Home Buyers Incentive Key Points
Some of the Key Points in CMHC’s new first time home buyer incentive program
To be eligible for the home buyers incentive at least one borrower must be a first time home buyer. This means you can not have owned or lived in a home owned by your spouse in the last 4 years. You have never owned a home before. You may also qualify as a first time home buyer if you have gone through a breakdown of marriage or common law partnership.
In addition to being a first time home buyer they have some other eligibility requirements. Annual income must be $120000. The mortgage plus incentive amount cannot exceed 4 times the borrowers qualified annual income. Canadian citizens, permanent residents and non permanent residents who are legally authorized to work in Canada are eligible for the program.
Do you have to contribute?
You are still required to contribute the minimum down payment. A borrowed down payment is does not meet the guidelines for this incentive program. The minimum down payment for all buyers is 5%. Under the new first time home buyer program CMHC will then also contribute 5% for an existing home or 10% for a new construction.
The loan must be paid back when your home sells or after 25 years. At the time of repayment your home will be assessed by a qualified appraiser. The homeowner is responsible for the any costs associated with getting this appraisal completed. The amount you must repay to CMHC will be 5% or 10% of whatever this appraised market value is determined to be. This is regardless of whatever you may be selling your home for.
More information to note
The program will exist for 3 years and has been allocated $1.25 billion. The program will end either after 3 years or when the allocated funds run out.
This is a shared equity program which means the government of Canada will have a shared investment in the home. They will have shares in both the upside and the downside of the property value. Their will be a charge registered on your title to account for the incentive amount that is borrowed.
This home buyers incentive program has been designed to help first time home buyers get into home ownership. It may not be the right fit for everyone. It is always best to consult a professional to find out if it is right for you personally. Get in touch with Red Deer mortgage broker Jessica or Brenda at 403-347-0774
You may also visit CMHC’s website to read more on this program. Click here to be taken to their website.