value or $15,000.

NOTE: If your property value goes down, you are still responsible for repaying the shared equity mortgage based on the current home value at time of repayment.

How do I apply?

Complete and sign the application documents (coming soon) and take them to your lender, who will submit them on your behalf.

NOTE: Once processed and accepted, you MUST call 1.833.974.0963 to activate the FTHBI payment and provide the name of the lawyer/notary you have chosen to close your deal. You must provide your lawyer/notary information as soon as you have chosen one and no less than 2 weeks prior to your closing.

The program is expected to be ready to receive Incentive applications starting September 2, 2019. If approved for the Incentive, the purchase transaction must close on or after November 1, 2019.

How much funding is available?

The total amount of funding will be $1.25 billion over 3 years.

Why is it for first-time homebuyers only?

For many Canadians, especially young people and first-time buyers, finding an affordable place to call home is not just a challenge – it feels like an impossibility. There aren’t enough houses for people to buy, or apartments for people to rent. That makes finding a good place to live too expensive and beyond what many people, especially younger Canadians, can afford.

This initiative is designed to help young Canadians access home ownership in a fiscally responsible and affordable way. Statistically this is the demographic group with the lowest percentage of homeownership.

How will this help younger Canadians struggling to save for a down payment?

In all cases, the borrower must meet minimum down payment requirements with traditional sources such as savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member. By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage.

What properties are eligible?

The Incentive is to help first-time homebuyers purchase their first home. Eligible residential properties include:

  • new construction
  • re-sale home
  • new and re-sale mobile/manufactured homes

Residential properties can include 1 to 4 units

Types of residential properties include:

  • single family homes
  • semi-detached homes
  • duplex
  • triplex
  • fourplex
  • town houses
  • condominium units

IMPORTANT: The property must be located in Canada and must be suitable and available for full-time, year-round occupancy.

Contact me for all the Information:

Sloan Van Mierlo

Re/max Realtron Brokerage

416-986-2121 Text

sloan@sloansellsrealestate.com

m.me/soldwithsloan  Messenger

Contact

https://www.sloansellsrealestate.com/node/add/contactSite

 

Sloan Van Mierlo

As your realtor we want to make your buying and homeselling as smooth and stress-free as possible for you. If you buy a home with us, and after 12 months your not happy with the home, we will sell it commission FREE. ( some conditions apply ) We will be with you every step of the way through the process to make sure you receive the best possible expert advice and guidance. Whether you are looking to buy or sell, give us a call and I will put our years of experience to work for you!