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BC’s New First Time Buyer No Interest Loan Support

Effective January 16, 2017 the province of British Colombia will provide a Home Owner Mortgage and Equity Partnership Program to support first time homebuyers with the purchase of their first home. As part of the program, the B.C. government will match the down payment being contributed by the new homebuyers (up to 5% of the purchase price to a maximum of $37,500). This will be in the form of a 25 year BC Government administered loan with no interest or payments required for the first 5 years.

Some other points to be aware of:

1)  the applicants will need a pre-approval letter from either their bank or their mortgage broker in order to              apply for the loan.  Loan approval is expected to take approximately 5 days;

2)  minimum of 14 days (10 business days) required to fund the loan after final approval (subject removal);

3)  gifted funds for the applicants portion of the down payment will be allowed;

4)  there is no interest for the first five years, but immediately at year six the applicant will be required to either      pay the loan in full, or make monthly payments to a maximum of 20 years.  The interest rate is re-set every        five years.

The following criteria must be met in order to proceed with this program:

  • First time home buyers only. EVERY person on title must be a first time home buyer.
  • Combined annual income for all parties on title cannot exceed $150,000;
  • The closing date on the purchase of the home must be on or after February 15, 2017.
  • The mortgage must be high ratio default insured by CMHC, Genworth or Canada Guarantee;
  • A monthly loan payment will be included in the Total Debt Service (TDS) ratio to calculate the approval amount. The payment will be calculated using the Bank of Canada rate and a 20 year amortization;
  • All applicants must be a Canadian Citizen or permanent resident;
  • Must have been a resident of BC for at least one year;
  • Property must be the applicants principle residence;
  • Applicants must remain in the property for five years.  If they sell the property within the first five years the loan must be paid out;
  • Maximum purchase price of $750,000;
  • The program will end on March 31st, 2020.

Some other points to be aware of:

1)  the applicants will need a pre-approval letter from either their bank or their mortgage broker in order to              apply for the loan.  Loan approval is expected to take approximately 5 days;

2)  minimum of 14 days (10 business days) required to fund the loan after final approval (subject removal);

3)  gifted funds for the applicants portion of the down payment will be allowed;

4)  there is no interest for the first five years, but immediately at year six the applicant will be required to either      pay the loan in full, or make monthly payments to a maximum of 20 years.  The interest rate is re-set every        five years;

5)  due to government regulation enacted two years ago, all non spousal applicants who’s income is being            used to qualify the mortgage must be on title.  On this program, all members on title have to be first time          buyers.  So for purchasers who have parents etc. who are co-signing the mortgage, they will not qualify            for this program unless the parents are also first time buyers and will be residing in the property.

The loan applications can be done on-line at  https://www.bchousing.org/housing-assistance/bc-home-partnership/program-overview-applicant-information . You will be required to provide their pre-approval letter along with other supporting documents at the time of the application.

 

Once the application is approved (approximately 5 business days) you will receive an approval confirmation.

The loan will be funded directly to the solicitor and registered as a 2nd mortgage on title.

 

New BC Government help for First Time Buyers

BCREA Applauds the New BC HOME Partnership Program

Vancouver, BC – December 15, 2016. REALTORS® and the British Columbia Real Estate Association (BCREA) welcome the announcement by Premier Clark and Minister Coleman of the new BC Home Owner Mortgage and Equity Partnership program.

“The introduction of this program will address the affordability gaps that, as a REALTOR®, I hear about every day,” says BCREA President Deanna Horn. “We thank Premier Clark and Minister Coleman for introducing this valuable program to assist first time home buyers in entering the marketplace.“

The province has taken steps to address housing affordability by investing in affordable rental housing and transitional and emergency housing. The BC HOME Partnership will address the impact on the first-time homebuyer with matching dollars and an extended period of time to begin paying back the down payment loan. Many first-time homebuyers struggle to achieve the down payment required to enter the housing market, and BCREA believes this program will help them overcome that barrier.

In fact, enabling home ownership benefits the entire BC economy. A 2015 study by Altus Group Economic Consulting found that the average housing transaction on the Multiple Listing Service® generates approximately $63,000 in additional expenditures.

BCREA believes additional opportunities exist to help existing homeowners, particularly those looking to buy their second or third homes to accommodate families or significant life changes. Doing so will help to ensure balance in the continuum of housing affordability.

For more information on the program: https://news.gov.bc.ca/releases/2016PREM0154-002782