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All Canadians deserve to have a safe and affordable place to call home. That is why the Government of Canada is introducing an innovative new tool to help middle class Canadians buy their first home.
Today, the Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC), announced the details of the First-Time Home Buyer Incentive, including the expected launch date.
Starting on September 2, 2019, the First-Time Home Buyer Incentive will help middle class families take their first steps towards homeownership by reducing monthly mortgage payments required for first-time homebuyers without increasing the amount they need to save for a downpayment. This program complements other measures taken in Budget 2019 to support first time homebuyers with their downpayment such as increased RRSP withdrawal limit from $25,000 to $35,000. The Government of Canada has allocated $1.25 billion over three years (starting in 2019) for this program. The incentive will be available to first-time homebuyers with qualified annual household incomes up to $120,000.
Budget 2019 also previewed the Shared Equity Mortgage Provider Fund, a five-year, $100-million lending fund to assist providers of shared equity mortgages to help eligible Canadians achieve affordable homeownership. This will support an alternative homeownership model targeted at first-time homebuyers, help attract new providers of shared equity mortgages and encourage additional housing supply. The fund will be launched on July 31st, 2019, and will be administered by CMHC.
Quotes:
“Through the National Housing Strategy, more middle-class Canadians — and people working hard to join it — will find safe, accessible and affordable homes. Our proposed measures will reduce the monthly mortgage for your first home by up to $286. This will mean more money in the pockets of Canadians and will help up to an estimated 100,000 families across Canada.”
| without FTHBI | with FTHBI | without FTHBI | with FTHBI | without FTHBI | with FTHBI | |
|---|---|---|---|---|---|---|
| House Price | $200,000 | $200,000 | $350,000 | $350,000 | $500,000 | $500,000 |
| Down Payment (5%) | $10,000 | $10,000 | $17,500 | $17,500 | $25,000 | $25,000 |
| FTHBI (10%) | NA | $20,000 | NA | $35,000 | NA | $50,000 |
| Insured Mortgage | $190,000 | $170,000 | $332,500 | $297,500 | $475,000 | $425,000 |
| Insured Mortgage + Mortgage Insurance Premium | $197,600 | $174,760 | $345,800 | $305,830 | $494,000 | $436,900 |
| Monthly Payment* | $989 | $875 | $1,731 | $1,531 | $2,473 | $2,187 |
| Savings on Monthly Payment | $114 | $200 | $286 | |||
| Savings on Yearly Payment | $1,372 | $2401 | $3,430 | |||
- Visit here for further First-Time Home Buyer Incentive program details.
Quick Facts about the Shared Equity Mortgage Provider fund program:
- The Shared Equity Mortgage Provider (SEMP) fund program will assist providers of shared equity mortgages in helping eligible Canadians achieve affordable homeownership.
- The SEMP fund program is a 5-year program scheduled to launch on July 31, 2019.
- This $100-million lending fund, administered by CMHC, will help attract new providers of shared equity mortgage and encourage additional housing supply.
- The program will offer eligible proponents loans from two possible funding streams: Pre-construction (stream 1) and Direct Shared Equity Mortgages (stream 2)
- Stream 1 is for pre-construction costs to commence new housing projects that provide shared equity mortgages to home purchasers.
- Stream 2 is for funding of shared equity mortgages provided by the proponent directly to home purchasers.
- Non-profit organizations, other level of governments and for-profit organizations may be eligible to apply.
- Visit here for further Shared Equity Mortgage Provider Fund program details
- The Government of Canada’s National Housing Strategy (NHS) is an ambitious 10-year, $55 billion plan that will create 125,000 new housing units, repair and renew more than 300,000 housing units and reduce chronic homelessness by 50 percent, with the target of removing 530,000 families from housing need
- The NHS is built on strong partnerships between federal, provincial and territorial governments, and on continuous engagement with others, including municipalities, Indigenous governments and organizations, and the social and private sectors, to make a meaningful difference in the lives of Canadians.
Associated links:
As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers unbiased housing research and advice to all levels of Canadian government, consumers and the housing industry. CMHC’s aim is that by 2030, everyone in Canada has a home they can afford, and that meets their needs. For more information, follow us on Twitter, Instagram, YouTube, LinkedIn and Facebook.
To find out more about the National Housing Strategy, visit www.placetocallhome.ca.
Media contacts:
Valérie Glazer
Press Secretary
Office of the Minister of Families, Children and Social Development
819-654-5546
valerie.glazer@hrsdc-rhdcc.gc.ca
Audrey-Anne Coulombe
CMHC Ottawa
613-748-2573
acoulomb@cmhc.ca
