What is the Canadian first time home buyer incentive?
The Canadian First-Time Home Buyer Incentive
The FTHBI is a government program that was launched in September 2019 to help first-time homebuyers with the costs of purchasing their first home.
The program provides a shared equity mortgage with the Government of Canada, which means that the government shares in the upside and downside of the property value.
Shared equity with the federal government
Under this program, eligible first-time homebuyers can receive a shared equity mortgage of up to 5% of the purchase price of a resale home or up to 10% of the purchase price of a newly constructed home.
The maximum value of the incentive is $40,000.
Mortgage Qualification with FTHBI
The program is designed to help reduce the monthly mortgage payment for the homebuyer and to make it easier for them to qualify for a mortgage.
The incentive is not considered a loan and does not require ongoing payments or interest.
Instead, the incentive is repaid when the property is sold or after 25 years, whichever comes first.
To be eligible for the program, the homebuyer must have a minimum down payment of 5%, and their total annual income must be $120,000 or less. Additionally, the purchase price of the home must be less than $505,000 for a resale home or less than $565,000 for a newly constructed home.
FTHBI Eligibility
To be eligible for the program, the homebuyer must have a minimum down payment of 5%, and their total annual income must be $120,000 or less.
Additionally, the purchase price of the home must be less than $505,000 for a resale home or less than $565,000 for a newly constructed home.
Conclusions and Further Thoughts
Depending on where you happen to live in Canada it may be hard to meet the FTHBI qualification criteria. Home prices have outpaced the bureaucrats in charge of this program.
Sometimes governments put programs in place to make it look like they care about certain things. In this case, the FTHBI is aimed to make it look like the federal government cares about first time home buyers.
Unfortunately the government cares for the Canadian real estate market lobbyists more.
Sincerely,
Michael
PS – One of my hobbies is blogging about mortgages, debt and government policy. During the day I’m a MORTGAGE BROKER in Kelowna, BC!
Check out the Huber Mortgage Home Buyers Guide HERE
