In last weeks budget the federal government floated a policy they’re calling the “First Time Home Buyer’s Incentive” to help first time home buyers manage their debt load, that is to say, the amount of mortgage they have to carry. Up to 10% on a newly constructed home and 5% on a resale home will be paid by CMHC up front and later the owner can pay it when they sell the home or earlier. Of course, rules apply – such as maximum price of $480,000 and have less than $120,000 for a household income. In essence it reduces the mortgage the buyers have to take out at the initial buy. Buyers will still have to save at least 5% of the purchase price on their own. While details are scarce at this time, it is encouraging for those of us in organized real estate to think that there are alternatives that will help our first time home buyers own their own home!
This program in addition to the recently announced Down Payment Assistance Program by the Provincial Government is hopefully another step in the right direction toward assisting more people to get into the housing market!
From the Budget:
The new incentive “enables homebuyers to reduce the amount of money required from an insured mortgage without increasing the amount they must save for a down payment.” The government has put aside $1.25 billion over three years, administered by CMHC.