In the spirit of the holiday season, BC Premier Christy Clarke is giving first-time home buyers an unexpected and much-welcome gift.
On December 15, 2016, Premier Clark announced a new initiative, the BC Home Owner Mortgage and Equity (HOME) Partnership program.
The program, which begins accepting applications on January 16, 2016, will offer first time home buyers interest-free and payment-free down payment loans for the first five years.
“This program will boost sales to first-time home buyers. Without question, they will take advantage of it wherever they can,” said Helmut Pastrick, Central 1 Credit Union chief economist.
“This will offset the negative effects of the October 2016 Federal Government move to cool the market by making it more difficult for first-time buyers to qualify for mortgages,” Pastrick said.
The province estimates the new program will help at least 42,000 buyers or households province-wide. About half of these buyers will be in the Lower Mainland, according to Pastrick.
- The program meets the buyer’s contribution up to 5 per cent of the home’s purchase price, up to a maximum of $37,500 and a maximum purchase price of $750,000.
- After five years, buyers can either repay their loan or enter into monthly payments at current interest rates.
- Loans through the program are due after 25 years – the same length as most mortgages.
To qualify for the program, home buyers with a registered interest on title must reside in the home and be:
- a Canadian citizen or permanent resident for at least five years;
- a resident of BC for at least one year immediately preceeding the date of application; and
- a first-time buyer who has not owned an interest in a residence anywhere in the world at any time.
The home buyer must:
- use the property as their principal residence for the first five years;
- buy a home with a purchase price of $750,000 or less (excluding taxes and fees);
- obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price;
- have a combined, gross household income of all individuals on title not exceeding $150,000
- have saved a down payment amount at least equal to the loan amount for which the buyer applied
Buyers can begin gathering the documents they’ll need to submit an online application. Buyers will need:
- Proof of status in Canada and residency in British Columbia.
- Secondary identification (must include your photo).
- Proof of income and tax filings.
- Insured first mortgage pre-approval.
There are those who think the Metro Vancouver real estate market is overheated and needs to cool off.
“They will oppose this program since this does the exact opposite and will increase demand and keep demand and prices up,” said Pastrick.
“This will help First-time buyers and is positive for market. There will be more sales than otherwise, more construction and more spin-offs into our economy. “