Valueland Sat, 11/28/2020 - 19:40

Effective September 2, 2019, the Government of Canada introduced the First Time Home Buyer Incentive (FTHBI) to help qualified First Time Home Buyers (FTHB) purchase a home, making homeownership more affordable by reducing their monthly mortgage payment without increasing their down payment.  

The FTHBI is considered a Shared Equity Mortgage (SEM) where the Government of Canada has a shared interest in the borrower's property value. This program is available through the default insurers; Canada Mortgage Housing Corporation (CMHC), Genworth and Canada Guaranty. Borrowers will receive an incentive in the form of an interest-free loan towards their down payment:

  • 5% for the purchase of a resale property OR
  • 5% or 10% for the purchase of a new construction home

The loan has no monthly payment. Repayment amount will be based on fair market value to be determined at the time of repayment.

  • Repayment will be required when the property is sold or at the end of the 25-year term, whichever happens earlier.
  • Voluntary repayment of the full incentive can be made without any prepayment penalties.

You are considered a Frist Time Home Buyer if you meet one of the following qualifications:

  • You never owned a property before.
  • You've recently experienced a breakdown of a marriage or common-law partnership.
  • In the last 4 years, you did not occupy a home that you or your current spouse/common-law partner owned.

Program Eligibility

  • The borrower must be a Canadian Citizen, Permanent Resident or Non-Permanent Resident who is legally authorized to work in Canada.
  • Property must be owner occupied and located in Canada.
  • Borrowers must contribute the minimum required down payment (5%) from traditional sources.
  • Borrower's annual household income does not exceed $120,000.
  • The closing date must be on or after November 1, 2019.
  • Only High Ratio mortgages (greater than 80% Loan-to-Value) are eligible.

To find out whether you can be qualified for the FTHBI, you may use Government of Canada's online calculator tool.

For more detailed information, please speak to Sean @ Valueland Mortgages at toll free number: 1-877-479-9998.