First-Time Home Buyer Incentive
The First-Time Home Buyer Incentive helps people across Canada purchase their first home. The program offers 5 or 10% of the home’s purchase price to put toward a down payment. This addition to your down payment lowers your mortgage carrying costs, making homeownership more affordable.
NOTE: First-time homebuyers purchasing a home in the Toronto, Vancouver, or Victoria Census Metropolitan Areas are now eligible for an increased Qualifying Annual Income of $150,000 instead of $120,000, and an increased total borrowing amount of 4.5 instead of 4.0 times their qualifying income.
UPDATES TO THE FIRST-TIME HOME BUYER INCENTIVE CAN BENEFIT MORE HOMEOWNERS
The Government of Canada will limit its share in the appreciation of a home! Now, homeowners will pay back up to a maximum gain of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.
THIS MEANS THAT PARTICIPANTS MAY BE ABLE TO KEEP MORE WHEN THEIR HOMES INCREASE IN VALUE
The Government of Canada will also limit its share in the depreciation of a home at the time of repayment. This is up to a maximum loss of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.
In the case of appreciation, the above Incentive repayment calculation is retroactive to the implementation date of the First-Time Home Buyer Incentive (September 2, 2019). In the case of depreciation, the above Incentive repayment calculation applies to all borrowers who have signed a shared equity mortgage agreement on or after June 1, 2022.
HOW TO APPLY FOR THE INCENTIVE?
Once you’ve been pre-approved for a mortgage, found the home you’re looking for and determined you’re eligible to apply for the incentive, it’s time to apply. Simply fill out these 2 application forms to apply for the First-Time Home Buyer Incentive:
FTHBI - SEM Information Package (PDF) - available @ www.canada.ca
SEM Attestation and Consent Form (PDF) - available @ www.canada.ca
Once complete, give these to your lender. They will submit the application for you.
Give the final signed copy of the shared equity mortgage package to your solicitor to retain on your behalf.
When you receive your acceptance, call FNF Canada at 1-(855) 844-4535 to activate your incentive and provide the name of your lawyer/notary. (This must be at least 2 weeks prior to your closing date.)
For more information feel free to contact me for professional advice.