New First Time Home Buyer Incentive Program (FTHBI)
Effective September 2, 2019, the Government of Canada introduced the First Time Home Buyer Incentive (FTHBI) to help qualified First Time Home Buyers (FTHB) purchase a home, making homeownership more affordable by reducing their monthly mortgage payment without increasing their down payment.
The FTHBI is considered a Shared Equity Mortgage (SEM) where the Government of Canada has a shared interest in the borrower's property value. This program is available through the default insurers; Canada Mortgage Housing Corporation (CMHC), Genworth and Canada Guaranty. Borrowers will receive an incentive in the form of an interest-free loan towards their down payment:
o Repayment will be required when the property is sold or at the end of the 25-year term, whichever happens earlier.
o Voluntary repayment of the full incentive can be made without any prepayment penalties.
Application Process Requirements
o Only High Ratio mortgages (greater than 80% Loan-to-Value) are eligible and the borrower's annual qualifying household income does not exceed $120,000.
o The combined mortgage loan amount and incentive cannot exceed four times the total annual qualifying income. To verify this, colleagues can use the Government of Canada's online calculator tool.
If additional details of the program are required, you can call the Government of Canada at 1-877-884-2642 or visit the website at https://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive.