Struggling to afford a home as a first-time buyer? You’re not alone. In response, the Government of Canada has created the First-Time Home Buyer Incentive to help first-time buyers achieve their dreams of homeownership.
What is the First-Time Home Buyer Incentive?
The First-Time Home Buyer Incentive is designed to help first-time buyers by providing additional funds for a down payment on a home. It’s a shared-equity mortgage with the Government of Canada intended to reduce monthly mortgage payments and make housing more accessible for first-time buyers.
What are the Eligibility Requirements?
To qualify for the First-Time Home Buyer Incentive:
- You must be a Canadian citizen, permanent resident, or non-permanent resident authorized to work in Canada.
- Your total income is less than $120,000, or $150,000 if you are purchasing in Toronto, Vancouver, or Victoria.
- Your mortgage is no more than 4 times your qualifying income, or 4.5 times if you’re buying in Toronto, Vancouver, or Victoria.
- You or your partner are first-home home buyers.
- You meet the minimum down payment requirements with your own funds.
What Types of Houses Qualify?
Most types of homes qualify with the exception of investment properties. Your prospective home must be in Canada, and it must be available for full-time, year-round occupancy. This can include:
- Single family homes
- Semi-detached homes
- Duplexes
- Triplexes
- Fourplexes
- Townhomes
- Condos
- Mobile homes
How Much Money Can First Time Home Buyers Get?
The incentive is calculated based on a percentage of your home’s purchase price. For example, if you purchase a pre-existing home for $500,000, your incentive amount would be 5%, bringing the total incentive amount to $25,000.
Newly built homes qualify for a larger incentive, up to 10%. Existing homes or mobile homes qualify for 5%.
When Do I Need to Repay the Incentive?
The incentive is repayable whenever you sell your home or after 25 years, whichever comes first. It is interest-free.
Your repayment will be calculated based on the percentage you were granted (between 5-10%) along with the value of your home. If your home increases or decreases in value, the payment will be adjusted accordingly. For example, if your home sells at $600,000 and your incentive was 10%, you would pay 10% of the new value, or $60,000.
How Do I Apply?
Before you can apply, you must be pre-approved for a mortgage and find the home you wish to purchase. If you’re having trouble qualifying for a mortgage, our Rent to Own program can help! After you’ve done this, you can apply for the First Time Home Buyers Incentive online at the CMHC website.
Experience Homeownership with JAAG Properties
The First-Time Home Buyers Incentive can be a wonderful complement to our Rent to Own program, allowing you to own your home sooner than you think. Whether you’re new to Canada, have gone through a divorce or separation, or have bad or no credit, we can help! Contact our representatives to learn more.
