Expanded First-Time Home Buyer Incentive is Now Live
Are you, or someone you know, a first-time homebuyer struggling to get into the housing market? If so, the First-Time Home Buyer Incentive (FTHBI)—a shared-equity program run by the Canada Mortgage and Housing Corporation—has just been expanded to help buyers in some of the country’s priciest markets.
How Does it Work? The FTHBI was first launched in 2019 and provides interest-free shared-equity loans to interested buyers in the form of down payment assistance. Participants must put down at least 5% of the home’s value with their own money, while the government (through CMHC) contributes an additional 5% of the down payment if the purchase is of an existing home, or 10% if it’s a new build. Buyers don’t need to make any monthly payments on the funds provided by the government, though the loan must be repaid after 25 years or when the home is sold. CMHC also shares proportionately in any future gains or losses in your home’s value. What’s New? A revamped version of the FTHBI specific to buyers in Toronto, Vancouver, and Victoria is now available as of today. First-time buyers in those cities are now:
eligible as long as their household income is less than $150,000 (an increase from $120,000)
able to borrow up to 4.5 times their household income, up from the current four times.
Assuming maximum household income and the minimum 5% down, the maximum eligible purchase price will increase from about $505,000 to approximately $722,000 for buyers in Toronto, Vancouver, and Victoria. For those
in the rest of the country, the original eligibility requirements still apply (i.e. your household income must be $120,000 or less to participate, and the total borrowing must be no more than four times your income). Up until now, the current program has seen very little uptake since it was first launched, but that could change given these new changes and the rapid rise in home prices across the country. More information on the program is available from the CMHC here. If you or someone you know is considering buying your first home and want to know more about this program, I’d be happy to review the details with you.